- FCPA Professor - http://fcpaprofessor.com -

Development Down Under

If you have any interest in the issue of facilitating payments or Australia’s “FCPA-like” law you will want to read this [1] document recently released by the Australia Attorney-General’s Department, Criminal Justice Division.

The document states as follows.  “In September 2011, the Australian Government announced the commitment of $700,000 to develop and implement Australia’s first National Anti-Corruption Plan.  A key objective of the Plan is to strengthen Australia’s existing governance arrangements by developing a whole-of-government policy on anti-corruption.  The Plan will bring the relevant agencies together under a cohesive framework and strengthen the Government’s capacity to identify and address corruption risks.” 

Australia’s “FCPA-like” law (Division 70 of the Criminal Code Act 1995) currently states that a person is guilty of an offense of bribing a foreign public official if:  “the person provides a benefit to another person, offers or promises to provide a benefit to another person, or causes a benefit to be provided, offered or promised to another person AND the benefit is not legitimately due to the other person AND step 1 was carried out with the intention of influencing a foreign public official (who may or may not be the recipient of the benefit) in the exercise of the official’s duties, in order to obtain or retain business or obtain or retain a business advantage which is not legitimately due.”  Under the law, “two defenses are provided for the foreign bribery offense: (i) that the benefit was permitted or required by written law and (ii) that it was a ‘facilitating payment.'”

As relevant to the foreign bribery offense, the Australian government is reviewing “the treatment of facilitation payments under Australian law;” “the factors that influence whether a benefit is ‘legitimately due’ to the recipient;” and “the current requirement to identify a particular foreign public official in order to establish an offence.”

As to facilitating payments, the document states as follows under the heading “international approaches.”  “The United States’ Foreign Corrupt Practices Act, on which the Australian law was modelled, includes a similar exemption to the offense of foreign bribery for facilitation payments. The United States Government has stated that it does not condone facilitation payments. The OECD has recommended that the United States review its policy.  The United Kingdom’s Bribery Act, which came into force on 1 July 2011, prohibits facilitation payments.”  The document also states as follows.  “The international movement towards criminalizing facilitating payments is demonstrated by the recent amendments to both UK and US bribery legislation.”   This statement is clearly wrong, there have been no recent amendments to the FCPA, although I agree with what seems to be the implication that the current FCPA enforcement agencies do not recognize the facilitating payments exception Congress put into the law.

The document states that the “government is considering whether to remove the defense of facilitating payments by repealing” that relevant section of the law.

Another issue the Australian government is reviewing is whether a particular foreign official must be identified in order to establish a bribery offense.  This same issue was disputed in both the Nexus Technologies and Africa Sting enforcement actions. 

As to this issue, the document states as follows.  “Under subsection 70.2 of the Criminal Code it is an offense to offer or provide an undue benefit to a person with the intention of influencing a public official in the course of their duties, in order to obtain business or an undue business advantage.  In some circumstances, it will be possible to establish that a bribe has been offered or provided to a person to induce a Government agency to grant business or an undue business advantage but it may be difficult to identify the specific official who will be influenced. For example, it may be possible to prove a person offered or provided a bribe to an agency in charge of granting public infrastructure contracts, but not possible to identify whether the payment is destined for the official directly responsible for granting contracts or another official who will direct their staff to grant a certain contract.  The Government therefore is considering whether to amend legislation so that, when proving that a benefit was offered or provided with an intention to influence a foreign public official, it is not necessary to prove an intention to influence a particular foreign public official.”

The Australian government is inviting submissions as to the above (and other issues) by December 15th.