Anti-bribery compliance in Australia: Key offenses, adequate procedures, and legislative reach

Recent reforms in Australia have strengthened its legislative framework to address growing concerns over foreign bribery and corruption.

However, the introduction of the “failure to prevent” foreign bribery offense has put Australian corporations on alert to sufficiently adapt their compliance policies.

This article provides a concise overview of key bribery offenses in Australia, guidance on adequate procedures, and the reach of Australia’s foreign bribery laws.

Domestic versus foreign bribery offenses

In Australia, bribery offenses are divided into domestic and foreign categories.

Domestic bribery is primarily addressed under state and territory criminal legislation, as well as the Commonwealth Criminal Code Act 1995 (Cth) (Criminal Code).

These offenses typically involve the dishonest giving, offering, or receiving of a benefit to influence a public official or any other person within Australia in the course of their duties. The person influenced can include a Commonwealth public official, a state or local government public official, civil servants, or any other person within the private sector (including corporations, their employees, and anyone acting on their behalf). The law’s focus is on corrupt conduct within Australia’s borders, with penalties including significant fines and imprisonment.

Foreign bribery, on the other hand, is criminalized under Division 70 of the Criminal Code. This offense prohibits bribery against foreign public officials (i.e., public officials operating for governments outside of Australia). The prohibition is broad, reflecting Australia’s obligations under international anti-bribery conventions. Notably, foreign bribery carries severe penalties, including substantial fines for corporations and up to ten years’ imprisonment for individuals. For a company to be found guilty of foreign bribery due to actions by its employees or agents, it generally must be shown that its senior management or board was involved, authorized the conduct, fostered a culture of non-compliance, or failed to ensure a compliant corporate culture.[1]

The new offense: Failure to prevent bribery of foreign public officials

To enhance accountability and encourage proactive anti-bribery measures within Australian organizations, Australia introduced a new corporate offense in the Criminal Code last year: the "failure to prevent" the bribery of foreign public officials.[2]

Section 70.5A, which took effect on September 8, 2024, makes it unlawful for a company to fail to prevent an associate from bribing a foreign public official for the benefit of the company. The definition of what constitutes an "associate" is broad and includes anyone that performs services on behalf of a company (which is much broader than the previous laws that only extended to the company's officers, employees, and agents, bringing Australia into alignment with jurisdictions like the United Kingdom).

Importantly, the "failure to prevent" is an absolute liability offense – meaning a company can still be prosecuted in the event that it was not aware of or did not authorize the bribery. The only defense available for a company facing prosecution is demonstration of "adequate procedures" to prevent such conduct.

Adequate procedures and guidance

With the introduction of the "failure to prevent" offense, the concept of "adequate procedures" has become central to Australian corporate compliance strategies. While the legislation does not prescribe exactly what constitutes “adequate procedures,” the Attorney-General's Department released guidance in August 2024 to help organizations develop robust anti-bribery frameworks. Key elements of adequate procedures typically include:

• Risk assessment: Regular and thorough evaluation of bribery risks relevant to the organization’s activities and jurisdictions (and document findings)
  
  
• Implementing controls: Effective controls scaled to risk levels (ensure proportionality and effectiveness)
  
  
• Top-level commitment: Clear leadership from senior management in promoting a culture of integrity and endorsing anti-bribery policies, including a code of conduct
  
  
• Training and communication: Ongoing education for staff and associates regarding bribery risks and the company’s expectations
  
  
• Reporting foreign bribery: Secure, confidential reporting mechanisms and compliance with whistleblower protections
  
  
• Monitoring and review: Regular audits and updates to anti-bribery programs based on evolving risks

Organizations are encouraged to tailor their procedures to their specific size, structure, and risk profile. To date, no investigative or enforcement action has been taken specifically in relation to the "failure to prevent" offense; therefore, there is no judicial commentary or analysis on the concept of "adequate procedures." It will ultimately be determined on a case-by-case basis.

The reach of Australian foreign bribery laws

Australia’s foreign bribery laws, similar to anti-bribery regimes in the United States and United Kingdom, have broad jurisdictional reach.

An offense of bribing a foreign public official under Section 70.2 of the Criminal Code can be established if there is a sufficient connection with Australia. This includes situations where the conduct constituting the alleged offense occurs:

• Wholly or partly in Australia
  
  
• Wholly or partly on board an Australian aircraft or Australian ship, or
  
  
• Wholly outside Australia (by a perpetrator who is an Australian citizen, Australian resident, or an entity incorporated under a law of Australia).[3]

Where the bribery is committed outside of Australia by an overseas employee or agent – including, for example, a subsidiary company incorporated in a foreign jurisdiction – the Australian company may be liable for the acts of that agent.

This broad jurisdictional reach underscores the importance for Australian businesses, or those having a connection within Australia, to implement effective anti-bribery measures and vigilantly monitor the conduct of their employees and associates worldwide.

Conclusion

Australia continues to strengthen its anti-bribery regime, placing a premium on corporate accountability and proactive compliance. The new “failure to prevent” offense raises the stakes for organizations significantly, making the implementation of adequate procedures key in preventing bribery and mitigating substantial legal and reputational risks.

For more information, please contact the authors.

^{[1] Section 12.3 of the Criminal Code Act 1995 (Cth)}

^{[2] Section 70.5A of the Criminal Code Act 1995 (Cth)}

^{[3] Section 70.5 of the Criminal Code Act 1995 (Cth)}