Foreign Bribery & Corruption
Do you conduct business internationally?
Conducting business internationally is no longer the sole purview of large corporations. With advances in technology it isn’t uncommon for small to medium businesses to be increasingly involved in conducting commerce across national boundaries. While expansion into international markets is good for business, it isn’t without regulatory risks. Don’t think that Australian regulators don’t have the ability to investigate and prosecute matters just because they don’t occur in Australia.
Businesses need to be aware of any potential risks or exposure to possible breaches of Australian foreign bribery and corruption laws as they have what is termed ‘extra territorial reach’ – that is they can apply outside Australia. Depending upon your circumstances, you should also be aware that there are other similar laws which exist in the United Kingdom and the United States and regulators in those countries are increasingly active. Not to mention what relevant laws may be in operation within the country you are doing business.
By way of example on the complexity in this area; did you know that under Australian law it is a criminal offence to bribe a foreign official? The bribe doesn’t even have to be given to a public official – by offering to provide a benefit to a family member or a friend of that government official, for example, would be considered sufficient. Additionally a business can’t escape the provisions by hiring someone else to offer the benefit on your behalf. The laws are structured such that this conduct is still caught. Consider the following scenario – what would you do?
“Your company is doing well and you have decided to enter the export market and import the widgets you produce into a neighbouring country where your market research indicates there is an untapped market upon which you wish to capitalise. Your first import of widgets gets held up in that country’s customs and has been for months. You are so concerned that you decide to travel over and see what the hold up is. Upon arrival you are informed that it is customary for customs officers to receive a ‘facilitation payment’ so that they will release your widgets. The facilitation payment is not an official payment and is something that is pocketed personally by the customs officers. You are advised that this is normal because the wages are so low they are more or less expected to engage in this behaviour to supplement their income to survive. The customs officer knows your goods are important to you and is asking for an equivalent to AUD$5,000 to release them. You have the money and are prepared to pay but you know that this amount of money is enough to buy a house in this country. If you pay the money to the customs officer will that potentially cause you problems with Australian law?”
We can be your trusted partner and help you navigate problems like this. We can also help you and your staff to understand your obligations before situations like this occur – in an educative and compliance role.
Conducting business in our free market economy doesn’t mean you are free from restrictions. For example, you can’t enter into cosy agreements with a competitor to fix the price for your goods or services that you sell; and if your business is a corporation, it has certain obligations under the corporations law, such as not to continue to operate if it is unable to pay all of its debts as and when they fall due . The regulators responsible for those areas of law are the Australian Competition and Consumer Commission (ACCC) and the Australian Securities and Investments Commission (ASIC), but there are many more.
Many regulators, such as the ACCC and ASIC, have become more active in their efforts to uncover and punish corporate misconduct. It is not uncommon for newspaper headlines reporting ‘raids’ by these regulators which can give rise to negative media commentary and can quickly lead to brand damage.
It is best to be on the front foot. If you have heard rumours in your organisation or suspect there might be a problem, contact us as soon as possible and we can help you to ascertain the facts quickly and provide sound advice on your next steps. Don’t wait for a regulator to knock on your door.
If you have been or are currently subject of an investigation by a regulator, contact us for advice. Our staff have worked in the ACCC in a senior law enforcement role and can provide valuable insight.