bribery and corruption
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Bribery and corruption - where is it on your agenda? French Trade Commission Group 19 April 2012 Lewis Rangott Ernst & Young Plus de contenu sur http://australie.cnccef.orgTRANSCRIPT
Bribery and corruption -where is it on your agenda?French Trade Commission Group
19 April 2012Lewis Rangott
© 2011 Ernst & Young Australia. Liability limited by a scheme approved under Professional Standards Legislation.2
Fraud and corruption definition
Fraud: “Dishonest activity causing actual or potential financial loss…where deception is used...”[Source: AS 8001-2008 Fraud and Corruption Control]
Corruption: “Dishonest activity in which an… employee… of an entity acts contrary to the interests of the entity…in order to achieve some personal gain…”[Source: AS 8001-2008 Fraud and Corruption Control]
© 2011 Ernst & Young Australia. Liability limited by a scheme approved under Professional Standards Legislation.3
Hitting home – Australia and foreign bribery
If, as an Australian citizen or resident, you perform an act of bribery towards a public official offshore or a Commonwealth official, you could be fined $1.1 million, jailed for 10 years and your company can be fined at least $11 million under the Australian Criminal Code Act 1995
© 2011 Ernst & Young Australia. Liability limited by a scheme approved under Professional Standards Legislation.4
Some recent headlines
ASIC obtains passport and freezing orders against Hanlong Mining executives and othersASIC – 13 September 2011
© 2011 Ernst & Young Australia. Liability limited by a scheme approved under Professional Standards Legislation.5
Some recent headlines
© 2011 Ernst & Young Australia. Liability limited by a scheme approved under Professional Standards Legislation.
A snapshot of the legislation
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French foreign bribery legislation
The French Penal Code contains provisions relating to domestic and foreign bribery. It:
Prohibits bribery of foreign public officials and international organisations (penalty: 10 years imprisonment and €150,000 fine)Prohibits trading in influence with a foreign public official (penalty: 5 years imprisonment and €75,000 fine)Applies to entities as well as natural personsApplies to active and passive briberyProtects whistleblowers
© 2011 Ernst & Young Australia. Liability limited by a scheme approved under Professional Standards Legislation.7
A snapshot of the legislation
US Foreign Corrupt Practices Act of 1977
UK Bribery Act 2010 Australian Criminal Code Act 1995
Concerns foreign bribery only Concerns both domestic and foreign bribery
Concerns both domestic and foreign bribery
Bribes to public officials only Bribes to both public officials and in private sector
Bribes to public officials only
Concerns the bribe payer only Concerns the bribe payer and recipient
Concerns the bribe payer only
Explicit exception –
1)Facilitation payments
2)Reasonable marketing expenses
No specific exemptions –although defence if company can show “adequate procedures” were in place
Exceptions –1)Facilitation payments
2)Common law principles e.g. Duress, extraordinary
emergency
SEC and DoJ may pursue civil enforcement under lower standards and penalties
Criminal enforcement only -corporate offence for failing to prevent bribery
Criminal enforcement only
© 2011 Ernst & Young Australia. Liability limited by a scheme approved under Professional Standards Legislation.
UK Bribery Act 2010
What is the ActThe UK introduced the Act in 2010. It prohibits companies and their employees from
committing various acts associated with bribery anywhere in the world. In particular, the Act sets out the following four offences:Giving, promising, or offering a bribe
Requesting, agreeing to receive, or accepting a bribeBribing a foreign public officialFailing to prevent bribery
Who does it apply to?The UK can bring criminal prosecution against the following individuals and companies:
UK Citizens and Residents (including citizens living outside the UK)Non-UK Citizens and Residents (only if the bribe occurs in the UK)UK Headquartered CompaniesCompanies that operate in the UK can be prosecuted for the actions of any of their employees (regardless of nationality), agents, etc.
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UK Bribery Act 2010 – Quick Facts
© 2011 Ernst & Young Australia. Liability limited by a scheme approved under Professional Standards Legislation.
* Representatives of some enforcement agencies occasionally provide informal statistics about the number of open matters they currently have under investigation. Because these agencies will not officially confirm these numbers, they have not been included
here.
Source: TRACE Global Enforcement Report 2010
Foreign Bribery Enforcement by Country1977 - June 2010*
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© 2011 Ernst & Young Australia. Liability limited by a scheme approved under Professional Standards Legislation.
Source: TRACE Global Enforcement Report 2010
International Enforcement Activity By Industry1977 - June 2010
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© 2011 Ernst & Young Australia. Liability limited by a scheme approved under Professional Standards Legislation.11
Principal Description
1. Proportionate procedures • Proportionate to the risks faced and the size and complexity of the business• Clear, practical, accessible, properly implemented and enforced
2. Top level commitment • Take responsibility at the board level for bribery prevention• Foster a zero-tolerance culture toward bribery
3. Risk assessment • Consider both internal and external risks• Be performed periodically and risk-based
4. Due diligence • Conducted on parties performing services for or on behalf of a business• Proportionate and risk-based
5. Communication (including training)
• Should ensure that bribery prevention policies and procedures are embedded and understood throughout the business
• May include external communication and a secure, confidential and accessible “speak up” procedure
6. Monitoring and review • Evaluate the effectiveness of current bribery prevention procedures• Identify and implement necessary improvements
Adequate procedures guidance summary The UK Bribery Act – The “Only” Defence
