1.4 - Combating corporate crime

Foreign bribery and DPAs (milestones 1 and 2)

The Minister for Justice released public discussion papers on a proposed deferred prosecution agreement (DPA) scheme (March 2017) and possible reform of laws applying to bribery of foreign public officials (April 2017). These were published on the Attorney-General’s Department’s (AGD) website. Information on AGD commitments in the NAP (commitments 1.4, 3.1 and 4.2) is also published on AGD’s website.

Public consultations on foreign bribery and DPA proposed reforms closed on 1 May 2017.

The consultation process included engagement with non-government stakeholders through the Government Business Anti-Corruption Roundtable held on 31 March 2017 (the subject of commitment 4.2) and a further consultation event held on 27 April 2017.

The Government introduced the Crimes Legislation Amendment (Combating Corporate Crime) Bill 2017 to the Parliament on 6 December, which will:

• remove impediments to the successful investigation and prosecution of foreign bribery and introduce a new corporate offence of failure to prevent bribery, and
• implement a Commonwealth DPA scheme to encourage companies to report corporate crime and cooperate with law enforcement.

On 7 December 2017, the Senate referred the Bill to the Senate Legal and Constitutional Affairs Legislation Committee for inquiry and report by 20 April 2018.

AML/CTF Act review (milestone 3)

Extensive public consultation was undertaken both during the statutory review of Australia’s AML/CTF regime and following the tabling of the report in April 2016. Consultations took place on proposals to implement the first phase of legislative proposals arising from the report’s recommendations. The Department of Home Affairs is now in the process of consulting with Government and industry partners on the next phase of reforms to Australia’s AML/CTF regime.

Details of the statutory review and subsequent consultation processes have and will continue to be published on the Department’s website.

The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2017 passed the Parliament on 7 December 2017 and received Royal Assent on 13 December 2017. It commenced via proclamation on 3 April 2018.

The Act comprises the first phase of legislative reform implementing the recommendations of the statutory review of Australia’s AML/CTF regime and contains a number of measures to modernise the regime. The Act regulates digital currency exchange businesses under the AML/CTF regime. The Act also provides regulatory relief to industry, including by de-regulating the cash-in-transit sector and clarifying financial institutions’ correspondent banking due diligence obligations. The Act is expected to result in estimated savings to industry each year for the ten years after the measures come into force of $36,086,393. This financial impact includes average annual regulatory costs of $662,221 for business and community organisations arising from measures to regulate digital currency exchange providers.

Work has commenced on reforms to implement the remaining recommendations of the statutory review.

The statutory review also recommended the Government develop options for regulating ‘tranche two’ entities (lawyers, conveyancers, accountants, real estate agents, trust and company service providers and high-value dealers) under the AML/CTF regime and undertake a cost-benefit analysis (CBA) of the options developed. The CBA was completed on 30 June 2017 and is currently being considered by the Government.

Should the Government decide to regulate tranche two entities, these sectors would be subject to obligations under the AML/CTF regime. The nature and extent of any such obligations would be considered during further consultation with industry.

Australian Securities and Investment Commission enforcement review taskforce (milestone 4)

The taskforce completed public consultation on a number of issues, including penalties for corporate fraud, prior to the delivery of a final report to Government.

The Taskforce was led by a Panel chaired by the Department of the Treasury, and included senior representatives from Australian Securities and Investments Commission, the Attorney-General’s Department, and the office of the Commonwealth Director of Public Prosecutions, with support from an Expert Group drawn from academia and legal experts recognised for their expertise in corporations, consumer, financial and credit law. The Expert Group provided ongoing advice and feedback to the Panel during the preparation of report and recommendations.

The final report was provided to Government in December 2017 and the Government provided its response in April 2018, which agreed, or agreed-in-principle, to all 50 recommendations. The Taskforce report and the Government response can be accessed at https://treasury.gov.au/review/asic-enforcement-review/.