FCPA Compliance and Ethics Blog

April 17, 2012

The Ashes and Australian Anti-Bribery Enforcement Efforts, with an assist from ethiXbase

Today we celebrate my favorite English sport, cricket. As baseball is my first love, it is not too surprising to find that I enjoy cricket. I like the cerebral nature of the game, coupled with its meandering pace, which can lead to Test Matches of five days. We note that England currently holds the Ashes, which is a Test series that has been played between England and Australia since 1882. It is one of the most celebrated rivalries in international cricket and is currently played biennially, alternately in England and Australia. England is the current holder after winning the Ashes in 2009 and again in the 2010/11 series in Australia. The next series will be held in 2013 in England.

Transitioning from the Ashes, we expand our UK theme week to include the Commonwealth of Nations country of Australia, which has an anti-bribery law on the books, entitled “The Criminal Code Amendment (Bribery of Foreign Public Officials) Act 1999”, which was viewed by the Australian Federal Government as a major step in formalizing Australia’s commitment to stamping out international corruption. A Transparency International (TI) White Paper, entitled “Australian Laws Prohibiting Foreign Bribery”, said that the Australian legislation was a part of an international effort to ensure that contracts are won and awarded fairly, which was led by signatories to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

As reported by TI, in an article entitled “Steps taken to implement and enforce the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions”, this law was amended in 2010, when “the Australian Parliament passed the Crimes Legislation Amendment (Serious and Organised Crime) Act 2010.” This new law increased the financial penalties for bribery offences by creating a formula for fines and penalties based on existing penalties for restrictive trade practices and cartel behavior but it allowed a higher monetary fine if the serious criminal nature of bribery and the serious detrimental effects of bribery merited it.

From the looks of recent developments Down Under, it appears that the anti-bribery enforcement is alive and well. There have been several recent articles involving different industries in Australia, which have allegedly self-reported violations of the Australian Laws Prohibiting Foreign Bribery or are otherwise under investigation. In an article in The Age, entitled “Firms tell of possible bribes”, Richard Baker and Nick McKenzie reported that “companies involved in mining, exploration and other sectors in Africa and Asia have discovered possible evidence of overseas bribery during recent internal audits.” One company Leighton Holdings has publicly admitted “it had alerted the AFP to a possible breach of anti-bribery laws. The alleged breach involves its Singapore-based subsidiary Leighton Offshore Pvt and payments made to facilitate a wharf construction project in Iraq.” Further, The Age reported “Documents from a NSW Supreme Court case last year reveal Leighton conducted an internal inquiry into ”apparently corrupt conduct” involving allegations that a senior employee channelled half a million dollars worth of steel to a third-party project at the Bantam Shipyard in Indonesia.”

In another article by the same two reporters, this time in the Sydney Morning Herald, entitled “Defence firm faces bribery probe”, Baker and McKenzie reported “AUSTRALIA’s biggest military contractor, Tenix Defence, is under federal police investigation for allegedly bribing officials and politicians across Asia to win massive contracts.” The article reported that the Australian Federal Police (AFP) has stated the agency ”received a referral in 2009 for alleged improper payments made by multinational staff members to secure contracts in the Asia region”. The investigation involves five separate Tenix transactions in which the company “is suspected of channelling several million dollars in alleged kickbacks through agents to win defence contracts across Asian countries including Indonesia and the Philippines between 2001 and 2008.”

With this increase in Australian enforcement, you may wonder, if you are sitting in the UK or US, just how can you keep up with the plethora of new laws, codes and enforcement actions. One of the best answers appeared this week in the FCPA Blog with the announcement of the “rollout of ethiXbase, the world’s largest anti-corruption database. ethiXbase builds on the global success of the FCPA Database. It features 8,000 BRIIC and U.S. anti-corruption enforcement actions, live SEC and DOJ feeds, and the most extensive collection of local anti-corruption and gift-giving laws ever assembled.” In addition to providing the legal basis for anti-corruption and anti-bribery enforcement, the database has trending analytics tools that reveal emerging compliance trouble spots around the world. Additionally, users of the database can create alerts for countries, industries, and companies. Finally, close to my heart as a practicing lawyer, the database has a global law firm directory available to the public, which includes 9,000 listings. It also includes more than 1,200 searchable law firm memos by leading practitioners who cover the US Foreign Corrupt Practices Act (FCPA), UK Bribery Act, and other global enforcements.

So while thinking of England and the UK Bribery Act, it is well to remember that most of the world is moving towards a more robust enforcement regime to combat corruption and bribery. While the US has led the way, other countries are quickly catching up and the era of international enforcement cooperation is upon all compliance practitioners and companies. It is far better to learn what laws you may face, assess your risks and then manage or mitigate those risks now rather than later.

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The articles referenced in this post were provided by James Greenall, a Director with STEELE in Washington DC,  who has been closely following anti-corruption efforts in his native Australia, where his firm conducts a significant amount of investigative due diligence. James can be reached atjgreenall@steelecis.com.

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This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

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