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Harry Cassin
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Top Aussie regulator defends anti-bribery enforcement record

Greg Medcraft, the chairman of the Australian Securities and Investment Commission (roughly equivalent to the SEC), spoke to an AmCham crowd last week in Sydney about enforcement of Australia’s foreign anti-bribery law.

Australia’s enforcement record has been criticized. So Medcraft, left, who spent ten years in the U.S. as a banker, called his talk ‘Setting the record straight.’

Bribery of foreign officials falls under the Criminal Code Act 1995, a law mainly enforced by the Australian Federal Police and not the ASIC. The AFP are responsible for investigating foreign bribery and corruption, Medcraft said, and bringing criminal enforcement actions through the courts. ‘They are the bribery specialists,’ he said, with a dedicated fraud and anti-corruption center, officers in some foreign jurisdictions, forensic accountants and lawyers, and access to international intelligence such as Interpol.

The ASIC, on the other hand, has no legislated jurisdiction over foreign bribery. So its role is limited to investigating breaches of the companies laws and bringing civil enforcement actions, he said.

‘In the small number of cases,‘ Medcraft said, ’where a company is involved in bribery it might mean the directors are liable for breaches of the Corporations Act — for example, their directors’ duties. This will be an issue for ASIC.’

The ASIC also hangs back if there’s a criminal investigation or enforcement action under way, he said. A criminal defendant has a right to silence in Australia, so courts routinely stay civil proceedings that may compromise that right.

Civil penalties for a director’s breach of the Corporations Act are a maximum fine of A$200,000 ($189,000) and being banned as a director. In comparison, the maximum penalties for the criminal offence of bribing a foreign public official is 10 years in prison and an A$1.7 million fine, or both, and automatic debarment to act as a director for five years after release from prison.

Medcraft said,

What do you think has the biggest deterrent effect — a fine or gaol? Losing some of your money, or losing all of your liberty? My point is that in any foreign bribery investigation, criminal proceedings are the main game. ASIC cannot, and will not, do anything to jeopardize the success of criminal actions, taken by the AFP. This is something the media has mostly chosen to ignore.

Last year the ASIC completed 187 investigations, he said. It banned 88 people from the financial services industry, convicted 22 defendants, and had 9 sent to jail. There were also 528 ‘summary prosecutions’ (similar to SEC administrative actions).

Greg Medcraft’s full remarks can be found on the ASIC site here.


Richard L. Cassin is the Publisher and Editor of the FCPA Blog. He can be contacted here.

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1 Comment

  1. Australia actually has an epidemic of "FCPA" abuses which would be subject to severe penalties in the US, but since the rot starts at the top with the Reserve Bank of Australia (RBA) bribing foreign officials there is a concerted effort to sweep all under the table.

    We have active cases of firms and organizations including the RBA bribing Iraqi officials during the US sanctions, being banned by the World Bank for FCPA abuses, and continuing to trade unfettered and uninvestigated in Australia. In fact senior Government officials here have responded to questions about all this by saying "that's overseas" and therefore not relevant to ethics and behavior in Australia.

    You would do your readers a favor by investigating, there is the Reserve Bank of Australia, Leightons, GHD, etc. A Google search "bribing foreign officials Australia" will bring up the cases or try for example.

    With the Governor of the Reserve bank leading the charge to keep their own bribery under wraps and the lack of appetite by any Australian political leaders to upset the applecart it will take exposure on the likes of The FCPA Blog to bring these disgraceful events into the clear liight of day. I trust that you can do that.

    Walter Adamson

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