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Key themes shaping Australian regulatory enforcement risk in 2024
Key themes shaping Australian regulatory enforcement risk in 2024

Corporate crime

Key regulatory and enforcement developments in 2023

From a regulatory perspective, the key development in 2023 was the establishment of the National Anti-Corruption Commission (NACC). The NACC is off to a fast start—as at [17 December 2023], it had received [2,327] referrals, was conducting [14] preliminary investigations and [10] active investigations, and had referred [4] corruption issues to other agencies. As we have reported, the NACC has far-reaching powers to investigate private companies in connection with serious or systemic public-sector corruption. Notably, the Commissioner, the Hon Paul Brereton AM RFD SC has commented that the government consulting sector is likely to be a focus.1

Other noteworthy regulatory developments of 2023 included:

  • the reintroduction of a federal bill to reform Australia's foreign bribery laws,2 including by establishing a 'failure to prevent foreign bribery by associates' offence—the bill has passed the House of Representatives and is before the Senate (see here for more);
  • the introduction of a bill to establish a global, high-watermark tax transparency reporting regime3—the Assistant Minister for Treasury recently stated that the Government intends for the regime to take effect in time for FY25 reporting;4
  • a long-awaited High Court decision concerning the maximum monetary penalty available in relation to the foreign bribery offence (see here for more); and
  • a 14% increase in the federal Penalty Unit value, which took effect from 1 July 2023.

From an enforcement perspective, key points to note include:

  • Australian Federal Police (AFP) enforcement focuses have included criminal money laundering (Operation Avarus-Nightwolf), cybercrime (Operation Guardian), tax evasion (Operation Elbrus), and transnational organised crime (Operation Ironside).
  • The Commonwealth Director of Public Prosecutions' FY23 annual reporting disclosed material increases in indictable charges brought under the federal bankruptcy, crimes and tax administration statutes; decreases in indictable charges brought under competition and corporations statutes; and an overall increase in the complexity of the cases referrals it is receiving.
  • The ACCC is continuing to develop a proactive cartel-detection program. The program uses data analysis and sectoral screening, as well as industry and community engagement.

 Significant enforcement outcomes have included:

  • successful corporate and individual prosecutions relating to cartel conduct in the waste management sector;5 and
  • a first foreign bribery resolution applying the CDPP's Best Practice Guideline on Self-Reporting of Foreign Bribery and Related Offending by Corporations (see here for more).

 

What are the likely regulatory and enforcement developments in Australia in 2024?

Key developments to watch out for in 2024 may include:

  • The passage of the aforementioned foreign bribery law reform bill—the Government has recently recommitted to the passage of the bill,6 and the Organisation for Economic Co-operation and Development's (OECD's) Working Group on Bribery has called on Australia to accelerate this process.7
  • The possible introduction of a deferred prosecution agreement regime (DPA)—while the Government opposes the introduction of a DPA regime at this time, the Opposition has proposed that the foreign bribery reform bill be amended to provide for one, and the OECD Working Group has called on the Government to reconsider its position.
  • Significant changes to Australia's autonomous sanctions framework—the regulations that establish the framework are due to sunset in April 2024. In this context, the Australian Department of Foreign Affairs and Trade has undertaken a review of aspects of the framework. The review seeks to reduce the volume of subordinate legislation, refine authorisation powers for sanctions permits and consider the introduction of civil penalty provisions for sanctions breaches. The review's outcomes have not yet been publicised.
  • Judicial and regulatory guidance on key sanctions law concepts—presently, there is a lack of guidance on the application of Australia's sanctions laws. Judgment in a key Federal Court case is currently reserved, and the Australian Sanctions Office has recently commenced publishing substantive guidance to industry.
  • Increased use of the Government's sanctions powers—in January 2024, the Government used its cyber sanctions framework for the first time since it was legislated in 2021 to apply financial punishments to people involved in significant cyber attacks. As the number of cyber incidents increases each year, we expect the Government to deploy its sanctions powers if perpetrators of other cyber attacks are identified.
  • The establishment of the aforementioned multinational tax reporting bill—if passed in its current form, Australia will gain global, high-watermark tax transparency laws in the reporting of multinational tax information.
  • More criminal referrals and deeper cooperation between Australian and foreign law enforcement agencies—the AFP has been deepening cooperation with Five Eyes law enforcement agencies and other foreign counterparts, which may result in increased enforcement activity.8

Who are the key regulators in relation to this area?

AFP, ASIC, APRA and the ACCC. The majority of offences at the federal level are referred to the CDPP for prosecution. Although not a regulator, the NACC will play an important role in investigating corruption matters involving the Government, and will be a key referrer of matters to relevant regulators.

What are the key sectors of focus?

Financial services, industrials and resources.

 

Footnotes

  1. Hon Paul Brereton AM RFD SC, 'Keynote Address: The Launch of the National Anti-Corruption Commission' (18 July 2023), available at https://www.nacc.gov.au/sites/default/files/documents/2023-08/2023-australian-dialogue-on-bribery-and-corruption-18-july-2023.pdf.

  2. https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r7055.

  3. https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r7057.

  4. FACT Coalition, 'FACT, Allies Make the Case at UN for Enhanced Tax Transparency Measures to Meet Sustainable Development Goals' (17 November 2023), available at https://thefactcoalition.org/fact-allies-make-the-case-at-un-for-enhanced-tax-transparency-measures-to-meet-sustainable-development-goals/.

  5. https://www.accc.gov.au/media-release/aussie-skips-and-ceo-plead-guilty-to-alleged-waste-services-price-fixing-cartel

  6. https://www.smh.com.au/business/companies/historic-foreign-bribery-crackdown-faces-further-senate-delay-20231130-p5enym.html

  7. https://www.oecd.org/daf/anti-bribery/australia-should-promptly-adopt-long-standing-reforms-to-boost-enforcement-of-its-foreign-bribery-offence.htm

  8. https://www.afp.gov.au/news-centre/media-release/afp-joins-forces-global-partners-tackle-transnational-serious-organised; https://www.afp.gov.au/news-centre/media-release/five-eyes-law-enforcement-group-meets-australia-combat-serious-crime