![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]
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Bribery and corruption
- 1. Bribery and corruption - where is it on your agenda? French Trade Commission Group 19 April 2012 Lewis Rangott
- 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] 2 © 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 3 © 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 others ASIC – 13 September 2011 4 © 2011 Ernst & Young Australia. Liability limited by a scheme approved under Professional Standards Legislation.
- 5. Some recent headlines 5 © 2011 Ernst & Young Australia. Liability limited by a scheme approved under Professional Standards Legislation.
- 6. A snapshot of the legislation 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 persons Applies to active and passive bribery Protects whistleblowers 6 © 2011 Ernst & Young Australia. Liability limited by a scheme approved under Professional Standards Legislation.
- 7. A snapshot of the legislation US Foreign Corrupt UK Bribery Act 2010 Australian Criminal Code Practices Act of 1977 Act 1995 Concerns foreign bribery only Concerns both domestic and Concerns both domestic and foreign bribery foreign bribery Bribes to public officials only Bribes to both public officials Bribes to public officials only and in private sector Concerns the bribe payer only Concerns the bribe payer and Concerns the bribe payer only recipient Explicit exception – No specific exemptions – Exceptions – 1)Facilitation payments although defence if company 1)Facilitation payments can show “adequate 2)Common law principles e.g. 2)Reasonable marketing procedures” were in place Duress, extraordinary expenses emergency SEC and DoJ may pursue Criminal enforcement only - Criminal enforcement only civil enforcement under lower corporate offence for failing to standards and penalties prevent bribery 7 © 2011 Ernst & Young Australia. Liability limited by a scheme approved under Professional Standards Legislation.
- 8. UK Bribery Act 2010 – Quick Facts UK Bribery Act 2010 What is the Act The 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 bribe Bribing a foreign public official Failing 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 Companies Companies that operate in the UK can be prosecuted for the actions of any of their employees (regardless of nationality), agents, etc. 8 © 2011 Ernst & Young Australia. Liability limited by a scheme approved under Professional Standards Legislation.
- 9. Foreign Bribery Enforcement by Country 1977 - June 2010* Source: TRACE Global Enforcement Report 2010 * 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. 9 © 2011 Ernst & Young Australia. Liability limited by a scheme approved under Professional Standards Legislation.
- 10. International Enforcement Activity By Industry 1977 - June 2010 Source: TRACE Global Enforcement Report 2010 10 © 2011 Ernst & Young Australia. Liability limited by a scheme approved under Professional Standards Legislation.
- 11. Adequate procedures guidance summary The UK Bribery Act – The “Only” Defence 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 • Should ensure that bribery prevention policies and procedures are embedded and training) 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 11 © 2011 Ernst & Young Australia. Liability limited by a scheme approved under Professional Standards Legislation.