This past year Australia adopted a new record-keeping offense that is not limited to situations involving the bribery of foreign public officials. It is very significant in that it may be applied in entirely domestic situations where there are no allegations of bribery or even public corruption. Unlike the FCPA, it is not limited to publicly-held companies.
Criminal Penalties May Be Imposed for Intentional or Reckless Conduct
Substantial criminal penalties may be imposed for anyone who intentionally or recklessly “makes, alters, destroys or conceals an accounting document” or, alternatively, “fails to make or alter an accounting document that the person is under a duty, under a law of the Commonwealth, a State or Territory or at common law, to make or alter” in order to “facilitate, conceal or disguise” conduct that may fall into one or more of five categories:
- when the person receiving the benefit is not “legitimately due” the benefit;
- when a benefit is “not legitimately due to the recipient, or intended recipient”;
- when the person receiving a benefit “is not legitimately due” the benefit;
- when another person gives “a benefit that is not legitimately due to the recipient, or intended recipient.” This may include a benefit to the person who intentionally takes action or fails to take action with the accounting document;
- when “the loss to another person” is “not legitimately incurred by the other person.”
It is not necessary to prove that a benefit was actually given or received or that someone actually suffered a loss. An “accounting document” means any account, any record or document made or required for any accounting purpose; or any register under the Corporations Act 2001, in addition to any financial report or financial records within the meaning of the Corporations Act 2001.
The record-keeping offense applies to publicly and privately-held corporate bodies
The law applies to corporations established under Australian law or in one of its territories. It extends to individuals acting on behalf of Australian corporations or providing services to Australian corporations. It also extends to “a Commonwealth public official acting in the performance of his or her duties or the carrying out of his or her functions.” However, the law does not apply in situations where the person is acting in an entirely personal or private capacity.
The record-keeping offense applies extraterritorially in a wide range of contexts.
The jurisdictional reach of the record-keeping offense is very broad. The law also applies to situations where the person’s act occurs in a Territory or outside of Australia; concerns matters outside of Australia; or “facilitates or conceals the commission of an offence against a law of the Commonwealth.” In addition, the law applies to situations where the “accounting document” is outside of Australia.
For an intentional act of an individual, a term of imprisonment up to 10 years or a fine of not more than 10,000 penalty units, or both, may be imposed. For a body corporate, a fine may be imposed of the greatest of 100,000 penalty units, 3 times the value of the benefit to the body corporate, or 10 percent of annual turnover. For a reckless act, the penalties of an individual or a body corporate may be one half of the that imposed for an intentional act.