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The Federal Government has announced and invited submissions on:

  1. a proposal for a deferred prosecution agreement (DPA) scheme to be introduced in Australia; and
  2. proposed amendments to the foreign bribery offence in the Criminal Code Act 1995 (Cth)

These proposals indicate that the Federal Government is seeking to maximise the prospects of successfully taking enforcement action against companies and individuals involved in corrupt conduct.

What you need to know

  • The Federal Government has released a consultation model for a proposed DPA scheme in Australia (available here) after receiving mostly supportive submissions for the further development of a DPA scheme from a broad range of stakeholders in 2016.
  • ​The Federal Government has released a consultation paper (available here) for submissions on its proposed amendments to the foreign bribery offence.  These proposals include introducing a corporate liability model similar to the UK Bribery Act 2010 and introducing an offence based on recklessness rather than intent that would potentially capture conduct not covered by the UK Bribery Act.
  • Both proposals signal the Federal Government’s commitment to develop new enforcement mechanisms for serious corporate crime, including reviewing its foreign bribery laws as part of its National Action Plan under the Open Government Partnership.
  • The deadline for submissions on both papers is 1 May 2017.

Proposed deferred prosecution agreement scheme

What is a deferred prosecution agreement / DPA?

A DPA is a voluntary negotiated settlement between the prosecuting authority and defendant to avoid the formal prosecution of the defendant. DPAs have been used in both the US and the UK for serious corporate offences, with the US renowned for its significant Foreign Corrupt Practices Act 1977 fines and disgorgements through DPAs.  DPAs are a more recent enforcement tool in the UK, but they are also beginning to result in similarly large fines.

Under existing DPA schemes, where a company (or company officer) has engaged in serious corporate crime, it is possible for the company to negotiate an agreement to comply with a range of specified conditions.  Such conditions usually require the company to cooperate with any investigation, admit to agreed facts, pay a monetary penalty and implement a compliance program.  If those conditions are satisfied by the company then it will not be prosecuted.

However, if the company breaches the terms of a DPA, then the company may be prosecuted or alternatively have to renegotiate a DPA with the prosecuting agency.

Proposed model for a DPA scheme in Australia 

The Federal Government’s current proposal is for an Australian DPA scheme which is similar to the UK’s DPA scheme, being available only to companies (for an initial two year implementation period) and applying to a specific list of serious corporate crimes, including foreign bribery, money laundering and fraud.  The Federal Government is continuing to assess whether a DPA scheme should be available for other criminal offences, such as environmental crimes, tax and cartel offences.

The Federal Government’s proposed DPA model “would be focused on reparation, remediation, financial penalties and on the implementation of effective compliance programs”.  Key features of the current proposal include:

  • broad prosecutorial discretion in deciding whether to invite a defendant company to enter into DPA negotiations;
  • a recognition that clear and detailed guidance on when a prosecutor is likely to offer DPA negotiations is required for greater certainty around accessing the DPA scheme, so as to encourage self-reporting by companies;
  • flexibility in the manner in which the negotiations are conducted and in the terms of the DPA, but with some minimum mandatory terms, such as an end date by which the DPA terms must be satisfied, an agreed statement of facts, formal admissions of criminal liability and grounds for termination of the DPA in the event of breach;
  • the publication of the DPAs terms and statement of agreed facts, unless exceptional circumstances exist; and
  • always being subject to two proposed safeguards, whereby DPAs are only offered if the Commonwealth Director of Public Prosecutions (CDPP) considers it is in the public interest and the DPA’s terms are only approved if found to be in the interests of justice.

​Australia’s proposed DPA scheme would require approval by either a retired judge or the CDPP.  Once a DPA has been approved, it has been proposed that independent monitors could be appointed at the company’s expense to ensure compliance with the terms of the DPA.  The  independent monitor could also be required to report to the CDPP, given the agency’s current lack of oversight or investigatory capacity to determine a company’s compliance with the DPA terms.

Proposed amendments to the foreign bribery offence

The Federal Government’s proposed amendments to the foreign bribery offence under the Criminal Code Act 1995 (Cth) (Criminal Code) would:

  • expand the “foreign public official” definition to include candidates for office;
  • introduce the concept of conduct being engaged in to “improperly influence” a foreign public official replacing the need to establish that a benefit/business advantage was “not legitimately due”;
  • extend the bribery offence to cover obtaining a personal advantage;
  • introduce a new foreign bribery offence based on the fault element of recklessness.  While an element of the offence would still require intention as to the conduct of “providing, promising or offering” a benefit, the offence would be established if the person was reckless as to whether that conduct would improperly influence a foreign public official to obtain or retain business or an advantage.  This could potentially capture conduct that would not be caught by the UK Bribery Act.  The proposed incorporation of recklessness into the foreign bribery offence follows a similar approach with the money laundering and false accounting offences under the Criminal Code;
  • introduce a new corporate offence of failing to prevent foreign bribery.  This proposed offence would have a similar effect to section 7 of the UK Bribery Act.  It would mean that a company would be liable for bribery by its employees, contractors and agents (including those who may be operating overseas), unless the company can show that it had proper internal controls and compliance systems in place to prevent bribery from occurring.  This effectively reverses the onus of proof and requires a company to establish that it had sufficient compliance systems in place rather than requiring the prosecution to establish that the company did not have sufficient compliance systems.  The proposal recognises that the Minister of Justice would be required to publish specific guidelines as to the appropriate steps and measures companies can implement to prevent such bribery;
  • remove the requirement of influencing a foreign public official in the exercise of their official capacity; and
  • clarify that the offence does not require the accused to have a specific business or advantage in mind, and that business or an advantage can be obtained for someone else.

The proposed amendments do not remove the facilitation payments defence under the Criminal Code, leaving Australia as one of the few remaining OECD Bribery Convention countries which still permits that defence.


Both consultation papers signal an increased focus by Australian regulators to develop new enforcement mechanisms to aid the successful prosecution of companies and individuals for serious corporate crimes, including foreign bribery.

Since the enactment of the UK Bribery Act, the UK has actively prosecuted companies for failing to maintain proper controls and compliance systems to prevent bribery.  The US and UK have both used DPAs to increase their successful prosecution of companies for serious corporate crimes.

As the Federal Government takes these steps to strengthen Australia’s foreign bribery laws, it provides a timely opportunity for companies to evaluate whether their compliance systems are adequate to prevent and detect corrupt conduct and reduce their exposure to that significant risk.


Andrew is senior associate in Baker McKenzie’s Sydney office. He is a member of the Dispute Resolution practice group, with a practice covering general corporate and commercial disputes, domestic and international arbitration, and advising on international trade and customs, export control, sanctions and anti-bribery and corruption compliance and investigations.


Georgie Farrant is a partner in Baker McKenzie's Dispute Resolution Practice Group in Sydney and head of the Firm's Compliance & Investigations team in Australia. She has over 20 years of experience in disputes and compliance matters, including working for a regulator and an in-house compliance team.


Natalie Wee is an associate in Baker McKenzie’s Sydney office.