Case studies


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This case study demonstrates the types of enforcement actions and penalties that might apply if a company, its officers or employees are found guilty of bribery and corruption offences.   


This is a continuation of the scenario in the Investigating an internal complaint and Responding to contact by an authority case studies.

Sarah’s macadamia nut business was rocked by a discovery that her senior employee, Andy, entered into a contract with an offshore intermediary that reportedly facilitates access to local markets in exchange for bribes disguised as inflated service fees. It now also appears that Andy personally benefitted from these arrangements, receiving a kick-back payment for each ‘service fee’ paid to the intermediary by Sarah’s business.

Sarah acted quickly and took the matter seriously but her company’s lack of appropriate policies and procedures to prevent the conduct has cost it dearly. Following both an internal investigation, and an investigation by an authority that lasted five years, Sarah’s business is now facing possible prosecution in Australia by the Commonwealth Director of Public Prosecution (CDPP) for foreign bribery offences. In addition, Andy will likely face charges. Sarah is hoping the steps she took to address the situation may influence the CDPP’s decision on whether to prosecute her business.

Possible enforcement actions that could be taken

The maximum penalties in Australia for individuals and corporations found to have bribed a foreign official are:

  • For an individual, a term of imprisonment for up to 10 years, a fine of up to $2,220,000, or both;
  • For a corporation, the larger of:
    • $22,200,000;
    • If the value of the benefit to the corporation obtained can be determined, then three times the value of that benefit; or
    • If the value of the benefit to the corporation obtained cannot be determined, then 10 per cent of the annual turnover of the corporation and any related corporations during the preceding 12 month period. 

There are several well-publicised cases of Australian courts implementing significant penalties for foreign bribery offences.

In addition to being prosecuted for the bribery of foreign officials, there are associated actions that can be taken against a business and key individuals. For example:

  • If Sarah was alerted to the red flags and did not take steps to investigate them, she could be found to have breached her duties as a director or officer of the company.
  • If Andy knew that the nature of the payments was falsely described in contracts, he might also face charges for false accounting offences.

In addition to potential criminal penalties, there may also be serious reputational costs to a business.

Potential mitigating factors available to Sarah and the business

Conduct and response to concerns

A business should take ongoing compliance seriously – not only for the goal of preventing bribery and corruption risks, but also for mitigating serious legal, financial and reputational consequences.

The CDPP will likely take into account the steps Sarah and the business took in addressing the concerns, including the following:

  • The implementation and active enforcement of an anti-bribery and corruption policy, including what risk assessments and due diligence were undertaken in relation to the relevant contractual arrangements; and
  • The steps taken by the business and Sarah since becoming aware of the concerns, including the decision to terminate the contract, cooperation with authorities and any steps taken since the issues came to light to strengthen the anti-bribery and corruption compliance program.

There are cases abroad where such factors have been taken into account by law enforcement authorities in determining not to prosecute a business or executives for foreign bribery offences. If a prosecution is commenced, then such factors can also be considered in determining whether a reduced penalty is appropriate.

Prevention is the best way to avoid liability

The best way to avoid liability under Australian and foreign anti-bribery laws is to ensure appropriate preventative steps are implemented in the first place. This includes:

The Bribery Prevention Network acknowledges the pro-bono contribution of Corrs Chambers Westgarth in developing this case study.

Relevant resources

In 2011, two subsidiaries of the Reserve Bank of Australia plead guilty to charges of bribing foreign officials in relation to a Malaysian bank during the period of 1999-2004 and were fined over A$22 million. Four employees, including the CEO and CFO of Securency, pleaded guilty to charges of conspiring to bribe and/or false accounting, each receiving between 6-24 months imprisonment.

This case study of the AWB class action examines allegations that can be made when a company does not report suspected corruption. Bribery and corruption allegations can have serious consequences for companies, including fines, loss of business and reputation, loss of licenses and inability to recover payments. For listed companies, those potential consequences may be material enough to need to be reported to the ASX.

This news story reports on the 2017 case where three individuals pleaded guilty and were convicted of conspiring to bribe an Iraqi foreign public official to secure infrastructure contracts for their construction company. One, a middleman who facilitated the bribe, was sentenced to four years’ imprisonment. The other two, directors of the company, were sentenced to imprisonment for three years and four months and fined A$250,000 each.

Exporters need to be aware of the risks of bribery and corruption in international transactions and requirements to comply with laws in multiple jurisdictions. Bribery committed outside Australia can be captured under Australian laws and have serious consequences. Export Finance Australia provides useful links to assist exporters in understanding their obligations to comply with relevant laws against bribery and corruption. 

The United States (US) Securities Exchange Commission (SEC) is the regulator for companies that are listed in, or raise capital in, the US. It frequently brings enforcement action against companies for 'books and records' offences related to foreign bribery under the Foreign Corrupt Practices Act. This resource includes an annotated list of enforcement actions under this Act.

Companies that have paid bribes can try to undo some of the harm through reparations. Enforcement agencies might also compel reparations to be made. This article outlines some of the forms that reparations can take and provides case studies from past enforcement actions.