Anti-Bribery Compliance for Australian Financial Services: Criminal Code Division 70, Adequate Procedures Defence, and the 2024 Foreign Bribery Reforms

The Crimes Legislation Amendment (Combatting Foreign Bribery) Act 2024 introduced the most significant change to Australia's anti-bribery regime in two decades: a new corporate offence for failure to prevent foreign bribery. For financial services firms operating internationally, this means anti-bribery is no longer just a criminal law concern - it's a compliance program obligation with a direct defence tied to having adequate procedures in place.

Criminal Code Division 70: Foreign Bribery Offences

Division 70 of the Criminal Code Act 1995 criminalises the bribery of foreign public officials. The offence applies to any person (individual or body corporate) who provides, offers, or promises a benefit to a foreign public official with the intention of influencing them in the exercise of their duties to obtain or retain business or a business advantage.

Penalties

Key elements of the offence:

• Broad definition of "benefit": money, gifts, hospitality, favourable treatment, employment offers, charitable donations made at an official's request
• Foreign public official: includes employees of government-owned enterprises, international organisations, and anyone performing a public function
• No "facilitation payment" defence: Australia eliminated the facilitation payment defence in 2019 - any payment to influence an official is potentially an offence
• Extraterritorial reach: applies to conduct occurring wholly outside Australia if the person is an Australian citizen, resident, or incorporated in Australia

The 2024 Reforms: Failure to Prevent Foreign Bribery

The Crimes Legislation Amendment (Combatting Foreign Bribery) Act 2024 introduced section 70.5A of the Criminal Code - a new offence for bodies corporate that fail to prevent an associate from bribing a foreign public official for the benefit of the body corporate.

How the New Offence Works

• Trigger: An "associate" (employee, agent, contractor, subsidiary, or any person performing services for the body corporate) commits a foreign bribery offence
• Liability: The body corporate is automatically liable unless it can prove it had adequate procedures in place to prevent the conduct
• Reversal of proof: The prosecution does not need to prove the company was complicit - the company must prove it took reasonable steps
• Same penalties: Maximum of $22.2M, 3x the benefit, or 10% of annual turnover

This is modelled on the UK Bribery Act 2010 "failure to prevent" offence and represents a fundamental shift: companies can no longer claim ignorance. The question is whether your anti-bribery program was adequate before the conduct occurred.

The Adequate Procedures Defence

The adequate procedures defence is the single most important concept for compliance teams to understand. The Attorney-General's Department has published guidance on what constitutes "adequate procedures," drawing on six core principles:

1. Risk Assessment

The organisation must conduct a bribery and corruption risk assessment that is proportionate to its size, operations, and exposure. For financial services, this means:

• Country risk assessment for every jurisdiction of operation
• Product/service risk assessment (trade finance, correspondent banking, insurance placement carry higher risk)
• Third-party risk assessment for agents, brokers, and intermediaries
• Transaction risk assessment for high-value or unusual dealings with government-connected entities

2. Third-Party Due Diligence

Adequate procedures require risk-based due diligence on all third parties who act on the organisation's behalf:

• KYC-equivalent checks on agents, consultants, and intermediaries
• Beneficial ownership verification to identify government connections
• Ongoing monitoring of third-party relationships, not just onboarding checks
• Contractual anti-bribery representations and audit rights

3. Gifts, Hospitality, and Entertainment Policies

• Clear monetary thresholds requiring pre-approval (e.g., gifts over $200, hospitality over $500)
• Register of all gifts given and received, especially involving government-connected persons
• Prohibition on gifts during active procurement or licensing processes
• Charitable donations and sponsorship policies with anti-bribery controls

4. Training and Communication

• Role-based training: higher risk roles (business development, procurement, government relations) receive more intensive training
• Board and senior management training on personal liability
• Training records maintained as evidence of adequate procedures
• Regular communications reinforcing the anti-bribery policy

5. Whistleblower Channels and Reporting

• Anonymous reporting channels accessible to employees and third parties
• Protection aligned with the Corporations Act 2001 Part 9.4AAA whistleblower protections
• Investigation procedures for reported concerns
• Board reporting on whistleblower reports and investigation outcomes

6. Monitoring, Review, and Continuous Improvement

• Regular audits of the anti-bribery program
• Data analytics to detect red flags (unusual payments, pattern of gifts, agent commissions)
• Annual review and update of the risk assessment
• Remediation tracking for identified weaknesses

Domestic Bribery and Secret Commissions

While Division 70 covers foreign bribery, Australian financial services firms must also address domestic corruption risks:

Criminal Code Division 141 - Bribery of Commonwealth Officials

It is an offence to provide or offer a benefit to a Commonwealth public official with the intention of influencing them. Maximum penalty: 10 years imprisonment. This applies to dealings with APRA, ASIC, AUSTRAC, the RBA, Treasury, and any Commonwealth agency.

Secret Commissions Act 1905

This older but still active legislation prohibits secret commissions in commercial dealings - giving or receiving undisclosed payments for favouring a party in a transaction. For financial services, this is relevant to:

• Broker and intermediary commissions that are not disclosed to clients
• Referral fees that influence product recommendations
• Procurement kickbacks from vendors and service providers
• Soft-dollar arrangements that are not properly disclosed

State and Territory Legislation

Each state has its own anti-corruption framework. Financial services firms operating nationally must be aware of bodies such as NSW ICAC, Victoria IBAC, Queensland CCC, and WA CCC, each of which can investigate corruption involving state government dealings.

PEP Screening and AML/CTF Integration

Anti-bribery compliance does not exist in isolation. It intersects directly with your AML/CTF program:

Politically Exposed Persons (PEPs)

AUSTRAC's AML/CTF Rules require enhanced customer due diligence for PEPs. From an anti-bribery perspective, PEP screening serves a dual purpose:

• AML/CTF: identifying customers who may be laundering proceeds of corruption
• Anti-bribery: identifying relationships where bribery risk is elevated because of a counterparty's government connections

Best practice is to extend PEP screening beyond customer onboarding to include:

• Third-party agents and intermediaries
• Joint venture partners
• Beneficial owners of corporate counterparties
• Recipients of sponsorships and charitable donations

Suspicious Matter Reporting

If your AML/CTF monitoring detects transactions that may indicate bribery or corruption (e.g., structuring payments to government-connected entities, unusual agent commissions in high-risk jurisdictions), these should trigger both a suspicious matter report to AUSTRAC and an internal investigation under the anti-bribery program.

Best Practice Anti-Bribery Program Elements

How GoComply Helps with Anti-Bribery Compliance

GoComply's compliance scanner checks your policy documents, risk frameworks, and governance materials against anti-bribery requirements:

• Policy gap detection: Scans for references to Criminal Code Division 70, the adequate procedures defence, gifts and entertainment policies, and third-party due diligence requirements
• AML/CTF integration check: Verifies that your anti-bribery program references PEP screening, suspicious matter reporting, and AUSTRAC obligations
• FAR alignment: Checks whether an accountable person is assigned responsibility for anti-bribery compliance under the Financial Accountability Regime
• CPS 220 integration: Assesses whether bribery and corruption risk is addressed within your enterprise risk management framework
• Training and monitoring evidence: Flags where documentation lacks evidence of training records, risk assessment reviews, or monitoring activity

This article reflects anti-bribery legislation and guidance as of March 2026, including the Crimes Legislation Amendment (Combatting Foreign Bribery) Act 2024. GoComply chatbot covers anti-bribery requirements across Australian financial services regulations.