AUSTRALIA Law and Practice Contributed by: Tobin Meagher, David Benson, Tessa Trend and William Stefanidis, Clayton Utz
• wholly outside the state, but the offence has an effect in the state. Liability for a breach of directors’ duties under the Corporations Act will arise if the relevant person is a director or officer of an Australian-incorporated com - pany. If the relevant person is a director or officer of a foreign company, the Corporations Act will only have extraterritorial reach over that individual in limited cir - cumstances, including where the conduct occurred in connection with the foreign company carrying on business in Australia (Section 186). 3.3 Corporate Liability Under Australian law, a company, as a separate legal entity, can be convicted of bribery offences. Compa - nies and individuals can also be held liable for the same offence. The Criminal Code has specific provisions which address corporate criminal responsibility. Under these provisions, for a company to be criminally responsible for an offence, the physical and mental (or “fault”) ele - ments must be attributed to the company as follows: • the physical element is attributed if that element was committed by an employee, agent or officer of the company acting within the actual or apparent scope of that person’s employment or within their actual or apparent authority; and • the key fault element (intention) is attributed if the company expressly, tacitly or impliedly authorised or permitted the commission of the offence. The means by which that may be established include proving that a “high managerial” agent intentionally engaged in the relevant conduct or proving that a corporate culture existed that directed, encour - aged, tolerated, or led to non-compliance with the relevant provision. In addition to these general attribution rules, since 8 September 2024, companies have strict liability for failure to prevent foreign bribery by their associates unless they can prove a defence of adequate proce - dures: see 2.1 Bribery . In other Australian jurisdictions, generally speaking, a corporation may be found guilty of a criminal offence
either on the grounds of vicarious liability or on the basis that the person who committed the acts and had the requisite mental state was the directing mind and will of the company. In the M&A context, a successor entity will not be held liable for offences by the target entity that occurred prior to the merger or acquisition. However, if the transaction was effected by a share sale, the target entity will remain liable even after the acquisition. Two specific defences are available for the offence of foreign bribery under Section 70.2 (1) of the Criminal Code. Both are very narrow. The first defence (Section 70.3) is enlivened where the provision of the benefit is permitted or required by a written law of the place where the conduct occurred. The second defence (Section 70.4) is in respect of facilitation payments. If the value of the benefit was of a minor nature, and made to expedite or secure the performance of a “routine government action” of a minor nature, and a record of the details of the con - duct was created as soon as practicable, a defendant will have a good defence against liability. Routine gov - ernment action excludes a decision about the award - ing of new business, continuing existing business, or the terms of new or existing business. Rather, it is an action commonly performed by the foreign public offi - cial, such as granting permits or licences, processing government papers or providing access to utilities. While Australia had been considering removing the facilitation payment defence for some time, it was retained in the Combatting Foreign Bribery Act. None - theless, Australian authorities recommend avoiding such payments, given that they are often difficult to distinguish from bribes. 4. Defences and Exceptions 4.1 Defences In respect of the new failure to prevent foreign brib - ery offence, Section 70.5A(5) of the Criminal Code provides that this offence will not apply if the body corporate demonstrates it had adequate procedures
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