03 May 2023
5 min read
#White Collar Crime & Regulatory Investigations, #Dispute Resolution & Litigation
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After controversy spanning several governments, the Commonwealth Government passed legislation establishing the National Anti-Corruption Commission (NACC) on 30 November 2022.
The government expects the NACC to begin operations in mid-2023.
The NACC has powers to hold public hearings, commence investigations and refer matters to criminal law enforcement agencies about serious or systemic corrupt conduct involving a public official.
Companies who engage in business with government entities will need to take note, as the NACC can investigate any person or business implicated in corrupt conduct. Companies should take steps to ensure:
Justice Paul Brereton has been appointed as the NACC Commissioner. Most recently, Justice Brereton led the inquiry into allegations of war crimes by Australian soldiers in Afghanistan. Nicole Rose and Ben Gauntlett were appointed deputy commissioners. Gail Furness SC was appointed to act as inspector.
In November 2022, the Commonwealth government introduced legislation to strengthen protections for public sector whistleblowers.
The Public Interest Disclosure Amendment (Review) Bill 2022 aims to ensure that immediate improvements to the public sector whistleblower scheme are in place before the NACC commences in mid-2023.
At the time of writing, the Bill is before the Senate.
The Commonwealth Government is conducting a preliminary assessment on whether to expand the Federal Court of Australia’s jurisdiction to hear corporate criminal offences.
The Federal Court is currently restricted on the types of corporate crime matters it can hear. If the reforms are implemented, it is likely we will see more efficient prosecution of corporate crime and an uplift in the number of corporate criminal matters that are prosecuted by regulators. On 31 October 2022, the Attorney-General’s Department closed consultation on the draft Bill.
ASIC will be focusing on targeting greenwashing, predatory lending and misleading insurance pricing promises this year, as publicly announced in its enforcement priorities for 2023. Other priorities include misconduct involving high-risk products such as cryptocurrency, combatting and disrupting investment scams and manipulation in energy and commodities derivatives markets.
ASIC has provided practical guidance to organisations for the implementation of their whistleblower policies to ensure they are compliant with their statutory obligations. In March 2023, ASIC also published a report on good practices for handling whistleblower disclosures (Report 758) following a targeted review of whistleblower programs in a selection of entities including ANZ, BHP Group Ltd and Woolworth Group Limited.
On the enforcement front, the Commonwealth Director of Public Prosecutions has this year pursued several criminal prosecutions in the courts following referrals from ASIC, including charging:
In February 2023, the Federal Court handed down the largest ever penalty against a company for breaching continuous disclosure laws in its statements in the Australian Securities Exchange, ordering GetSwift Limited (in liquidation) to pay a penalty of $15 million.
GetSwift’s former director, CEO and executive chairman, was ordered to pay a penalty of $2 million and disqualified from managing corporations for 15 years. Another former director was ordered to pay a penalty of $1 million and disqualified for 12 years. These are two of the highest penalties ordered against directors for corporate misconduct. A third former director of GetSwift has been ordered to pay a penalty of $75,000 and was disqualified from managing corporations for two years.
Following Royal Commissions which exposed endemic corruption and money laundering in casino operators, AUSTRAC commenced civil penalty proceedings against the Australian casino operator SkyCity Adelaide in December 2022 for alleged serious and systemic non-compliance with AML/CTF laws. The enforcement action follows the proceedings issued by AUSTRAC against other casino operators including Crown Melbourne, Crown Perth, The Star Pty Limited and The Star Entertainment QLD Limited for alleged serious and systemic non-compliance with Australia’s AML/CTF laws.
In its financial report, The Star Group has provided for fines and penalties of $150 million from alleged non-compliance with AML/CTF laws for the half-year ended 31 December 2022.
Intelligence indicates that criminals are increasingly employing sophisticated methods to integrate illicit funds into the financial system. Recognising this, in October 2022, AUSTRAC released a financial crime guide on Preventing Trade-Based Money Laundering in Australia to assist financial service providers in identifying and reporting suspicious transactions indicative of criminal activity.
Enhancing its supervisory capability, AUSTRAC signed a Memoranda of Understanding (MOU) in early 2023 with two British regulators, the Financial Conduct Authority and His Majesty’s Revenue and Customs. The MOUs will allow AUSTRAC and its UK counterparts to exchange regulatory information to assist their joint anti-money laundering and counter-terrorism financing supervision.
If you have any questions about this quarterly update, please get in touch with a member of our team below.
Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.
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