As part of its efforts to strengthen its anti-bribery and corruption enforcement framework and comply with international obligations, the Australian government has introduced two new criminal offences relating to “false accounting” into the Commonwealth Criminal Code.
On 29 February 2016, Royal Assent was given to the Crimes Legislation Amendment (Proceeds of Crime and Other Measures) Act 2016. The Act, among other things, introduces two new offences relating to the “false dealing with accounting documents”.
It is now an offence for a person to:
• make, alter, destroy or conceal an accounting document, or
• fail to make or alter an accounting document that the person is under a duty to make or alter,
where the act or omission is done with the intention that the person’s conduct would facilitate, conceal or disguise the receiving or giving of a benefit that is not legitimately due, or a loss that is not legitimately incurred.
The legislation introduces a second offence, which is exactly the same as the first except that it applies where a person is reckless as to whether the making, alteration, destruction or concealment of the document (or the failure to make or alter the document) facilitates, conceals or disguises the relevant benefit or loss.
The offences apply to “accounting documents”. These are given a broad definition and include:
- any account, record or document made or required for any accounting purpose;
- any register under the Corporations Act 2001 (Cth); and
- any financial report or financial records within the meaning of that Act.
It is not necessary for the prosecution to prove that the defendant, or another person actually received or gave a benefit or that any loss was incurred. It is also not necessary to prove that the defendant intended that a particular person receive or give a benefit, or incur a loss.
For individuals, the first offence of false dealing with accounting documents carries a penalty of 10 years’ imprisonment or a fine of AUD1.8 million (or both).
Meanwhile, corporations found to be liable face a penalty, which is the greater of:
- AUD18 million;
- three times the value of the benefit obtained by the body corporate and any related body corporate from the offence; or
- 10% of the annual turnover of the body corporate during the previous 12 months.
The penalties for the second offence, which has the lower requisite state of mind of recklessness, are half of these amounts.