Financial Crime World

New Era of White-Collar Crime Regulation in Australia: Reforms, Enforcements, and Notable Cases

Over the past decade, Australian regulators have come under increasing scrutiny for their handling of white-collar crimes, particularly in the context of large corporations and financial institutions. This pressure has sparked a wave of proposed legislative reforms and increased enforcement activity.

Legislative Changes and Proposed Reforms

Financial Accountability Regime (FAR)

In response to the Royal Commission into the Banking, Superannuation and Financial Services Industry (the “Financial Services Royal Commission”) in 2018, the Australian government introduced the Financial Accountability Regime (FAR). This initiative comes with enhanced accountability measures and extended obligations beyond the banking sector. Key aspects of the FAR include:

  • Stronger penalties for non-compliance
  • Various enforcement mechanisms
  • Oversight by the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC)
  • Expected commencement dates in late March 2024 for the banking industry and late March 2025 for the insurance and superannuation sectors

Deferred Prosecution Agreement (DPA) Scheme

The proposed Deferred Prosecution Agreement (DPA) scheme aims to encourage companies to self-report potential wrongdoings and negotiate a settlement before formal charges are filed. While the coalition government attempted to implement the DPA scheme in 2019, the May 2022 Federal Election put its future on hold. The Labor Party, which came to power in the election, has yet to announce its stance on this issue.

National Anti-Corruption Commission (NACC)

As part of its election campaign, the Labor Party pledged to establish a National Anti-Corruption Commission (NACC) to tackle corruption involving Commonwealth public officials. The NACC commenced operations on 1 July 2023 and has jurisdiction over both public officials and entities providing goods and services to the Commonwealth. During its first three months, the NACC received 813 referrals, resulting in 491 investigations.

Recent Regulatory and Enforcement Activity

Australian Securities and Investments Commission (ASIC)

ASIC has revised its enforcement approach, focusing on consumer protection and market integrity. Some of its key priorities for the coming years include:

  • Addressing greenwashing in financial products
  • Enhancing whistleblower protection
  • Ensuring adequate disclosures from directors

Australian Competition and Consumer Commission (ACCC)

The ACCC’s priorities extend beyond cartel conduct, product safety, and consumer vulnerability. New areas of concern include:

  • Environmental and sustainability claims
  • Scams
  • Competition issues involving digital platforms and essential services

Australian Transaction Reports and Analysis Centre (AUSTRAC)

AUSTRAC has taken a more active role in enforcement actions against non-compliant entities and signed Memorandums of Understanding with foreign regulators to improve collaboration and information sharing.

Significant White-Collar Crime Cases

A landmark judgment in 2023 by the High Court of Australia ruled that the maximum penalty for corporate foreign bribery offenses should be based on the “gross” value of the benefits obtained, rather than the “net” value. This case, The King v Jacobs Group (Australia) Pty Ltd, marked a significant shift in corporate foreign bribery penalties and could have implications for other criminal and civil penalty provisions.

As Australia’s regulatory landscape evolves, white-collar crime enforcement and legislative reforms will continue to be a major focus for the nation’s financial regulators, lawmakers, and the public in the coming years. These initiatives reflect a more robust approach to holding corporations and their executives accountable for their actions and fostering greater transparency and integrity within Australian businesses.