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Thursday, 14 June 2007
Page: 4


Mr RUDDOCK (Attorney-General) (9:15 AM) —I move:

That this bill be now read a second time.

The International Trade Integrity Bill 2007 continues Australia’s tough stance against foreign bribery and contravention of United Nations sanctions.

Australia is a significant player in international trade.

We have a reputation as a corruption-free trading partner and an important participant in enforcing UN sanctions against states which seek to avoid their international responsibilities.

This bill creates new offences and penalties against those who seek to get around UN sanctions and further restricts bribery of foreign officials.

The International Trade Integrity Bill 2007 contains the legislative changes arising from the recommendations made by Commissioner Terence Cole QC, who chaired the inquiry into certain Australian companies in relation to the UN oil for food program. Commissioner Cole’s inquiry led the world as an open, transparent and independent public inquiry with royal commission powers into corruption of the UN oil for food program in Iraq.

The report of the Cole inquiry was tabled in parliament on 27 November 2006, with five principal recommendations.

On 3 May 2007, I presented the government’s response to parliament on recommendations 1 to 3 of the report.

The bill in fact goes further than the Cole inquiry recommendations, which focused on Australian law in the context of an Iraqi sanctions regime.

The government considers that Commissioner Cole’s recommendations can apply to all UN sanctions enforced in Australia regardless of what countries or goods they apply to.

Enforcement of UN Sanctions

The bill introduces a new offence to the Charter of the United Nations Act 1945 for contravening a Commonwealth law that enforces UN sanctions, with severe penalties as recommended by Commissioner Cole.

The bill also increases penalties for existing offences for acting in contravention of UN Security Council sanctions relating to terrorist financing.

The bill introduces a separate criminal offence for providing false or misleading information in connection with the administration of a UN sanction enforcement law.

Companies and their officers must certify the accuracy of information provided in connection with trading activities subject to UN sanctions.

If false or misleading information is provided it will be grounds for invalidating any authorisation to conduct business under UN sanction regimes.

As Commissioner Cole recommended, criminal consequences can also apply.

Agencies that administer UN sanction regimes in Australia will be granted an information-gathering power for the purpose of investigating whether companies and individuals are complying with UN sanctions.

Customs Act 1901

The bill introduces new offences to the Customs Act for individuals or companies who import or export prohibited goods without proper authorisation.

These offences carry identical penalties to the new offences in the Charter of the UN Act, to effectively deter and punish any contravention of UN sanctions by Australian companies or individuals.

Applications for authorisation to import or export UN sanctioned goods will be made on approved forms and false or misleading applications will attract criminal liability and invalidate authorisations.

Bribery of Foreign Officials

Criminal Code Act 1995

The bill amends the Criminal Code Act 1995 to clarify the circumstances in which a payment to a foreign public official is not a bribe.

In future, a payment to a foreign public official will be allowed only if that payment is required or permitted by the written law of the place or country that governs the foreign official.

This will be so regardless of the outcome of the payment or whether it was purported to be necessary for any other reason.

Income Tax Assessment Act 1997

The bill will similarly amend the Income Tax Assessment Act 1997 to provide that an amount paid to a foreign public official is not a bribe only in circumstances where it was required or permitted by the written law that governs the foreign public official.

The failure to obtain the advantage sought by the bribe will not be relevant to determining whether a benefit paid is a bribe to a foreign public official.

The definition of ‘facilitation payment’ in the Income Tax Assessment Act 1997 will also be aligned with the definition in the Criminal Code Act 1995.

Facilitation payments are tax deductible and are not a bribe to a foreign public official.

This will clarify the current law by ensuring that a benefit paid to a foreign public official will be considered a facilitation payment only if it is minor in value and for the sole or dominant purpose of securing a routine government action of a minor nature.

Consultation

These are significant changes to the law but they accord with common sense.

Australian exporters and importers must obey sanctions and not make false and misleading statements.

To inform the public about these changes the government will commence a consultation program, focusing particularly on the financial sector and those businesses importing and exporting goods and services.

To allow sufficient time for this consultation to take place, amendments to the Charter of the UN Act and to the Customs Act will commence on a day to be fixed by proclamation or six months after the bill receives the royal assent.

The government will also refer the bill to the Senate Legal and Constitutional Affairs Committee for consideration.

The government is committed to promoting a culture of ethical dealing in connection with UN sanctions and international trade.

Legislation alone cannot accomplish this and it falls on Australian businesses to maintain their reputation of ethical dealing and integrity. Australia and our trading partners will benefit from seeking to eliminate the cancer of corruption in international trade.

Debate (on motion by Ms Plibersek) adjourned.