A new tool in the fraud and anti-corruption kit

In brief

The Federal Government has established a new Fraud and Anti-Corruption Centre to deal with allegations of white-collar crime. Partner Rachel Nicolson, Senior Associate Tessa Meyrick and Associate Freya Dinshaw consider the impact of the new federal body and the changing enforcement landscape in Australia.

A new centre

On 31 July 2014, the Australian Federal Police (AFP) launched the Fraud and Anti-Corruption Centre (FAC Centre), a new 'multi-agency' initiative designed to strengthen law enforcement capability and provide a coordinated approach to federal investigations and prosecutions. The creation of the FAC Centre allows for unprecedented information-sharing between government bodies and has been described as marking 'a new era in the approach to dealing with fraud and corruption at a federal level'¹.

Governed by a federal multi-agency Memorandum of Understanding, the FAC Centre brings together expertise and intelligence from the ATO, ASIC, Australian Crime Commission, and numerous government departments including Defence, Foreign Affairs and Trade, Customs and Border Protection, Human Services, and Immigration. The FAC Centre will be housed in the AFP's headquarters in Canberra, and resourced by AFP officers and secondees from other member agencies.

The main functions of the new centre include:

• receiving and classifying complaints before referring them to state-based investigation teams;
• providing 'whole-of-government' fraud investigations training; and
• coordinating intelligence between agencies, local intelligence initiatives and financial intelligence agencies, such as AUSTRAC.

The FAC Centre will focus on matters involving multiple or international jurisdictions, and particularly significant criminal matters where additional strategic input is required. The AFP has produced a list of criteria for referring certain types of matters to the FAC Centre, which include:

• serious and complex fraud and corruption cases;
• allegations involving foreign bribery; and
• cases that meet minimum time and dollar value requirements, or involve misconduct by Australian government employees.

Significance for business

Until now, the AFP has had primary responsibility for investigating and enforcing breaches of Australia's Criminal Code, particularly in respect of fraud, bribery and corruption. ASIC has also played a role where alleged criminal activity coincides with a breach of the Corporations Act 2001 (Cth) (for example, a breach of a director's duty).

While these roles remain unchanged, the triaging and coordinating functions of the FAC Centre allow the AFP, ASIC and other government bodies to work together, rather than in parallel (or in conflict), with each body bringing its respective expertise and intelligence to bear in a single investigation.

While the FAC Centre falls short of calls for a federal commission against corruption (modelled on the Victorian and NSW approaches), it is consistent with an increased effort by successive Australian governments to overcome the challenges of law enforcement in the anti-bribery and corruption space. Together with the federal 'whistleblower protection' laws introduced under the previous Labor government last year (read more here), the FAC Centre is likely to lead to an increase in investigative activity and enforcement of fraud, bribery and corruption allegations, due to increased resources and more efficient processing. The new centre may also lead to less duplication in investigation by government agencies with overlapping powers, therefore providing more clarity and certainty for businesses who are investigated in connection with alleged wrongdoing.

Conclusion

This development is a positive step toward a more comprehensive, national framework for dealing with allegations of white-collar crime. The new FAC Centre should be well placed to deal with allegations more efficiently, diligently, and with greater procedural clarity from the perspective of businesses and individuals facing investigation. The new intelligence-sharing arrangements are also likely to improve the ability of authorities to adduce evidence to support claims of wrongdoing, as well as increasing the number of investigations and prosecutions generally.

Businesses should ensure that they have robust internal systems in place to protect against potential breaches of national fraud, anti-corruption and anti-bribery laws, including setting up comprehensive record keeping measures and due diligence processes, in order to prepare an increasingly active enforcement environment in Australia.