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The March implementation of new false accounting legislation has led to significant implications for Australian business, according to Jones Day.
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New accounting laws to affect Australian business, says leading law firm
23 March 2016
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On 23 February, the Federal Parliament passed into law the Crimes Legislation Amendment (Proceeds of Crime and Other Measures) Bill 2016, which sought to amend the federal criminal code and prohibit the making, altering, destroying or concealing of an accounting document;
(i) With the intention to facilitate, conceal, or disguise the giving or receipt of a payment not legitimately due to a person; or
(ii) Reckless to the fact that doing so facilitates, conceals or disguises the giving or receipt of such a payment.
The amendments themselves serve as a response to increasing international pressure and scrutiny on Australia’s own anti-corruption legislation.
According to prominent global law firm Jones Day, there “can be no doubt that these amendments will have serious ramifications for Australian business”.
“By legislating that an offence under the new false accounting provisions may be established without the need to prove that a bribe was actually given or received – and that the Director of Public Prosecutions only need establish that a corporation was reckless – Australia is likely to follow the US trend of focusing on the easier-to-prove false accounting offences,” the firm stated.
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“As a result, we can expect a significant increase in prosecutorial action against Australian corporations and individuals.”
According to Jones Day, any accounting document (broadly defined) that either intentionally or recklessly facilitates, conceals or disguises payments not legitimately due to the recipient will trigger potential liability under the relevant provisions.
Fellow firm Clayton Utz also weighed into debate regarding the new legislation, urging Australian companies to consider reviewing their current accounting protocols, implementing stricter protocols if necessary, as well as ensuring that an appropriate bribery and corruption compliance regime is in place.
“Directors, financial executives and other relevant company officers need to be alive to these changes as substantial criminal offences will apply to them individually where the company has engaged in illegal or improper transactions,” the firm concluded.
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