Criminal penalties for corporate and financial sector misconduct are set to double in some cases and civil penalties due to increase by more than tenfold for corporations and more than fivefold for individuals, as the Coalition Government plans to introduce legislation into the Parliament next week, further protecting Australian consumers.
These significantly strengthened sanctions overhaul Australia's penalties for white collar crime, include increases to penalties that haven't changed in more than twenty years, bring our penalties closer to those in other leading international jurisdictions and, most importantly, provide greater protection for consumers against financial and corporate sector misconduct.
Based on recommendations from the Australian Securities and Investments Commission (ASIC) Enforcement Review Taskforce which follows our Financial System Inquiry, the bill significantly increases maximum penalties for both criminal and civil wrongdoing, while also expanding the range of contraventions subject to civil penalties.
In relation to maximum criminal penalties:
| OLD | NEW |
|---|---|
| Individuals | |
| 5 years imprisonment and/or $42,000 |
10 years imprisonment and/or the greater of $945,000 or three times the benefit gained/loss avoided |
| Corporations | |
| $210,000 | The greater of $9.45 million or three times the benefit gained/loss avoided or 10 per cent of annual turnover |
In relation to maximum civil penalties:
| OLD | NEW |
|---|---|
| Individuals | |
| $200,000 | The greater of $1.05 million or three times the benefit gained/loss avoided |
| Corporations | |
| $1 million | $10.5 million or three times the benefit gained/loss avoided or 10 per cent of annual turnover (capped at $210 million) |
Additionally, the Government is giving the courts the power to seek additional remedies to strip wrongdoers of profits illegally obtained or losses avoided from contraventions resulting in a civil penalty proceeding.
This bill builds on actions the Government has already taken including providing $70.1 million in additional funding to ASIC to bolster its enforcement capabilities, appointing a new ASIC Chair and a second Deputy Chair with a focus on enforcement and establishing a new one-stop-shop for external dispute resolution.
As the legislation includes changes to the Corporations Act, its introduction requires the agreement of at least three states or two states and one territory. The Government is actively seeking this agreement.