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Australian regulatory bodies are specifically charged with their remit and authority by statutes and are reliably impartial and independent to political changes. They oversee the enforcement of Australian laws and take action to investigate and respond to unlawful conduct.
The most prominent for businesses are:
- the Australian Competition and Consumer Commission (ACCC), which monitors competition, fair trading and consumer protection issues;
- the Australian Securities and Investments Commission (ASIC) which regulates Australia’s financial markets, corporations and financial services and is generally seen as the Australian corporate police, and
- the Australian Taxation Office (ATO).
The regulators have been known to work with the police force to investigate and enforce Australian laws.
Australia’s regulators investigate matters that are also the subject of regulatory investigation or enforcement abroad, such as global cartels, conduct arising from firms headquartered in other countries, and multi-regulator investigations.
ASIC and the ACCC have wide powers to investigate suspected contraventions of the applicable legislation, including to compel individuals or corporations to provide information or produce documents. They can summon officers of corporations to answer questions to assist their investigations before any proceedings have commenced (see further below).
Once ASIC or the ACCC has concluded an investigation, and it is satisfied that it has sufficient evidence of a suspected contravention, it may decide to take enforcement action. The action each is empowered to take will depend on the particular contravention and provision of the relevant legislation.
Relevantly, ASIC or the ACCC may determine to institute proceedings to address more serious civil contraventions including breaches of civil penalty provisions or criminal offences. Alternatively, and often in response to less serious misconduct, ASIC and the ACCC may address contraventions through disciplinary action, disqualification orders, restricting certain activities, issuing public notices and requiring the implementation of training and compliance programs. They have limited ability to impose fines without first prosecuting a case to judgment in court. Accordingly, ASIC has been known to use its position as the provider of Australian Financial Services Licences to impose conditions on the licence or compel entry into an enforceable undertaking to obtain early remedial action. It can then move to more severe measures such as cancellation or suspension of the licence.
Criminal proceedings
Once an investigation has reached a point where ASIC or the ACCC take a view a crime is likely to have been committed, the matter can be referred to the Commonwealth Director of Public Prosecutions (CDPP), which is the independent prosecuting body for federal matters. The CDPP will assess the evidence available against its Prosecution Policy as to reasonable prospects of conviction and public interest; it may then commence criminal proceedings.
Matters which ASIC or the ACCC may decide to refer to the CDPP can include insider trading, offences relating to fraud and false or misleading documents, falsification or concealment or alteration of financial records, and cartel conduct. ASIC is also authorised to prosecute some minor regulatory offences on its own behalf, such as breaching financial reporting obligations.
If the CDPP elects to commence criminal proceedings against an individual or company, the litigation follows the typical steps that the CDPP would take in other criminal prosecutions. The criminal burden of proof, namely beyond all reasonable doubt, applies. An individual or company may also seek to engage in charge negotiations with the CDPP.
Generally, an individual accused of a crime in Australia enjoys a right to silence and the prosecution must establish the elements of the offence without the assistance of the accused. However, certain legislation has been enacted which partially abrogates that right to silence.
For example, pursuant to certain sections of the Australian Securities and Investments Commission Act 2001 (Cth), ASIC can require attendance at an examination to answer questions by a regulator and the production of books and information by both individuals and companies.
It is a crime to refuse to answer a question on grounds that it may tend to incriminate a person in circumstances where an investigating body compels an individual to attend an examination and answer questions. The use of the answers to those questions is heavily regulated, however in some circumstances, those answers can be given to prosecuting bodies to aid in the preparation of criminal proceedings for those crimes.
Civil proceedings
Civil litigation brought by ASIC or the ACCC follows a similar process to litigation brought by private parties.
ASIC or the ACCC may utilise litigation to pursue a wide range of outcomes designed to address and deter misconduct. This may include the imposition of civil penalties for contraventions which may require the payment of a sum of money. The civil penalty regime is intended to provide an easier route for regulators to obtain outcomes without satisfying the higher burdens of proof in criminal cases and enduring lengthier criminal processes.
It is not uncommon for private suits to follow regulatory enforcement, such as class actions.
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