Greasing the Wheels or Slipping on the Slope? The Facilitation Payments Defence in Australia

What you need to know

• Australia stands as one of the few jurisdictions still holding on to the facilitation payments (also known as 'grease payments') defence—a defence to the foreign bribery offence that allows, in certain circumstances, minor payments to foreign officials to expedite routine government actions.
• There are significant risks in relying on the availability of the defence: such payments may be illegal under the laws of foreign countries; there is little Australian judicial guidance on the defence; and recent Australian Government guidance strongly discourages Australian companies from making facilitation payments.

What you need to do

• For companies operating across borders, understanding the facilitation payments defence and its limitations is essential.

Overview of the facilitation payments defence

Bribery of foreign public officials

Under Australian law, bribing a foreign public official constitutes an offence pursuant to section 70.2 of the Schedule to the Criminal Code Act 1995 (Cth) (the Criminal Code). Individuals convicted of this offence face a maximum penalty of 10 years’ imprisonment and/or a fine of up to 10,000 penalty units (currently equivalent to AU$3.3 million).

For corporations, the maximum financial penalty is determined as the highest of the following:

• 100,000 penalty units (currently AU$33 million);
• if the value of the benefit the body corporate directly or indirectly obtained can be determined – 3 times the value of that benefit; or
• if the court cannot determine the value of that benefit – 10% of the annual turnover of the corporation and related bodies corporate during the 12 months ending at the end of the month in which the conduct constituting the offence occurred.

The High Court of Australia in The King v Jacobs Group (Australia) Pty Ltd (2023) 411 ALR 202 clarified that the "value of the benefit" is the gross benefit obtained from the conduct, not the net benefit. See Ashurst's publication on this decision, here.

Since 8 September 2024, unless they can demonstrate that they had 'adequate procedures' in place to prevent the commission of foreign bribery, companies will be criminally liable where an 'associate' of the company (meaning its officers, employees, agents, contractors, other service providers, or others who perform services for or on behalf of the company) has committed such bribery for the profit or gain of the company (s 70.5A of the Schedule to the Criminal Code). Importantly, the company may be held liable even if it was not involved in or authorised the offending conduct. See Ashurst's publication on this additional foreign bribery offence, here.

What is a facilitation payment?

Under section 70.4 of the Criminal Code, a facilitation payment is a complete defence to the offence of bribing a foreign public official where:

• the value of the benefit offered or paid (that is, the alleged 'bribe') was of a minor nature;
• the person's conduct was engaged in for the sole or dominant purpose of expediting or securing the performance of a routine government action of a minor nature; and
• as soon as practicable after the conduct occurred, the person made a record of the conduct.

A 'routine government action' is an action of a foreign public official that is ordinarily and commonly performed by that official. Examples include granting a permit or licence that qualifies a person to do business in a foreign country, processing government papers such as a visa or work permit, scheduling inspections associated with contract performance or related to the transit of foods, providing phone service, power and water supply, or loading and unloading cargo.

A routine government action does not include decisions about awarding new business, continuing existing business with a particular person, or about the terms of a new or existing business.

The legislation does not prescribe what value might be regarded as 'minor', or whether the government action involved is 'of a minor nature' – that falls to be assessed in the circumstances, as does the purpose of offering or paying the relevant benefit. There are also a series of requirements around the record made of the conduct, in order for the defence to be available. That record of the conduct must set out the value of the benefit concerned, the date it was given, details identifying the foreign public official involved, and particulars of the routine government action that was sought to be expedited or secured by the conduct.

Lack of Australian judicial guidance

To date, no Australian Court has considered the facilitation payments defence, meaning there is no Australian judicial guidance on its interpretation.

Given the lack of Australian case law, it is of interest to consider how US Courts have approached the similar facilitation payments defence (or exception) available under the Foreign Corrupt Practices Act 1977 (FCPA). Generally, that exception has been construed narrowly, applicable to routine non-discretionary governmental actions¹  that would occur even without payment, but not to payments that might affect the outcome of an official's decision. So, for example, a payment to accelerate processing of an application may qualify for the exception, but not a payment to influence the outcome of the application.

Australian government discourages use of facilitation payments

It is a defence to the newly introduced corporate 'failure to prevent foreign bribery' offence, if the company had in place, 'adequate procedures' to prevent such bribery. On 28 August 2024, the Australian Government published guidance on what might comprise adequate procedures. In its guidance, the Australian Government strongly discourages Australian companies from making facilitation payments, pointing out that although the conduct is permissible under Australian law (provided the specific requirements of the defence are satisfied), such payments may be illegal under the law of foreign countries.

In 2018 an Australian Senate Committee conducting an inquiry concerning Australia's foreign bribery framework recommended that the defence be abolished (allowing for a transition period) but this recommendation was not taken up in subsequent amendments to the framework. Despite this, Australian guidance remains not to engage in facilitation payments.

International standards and trends

Global standards

Globally, Australia remains one of the few jurisdictions to retain a facilitation payments defence. In other jurisdictions (such as the United Kingdom, Canada and Brazil, to name a few), facilitation payments are not recognised as exceptions to bribery offences and are illegal.

International bodies like the OECD and the United Nations Convention against Corruption also discourage or prohibit facilitation payments. The OECD, for example, has recommended that member states encourage companies to prohibit or discourage the use of small facilitation payments in internal company controls, ethics and compliance programmes or measures.

As a result, Australian companies with global operations spanning jurisdictions where no exception exists for facilitation payments, may choose to align their internal policies with these international standards to ensure consistency and avoid conflicting obligations.

United States

As noted above, the United States allows facilitation payments as an exception to the prohibition on foreign bribery. The FCPA permits payments to foreign officials to expedite or to secure the performance of routine government action. It lists the same examples of 'routine government action' that appear in subsection 70.4(2) of the Australian Criminal Code.

On 9 June 2025, after a February 2025 executive order pausing FCPA enforcement, the Department of Justice released guidance regarding its approach to the enforcement of the FCPA, Guidelines for Investigations and Enforcement of the Foreign Corrupt Practices Act (DOJ Guidelines). The guidelines emphasise a prosecutorial focus on prioritising serious misconduct rather than "routine business practices in other nations". The guidelines state that prosecutors ought to be mindful of the facilitation payments exception, and that investigations and prosecutions should not be focused on alleged misconduct involving routine business practices or the type of corporate conduct that involves de minimis, generally accepted business courtesies.

As discussed above, the US has historically had a narrow interpretation of its facilitation payments exception. However, the DOJ Guidelines suggest that the current US administration may treat the exception as having a wider scope going forward, with the focus instead on cases bearing "strong indicia of corrupt intent" such as substantial bribe payments, sophisticated efforts to conceal bribery schemes, and fraudulent conduct in furtherance of a bribery scheme.

Arguments for and against the facilitation payments defence

The case for retention:

• Practical realities: some sectors, particularly mining and SMEs operating in high-risk jurisdictions, argue that facilitation payments are a necessary evil—without them, business grinds to a halt.
• Distinction from bribery: some claim these payments don’t involve discretion or confer improper advantage, and thus lack the moral taint of bribery.
• Competitive disadvantage: there’s concern that abolishing the defence would leave Australian companies at a competitive disadvantage.

The case for abolition:

• No real difference: critics argue that facilitation payments are simply small, institutionalised bribes, blurring the line between legal and illegal conduct.
• Corrosive effect: Allowing such payments sends a mixed message to employees and the market.
• Compliance issues: the lack of judicial guidance makes compliance a guessing game, increasing legal and reputational risk.

There are also practical hurdles in allowing for facilitation payments:

1. Administrative burden and recordkeeping challenges: The statutory defence requires detailed and prompt recordkeeping of facilitation payments. Failure to maintain the necessary documentation, with all of the details specified by the legislation, makes it difficult to rely on the defence if challenged.
2. Operational consistency: Where Australian businesses operate in multiple jurisdictions, some of which prohibit facilitation payments, a single global policy prohibiting facilitation payments can assist to ensure operational consistency and avoid the complexity of applying different standards in different countries.

Key takeaways

In summary, the lack of Australian judicial guidance on the facilitation payments defence and the international trend of abolishing that defence (with the United States the most prominent exception) leaves businesses in a precarious position.

The key takeaways for businesses are:

• Treat facilitation payments as high-risk, both legally and reputationally
• Ensure robust internal policies and training – when in doubt, don't pay
• Prompt and robust record-keeping is essential

Want to know more?

• The King v Jacobs Group: High Court opens the door for larger foreign bribery penalties (3 August 2023)
• A long time coming – Australia's new 'failure to prevent' foreign bribery offence (4 March 2024)

Authors: Rani John, Partner; Carla-Rose Brett, Lawyer, and Poppy Gammon, Graduate.