Modelled on regimes already in place in Britain and the United States that have helped transform business culture, the legislation will also provide incentives for firms to come forward and work with government agencies.
"Corporate crime is estimated to cost Australia more than Aus$8.5bn each year," Justice Minister Michael Keenan said in introducing the changes.
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"It hurts our businesses, hinders economic growth and jeopardises Australia's international reputation."
Keenan said the reforms make investigating and prosecuting offenders simpler while strengthening offences for companies operating offshore.
A new crime of failing to prevent foreign bribery will be created and amendments made to broaden existing foreign bribery laws.
Seven years to resolve cases
The legislation also establishes a "deferred prosecution agreement scheme", providing incentives for companies to report wrongdoing themselves.
Successful corporate crime prosecutions by Australia have been few and far between, with detecting and responding to bribery proving to be notoriously difficult.
"It is inherently challenging to investigate - there is often no readily identifiable victim, evidence is often offshore, and bribes can be concealed in legitimate business transactions," said Keenan.
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The Organisation for Economic Co-operation and Development estimates the average time to resolve foreign bribery cases is more than seven years.
A recent success saw three Australian men sentenced to four years in jail in September for conspiracy to bribe a public official in Iraq to gain contract work for their engineering and construction company Lifese.
The new laws follow the government last year boosting funding to bolster its fraud and anti-corruption unit while establishing a Serious Financial Crimes Taskforce.