FCPA Compliance and Ethics Blog

July 17, 2013

Changes to the Canadian Anti-Corruption Regime Are Now in Force

Filed under: Corruption for Foreign Public Officials Act,John Boscariol — tfoxlaw @ 1:01 am
Tags:

Ed. Note-this has been a-buzz from North of the Border, where it was announced that Canada was amending its Canadian anti-corruption law, the Corruptions of Public Officials Act. I ask John Boscariol, a partner at McCarthy Tétrault LLP if he could explain these changes for us. So together with his colleague Brenda Swick they have prepared this guest post. 

On June 19, 2013, Bill S-14: The Fighting Foreign Corruption Act, received Royal Assent, thereby bringing into force the most significant changes to Canada’s anti-corruption legislation, the Corruption of Foreign Public Officials Act (CFPOA), since its inception.

Bill S-14, which passed through both the Senate and House of Commons without amendment, significantly increases the scope of the CFPOA’s prohibitions and enhances the ability of Canadian authorities to prosecute and penalize offenders.

Canadians companies should now be carefully reviewing their anti-bribery policies and procedures to ensure they are in full compliance with these new laws. Further, those companies whose policies currently allow for facilitation payments should now be taking steps to eliminate those practices as the government has served notice that the existing exception for such payments will be repealed.

The Key Changes

There are six key changes to Canada’s anti-bribery regime, each of which are summarized in detail in Significant Amendments Proposed to Strengthen Canada’s Anti-Corruption Regime. In brief, they are as follows:

the exception for facilitation payments is now subject to elimination by an order of the federal Cabinet; the government has put Canadian companies on notice that the exception for payments made to expedite or secure the performance of acts of a routine nature will be eliminated at a future date, allowing time for companies to adjust their policies and being cognizant of the competitive disadvantage this may create vis-à-vis other countries (such as the United States) that continue to allow their companies to make such payments;

there are new prohibitions against engaging in a wide range of activities regarding books and records when undertaken for the purposes of bribing a foreign public official or disguising such bribery;

the jurisdiction of the CFPOA is significantly expanded from a territorial to a nationality basis; regardless of where the alleged bribery has occurred, the CFPOA now applies to all Canadian companies and citizens as well as permanent residents present in Canada after they commit the offence;

the maximum term of imprisonment for individual offenders has been increased from five to 14 years; in addition to sending a signal regarding the seriousness with which the government views CFPOA violations, this eliminates the availability of discharges and conditional sentences;

the definition of business activity subject to the CFPOA has been expanded with the removal of the “for profit” requirement; and

the Royal Canadian Mounted Police (RCMP) has been accorded exclusive authority to lay charges for CFPOA and related offences.

Continued Developments

These changes should be viewed in the wider context of recent policy initiatives and increased anti-corruption enforcement in Canada. On June 13, 2013, the Canadian government announced that it will implement a mandatory reporting regime for companies in the extractive industries – see Canada Announces New Initiative for Disclosure of Payments to Governments.

Recent efforts by the RCMP to step up enforcement have led to convictions and significant multi-million dollar penalties – for example, see A Closer Look at the Griffiths Energy Case: Lessons and Insights on Canadian Anti-Corruption Enforcement and A Deeper Dive Into Canada’s First Significant Foreign Bribery Case: Niko Resources Ltd. There are currently over 35 ongoing CFPOA investigations, a few of which have been making headlines in Canadian and international media.

Companies and their boards should be reviewing their anti-corruption compliance policies and procedures to ensure they are up to date with all of these developments in Canada and in other jurisdictions that are also expanding anti-corruption obligations and enforcement efforts. In addition to preventing violations of applicable anti-corruption laws, those policies and procedures should enable management and directors to quickly detect potential violations and respond accordingly.

===========================================================================================

John W. Boscariol is head of the firm’s International Trade & Investment Law Group and a partner in the Litigation Group. He can be reached via email at jboscariol@mccarthy.ca.

===========================================================================================

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. 

December 4, 2012

Foreign Corruption Risk Mitigation: The Importance of Recent U.S. FCPA Guidance to Canadian Companies

Ed. Note-today we are pleased to have a guest post from two of our colleagues from north of the border, Paul Michael Blyschak and John W. Boscariol both partners at the law firm of McCarthy Tétrault. 

Over the last year and a half, Canadian corporate culture has been undergoing significant change in response to new and vigorous enforcement of the Corruption of Foreign Public Officials Act (CFPOA) by the Royal Canadian Mounted Police (RCMP) and Crown prosecutors. The widely publicized guilty plea of Niko Resources Ltd. in June of last year and ongoing RCMP investigations into the activities of a number of other Canadian companies serve as stark warnings of the costs of non-compliance. With an additional 30 or so RCMP investigations underway, Canadian companies are moving quickly to implement and enforce specially designed anti-corruption policies and procedures as well as transactional risk mitigation strategies.

On November 14, 2012, these efforts received welcome assistance through the publication by the United States Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) of the Resource Guide to U.S. Foreign Corrupt Practices Act 1(Guide). At 120 pages, the Guide is a comprehensive collection of DOJ and SEC precedent and policy in respect of the Foreign Corrupt Practice Act (FCPA), complimented by hypothetical case studies as well as summaries of U.S. FCPA jurisprudence. Although the Guide does not contain any surprises, it is a very helpful tool for Canadian companies with overseas operations. While they are different statutes that are enforced by different national regulators, in many respects the CFPOA and the FCPA mirror each other closely in substance. There has also to date been every indication, including numerous elements of the order issued by the Court reviewing the Niko Resources guilty plea (the Niko Order), that Canadian and U.S. authorities work together closely in their anti-corruption enforcement efforts. For a further review of the Niko case and its implications for Canadian companies, see A Deeper Dive Into Canada’s First Significant Foreign Bribery Case: Niko Resources Ltd.

Notably, in the Niko case U.S. precedents were referred to in determining appropriate penalties and the probation order very closely matched those used by U.S. authorities in deferred prosecution and non-prosecution agreements under the FCPA. Accordingly, U.S. developments can be an important consideration for Canadian companies trying to understand or anticipate developments under the CFPOA here in Canada. Of course, Canadian companies may also be directly subject to broad FCPA jurisdiction, including where they are listed in the United States or carry on certain business or transactions in or through the United States.

Towards this end, we note that the Guide addresses the following issues of particular relevance to Canadian companies with overseas operations:

  1. Effective Anti-Corruption Policies and Procedures: The Niko Order made clear that Canadian regulators expect anti-corruption policies and procedures to be the product of company-specific risk assessments, i.e., that they be customized to a company’s particular circumstances and corruption risk exposure rather than generic models. In this regard, the Guide serves as a useful compliment to the Niko Order, further elaborating on various components essential to effective anti-corruption policies and procedures. This includes, amongst other things, reassurance that appropriately designed policies and procedures will in part depend on the size and nature of the business. For further discussion of anti-corruption risk assessment, please see Anti-Corruption Compliance Message Received? Risk Assessment Is Your Next Step.
  2. Corruption Due Diligence in M&A Transactions: The risk of acquiring corruption liability through the acquisition of an entity with overseas operations has become a fundamental concern for companies considering expanding their operations through M&A activity. While the Guide reiterates that merger or acquisition does not purge anti-corruption liability, it also clarifies (i) that the DOJ and SEC will not have jurisdiction to prosecute pre-acquisition corrupt practices of a target where the target only became subject to the FCPA upon being acquired (i.e., that the acquisition of a target will not create liability where such liability did not previously exist), and (ii) that the DOJ and the SEC are unlikely to prosecute an acquirer for the pre-acquisition liability of a target where the acquirer made good faith, best efforts to diligence the target for corruption liability, even if ultimately unsuccessfully. For further discussion of anti-corruption due diligence in international acquisitions and financings, please see Overseas Financing and Acquisitions: The Increasing Importance of Anti-Corruption Due Diligence.
  3. The Scope of Affirmative Defences: The CFPOA and the FCPA share three identical or near identical affirmative defences. These are (i) where a payment is permitted or required under local law, (ii) where a payment relates to reasonable and bona fidebusiness development expenditures, and (iii) facilitation payments for routine and non-discretionary government action. The Guide provides a number of valuable insights regarding the scope of these defences, including (i) that the local law defence will arise infrequently in practice as local laws rarely (if ever) permit corrupt payments, (ii) that trips that are primarily for personal entertainment purposes will typically not qualify as reasonable and bona fide business development expenses, and (iii) that the size of a purported facilitation payment will be telling, as a large payment is more suggestive of corrupt intent to influence a non-routine governmental action.
  4. Gift Giving and Hospitality: A common area of concern for companies operating in foreign countries and amidst foreign cultures and customs is the line between proper and improper gift giving and hospitality under applicable anti-corruption legislation. Helpfully, the Guide states that the DOJ and the SEC recognize that a small gift or token of gratitude is often an appropriate way for business people to display respect for each other, and that the hallmarks of appropriate gift-giving include (i) giving the gift openly and transparently, (ii) properly recording the gift in the giver’s books and records, and (iii) giving the gift only to reflect esteem or gratitude. On the other hand, the Guide cautions that the larger or more extravagant the gift, the more likely it was given with an improper purpose.
  5. Extorted Payments: One of the most difficult predicaments encountered by companies operating overseas occurs where a corrupt foreign official attempts to extort payments by threatening the company’s operations or personnel. The Guide expresses sympathy for companies subject to such extortive efforts, stating that situations involving extortion or duress will not give rise to FCPA liability because a payment made in response to true extortionate demands cannot be said to have been made with corrupt intent or for the purpose of obtaining or retaining business. That said, the DOJ and the SEC limit this exception to extortionate demands made under threat of physical harm and exclude demands merely involving economic coercion.
  6. When DOJ and SEC Decline to Enforce: Deferred prosecution and non-prosecution agreements negotiated with DOJ and SEC typically involve significant compliance and remediation commitments and payment of monetary fines by individuals and companies in return for the DOJ and SEC agreeing to forgo further enforcement action. However, U.S. authorities may also decline to bring any enforcement action without any commitments being undertaken by the subject individuals and companies. These declinations are not typically publicized but can provide useful insight to how regulators view potential violations of anti-corruption laws. The Guide provides a no-names summary of the factors taken into consideration in six cases where the SEC and DOJ declined to pursue any enforcement action against the companies involved.

Overall, the Guide will undoubtedly serve as a useful resource for both U.S. and Canadian companies grappling with the complexities of foreign corruption risk. As highlighted by the U.S. Chamber of Commerce in a letter to the DOJ and the SEC in anticipation of the Guide,2since anti-corruption compliance can unfortunately be a costly matter, any clarification of the scope and substance of anti-corruption law is appreciated insight.

That said, Canadian companies need to keep in mind that even though the CFPOA and the FCPA closely mirror one another in many respects, important differences between the statutes do exist and can significantly affect how potential non-compliance is addressed in each country. Furthermore, Canadian companies should note that the CFPOA is not enforced in a vacuum, and that various principles of related Canadian legal disciplines, including corporate law, criminal law, securities law and jurisdictional law, will also need to be taken into consideration when judging the full scope of the statute’s application.

McCarthy Tétrault’s International Trade & Investment Law Group specializes in compliance and enforcement matters related to anti-corruption laws and policies, economic sanctions and export controls and other laws governing the cross-border trade in goods, services and technology and foreign investment.

March 30, 2012

Is a Major Bribery Prosecution Coming in Canada Under the CFPOA?

“What did the President know and when did he know it?” That is the iconic question from the Watergate Hearings asked by Senator Howard Baker of various witnesses. In the case of the Canadian engineering company SNC-Lavalin Group Inc. (SNC), it appears that its chief executive knew something was amiss and had known so for quite some time.

In an article in the March 27, 2012 edition of the Wall Street Journal (WSJ), entitled “Big Builder’s Chief Resigns”, reporters Caroline Van Hasselt and Satish Sarangarajan detailed the ongoing turmoil at SNC. In an article in the New York Times (NYT), entitled “Chief of Canadian Firm Steps Down After the Inquiry”, reporter Ian Austen reported that the chief executive of the firm, Pierre Dunhaime, resigned on Monday, March 26, after the “release of a report indicating that he had authorized that $56 million in improperly documented payments to unidentified agents.” The WSJ reported that the company “still had unanswered questions about the payments and had referred the matter to the Royal Canadian Mounted Police [RCMP]…”

Both newspaper articles reported on the release Monday of a copy of the company’s internal investigation, although the NYT article stated that it “appeared to raise more questions than it answered.” It appeared from the WSJ articles that Dunhamie had personally approved these payments to unknown agents to secure work for SNC projects. Apparently these agents were hired without any formal vetting process. Further the company reported that it was taking a charge to earnings for separate amounts of $33.5 million and $22.5 million, which had been incorrectly recorded on the company’s books and records. These payments had been made from 2009 until 2011.

Interestingly the company’s Chief Financial Officer (CFO) had objected to these payments because, as reported by the WSJ, “the agents identities weren’t properly disclosed and their fees would be charged to other projects.” The NYT reported that the payments to “agents who broker and manage contracts with foreign governments.”

So what does all this mean under relevant Canadian law? It could mean quite a bit. Canada has its own law prohibiting bribery and corruption of foreign governmental officials, the Canadian Corruption of Foreign Public Officials Act (CFPOA) which was enacted in 1999. The criminal provisions of the CFPOA are almost identical to those found in the US Foreign Corrupt Practices Act (FCPA) but it has no equivalent to the books and records component and there is no civil component which is enforced by the US Securities and Exchange Commission (SEC). The CFPOA only contains a criminal component, similar to that which is enforced by the US Department of Justice (DOJ). The FCPA has a longer jurisdictional reach than the CFPOA, where the test for jurisdiction requires that the cases involved have a “real and substantial” link to Canada. This means that a portion of the illegal activities must have been committed in Canada or have a real impact on Canadians.

Under CFPOA, there are clearly questions raised that would be similar to those raised under a FCPA analysis. What due diligence, if any, was done on the agents? What services, once again if any, were performed by the agents? The fact that the agents are still not known to the company or what the $56 million payment was for, or where it went, are problematic as well? Why did the company executive approve these payments over the objections of the CFO? While there is no books and records equivalent under CFPOA, mis-characterizing payments and expenses would seem to indicate a desire to hide the true nature of the payments.

SNC had strong relationships with members of the former ruling family in Libya, the Qaddafi’s, and had done ongoing work for the country before the regime fell. A consultant for the company was reported by the NYT to have traveled to Libya during the allied forces bombing and “produced a five-page report that was critical of the NATO-led bombing campaign in support of Libyan rebels.” In view of these relationships, could some of this $56 million have been paid as bribes in Libya?

As noted, the matter has been turned over to the RCMP for further action. In a guest post on this blog, entitled “Why Does It Appear Anti-Bribery Enforcement Is Lacking in Canada?” our colleague Cyndee Todgham Cherniak wrote that Canada’s criminal justice system does not include grand juries. As a result, the job of the RCMP is to gather sufficient information to cause the Crown to lay charges. Canada does not use grand juries as an investigatory tool. When there is a Canadian investigation, the RCMP is not inclined to talk about it. Appropriately, they declined comment for both articles.

Many questions are left unanswered by the company report. But as we might say down here south of the border, it is time for several people to “lawyer up”.

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2012

August 3, 2011

3 Countries, 3 Approaches, 1 Powerful Bribery Act

Ed. Note-today we are pleased to host our the newest addition to i-sight.com, Dawn Lomer for a guest posting. 

=======================================================

As the implications of the News Corp scandal wend their way across the pond with a real possibility of US charges being filed, the global reach of anti-corruption legislation becomes more and more evident. A UK, US or Canadian company has to be concerned not only about abiding by the laws of its own country, but also the laws of any country under whose jurisdiction some of its activities may fall. This is especially true today, in light of the new UK Bribery Act, with power to prosecute some foreign companies for bribery that takes place anywhere the world.

At the same time, there’s considerable pressure, from the OECD for example, for countries with weak anti-corruption legislation and enforcement to step up to the plate and take responsibility for preventing and prosecuting corruption on a global scale. Canada has come under recent scrutiny for its weak anti-corruption laws and dearth of prosecutions.

Canada Tackles Corruption

This criticism may be about to change, however, says Anthony Cole, a UK lawyer practicing in Calgary with Christine Silverberg, retired Chief of Police and lawyer of the firm Wolch, Hursh, deWit, Silverberg & Watts.  He cites the establishment of two RCMP overseas anti-corruption teams inOttawaandCalgaryas a positive sign for strengthening anti-corruption measures in the country. “This is especially so in light of the statement by representatives of those teams that they have over 20 active investigations,” he says.

Cole compares the situation in Canada to that of the UK several years ago, when law enforcement agencies in the UK, led by the Serious Fraud Office, realized that the UK Proceeds of Crime Act, and in particular the civil recovery powers created under that Act, could be a powerful tool in tackling corruption.

Long Arm of the UK Bribery Act

“The new UK Bribery Act will provideUKlaw enforcement authorities with a far more effective means of ensuring the successful criminal prosecution of companies and individuals who engage in, or indeed fail to prevent, bribery overseas,” he says.

“It will be interesting to see whether the Proceeds of Crime Act will continue to be used frequently in overseas bribery cases, or whether the favored approach will be to prosecute solely under the Bribery Act whenever possible. I think that, at least initially, there will be a desire to use the new Bribery Act, but what happens in the long term will probably be determined by the success of the prosecutions in the early stages of the Act being in force”, says Cole.

US is the Global Champion in Anti-Corruption

A fundamental difference between theUKandUSlegislation governs overseas corruption: in contrast to theUS, the UK Bribery Act is not restricted to the corruption of public officials, but also applies to purely private sector bribery. “In this regard, its scope is significantly wider than the US Foreign Corrupt Practices Act (FCPA),” says Cole. “That said, theUShas a remarkable track record in handling overseas anti-corruption cases, and is, at present, the unquestioned global champion in the fight against corruption. The means through which theUShandles such cases, though, is different.”

Cole explains that most overseas corruption cases handled by US authorities do not result in criminal convictions following trial, but rather are dealt with as civil violations or are resolved by plea agreements or deferred prosecution agreements at a very early stage.

“The favored approach ofUSlaw enforcement agencies dealing with corporate overseas corruption cases seems to be to encourage self-reporting and an early plea or settlement by the corporation, resulting in a huge fine or disgorgement, but often allowing the corporation the opportunity to issue a face-saving joint press-release with the relevant law enforcement agency,” he says. Law enforcement agencies, in this way, can secure a high-profile victory without committing vast resources to each case, so they can deal with a much larger number of cases.

Serious Bribery as a Serious Crime

The settling of bribery and corruption cases by what might be described as plea bargaining, and the frequent  use of civil settlements of civil recovery proceedings (which might involve a joint press-release), was adopted by the Serious Fraud Office in the UK, says Cole, but it received withering criticism from one of the UK’s most senior criminal judges, who appeared to suggest that the criminal justice procedure applied to perpetrators of serious bribery should be no different  from that applied to burglars or rapists. The Serious Fraud Office vowed to change its practices, reflecting the preference of the English Courts to see serious bribery and corruption dealt with by criminal process, rather than by civil process and plea bargaining, as appears to be favored by US authorities.

Dawn Lomer the Corporate Journalist at Customer Expressions, developers of i-Sight investigative case management software. With 20 years of experience as a writer and editor in Canada, the Caribbean and the Middle East, she brings a global perspective to the subjects she covers. She joins Lindsay Walker in writing for the company’s blog i-Sight.com.

Ed. Note-The prior post of this blog incorrectly miss-spelled the name of the author. The correct spelling is Lomer.

October 21, 2010

Why Does It Appear Anti-Bribery Enforcement Is Lacking in Canada?

Filed under: Corruption for Foreign Public Officials Act,FCPA — tfoxlaw @ 7:27 pm
Tags: ,

Ed. Note-this post was originally published in Trade Lawyers Blog and comes courtesy of our colleague Cyndee Todgham Cherniak 

On October 2, 2010, I gave a presentation at the University of Windsor, Center for Transnational Law and Justice concerning Canada’s anti-bribery laws. The theme of my presentation was that Canada takes a balanced approach to anti-bribery enforcement. 

As part of my presentation, I discussed why it appears that Canada’s anti-bribery enforcement is lacking. Canada is often criticized by the United States because of enforcement of the Corruption of Foreign Public Officials Act (and for the record I would like the name of Canada’s law changed to “The Prevention of Corruption of Foreign Public Officials Act) (CFPOA). There is only one decided case under the CFPOA (Hydro Kleen Group) and currently one case may public by the Royal Canadian Mounted Police, International Anti-Corruption Unit (RCMP, IACU) (being the Nazir Karigan case). In addition, Niko Resources (a publicly listed company) announced issued a press release that they were being investigated under the CFPOA and a number of NGOs have posted a letter they sent to the RCMP-IACU asking that an investigation be commenced concerning Blackfire Exploration. 

However, this does not mean there isn’t work being done and other corruption investigations are not being conducted. On the contrary, the RCMP-IACU has two busy branches in Ottawa and Calgary. So, why is it that no one knows about Canada’s anti-bribery enforcement – because the Canadian way is different than the U.S. way of enforcement. 

Canada has signed 3 international anti-bribery treaties (the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, the OAS Inter-American Convention Against Corruption, and the U.N. Convention Against Corruption) and has incorporated the international obligations into Canadian law. 

That being said, Canada’s anti-bribery regime is different than the U.S. regime even though the U.S. is a signatory to the same international agreements. Canada has implemented its international obligations in a manner that is different and that is permitted. 

What are the differences? 

1. Canada’s CFPOA was enacted in 1999 and, therefore, is only 11 years old. The first 11 years of The U.S. Foreign Corrupt Practices Act (FCPA) saw a small number of prosecutions. 

2. Canada’s population is significantly less than the population in the United States. The volume of Canada’s business in foreign jurisdictions is significantly lower than the volume of U.S. business in foreign jurisdictions. As a result, the proportionate volume of cases would be significantly lower. 

3. Canada’s CFPOA does not contain the record-keeping/accounting requirements that are in the FCPA. As a result, cases do not arise from reportings to Canada’s equivalent of the Securities Exchange Commission (since there are not any equivalent FCPA reportings). A large number of U.S. cases commence under the FCPA accounting/reporting provisions. Since this mechanism does not exist in Canada’s law, the volume of cases is significantly reduced in Canada. 

4. Canada does not have any foreign whistle-blower incentives. Section 425.1 of Canada’s Criminal Code creates an offence if a company or company officials retaliates against an employee who provides information during the course of an investigation. However, there isn’t Canadian legislation that financially rewards a foreign whistle-blower. Since this mechanism does not exist in Canada’s law, the volume of cases is significantly reduced in Canada.

5. Canada does not have a voluntary disclosure program for companies and company officials to disclose their own wrong-doing or the wrong-doing of a predecessor entity. As previously mentioned, the RCMP-IACU is the enforcement authority in Canada (not the Department of Justice like in the United States). I have spoken with the RCMP-IACU and they have informed me that there is no administrative program that allows a company or company officials to make a voluntary disclosure to prevent or diffuse a potential prosecution. The role of the RCMP is to investigation crimes and hand to the Crown (Department of Justice) the facts (investigative report) so that the Crown can decide whether to pursue a criminal conviction. There isn’t a mechanism to negotiate the payment of a fine without the prosecution. 

6. When there is a Canadian investigation, the RCMP-IACU are not inclined to talk about it. When I spoke with the RCMP, they would not confirm any active investigation or the number of investigations underway. The RCMP do not undertake “perp walks” as is common in the United States. There is not significant publicity of active investigations. The Canadian authorities are less likely to commence “overzealous prosecutions” or undertake prosecutions as publicity stunts. Canadian prosecutors are not elected and do not have to “grand-stand” for the votes. 

7. Canada’s criminal justice system does not include grand juries. As a result, the job of the RCMP is to gather sufficient information to cause the Crown to lay charges. Canada does not use grand juries as an investigatory tool. 

8. Canadian law does not permit tax authorities to share information that they receive during the course of an income tax, sales tax or other tax audit. The information provided during the course of an audit to tax authorities is confidential under the law and cannot under Canadian law be used by tax authorities for purposes other than enforcement of tax laws. If the Canada Revenue Agency is involved in a criminal / special investigation, the information may be used CFPOA purposes. Most tax audits are not special investigations. As a result, if there is evidence of payment of bribes paid to foreign public officials discovered during a review of books and records during a tax audit, the information should not be conveyed by the Canada Revenue Agency to the RCMP-IACU and should not be used as evidence against the taxpayer. 

9. Canada does not have a robust advisory opinion mechanism similar to the administrative mechanism in the United States. The RCMP-IACU decide whether to investigate a crime and do not provide guidance on how to avoid prosecutions or get away with crimes. The RCMP-IACU do not make the law, they merely enforce existing laws. 

10. Canada’s CFPOA at the present time does not apply where the bribery activity does not have a “real and substantial connection” to Canada. In 2009, the Minister of Justice tabled legislation (Bill C-31) to incorporate a nationality principle in Canada’s CFPOA. However, that legislation did not proceed in the House of Commons when Parliament prorogued in December 2009. The legislation has not been re-introduced.

11. Canada does not have a mentorship program similar to the mechanism in the United States. Since Canada does not have a voluntary disclosure mechanism or a mechanism to improve compliance, Canada does not have a mechanism where a lawyer is appointed to assist Canadian companies comply better with Canada’s anti-bribery laws. 

The Canadian anti-bribery regime’s significant differences with the U.S regime makes Canada’s enforcement less visible. Less visible does not mean the Canadian enforcement regime does not exist or it is not active. You cannot look for evidence of enforcement activity in the same places that it is found in the U.S. 

Cyndee Todgham Cherniak  can be reached at 416-307-4168 or cyndee@langmichener.ca.

The Rubric Theme. Blog at WordPress.com.

Follow

Get every new post delivered to your Inbox.

Join 4,655 other followers