On February 5, 2013, the Canadian government introduced Bill S-14, entitled the Fighting Foreign Corruption Act, in an effort to revamp the Corruption of Foreign Public Officials Act (the "CFPOA"). The Bill was tabled just two weeks after Griffith Energy International Inc. entered a guilty plea to a charge under the CFPOA for its actions in securing an oil and gas contract in Chad. According to Foreign Affairs Minister John Baird, "[t]hese amendments will help ensure that Canadian companies continue to act in good faith in the pursuit of freer markets and expanded global trade."

Should Bill S-14 come into force, it will most notably:

  • Broaden the CFPOA's scope of application: Bill S-14 aims to strengthen the CFPOA's extraterritorial reach by providing that Canadian citizens and corporations who commit an act or omission abroad, which would constitute an offence under the CFPOA if committed in Canada, could be tried and convicted domestically. Accordingly, Bill S-14 would introduce in the CFPOA a nationality-based jurisdiction, overriding the "real and substantial link" criteria established by jurisprudence, according to which Canada only has prosecutorial jurisdiction where a significant portion of the activities constituting an offence have taken place in Canada (Libman v. The Queen, [1985] 2 S.C.R. 178).
  • Increase the maximum term of imprisonment: Subsection 3(2) of the CFPOA currently provides that every person who commits a foreign bribery offence will be guilty of an indictable offence and liable to imprisonment for a term of not more than 5 years. The adoption of Bill S-14 would see the maximum term of imprisonment increased to 14 years, enhancing the CFPOA's deterrent effect by introducing longer sentences.
  • Enlarge the foreign bribery offence: As currently enacted, subsection 3(1) of the CFPOA limits the foreign bribery offence to profitable businesses. Bill S-14 proposes to bring unprofitable businesses under the bribery offence's scope by removing the profitability criterion from the definition of "business".
  • Introduce a new books and records offence: Under Bill S-14, it would be an offence if, for the purpose of bribing a foreign public official in order to obtain an advantage in the course of business or for the purpose of hiding that bribery, a person establishes accounts which do not appear in the books; makes transactions that are not recorded or that are inadequately identified; records non-existent expenditures; enters liabilities with incorrect identification of their object; knowingly uses false documents; or intentionally destroys accounting books. A person who commits one of these new offences would be guilty of an indictable offence and liable to imprisonment for a maximum term of 14 years.
  • Implement a stricter regime: Facilitation payments, that is payments made to expedite or secure the performance by a foreign public official of any act of a routine nature that is part of the foreign public official's duties or functions, do not currently amount to an offence under the CFPOA. Bill S-14 would, however, put an end to the facilitation payments exception. The amendment would come into force after Bill S-14's Royal Assent, at a date to be set by order of the Governor in Council, therefore giving some time to Canadians to adjust their foreign activities accordingly.
  • Facilitate the specialization of the anti-corruption fight: Currently, both provincial and federal authorities may lay charges for offences under the CFPOA. Bill S-14 would centralize those powers exclusively within the purview of the RCMP and the Public Prosecution Service of Canada, an amendment that is keeping in step with the creation, in 2008, of the RCMP's International Anti-Corruption Unit.

Ultimately, Bill S-14 promises a tougher approach by Canada towards the corruption of foreign public officials. It highlights the importance for Canadian businesses to adopt a detailed compliance and monitoring program to minimize the risk of illegal conduct by their employees and to conduct a thorough anti-corruption due diligence while carrying out a merger or an acquisition in order to avoid successor liability.

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