Griffiths Energy International Inc. (GEI) pleaded guilty on
January 22, 2013, to one charge of bribing a foreign official
contrary to the Canadian Corruption of Foreign Public Officials
Act (CFPOA). This is the third conviction under the CFPOA, and
the first such conviction where a party has self-disclosed a
contravention following an internal investigation.
GEI has admitted to making an unlawful payment of US$2 million
in relation to the negotiation of an oil production sharing
contract with the Republic of Chad. The payment was made as a
success fee pursuant to a consulting agreement with Chad Oil
Consulting LLC (COCL), a company controlled by the wife of the
Chadian Ambassador to Canada. GEI had initially entered into a
substantially similar consulting agreement with a company
controlled by the Ambassador, but subsequently terminated that
Agreement as a result of counsel's advice. The Ambassador's
wife and two other individuals nominated by her also subscribed to
acquire founders' shares of GEI.
The company was sentenced by the Alberta Court of Queen's
Bench to pay a fine in the amount of C$9 million, plus a 15-percent
victim surcharge, for a total penalty of C$10,350,000. The fine
takes into consideration the "full and extensive
cooperation" shown by Griffiths in bringing the matter to the
attention of the authorities and disclosing the detailed findings
of its internal investigation. In recognition of this cooperation,
and unlike the 2011 conviction of Niko Resources Ltd. (Niko) for a
bribe paid to the Bangladeshi Energy Minister, Griffiths will not
be subjected to a three-year period of probation whereby the court
would supervise its compliance with the CFPOA through third-party
audits and reports.
The fine represents a Canadian record in a matter under the
CFPOA, exceeding the combined C$9,499,000 fine in the Niko
case. The conviction and fine in this case reinforce the need for
Canadian companies that do business internationally to implement
robust anti-corruption compliance programs and other measures to
detect and prevent potential violations of the CFPOA. An effective
compliance program will require heightened screening where
employees or third parties acting on behalf of the company interact
with foreign public officials. Compliance programs should be
customized to the needs of each company, but will generally include
the following elements:
senior management and board commitment to compliance;
clearly articulated rules and procedures based on a thorough
risk assessment of the company's business;
a dedicated compliance officer with adequate resources;
adequate due diligence with regard to third parties and
ongoing compliance training for employees and third-party
agents and representatives; and
periodic audits and monitoring.
This year promises to be a watershed for Canadian enforcement of
anti-corruption rules. The GEI conviction is likely only the first
of many enforcement actions taken in 2013 by Canadian authorities,
who have close to 40 active investigations ongoing.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
While that agreement mandated export measures on Canadian softwood lumber exports destined for the United States, it also protected those lumber exports from the potential imposition of onerous import measures by the U.S.
On September 29, 2016, the Supreme Court of Canada issued its first tariff classification decision since Canada signed the International Convention on the Harmonized Commodity Description and Coding System in 1998.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).