Canada has proposed significant amendments to the Corruption
of Foreign Public Officials Act (CFPOA). Bill S-14, the
Fighting Foreign Corruption Act, was tabled as a
Government bill in the Senate on February 5, 2013, and is
Canada's latest effort to combat corruption and bribery by
Canadians in foreign markets.
The major proposed amendments are as follows:
Creation of a new "books and records"
offence: It will now be an offence to, among other things,
maintain false accounts, fail to record or to adequately identify
transactions, or to record non-existent expenditures, if the
purpose is bribery or to hide that bribery. Currently, CFPOA makes
it a criminal offence to bribe foreign public officials to obtain
or retain an advantage in the course of international business.
However, proving a bribery offence is notoriously difficult, and
the three convictions to date under CFPOA have all been based on
plea agreements. The proposed amendment effectively lowers the bar
for prosecutions by requiring Canadian companies to keep adequate -
and truthful - records, and establishing stiff fines for failure to
do so. The new offence will attract a maximum of 14 years'
imprisonment and unlimited fines.
Extending Canadian jurisdiction: Canada will
now be able to prosecute Canadian citizens (and, of course, dual
nationals) for offences under the CFPOA, wherever those citizens
may be living, and the amendments make provision for prosecuting
Canadians in absentia. Landed immigrants can be prosecuted
if, after the commission of the offence, they are present in
Canada. This extra-territorial application of Canadian law to reach
Canadian citizens overseas is already a part of many Canadian
sanction regimes. Extending it to the anti-bribery rules will
reinforce the need for businesses to give clear directions to their
The elimination of facilitation payments:
Currently, facilitation payments made to a foreign public official
to secure the performance of acts of a routine nature, are not
considered bribes. Under the proposed amendments, the notion of
facilitation payments will be eliminated, and all payments to a
foreign public official to secure a benefit will be prohibited.
Interestingly, while all of the other provisions of Bill S-14 will
become law on Royal Assent, the provisions eliminating the
facilitation payments exemption will come into force at a date to
be determined by the Cabinet.
Increasing the maximum penalty: Currently, a
conviction under CFPOA attracts a maximum of five years'
imprisonment and unlimited fines. Under Bill S-14, the maximum jail
time will increase to 14 years.
Narrowed power to lay charges: In one
significant respect, the bill would weaken the CFPOAby limiting its
enforcement. Bill S-14 would eliminate the potential for private
prosecution of the CFPOA − of the entire CFPOA, not just of
the new offences added by Bill S-141. While some
commentators have interpreted this amendment as an attempt to
centralise CFPOA policing by giving sole jurisdiction to
Canada's national police force, the RCMP, it appears instead to
be motivated by a desire to prevent interest groups and activists
from laying charges against Canadian businesses that operate
Positioning: By naming the legislation
the Fighting Foreign Corruption Act and declaring that it
is "strengthening the fight against foreign
bribery,"2 the Government of Canada is trying to
convey the impression that its legislation is aimed at foreign
activity. In fact, the bill targets the foreign activities of
Canadians and Canadian businesses. This sweeping law has the
potential to affect every Canadian business3, Canadian
citizen and Canadian permanent resident that conducts any activity
Bill S-14 is a Government bill and, given the Government's
majority in both Houses of Parliament, it can be expected to become
The Bill sends a clear message to Canadian businesses: Canada
takes bribery and corruption seriously, and Canadian businesses
must do the same. Canada's latest contribution to the
international anti-corruption effort follows similar efforts by the
U.S. and the U.K. governments to bolster the legal regimes
prohibiting corruption and to aggressively prosecute those
companies that engage in bribery.
1.Under the proposed section 6 of the CFPOA, section 504 of
theCriminal Code, which allows
anyone on reasonable grounds to lay a charge for an indictable
offence, would not apply to the CFPOA.
2.Government of Canada, Department of Foreign Affairs and
International Trade, news release, February 5, 2013.
3.Most significantly, the bill would define
"business" broadly as, "any business, profession,
trade, calling, manufacture or undertaking of any kind carried on
in Canada or elsewhere."
Canadian engineering and construction giant SNC-Lavalin has been charged by the RCMP with paying bribes of nearly $48 million to Libyan government officials and defrauding Libya of nearly $130 million.
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