Federal government proposes three key amendments to the
Corruption of Foreign Public Officials Act
This week, the Federal Government tabled Bill S-14 in the Senate
to amend the Corruption of Foreign Public Officials Act
("CFPOA" or the "Act"). The Act has been on the
books since 1998, but has escaped a serious re-working before now.
In summary, CFPOA criminalizes, and makes prosecutable in Canada,
the bribery of foreign public officials to obtain a commercial
gain. Despite formation of an RCMP task force to investigate such
corruption and news that the task force is investigating a number
of suspected cases of bribery, the Act has been the source of a
small number of high profile prosecutions since its inception. Bill
S-14 might suggest a renewed vigour on the part of the Federal
Government to take action against Canadian agents of foreign
The Bill makes three key amendments to the Act. First, the
maximum custodial sentence for offences under the Act will be
raised from five to fourteen years. This is unsurprising, as
fourteen years is the maximum imprisonment permitted for bribing
judicial officers or Canadian public officials, as per sections 119
and 120 of the Criminal Code.
The second amendment is the introduction of a series of new
offences addressing business records. The Government proposes
criminalizing, for the purpose of enabling the bribery of foreign
Keeping a second set of books outside of what records are
Making false records of transactions in the relevant corporate
records, or failing to record actual transactions;
Incorrectly identifying liabilities in the corporate
Knowingly using false documents; and
Intentionally destroying accounting books and records earlier
than permitted by law.
The "knowing use of false documents" offence will,
eventually, require clarification, as it is not immediately clear
what counts as "using" a false document. One can conceive
of obvious examples, such as the backdating or falsifying of
receipts to cover an illicit payment, or a marketing campaign
designed to give a veneer of legitimacy to a front company whose
actual purpose is the funneling of bribes. The question is murkier,
however, if the false documents are created internally but never
used externally, or are discovered to be false after their use. As
well, it is worth noting that (aside from potential prosecutions
under the Act) the failure to keep accurate books and records and
the failure to maintain proper internal controls may also be an
offence under the applicable Securities Act in the case of a public
Finally, the third change relates to the jurisdiction of the
Canadian Courts. Bill S-14 provides that any person who commits an
act outside Canada that, if committed in Canada, would constitute
an offence under the Act, is deemed to commit that offence inside
Canada if they are a Canadian citizen, permanent resident, public
body, or corporate entity organized under Canadian or provincial
laws. This means that the employees local to the foreign operations
of a Canadian business, if they are Canadian citizens or permanent
residents, are within the force of this Act. The Act was previously
silent on this question and as a result the jurisdiction of
Canadian Courts over offences taking place outside Canada was
The Act permits payments to expedite (or encourage) public
officials acting in the ordinary course of their jobs. This
exception, for "facilitation payments", can be criticized
for its vagueness. The goal of allowing facilitation payments is to
avoid hindering a Canadian company or person from doing business in
the ordinary, customary matter of certain foreign jurisdictions.
What form of conduct amounts to routine business is a fact-specific
question to each case of alleged corruption. Bill S-14 makes no
amendments to the facilitation payments defence. Bill S-14 also
makes no changes to address CFPOA's lack of de minimis
provisions to permit gifts or goodwill gestures.
Bill S-14 faces debate in the Senate and reading in the House of
Commons, and will likely not be law before the end of this
parliamentary session. Nevertheless, this bill was introduced into
the Senate by the Government house leader in the Senate and we can
accordingly anticipate that the reforms to CFPOA proposed in the
Bill will become law, and may signal the intention of the
Government to crack down in a more meaningful way on foreign
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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