United States companies recognize the importance of establishing
an effective anti-corruption compliance program, in order to
prevent and detect potential violations of the Foreign Corrupt
Practices Act of 1977 ("FCPA")1. This
awareness results from a long history of aggressive FCPA
enforcement by the Fraud Section of the U.S. Department of Justice
("DOJ") and the U.S. Securities and Exchange Commission
North of the border, the Royal Canadian Mounted Police has only
recently started to investigate and prosecute Canadian companies
aggressively for violations of the Corruption of Foreign Public
Officials Act ("CFPOA"). As a result, Canadian
companies have been slower to recognize the value of implementing
their own anti-corruption compliance programs.
Despite this lack of awareness, the need to establish an
effective anti-corruption compliance program should not be
underestimated. This need is expected to increase significantly in
the future as CFPOA prosecutions become more frequent.
Who is at Risk?
The Canadian companies that are most vulnerable to a CFPOA
violation are those that typically rely heavily on: (a) foreign
government regulatory approvals, (b) joint venture or production
sharing arrangements with foreign governments or state-run
agencies; or (c) procurement agreements with foreign governments or
state-run agencies. For example, companies that deal with energy
and natural resources (such as oil, gas, and mining) are at risk
because they typically operate in countries that have been found to
have high levels of corruption, their activities usually require
regulatory approval from the foreign government, and they may enter
into joint venture or production sharing agreements with a foreign
government or state-run agency.
Of course, any Canadian company that carries on business in a
country having a high level of corruption can also be vulnerable to
a CFPOA violation. This risk can be assessed by considering the
Corruption Perception Index ("CPI") for each country
where the company carries on business.
1 15 U.S.C. §§78dd-1, et seq.
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