On June 18, 2013, the Parliament of Canada passed legislation to
amend the Corruption of Foreign Public Officials Act
(CFPOA). These amendments, announced by Canadian Foreign
Affairs Minister John Baird on February 5, 2013, will enhance
Canada's efforts to combat corruption and bribery in
international business transactions.
Under the CFPOA, it is a Canadian criminal offence for persons
or companies to bribe foreign public officials to obtain or retain
an advantage in the course of business. The amendments, which will
become law in Canada upon receiving Royal Assent, include the
following key provisions:
Maximum Penalty. The maximum jail term for an individual
convicted of a foreign bribery offence is increased from five years
to 14 years, in addition to unlimited fines.
Books and Records Offence. The amendments create a new offence
related to books and records of account kept to further or hide
foreign bribery. The penalty for conviction under this new offence
is a maximum of 14 years' imprisonment and unlimited
Nationality Jurisdiction. The amendments extend the
jurisdictional reach of the CFPOA, permitting Canadian authorities
to prosecute persons or companies of Canadian nationality for
international bribery. This change makes it easier for Canadian
authorities to launch prosecutions regardless of where the alleged
bribery took place.
Facilitation Payments. The exception for facilitation payments
from the CFPOA's bribery prohibition will be phased out.
Facilitation payments are those made to foreign public officials to
secure or expedite the performance of acts of a routine nature that
are within the scope of the official's duties. This amendment
will come into force at a later date yet to be determined.
Exclusive RCMP Authority. The RCMP will have the exclusive
authority to lay charges under the CFPOA.
Definition of "Business." The qualifying phrase
"for profit" will be removed from the definition of
"business," making it clear that the CFPOA applies to all
businesses, regardless of whether or not a profit is made.
These amendments, along with other recent announcements from the
Canadian government on domestic and international anti-corruption
initiatives, indicate the increasing emphasis on rooting out
international corruption and bribery from Canadian business
practices and highlight the need for heightened attention to
Steps for Complying with the Amendments
Canadian companies conducting business abroad are well-advised
to undertake a review of their anti-corruption and accounting
policies and practices to ensure that, moving forward, their
operations are compliant with the amendments to the CFPOA. The
minimum recommended steps in this regard include:
Reviewing your anti-corruption policy and practices to
incorporate accounting and reporting procedures and controls
designed specifically to reduce the risk of violating the new books
and records offence;
Implementing a strategy to phase out facilitation payments from
your company's operations in preparation for the eventual
removal of the current exception from the CFPOA;
Training your accounting and in-country personnel on the new
amendments to the CFPOA, and the practical impacts on your
business's current practices and operations; and
If your organization is a not-for-profit entity operating
abroad, designing and implementing an anti-corruption compliance
program tailored to your organizations foreign bribery risks.
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.
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