The first conviction under the Corruption of Foreign Public
Officials Act (the "Act") has
recently been issued, raising many important considerations for
Canadian companies conducting business abroad. In R. v.
Karigar, the Ontario Superior Court of Justice convicted Nazir
Karigar of agreeing to offer a bribe to a foreign official contrary
to section 3(1)(b) of the Act.
Much of the evidence at trial consisted of testimony from a
co-conspirator who was granted immunity for cooperating with the
Crown. In reaching its decision, the Court made the following
findings of fact.
In 2005, Mr. Karigar approached Cryptometrics Canada, a
Kanata-based tech company, and advised them that Air India was
seeking a technology solution for certain air security issues, and
that Cryptometrics' facial recognition technology might be a
viable solution. Ultimately, Cryptometrics established a subsidiary
in India and Mr. Karigar was hired by Cryptometrics as the
executive director of the subsidiary for the purposes of securing a
contract with Air India.
Eventually, Mr. Karigar suggested to Cryptometrics that it
needed to pay various bribes in order to help secure the contract,
which Air India had put out to tender. Mr. Karigar believed that
paying bribes, including to certain persons at Air India and the
Indian Minister of Civil Aviation, was a necessary part of doing
business in India. Cryptometrics agreed with Mr. Karigar that he
should offer bribes as he recommended. Mr. Karigar then offered the
bribes, and Cryptometrics advanced funds to Mr. Karigar to make the
It was unclear whether or not the bribes were in fact ever
received by the intended recipients, and, in the end, Cryptometrics
did not get contract. Nonetheless, the Court convicted Mr. Karigar
of an offence under the Act.
Key Points for Canadian Companies
The Court's decision raises important points for Canadian
companies to consider when conducting business abroad.
First, the Court held that section 3 of the Act includes a
conspiracy offence, and that therefore the mere existence of the
conspiracy to pay a bribe was sufficient to warrant a conviction.
According to the trial judge, it was not necessary for the Crown to
prove that (i) a bribe was actually paid; or (ii) the foreign
public official actually agreed to accept the bribe. Rather, the
Crown must only prove that the accused believed that a bribe was
being paid. Thus, unless the decision is reversed on appeal, an
agreement between business associates to bribe a foreign official
can itself constitute an offence under the Act.
Second, the category of individuals who may be considered a
"foreign public official" is broad, and can include
employees of state controlled/sponsored entities even where the
entity carries out purely private-sector commercial activities. In
Karigar, the Court appeared to have little difficulty
finding that the officers of Air India, a government-owned entity,
constituted foreign public officials.
Lastly, there appears to be a low threshold to prove a
"real and substantial link" between the offence and
Canada in order for a Canadian Court to have jurisdiction under the
Act. Importantly, the Court held that the bribery conduct could not
be separated from the "legitimate aspects" of the
underlying transaction when considering whether or not a Canadian
court has jurisdiction. In Karigar, the Court found the
following factors sufficient to give the Ontario court jurisdiction
despite the fact that the bribe was not made in Canada and
Cryptometrics' senior officials who approved the bribe were in
the US: Cryptometrics was a Canadian company; Mr. Karigar had been
a Canadian businessman; he was employed by or acted as an agent for
Cryptometrics; the conspiracy was to obtain an unfair advantage to
a Canadian company (or a significant Canadian component of an
international company); and much of the work under the contract
would have taken place in Canada. The Court also referred to
Canada's obligations as a signatory under the international
Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions as a reason to make sure
an overly restrictive approach to jurisdiction does not thwart
effective enforcement of the Act.
The conviction in Karigar is a reminder to Canadian
companies operating abroad that Canadian authorities have increased
their enforcement of the Act, and that Canadian Courts may take a
broad view of what constitutes an offence under the Act.
Karigar reinforces the need for a robust compliance
program so that employees and foreign agents of companies connected
to Canada are aware of, and adhere to, a policy that prohibits
paying or offering bribes to foreign public officials.
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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