Companies who do business overseas should pay heed to the
statements made in February 2014 by Kara Brockmeyer, the Chief of
the U.S. Security and Exchange Commission's Foreign Corrupt
Practices Act unit, that companies should act prudently by
ensuring that they have robust anti-corruption compliance
In light of the prosecution and enforcement efforts in 2013 by
the SEC and the U.S. Department of Justice aimed at the oil, mining
and gas sectors -- including significant penalties paid by Parker
Drilling Company ($12 million), Total S.A. ($398 million), and
Weatherford International Limited ($153 million) – Canadian
companies in the resources sector with any connection to the U.S.,
particularly those listed on U.S. securities exchanges, should
expect that sooner or later their overseas business practices could
come under scrutiny of U.S. enforcement authorities.
2013 was a watershed year for the Corruption of Foreign
Public Officials Act (CFPOA) which was significantly amended
to make prosecutions easier for the Canadian enforcement
authorities. In addition, Griffiths Energy International Inc.
pled guilty in January 2013 to a criminal charge under the CFPOA
and agreed to a C$10.35 million fine. In August of 2013,
Nazir Karigar, an agent for Cryptometrics Canada, was convicted for
agreeing to bribe a foreign official, in what was the first trial
conducted under the CFPOA. The sentencing of Mr. Karigar is
expected to take place in an Ottawa courtroom in April, 2014.
Griffiths Energy, the Karigar case, and
previously Niko Resources, make it abundantly clear that
we will continue to see vigorous enforcement by Canadian
authorities of the provisions of the CFPOA in relation to overseas
business activities. Directors, officers, general counsel,
and outside legal and other advisors are under notice from the
Canadian enforcement authorities that hefty fines imposed in the
U.S. and other countries under anti-corruption laws will also be
imposed in Canada for engaging in foreign corrupt
An effective anti-corruption compliance program, including a
whistleblower program, proper training for management, employees
and agents, and a protocol for handling internal investigations and
dealings with enforcement authorities, can no longer be considered
on optional compliance regime, but one that is critical for any
Canadian company doing business overseas in industries and
countries prone to corruption in business dealings.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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