On May 23, 2014, Nazir Karigar was sentenced by the Ontario
Superior Court to three years imprisonment under Canada's
Corruption of Foreign Public Officials Act (CFPOA) for
having agreed with others to offer bribes to foreign public
officials. Mr. Karigar was convicted in August 2013 after
Canada's first trial under the CFPOA. This prison sentence,
combined with other significant fines imposed against several other
Canadian companies, shows that the police and courts are becoming
ever-more serious about prosecuting and punishing Canadian
companies involved in corrupt foreign practises.
The facts of this case make interesting reading. In 2005, Mr.
Karigar approached Cryptometrics Canada to say that Air India was
looking to enhance airline security through solutions such as
facial recognition technology. Cryptometrics, who produced facial
biometric authentication technology, was a serious contender for
Mr. Karigar told Cryptometrics that he had very good relations
with key Air India officials who would be involved in the
procurement process and that he could help obtain these lucrative
contracts by bribing these officials. In return, Mr. Karigar would
receive a sizable percentage of the contract's revenue stream
once the contracts were awarded to Cryptometrics.
Cryptometrics transferred funds totalling almost $450,000 to Mr.
Karigar for the purpose of bribing Air India officials. This
criminal scheme began to unravel and, in the end, Cryptometrics
never did receive the contracts.
At his trial Mr. Karigar argued that he should not be convicted
in the absence of any evidence that bribe money was actually
received by Air India officials (no one knew where exactly the
bribe money ended up). The trial judge disagreed saying that a
conspiracy or agreement to bribe foreign officials was a violation
of the CFPOA and that it was unnecessary to show that the foreign
public official actually received the inducement.
Mr. Karigar's sentence follows several other high profile
convictions under Canada's anti-corruption legislation
including the 2011 conviction of Niko Resources (Alberta), who was
fined $9.1 million for bribing a Bangladesh cabinet minister for
natural gas drilling rights, and the 2013 conviction of Griffiths
Energy International Inc. (Alberta), who was fined $10.35 million
for paying a $2 million bribe to a diplomat's wife to secure
oil rights in Chad.
Companies involved in commercial activities overseas need to
take proactive steps to ensure they have in place a well-developed
and properly implemented anti-corruption compliance program. The
cost to companies who fail to develop and enforce an
anti-corruption regime is measured not only in the possibility of
significant fines and the specter of prison sentences, but also in
lost contract opportunities arising from contractor debarment and
In R v Villaroman, the Supreme Court of Canada recently dealt with the issue of circumstantial evidence and the inferences that can be reasonably drawn from that evidence in order to find an accused guilty beyond a reasonable doubt.
Canadian engineering and construction giant SNC-Lavalin has been charged by the RCMP with paying bribes of nearly $48 million to Libyan government officials and defrauding Libya of nearly $130 million.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).