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 those contracts.
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 suspension.
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