It was announced last Wednesday that former
SNC-Lavalin executive, Riadh Ben Aissa, was extradited to Canada
from Switzerland to face 16 fraud-related charges in connection
with the McGill University Health Centre project. Two weeks
earlier, Swiss authorities had announced that Aissa plead
guilty to corruption charges, including bribery and money
laundering, before a Swiss Federal Penal Tribunal and was sentenced
to three years in prison. This is but one of numerous examples of
the flurry of enforcement efforts worldwide in the area of
anti-corruption. Laws prohibiting bribery affect companies –
and often corporate executives – in virtually every sector,
from the extractive industry, to the construction and health
industries, and increasingly to the financial sector. Some
countries, like Canada, have had foreign anti-corruption
legislation for over a decade and have recently been expanding the
scope of the laws to create a more robust enforcement regime. Other
countries, like the U.K. and Brazil, for example, have only
recently followed the lead of the United States in instituting
broad anti-corruption programs.
The recent conviction and jail term sentence of Nazir Karigan
has demonstrated that Canada's foreign corruption legislation
has teeth. An agent for Ottawa-based technology company,
Cryptometrics Canada, Karigar was convicted for conspiring to bribe
a foreign public official and sentenced to three years in jail,
notwithstanding he was 67 years old and in poor health. This sent a
clear message to Canadian executives that offences under the CFPOA
will carry heavy sentences.
The following summarizes consistency in this trend:
Canada's anti-corruption enforcement efforts have been
amplified in the last year with the expansion of the Corruption
of Foreign Public Officials Act (CFPOA), legislation which was
first enacted in 1998. As of June 2013, new provisions came into
force which, amongst other things, expanded prosecutorial
jurisdiction, increased the maximum prison term, and created new
books and recordkeeping requirements. For more information on these
changes, see the
Osler Update from June 2013.
Similar to Canada's regime, the U.S. Foreign Corrupt
Practices Act (FCPA) also prohibits the bribery of foreign
public officials and requires companies to maintain accurate books
and records. The FCPA is enforced by the Department of Justice and
the Securities and Exchange Commission, both of which invest
substantial funding and resources on anticorruption enforcement.
The FCPA notoriously has very broad, global reach, applying to all
US persons, agents or subsidiaries of U.S. persons, and all foreign
persons that cause, directly or indirectly, any act within the U.S.
that furthers conduct in violation of the FCPA. Although the laws
apply to companies in all industries, the U.S. Government has
increasingly been shifting its focus to target firms in the
The U.K.'s Bribery Act, which went into effect in
2011, extends beyond the public sector prohibiting bribery in
general, be it of a government official or a private citizen. The
UK also introduced the corporate crime of failing to prevent
bribery, which applies globally to any company that carries on a
business or part of a business in the UK. Recently, the U.K. has
introduced deferred prosecution as a tool for its Serious Fraud
Office, the body responsible for enforcement of the Bribery
Develop an Effective Compliance Program
Each of Canada, the US, and the UK approach anti-corruption
slightly differently. Yet, the essence of the prohibitions are
Companies doing business in different countries must develop the
tools to keep up to date with developments involving
anti-corruption laws and regulations. They need to develop and
implement effective and integrated compliance programs, which can
include the following:
Proper due diligence programs;
Risk identification protocols; and
Effective training, including promoting a culture of compliance
within the organization.
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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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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