Canada: No Bribe, No Bribee, No Essential Offence Elements In Canada… But Conspiracy Conviction Under CFPOA Affirmed

On July 6, the Ontario Court of Appeal released the first Canadian appellate decision to address the scope of Canada's Corruption of Foreign Public Officials Act (the "CFPOA"), upholding the conviction of Nazir Karigar for agreeing to offer bribes to Indian officials in relation to a bid for a security contract. The decision confirms that the foreign corruption offence casts a wide net, prohibiting not only giving or offering of bribes to foreign public officials, but also "agreeing" to give or offer bribes, regardless of whether the targeted official partakes in an agreement and regardless of whether a bribe was actually paid. The decision also rejected an attempt to narrow the 'real and substantial' connections necessary to establish Canada's jurisdiction over foreign corruption.

Background

The facts before the trial judge, Justice Hackland of the Ontario Superior Court of Justice, and his key findings on the application of the CFPOA in this case are set out in detail in our earlier client alert at First Trial Under Canada's Corruption of Foreign Public Officials Act Results in Conviction. Nazir Karigar, an Ottawa-based businessman, had approached Cryptometrics Canada offering to use his "good connections" with Air India and other Indian public officials in order to secure a major contract for facial recognition technology. In the course of their enterprise, Karigar along with his associates and certain executives of Cryptometrics:

  • openly discussed the payment of bribes to Indian officials in order to secure the contract;
  • prepared a spreadsheet budgeting intended bribes, in cash and in shares, to identified Indian officials;
  • designed a sham proposal, through a related entity, in order to create the appearance that the bidding process was competitive;
  • transferred monies to Karigar, upon the latter's request, with the understanding that they would be remitted to officials listed in the spreadsheet; and
  • discussed how to amortize the bribes in order to maintain the profitability of the project.

The money at issue (approximately US$450,000) could not be traced beyond its transfer by Karigar to an agent in India to the attention of a foreign official. Karigar ultimately had a falling out with his co-conspirators and reported them to the Canadian and US authorities.

On August 15, 2013, Karigar was convicted under the foreign corruption offence for his agreeing to offer bribes – even though the Crown was unable to prove that the bribes were offered or remitted to the Indian officials. He was sentenced to three years in prison. For details on the Court's sentencing of Karigar, see our previous client alert at First Prison Sentence Under Canada's Corruption of Foreign Public Officials Act Sends Strong Message to Business Community. It is important to note that at the time of the relevant facts, a CFPOA violation was subject to a discretionary fine and imprisonment of up to 5 years. The maximum imprisonment term has since been increased to 14 years and it is expected that the prosecution will seek proportionately harsher sentences under the amended offence.

Karigar appealed on the grounds that Justice Hackland had made several errors in his determination. These related to the meaning of "agree", the scope of territorial jurisdiction, the co-conspirator exception to the hearsay rule, and misapprehension of the evidence. All grounds of appeal were rejected. The Ontario Court of Appeal's most important rulings were on the nature of agreement necessary to establish the offence and territorial jurisdiction.

Broad interpretation of agreement

Karigar argued on appeal that the foreign corruption offence required proof of an agreement between the accused and the foreign public official. It was his position that because the evidence only revealed an agreement between him and his partners, and not with any of the Indian officials, the conviction could not stand.

The Ontario Court of Appeal rejected the argument, noting that the offence is committed when a person "directly or indirectly gives, offers or agrees to give or offer [our emphasis]" a bribe to a foreign public official. Accordingly, the offence is committed as soon as the accused agrees to give or offer a bribe, regardless of whoever else is party to the agreement. In the Court's words:

There is no limiting language on who must "agree", prescribing the parties to the agreement. It does not say that the agreement must be with the foreign official, only that the loan, reward, advantage or benefit that is the subject of the agreement must be a loan, reward, advantage or benefit to (or for the benefit of) a public official. On the language alone, there is no basis to read in a limitation on who must be parties to an agreement.

The Court noted that this interpretation was aligned with Canada's obligations under the Organisation for Economic Co-operation and Development's Convention on Combatting Bribery of Foreign Public Officials, which prohibits conspiracies to bribe as well as actual bribes of foreign officials.

Extensive jurisdiction over foreign corruption

The Court also rejected Karigar's argument that his conviction should be overturned because the essential elements of the offence had taken place abroad, outside of the jurisdiction of the Canadian authorities.

The offence in this case was committed prior to the June 19, 2013 amendments to the CFPOA which extended the foreign corruption offence's extraterritorial reach to acts committed abroad by Canadian citizens, residents and corporations. Nevertheless, even in the absence of a jurisdiction automatically determined by citizenship, the Court found that Canadian citizenship could be considered, in addition to other factors, in determining whether there was a real and substantial link with Canada, the jurisdictional test established by the Supreme Court of Canada in R. v. Libman in 1985.

Importantly, the Court confirmed the principle that the real and substantial link test "is not limited to the essential elements of the offence, and that the bribery could not be hived off from the legitimate aspects of the transaction for the purpose of the territorial connection analysis." The fact that essential elements of the offence in this case, such as the decision to bribe foreign officials and the dealings in India, may have taken place outside of Canada did not change the finding that other aspects of the transaction – including legitimate aspects – were sufficiently linked to Canada. Among those were the facts that:

  • the accused was a Canadian businessman who approached a Canadian company with the business proposal that eventually involved bribery;
  • the advantage and fruits of the contract obtained through bribery would benefit a Canadian company;
  • a great deal of the contract work was to be done in Canada; and
  • the bulk of the documentary evidence was seized in Canada and all the witnesses were from Canada.

Key implications for anti-bribery enforcement and compliance

The decision is a reminder that the foreign corruption offence condemns conduct – the giving, the offering or the agreeing to give or offer a bribe – regardless of the result. It signals that the offence can be committed regardless of:

  • whether the conduct had any impact or influence on the targeted official;
  • whether the bribe changed hands; or
  • whether a foreign public official or other persons were party to the agreement.

Karigar was convicted even in the absence of any evidence as to what became of the bribe money, whether it was ever offered or paid to anyone who qualified as a foreign public official and whether such person could influence the outcome of the bidding process. Notwithstanding those shortcomings in the prosecution's case, there was very good evidence of a specific agreement to offer a bribe, as noted above. The juxtaposition of the emails, spreadsheets and fund transfers left no reasonable doubt for the trial judge concerning the existence of an agreement to bribe a list of foreign public officials with a view to securing a contract.

The decision is also notable for its flexible approach toward Canada's jurisdiction over transboundary crimes, and is relevant for establishing territorial jurisdiction over CFPOA violations committed by Canadians prior to June 19, 2013 and non-Canadians after that time, as well as over other white collar criminal offences. It is an important precedent with respect to Canada's jurisdiction over non-Canadians engaged in corruption of foreign public officials. The Ontario Court of Appeal's approach to jurisdiction is similar to the notion of "qualified territoriality" proposed by the Ontario Superior Court in Chowdhury v. H.M.Q. – another foreign corruption case – where it was acknowledged that "bright territorial lines have blurred as economies globalize and modern developments in travel and information technology lead to more transnational and international criminal activity." It follows that courts may greenlight enforcement actions over transboundary offences that arguably have limited links with Canada, even absent a clear statutory grant of extraterritorial jurisdiction.

Recent developments

There have been three other convictions under the CFPOA, all of companies and all following guilty pleas. Global Affairs Canada has most recently reported that there are 10 ongoing CFPOA investigations.

Karigar remains the first and, so far, the only individual to be convicted under Canada's foreign corruption offence. Others involved in the conspiracy, Cryptometric's former CEO and COO (both US nationals) and an agent for the company (a UK national), have been charged with agreeing to pay bribes to Indian officials in violation of the CFPOA. The company agent is also charged with theft under section 334 of the Criminal Code. Their cases are currently before the courts.

A number of other foreign corruption cases are proceeding in Canadian courts. In November 2016, the president of Canadian General Aircraft, Larry Kushniruk, was charged under the CFPOA with conspiring to bribe Thai military officials in respect of the sale of a commercial passenger airplane. The charges were laid against the Calgary-based businessman even though the investigation did not, reportedly, reveal evidence that Thai public officials were actually bribed or were parties to the conspiracy – a fact pattern similar to the Karigar matter.

Also, earlier this year, the Ontario Superior Court of Justice dismissed the case against former SNC-Lavalin executives accused of bribing government officials involved in the Padma Bridge project in Bangladesh, after excluding wiretap evidence determined to be obtained on the basis of a faulty warrant. Foreign bribery charges against SNC-Lavalin with respect to major construction projects in Libya are set for a 50-day trial in September of 2018, while both bribery and economic sanctions charges against former SNC-Lavalin executives in connection with activities in Libya continue to proceed through the courts.

To view the original article click here

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
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).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions