Canada: Corruption Of Foreign Public Officials Act: Overview

Last Updated: December 6 2017
Article by Kenneth Jull

The CFPOA: Mandatory Risk Assessment

The Corruption of Foreign Public Officials Act, S.C. 1998, c. 34 (CFPOA) has been in force since 1999. In June of 2011, the CFPOA streaked across the radar screens of compliance officers when Niko Resources Ltd. (Niko), a Canadian energy company, plead guilty and paid a fine of almost $10 million as a result of bribes paid to a Bangladeshi official. The bribes included a luxury SUV (Toyota Land Cruiser) and trips to New York and Calgary.

Niko and its subsidiaries were placed on probation requiring that the companies develop compliance procedures based on a risk assessment. The following paragraph from the Probation Order demonstrates the extent to which a risk assessment is now a mandatory element of compliance in the anti-corruption arena:

The company will develop these compliance standards and procedures, including internal controls, ethics and compliance programs on the basis of a risk assessment addressing the individual circumstances of the company, in particular foreign bribery risks facing the company, including but not limited to, its geographical organization, interactions with various types and levels of government officials, industrial sectors of operation, involvement in joint venture agreements, importance of licences and permits in the company's operations, degree of governmental oversight and inspection, and volume and importance of goods and personnel clearing through customs and immigration.

In this note, we survey the essentials of the CFPOA and develop the concept of a risk management matrix which has been applied on a global scale. The matrix will assist an organization in identifying the appropriate level of auditing and training that will be necessary in a given situation. The methodology of this matrix is also discussed.

Centerpiece of the CFPOA

The "centerpiece" of the CFPOA is the offence of bribing a foreign public official:

Every person commits an offence who, in order to obtain or retain an advantage in the course of business, directly or indirectly gives, offers or agrees to give or offer a loan, reward, advantage or benefit of any kind to a foreign public official or to any person for the benefit of a foreign public official

  • as consideration for an act or omission by the official in connection with the performance of the official's duties or functions; or
  • to induce the official to use his or her position to influence any acts or decisions of the foreign state or public international organization for which the official performs duties or functions.

Every person who commits this offence is guilty of an indictable offence and liable to imprisonment for a term of not more than 14 years.

(sections 3(1) and (2), CFPOA)

The CFPOA contains a number of definitions which are important to consider.

"Foreign public official" means:

  • A person who holds a legislative, administrative or judicial position of a foreign state.
  • A person who performs public duties or functions for a foreign state, including a person employed by a board, commission, corporation or other body or authority that is established to perform a duty or function on behalf of the foreign state, or is performing such a duty or function.
  • An official or agent of a public international organization that is formed by two or more states or governments, or by two or more such public international organizations.

Note that the definition does not include members of political parties that are in opposition, but caution should be exercised in this scenario.

"Foreign state" means a country other than Canada, and includes:

  • Any political subdivision of that country.
  • The government, and any department or branch, of that country or of a political subdivision of that country.
  • Any agency of that country or of a political subdivision of that country.

The First Litigated Case: Karigar

The case of R. v. Karigar, 2013 CarswellOnt 11325 (Ont. S.C.J.) (Karigar) was decided on August 15, 2013. This case is important on a number of levels:

  • Whistleblowing backfired, relevant only to sentence. A very unusual aspect of the case is that Mr. Karigar described the scheme in an e-mail sent under a pseudonym "Buddy" to the Fraud Section (FCPA) of the US Department of Justice stating he had information about US citizens paying bribes to foreign officers and inquired about reporting the matter. Mr. Karigar admitted that he is "Buddy". The statement described the scheme as follows:

There was a tender put out by Air India (Government of India enterprise) for a biometric security system, Cryptometrics bid on the system.

  1. Cryptometrics Paid USD 200,000 to make sure that only 2 companies were technically qualified.
  2. They paid $250,000 for the minister to 'bless' the system. There are documents executed to return the funds if the contract is not awarded. There are recordings asking for the money back.
  3. The People involved are Mr. Robert Barra, US citizen, CEO of Cryptometrics and Dario Berini, COO of Cryptometrics, also US Citizen.
  4. Canadian Citizen on contract with the Canadian subsidiary of Cryptometrics.
  5. What about my immunity?

Ultimately Karigar did not receive immunity. To the contrary, he was charged and convicted in Canada under the CFPOA. The court decision does not discuss why Karigar's immunity request was denied.

  • Conspiracy. The decision in Karigar demonstrates that the word "agrees" in section 3 of the CFPOA imports the concept of conspiracy. Moreover, where there is a conspiracy, the prosecution need not prove the identity of the recipient of a proposed bribe as this could put foreign nationals at risk. In Karigar, the purpose of the conspiracy to bribe was to win a tender for a multi-million dollar contract to sell facial recognition software to Air India, a state enterprise.
  • No actual bribe, but belief in a bribe. It is not necessary for the prosecution to prove that a bribe was actually paid to a foreign official to establish a violation of section 3 of the CFPOA. It is sufficient for the party to believe that a bribe was being paid to such an official. The court found that Karigar believed that bribes needed to be paid as a cost of doing business in India and he agreed with others to pay such bribes. He believed bribes were in fact paid and he said as much to the Deputy Trade Commissioner in Mumbai and to US authorities and to the RCMP.

The decision in Karigar was affirmed on appeal, 2017 CarswellOnt 10393 (Ont C.A.). Justice Feldman affirmed that the offence is clearly committed when a person agrees with a foreign public official to give that official a benefit. But equally clearly, the offence is not limited to that scenario. It includes both a direct and an indirect agreement to give or to offer an advantage. There is no limiting language on who must "agree", prescribing the parties to the agreement. Justice Feldman rejected the defence position that the agreement must be with the foreign official. The offence only requires 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.

Level of Intent Required: Includes Willful Blindness

With respect to the mens rea (intent to commit) of the offence set out in section 3 of the CFPOA, the Department of Justice Guide to the CFPOA states:

No particular mental element (mens rea) is expressly set out in the offence since it is intended that the offence will be interpreted in accordance with common law principles of criminal culpability. The courts will be expected to read in the mens rea of intention and knowledge.

The concept of mens rea includes the doctrine of willful blindness, which has been reviewed by the Supreme Court of Canada in R. v. Briscoe, 2010 CarswellAlta 589 (S.C.C.). Justice Charron for the Court observed that:

The doctrine of willful blindness imputes knowledge to an accused whose suspicion is aroused to the point where he or she sees the need for further inquiries, but deliberately chooses not to make those inquiries.

The existence of a robust compliance system will assist organizations in refuting any suggestion that they were willfully blind.

Exemption for Reasonable Promotional Expenses

Promotional expenses on behalf of government officials: when is this necessary? The CFPOA contains an exemption for reasonable promotional expenses. This concept may cause some initial confusion, as one does not normally think about payments to government officials as promotional in nature, unless the government is a prospective customer. However, in order to obtain government approvals, it is often necessary to explain the nature of the proposed project and this may require that foreign officials take action such as travel to the location of the proposed project or take time away from their office. The officials may require that travel be provided or that expenses are reimbursed.

Exact wording of promotional exemption. The exemption reads as follows:

No person is guilty of an offence under subsection (1) if the loan, reward, advantage or benefit:

  • is permitted or required under the laws of the foreign state or public international organization for which the foreign public official performs duties or functions; or
  • was made to pay the reasonable expenses incurred in good faith by or on behalf of the foreign public official that are directly related to:

    • the promotion, demonstration or explanation of the person's products and services, or
    • the execution or performance of a contract between the person and the foreign state for which the official performs duties or functions.

(section 3(3), CFPOA)

Facilitation Payments

The CFPOA previously had an exception for facilitation payments, for example, payments made for acts of a routine nature such as the issuance of a permit or the processing of official documents.

Facilitation payments are outside government fee schedules. Facilitation payments are best described by first contrasting them to official government programmes for expedited payments. For example, if applying for a passport, one can pay a fee to the government to expedite the processing of the passport. A facilitation payment, by way of contrast, is a payment made to individual government officials who indicate that approvals may be expedited by a payment to them individually, outside of an official framework (section 3(4), CFPOA).

Elimination of facilitation payments. The CFPOA was amended in June 2013. These amendments provided for the elimination of the exception for facilitation payments on a later date to be decided by Cabinet. The amendments are in force as of October 31, 2017 so facilitation payments are no longer permitted under the CFPOA.

Books and Records

A new criminal offence. As part of the June 2013 amendments, there is a new books and records offence: all transactions and expenditures must be adequately and accurately identified in the books and records of the company. While the offence does not explicitly outline a mental element, it is expected that the courts will read in the requirement of intention and knowledge, which flows from the preamble wording "for the purpose of bribing". In contrast to the law in the United States, there is no parallel civil enforcement mechanism relating to proper books and records.

Books kept for the purpose of bribing or hiding a bribe. The new provision reads as follows:

Every person commits an offence who, for the purpose of bribing a foreign public official in order to obtain or retain an advantage in the course of business or for the purpose of hiding that bribery,

  • establishes or maintains accounts which do not appear in any of the books and records that they are required to keep in accordance with applicable accounting and auditing standards;
  • makes transactions that are not recorded in those books and records or that are inadequately identified in them;
  • records non-existent expenditures in those books and records;
  • enters liabilities with incorrect identification of their object in those books and records;
  • knowingly uses false documents; or
  • intentionally destroys accounting books and records earlier than permitted by law.

Every person who contravenes subsection (1) is guilty of an indictable offence and liable to imprisonment for a term of not more than 14 years.

(section 4, CFPOA)

Six Categories of Books and Records Offences. From a practical view, the books and records categories can be labelled as follows:

  • The "offsheet books" offence: Maintaining accounts which do not appear in any of the required books and records (section 4(a), CFPOA).
  • The "invisible transactions" offence: Making transactions that are not reported or are inadequately recorded and identified. What constitutes "inadequate" will be a source of considerable litigation (section 4(b), CFPOA).
  • The "fake expenditures" offence: Recording non-existent expenditures in the books and records (section 4(c), CFPOA).
  • The "incorrect liabilities" offence: Entering liabilities with incorrect identification of their object in those books (section 4(d), CFPOA).
  • The "false documents" offence: Knowingly using false documents (section 4(e), CFPOA).
  • The "destruction of documents" offence: Intentionally destroying accounting books and records earlier than permitted by law (section 4(f), CFPOA).

Transparency in books and records. Businesses should ensure that they have complete and continually updated books and records with respect to all third-party consultants in foreign jurisdictions. These books and records must be sufficiently transparent and have enough independence to withstand potential audits. Where possible, companies should demand audit rights from third-party agents. It would be wise to have a forensic accounting firm retained by counsel to review and test the books and records systems against the potential six categories of offences listed above and to remediate where necessary.

The Canadian government has not followed the U.S. route of also having a civil regime to enforce books and records requirements. Canadian companies that are cross listed in the United States must comply with U.S. books and records law. In the matter of Nordion (Canada) Inc. the U.S. Securities and Exchange Commission (SEC) imposed a civil money penalty in the amount of $375,000 on March 3, 2016. Nordion did not have adequate policies and procedures in place to detect corruption risks. Nordion mischaracterized fees paid to its Agent as legitimate business expenses when some or all of the fees may have been used to make corrupt payments to Russian government officials. In assessing the amount of the penalty, the SEC "considered remedial acts promptly undertaken by Nordion, Nordion's self-reporting, and their cooperation afforded the Commission staff. Nordion self-reported the conduct to authorities in both the U.S. and Canada, conducted a thorough internal review, identified the illegal conduct, voluntarily produced witnesses from Canada for interviews in the U.S. and translated documents, and implemented substantial remedial measures to prevent future violations."

To view the full 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

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

Similar Articles
Relevancy Powered by MondaqAI
Affleck Greene McMurtry LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Affleck Greene McMurtry LLP
Related Articles
Up-coming Events Search
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
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 (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

To Use 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.


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.


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