CFPOACorruption of Foreign Public Officials Act (Canada)
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In 2015, several years after the debarment of SNC-Lavalin and dozens of its affiliates by the World Bank, (99) Canadian authorities charged SNC-Lavalin with foreign bribery under the CFPOA. (100) Settlement negotiations reportedly failed because Canadian authorities would only consider a guilty plea, which would trigger SNC-Lavalin's mandatory debarment.
(82) See R v Watts, [2005] AJ No 568,2005WL6933319 (Alta QB) (accepting a guilty plea from the corporation Hydro Kleen for a violation of the CFPOA).
The 2013 amendment provided that the exemption for facilitation payments would be removed from the CFPOA upon an order of the Governor in Council (see ibid, cl 5), which was issued in October of 2017.
Faced with this sea change in the Canadian enforcement landscape, Canadian corporations with international operations have rushed to ensure compliance with the CFPOA and its prohibitions, including through the adoption of anti-corruption policies and procedures.
In June 2013, Bill S-14 became law, amending the CFPOA to significantly expand the reach of the CFPOA by replacing the stricter standard of "territorial jurisdiction" with that of "nationality jurisdiction"; and to impose a "books and records" provision prohibiting accounting practices intended to conceal corrupt practices.
Following a brief review of the prohibitions of the CFPOA (Part I), this paper moves to a multi-tiered consideration of section 22.2 of the Criminal Code, (9) which is the provision controlling those circumstances in which a Canadian corporation may be held criminally liable for the acts of its human agents (Part II).
Generally speaking, the CFPOA imposes criminal and civil liability on individuals and entities that engage in bribery or other corruption of foreign public officials.
In addition, Bill S-14, enacted and effective as of 19 June 2013, adds a corresponding "books and records" offence to the CFPOA. (12) This enactment makes it a criminal offence for an individual or entity to, "for the purpose of bribing a foreign public official ...
Should the agent be partly or wholly staffed or owned by current public officials, the very engagement of the agent could constitute a violation of the CFPOA. It may also be important to verify that the engagement of the agent does not violate any local laws, as certain jurisdictions actually prohibit certain contractual arrangements involving government relations or negotiation.
However, corporations must appreciate that the appropriate due diligence and monitoring of agents will not, in and of itself, provide immunity from liability under the CFPOA for an indirect violation of section 3(1).
On the one hand, amendments to the jurisdictional reach of the CFPOA, effected by Bill S-14 in June of 2013, create a potentially important distinction among the corrupt practices for which Canadian target entities may be held liable.
The situation is no different in the context of CFPOA liability.