Speaking at the second annual Canadian and global anti-corruption compliance conference held Feb. 21-22 in Toronto, RCMP Supt. Stephen Foster outlined some of the changes and discussed how they put Canada’s legislation on a more equal footing with that of the U.S. Foreign Corrupt Practices Act and the British Bribery Act.
For example, the Canadian act currently contains language that restricts a bribery offence to for-profit transactions. Under the proposed amendments, the for-profit requirement has been removed. Groups like the Organisation for Economic Co-operation and Development have been critical of Canada’s approach in this area.
“The OECD has criticized Canada for not including non-profit organizations in CFPOA,” said Foster, who designed the international anti-corruption and enforcement program for the RCMP.
On Feb. 5, 2013, Bill S-14, the Fighting Foreign Corruption Act, was introduced into Canada's Senate. The changes include:
• Repeal the existing exception for facilitation payments: The existing exception covers payments made to expedite acts of a routine nature that are part of the foreign public official’s duties or functions, such as small payments for the processing of official documents and mail pickup and delivery.
• Criminalizing illicit accounting: The amendments create a separate offence for concealing bribery in an entity’s books and records.
• Expanding jurisdiction on the basis of nationality: Under the proposed amendments, every person who commits an act or omission outside Canada that, if committed in Canada, would constitute an offence under the Canadian act is deemed to have committed that act or omission in Canada if the person is a Canadian citizen; a permanent resident who, after the commission of the act or omission, is present in Canada; or a company, partnership or other entity formed or organized under the laws of Canada.
• Increased sentences for individuals of up 14 years from five years.
• Apply the act to not-for-profit organizations.
• RCMP to have exclusive authority to lay charges.
In particular, Foster said an important change is the proposed amendments that would change territorial jurisdiction to include nationality jurisdiction.
“However, it wouldn’t override territorial jurisdiction based on the case law of R. v. Libman, which is the real and substantial connection,” he said. “R. v. Libman is how Canada extends to an international jurisdiction without using nationality jurisdiction.”
Jennifer Lay, senior manager for business conduct and anti-corruption compliance with Scotiabank, said the British Bribery Act and U.S. legislation created a global standard for compliance programs and Canada is now filling in where gaps have existed in our law.
“The requirement for accurate books and records is in line with the FCPA requirements,” said Lay, who spoke about developing and sustaining an anti-corruption and compliance program.
While anti-corruption efforts are still relatively new in Canada, when it comes to investigations and charges being issued, concerns have definitely become amplified in corporate Canada, said Morgan Frontczak, senior counsel for global competition and regional ethics and compliance with Weatherford International, a Houston-based oil field service company with extensive operations in Canada.
“The frequency has definitely changed. We didn’t hear anything since the Hydro Kleen Group case and we now know of 35 active investigations and two dedicated [RCMP] units. This is something we’re going to continue to see make the news here,” she says.
Frontczak spoke about anti-corruption enforcement trends in Canada and pointed out that increased resources for the RCMP and self-reporting in cases like the recent Griffiths Energy International Inc. case in Alberta demonstrate there will be a greater “speed to indict.”
“We’ve seen an increase speed in indicting these violations and increasing fines,” she said. “But I think it’s very much still a wait-and-see game. I still think the jury is out when it comes to where these fines will go.”
With the Griffiths Energy case in Alberta on Jan. 25, 2013, the Alberta Court of Queen’s Bench approved a $10.35-million penalty against Griffiths for a violation of the Canadian act in connection with the actions of the company’s previous management and representatives in Chad.
“While Niko had previously set the benchmark at $9.5 million, Griffiths now topped that and with some cases out there, like SNC, we’re probably going to see much more significant fines, potentially with that case,” she said. “That’s definitely something for Canadian companies to be concerned about.”
However, the actual bribe in Niko was $200,000 while in Griffiths there was a $2-million payment.
“There’s no doubt the approach the Griffiths’ team chose in coming forward to officials and doing it quickly saved everyone money and resources,” she said.
Frontczak says the SNC-Lavalin case will put the RCMP’s enforcement efforts under heightened scrutiny.
“It’s also going to be harder for companies to feign ignorance. This is very much a national conversation that is being held now and it’s something all Canadian operations should very much know about.”