On June 18, 2013, the Parliament of Canada passed legislation to amend the Corruption of Foreign Public Officials Act (CFPOA). These amendments, announced by Canadian Foreign Affairs Minister John Baird on February 5, 2013, will enhance Canada's efforts to combat corruption and bribery in international business transactions.
Under the CFPOA, it is a Canadian criminal offence for persons or companies to bribe foreign public officials to obtain or retain an advantage in the course of business. The amendments, which will become law in Canada upon receiving Royal Assent, include the following key provisions:
- Maximum Penalty. The maximum jail term for an individual convicted of a foreign bribery offence is increased from five years to 14 years, in addition to unlimited fines.
- Books and Records Offence. The amendments create a new offence related to books and records of account kept to further or hide foreign bribery. The penalty for conviction under this new offence is a maximum of 14 years' imprisonment and unlimited fines.
- Nationality Jurisdiction. The amendments extend the jurisdictional reach of the CFPOA, permitting Canadian authorities to prosecute persons or companies of Canadian nationality for international bribery. This change makes it easier for Canadian authorities to launch prosecutions regardless of where the alleged bribery took place.
- Facilitation Payments. The exception for facilitation payments from the CFPOA's bribery prohibition will be phased out. Facilitation payments are those made to foreign public officials to secure or expedite the performance of acts of a routine nature that are within the scope of the official's duties. This amendment will come into force at a later date yet to be determined.
- Exclusive RCMP Authority. The RCMP will have the exclusive authority to lay charges under the CFPOA.
- Definition of "Business." The qualifying phrase "for profit" will be removed from the definition of "business," making it clear that the CFPOA applies to all businesses, regardless of whether or not a profit is made.
These amendments, along with other recent announcements from the Canadian government on domestic and international anti-corruption initiatives, indicate the increasing emphasis on rooting out international corruption and bribery from Canadian business practices and highlight the need for heightened attention to anti-corruption compliance.
Steps for Complying with the Amendments
Canadian companies conducting business abroad are well-advised to undertake a review of their anti-corruption and accounting policies and practices to ensure that, moving forward, their operations are compliant with the amendments to the CFPOA. The minimum recommended steps in this regard include:
- Reviewing your anti-corruption policy and practices to incorporate accounting and reporting procedures and controls designed specifically to reduce the risk of violating the new books and records offence;
- Implementing a strategy to phase out facilitation payments from your company?s operations in preparation for the eventual removal of the current exception from the CFPOA;
- Training your accounting and in-country personnel on the new amendments to the CFPOA, and the practical impacts on your business?s current practices and operations; and
- If your organization is a not-for-profit entity operating abroad, designing and implementing an anti-corruption compliance program tailored to your organizations foreign bribery risks.