Bill S-14, which proposes significant changes to Canada’s Corruption of Foreign Public Officials Act(the “CFPOA”), passed second reading on February 27, 2013. The proposed amendments continue the trend of the Canadian government’s increasing attention on preventing Canadian businesses from bribing foreign officials. Given that the Bill was only introduced three weeks ago, it is likely to become law quickly and Canadian businesses will have to revisit their anti-corruption policies to ensure compliance. Canadian charities also need to pay particular attention, as their activities will be subject to the CFPOA.

The proposed amendments set out in Bill S-14 include:

No More Facilitation Payments

  • The facilitation payment exception will be eliminated. Facilitation payments, also known as “grease payments,” were previously permitted under the CFPOA. Companies were allowed to make small payments to facilitate faster performance of routine activities; for example, they could pay $50 to a foreign immigration officer to speed up the granting of an entry visa. Any corporate compliance policy that allows these payments must be updated.

Not-for-profit Enterprises and Charities No Longer Exempt

  • The proposed amendments will also bring Canadian charities and not-for-profit enterprises under the umbrella of the CFPOA. Previously, the CFPOA only applied to businesses operating “for profit”. This change will be of extreme concern particularly to Canadian charities involved in humanitarian relief, where facilitation payments are commonly used to get urgently needed supplies.

Stiffer Penalties

  • The maximum prison term has been significantly increased to 14 years. Currently, offences under the Act are punishable by unlimited fines and up to five years imprisonment.

Extra-Territorial Reach

  • The reach of the CFPOA will be extended to Canadian companies and citizens operating abroad. This eliminates the current requirement to prove that there is a “real and substantial connection” between an offence and Canadian territory. Now, for example, a Canadian citizen working for a foreign company outside of Canada will be subject to the CFPOA.

Books and Records Offences

  • New books and records offences will criminalize creating secret or misleading accounts or records for the purpose of concealing bribes.

Particularly in the wake of the ongoing high-profile investigations involving Griffiths Energy and SNC-Lavalin, Bill S-14 is a strong message to Canadian businesses and organizations operating abroad that it is now more important than ever to invest in and strengthen internal compliance protocols.