On May 23, 2014, the Ontario Superior Court sentenced Mr. Nazir Karigar, an Ottawa-based business executive, to a three-year prison term for attempting to bribe foreign public officials. This judgment marks the first time an individual has been found guilty and convicted under Canada’s Corruption of Foreign Public Officials Act (CFPOA). Enacted in 1998, the CFPOA criminalizes the offering of bribes or other advantages to foreign public officials, and is Canada’s equivalent to the United States’ Foreign Corrupt Practices Act.
The court held that Karigar, 67, conspired with employees and associates of Cryptometrics Canada in Ottawa in an effort to win a $100 million security contract with Air India. He arranged illicit payments for officials of Air India and an Indian Cabinet Minister. Karigar’s defense counsel submitted that Karigar’s age and his lack of prior criminal involvement, as well as Cryptometric’s ultimate failure to receive the contract, should be considered as mitigating factors in sentencing, and requested a conditional sentence. In his judgment, Judge Charles Hackland rejected the notion that Karigar should avoid jail, noting a list of aggravating factors, namely that:
- this was a sophisticated and carefully planned bribery scheme intended to involve senior public officials. If successful, it would have involved the payment of millions of dollars over time;
- Karigar’s participation in the bidding process involved other dishonest elements (e.g., entry of fake competitive bids to create the illusion of a competitive bidding process and the receipt and use of confidential insider information);
- Karigar consistently behaved with what the judge called a sense of entitlement, candidly relating to a Canadian Trade Commissioner that bribes had been paid, and then urging the Canadian Government to assist in closing the transaction; and
- Karigar personally conceived of and orchestrated the bribery proposal, including providing the identity of the targeted officials and the proposed payment amount, which was reflected in financial spreadsheets he helped to prepare.
Ultimately, Judge Hackland found that Karigar had played a leading role in the conspiracy and determined that the three-year prison term was necessary in light of the “paramount and overriding consideration” of denunciation and deterrence. While the CFPOA was amended in 2013 to increase the maximum prison term to 14 years, Karigar was charged under the old legislation, meaning that the maximum sentence he could have received was five years in prison. The Crown had been seeking a four-year term.
This case establishes a precedent for future cases involving Canadian companies conducting business abroad. Referring to Canada’s obligations under the OECD Convention on Combating Bribery in International Business Transactions, the Court stressed that bribery of foreign public officials should be subject to the same sanctions as would be applied to the bribery of Canadian public officials. The Court further added that “[t]he idea that bribery is simply a cost of doing business in many countries, and should be treated as such by Canadian firms competing for business in those countries, must be disavowed.”
The Karigar case marks only the 4th conviction under the CFPOA since its enactment. All three prior cases involved conviction only of the corporate entities, not of individuals, and were resolved by way of guilty pleas as well as fines ranging up to over $10 million. Dozens of investigations, however, are said to be in progress, as Canada steps up its enforcement efforts against corruption both at home and abroad.