The Government of Canada enacted Bill S-14, An Act to amend the Corruption of Foreign Public Officials Act
On June 18, 2013, the Government of Canada enacted Bill S-14, An Act to amend the Corruption of Foreign Public Officials Act (CFPOA). With Royal Assent provided the following day, the following four major changes to the CFPOA come into force immediately:
- The amended CFPOA establishes nationality jurisdiction applicable to all offences.
- The maximum sentence of imprisonment applicable to the offence of bribing a foreign public official is increased from 5 years to 14 years (there is still no maximum fine amount).
- There is a new offence relating to books and records and the bribing of a foreign public official or the hiding of that bribery, also punishable by up to 14 years imprisonment.
- The CFPOA now applies to not-for-profit organizations.
In addition, the following amendment comes into force on a date to be fixed by the Government:
- The facilitation payments exception to the offence of bribing a foreign public official is repealed.
Previously, the Canadian authorities only had jurisdiction over offences that occurred in whole or in part in Canada. Under the amended CFPOA, the authorities now have jurisdiction to pursue acts of bribery committed by any Canadian citizen, permanent resident or entity incorporated or formed under the laws of Canada or any province thereof, no matter where in the world the act is alleged to have occurred and regardless of whether it has any other connection to Canada.
Importantly, the proposed amendments to the CFPOA would preserve the Canadian and British concept of international double jeopardy, such that if a Canadian company or individual were to be convicted and sentenced for the same conduct by a foreign court of competent jurisdiction, in certain circumstances any further criminal proceedings by the Canadian authorities would be barred.
Although not identical to the books and records provisions of the American Foreign Corrupt PracticesAct, by creating a new accounting offence Canada significantly expands the scope of the CFPOA. Under the amended CFPOA the accounting offence would require evidence that books and records were not properly maintained for the purpose of bribing a foreign public official or hiding a bribe, once it had occurred. This suggests that negligence alone would be insufficient but that there must be an unlawful purpose to the creation of improper books and records.
Historically, Canada has been subject to criticism by the international anti-corruption community by limiting the scope of the CFPOA to “for profit” businesses only. By amending the definition of the word “business”, the new CFPA will also apply to not-for-profit organizations.
The eventual elimination of facilitation or “grease” payments constitutes the final dramatic shift in the legislative regime. Previously permitted under the CFPOA, facilitation payments are payments made to foreign public officials for non- discretionary decisions that cover acts of a routine nature. Examples include issuing business permits or licences, processing visas or work permits and providing services normally offered to the public such as mail delivery, telecommunication service and the scheduling of inspections related to the transit of goods. Once the federal cabinet committee formally fixes a date to eliminate this exemption, Canada will officially part ways with the American Foreign Corrupt Practices Act (which allows for facilitation payments) and follow in the footsteps of the U.K. Bribery Act (which does not allow for facilitation payments).
There have been several recent high profile international scandals involving Canadian companies, including SNC Lavalin and Griffiths Energy. These amendments to the CFPOA will significantly expand the scope of Canada’s international enforcement efforts against bribery and corruption.