It was announced last Wednesday that former SNC-Lavalin executive, Riadh Ben Aissa, was extradited to Canada from Switzerland to face 16 fraud-related charges in connection with the McGill University Health Centre project. Two weeks earlier, Swiss authorities had announced that Aissa plead guilty to corruption charges, including bribery and money laundering, before a Swiss Federal Penal Tribunal and was sentenced to three years in prison. This is but one of numerous examples of the flurry of enforcement efforts worldwide in the area of anti-corruption. Laws prohibiting bribery affect companies – and often corporate executives – in virtually every sector, from the extractive industry, to the construction and health industries, and increasingly to the financial sector. Some countries, like Canada, have had foreign anti-corruption legislation for over a decade and have recently been expanding the scope of the laws to create a more robust enforcement regime. Other countries, like the U.K. and Brazil, for example, have only recently followed the lead of the United States in instituting broad anti-corruption programs.
The recent conviction and jail term sentence of Nazir Karigan has demonstrated that Canada’s foreign corruption legislation has teeth. An agent for Ottawa-based technology company, Cryptometrics Canada, Karigar was convicted for conspiring to bribe a foreign public official and sentenced to three years in jail, notwithstanding he was 67 years old and in poor health. This sent a clear message to Canadian executives that offences under the CFPOA will carry heavy sentences.
The following summarizes consistency in this trend:
Canada’s anti-corruption enforcement efforts have been amplified in the last year with the expansion of the Corruption of Foreign Public Officials Act (CFPOA), legislation which was first enacted in 1998. As of June 2013, new provisions came into force which, amongst other things, expanded prosecutorial jurisdiction, increased the maximum prison term, and created new books and recordkeeping requirements. For more information on these changes, see the Osler Update from June 2013.
Similar to Canada’s regime, the U.S. Foreign Corrupt Practices Act (FCPA) also prohibits the bribery of foreign public officials and requires companies to maintain accurate books and records. The FCPA is enforced by the Department of Justice and the Securities and Exchange Commission, both of which invest substantial funding and resources on anticorruption enforcement. The FCPA notoriously has very broad, global reach, applying to all US persons, agents or subsidiaries of U.S. persons, and all foreign persons that cause, directly or indirectly, any act within the U.S. that furthers conduct in violation of the FCPA. Although the laws apply to companies in all industries, the U.S. Government has increasingly been shifting its focus to target firms in the financial sector.
The U.K.’s Bribery Act, which went into effect in 2011, extends beyond the public sector prohibiting bribery in general, be it of a government official or a private citizen. The UK also introduced the corporate crime of failing to prevent bribery, which applies globally to any company that carries on a business or part of a business in the UK. Recently, the U.K. has introduced deferred prosecution as a tool for its Serious Fraud Office, the body responsible for enforcement of the Bribery Act.
Develop an Effective Compliance Program
Each of Canada, the US, and the UK approach anti-corruption slightly differently. Yet, the essence of the prohibitions are similar.
Companies doing business in different countries must develop the tools to keep up to date with developments involving anti-corruption laws and regulations. They need to develop and implement effective and integrated compliance programs, which can include the following:
- Proper due diligence programs;
- Regulator auditing;
- Risk identification protocols; and
- Effective training, including promoting a culture of compliance within the organization.