On August 15, 2013, the Ontario Superior Court of Justice convicted Nazir Karigar, an agent of a Canadian subsidiary of a U.S. technology company, under Canada’s Corruption of Foreign Public Officials Act (“CFPOA”). The conviction was the first ever of an individual under the CFPOA and suggests a new focus by Canadian authorities on the investigation and prosecution of foreign bribery. Karigar faces a statutory maximum sentence of five years in prison.
The Canadian court found that in 2005, Karigar was hired by Cryptometrics Canada to use his purported contacts at an Indian government-owned airline, Air India, and help Cryptometrics obtain business for the company’s biometric facial recognition technology. In 2006, Karigar helped Cryptometrics submit a bid for an Air India project. Karigar also helped a second company submit a bid in order to make the bidding process appear to be competitive. While the bids were being considered, Cryptometrics transferred $200,000 to Karigar to ensure that Air India executives would consider only the two submitted bids. Cryptometrics then transferred an additional $250,000 to Karigar for the purpose of paying the Indian Minister of Civil Aviation to support Cryptometrics’ bid. The Canadian court noted that there was no evidence that the $450,000 was actually paid to any Indian officials.
Cryptometrics failed in obtaining the business contract. Although the court agreed with Karigar that there was insufficient evidence that a bribe was actually offered or paid, it nonetheless found him guilty of conspiring to bribe the Air India executives and the Indian Minister of Civil Aviation, all of whom were held to be “foreign officials” for purposes of the CFPOA.
A few notable takeaways from this case include:
- The CFPOA is similar in key respects to the U.S. Foreign Corrupt Practices Act. Like the FCPA, the CFPOA imposes liability on any person who “directly or indirectly gives, offers or agrees to give or offer a loan, reward, advantage or benefit of any kind to a foreign public official or to any person for the benefit of a foreign public official” in order to obtain or retain an advantage in the course of business either (a) in exchange for an act or omission by such official or (b) to induce such official use his or her position to influence any acts or decisions of the foreign state or public international organization for which the official performs duties or functions.
- The court’s opinion that executives of Air India are “foreign public officials” shows that Canadian courts interpret that phrase broadly, as do American courts under the FCPA.
- The investigation leading to Karigar’s conviction demonstrates the level of cooperation and communication between U.S. and foreign government agencies in anti-corruption cases. The trial evidence showed that Karigar contacted the U.S. Department of Justice in January 2008 under the alias “Buddy” to report that Cryptometrics had engaged in foreign bribery. At the end of the communication, Karigar inquired of DOJ, “What about my immunity?” DOJ then shared that information to Canadian enforcement authorities.
Companies that conduct business or have subsidiaries in Canada should be on notice of this case, as it signals a potential increase by the Royal Canadian Mounted Police to investigate and prosecute cases under the CFPOA.