In 2006 through to at least 2011, the Las Vegas Sands hotel and casino corporation transferred funds totaling more than $62 million to a “consultant” in China to promote their interests.
Lacking supporting documentation for appropriate authorization and identity, the money trail raised a red flag for the Department of Justice (DOJ) in the United States. This led to an investigation under the authority of Foreign Corrupt Practices Act (FCPA), as well as an investigation carried out by the U.S. Securities and Exchange Commission (SEC), since the Sands is traded on the New York Stock Exchange.
Since the Sands management could not account for the funds transferred to the consultant, bribery was inferred. This lack of controls extended to other transactions, including gifts and entertainment to foreign officials, employee and vendor expense reimbursement, and customer complimentary services.
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), the federal agency responsible for the detection, prevention and deterrence of money laundering and terrorist financing, has, for the first time, imposed an administrative monetary penalty on a Canadian bank. The penalty of more than $1.1-million comes at a time of increased scrutiny of Canadian financial institutions and financial transactional crime as a result of the publication of the Panama Papers.
Despite internal safe guards and the best efforts of mining companies and their executives, criminal investigations can arise in relation to operations at home or abroad. How a company responds to a criminal investigation or to possible internal criminal misconduct, can have a serious legal and reputational impact, particularly since changes to Canadian law have made it easier for prosecutors to convict corporations and their officers of criminal wrongdoing. Today at Fasken Martineau’s PDAC 2016 seminar, Peter Mantas and Norm Keith of Fasken Martineau and Sandy Boucher of Grant Thornton discussed how proactive a mining company should be during the critical period after suspected criminal wrongdoing is discovered.
On December 10, 2015, SNC-Lavalin announced that it had signed the first-ever administrative agreement with the Government of Canada under the Integrity Regime.
The Integrity Regime, in effect since July 2015, bars companies and their related legal entities from bidding on government contracts if they are charged with or convicted of certain criminal or administrative charges. SNC-Lavalin is currently battling fraud and corruption charges filed in February, 2015 regarding three of its legal entities. This administrative agreement allows it to bid and win government contracts as it signifies the government’s satisfaction with SNC-Lavalin’s ethics and compliance programs.
SNC-Lavalin had to undertake and institute a comprehensive ethics and compliance program. Some of the measures it took include an antitrust and competition policy, a whistleblowing policy, a political contribution policy, appointing compliance officers in every business sector, and obligatory compliance training and certification for all employees.
This is a significant step towards addressing what many companies and legal advisors believe to be a harsh policy. Until now, the Integrity Regime allowed very little discretion to the government to create an alternative to debarment of the accused, pending a judicial decision on criminal charges. While on its face, the Integrity Regime remains rigid, in practice, it now appears that companies facing criminal charges or under investigation may have other options.
On November 27, 2015, the Supreme Court of Canada decided two appeals, B010 v. Canada (Citizenship and Immigration) and R. v. Appulonappa. The appeals concerned the meaning and application of the human smuggling provisions in the Immigration and Refugee Protection Act (IRPA).
The Supreme Court of Canada unanimously concluded that the offence of “human smuggling” in s. 117 of IRPA, despite its broad wording, applies only to those engaged in organized crime. It does not apply to those who provide humanitarian, mutual and family assistance to asylum-seekers coming to Canada.
These cases arose out of large scale entries to Canada in 2009 and 2010 by Tamil refugees arriving by boat in British Columbia. The Supreme Court’s decision comes in the midst of the most serious worldwide refugee crisis since the Second World War and as Canada prepares to welcome 25,000 Syrian refugees.