On October 31, 2017, the Government of Canada eliminated the facilitation payment exception from the Corruption of Foreign Public Officials Act (the “CFPOA”). The elimination of this exception was the final component of significant and high profile amendments to the CFPOA enacted over four years ago, which also:
- Expanded the jurisdiction for corruption offences based on nationality.
- Increased the maximum penalty for an individual convicted under the legislation to 14 years.
- Created a books and records offence.
- Provided the RCMP with exclusive authority to lay charges under the CFPOA.
The government delayed implementation of the provision of the 2013 amendments removing the facilitation payment exception from the CFPOA to provide companies with sufficient time to modify business practices and adapt their internal controls. Despite the length of notice, it is critical for companies conducting business abroad to be mindful of this major change to the legislation.
On July 3, 2015, the Government of Canada introduced a new and controversial procurement policy with serious repercussions should a company be charged with certain criminal offences.
The Department of Public Works and Government Services Canada’s (PWGSC) Ineligibility and Suspension Policy  states that if a person or company is charged criminally, they may be barred (also known as “debarment”) from doing business with the federal government for up to ten years.
For individuals and corporations who do, or want to do, business with the Canadian government, this policy is a game changer. Such companies must now consider if and how they can avoid being charged.
Many companies already take steps to avoid criminal prosecution. But in an increasingly complex business world, where companies have operations globally, the risk of running afoul of the law, both at home and abroad, cannot be eliminated. Recent changes to Canada’s Criminal Code, which have expanded who within a company can create criminal liability for a corporation, have increased this risk.
Recent trends have seen legislative penalties increase, prosecutors cracking down, and more individuals going to jail. We have entered a new era of white collar crime enforcement in Canada.
In mid-2013, the Corruption Foreign Public Officials Act (CFPOA) was amended by the Federal Government. It introduced a “new books and records” offence, increased the maximum jail time to 14 years for individuals, and promised to phase out the legality of facilitation payments. The Royal Canadian Mounted Police (RCMP) was assigned the exclusive jurisdiction over investigation and laying charges under the CFPOA and given an enhanced increase in their mandate to investigate and prosecute more corporations and individuals, which it is doing.
Following this, the RCMP prosecuted Nazir Karigar, a Canadian-Indian business man, under the CFPOA. At his lengthy trial it was never proven that he gave a bribe to an Air India (foreign) official, as alleged; the Crown did prove, to the court’s satisfaction, that he intended to pay a bribe to secure business with Air India for an American company. That was enough to convict and send him inside for 3 years.