Royal Canadian

Reviewing the Canadian Corruption of Foreign Public Officials Act

Recently,Nazir Karigar, a Canadian citizen, was arrested for allegedly bribing an Indian official. Since our company, Customer Expressions, is located in Canada, the article prompted me to learn more about the implications faced by those charged under the Canadian Corruption of Foreign Public Officials Act (CFPOA). According to CBC News, it was reported that this is only the second time a charge has been made under the CFPOA.

Canada is a member of the OECD, which enacted the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions on February 15th, 1999. Recently, Canada has identified the need to work harder to impose stricter enforcement on those violating the laws regarding the bribery of foreign public officials. As mentioned in the Wrageblog post “Questioning Canada’s Commitment to Combating the Corruption of Foreign Public Officials: Watching Bill C-31,” the country was labeled as a “laggard” by the OECD in 2009 for their lack in action when it comes to enforcing anti-corruption laws.

Canadian Department of Justice

On February 14th, 1999, the CFPOA was introduced as law in Canada. The CFPOA states that an offence is committed against the act:

“In order to obtain or retain an advantage in the course of business, 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.”

The act applies to everyone, Canadian or not, and isn’t limited to individuals, as it includes corporations. In the OECD Convention against bribery, the offence of bribing foreign public officials refers to the conduct of “international” business. According to the Department of Justice in Canada, a violation of the CFPOA occurs if the bribery of a foreign public official takes place “in the course of business.” This means that bribery doesn’t need to occur through cross border transactions in order to violate the CFPOA, it must however, have close ties to Canada. In an example provided by the Department of Justice, it would be illegal to bribe a foreign public official in Canada to obtain a business contract to build a new wing on an embassy in Canada.

The consequences for violating the CFPOA consist of a five-year maximum term of imprisonment if found guilty of bribing a foreign public official- this ensures that it is an extraditable offence. Since corporations cannot be imprisoned, they can be fined. If a corporation is found guilty of violating the CFPOA, the dollar value of the fine has no maximum and is set at the discretion of a judge. As outlined on the website for the Department of Justice in Canada:

“The Act allows for “facilitation payments,” which are made to expedite or secure the performance by a foreign public official of any “act of a routine nature” that is part of the foreign public official’s duties or functions.”

In response to the OECD’s “laggard comment” mentioned above, the Department of Justice in Canada created a new division in the RCMP (Royal Canadian Mounted Police), with a commissioned officer responsible for overseeing the anti-corruption programs. The unit investigates tips related to corrupt acts to increase enforcement of the CFPOA.

Export Development Canada (EDC)

As part of EDC’s social responsibility commitments, they require companies to sign a statement of declaration that denies any presence of corruption in EDC supported business transactions. If the declaration is signed without knowledge of corruption related to the transaction, liability will be voided, unless “willful blindness” is proven. We have previously addressed this issue in a post written about control person liability.

About the Author

i-Sight is a case management software platform designed to simplify your process and provide outstanding reports. It’s primarily configured to manage customer complaints and corrective actions, or employee relations, HR & ethics investigations. It’s also used for a variety of other customized case management solutions. We blog at i-Sight.com, providing advice and tips to HR managers and investigators in regards to managing internal investigations.

Canada Customs-Royal Canadian Air Farce