Canada has proposed significant amendments to the Corruption of Foreign Public Officials Act (CFPOA). Bill S-14, the Fighting Foreign Corruption Act, was tabled as a Government bill in the Senate on February 5, 2013, and is Canada's latest effort to combat corruption and bribery by Canadians in foreign markets.
The major proposed amendments are as follows:
Creation of a new "books and records" offence: It will now be an offence to, among other things, maintain false accounts, fail to record or to adequately identify transactions, or to record non-existent expenditures, if the purpose is bribery or to hide that bribery. Currently, CFPOA makes it a criminal offence to bribe foreign public officials to obtain or retain an advantage in the course of international business. However, proving a bribery offence is notoriously difficult, and the three convictions to date under CFPOA have all been based on plea agreements. The proposed amendment effectively lowers the bar for prosecutions by requiring Canadian companies to keep adequate - and truthful - records, and establishing stiff fines for failure to do so. The new offence will attract a maximum of 14 years' imprisonment and unlimited fines.
Extending Canadian jurisdiction: Canada will now be able to prosecute Canadian citizens (and, of course, dual nationals) for offences under the CFPOA, wherever those citizens may be living, and the amendments make provision for prosecuting Canadians in absentia. Landed immigrants can be prosecuted if, after the commission of the offence, they are present in Canada. This extra-territorial application of Canadian law to reach Canadian citizens overseas is already a part of many Canadian sanction regimes. Extending it to the anti-bribery rules will reinforce the need for businesses to give clear directions to their overseas nationals.
The elimination of facilitation payments: Currently, facilitation payments made to a foreign public official to secure the performance of acts of a routine nature, are not considered bribes. Under the proposed amendments, the notion of facilitation payments will be eliminated, and all payments to a foreign public official to secure a benefit will be prohibited. Interestingly, while all of the other provisions of Bill S-14 will become law on Royal Assent, the provisions eliminating the facilitation payments exemption will come into force at a date to be determined by the Cabinet.
Increasing the maximum penalty: Currently, a conviction under CFPOA attracts a maximum of five years' imprisonment and unlimited fines. Under Bill S-14, the maximum jail time will increase to 14 years.
Narrowed power to lay charges: In one significant respect, the bill would weaken the CFPOAby limiting its enforcement. Bill S-14 would eliminate the potential for private prosecution of the CFPOA − of the entire CFPOA, not just of the new offences added by Bill S-141. While some commentators have interpreted this amendment as an attempt to centralise CFPOA policing by giving sole jurisdiction to Canada's national police force, the RCMP, it appears instead to be motivated by a desire to prevent interest groups and activists from laying charges against Canadian businesses that operate abroad.
Positioning: By naming the legislation the Fighting Foreign Corruption Act and declaring that it is "strengthening the fight against foreign bribery,"2 the Government of Canada is trying to convey the impression that its legislation is aimed at foreign activity. In fact, the bill targets the foreign activities of Canadians and Canadian businesses. This sweeping law has the potential to affect every Canadian business3, Canadian citizen and Canadian permanent resident that conducts any activity outside Canada.
Bill S-14 is a Government bill and, given the Government's majority in both Houses of Parliament, it can be expected to become law.
The Bill sends a clear message to Canadian businesses: Canada takes bribery and corruption seriously, and Canadian businesses must do the same. Canada's latest contribution to the international anti-corruption effort follows similar efforts by the U.S. and the U.K. governments to bolster the legal regimes prohibiting corruption and to aggressively prosecute those companies that engage in bribery.
Footnotes
1.Under the proposed section 6 of the CFPOA, section 504 of the Criminal Code, which allows anyone on reasonable grounds to lay a charge for an indictable offence, would not apply to the CFPOA.
2.Government of Canada, Department of Foreign Affairs and International Trade, news release, February 5, 2013.
3.Most significantly, the bill would define "business" broadly as, "any business, profession, trade, calling, manufacture or undertaking of any kind carried on in Canada or elsewhere."
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