On February 5, 2013, the Government of Canada introduced Bill S-14, An Act to amend the Corruption of Foreign Public Officials Act (CFPOA). Bill S-14 has passed its first reading before the Senate of Canada and would provide five major changes to the CFPOA:
- Increasing the maximum sentence of imprisonment applicable to the offence of bribing a foreign public official from 5 years to 14 years (there is still no maximum fine amount);
- Eliminating the facilitation payments exception to that offence;
- Creating a new offence relating to books and records and the bribing of a foreign public official or the hiding of that bribery;
- Establishing nationality jurisdiction that would apply to all of the offences under the Act; and
- Making the CFPOA applicable to not-for-profit organizations.
Although not identical to the books and records provisions of the American Foreign Corrupt Practices Act, by creating a new accounting offence Canada will significantly expand the scope of the CFPOA. Under the proposed changes to the CFPOA the accounting offence would require evidence that books and records were not properly maintained for the purpose of bribing a foreign public official or hiding a bribe, once it had occurred. This suggests that negligence alone would be insufficient but that there must be an unlawful purpose to the creation of improper books and records.
Historically, Canada has been subject to criticism by the international anti-corruption community by limiting the scope of the CFPOA to "for profit" businesses only. By amending the definition of the word "business", the new CFPA will also apply to not-for-profit organizations.
The elimination of facilitation or "grease" payments also constitutes a dramatic shift. Currently permitted under the CFPOA, facilitation payments covers payments made to foreign public officials for non-discretionary decisions that cover acts of a routine nature. If a payment is made solely in order to expedite or facilitate the performance of a routine government action, it would not result in prosecution under the current CFPOA. Examples include issuing business permits or licences, processing visas or work permits and providing services normally offered to the public such as mail delivery, telecommunication service and the scheduling of inspections related to the transit of goods. By eliminating this exemption, Canada will part ways with the American Foreign Corrupt Practices Act (which allows for facilitation payments) and follow in the footsteps of the the U.K. Bribery Act (which does not allow for facilitation payments).
Establishing a nationality-based jurisdiction for the CFPOA constitutes the final major change. Under current law, the Canadian authorities only have jurisdiction over offences that occur in whole or in part in Canada. Under the proposed change, the authorities would have jurisdiction to pursue acts of bribery committed by any Canadian citizen, no matter where in the world the act is alleged to have occurred and regardless of whether it has any connection to Canada. This amendment had initially been proposed in Bill C-31in 2009 but died when Parliament was prorogued in December, 2009.
Importantly, the proposed amendments to the CFPOA would preserve the Canadian and British concept of international double jeopardy, such that if a Canadian company or individual were to be convicted and sentenced for the same conduct by a foreign court of competent jurisdiction, in certain circumstances and further criminal proceedings by the Canadian authorities would be barred.
There have been several recent high profile international scandals involving Canadian companies, including SNC Lavalin and Griffiths Energy. These amendments to the CFPOA will sharpen Canada's international enforcement tools in the fight against bribery and corruption.
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