On February 19, 2015, the RCMP announced that it has charged SNC-Lavalin Group Inc. and two related entities (collectively, "SNC-Lavalin") with one count of foreign corruption contrary to the Corruption of Foreign Public Officials Act and one count of fraud under the Criminal Code. These charges follow a long-running international investigation into the activities of SNC-Lavalin and certain of its former employees in Libya, Canada, Bangladesh and elsewhere as well as foreign and domestic corruption charges in prior years against certain former executives of SNC-Lavalin.
According to the RCMP's press release, the latest round of corruption charges (the first against SNC-Lavalin itself) relate to alleged illegal activities over a 10 year period from August 16, 2001 to September 20, 2011, respecting $47.6 million in alleged bribes to foreign public officials and an alleged fraud of $130 million in relation to projects in Libya.
In addition to the potential financial penalties and reputational damage to SNC-Lavalin, these charges pose a serious risk that SNC-Lavalin will face debarment in Canada and abroad. Certain SNC-Lavalin entities are already the subject of a debarment order by the World Bank. SNC-Lavalin's Chief Executive Officer stated in October 2014 that any such debarment orders in Canada could result in the sale or closure of the company.
These charges follow recent public statements, as well as concrete steps taken by the government, to strengthen Canada's commitment to combating foreign corrupt practices, including amending the Corruption of Foreign Public Officials Act ("the Act") to, among other things, broaden its jurisdictional reach and increase the maximum term of imprisonment for individuals convicted under the Act and obtaining the first conviction and sentencing of an individual for bribery of a foreign public official. These developments highlight the critical importance of robust anti-corruption compliance regimes for Canadian companies conducting business outside of Canada.
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