Canada Continues Strong Enforcement of Anti-Corruption Laws with First Individual Conviction

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Canada's first conviction of an individual under the Corruption of Foreign Public Officials Act (CFPOA) is expected to set a precedent for future corruption cases as regulators continue their crackdown on global corruption. Following the conviction last fall of an Indian-Canadian businessman, prosecutors are now seeking a four-year prison term for his efforts to bribe government officials in India in an attempt to win the business of a state-owned airline.

In 2005, the businessman approached the Ottawa branch of a U.S.-based security company with an offer to help the company sell a facial recognition system to an airline owned and controlled by the government of India. The security company later established an office in Mumbai, India and installed him as its executive director. In this role, he organized the distribution of at least $450,000 to airline officials and an Indian cabinet minister in the hopes of securing a contract to provide the airline with security technology.

In the end, the company was not awarded the contract. The defense team argued that no evidence was produced proving a bribe was actually offered or paid. Nonetheless, Justice Charles Hackland of the Ontario Superior Court ruled that the defendant was still guilty of entering into a bribery conspiracy, based on the fact that there was enough of a paper trail to show that he intended to make the payments.

Although prosecutors are seeking a four-year prison term for the first individual convicted under the CFPOA there are no similar cases for the judge to consider with respect to sentencing. Three companies have been convicted under the law since it went into effect in 1999, but all pleaded guilty and the cases did not go to trial. Currently, the maximum sentence under the law is 14 years; however, prosecutors are restricted to seeking the maximum of five years in place at the time the former executive director was convicted.

Despite a slow start and lax enforcement efforts, since 2011 the Canadian government has taken significant steps to strengthen CFPOA enforcement — including a 2013 amendment that provides for stiffer penalties and stronger enforcement measures — resulting in a sharp increase in investigations, charges and convictions. As a result, Canadian companies need to invest in anti-corruption training programs that include thorough risk assessments, effective internal controls and due diligence measures to ensure compliance with the CFPOA and other applicable anti-bribery laws.

 

Topics:  Anti-Corruption, Canada, CFPOA

Published In: General Business Updates, Criminal Law Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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