Mergers & Acquisitions: Shifting Sands in Canadian Anti-Bribery and Trade Control Laws Raise the Stakes in Due Diligence


Recent developments in Canadian anti-corruption, economic sanctions, and export control laws are having a significant impact on the due diligence that should be conducted on potential targets in the context of mergers and acquisitions as well as other business combinations such as joint ventures.

New and expanding measures along with increased enforcement, particularly in the resource extraction industries such as energy and mining, have raised the stakes for those investing in Canadian companies. Today, it is becoming more common for potential acquirers or investors to delay, re-price or even walk away from transactions because of actual or perceived compliance failures in the target’s operations.

A misstep in this area can have significant ramifications – in addition to criminal prosecution and penalties, compliance failures can also result in significant expenditure on internal investigations the inability to move product or transfer technology cross-border, delayed or cancelled customer orders, debarment from doing business with government, and substantial reputational costs in your relationships with business partners, including banks, investors, customers, suppliers and other stakeholders. Further, the now well-established pattern in the United States of shareholder class action suits being launched following allegations of management failure to implement proper internal controls is beginning to take hold in Canada.

LOADING PDF: If there are any problems, click here to download the file.