Canada Anti-Corruption Law May Affect FCPA Enforcement

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On June 1, 2015, Canada’s Extractive Sector Transparency Measures Act (“ESTMA”) came into force. Approved in December 2014, but not in force until this month, the act requires companies in the extractive sector to report annually on certain payments made to any level of government — including payments made to employees of state-owned corporations — both in Canada and abroad.

In line with Canada’s commitment to join global anti-corruption efforts, the act’s stated purpose is to enhance transparency in the resource extractive sector in order to deter and detect corruption, including corruption under Canada’s Corruption of Foreign Public Officials Act. As discussed in this article, the act contains its own enforcement and penalty provisions. Equally important, in light of the heavy scrutiny given to the extractive sector by foreign bribery prosecutors — according to a recent study by the Organization for Economic Cooperation and Development, 19 percent of all concluded foreign bribery cases since 1999 have involved the extractive industries — the act also has broader implications for foreign bribery enforcement, including enforcement of the U.S. Foreign Corrupt Practices Act.

Originally published in Law360 on June 19, 2015.

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