Risks of International Anti-Corruption Enforcement

by Michael Volkov

canada2White collar criminal investigations take time. Corruption investigations are no different.

Everyone expected UK Bribery enforcement to quickly increase and cause complex headaches for companies operating in the global marketplace. Looking back, many of us knew that without political support and resources, UK Bribery Act enforcement was destined to be a dud.

No one would have expected for Canada to rise from the ashes, like a phoenix, and enter the global enforcement picture. For years, Canada was criticized for its lack of enforcement. Canada enacted a statute similar to the FCPA but with some glaring omissions – no books and records requirement and a stringent jurisdiction requirement.

The Royal Canadian Mountain Police assigned more resources to investigate corruption. Canada fixed its anti-corruption statute, Corruption of Foreign Public Officials Act (CFPOA) last year and increased criminal penalties.

Canada’s efforts are starting to bear fruit — not because prosecutors obtained the first criminal conviction and jail sentence under the CFPOA, but because Canada issues three new arrest warrants, including two foreign US nationals, charging them with violations of the FCPOA. They include the former Crytometrics CEO and COO for payment of $450,000 in cash and shared to Air India and Civil Aviation authorities in India to secure a $100 million government contract for facial recognition software.

Nazir Karigar, the first person convicted under the CFPOA was sentenced to three years imprisonment for his role in the same scheme.

The Canadian judge who sentenced Karigar made it clear that Canada was going to enforce the CFPOA and jail sentences would be handed out.canada

Canada’s sudden appearance on the global anti-corruption includes an important message – foreign nationals working for Canadian companies will be prosecuted. That is a very serious message.

For companies operating in the global marketplace subject to the CFPOA and FCPA, the possible nightmare scenario can occur where one act of bribery could be prosecuted by multiple enforcement agencies, including the RCMP, the FBI and the Serious Fraud Office in the UK. Plea negotiations can extend across the ocean and north of the US border raising the stakes on corruption enforcement.

The US Department of Justice has shown willingness to take into account it its settlement negotiations the parallel resolution of cases in other jurisdictions (E.g. Germany) but that willingness may become less cooperative as more enforcement agencies and countries get into the act.

For now, global enforcement risks continue to rise – China has shown a willingness to prosecute foreign nationals and now Canada has done the same. The list will continue to grow and the concomitant risks for multinational companies.

canada3Multiple enforcement agencies mean multiplicity of risks and of foreign legal regimes. Enforcement agencies use country-specific rules and regulations – navigating these practices across jurisdictions means more difficulties, more lawyers and more possibilities of inconsistent results. In the end this means more headaches.

Companies have to take account of the CFPOA – compliance has become even more important along with appropriate training and awareness of enforcement policies and procedures.   The FCPA has been the driving force in the global battle against corruption – Canada has now added a new wrinkle to this movement.


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.

© Michael Volkov, The Volkov Law Group | Attorney Advertising

Written by:

Michael Volkov

The Volkov Law Group on:

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