Thursday, July 29, 2010

Mounties Lay Corruption Charges

The U.S. is not the only country with an anti-bribery law on its books.

In this guest post, Mark Morrison (here) and Michael Dixon (here) of Blake, Cassels & Graydon LLP discuss a recent enforcement action brought under Canada's Corruption of Foreign Public Officials Act.


The Royal Canadian Mounted Police (“RCMP”) recently announced that they have laid charges under the Canadian equivalent of the FCPA, the Corruption of Foreign Public Officials Act (“CFPOA”), against a former employee of an Ottawa based technology company in relation to alleged overseas bribery. Few details have been released at this time, but it appears that the charges relate to alleged bribes paid to a foreign government official in an effort to secure a multi-million dollar contract. At this point in time, no charges have been laid against the company or other individuals, but comments by the RCMP suggest that further charges may be pending.

This is the second charge laid to date under CFPOA. The first related to the conduct of a United States Immigration Officer who was hired as a consultant by a Canadian corporation. In 2005, that corporation pled guilty and was sentenced to a fine of $25,000. A number of other bribery cases in Canada have also dealt with the corruption of domestic officials, but these have proceeded under the provisions of the Canadian Criminal Code.

What is interesting about this case to those of us who practice in the area is that we have been expecting something of this nature for some time as Canada has been under significant pressure from the OECD to meet its international anti-corruption enforcement obligations. In response to this pressure, the RCMP has established a special unit solely dedicated to investigating international bribery. The unit, with divisions in Ottawa and Calgary, has been actively engaged in several investigations, however, this is the first charge they have laid. Further charges are anticipated as other investigations progress.

Another interesting point raised by this case is the extent to which the Canadian courts are willing to apply the CFPOA to the extraterritorial actions of Canadian citizens. While the Canadian government previously introduced a Bill to amend the CFPOA to clarify its application to Canadians acting outside Canada, this Bill was not passed into law. In the absence of this Bill, the Canadian test for jurisdiction, as determined by the case law, is different than that employed in the US. Historically, only cases with a “real and substantial” link to Canada will be considered as falling within the jurisdiction of the Canadian courts. Accordingly, the Canadian test requires that a portion of the illegal activity occur within Canada or a real connection to Canada. While we do not know to what extent the alleged corrupt activity occurred in Canada, this case appears to represent the first opportunity for the Canadian courts to clarify the reach of the CFPOA to Canadian citizens acting abroad.

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