2023 Year In Review: White Collar Defence And Investigations

• Published date: 17 January 2024
• Subject Matter: Antitrust/Competition Law, Criminal Law, Antitrust, EU Competition , White Collar Crime, Anti-Corruption & Fraud
• Law Firm: Gowling WLG
• Author: Mr Glen Jennings, Carly Downs and Cristina Borbely

As has been the trend in the last few years, 2023 cannot be considered a robust year for the prosecution of white collar matters in Canada, particularly in the areas of foreign corruption, competition or quasi-criminal securities prosecutions. However, there were a few notable developments and decisions over the past year which we will highlight in this year-end review.

Notably, foreign interference has been a consistent concern in the past year amongst regulatory agencies amid reports of alleged Chinese interference in Canadian elections. As such, Canadian regulators and enforcement agencies have continued to heavily scrutinize international transactions and foreign investments. Regulation geared at addressing foreign interference risk in various areas is likely to increase.

In addition, Canadian regulators and government bodies have responded to allegations of improper and unethical business practices by launching several Serious Fraud Office (SFO) and Canadian Ombudsperson for Responsible Enterprise (CORE) investigations, amendments to the Competition Act and increased whistleblower protections.

To ensure compliance with the complex framework of laws, regulations and governance, it is imperative that businesses take a proactive stance by consulting a team of legal professionals with national and international capabilities and experience. Gowling WLG's White Collar Defence and Government Investigations Group has a breadth of experience in assisting clients navigate prosecutions and investigations.

Table of contents

1. Concerns of foreign interference lead to increased scrutiny of international transactions
2. Canada's prosecutions under the Corruption of Foreign Public Officials Act
3. The Superior Court of Quebec clarifies the remediation agreement approval process
4. Amendments to Canada's Proceeds of Crime (Money Laundering) and Terrorist Financing Act regime
5. Amendments to the Competition Act criminalize wage-fixing, no-poach agreements and drip pricing
6. The SFO launches several investigations into scams targeting Canadians
7. Bill 79 amends the maximum fine for a corporation under Ontario's Occupational Health and Safety Act
8. Occupational health and safety: Increase exposure to "owners"
9. Lowering criminal interest rates
10. CORE launches investigations into Canadian companies' use of forced labour

1. Concerns of foreign interference lead to increased scrutiny of international transactions

The federal government reviews investments in Canada by non-Canadians with a view to national security pursuant to the Investment Canada Act. Extended national security reviews have seen a sharp rise since 2020, with 23 being reported between 2017 to 2020 and 80 being reported between 2020 and 2023.¹

Regulation is likely to continue to increase amidst persistent concerns of foreign interference, with increased scrutiny of investments by non-Canadians in Canada, particularly with respect to investors from China and Russia.

2. Canada's prosecutions under the Corruption of Foreign Public Officials Act

While Canada was slow to enforce the Corruption of Foreign Public Officials Act (CFPOA), since 2011 there has been a sporadic and moderate increase in enforcement.

• In 2011, Niko Resources Ltd. pleaded guilty under the Act and was sentenced to a $9.5-million fine and three years of corporate probation.
• In 2013, Griffiths Energy, a Canadian oil company operating in Chad, Africa, was sentenced to a $10.25-million fine under the Act.
• Also in 2013, Nazir Karigar was convicted for bribes paid to the Indian minister of civil aviation and employees of Air India to influence the sale of facial recognition software. Karigar was the first individual to be convicted under CFPOA. He was sentenced to three years in jail.
• In July 2017, Karigar's conviction was upheld by the Ontario Court of Appeal.
• In late 2018, two individuals, Robert Barra and Shailesh Govindia, were convicted of agreeing to bribe a foreign public official, contrary to the CFPOA. In March 2019, the two were sentenced, each receiving a 30-month custodial sentence.
• In 2020, Sami Bebawi, former vice-president of an international corporation, was found guilty on five counts relating to fraud corruption of foreign officials and laundering proceeds of crime and sentenced to over eight years in prison.
• In 2023, Damodar Arapakota was found not guilty of bribing a foreign official. The Crown initiated an appeal of this decision in May 2023.

These prosecutions, coupled with recent increased activity by CORE, described below, demonstrate a trend towards the prosecution of corporate corruption abroad. Nonetheless, a report released in October 2023 by the OECD Working Group on Bribery in International Business Transactions pointed out deficiencies in Canada's foreign bribery framework and provided recommendations to enhance the detection and enforcement of foreign bribery.

International Developments

On December 14, 2023, the United States Congress passed the Foreign Extortion Prevention Act (FEPA), which allows for the prosecution of foreign public officials who demand or receive a bribe from Americans or American businesses while in the US. The US joins the UK, Germany and France in criminalizing...