Significant Amendments Proposed To Strengthen Canada’s Anti-Corruption Regime

On February 5, 2013, Bill S-14, the Fighting Foreign Corruption Act was introduced into Canada's Senate. It proposes the most significant amendments to the Corruption of Foreign Public Officials Act (CFPOA) since it came into effect in 1999. These broad ranging amendments will increase the scope of the CFPOA's prohibitions and the ability of enforcement authorities to prosecute or penalize alleged offenders. The ramifications of Bill S-14 should therefore be closely considered by all Canadian companies and individuals conducting business overseas. In particular, companies should be immediately reviewing their business conduct and anti-corruption policies and procedures in light of the key changes discussed below.

Existing Exception for Facilitation Payments to Be Repealed

The proposed amendments provide for the eventual elimination of the exception granted for "facilitation payments." The existing exception in the CFPOA covers payments made to expedite or secure the performance of acts of a routine nature that are part of the foreign public official's duties or functions - such as small payments for the processing of official documents and mail pick-up and delivery. Though the facilitation payment exception continues to be recognized in the United States under its Foreign Corrupt Practices Act, individuals and entities subject to the CFPOA will now need to amend their policies and procedures accordingly.

This amendment would not come into force immediately on passage of Bill S-14. Rather, it would only enter into force at a future date to be determined by the federal Cabinet. The intention is to allow companies time to adjust their anti-corruption policies to be consistent with the amended legislation.

This prohibition would also bring Canada closer in line with anti-corruption laws in the United Kingdom where its Bribery Act 2010 prohibits facilitation payments. This is also consistent with movements afoot in some international organizations, including the Organisation for Economic Co-operation and Development, to eliminate the facilitation payment exception.

Criminalizing Illicit Accounting: Books and Records

The amendments create a separate offence for concealing bribery in an entity's books and records. They prohibit the following when undertaken for the purpose of bribing a foreign public official or for the purpose of disguising such bribery:

establishing or maintaining accounts which do not appear in any of the books and records that...