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Wednesday
Dec212016

Lincoln Caylor: Canada Supreme Court bolsters World Bank anti-graft fight

This year's annual report from the Integrity Vice Presidency (INT) of the World Bank Group report put Canada in the spotlight -- specifically, our top court's recent decision in World Bank Group v. Wallace. The case is seen as a significant acknowledgement of the unique role that multilateral institutions play in fighting corruption.

In Wallace, the central issue was whether the court could compel the World Bank Group to produce certain internal documents and require INT investigators to testify before the court. The Supreme Court of Canada concluded that the World Bank Group could not be so compelled.

In coming to this conclusion, the Supreme Court made important statements about the immunities and privileges that allow for cooperation between state and non-state actors in the battle against corruption.

The court's opinion in Wallace is here.

The case arose in relation to an agreement under which the World Bank Group would provide more than $1 billion in financing to construct a bridge over the Padma River in Bangladesh. The INT subsequently learned that representatives of SNC-Lavalin planned to bribe government officials in Bangladesh to obtain a contract related to the construction of this bridge.

As the INT investigated, it voluntarily shared information with the Royal Canadian Mounted Police (RCMP). This information enabled the RCMP to pursue their own investigation and obtain authorization for a wiretap, ultimately leading to the indictment of several individuals under the Corruption of Foreign Public Officials Act, SC 1998, c 34.

The accused -- Kevin Wallace, Zulfiquar Bhuiyan, Ramesh Shah, and Mohammad Ismail -- brought an application in the Ontario Superior Court of Justice challenging the wiretap authorizations and seeking an order requiring the INT to produce applicable records and requiring that INT investigators appear before the court.

The trial judge granted the application. The World Bank Group appealed.

In setting aside the lower court's decision, the Supreme Court found that the INT, although operating as an independent investigative arm, fits within the World Bank Group's overall structure and therefore benefits from the same immunities granted to other World Bank Group entities.

As the INT notes in its annual report, however, the significance of the decision goes well beyond confirming the scope of the World Bank Group's privileges and immunities as an international institution. Indeed, the Supreme Court took Wallace as opportunity to issue a broad statement regarding the importance of cooperation between state and non-state actors in the fight against corruption.

In its opening passage, the Supreme Court declared:

Corruption is a significant obstacle in international development. In order to tackle this global problem, worldwide cooperation is needed. […] When international financial organizations, such as the World Bank Group, share information gathered from informants across the world with the law enforcement agencies of member states, they help achieve what neither could do on their own.

Looking ahead to 2017, the INT took the Supreme Court's statements in Wallace as an invitation to further cultivate its close partnership with Canadian authorities as well as providing momentum for strengthening its partnerships with other national authorities.

____

Lincoln Caylor is a partner at Bennett Jones in Toronto. He practices commercial litigation and is internationally recognized for leading asset tracing investigations and pursuing asset recovery litigation and enforcement actions in prominent, high-value international financial frauds and other economic crimes. He's the only Toronto member of ICC FraudNet, a worldwide network of selected lawyers specialized in asset tracing and recovery.

The author gratefully acknowledges the assistance of Jessica Starck in preparing this post.

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