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Tuesday
Aug152017

Norm Keith: Canada does enforcement (yes, really)

Just like a blind side body check in a hockey game, the appeal decision in July upholding the overseas bribery conviction of Nazir Karigar came as a shock to many observers of anti-corruption enforcement initiatives around the globe.

In the previous post I reviewed the facts, conviction and grounds of appeal heard by the Court of Appeal for Ontario in the Karigar case.

In this post I'll talk about how there could be an “agreement” to bribe Air India public officials without proof that a bribe was either offered or ever paid to a foreign public official.

Karigar argued on the appeal that the plain and ordinary language meaning of  section 3 of the Corruption of Foreign Public Officials Act (CFPOA) should apply to the meaning of an agreement to bribe. The language creating the offense says:

Every person commits an offence who, in order to obtain or retain an advantage in the course of business, directly or indirectly gives, offers or agrees to give or offer a loan, reward, advantage or benefit of any kind to a foreign public official or to any person for the benefit of a foreign public official”… commits a crime.

[emphasis added] 

However, the Court of Appeal rejected the argument that an agreement required an offer an accept of a bribe. It upheld the lower court finding that section 3 of the CFPOA criminalizes agreements between “any parties” to offer a bribe to a foreign public official. 

The Canadian law therefore does not need to have proof that there was an agreement with the foreign public official or proof of payment of the bribe. The offense is committed as soon as the accused agrees to give or offer a bribe, regardless of whoever else is party to the agreement.

In the Court’s words:

There is no limiting language on who must “agree”, prescribing the parties to the agreement. It does not say that the agreement must be with the foreign official, only that the loan, reward, advantage or benefit that is the subject of the agreement must be a loan, reward, advantage or benefit to (or for the benefit of) a public official. On the language alone, there is no basis to read in a limitation on who must be parties to an agreement.

The Court’s decision is a sobering statement that the foreign corruption offense criminalizes conduct -- the giving, the offering or the agreeing to give or offer a bribe -- regardless of the result. It proclaims that the crime can be committed regardless of:

  • whether the conduct had any impact or influence on the targeted official
  • whether the bribe changed hands, or
  • whether a foreign public official or other persons were party to the agreement.

Karigar's conviction, without evidence as to what became of the alleged bribe money, may be a Canadian first.

This ruling means that any Canadian business or a business connected to Canada must have enhanced anti-corruption compliance policies and training that satisfy this uniquely rigorous standard of what amounts to an “agreement” to bribe. 

Whether this is a one off prosecution that relies uniquely on the facts or is the start of a new Canadian anti-corruption crackdown is too early to tell.

Since the Corruption of Foreign Public Officials Act was enacted in 1999, there have been only three other convictions under the CFPOA, all of companies and all following guilty pleas.

Global Affairs Canada has most recently reported that there are 10 ongoing CFPOA investigations, without naming the companies under investigation.

Also, it is critical to be aware that there is currently no DPA regime in Canada for CFPOA investigations and charges..

Nazir Karigar remains the first and only individual to be convicted under the Corruption of Foreign Public Officials Act. Others involved in the alleged conspiracy, Cryptometric’s former CEO and COO (both U.S. nationals) and an agent for the company (a UK national), have also been charged with agreeing to pay bribes to Indian officials in violation of the CFPOA. These cases are currently before the courts.

The Karigar case showed that the law passed to satisfy the OECD Anti-Corruption Convention produced a provocative application of anti-bribery standards -- in a uniquely Canadian way.

_____

Norm Keith is a senior litigation partner with Fasken Martineau DuMoulin LLP, based in the firm's Toronto office. He's a founding member of Fasken’s White Collar Defense and Investigations practice group and a Canadian representative of the American Bar Association White Collar Crime Committee. He has has authored a number books on the subject including, Corporate Crime, Accountability and Social Responsibility in Canada (2nd Edition), Insider Trading in Canada (2nd edition) and Canadian Anti-Corruption Law and Compliance (2nd edition). He can be contacted here.