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Corporate Social Responsibility - Bribery and Corruption

The Twelfth Annual Report to Parliament (October 17, 2011)

Implementation of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and the Enforcement of the "Corruption of Foreign Public Officials Act (September 2010 – August 2011)"

Table of Contents

Highlights – September 2010 to August 2011

  • On July 24, 2011, Niko Resources Ltd, a publicly traded company based in Calgary, pleaded guilty in the Court of Queen’s Bench in Calgary for one count of bribery under the Corruption of Foreign Public Officials Act (CFPOA).  The company was fined $9,499,000 CDN and placed under a Probation Order for three years.  The conviction comes after numerous years of investigation by the RCMP’s International Anti-Corruption Unit, and is the first conviction under the CFPOA since the establishment of this specialized investigative unit in 2008.

  • Canada’s Phase 3 Evaluation of its implementation and enforcement of the OECD Anti-Bribery Convention was completed in March 2011.  Among other things, the evaluation report praises the enforcement efforts of the RCMP’s International Anti-Corruption Unit, which currently has over twenty active investigations.  The report contains numerous recommendations on ways that Canada can improve its fight against foreign bribery.

Background

On December 17, 1997, Canada signed the Convention on Combating Bribery in International Business Transactions of the Organisation for Economic Co-operation and Development (OECD Convention). Parliament passed the Corruption of Foreign Public Officials Act (CFPOA) to implement Canada’s obligations under the OECD Convention into Canadian law.[i] With the adoption of the CFPOA, which received Royal Assent on December 10, 1998, the Government of Canada deposited its instrument of ratification with the OECD on December 17, 1998, thereby becoming a party to the Convention. [ii]  

The OECD Anti-Bribery Convention

The OECD Convention aims to stop the flow of bribes and to remove bribery as a non-tariff barrier to trade, producing a level playing field in international business.  The OECD Convention came into force on February 15, 1999, following Canada’s ratification.

To date, 38 states have ratified the OECD Convention, including the 34 member states of the OECD and four non-member states: Argentina, Brazil, Bulgaria and South Africa. [iii]

  • Companion Instruments

The OECD Convention is supplemented by a number of companion instruments: 

The 2009 Recommendation

The OECD Recommendation for Further Combating Bribery of Foreign Public Officials in International Business Transactions (2009 Recommendation) [iv] was adopted by the OECD Council on November 26, 2009 and released on December 9, 2009 on the tenth anniversary of the OECD Convention. [v] 

Guidelines for Multinational Enterprises

Section VII of the OECD Guidelines for Multinational Enterprises contains recommendations regarding Corporate Social Responsibility (CSR) aimed at multinational enterprises investing abroad.  The section is guided by the OECD Convention.  Updates to the Guidelines, including the section on “Combating Bribery, Bribe Solicitation and Extortion”, were completed in May 2011.

Other companion instruments include the OECD Recommendation on Tax Measures for Further Combating Bribery of Foreign Public Officials in International Business Transactions [vi]; the OECD Recommendation on Bribery and Officially Supported Export Credits[vii]; and the Recommendation on Anti-Corruption Proposals for Bilateral Aid and Procurement [viii].

  • The Peer Review Process

The OECD Convention provides for mutual evaluation by members of the OECD Working Group on Bribery (Working Group), comprised of representatives from the states parties to the Convention as well as representatives from states which have been invited to become a full participant in anticipation of their ratification of the Convention [ix], on their enforcement and implementation of the OECD Convention and companion instruments.  The peer review monitoring system has, thus far, been carried out in three phases.  Phase 1 is designed to evaluate whether the legal frameworks through which participants implement the Convention meet the standards set by it.[x] Phase 2 studies and assesses the structures put into place to enforce national laws and determine their practical application.[xi] Phase 3 is intended to be shorter and more focused than the Phase 2 evaluation, concentrating on progress made by the parties on the recommendations made during Phase 2, on issues raised by changes in domestic legislation or institutional frameworks of the parties, and on enforcement efforts, results and other horizontal issues.

The Phase 3 cycle of evaluations began in 2010 and is scheduled for completion in 2014.

  • Canada and the Peer Review Process

As a state party to the OECD Convention, Canada is committed to and actively participates in the peer review mechanism, as a peer reviewer, evaluated country, and Working Group member.  Between September 2010 and August 2011, Canada’s participation included the following:

Canada as Lead Examiner

Canada acted as a lead examiner for the Phase 1ter Evaluation of the United Kingdom, which included an in-depth examination of the United Kingdom’s new Bribery Act 2010.  The Phase 1ter Evaluation Report on the United Kingdom was adopted by the Working Group in December 2010. In addition, experts from Canada are currently participating as lead examiners in the Phase 3 Evaluation of Japan.  The on-site visit by Canadian and Norwegian experts took place in Tokyo, Japan in late July 2011.  The resulting evaluation report is scheduled to be discussed and adopted by the Working Group during its plenary meetings in December 2011.

Canada’s Phase 3 Evaluation

The Phase 3 Evaluation of Canada was led by experts from the United States and Austria.  The visit by the lead examiners to Ottawa and Toronto took place from October 19 to 22, 2010.  During the visit, the examination team met with representatives from federal and provincial departments and agencies, local law enforcement, professional associations and law firms, corporations and business associations, civil society, and academia.  Canada’s Phase 3 Evaluation Report [xii] was adopted by the Working Group on March 18, 2011.

The Report notes a number of positive developments in Canada’s fight against foreign bribery, including the establishment of the Royal Canadian Mounted Police’s International Anti-Corruption Unit in 2008, the establishment of the independent Public Prosecution Service Canada in 2006, and a number of administrative and legal measures taken by the Government of Canada to encourage reporting of CFPOA violations to law enforcement authorities. [xiii]However, the Report addresses a number of concerns by the Working Group regarding Canada’s legal framework regarding the bribery of foreign public officials and regarding resources for prosecutions of cases under the CFPOA.  Many of these areas of concern are described throughout this Report.  Canada is actively developing responses to these issues.

Canada will report to the Working Group during its plenary meetings in October 2011 on progress made on the recommendations contained in the Phase 3 Evaluation Report.  This will be followed by an oral report in March 2012, one year after the adoption of the Phase 3 Report, as well as a written follow-up report in March 2013.

Stock-Taking on Phase 3 Evaluation Procedures – At the plenary meeting of the Working Group in June 2011, Canada led a discussion co-sponsored by a number of parties to the OECD Convention that aimed to ensure adherence throughout the Phase 3 evaluation cycle to the monitoring procedures agreed upon by the states parties to the OECD Convention in 2009, as well as renewed commitment to a focused, efficient and transparent evaluation process. 

The Corruption of Foreign Public Officials Act (CFPOA)

The CFPOA criminalizes the bribery of a foreign public official.  The CFPOA also makes it possible to prosecute, for example, a conspiracy or attempt to commit such bribery, as well as aiding and abetting in committing bribery, an intention in common to commit them, and counselling others to commit bribery.   Laundering property and proceeds of such bribery, as well as possession of property and proceeds, are offences under the Criminal Code.

  • Jurisdiction

Under the CFPOA, Canada exercises territorial jurisdiction, which allows Canada to prosecute the foreign bribery offence when it is committed in whole or in part in Canada.  There must be a “real and substantial link” between the offence and Canada.  In addition, unlike some other countries, Canada can extradite its nationals to face criminal prosecution in other countries.

However, the fact that Canada does not exercise nationality jurisdiction to prosecute a Canadian for bribing a foreign public official on the basis of Canadian nationality without needing to provide evidence of a link to Canada has been strongly criticized by international organizations.  Recommendations have been made by Transparency International and in Canada’s Phase 3 Evaluation Report that Canada amend its laws to exercise nationality jurisdiction over the foreign bribery offence to promote prosecution of cases under the CFPOA. Such a recommendation also came out of discussions at the National Roundtables on Corporate Social Responsibility.[xiv]

On May 15, 2009, the Minister of Justice introduced Bill C-31 (An Act to amend the Criminal Code, the Corruption of Foreign Public Officials Act and the Identification of Criminals Act and to make a consequential amendment to another Act) which, if passed, would have amended the CFPOA to allow Canada to prosecute Canadian companies, or Canadian citizens or permanent residents for bribing a foreign public official without having to provide evidence of a link between Canada and the offence.  The Bill had passed Second Reading and was at the Committee Stage when the House was prorogued in December 2009. [xv]

  • Investigations and Prosecutions

There are currently 22 ongoing investigations under the CFPOA, and there have been two convictions under the CFPOA to date.  There is one case in which charges have been laid but has not yet concluded. [xvi]

Niko Resources Ltd.

Niko Resources Ltd. is a publicly traded company based in Calgary, Alberta.  On June 24, 2011, the company entered a guilty plea in the Court of Queen’s Bench in Calgary for one count of bribery under paragraph 3(1)(b) of the CFPOA, covering the period of February 1, 2005 to June 30, 2005.  The company admitted that, through its subsidiary Niko Bangladesh, it provided the use of a vehicle (which cost $190,984 CDN) in May 2005 to AKM Mosharraf Hossain, then the Bangladeshi State Minister for Energy and Mineral Resources, in order to influence the Minister in his dealings with Niko Bangladesh.  In June 2005, Niko Resources Ltd. paid travel and accommodation expenses for the same Minister to travel from Bangladesh to Calgary to attend the GO EXPO oil and gas exposition, and improperly paid approximately $5000 CDN for the Minister to travel to New York and Chicago to visit his family. 

As a result of the conviction, Niko Resources Ltd. was fined $9,499,000 CDN and placed under a Probation Order, which puts the company under the Court’s supervision for three years to ensure that audits are completed to examine the company’s compliance with the CFPOA.

Hydro-Kleen Group Inc.

Hydro-Kleen Group Inc., based out of Red Deer, Alberta, entered a guilty plea in the Court of Queen’s Bench in Red Deer on January 10, 2005 to one count of bribery under paragraph 3(1)(a) of the CFPOA and was ordered to pay a fine of $25,000 CDN.  Along with its president and an employee, the company had been charged under the CFPOA with, among other things, two counts of bribing a U.S. immigration officer who worked at the Calgary International Airport.  The charges against the director and the officer of the company were stayed.  The U.S. immigration officer pleaded guilty in July 2002 to accepting secret commissions under subparagraph 426(1)(a)(ii) of Canada’s Criminal Code.  He received a six-month sentence and was subsequently deported to the United States.

Mr. Nazir Karigar

On May 28, 2010, the RCMP laid charges against Mr. Nazir Karigar under paragraph 3(1)(b) of the CFPOA for allegedly making a payment to an Indian government official to facilitate the execution of a multi-million dollar contract for the supply of a security system by Cryptometrics, a Canadian high-tech firm.  This matter is currently before a Canadian court.

Canada and the Fight against Foreign Bribery

A number of federal departments, agencies and Crown corporations play key roles in Canada’s fight against foreign bribery.  They work in close cooperation in Canada’s two-pronged approach to foreign bribery – enforcement and prevention.

  • The Royal Canadian Mounted Police (RCMP)
Enforcement

The corruption of foreign public officials is specifically referenced in the mandate of the RCMP Commercial Crime Program.  Current RCMP policy specifically identifies the CFPOA as a responsibility of the Commercial Crime Branch.  The RCMP has the capability to track CFPOA cases being handled by the Force and expects that credible allegations reported to other law enforcement agencies or other Canadian officials, including those in foreign missions, will continue to be reported through to the RCMP.

In 2008, the RCMP established the International Anti-Corruption Unit, comprised of two seven-person teams based in Ottawa and Calgary, respectively.  The unit is charged with investigating allegations that a Canadian person or business has bribed a foreign public official, allegations that a foreign person has bribed a Canadian public official that may have international repercussions, and allegations that a foreign public official has secreted or laundered money in, or through, Canada.  The unit also deals with requests for international assistance.  The RCMP provides functional oversight of the unit and anti-corruption enforcement activities through a commissioned officer at RCMP National Headquarters. 

Training and Cooperation

The RCMP includes the issue of foreign bribery generally and the CFPOA, in particular, to its training of all RCMP liaison officers before they depart for overseas assignments.  While the RCMP is an enforcement body, specific reference to the corruption of foreign public officials in the Commercial Crime Program mandate is intended to raise awareness of this responsibility among investigators.  To this end, the International Anti-Corruption Unit has participated in numerous anti-corruption awareness programs and training.  In addition, orientation manuals have been completed for the unit covering the CFPOA and the various contacts and their roles.  The establishment in 2010 of a logic model and measurements for the unit complements these training efforts and promotes the unit’s work.

The unit has also established contacts within the Department of Justice’s International Assistance Group to ensure that priority is given to requests for mutual legal assistance in corruption matters.  Similarly, the RCMP continues to prioritize the establishment of procedures and mechanisms for information sharing within Government about suspected cases of corruption.

Outreach

Due to the specialized nature of its work, the RCMP complements its training by developing  educative resources for external partners.  In this respect, the RCMP has developed information pamphlets and posters describing the RCMP’s work and the negative effects of corruption for distribution and presentation to Canadian missions abroad.  The RCMP includes information on the International Anti-Corruption Unit and its mandate on the RCMP’s internal and external websites.  Notably, the RCMP headlines International Anti-Corruption Day on its website.  The RCMP also reaches out to the media to discuss the Force’s work, which has promoted awareness of RCMP activities to prevent and combat corruption.

During the reporting period, the RCMP made a number of presentations to external stakeholders, including: ten presentations by representatives from RCMP National Headquarters to local universities, non-governmental organizations, the Canadian Institute of Mining, and numerous international associations of experts and professionals; and over thirty presentations by the investigative teams in Calgary and Ottawa to targeted companies conducting business in other countries, law firms, government partners, Canadian professional associations, and the Foreign Corrupt Practices Act “Boot Camp” hosted by the United States in Washington, D.C..

  • Public Prosecution Service Canada (PPSC)
Prosecutions

The PPSC prosecutes criminal offences under federal statutes, including the CFPOA, on behalf of the Attorney General of Canada.  To ensure a standard approach to the prosecution of offences under the CFPOA, the PPSC has established a subject-matter expert position located in Ottawa for international corruption cases.  The subject-matter expert has developed linkages with the RCMP International Anti-Corruption Unit and with other key government interlocutors involved with the enforcement and development of the CFPOA.

Training and Outreach

Internally, training in relation of the CFPOA has been provided to designated contacts in each of the PPSC’s regional offices.  These contacts, who are generally senior prosecutors, will act as local points of contact and coordinators in relation to CFPOA matters as they arise for prosecution.  In addition, presentations have been made to the PPSC’s Regional Directors in order to increase awareness of the OECD Convention, the CFPOA and the current activities of the RCMP and the PPSC in this area.  Externally, the PPSC participated in Transparency International’s Spotlight on Corruption event in Toronto, Ontario on May 12, 2011, and has made presentations to groups such as the provincial Heads of Prosecutions, all emphasizing the importance of CFPOA cases and the role that the PPSC will play in their prosecution.

Other training and outreach efforts are ongoing, including the development of an internal website dedicated to CFPOA matters which will be made available to all federal prosecutors.

  • Department of Foreign Affairs and International Trade (DFAIT)

In Canada and Beyond – DFAIT’s Trade Commissioners and other personnel at Canadian missions work closely with Canadian companies doing business abroad through the provision of a wide range of services and support.[xvii]  In this respect, Trade Commissioners play a key role the prevention of foreign bribery through making Canadian clients aware of their obligations under the CFPOA, and through the active promotion of Corporate Social Responsibility (CSR).  DFAIT also plays a lead role in representing Canada in outreach efforts with emerging economies regarding corruption and at international anti-corruption forums, such as the Working Group on Bribery, and in coordinating Canada’s approach to meeting its international anti-corruption obligations.  

Extractive Sector CSR Counsellor – The Office of the Extractive Sector Corporate Social Responsibility Counsellor (CSR Counsellor) was established by DFAIT in 2009 as part of Building the Canadian Advantage, the Government of Canada’s CSR strategy for the Canadian extractive sector operating overseas.  The first CSR Counsellor, Marketa Evans, was appointed in October 2009 and the Office was opened in Toronto in 2010.  The mandate of the Office is to review CSR practices of Canadian companies operating outside of Canada and to advise stakeholders on the implementation of the endorsed performance standards, including the OECD Guidelines for Multinational Enterprises and its section on Combating Bribery, Bribe Solicitation and Extortion.  The CSR Counsellor has taken part in numerous outreach activities specifically focused on corruption during the reporting period, including Transparency International’s Spotlight on Corruption event in Toronto, Ontario on May 12, 2011.

Information Sharing – In March 2010, DFAIT adopted the Policy and Procedure for Reporting Allegations of Bribery abroad by Canadians or Canadian Companies , which instructs Canadian missions, including High Commissions and embassy personnel, on the steps that must be taken where allegations arise that a Canadian company or individual has bribed a foreign public official or other bribery-related offences.  Under this policy, information in the possession of DFAIT officials is sent to DFAIT Headquarters and passed on to law enforcement in accordance with the established procedures.

Training

DFAIT continues to provide information and training for its Heads of Mission, Trade Commissioners, and Political Officers on the CFPOA and Canada’s international obligations to prevent and combat corruption.  During the reporting period, DFAIT has continued to deliver the mandatory, comprehensive four-day training course called “The Global Learning Initiative for Commercial/Economic Staff Abroad” (GLI-2), which was developed by the Trade Commissioner Service (TCS) Renewal Division.  In this course, participants are informed of their responsibilities regarding the CFPOA, and trade commissioners participate in exercises where they apply TCS core values.[xviii] The Trade Commissioner Service’s newly developed CSR online training course also includes a CFPOA component which details employee obligations and reporting procedures.  In addition, the TCS Support Division hosted a training session for Trade Commissioners and the CFPOA at the 2011 Prospectors and Developers Association of Canada Convention.  The TCS Support Division is currently developing an online course for Canadian Direct Investment Abroad that will include a CFPOA component.

Outreach – During the reporting period, Canadian missions have continued to organize CSR seminars in various regions of the world, which include a specific focus on the CFPOA.  The TCS Support Division’s CSR E-Bulletin and Canadian Direct Investment Abroad E-Bulletin provide regular updates to government partners on efforts to enforce and bring awareness to the CFPOA.  DFAIT legal experts also made presentations and actively participated on panels raising awareness to Canada’s anti-corruption activities, including bringing together a high-level panel of anti-corruption experts at the International Centre for Criminal Law Reform and Criminal Justice Policy’s conference on Globalization of Crime in Ottawa, Ontario in August 2011.

  • Export Development Canada (EDC)

Combating Corruption – EDC’s policy statement with respect to bribery is set out in EDC’s Code of Business Ethics, which states, in part, that “[u]nder no circumstances will EDC, directly or indirectly, knowingly offer or give a bribe.  Further, EDC will not support a transaction that involves the offer or giving or a bribe, and will exercise reasonable diligence and care not to support unknowingly such a transaction”.  EDC also has in place Anti-Corruption Policy Guidelines [xix] which outline measures that EDC will apply to combat corruption, including (i) possible notification of law enforcement authorities, and (ii) refusal to provide support where, in EDC’s opinion, there is credible evidence that bribery was involved in a transaction.

At EDC, exporters are required, with few exceptions, to sign anti-corruption declarations.  There may be small variations in the wording of the declaration depending on the product in question, but it generally requires exporters to state that, with respect to the transaction being supported by EDC, the exporter has not been and will not knowingly be party to any action which is prohibited by any applicable criminal law dealing with the bribery of foreign public officials including the CFPOA.  Exporters are also required to declare whether they are currently under charge in a court, or within the last five years, have been convicted for violation of laws against the bribery of foreign public officials.  Further, many EDC products include exclusions, representations and warranties and covenants, as applicable, dealing with bribery of foreign public officials.

Awareness Raising

EDC has devoted an entire page on its website to corruption and bribery, including links to the CFPOA, the OECD Convention, and the OECD Recommendation on Bribery and Officially Supported Export Credits.  EDC has also developed an anti-corruption brochure that is systematically distributed to its new customers to inform them of the potential risks they face if exposed to corrupt business practices, and to encourage the development of corporate best practices in this area.  The brochure encourages Canadian exporters to develop, apply and document appropriate management control systems that combat bribery.  The brochure is sent to all new customers with a cover letter from EDC’s President and CEO.

In the course of its due diligence in connection with allegations of corruption, EDC has had discussions directly with some customers on the risks of bribery and corruption and best practices to protect themselves against such risks.  As a result, EDC has encouraged a number of firms to put in place anti-corruption mechanisms such as the Code of Conduct and training for their staff.

EDC continues to seek opportunities to educate customers about corruption through various means such as writing articles for relevant publications and industry association newsletters.  In addition, and where opportunities exist, EDC representatives raise awareness on anti-corruption initiatives through various speeches and events with customers.

  • Canadian International Development Agency (CIDA)

Dealing with Allegations of Corruption – CIDA’s Protocol for Dealing with Allegations of Corruption associated with funding by CIDA includes specific internal procedures for a thorough assessment of the allegations so that senior management can ascertain whether corrupt practices have occurred and decide on corrective measures.  CIDA also has principles and guidelines, approved in December 2009, for the conduct of investigations of fraud, corruption and wrongdoing, including disclosures of wrongdoing made by public servants.  These principles and guidelines require CIDA employees to report to the Chief Auditing Executive allegations or evidence of fraudulent or corrupt practices, including possible violations of the CFPOA, related to CIDA-financed activities.  These principles and guidelines also state that all losses of money and suspected cases of fraud, defalcation or any other offence or illegal act against Her Majesty must be reported to law enforcement authorities.

In addition, CIDA has in place a policy that requires entities wishing to enter into a contract or contribution agreement with CIDA to declare previous corruption-related convictions and sanctions and to confirm that, in the three years prior to signing a contract or contribution agreement, they have not been convicted of, and are not under sanction for, any corruption-related offence.  If an entity has been convicted or is under sanction, it will have the opportunity to make representations to CIDA to show that steps have been taken to counter the problem.  However, CIDA reserves the right to accept, to accept conditionally, or simply refuse to do business with an entity convicted of, or sanctioned for, a corruption-related offence.

A Protocol is also in place for entities found guilty of corruption, which is to be implemented if/when an entity declares a previous corruption-related offence involving activities funded by an organization other than CIDA.  Published at the end of 2008, the Local Contracting and Contribution Agreement Guide includes additional provisions relating to anti-corruption and provides a certification form that must be completed by contractors and beneficiaries.

Managing Corruption as Key Risk

CIDA approved its Corporate Risk Profile in 2008.  Corruption risks are identified under three areas, including Fiduciary Risk, Human Resources Risk, and Socio-Political Risk.  The Corporate Risk Profile establishes methods to analyze and mitigate these risks, and harmonizes them with Internal Audit and Financial Risk Management Unit procedures. 

CIDA also participates actively in the OECD Development Assistance Committee (DAC) Task Force on Procurement, supporting procurement-related commitments of the Paris Declaration and the Accra Agenda for Action.  The Task Force on Procurement is continuing the work related to the Methodology for Assessment of Procurement Systems (MAPS), a common tool being used to establish reliable baseline data on the quality of country procurement systems, including specific anti-corruption measures.[xx] For CIDA, assessments will be used as part of fiduciary risk due diligence when considering programming approaches that rely on the use of country systems.  Links to MAPS and other key complementary resources on anti-corruption in public procurement, such as the OECD Checklist for Enhancing Integrity in Public Procurement, are integrated into CIDA’s Operational Guide to Program-based Approaches.

Awareness Raising

CIDA has helped to raise awareness globally by supporting audit, transparency and anti-corruption work in partner countries and regions.  CIDA supports awareness-raising work of international bodies such as the OECD DAC GOVNET and the Ulstein Group, as well as international organization such as Transparency International and its country chapters, and the Global Organization of Parliamentarians Against Corruption (GOPAC).

  • Canada Revenue Agency (CRA)
Tax Deductibility

The Government of Canada and all provinces deny the tax deductibility of outlays made or expenses incurred in the bribery of foreign public officials.  As noted in the Eleventh Annual Report, the CRA has revised its Audit Manual and its Investigations Manual to address the tax non-deductibility of bribe payments to foreign public officials.  To be in a better position to report to Parliament, as well as to international partners, should the need arise, the CRA is planning to track cases where illegal payments are allowed under section 67.5 of the Income Tax Act.

Information Sharing

In 2004, Canada signed the Convention on Mutual Administrative Assistance in Tax Matters, which would enable Canada, subject to its domestic laws, to share with its law enforcement authorities information received under the Convention from tax authorities of other states parties.  Legislative amendments are required for Canada to exchange tax information pursuant to the provisions of the Convention.  Such legislation was tabled in Parliament in the past, but was not passed. 

Training and Outreach

In the Eleventh Annual Report, CRA reported that training course TD1000-00B Income and Expenses – Basic Rules had been revised and would be ready for release in early 2011.  Due to unforeseen circumstances, the CRA expects that this course will be available by the end of 2011.

However, following both Canada’s Phase 3 Evaluation and Canada’s evaluation under the Inter-American Convention against Corruption, the CRA is in the process of drafting additional text to better train its auditors, examiners and investigators in distinguishing between illegal payments (i.e. bribes) and “facilitation payments”.  The CRA is planning to draft text aimed at aiding auditors, examiners and investigators in understanding the exceptions in the CFPOA under subsections 3(3) and 3(4).  No dates have yet been set for the release of this information, as it is expected that this training will be expanded to include text that is created for the revised OECD Bribery Handbook.

CRA is also planning to develop its own Outreach material for taxpayers and tax preparers, especially those operating in those sectors of the economy where the risk of participating in bribery of foreign officials has historically been greater.

  • Department of Justice Canada
Mutual Legal Assistance

The Department of Justice’s International Assistance Group, which is Canada’s central authority for mutual legal assistance in criminal matters, has established a position dedicated to dealing with mutual legal assistance requests to and from Canada in international corruption cases.  Legal counsel in this designated position works closely with the RCMP’s International Anti-Corruption Unit and other relevant law enforcement officials and prosecutors.

Awareness Raising

The Department recently updated a paper entitled “Canadian Public Integrity and Anti-Corruption Measures”, now available in English, French, Spanish and Portuguese, which highlights innovative Canadian approaches that may be of particular interest to other countries.  In addition, Department of Justice officials continue to give presentations on the CFPOA as well as on anti-corruption activities, including the work of the OECD.  On December 9, 2010, the Department of Justice marked International Anti-Corruption Day by hosting an information kiosk focusing on anti-corruption efforts from a Canadian perspective.  Emphasis was placed on the United Nations Convention against Corruption, the OECD Convention and the Inter-American Convention against Corruption.

  • Canadian Commercial Corporation (CCC)
Prohibiting Bribery

The CCC includes in all of its domestic contracts with Canadian suppliers a clause prohibiting and corruption of government officials.  As such, should the CCC determine that a Canadian supplier has contravened the CFPOA while under a contract with the CCC, the Corporation will apply various sanctions which may include the termination of the contract with the supplier.

Codes of Conduct

The CCC is committed to ensuring legal and ethical conduct in its business dealings and addresses issues of bribery and corruption within the general framework of CSR.  As part of its CSR initiatives, the CCC has finalized a Code of Conduct and a Code of Business Ethics, which seeks to provide specific guidance and direction both to the Corporation’s employees and clients, with regards to ethical behaviour.  All employees and clients have access to a copy of the Code of Conduct and the Code of Business Ethics on the internal portal and are required to sign an acknowledgement and agreement confirming their understanding of the Codes and their responsibility to comply with the Codes.  The Code of Conduct and the Code of Business Ethics are also available to CCC clients on the external website.

Annex A

For the complete list of Ratification statuses, please visit the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (PDF * 92.9 KB).


Notes:

  1. The CFPOA can be viewed at the Department of Justice website.
  2. In addition to the OECD Convention, Canada is a party to two other international treaties related to bribery and corruption.  The United Nations Convention against Corruption(UNCAC) entered into force on December 14, 2005.  Not only does UNCAC adopt some of the language from the OECD Convention, but by providing global norms on the criminalization of bribery and for transnational cooperation in related investigations, it is expected to complement enforcement of the CFPOA.  Canada signed the UNCAC on May 21, 2004.  Parliament passed legislation in May 2007 making Canadian law consistent with the provisions of the UNCAC.  Canada ratified the UNCAC on October 2, 2007.  Canada is also a party to the Inter-American Convention against Corruption.
  3. Annex A to this report contains information on the ratification status of the OECD Convention.
  4. The 2009 Recommendation replaced the 1997 Revised Recommendation on Combating Bribery in International Business Transactions and calls on states parties to, among other things, periodically review their processes and approaches regarding small facilitation payments, improve cooperation in sharing information and evidence in foreign bribery investigations and prosecutions and in seizure, confiscation and recovery of proceeds of transnational bribery, provide effective channels for public officials to report suspected foreign bribery internally within the public service and externally to law enforcement authorities, and protect whistleblowers from retaliation.  The 2009 Recommendation also contains an annex which provides good practice guidance to companies on internal controls, ethics and compliance.  The 2009 Recommendation can be viewed in PDF format (PDF Version, 187 kb) *.
  5. Decision-making power is vested in the OECD Council.  It is made up of one representative per member country of the OECD, plus a representative of the European Commission.  The Council meets regularly at the level of permanent representatives to the OECD and decisions are taken by consensus.  The Council meets at the Ministerial level once a year to discuss key issues and set priorities for OECD work.  The work mandated by the Council is carried out by the OECD Secretariat.
  6. This document was adopted by OECD Council on May 25, 2009. 
  7. This document was adopted by OECD Council on December 14, 2006.
  8. This document was endorsed by the OECD Development Assistance Committee in May 1996.
  9. The most recent addition to the Working Group is the Russian Federation, which was invited to become a full participant on May 25, 2011 as a first step towards acceding to the Convention.  The Russian Federation is expected to complete the accession process in the coming months.
  10. The Working Group evaluated Canada’s implementing legislation in July 1999 and concluded that the CFPOA met the requirements set by the OECD Convention.  The Working Group also noted that some issues may benefit from further examination during the Phase 2 Evaluation.  These include the exemption of reasonable expenses incurred in good faith, Canada’s choice not to establish nationality jurisdiction with respect to bribery of foreign public officials, payments to secure performance of any act of a routine nature from the purview of the offence, and the discretion of sentencing courts in imposing fines.  The Phase 1 Report on Canada may be viewed in PDF format (PDF Version, 125 kb) *.
  11. The Working Group approved the Phase 2 Report on Canada in June 2003.  Overall, the report is positive in its evaluation of Canada’s fight against corruption.  However, the Working Group made a number of recommendations in the report, which deal with measures to prevent and detect foreign bribery as well as measures to prosecute and sanction it.  The Report also identified issues requiring follow-up by the Working Group because of insufficient practice at the time of the evaluation.  The Phase 2 Report on Canada can be viewed in PDF format (PDF Version, 398 kb) *. The OECD post-Phase 2 follow-up procedure required Canada to provide information on its follow-up actions at a meeting of the Working Group in March 2005, one year after the publication of the Phase 2 Report on Canada, and a more detailed report after two years.  In March 2006, Canada presented its Written Follow-up to the Phase 2 Report and the Working Group issued its response on June 21, 2006.  The Working Group’s Phase 2 Follow-up Report can be viewed in PDF format: (PDF Version, 294 kb) *.
  12. Canada’s Phase 3 Evaluation report can be viewed in PDF format: (PDF Version, 630 kb) *.
  13. These developments have been reported in previous Reports to Parliament on the Implementation of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and the Enforcement of the Corruption of Foreign Public Officials Act, as well as in other parts of this Report.
  14. The National Roundtables on Corporate Social Responsibility are detailed in the Seventh Annual Report to Parliament on the Implementation of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and the Enforcement of the Corruption of Foreign Public Officials Act, which can be viewed at the Foreign Affairs and International Trade Canada website
  15. A copy of the Bill is available at the House of Commons website.
  16. No other prosecutions under the CFPOA have been reported to the Department of Justice by provincial Heads of Prosecution or by federal prosecutors in the time period relevant to this Report.
  17. See:the Canadian Trade Commissioner Service website for an overview.
  18. Since 2005, over 1,400 Commercial/Economic staff abroad have participated in the GLI-2 course, which continues to be delivered many times a year to recently hired employees.
  19. EDC’s Anti-Corruption Policy Guidelines are available in PDF format on the EDC’s website (PDF Version, 62 kb) *.
  20. Information on MAPS are available at the Development Co-operation Directorate (DCD-DAC) website.

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