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Canada’s Fight against Foreign Bribery
Seventeenth Annual Report to Parliament
Implementation of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and the Enforcement of the Corruption of Foreign Public Officials Act
(September 2015 – August 2016)
Table of Contents
- Highlights – September 2015 to August 2016
- The OECD Convention
- The Corruption of Foreign Public Officials Act (CFPOA)
- Canada and the Fight against Foreign Bribery
Highlights – September 2015 to August 2016
- The OECD Working Group on Bribery’s mandatory Phase 4 peer monitoring cycle related to the implementation of the Convention by States Parties was launched in March 2016, during a ministerial-level meeting that was organized to mark the occasion, as well as celebrate 15 years of peer monitoring under the Convention, and enforcement successes and challenges. Throughout Phase 4, Canada is expected to fulfill its responsibilities as Evaluated Country and co-Lead Examiner and Facilitator with respect to four of the Group’s peer reviews between early 2016 and late 2024. While Facilitator obligations have not yet been scheduled, Canada (along with Korea) will be required to fulfill its responsibilities as co-Lead Examiner for the review related to Australia starting in October 2016, and (along with Switzerland) with respect to the review related to France starting in early 2019. Both reviews may continue until the conclusion of the Phase 4 cycle in late 2024. The Group’s peer review of Canada’s implementation of the Convention is scheduled to start in early 2020 and conclude by late 2024. While Facilitators have not yet been designated, co-Lead Examiners will be Austria and the United Kingdom. Canada continues to fulfill other mandatory, ongoing reporting obligations regarding its law enforcement efforts.
- In June 2016, the Legal Bureau of Global Affairs Canada (GAC) and the Royal Canadian Mounted Police (RCMP) jointly launched new departmental-wide training entitled “Anti-Corruption: Canadian Law & Identifying Red Flags in the Trade, Political/Consular & Development Contexts”. A number of training sessions will be scheduled in the coming months within GAC, as well as with various stakeholders across the Government of Canada.
- In its landmark decision of April 2016, World Bank Group v. Wallace, the Supreme Court of Canada recalled the importance of “worldwide cooperation” in the global fight against corruption. In 2011, the World Bank learned of allegations that representatives of SNC-Lavalin were planning to bribe officials of the Government of Bangladesh to obtain a contract related to the construction of a bridge over the Padma River. As its investigation unfolded, the World Bank voluntarily shared information of its findings with the RCMP, which pursued the case. Ultimately, several individuals were charged pursuant to the Corruption of Foreign Public Officials Act (CFPOA). The Court acknowledged that efforts of international organizations to fight fraud and corruption in development projects “serve at the frontlines of international anti-corruption efforts” and clarified the Bank’s privileges and immunities related to the non-access by third parties to its archives and staff, thus ensuring that a critical corruption prosecution can proceed.
On December 17, 1997, Canada signed the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Convention)Footnote iand Parliament passed the CFPOA to implement Canada’s obligations under the OECD Convention into Canadian law.Footnote iiWith 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 OECD Convention and triggering the coming into force of the Convention on February 15, 1999.Footnote iiiThe CFPOA came into force on February 14, 1999.
The OECD 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. To date, 41 states have ratified the OECD Convention, including all 34 member states of the OECD and seven non-member states: Argentina, Brazil, Bulgaria, Colombia, Latvia, Russia, and South Africa.Footnote iv Since the OECD Convention entered into force, over 300 individuals and over 100 entities have been sanctioned under criminal proceedings for foreign bribery in over one-third of these States Parties. Of those, over 80 of the sanctioned individuals have been sentenced to prison for foreign bribery in one-third of these States Parties. Almost 400 investigations are ongoing in over half of these States Parties.
- 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 TransactionsFootnote v (2009 Recommendation) was adopted by the OECD CouncilFootnote vi on November 26, 2009, and released on December 9, 2009 on the tenth anniversary of the OECD Convention. This Recommendation is binding on the States Parties to the OECD Convention.
Guidelines for Multinational Enterprises – The OECD Guidelines for Multinational Enterprises (Guidelines), which were updated in May 2011, contains guidance regarding corporate social responsibility (CSR) aimed at multinational enterprises investing abroad. The Guidelines are supported by National Contact Points (NCPs), offices established by adherents to implement and raise awareness of the Guidelines.
Other companion instruments include the OECD Recommendation on Tax Measures for Further Combating Bribery of Foreign Public Officials in International Business TransactionsFootnote viiand the Convention on Mutual Administrative Assistance in Tax Matters;Footnote viii the OECD Recommendation on Bribery and Officially Supported Export Credits;Footnote ix and the Recommendation on Anti-Corruption Proposals for Bilateral Aid and Procurement.Footnote x
- The Mandatory Peer Monitoring Process
The OECD Convention provides for mandatory peer evaluation by Members of the OECD Working Group on Bribery in International Business Transactions (Working Group) on the enforcement and implementation, by States Parties, of the OECD Convention and the 2009 Recommendation. The Working Group is comprised of representatives from the States Parties to the OECD Convention.Footnote xiThe purpose of ongoing mutual evaluations of the implementation of the Convention and the 2009 Recommendation is to maintain an up-to-date assessment of the structures put in place to enforce related laws and rules and their application in practice.
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 OECD Convention meet the standards set by it. Footnote xii Phase 2 studies and assesses the structures put into place to enforce national laws and determine their practical application.Footnote xiii Phase 3 is intended to be 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 2017. Discussions regarding the scope and procedures of Phase 4 commenced in March 2014. Phase 4 was launched in March 2016, during a ministerial-level meeting that was organized to mark the occasion, as well as celebrate 15 years of peer monitoring under the Convention and enforcement successes and challenges. Phase 4 will endeavour to take a tailor-made approach, considering each country’s unique situation and challenges, and will focus on key horizontal issues, progress made on weaknesses identified in previous Phases of evaluation, enforcement efforts and results, and any issues raised by changes in the domestic legislation or institutional framework of each State Party.
- 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 Lead Examiner, Evaluated Country, and Member of the Working Group. Between September 2015 and August 2016, Canada’s participation included the following:
Canada as Lead Examiner –With the June 2015 conclusion of the Working Group’s peer review of Australia, for which Canada and Japan were co-Lead Examiners, Canada continued to fulfill its co-Lead Examiner responsibilities on the Working Group’s Phase 3 evaluation related to Japan. Canada remains co-Lead Examiner for this assessment, along with Norway, until the completion of the Phase 3 evaluation cycle.
Throughout Phase 4, Canada is expected to fulfill its responsibilities as co-Lead Examiner and Facilitator with respect to the Working Group’s peer reviews of four other States Parties between early 2016 and late 2024. While Facilitator obligations have not yet been scheduled, Canada (along with Korea) will be required to fulfill its responsibilities as co-Lead Examiner for the Working Group’s peer review related to Australia starting in October 2016, and (along with Switzerland) with respect to the review related to France starting in early 2019. Both reviews can continue until late 2024.
Canada as Evaluated Country – The final stages of the Working Group’s Phase 3 peer review of Canada were completed in March 2014. Co-Lead Examiners were Austria and the United States.Footnote xiv. The Working Group’s peer review of Canada has moved on to Phase 4, which is scheduled to start in early 2020 and conclude by late 2024. While Facilitators have not yet been designated, co-Lead Examiners will be Austria and the United Kingdom. Canada continues to fulfill other mandatory, ongoing reporting obligations regarding its law enforcement efforts.
The Corruption of Foreign Public Officials Act (CFPOA)
The CFPOA criminalizes the bribery of a foreign public official and the maintaining or destruction of books and records to facilitate or hide the bribing of a foreign public official. Canada also criminalizes a conspiracy or attempt to commit those offences, as well as aiding and abetting in committing those offences, an intention in common to commit those offences and counselling others to commit those offences. Laundering property and proceeds of such offences, as well as possession of property and proceeds, are offences under the Criminal Code.Footnote xvAs described below, Canada continues to take significant steps to further deter Canadian companies and persons from paying bribes to foreign public officials in the course of business. As part of these efforts, the Government of Canada has been conducting outreach to enhance awareness and to encourage companies to adopt measures that can effectively implement their legal obligations with a zero-tolerance approach to the bribery of foreign public officials.
- Investigations and Prosecutions
There are currently 10 active investigations, four convictions and four cases in which charges have been laid but not yet concluded under the CFPOA.Footnote xvi
SNC-Lavalin Group Inc. – On February 19, 2015, Groupe SNC-Lavalin Inc. and two of its subsidiaries, namely, SNC-Lavalin Construction Inc. and SNC-Lavalin International Inc., were charged with one count of bribery contrary to paragraph 3(1)(b) of the CFPOAand one count of fraud contrary to paragraph 380(1)(a) of the Criminal Code. The charges relate to the alleged payment of bribes to secure an advantage for the company in relation to major construction projects in Libya. In addition, the company and its subsidiaries are charged with defrauding the Great Socialist People’s Libyan Arab Jamahiriya, the Management and Implementation Authority of the Great Man Made River Project of Libya, the General People’s Committee for Transport Civil Aviation Authority of Libya, Lican Drilling Co. Ltd., and the Organization for Development of Administrative Centers of Benghazi in Libya in the amount of $129,832,830.
Sami Bebawi, Constantine Kyres and Stéphane Roy – On January 31, 2014, charges were laid against two former SNC Lavalin executives, Sami Bebawi and Stéphane Roy, with respect to allegations of bribes to foreign public officials in Libya. Sami Bebawi has been charged with one count of fraud over $5,000, two counts of possession of proceeds of crime, four counts of possession of stolen property, and one count of bribery of a foreign public official (pursuant to subsection 3(1) of the CFPOA). Sami Bebawi was subsequently charged on September 9, 2014 with one count of obstructing justice. Constantine Kyres, the lawyer of Sami Bebawi, was also charged on September 9, 2014, with one count of obstructing justice and one count of extortion. Stéphane Roy has been charged with one count of fraud over $5,000, one count of bribery of a foreign public official pursuant to subsection 3(1) of the CFPOA, and one count under paragraph 7(2)(a) of the Special Economic Measures Act acting under article 41 of the Charter of the United Nations.
Robert Barra, Dario Berini, and Shailesh Govindia – On June 4, 2014, U.S. nationals Robert Barra (former Cryptometrics Chief Executive Officer (CEO)) and Dario Berini (former Cryptometrics Chief Operating Officer (COO)) and U.K. national Shailesh Govindia (an agent for Cryptometrics) were charged with agreeing to pay bribes to Indian officials in violation of the CFPOA.Footnote xvii Mr. Govindia is also charged with one count of fraud under section 380 of the Criminal Code. On January 13, 2015, a new information was sworn to replace the fraud charge against Mr. Govindia with a charge of theft under section 334 of the Criminal Code. The charges against these individuals flow from the same events that led to the conviction of Nazir Karigar (see under Matters Concluded below). In 2006, Cryptometrics Canada Inc. tendered a contract with Air India for a Biometric Passenger Security System valued at approximately $100 million USD. Evidence gathered and later presented at trial revealed an agreement by Nazir Karigar, an agent for Cryptometrics, to pay millions of dollars in bribes to Indian public officials for the purpose of securing a contract with Air India. While the initial investigation led to a conviction of Nazir Karigar, the second phase of the investigation focused on the activities of the former Chief Executive Officer and Chief Operating Officer of the company. All three accused are currently before the courts.
Kevin Wallace, Zulfiquar Ali Bhuiyan, and Abul Hasan Chowdhury – On September 16, 2013, charges were laid against Kevin Wallace, Zulfiquar Ali Bhuiyan and Abul Hasan Chowdhury. It is alleged that the three individuals agreed, with others, to pay bribes to officials in Bangladesh in relation to the construction of the Padma Multipurpose Bridge Project. The prosecution against Abul Hasan Chowdhury was stayed on April 28, 2014. Several delays were encountered pending a decision by the Supreme Court of Canada in World Bank Group v. Wallace. In April 2016, the Supreme Court of Canada recalled the importance of “worldwide cooperation” in the global fight against corruption. In 2011, the World Bank learned of allegations that representatives of SNC-Lavalin were planning to bribe officials of the Government of Bangladesh to obtain a contract related to the construction of a bridge over the Padma River. As its investigation unfolded, the World Bank voluntarily shared information of its findings with the Royal Canadian Mounted Police (RCMP), which pursued the case. Ultimately, several individuals were charged pursuant to the CFPOA as noted above. The Court acknowledged that efforts of international organizations to fight fraud and corruption in development projects “serve at the frontlines of international anti-corruption efforts” and clarified the Bank’s privileges and immunities related to the non-access by third parties to its archives and staff, thus ensuring that a critical corruption prosecution can proceed. Although the Court’s decision related to privileges and immunities is final, the criminal case continues.
Ramesh Shah and Mohammad Ismail – On February 29, 2012, the RCMP arrested, and on April 11, 2012, jointly charged, two former employees of SNC Lavalin, Ramesh Shah of Oakville, Ontario, and Mohammad Ismail of Mississauga, Ontario, for allegedly paying bribes in relation to the awarding of a contract for supervision and consultancy services for the construction of the Padma Multipurpose Bridge Project in Bangladesh and did thereby commit an indictable offence contrary to paragraph 3(1)(b) of the CFPOA. A preliminary inquiry took place in April 2013, and both accused were committed to stand trial. The matter remains before a Canadian court. The charge against Mohammad Ismail was stayed on November 27, 2015.
Nazir Karigar – On August 15, 2013, Nazir Karigar was convicted by the Ontario Superior Court of Justice for agreeing with others to offer bribes to foreign public officials contrary to paragraph 3(1)(b) of the CFPOA. The RCMP laid charges against Nazir Karigar under the CFPOA on May 28, 2010, for making a payment to Indian government officials to facilitate the execution of a multi-million dollar contract for the supply of a security system by Cryptometrics, a Canadian high-tech firm. On May 23, 2014, Nazir Karigar was sentenced to three years imprisonment. The conviction marks the first time that an individual has been convicted under the CFPOA, and the first time that a matter has gone to trial under the CFPOA.
Griffiths Energy International Inc. – Griffiths Energy International Inc., a privately-held oil and gas company based in Calgary, pleaded guilty on January 22, 2013 to one count of bribery under the CFPOA and was sentenced on January 25, 2013 to pay a $9,000,000 fine with a 15% victim surcharge, for a total financial penalty of $10,350,000, the largest to date under the CFPOA, in relation to its dealings in Chad.
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, contrary to paragraph 3(1)(b) of the CFPOA, covering the period from February 1, 2005 to June 30, 2005, in relation to its dealings in Bangladesh. As a result of the conviction, Niko Resources Ltd. was fined $8.26 million plus a 15% victim fine surcharge, for a total of $9,499,000.00. In addition, the company was placed under a probation order, which put the company under the Court’s supervision for three years to ensure that audits were completed to examine the company’s compliance with the CFPOA.
Hydro-Kleen Group Inc. – Hydro Kleen Group Inc., based in 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, contrary to paragraph 3(1)(a) of the CFPOA and was ordered to pay a fine of $25,000. 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, contrary to subparagraph 426(1)(a)(ii) of the Criminal Code. He received a six-month sentence and was subsequently deported to the U.S.
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, which focuses on enforcement and prevention.
- The Royal Canadian Mounted Police (RCMP)
Enforcement – The International Anti-Corruption Program is managed under the umbrella of the RCMP Federal Policing Special Services, Federal Coordination Centre (FCC). The FCC provides subject matter expertise internally and externally to national and international partners including government departments. The RCMP has the capability to track all CFPOA cases and expects that credible allegations reported to Canadian law enforcement agencies or government officials, including those in foreign missions, will continue to be reported to the RCMP.
The RCMP investigates international corruption using International Anti-Corruption Teams located in Ottawa (National Division) and in Calgary (K Division). National Division currently has 19 investigators working on major international corruption cases. K Division has 2 investigators working on anti-corruption cases. Both locations have a pool of over 37 investigators that can be drawn upon for major priority investigations, should the need arise. With regard to corruption, the investigative teams are tasked with:
- investigating allegations that a Canadian person or business has bribed, offered or agreed to bribe a foreign public official;
- investigating allegations that a foreign person has bribed a Canadian public official;
- investigating allegations that a foreign public official has secreted or laundered money in, or through, Canada;
- providing assistance on international assistance requests; and
- developing and delivering outreach activities to various target groups.
Allegations of corruption can have serious repercussions in relation to business transactions and international relations. They are taken very seriously by the RCMP and treated with the utmost confidence for reasons of privacy and ensuring the integrity of investigations.
Training and Cooperation – The RCMP includes the issue of foreign bribery and the CFPOA in its training of all RCMP liaison officers prior to departure for overseas assignments. The RCMP has participated in numerous international anti-corruption awareness programs and training. In addition, an orientation manual, which covers the CFPOA and includes contact information for the investigative teams and a description of their roles, has been completed.
RCMP Headquarters and investigative teams have an established point of contact within the Department of Justice’s International Assistance Group to ensure that priority is given to requests for mutual legal assistance in foreign bribery matters. The RCMP continues to prioritize the establishment of procedures and mechanisms for information sharing within the Government about suspected cases of corruption.
Outreach – Awareness and outreach are recognized as critical elements of the RCMP’s anti-corruption efforts. The RCMP has been proactive in reaching out to various stakeholders and developing partnerships with various organizations and institutions to promote the RCMP’s effort on anti-corruption and to provide information and tools on preventing corruption. Internal and external websites have been updated and an information sheet has been created to support the general efforts of reaching out to Canadian industry, universities, partners, stakeholders and the general public, in order to get the anti-corruption message out to as wide an audience as possible. The RCMP seeks to leverage available opportunities, such as International Anti-Corruption Day, media requests, conferences and selected anti-corruption workshops to promote the force’s anti-corruption efforts to prevent corruption-related offences.
The RCMP is engaged on a regular basis by partners and stakeholders to provide training and lectures on anti-corruption. From presenting at conferences and workshops that target various industry groups to providing training to other government departments such as GAC, non-governmental organizations and professional associations, the RCMP is very active in its outreach efforts. The RCMP has also been proactive and innovative in developing partnerships with universities which involve reaching out and engaging students who will be the next business leaders and in the context of students’ development of applied projects related to anti-corruption compliance tools for businesses. RCMP overseas Liaison Officers also engage with the Canadian business community abroad to enhance the community’s awareness of its legal obligations under the CFPOA. During this reporting period, the RCMP provided 47 anti-corruption training and lecture sessions to various target groups and reached over 2020 individuals.
- Public Prosecution Service of 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 Teams and with other key government interlocutors involved with the enforcement and development of the CFPOA.
Training and Outreach – Internally, training in relation to 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. The PPSC has also made presentations on, and actively participated on panels raising awareness of, Canada’s anti-corruption activities, including for a gathering of international enforcement officials in Washington, D.C. and the Canadian Bar Association.
- Global Affairs Canada (GAC)
In Canada and Beyond –GAC plays the lead role in:
- representing Canada at the OECD Working Group on Bribery plenaries and other international anti-corruption forums that are responsible for the related multilateral conventions to which Canada is a State Party;
- conducting, under the Convention, mandatory peer reviews as Evaluated Country, Lead Examiner, and Facilitator;
- coordinating Canada’s whole-of-government approach to meeting its international anti-corruption obligations; and
- undertaking internal training activities, as well as outreach efforts with, and providing technical assistance to, emerging economies regarding corruption.
In addition, GAC’s personnel at Canadian missions work closely with Canadian companies that do business abroad through the provision of a range of services and support including making the Canadian business community abroad aware of the CFPOA and promoting responsible business practices and in the management of Canada’s NCP, established under the Guidelines.Footnote xviii
Trade, Development, Risk Management, and Reporting Obligations – GAC continues to apply the 2010 Policy and Procedure for Reporting Allegations of Bribery abroad by Canadians or Canadian Companies, which instructs Canadian missions on the steps that must be taken when allegations arise that a Canadian company or individual has bribed a foreign public official or committed other bribery-related offences. Information is conveyed to law enforcement in accordance with Canadian law and established procedures. As stated in the previous annual report, in September 2014, a Standard Operating Procedure was implemented that relates to Declarations Regarding Corruption made in the context of advocacy support sought by Canadian businesses abroad. At the end of this reporting period, approximately 1,100 active Declarations were signed by Canadian companies.
On March 31, 2016, a Memorandum of Understanding related to procurement and real property transactions was concluded with Public Services and Procurement Canada (PSPC) in order to implement the government-wide Integrity Regime, which is governed by the Ineligibility and Suspension Policy and the Integrity Provisions.
In addition, as part of its internal due diligence, GAC requires entities that apply for project funding in the form of grants and contributions to certify that, they have not been convicted of, or been under sanction for, a corruption-related offence within the previous three years. To help advance global policy approaches on anti-corruption in developing countries, Canada requires all GAC international assistance programming to integrate governance considerations to reinforce Canada’s position that there are important linkages between governance and sustainable development. . Canada has supported transparency and anti-corruption work with country partners and other bilateral and multilateral donors, undertaking reforms in a range of areas (e.g., public sector capacity and financial management, internal/external audit, independent media, and civil society engagement) to help reduce corruption and enable citizens to hold their governments accountable. Canada also engages with key international organizations and forums, such as the OECD Development Assistance Committee (DAC) Network on Governance (GovNet) and its Anti-Corruption Task Team, and will support the GovNet in undertaking an in-depth study over the next two years on how development assistance can best contribute to global efforts to reduce illicit financial flows.
May 2016 saw the launch of the development of a harmonized and integrated risk management tool for all GAC grants and contributions. The framework for this tool is anticipated to be available by April 1, 2017. Several internal consultations on the framework were held with key stakeholders (at HQ and in the field) in the spring and the summer of 2016. To ensure broad participation, the corporate committee, which was previously known as the Fiduciary Risk Advisory Group and renamed as the Risk Management Advisory Group, held its inaugural meeting in the summer of 2016.
Since June 2015, Canada has been actively engaged in the revision of the OECD Methodology for Assessment of Procurement Systems (MAPS), a common tool used to evaluate the quality of country procurement systems, including specific anti-corruption measures.Footnote xix The revised universal core tool, which will be piloted in early 2017, will feature enhanced accountability, integrity and transparency assessment criteria. Specialized modules on institutional capacity, e-procurement, and Public Private Partnerships, for example, are also being developed. Such assessments are 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 GAC’s corporate guidance.
Training and Outreach – During the reporting period, GAC personnel, including Heads of Mission, Senior Trade Commissioners, and Trade Commissioners, received specialized pre-posting training which includes Canada’s international obligations to prevent and combat corruption, CSR, officials’ responsibilities pursuant to the CFPOA, corruption possibilities in certain markets, as well as facilitated case studies. An online CSR training course is also available. GAC also continued to deliver a mandatory five-day, trade-specific core training program, which includes anti-corruption efforts, tools and resources (209 Trade Commissioners and Senior Trade Commissioners participated in that program). In addition, GAC legal experts also made presentations and actively participated on panels to raise awareness of Canada’s anti-corruption measures, including legal mechanisms for freezing assets of corrupt foreign officials and combating the bribery of foreign public officials. GAC also ran related courses which were attended by officers from the trade, political, and development streams from across Canada and which were available to missions abroad. In June 2016, GAC legal officers and the RCMP jointly launched new departmental-wide training entitled Anti-Corruption: Canadian Law & Identifying Red Flags in the Trade, Political/Consular & Development Contexts. This new whole-of-government approach is intended to remain ongoing. A number of training sessions will be scheduled in the coming months within GAC, as well as with various stakeholders across the Government of Canada.
Canada continued to implement its updated CSR strategy for the Canadian extractive sector abroad, Doing Business the Canadian Way: A Strategy to Advance Corporate Social Responsibility in Canada’s Extractive Sector Abroad. During this period, GAC provided CSR tool-kits and organized many CSR activities abroad, such as forums and workshops. Many of these were led by Canadian missions, thus providing a platform to share Canadian best practices. An article on addressing corruption in international business was published in CanadExport, the official magazine of the Trade Commissioner Service, which directly reaches 21 000 Canadian businesses. In addition, GAC’s CSR E-Bulletin provides regular updates to government partners on the Government’s CSR efforts.
- Export Development Canada (EDC)
Combating Corruption –As set out in the EDC Code of Business Ethics and Code of Conduct, EDC employees bear the onus of “ensur[ing] that EDC does not knowingly support a transaction that involves the offer or giving of a bribe, and that EDC exercises reasonable diligence and care not to support such a transaction unknowingly”.Footnote xx EDC’s Anti-Corruption Policy GuidelinesFootnote xxi outline measures that EDC will apply to combat corruption, including (i) possible notification to 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 to sign anti-corruption declarations related to the effect that they have 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 charged with or, within the previous five years, have been convicted of, bribing a foreign public official.Footnote xxiiEDC also takes into consideration the positions of other Canadian government departments on companies that face corruption issues.
In 2015-16, EDC continued its implementation of recommendations arising from an external review of its anti-corruption efforts. Undertaken in 2014-15, the review assessed whether, and confirmed that, its anti-corruption policies, systems, practices and procedures were sound, appropriate, and reflective of global best practices, and provided recommendations for further improvement. The review also opined on EDC’s performance against its obligations under the OECD Recommendation on Bribery and Officially Supported Export Credits. It found that EDC was complying with the obligations and, in some areas, exceeding the requirements.
Consistent with Ministerial direction, EDC’s corporate plan reflects the importance of the ongoing promotion of the Guidelines and their incorporation into EDC’s own activities. In addition, EDC has been actively participating in meetings at the OECD Export Credits Group on its approach to anti-corruption due diligence and to share best practices among export credit agencies.
Raising Awareness –Through its engagement with clients, EDC provided feedback to customers on the risks of bribery and corruption and mitigating practices, responsible business conduct, as well as the strength of their anti-corruption policies and best practices on how to set the proper “tone at the top”, how to make improvements in their corporate governance practices, and how to educate employees about the CFPOA and other legal frameworks to aim to combat bribery in international business transactions.Footnote xxiii On December 9, 2015 (International Anti-Corruption Day), EDC launched an anti-corruption video to highlight for its customers best practices to combat bribery in international business. The video complements its 2014 checklist to help small and medium-size businesses assess their corruption risk.Footnote xxiv In 2016, outreach included participation in Transparency International’s annual Day of Dialogue. Earlier in the year and in conjunction with the United Nations Global Compact Network Canada (UNGCNC), EDC organized a session for mining companies, at the Prospectors and Developers Association of Canada (PDAC) annual convention, in which a panel led a role-play simulation to illustrate real-life encounters with bribery requests and how to manage them. Also, in collaboration with the UNGCNC, EDC supported the production of an anti-corruption e-book on how to design an effective anti-corruption compliance program.
- Canada Revenue Agency (CRA)
Information Sharing – One major initiative for the next three-year cycle will be for the CRA to participate in the OECD’s Action Plan on Base Erosion and Profit Shifting (BEPS). The CRA also continues to collaborate at the international level to address international and aggressive tax planning issues. The CRA participates in the Joint International Tax Shelter Information and Collaboration (JITSIC). Originally established in 2004 to combat cross-border tax avoidance, JITSIC was re-established in 2014 under the OECD’s Forum on Tax Administration (FTA) and now comprises 36 national tax administrations operating under a legal framework of bilateral and multilateral conventions and tax information exchange agreements to share experience, resources and expertise to tackle common tax avoidance issues. This will facilitate participation by an even broader network of countries and it is expected that the new network will be key for multilateral and bilateral exchanges of information on tax schemes, taxpayer specific information and risk profiles.
- Department of Justice Canada
Mutual Legal Assistance – The Department of Justice’s International Assistance Group (IAG), which is Canada’s central authority for mutual legal assistance in criminal matters, has designated a legal counsel to deal with all incoming and outgoing corruption-related mutual legal assistance requests. This legal counsel works closely with the RCMP and other relevant law enforcement officials and prosecutors.
Training and Outreach – The IAG regularly liaises with the central authorities from other countries to educate foreign officials with respect to the Canadian legal requirements to obtain effective assistance in criminal matters. The IAG works closely with foreign officials to provide assistance in drafting requests for legal assistance, which allows them to make more effective requests to Canada in the fight against corruption. Moreover, the IAG provides advice to Canadian prosecutors and law enforcement and foreign officials regarding assistance that can be provided without the requirement of a formal request.
Awareness Raising – Department of Justice officials participate in international anti-corruption fora and continue to raise awareness of the CFPOA and of international anti-corruption activities, including with the provinces and territories.
- Canadian Commercial Corporation (CCC)
Combating Corruption – Anti-bribery and corruption is a key component of CCC’s Corporate Social Responsibility Framework, with the Code of Conduct and Business Ethics forming the basis for CCC’s approach to fighting bribery and corruption.The Code and the Integrity Compliance Instructions and Guidelines provide specific guidance and direction to CCC’s employees and clients with regard to ethicalbehavior in all of its business activities. All employees have access to a copy of the Code and are obligated to sign a yearly acknowledgement confirming their understanding of, and responsibility to comply with it. The Code is also available to CCC clients on its external website.Footnote xxv
CCC utilizes external resources to bolster its internal anti-corruption expertise and practices. During the period under review, CCC renewed its membership with Trace International, a non-profit organization founded to provide members with anti-bribery compliance support and 100% of the employees (not on leave) completed training in anti-bribery compliance and avoiding trafficked labour.
Raising Awareness – CCC is committed to ensuring ethical conduct in its business dealings. Prior to a services agreement being signed with CCC, suppliers must complete a due diligence questionnaire (DDQ), which, among other things, assesses how a particular opportunity became known to the exporter, and whether there are any third parties or agents involved in the pursuit. The DDQ provides a preliminary assessment of the exporter’s business integrity profile and enhances the ability of CCC’s internal project assessment procedures to flag potential problem areas. Any red flags raised at the due diligence phase result in the recommendation not to move forward with the pursuit or in the initiation of an Enhanced Managerial Review wherein the CCC takes a deeper dive into the supplier and the pursuit before proceeding further. CCC screened over 80 projects in the reporting period to ensure that the risk of bribery and corruption is mitigated in CCC’s transactions.
- Public Services and Procurement Canada (PSPC)
On July 3, 2015, PSPC implemented a new government-wide Integrity RegimeFootnote xxvi consisting of the Ineligibility and Suspension Policy, any directives issued further to the Policy and any clauses used in instruments relating to contracts and real property agreements that incorporate the Policy by reference. The Regime applies to departments and agencies included in Schedule I, I.1 and II of the Financial Administration Act. Crown Corporations and parliamentary entities are encouraged to opt-in.
In accordance with the Integrity Regime, in September and December 2015, two companies were declared ineligible to be awarded contracts with federal departments and agencies. Both companies are listed on the Department’s Ineligibility and Suspension List. In December 2015, PSPC signed its first Administrative Agreement with a supplier which was also listed on the Department’s Integrity Regime website.
- Treasury Board Secretariat (TBS)
Enabling the mechanism for disclosure of acts of corruption and the bribery of foreign public officials has assisted in promoting a culture of accountability and integrity. During the reporting period, Canada continued to serve as chair for the OECD Working Party of Senior Public Integrity Officials (SPIO), a sub-group of the Public Governance Committee (PGC), which is responsible for designing and implementing policies to strengthen public governance and public sector institutions. The SPIO aims to strengthen public sector governance and institutions involved in policy making related to safeguarding integrity and preventing corruption and the underlying conditions that shape the policy-making process. Recent activities have involved the drafting of papers to present key policy options for combatting corruption and enhancing public integrity.
During 2016, Integrity Week at the OECD was held between April 18-22, beginning with a meeting of the SPIO, which was chaired by Canada, leading with a Forum on Global Trade without Corruption that included Canadian panellists and participants. This was followed by a PGC meeting, which included a Symposium on “Building integrity for inclusive growth” with several Canadian presenters and participants. In addition, Canada’s disclosure protection regime was featured in the publication, Government at a Glance 2015: Chapter on Integrity. Canada continues to engage with other countries on an ad hoc basis through on-site visits and providing technical guidance on the promotion of integrity frameworks related to public governance.
- Footnote i
The OECD Convention can be viewed at the OECD website: http://www.oecd.org/daf/anti-bribery/oecdantibriberyconvention.htm and http://www.oecd.org/daf/anti-bribery/ConvCombatBribery_ENG.pdf.
- Footnote ii
The CFPOA can be viewed at the Department of Justice website: http://laws-lois.justice.gc.ca/eng/acts/C-45.2/index.html.
- Footnote iii
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.
- Footnote iv
Ratification status of the OECD Convention can be found at: http://www.oecd.org/daf/anti-bribery/WGBRatificationStatus.pdf.
- Footnote v
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 at: http://www.oecd.org/daf/anti-bribery/oecdantibriberyconvention.htm and http://www.oecd.org/daf/anti-bribery/44176910.pdf.
- Footnote vi
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.
- Footnote vii
- Footnote viii
This OECD Recommendation was adopted by OECD Council on May 25, 2009. The Handbook was released on November 7, 2013, and can be viewed at http://www.oecd.org/ctp/bribery-corruption-awareness-handbook.htm. The Convention on Mutual Administrative Assistance in Tax Matters was ratified by Canada on November 21, 2013, and is in effect in respect of Canada as of March 1, 2014. It can be viewed at: http://www.oecd.org/ctp/exchange-of-tax-information/conventiononmutualadministrativeassistanceintaxmatters.htm. Ratification status can be viewed at: http://www.oecd.org/tax/exchange-of-tax-information/Status_of_convention.pdf.
- Footnote ix
This document was adopted by OECD Council on December 14, 2006.
- Footnote x
This document was endorsed by the OECD Development Assistance Committee in May 1996.
- Footnote xi
The Working Group evaluated Canada’s implementing legislation in July 1999 and concluded that the CFPOA met the requirements set by the OECD Convention: http://www.oecd.org/daf/anti-bribery/canada-oecdanti-briberyconvention.htm.
- Footnote xii
The Phase 1 Report on Canada can be found at: http://www.oecd.org/daf/anti-bribery/canada-oecdanti-briberyconvention.htm and http://www.oecd.org/daf/anti-bribery/anti-briberyconvention/2385703.pdf.
- Footnote xiii
The Working Group approved the Phase 2 Report on Canada in June 2003. Overall, the report was positive in its evaluation of Canada’s fight against corruption. However, the Working Group made a number of recommendations in the report, which dealt 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 found at: http://www.oecd.org/daf/anti-bribery/canada-oecdanti-briberyconvention.htm and http://www.oecd.org/daf/anti-bribery/anti-briberyconvention/31643002.pdf. 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 found at: http://www.oecd.org/daf/anti-bribery/canada-oecdanti-briberyconvention.htm and http://www.oecd.org/daf/anti-bribery/anti-briberyconvention/36984779.pdf.
- Footnote xiv
The Working Group’s Phase 3 report on Canada can be found on the OECD website at: http://www.oecd.org/daf/anti-bribery/canada-oecdanti-briberyconvention.htm and http://www.oecd.org/daf/anti-bribery/anti-briberyconvention/Canadaphase3reportEN.pdf. The Working Group’s Written Follow-up to its Phase 3 Report can be found at: http://www.oecd.org/daf/anti-bribery/canada-oecdanti-briberyconvention.htm and http://www.oecd.org/daf/anti-bribery/CanadaP3writtenfollowupreportEN.pdf. The OECD website has not been updated to reflect Canada’s Additional Phase 3 Written Follow-up Report to the Working Group in March 2014 and the Group’s subsequent positive assessment.
- Footnote xv
The Criminal Code can be viewed at: http://laws-lois.justice.gc.ca/eng/acts/C-46/index.html.
- Footnote xvi
No other prosecutions under the CFPOA have been reported by provincial Heads of Prosecution or by federal prosecutors in the time period relevant to this Report.
- Footnote xvii
- Footnote xviii
- Footnote xix
Information on MAPS is available at: http://www.oecd.org/development/effectiveness/45181522.pdf.
- Footnote xx
- Footnote xxi
- Footnote xxii
In cases where companies are facing allegations of bribery or corruption in any jurisdiction, EDC undertakes enhanced due diligence which can include, among other things, an interview with the company and a request for a more detailed anti-corruption declaration. The outcome of the due diligence exercise determines whether EDC will provide support.
- Footnote xxiii
EDC’s dedicated page related to information on combating corruption and bribery, including links to the CFPOA, the OECD Convention, and the OECD Recommendation on Bribery and Officially Supported Export Credits can be found at: http://www.edc.ca/EN/About-Us/Corporate-Social-Responsibility/Pages/business-ethics.aspx and http://www.edc.ca/EN/Promotions/Pages/csr.aspx.
- Footnote xxiv
EDC’s checklist for non-credit issues and video on anti-corruption, respectively, are available at: http://www.edc.ca/EN/Promotions/Documents/non-credit-issues-checklist.pdf and http://www.edc.ca/EN/Knowledge-Centre/Multimedia-Centre/Pages/default.aspx.
- Footnote xxv
- Footnote xxvi
More details on the new government-wide Integrity Regime are available on the PSPCwebsite: http://www.tpsgc-pwgsc.gc.ca/ci-if/ci-if-eng.html.
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