Canada’s Fight against Foreign Bribery
Eighteenth 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 2016 – August 2017)
Table of Contents
- Highlights – September 2016 to August 2017
- The OECD Convention
- The Corruption of Foreign Public Officials Act (CFPOA)
- Canada and the Fight against Foreign Bribery
Highlights – September 2016 to August 2017
- Canada (along with Korea) began to carry out its duties as co-lead examiner for the OECD Working Group on Bribery (Working Group)’s Phase 4 review of Australia’s implementation of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Convention). This included participating in an on-site visit to obtain input from Australian justice sector participants and representatives of the business and civil society sectors. Next steps will include reviewing a draft report and facilitating its adoption at the Working Group’s December plenary session. Canada is also scheduled to serve as co-lead examiner (along with Switzerland) with respect to France’s phase 4 review (starting in early 2019) and to be subject to its peer review (to be co-led by Austria and the United Kingdom), starting in early 2020. In addition, Canada continues to provide publicly-available information on its law enforcement efforts and relevant legislative developments each December in the context of the Working Group’s “Tour de Table” exercise.
- The RCMP continued to deliver its ambitious awareness-raising program, conducting over 65 anti-corruption-related training sessions and/or lectures to various target groups during the reporting period. One of the RCMP’s most progressive initiatives has been the Global Anti-Corruption University Project (GAUP). The Project now involves students working with real Small and Medium-sized Enterprises (SMEs) to develop compliance-related programs and tools.
- On July 6, 2017, the Ontario Court of Appeal in R. v. Karigar dismissed the appellant’s appeal from his 2013 conviction for agreeing to offer a bribe to a foreign public official contrary to section 3 of the Corruption of Foreign Public Officials Act (CFPOA). The Court recalled the Supreme Court of Canada’s comments on the significance of corruption in international business practices (in World Bank Group v. Wallace). It found that the trial judge was entitled to look at the OECD Convention and the anti-corruption policy that it represents as part of the context for the interpretation of the CFPOA and that to read in the statutory limitations that were urged by the appellant would have constrained the ability of the Crown to enforce the policy of the CFPOA in accordance with Canada’s international obligations (for more details, see under Matters Concluded).
On December 17, 1997, Canada signed the OECD ConventionFootnote i and Parliament passed the CFPOA to implement Canada’s obligations under the OECD Convention into Canadian law.Footnote ii 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 OECD Convention and triggering its coming into force on February 15, 1999.Footnote iii The 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, 43 states have ratified the OECD Convention, including all 35 member states of the OECD and eight non-member states: Argentina, Brazil, Bulgaria, Colombia, Costa Rica, Lithuania, Russia, and South Africa.Footnote iv Since the OECD Convention entered into force, over 350 individuals and over 130 entities have been sanctioned under criminal proceedings for foreign bribery in over one-third of States Parties. Of those, over 100 of the sanctioned individuals have been sentenced to prison. Based on the most recent enforcement data, published in November 2016, there are currently over 300 investigations and over 100 prosecutions ongoing in States Parties relating to offences under the OECD Convention.Footnote v
- 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 vi (2009 Recommendation) was adopted by the OECD CouncilFootnote vii on November 26, 2009, and released on December 9, 2009 on the tenth anniversary of the OECD Convention. The 2009 Recommendation aims to strengthen mechanisms for the prevention, detection, and investigation of foreign bribery.
Guidelines for Multinational Enterprises – The OECD Guidelines for Multinational Enterprises (Guidelines), which were updated in May 2011, contain 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 viii and the Convention on Mutual Administrative Assistance in Tax Matters;Footnote ix the OECD Recommendation on Bribery and Officially Supported Export Credits;Footnote x and the Recommendation on Anti-Corruption Proposals for Bilateral Aid and Procurement.Footnote xi
- The Mandatory Peer Monitoring Process
The OECD Convention provides for mandatory peer evaluation by Members of the 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 xii The 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 xiii Phase 2 studies and assesses the structures put into place to enforce national laws and determine their practical application.Footnote xiv Phase 3 is intended to be more focused than the Phase 2 evaluation, concentrating on progress made by the States Parties on the recommendations made during Phase 2, on issues raised by changes in domestic legislation or institutional frameworks of the States Parties, and on enforcement efforts, results and other horizontal issues.
Phase 4 was launched in March 2016. As well as focusing on key horizontal issues, it endeavours to take a tailor-made approach, considering each country’s unique situation and challenges, 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 2016 and August 2017, Canada’s participation included the following:
Canada as Lead Examiner – Canada (along with Korea) began to carry out its duties as co-lead examiner for the Working Group’s Phase 4 review of Australia’s implementation of the OECD Convention. This included participating in an on-site visit to obtain input from Australian justice sector participants and representatives of the business and civil society sectors. Next steps will include reviewing a draft report and facilitating its adoption at the Working Group’s December plenary session. Canada will also serve as co-lead examiner (along with Switzerland) with respect to France’s phase 4 review (starting in early 2019).
Until its completion (in June 2017), Canada continued to fulfill its co-lead examiner responsibilities (along with Norway) in relation to the Working Group’s Phase 3 evaluation of Japan.
Canada as Evaluated Country –The Working Group’s Phase 4 peer review of Canada is scheduled to start in early 2020. Co-lead examiners will be Austria and the United Kingdom.
In addition to its ongoing participation in the mandatory peer review process, Canada continues to provide publicly-available information on its law enforcement efforts and on relevant legislative developments each December in the context of the Working Group’s “Tour de Table” exercise.
The Corruption of Foreign Public Officials Act
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 xv As 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 have been four convictions under the CFPOA to date and there are four ongoing cases in which charges have been laid but not yet concluded.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 and one count of bribery of a foreign public official pursuant to subsection 3(1) of the CFPOA.
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. 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.
Larry Kushniruk – In December 2016 Larry Kushniruk, president of Canadian General Aircraft in Calgary, was charged with agreeing to offer a bribe to Thai officials in order to secure the sale of a commercial jet from Thailand’s national airline, in violation of subsection 3(1) of the CFPOA.
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 was 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 the 2016 decision by the Supreme Court of Canada on the World Bank’s privileges and immunities in relation to information it had referred to the RCMP about the foreign bribery allegations.Footnote xvii In January 2017, the Ontario Superior Court of Justice ruled that wiretap evidence obtained in this case was not admissible. As a result, the prosecution elected to call no evidence and Kevin Wallace and Ali Bhuiyan were acquitted.
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 thereby committing 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 charge against Mohammad Ismail was stayed on November 27, 2015. In January 2017, the Ontario Superior Court of Justice ruled that wiretap evidence obtained in this case was not admissible. As a result, the prosecution elected to call no evidence and Ramesh Shah was acquitted.
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 marked the first time that an individual was convicted under the CFPOA, and the first time that a matter had gone to trial under the CFPOA.
On July 6, 2017, the Ontario Court of Appeal in R. v. Karigar dismissed the appellant’s appeal from his 2013 conviction for agreeing to offer a bribe to a foreign public official contrary to section 3 of the CFPOA. The Court recalled the Supreme Court of Canada’s comments on the significance of corruption in international business practices (in World Bank Group v. Wallace). It found that the trial judge was clearly entitled to look at the OECD Convention and the anti-corruption policy that it represents as part of the context for interpretation of the CFPOA and that to read in the statutory limitations that were urged by the appellant would have constrained the ability of the Crown to enforce the policy of the CFPOA in accordance with Canada’s international obligations.
The Court agreed with the trial judge’s application of the common law “real and substantial link” test in finding that Canada had territorial jurisdiction over the offence (the conduct having occurred prior to the 2014 enactment of territorial jurisdiction over CFPOA offences on the basis of nationality). The Court did not agree with the appellant that “agreeing” to offer a loan, reward, advantage or benefit requires proof of an agreement between the accused and the foreign public official. It further rejected the notion that there must be evidence that the foreign public official had the ability to influence decision-making, holding that the foreign bribery offence only requires proof of an agreement to bribe a foreign public official, and does not require proof that the official has any particular power or authority. The Court held that the foreign bribery offence is clearly committed when a person agrees with a foreign public official to give that official a benefit, but, equally clearly, when there is an indirect agreement to give or offer an advantage. In other words, there is no limiting language on who must “agree”; the offence requires only that the loan, reward, advantage or benefit that is the subject of the agreement be made to, or to another person for the benefit of, a foreign public official.
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, aided by its exclusive authority (since 2014) to lay an information in respect of CFPOA offences, expects that all credible foreign bribery allegations, including those initially reported to Canadian law enforcement agencies or to other government officials (such as those in foreign missions), will be referred to the RCMP for evaluation and investigation if deemed appropriate.
Among other responsibilities, RCMP investigators in both National Division (Ottawa) and K Division (Calgary) are responsible for investigating offences under the CFPOA. They 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.
Integrated Approach – Through a tip-line partnership launched in April 2017, the RCMP will receive triaged information from the Competition Bureau regarding allegations of bid-rigging, bribery, price fixing, conflict of interest, false invoicing and product switching. This information will be analyzed to determine whether or not an investigation is warranted.
The RCMP Headquarters has 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.
Training and Outreach – The RCMP remains firmly committed to its awareness and outreach activities, which it views as a critical component of its anti-corruption efforts. To this end, the RCMP ensures that all corruption-related material on its internal and external websites is kept up to date on an ongoing basis.
The RCMP has been proactive in reaching out to key stakeholders and in developing partnerships with various organizations and institutions to promote its prevention efforts and initiatives. The RCMP continuously seeks to leverage available opportunities, such as International Anti-Corruption Day, media requests, conferences and selected anti-corruption workshops to promote the force’s efforts to prevent corruption-related offences.
An orientation manual which provides information regarding foreign bribery, various international anti-corruption conventions (OECD Convention, United National Convention Against Corruption (UNCAC)) and legislation under the CFPOA, including up-to-date contact information, has been completed and is available to all members.
The RCMP is engaged on a regular basis by partners and stakeholders to provide training and give lectures on anti-corruption. From presenting at conferences and workshops that target various industry groups to providing training to other government departments such as Global Affairs Canada (GAC), non-governmental organizations and professional associations, the RCMP remains very engaged in its outreach efforts and continues to seek new opportunities to raise anti-corruption awareness, and awareness of the CFPOA, specifically. One of the RCMP’s most progressive initiatives has been the Global Anti-Corruption University Project (GAUP). The Project now involves students working with real Small and Medium-sized Enterprises (SMEs) to develop compliance-related programs and tools. Internally, the RCMP ensures that its Liaison Officers are well-versed in criminal matters involving corruption and money laundering and actively encourages them to engage with the Canadian business community abroad to enhance the community’s awareness of its legal obligations, in particular those under the CFPOA.
During this reporting period, the RCMP gave 65 anti-corruption-related training sessions and/or lectures to a wide variety of target groups. These sessions are very well received, as evidenced by GAC’s invitations for the RCMP to give anti-corruption presentations in Asia and South America.
- 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 FCC 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.
- Global Affairs Canada (GAC)
In Canada and Beyond –GAC plays a lead role in representing Canada at international anti-corruption fora, such as the Working Group, in outreach efforts with emerging economies regarding corruption and in coordinating Canada’s whole-of-government approach to meeting its international anti-corruption obligations.
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 OECD Guidelines for Multinational Enterprises.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 noted in the previous annual report, in September 2014, a Standard Operating Procedure was implemented that relates to Integrity Declarations (previously known as Declarations Regarding Corruption) made in the context of advocacy support sought by Canadian businesses abroad. At the end of this reporting period, approximately 1,400 Declarations signed by Canadian companies were in force.
To help advance global policy approaches on anti-corruption in developing countries, since 2009 Canada has required 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, civil society engagement, and natural resources governance) to help reduce corruption and enable citizens to hold their governments accountable. For example, in December 2016, the Honourable Marie-Claude Bibeau, Minister of International Development and La Francophonie announced $13.6 million over four years for Transparency International to work with communities, civil society organizations, public institutions and businesses to combat corruption in 12 countries: Argentina, Colombia, the Democratic Republic of Congo, Ghana, Guatemala, Honduras, Jamaica, Mozambique, Nigeria, Peru, Trinidad and Tobago, and Venezuela.
Canada also engages with key international organizations and fora, such as the OECD Development Assistance Committee (DAC) Network on Governance (GovNet) and its Anti-Corruption Task Team, and is supporting the GovNet to undertake 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 September 1, 2018. Several internal consultations on the framework were held with key stakeholders (at HQ and in the field) in 2016. To ensure broad participation, the corporate committee, known as the Risk Management Advisory Group (previously the Fiduciary Risk Advisory Group), held several meetings throughout the past year. GAC is currently working with the IT team to develop business requirements and work on building the tool.
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 was tested in 2017, features enhanced accountability, integrity and transparency assessment criteria. Specialized modules on Agency Level Assessment, e-procurement, and Public Private Partnerships, for example, are currently 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 modules on Canada’s international obligations to prevent and combat corruption, promoting CSR, officials’ responsibilities pursuant to the CFPOA, corruption concerns in specific markets, as well as facilitated case studies. An online CSR training course is also available. GAC also continued to deliver mandatory, trade-specific core training, which includes coverage of anti-corruption efforts, tools and resources. Between September 2016 and August 2017, 181 Trade Commissioners participated in eight offerings of the four-day Core Training Program for Trade Commissioners Workshop, while the annual five-day Core Training Program for Senior Trade Commissioners had over 40 participants.
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 remains ongoing. The fight against corruption, including mentions of the CFPOA and its implications while doing business abroad, are included as references in close to 30 CSR training sessions including: one Head of Mission (HoM) training session, one Senior Trade Commissioners (STC) training session, eight Core Training Program sessions for Trade Commissioners, eight Global Compact Network Canada webinars for industry members across Canada and more than 10 presentations made by the Responsible Business Unit at signature events or directly to missions abroad.
As part of the Canada's CSR Strategy, missions abroad and Regional Offices in Canada have developed multiple initiatives in their respective regions and have participated in various anti-corruption activities organized by local and bilateral Chambers of Commerce, government organizations (local, national, international) and multilateral organizations such as Global Compact. Trade Commissioners’ participation has reinforced key messaging on CSR and on anti-corruption, focusing particularly on the implementation of the CFPOA and how it directly and indirectly affects Canadian companies doing business abroad.
Trade Commissioners regularly brief clients on the CFPOA and its implications while doing business abroad. GAC has worked closely with the Center of Excellence for Anti-Corruption (CCEAC) of the University of Ottawa to advance in the signing of a Memorandum of Understanding (MOU) focused on anti-corruption training with Universidad del Rosario in Colombia. Additionally, a senior investigator and outreach coordinator for the Sensitive and International Investigations unit of the RCMP visited Indonesia to meet Canadian businesses and stakeholders and extend information on the RCMP’s global efforts to combat corruption. In addition to Canadian companies, this event included Government of Indonesia representatives from the Anti-Corruption Commission (KPK) and the Ministry of Energy and Mineral Resources. Results of the event were encapsulated in a report that was shared directly with the office of the President of Indonesia. During the month of March 2017, an anti-corruption social media campaign was developed by Canada’s mission in Peru which helped to positively influence perceptions of Canada’s engagement on responsible business conduct as a low-cost approach. It also helped the mission’s discrete advocacy approach on behalf of Canadian interests that were being adversely affected in local media.
- 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. Further to this, EDC’s Anti-Corruption Program consists of processes and documentary safeguards, such as the requirement for customers to submit anti-corruption declarations and/or accept relevant provisions in their contracts to help ensure that EDC upholds its commitments. EDC underwriting and business development staff conduct up-front corruption screening on potential transactions. If screening reveals potential concerns, enhanced due diligence is then undertaken by a specialized team.Footnote xxii EDC works closely with Canadian government departments to ensure proper due diligence and alignment in its approach to companies facing corruption-related issues or allegations.
In 2016, based on a series of external reviews, EDC implemented a number of enhancements to its Anti-Corruption Program. The enhancements are expected to improve employee knowledge and capacity regarding anti-corruption and to help bring more clarity and confidence to management and decision-making for business where corruption is a risk factor (such as in higher risk markets). Part of EDC’s increased efforts in this space over the course of 2017 also includes re-structuring and making better use of technology to assess anti-corruption and other financial risks, such as money laundering, terrorist financing and sanctions.
During this reporting period, EDC has also been actively engaged in the review of the OECD Recommendation on Bribery and Officially Supported Export Credits with a view to modernizing and strengthening these guidelines.
Raising Awareness – As EDC assists customers in pursuit of international opportunities, it informs them about conducting business in a socially responsible and ethical manner. This includes providing ongoing feedback to customers on: a) the risks of bribery and corruption and mitigating practices; b) responsible business conduct; c) the strength of anti-corruption policies and best practices and setting the proper “tone from the top”; d) how to make improvements in corporate governance and compliance practices; and e) how to educate employees about the CFPOA and other legal frameworks that aim to combat bribery in international business transactions.Footnote xxiii
EDC continues to promote ethical business practices through its participation in anti-corruption events and initiatives, as well as by providing customers with information and resources on financial crime risksFootnote xxiv and EDC’s risk management approach. In this reporting period, EDC outreach included promotion of International Anti-Corruption Day and participation in Transparency International’s Annual Day of Dialogue. Also, in collaboration with the Alberta Government, EDC officials participated as panel experts in two anti-corruption trade events. The first, in September 2016, served as a platform for EDC to engage key customers and stakeholders in case example discussions and situational role play on such timely topics as agent due diligence, internal anti-corruption controls, and political and charitable donations. The second in January 2017, which took place in association with Transparency International, focused on anti-corruption compliance in the oil and gas sector and raising awareness of EDC’s role as a financial institution as it pertains to transaction anti-corruption due diligence and requirements. In conjunction with TRACE, EDC also published in its flagship magazine Exportwise a series of market analysis related articles which provided anti-bribery risk related tools and tips for international business. Exportwise, an exclusively online publication, receives over four thousand unique readers a month.Footnote xxv Through ongoing efforts to educate and promote sound ethical conduct, EDC seeks to support companies as they manage risks in existing operations and as they enter into new markets.
- Canada Revenue Agency (CRA)
Information Sharing – The CRA has had a large network of international partners for many years with 93 tax treaties and 22 Tax Information Exchange Agreements. Since the entry into force of the Convention on Mutual Administrative Assistance in Tax Matters (Multilateral Convention), the number of partners has increased to 143 countries. These instruments facilitate the exchange of information on a larger scale and provide more opportunity to detect and combat tax avoidance and more specifically bribery of foreign officials. The CRA is well engaged with its treaty network and committed to the exchange of information through specific, spontaneous and automatic exchange mechanisms that facilitate cooperation and transparency.
CRA also participates in the Joint International Taskforce on Shared Intelligence 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 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.
- Department of Justice Canada
International Anti-Corruption Activity – Department of Justice officials participate in international anti-corruption fora, including in meetings of the Working Group.
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. Given the ever-increasing numbers of incoming requests for assistance, beginning in 2017 the responsibility for corruption-related requests is being shared with other counsel within the IAG, under the supervision of the designated legal counsel who remains the point of contact for corruption-related requests.
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.
- Canadian Commercial Corporation (CCC)
Combating Corruption – Anti-bribery and corruption is a key component of CCC’s CSR 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 ethicalbehaviour 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 xxvi
CCC utilizes external resources to bolster its internal anti-corruption expertise and practices. During this reporting period, CCC renewed its membership with Trace International, a non-profit organization founded to provide members with anti-bribery compliance support and to provide training assistance. CCC regularly consults with its Portfolio partners and with other Crown corporations to ensure alignment of policies and procedures.
CCC is committed to ensuring ethical conduct in its business dealings. Prior to CCC entering into a binding service agreement with an exporter, a completed due diligence questionnaire (DDQ) and supporting documentation must be provided to CCC so that it can analyse the integrity profile of the company in question and of the intended project. 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. Further assessments in the form of an Enhanced Managerial Review are completed on those exporters and/or projects that raise unanswered red flags.
- Public Services and Procurement Canada (PSPC)
Combating Corruption – PSPC administers the government-wide Integrity Regime, introduced in July 2015, to ensure that Canada conducts business with ethical suppliers. The Regime is a policy-based instrument (i.e., the Ineligibility and Suspension Policy), enforced through corresponding contractual clauses that incorporate the Policy by reference. Under the Regime, Canada may suspend a supplier or declare them ineligible from being awarded a contract or real property agreement if they have been convicted of, or charged with, an applicable listed offence (e.g. corruption, fraud, bribery, etc.) within the past three years, in Canada or a similar offence abroad. The names of all ineligible and suspended companies are published on the PSPC website, as well as those who have entered into an administrative agreement with PSPC.Footnote xxvii To date, three companies have been declared ineligible and one company has signed an Administrative Agreement with PSPC in lieu of suspension.
Since its introduction, all departments or agencies identified in schedules I, I.1 and II of the Financial Administration Act have signed MOUs with PSPC to obtain supplier integrity verification services. This allows organizations to verify that a supplier is not ineligible to conduct business with the government, under the Regime, prior to awarding a contract or real property agreement. Additionally, two Crown Corporations have voluntarily adopted the Policy and have signed MOUs with PSPC for verification services.
Raising Awareness – PSPC works closely with the private sector, industry partners and civil society organizations to promote ethical business culture and integrity in public procurement. Senior PSPC officials have participated as guest speakers and delivered presentations in a range of events on Canada’s approach to combat fraud and corruption in procurement and real property transactions, the government-wide Integrity Regime, and the department’s framework to manage wrongdoing and fraud risk.
The department collaborates with federal partners on measures to prevent, mitigate and address unethical business practices within public procurement and real property. This includes participating in working groups, committees and bilateral meetings.
- Competition Bureau of Canada (CB)
Combating Corruption – In recent years, the CB has observed a close relationship between collusive behaviour and corruption. Given this connection, the CB has, in recent years, taken steps to maintain and improve its relationships with police forces, other anti-corruption officials, and procurement authorities in order to complement each organization’s efforts to promote competition and combat corruption.
In April 2017, Canada launched the Federal Contracting Fraud Tip Line, a dedicated telephone line and online form, to accept anonymous tips from Canadians who suspect fraud, collusion or corruption in federal government contracts and real property agreements. The Tip Line is a joint initiative of the CB, PSPC, and the RCMP, and complements measures already in place to ensure that federal contracts are lawful, ethical and fair.
The information received may be used to conduct investigations, gather intelligence and introduce due diligence measures where warranted to protect the integrity of federal government contracts and real property agreements.
Procurement and competition authorities around the world are developing “screens” to detect bid-rigging. The CB and PSPC are developing a pilot project to analyze bidding data for this purpose. A “Certificate of Independent Bid Determination” (CIBD) has proven to be effective at deterring bid-rigging conduct, around the world, by encouraging ethical decision-making by potential suppliers at the point of bid-submission. The CB continues to promote the use of this tool by tendering authorities throughout Canada.
In the past few years, the CB has signed MOUs with several domestic law enforcement partners including: the RCMP, which routinely assists the CB with the investigative powers including search warrants and wire taps; the Ontario Provincial Police, which has worked closely with the CB’s Ontario Regional Office on a number of matters; and the Bureau de l’inspecteur général de la Ville de Montréal, which has referred cases of suspected collusion in the City of Montreal to the CB.
Raising Awareness – Providing outreach presentations to public procurement organizations at all levels of government has been, and continues to be, a priority for the Cartels Directorate of the CB. The goal of these presentations is to provide procurement officials with the knowledge necessary to detect, prevent and report bid-rigging to the CB. In particular, these presentations cover topics including the bid-rigging provisions of the Competition Act, common forms of bid-rigging, characteristics that can make an industry particularly susceptible to bid-rigging, and techniques that can be used to prevent bid-rigging.
- 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 and recommendations for combating corruption and enhancing public integrity.
In addition to contributing to the SPIO, 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 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 most recent (2015) enforcement data was published on November 22, 2016, and can be found at: http://www.oecd.org/daf/anti-bribery/WGB-Enforcement-Data-2015.pdf.
- Footnote vi
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 vii
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 viii
- Footnote ix
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 x
This document was adopted by OECD Council on December 14, 2006.
- Footnote xi
This document was endorsed by the OECD Development Assistance Committee in May 1996.
- Footnote xii
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 xiii
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 xiv
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 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
In World Bank Group v. Wallace, 2016, the SCC noted that the World Bank and other multilateral development banks, through their investigations, serve at the frontline of international anti-corruption efforts and that sharing information with domestic law enforcement authorities plays an important role in detecting violations of domestic laws. It also recognized that, if cooperation with national authorities were to be construed as an implied or constructive waiver of the World Bank’s immunities, it would have a chilling effect on the World Bank’s cooperation with domestic law enforcement authorities. In this case, there was no dispute between the parties that the relevant immunities had the force of law in Canada, given that they had been implemented into Canadian law. In the absence of a finding of an express waiver of immunity on the part of the World Bank, the SCC ruled that the World Bank's anti-corruption staff could not be compelled to appear in court in Canada to provide information about the whistleblowers who first alerted the World Bank to these allegations and that the immunities also covered the World Bank records that were being sought.
- Footnote xviii
- Footnote xix
Information on MAPS is available at: http://www.oecd.org/gov/public-procurement/methodology-assessing-procurement/.
- Footnote xx
- Footnote xxi
- Footnote xxii
- 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
- Footnote xxv
- Footnote xxvi
- Footnote xxvii
The Integrity Regime website is located at: https://www.tpsgc-pwgsc.gc.ca/ci-if/ci-if-eng.html.
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