On October 30, Canada removed the facilitation payments exemption from the Corruption of Foreign Public Officials Act (CFPOA). This change goes into effect October 31.
If your corporation is subject to the CFPOA, it is imperative that you review your business code of conduct and anti-bribery policy as well as your operational guidelines abroad to ensure that all facilitation payments are eliminated immediately from your company's operations.
Facilitation payments, usually referred to as "grease payments", are generally characterized as disbursements made to foreign government officials to speed up or facilitate routine transactions, such as permits or the release of goods from customs.
This exception has been in place since Canada enacted the CFPOA and has meant that companies subject to the Act could nonetheless make facilitation payments without being found to be in contravention of Canada's foreign anti-bribery law.
This change brings Canada into line with other countries, like the United Kingdom, whose 2010 Anti-Bribery Act makes facilitation payments illegal. The United States continues to allow facilitation payments under the Foreign Corrupt Practices Act.
The CFPOA was enacted in 1998, making foreign corruption and bribery a crime for Canadians.
The Act contains two broad offences: bribing a foreign official and falsification of books and records.
It is an offence to make, offer or promise a payment, reward, advantage or benefit of any kind, directly or indirectly, to a foreign public officials or to any person for the benefit of a foreign public official for the purpose of obtaining or retaining an advantage in the course of business. The Court of Appeal of Ontario recently confirmed that it is an offence to "agree" to a bribe, even if the bribe never materializes.
It is also an offence to falsify a corporation's books and records - including by creating or maintaining hidden accounts, engaging in "off-book" transactions and inadequately identifying transactions - for the purpose of bribing or hiding a bribe to a foreign public official.
The penalties for being found guilty of an offence under the CFPOA are criminal and can include up to 14 years imprisonment for individuals and unlimited fines for corporations. Corporations may also face serious corresponding consequences, like debarment from Government of Canada procurement opportunities.
How Gowling WLG can help
Our White Collar Defence and Investigations Group brings together multijurisdictional professionals with the right combination of experience and expertise to minimize corruption risk and successfully represent corporations and individuals facing serious criminal or regulatory investigations and prosecutions.
We can assist you in designing and implementing a compliance program and review your existing policies, procedures and controls. We also advise on - and help establish - whistle-blowing venues and the entire underlying process regime to support this key governance tool.
Taking a proactive approach to ethics and anti-corruption, we also design and deliver comprehensive training programs to directors, management teams, employees, customers, suppliers and other business partners.