Vol. 151, No. 23 — November 15, 2017
SI/2017-69 November 15, 2017
FIGHTING FOREIGN CORRUPTION ACT
Order Fixing October 31, 2017 as the Day on which subsection 3(2) of the Act Comes into Force
P.C. 2017-1294 October 26, 2017
Her Excellency the Governor General in Council, on the recommendation of the Minister of Foreign Affairs, pursuant to section 5 of the Fighting Foreign Corruption Act, chapter 26 of the Statutes of Canada, 2013, fixes October 31, 2017 as the day on which subsection 3(2) of that Act comes into force.
(This note is not part of the Order.)
The Governor General in Council, on the recommendation of the Minister of Foreign Affairs, pursuant to An Act to amend the Corruption of Foreign Public Officials Act (Fighting Foreign Corruption Act) [the “Act”], chapter 26 of the Statutes of Canada, 2013, fixes October 31, 2017, as the day on which subsection 3(2) of that Act comes into force.
The Order-in-council is sought under subsection 3(2) of the Act to come into force on October 31, 2017. Subsection 3(2) of the Act provides for the repeal of subsections 3(4) and (5) of the Corruption of Foreign Public Officials Act (CFPOA). All other modifications in the Act came into force upon royal assent on June 19, 2013.
Subsection 3(2) of the Act provides for the elimination of the facilitation payments exception to the offence of bribing a foreign public official by deleting subsections 3(4) and (5) of the CFPOA. Until 2013, the CFPOA explicitly stated that facilitation payments did not constitute bribes for the purposes of the CFPOA. Since royal assent, there is no longer a distinction between facilitation payments and bribes. Prior to 2013, the scope of the facilitation payments exception in the CFPOA was the subject of confusion among Canadian stakeholders.
Facilitation payments are those made to foreign public officials to secure or expedite the performance of acts of a routine nature that are within the scope of the official’s duties. Otherwise, the payment would constitute a bribe, and bribery is already a crime. By adopting the amendment, Parliament clarified the ambiguous distinction between a facilitation payment and a bribe. Thus, by addressing the confusion, an additional barrier to effective enforcement of the CFPOA was removed.
Canada is active in international forums on corruption and bribery, and plays a leadership role in fighting corruption and creating a level playing field for Canadian businesses at home and abroad. The Government of Canada expects Canadian organizations operating overseas to act in accordance with applicable Canadian laws and the laws of those countries.
The CFPOA is Canada’s legislative contribution to the global efforts to combat corruption of foreign public officials. The CFPOA criminalizes the bribing of a foreign public official to gain a business advantage abroad. Canada passed this law to implement its international obligations under the Organisation for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the “Anti-Bribery Convention”), as well as two subsequent multilateral anti-corruption conventions: the Organization of American States Inter-American Convention against Corruption and the United Nations Convention against Corruption. Canada ratified the three conventions in December 1998, June 2000, and October 2007, respectively.
The OECD Anti-Bribery 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. As a party to the OECD Anti-Bribery Convention, Canada is also bound by the 2009 OECD Recommendation for Further Combating Bribery of Foreign Public Officials in International Business Transactions (the “2009 Recommendation”). As a state party to the OECD Anti-Bribery Convention, Canada is also a member of the OECD Working Group on Bribery, which is responsible for monitoring the enforcement and implementation, by states parties, of the OECD Anti-Bribery Convention and the 2009 Recommendation. The Convention provides for mandatory peer evaluation; its purpose 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.
As a state party to the OECD Anti-Bribery Convention, Canada is committed to and actively participates in the peer review mechanism as a lead examiner, evaluated country, and facilitator. The peer review monitoring system has, thus far, been carried out in three phases. The Phase 3 cycle of evaluations began in 2010 and is scheduled for completion in 2017. The Phase 4 cycle was launched in March 2016.
By way of the 2009 Recommendation, the OECD Working Group acknowledges “the corrosive effect” of facilitation payments, particularly on “sustainable economic development and the rule of law” and that countries should undertake to review related approaches with a view to ending the solicitation and acceptance of facilitation payments.
In 2010, the Working Group intensified its criticism of Canada regarding its facilitation payment exception and for perpetuating ambiguity in this regard. In 2011, the Working Group formalized its criticism during a rigorous peer review pursuant to the OECD Anti-Bribery Convention. In 2013, the Working Group commended Canada for its repeal of the facilitation payments exception, and expressed interest in its swift entry into force.
Since the 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.
In deciding to eliminate the facilitation payments exception in 2013, the Government of Canada sent a strong signal for a zero-tolerance approach to the bribery of foreign public officials. The intent of the delay was to provide Canadian organizations with time to transition their practices, policies, and internal controls, if they have not already done so, to ban the use of facilitation payments in their day-to-day operations. The delay also allowed for the conduct of supplementary outreach activities. Ample time has passed for Canadian organizations to have adjusted their practices and internal policies in a manner conducive to conducting business without recourse to facilitation payments.
Bill S-14 was subject to consultations prior to the tabling of legislative amendments, as well as consultations during three readings before both houses of Parliament. The decision to include this amendment was made following a comprehensive review by Canada of its policies and approaches on this issue, which included an extensive consultation with stakeholders. Stakeholders underscored that the elimination of facilitation payments defence would recognize the corrosive effect of such payments on corporate culture and on governance in recipient states.
The Royal Canadian Mounted Police, the Public Prosecution Service of Canada, and the Department of Justice have confirmed that they are in agreement with the coming into force of this amendment and that the recommended date would not have negative implications on their operations.
Conducting outreach is a critical element of anti-corruption efforts. Within the context of efforts leading up to these amendments, as well as since royal assent of June 2013, the Department and other federal government bodies have conducted outreach to enhance awareness, including on facilitation payments, and to encourage Canadian organizations to adopt measures that can effectively implement their legal obligations under the CFPOA. In the past several years, such stakeholders have included federal government bodies, industry groups and professional associations, associations of legal counsel, conferences of practitioners, non-governmental organizations, Canadian organizations operating abroad, and Canadian universities. In the past few years, combined outreach activities have reached over 2 500 individuals annually.
Awareness of the CFPOA has also been enhanced in Canada as a direct result of strong enforcement on the part of the Royal Canadian Mounted Police and the Public Prosecution Service of Canada.
Criminal, Security and Diplomatic Law Division (JLA)
Global Affairs Canada
Government of Canada