Canada criticized over corruption of foreign officials enforcement

The OECD has issued a critical report on Canada’s enforcement of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions that identifies significant issues with the failure of Canada to investigate and prosecute bribery offences.

According to the report, Canada has only prosecuted one case under the Corruption of Foreign Public Officials Act (the “CFPOA“) since its implementation, and has a paltry 40 investigations in foreign corruption in the pipeline, a number that is apparently not in sync with the volume or number of international trade transactions compared with other OECD member states. The report points to the chronic under-funding of the RCMP and the public prosecutions office as the main reason for the poor enforcement of the CFPOA in Canada.

There are some sound recommendations in the report that would raise awareness of the provisions of the CFPOA and lead to improved compliance, as follows:

  1. Canada amend the CFPOA to include the corruption of foreign nationals in any corporate transaction, not just corporate transactions where the corporation is for profit;
  2. Canada begin prosecuting Canadians for bribery of foreign public officials on an urgent basis;
  3. Canada prohibit a person or business convicted under the CFPOA from contracting with the government; and
  4. Canada allocate sufficient resources for the investigation and prosecution of cases under the CFPOA.

However, the OECD report has some flaws.

It was written based on the findings of a team of Austrian and American investigators who visited only Ottawa and Toronto for four days and met or had telephone conference calls with 19 federal and provincial government agencies, none of which were from British Columbia, and only one of which was from Québec. The team visited just Ontario to determine whether Canada was generally compliant with the CFPOA.

The report recommends that the federal government dictate policy decisions to provincial securities regulators, for example, by requiring that it “sanction books, records and securities violations associated with CFPOA misconduct.” The federal government in Canada does not dictate securities law policy at the provincial level.

Generally, the findings and recommendations in the report seem to suggest a lack of knowledge of the Canadian federal and provincial legislative regime and the division of powers, particularly in securities and corporate law. One of the recommendations suggests that the federal government require the adoption of compliance programs among all private sector companies, however the federal government only has the legislative competence over corporations registered under the Canada Business Corporations Act, and as a result, this recommendation appears to effectively ignores the majority of corporations registered under provincial statutes.