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Richard L. Cassin
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Russell A. Stamets
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Bill Steinman
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Where Is Canada, Really?

Canada has the Corruption of Foreign Public Officials Act (CFPOA). It has signed three international anti-corruption treaties — the OECD Convention, the OAS Inter-American Convention Against Corruption, and the U.N. Convention Against Corruption. And it has incorporated its international obligations into Canadian law.

Despite all that, there’s only been one case decided under the CFPOA, and that’s Hydro Kleen Group. There’s one case known to be pending involving Nazir Karigan. And Niko Resources, a publicly listed firm,  disclosed it’s being investigated under the CFPOA.

That’s it.

So why does it appear Canada is moving against international graft at barely a crawl?

The answer, according to a great post yesterday by Cyndee Todgham Cherniak on the Trade Lawyers Blog, may be found not in the similarities between U.S. and Canadian enforcement, but in the differences.

Among the facts she mentioned were these:

1. Canada’s CFPOA was enacted in 1999 and therefore is only 11 years old. The first 11 years of the FCPA also saw a small number of prosecutions. [Editor’s note: By our count, there were about six DOJ and / or SEC enforcement actions per year on average from 1978 through 1989.]

2. Canada has a population of about 34 million; the U.S. about 310 million. The volume of Canada’s business in foreign jurisdictions is proportionately lower than U.S. business overseas.

3. The CFPOA doesn’t contain internal controls and accounting requirements like those in the FCPA. Cases don’t arise from company reports to Canada’s equivalent of the SEC.

4. Canada doesn’t have voluntary disclosure for companies and company officials. There isn’t a mechanism to negotiate the payment of a fine without going through a prosecution.

5. When there’s a Canadian investigation, the Royal Canadian Mounted Police, International Anti-Corruption Unit (RCMP, IACU) don’t talk about it. And they don’t organize “perp walks” or publicize active investigations.

6. Canada’s criminal justice system doesn’t include grand juries. The RCMP gather information and the Crown decides whether to prosecute.

7. Canadian law doesn’t permit tax authorities to share information received during an income tax, sales tax, or other tax audit.

8. The CFPOA doesn’t apply where the bribery has no “real and substantial connection” to Canada. In 2009, the Minister of Justice tabled legislation (Bill C-31) to incorporate a nationality principle in Canada’s CFPOA. It didn’t pass and hasn’t been re-introduced.

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Cyndee Todgham Cherniak’s post was adapted from an October 2, 2010 presentation she gave at the University of Windsor, Center for Transnational Law and Justice. Our special thanks to her for allowing us to summarize it.

She can be reached by email here.

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