Canada is well known for hockey, maple syrup and good manners. But for being aggressive in the fight against foreign bribery and corruption, not so much.
That may be changing.
On July 6 the Court of Appeal for Ontario upheld the conviction of the first individual prosecuted under the Corruption of Foreign Public Officials Act, Canada’s FCPA.
The case involved Nazir Karigar. He was accused of offering bribes to Air Indian officials to secure a bid on optic security system contract with the state owned airline.
Karigar had been convicted under the Corruption of Foreign Public Officials Act or CFPOA in 2013. The prosecution was unable to prove that the bribes were actually offered or paid to the Indian government officials.
However, the trial judge said,
In my view, the foregoing events occurred as proven in the documentary evidence and lead to the inescapable conclusion, or proof beyond a reasonable doubt, that the accused conspired with Messrs. Berini and Barra representing Cryptometrics Inc. and Cryptometrics Canada Inc. and certain of his Mumbai based colleagues, to offer bribes to certain targeted Air India officials and the Minister of Civil Aviation for the purpose of obtaining the Air India contract.
Karigar was convicted and sentenced to three years in jail for his part in what turned out to be an unsuccessful alleged conspiracy to secure the Air India contract.
The appeal from the trial judgment raised the following questions:
Can an individual be prosecuted for an alleged conspiracy to bribe, when it largely took place outside of the Canada?
Can a person be convicted for a bribery offense when there is no proof that a bribe was ever paid?
Can there be an agreement to bribe when there is no evidence a bribe was ever demanded?
The answer to all these question, according to the appeal court, was yes.
The appellate decision confirmed that the Canada’s foreign corruption law casts a wide net over activities that have a “real and substantial” connection to Canada.
The appeal court accepted that Karigar had helped Cryptometrics Canada, the subsidiary of an American parent company, to try to win a contract through a conspiracy to bridge foreign public officials.
The court said:
He [the trial judge] found, correctly, that the substantial link test is not limited to the essential elements of the offense, and that the bribery could not be hived off from the legitimate aspects of the transaction for the purpose of the territorial connection analysis.
The first ground of appeal asserted that the old version of the CFPOA did not have a jurisdictional provision, as required by the OECD Anti Bribery Convention, and therefore was limited in scope and application. Since the alleged offense was committed prior to the June 19, 2013 amendments, which extended the foreign corruption offense’s extraterritorial reach to acts committed abroad by Canadian citizens, residents and corporations, the scope of the CFPOA should be interpreted narrowly, as with all criminal statutes in Canada.
However, the lack of a Canadian money trail did not influence the appeal court. The transfer of funds from the United States to India may have given the U.S. and India jurisdiction, but the appeal court said it did not deprive Canada of jurisdiction under the CFPOA. The appeal court held that Canada still had the jurisdiction to prosecute Karigar.
Once it confirmed Canadian jurisdiction, the appeal court went on to deal with the other grounds of appeal. Of particular interest in risk management planning were the appeal court’s finding that there was no need to prove a bribe was paid to secure a conviction and the meaning of “agrees” under the CFPOA.
I’ll talk about both of those issues in my next post.
Norm Keith, pictured above, is a senior litigation partner with Fasken Martineau DuMoulin LLP, based in the firm’s Toronto office. He’s a founding member of Fasken’s White Collar Defense and Investigations practice group and a Canadian representative of the American Bar Association White Collar Crime Committee. He has has authored a number books on the subject including, Corporate Crime, Accountability and Social Responsibility in Canada (2nd Edition), Insider Trading in Canada (2nd edition) and Canadian Anti-Corruption Law and Compliance (2nd edition). He can be contacted here.
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