Private equity firms with ties to Canada may need to revise their anti-corruption compliance strategies in light of new rulemaking. The country has bolstered its Corruption of Foreign Public Officials Act (CFPOA) by outlawing facilitation payments – which are made to government officials to secure business – and creating a “books and records offence”.
The CFPOA will also extend its territorial reach by providing that Canadian firms who commit a violation abroad could be tried and convicted domestically.
The amendments have not yet been finalized, however lawyers expect the bill to move quickly through the Senate and the House of Commons.
The CFPOA follows the US’ Foreign Corrupt Practices Act's (FCPA), lead by creating a “books and records” offence that assigns criminal liability for failure to record, or inadequately record accounts required by generally accepted accounting principles (GAAP).
“Criminal liability can arise for failure to record or inadequately recording transactions; recording expenditures that did not occur; incorrectly identifying the purpose of a liability; knowingly using false documents; and intentionally destroying books and records earlier than permitted by law,” warned a client memo from law firm Norton Rose.
The memo adds that US authorities rely heavily on the FCPA’s books and records provision because it is easier to convict a person for having not accurately recorded a bribe payment than actually catching a bribery offence.
Facilitation payments, which usually take the form of small payments to foreign officials, are accepted under the CFPOA’s current guise but will be “phased out” at a date to be set by the Governor in Council, according to a client alert from law firm Blake, Cassels and Graydon.