Tories to beef up laws against bribing foreign officials

Riyaz Dattu

Feb 5, 2013

The Globe and Mail

Campbell Clark and Jeff Gray


Ottawa will toughen laws outlawing the bribery of foreign officials, shoring up an area where the country has long been seen as lax after high-profile payoff cases have rocked corporate Canada.

A new law proposed by the Conservative government will allow authorities to prosecute Canadians even if they pay the bribe outside the country – closing a loophole that has made it harder for police to file charges. It will also increase the maximum sentence for bribing a foreign official to 14 years, from the current five-year maximum.


In January, Calgary-based oil firm Griffiths International Inc. disclosed that it had paid $2-million in February, 2011, to the wife of Chad’s then-ambassador to Canada to help secure oil-and-gas exploration contracts in the African country, according to an agreed statement of facts filed in a Calgary court. The company pleaded guilty to bribery charges, and agreed to pay a $10.35-million fine last month.


In addition to allowing prosecutors here to go after Canadian companies for bribes they pay abroad, the new law will outlaw so-called “facilitation payments” – the grease money paid to foreign officials even if it’s not directly linked to gaining a business deal or advantage. Those payments, technically different from a bribe, will not be immediately made illegal, but the government will outlaw them at a later date, presumably to give companies warning of the changing rules.


The measures were for the most part welcomed by Bay Street lawyers who advise companies on anti-bribery matters, but some warned that smaller companies, notably in the natural resource industry, might be forced to make major changes.


“This will be a huge sea change for the smaller companies that have not been mindful of the books-and-records provisions because they are not caught by the SEC,” said Riyaz Dattu, a lawyer with Osler, Hoskin & Harcourt LLP in Toronto.


To access the full article, Globe Unlimited Subscription is required.