Ontario Superior Court provides guidance on the bribery offence under the CFPOA
The Corruption of Foreign Public Officials Act (the CFPOA) is Canada’s contribution to the international battle against foreign corruption. For that reason, its enactment in 1998 was seen as a significant development. Nonetheless, the lack of guidance historically issued relating to interpretation of the Act and relatively infrequent enforcement to date make judicial decisions regarding the legislation significant.
In its decision released March 7, 2023, the Ontario Superior Court of Justice provided further clarity regarding the bribery of foreign public officials offence. In acquitting the accused, the Court provided guidance on what constitutes an “advantage” under the CFPOA, as well as the meaning of the requirement that the advantage be “as consideration for” actions undertaken by the foreign public official for purposes of section 3(1)(a).
In R. v. Arapakota, Mr. Arapakota, the founder and former CEO of a software development company, was charged with contravening section 3(1)(a) of the CFPOA, which makes it an offence to offer a loan, reward, advantage or benefit of any kind to a foreign public official as consideration for an act or omission by the official in connection with the official’s duties or functions, in order to obtain an advantage in the course of business. It was alleged that the accused gave an official with the Government of Botswana and his family a trip from New York to Orlando as consideration for the official providing letters confirming termination of a contract between the Government and its e-services provider, and stating an intention to engage the accused’s company, Imex, to provide these services instead. The letters allegedly acted as added assurance of the Government of Botswana’s intention to retain Imex to provide e-services, and the ability for Imex to include the projected revenue from the prospective contract as unbilled revenue in its financial statements. The Crown argued that the accused would not have paid for the trip if the payment was not made as consideration for the letters.
In holding that the Crown had not met its burden of proving the offence beyond a reasonable doubt, the Court analyzed the bribery of a foreign public official offence under the CFPOA, offering clarity on what the Crown must demonstrate in order to prove the offence.
In assessing whether the accused had contravened section 3(1)(a) of the CFPOA, the Court found that the offence possesses a subjective fault requirement and that the Crown must prove beyond a reasonable doubt that the accused
- intentionally offered or conferred a benefit, reward or advantage to the government official
- knew that the government official was a foreign public official
- knowingly or intentionally bestowed the benefit on the government official as consideration for official acts done by the government official
- did so for the purpose of, or in order to obtain or retain an advantage in, the course of his business
Pursuant to section 3(1)(a), there must be both an advantage or benefit given to the foreign public official and an advantage in the course of business obtained by the accused. The Court held that, in both contexts, “advantage” under section 3(1)(a) is meant to include benefits which are not trivial. The advantage must be a “material or tangible gain, or a material economic advantage”.
In respect of the advantage given to the official, the Court found that in planning and paying upfront for the trip for the official and his family, the accused conferred a non-trivial benefit to the official. Although the Court did not accept that all retail purchases on the trip paid for by the accused should be attributed to the official and his family, costs for flights, hotels, meals, attractions and insurance — totalling approximately $20,000 of the $40,000 spent on the trip — were significant enough to constitute a material advantage for the official, as it was more than what could be considered ordinary hospitality. The official’s partial reimbursement for the trip’s expenses did not change the Court’s determination, as the official still received a tangible benefit by having the accused handle all of the trip’s logistics and planning.
However, the Court held that the accused did not obtain an advantage in the course of business. While the letters given by the official to the accused may have given Imex’s Board of Directors added comfort that a contract would be entered into in the future, and may have bolstered the documentation supporting the declaration of unbilled revenues in Imex’s financial statement, neither rose to the level of a material economic benefit. In addition, there was insufficient evidence to establish that the accused subjectively believed the letters would give him an advantage in business.
As for the requirement that the benefit or advantage be “as consideration for” an advantage in the course of business, the Court found that section 3(1)(a) requires a quid pro quo, with proof of a link between the advantage given to the foreign public official and a specific act undertaken by the foreign public official. In coming to this conclusion, the Court compared language in this section to that of section 3(1)(b), which, absent the “as consideration for” language, it held leaves open the possibility of a conviction without a quid pro quo. Based on a thorough review of each of the letters obtained by the accused, the Court held that although there was a temporal connection, and the letters may have been generally helpful to the accused’s business, there was an insufficient link between the arranging of the trip and the official providing the letters to the accused to meet the quid pro quo requirement under section 3(1)(a).
The decision offers some needed judicial guidance on the interpretation of the bribery offence under the CFPOA:
‘Advantage’ means a non-trivial benefit
In order for something to constitute an “advantage” under section 3(1)(a) of the CFPOA, it must be a “material or tangible gain”, or a “material economic advantage”. The Court did not place a specific dollar amount on what may constitute a material advantage, but clarified that trivial benefits are not captured. Based on the Court’s decision, benefits that are generally helpful to a business would not meet the threshold required under section 3(1)(a). This is notable in particular as there is no de minimum threshold set out in the Act itself in order for a payment to constitute a bribe.
‘As consideration for’ requires a quid pro quo but only under section 3(1)(a)
As noted above, the Court held, consistent with the “as consideration for” language set out in section 3(1)(a) of the CFPOA, that an offence under that provision requires a quid pro quo as between the payment and the advantage received. However, the Court left open that an offence under section 3(1)(b) — which prohibits such payment to “induce an official to use his or her position to influence any acts or decisions” — could be made out in the absence of such a quid pro quo. Further judicial or regulatory guidance will be require to determine the precise scope of an offence under that provision.