Ontario Superior Court Issues First Prison Sentence under Canada's Corruption of Foreign Public Officials Act

On May 23, 2014, the Ontario Superior Court in Ottawa imposed the first jail sentence under Canada's Corruption of Foreign Public Officials Act (CFPOA). Defendant Nazir Karigar, who was convicted in August 2013, was sentenced to three years imprisonment for conspiring to bribe foreign public officials. While working as an agent for Cryptometrics Canada, Karigar attempted to bribe an Indian Cabinet Minister and officials of Air India (a state-owned airline) to win a contract to supply facial recognition software.

Karigar was the first individual prosecuted under the CFPOA, which applies to Canadian companies, partnerships, citizens and permanent residents, regardless of where the prohibited conduct occurred. All previous CFPOA prosecutions had involved corporate defendants. During sentencing, the Court warned that "any person who proposes to enter into a sophisticated scheme to bribe foreign public officials to promote the commercial or other interests of a Canadian business abroad must appreciate that they will face a significant sentence of incarceration in a federal penitentiary."

Canada's international anti-corruption enforcement efforts have increased recently. In 2013, Griffiths Energy admitted to paying $2 million to officials in Chad to secure oil exploration blocks. Griffiths Energy pleaded guilty to violating the CFPOA and was fined 10.35 million CAD. That fine was the largest ever imposed under the CFPOA, surpassing the approximately 9.5 million CAD fine paid by Niko Resources Ltd. in June 2011. Niko Resources pleaded guilty to violating the CFPOA and admitted that its Bangladesh subsidiary had provided a vehicle valued at over 190,000 CAD and other benefits to the Energy Minister of Bangladesh. In addition to the convictions of Griffiths Energy, Niko Resources, and Nazir Karigar, the Royal Canadian Mounted Police (RCMP) are reported to be investigating Blackfire Exploration and SNC Lavalin, among other companies, for potential CFPOA violations.

In its Phase 3 Report on Implementing the OECD Anti-Bribery Convention in Canada (March 2011), the Organization for Economic Development Working Group on Bribery acknowledged Canada's recent enforcement activity. It attributed the more active enforcement to the Royal Canadian Mountain Police's international anti-corruption unit, which was formed in 2008. However, the Group expressed concerns about the CFPOA itself, declaring that it did not authorize sufficient penalties or grant broad enough jurisdiction, among other concerns. The Canadian parliament addressed several of those issues in 2013 when it made several amendments to the CFPOA, including the following:

• extending jurisdiction to all Canadian citizens and companies and partnerships formed or organized under the laws of Canada or a province;
• adding provisions requiring accurate accounting and prohibiting the use of false documents;
• increasing the maximum penalty from five to fourteen years of imprisonment;
• eliminating the CFPOA's exception for facilitation payments; and
• eliminating the requirement that the prohibited conduct be conducted "for profit."

If recent enforcement actions, investigations, and amendments to the CFPOA portend more active enforcement of the law in the near future, then Karigar's sentence can be seen as a judicial endorsement of Canada's more aggressive approach towards enforcing the CFPOA.

See: R. v. Karigar, 2013 ONSC 5199 - CanLII (Judgment) and R. v. Karigar, 2014 ONSC 3093 (Sentencing Decision). See also: Cabinet FCPA Page (some materials accessible to Cabinet subscribers only).