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Corruption in Canada: Reviewing Practices from Abroad to Improve Our Response The International Centre for Criminal Law Reform and Criminal Justice Policy (ICCLR) / Le Centre international pour la réforme du droit criminel et la politique en matière de justice pénale (CIRDC) 1822 East Mall, Vancouver, B.C. / C.-B. V6T 1Z1 CANADA Tel / Tél: + 1 (604) 822-9875 Fax / Téléc: + 1 (604) 822-9317 Email / Courriel: [email protected] http://www.icclr.law.ubc.ca Corruption in Canada: Reviewing Practices from Abroad to Improve Our Response* Eileen Skinnider** Director of Human Rights and Research International Centre for Criminal Law Reform and Criminal Justice Policy March 2012 Updated and revised Professor Gerry Ferguson*** Senior Associate, ICCLR May 2017 * This research report was made possible by the funding and support received from the Department of Justice Canada. We are pleased to share this information with you and encourage you to use this document for research purposes. Please ensure that all credits are acknowledged when using all or any of the information in this document. Commercial reproduction is strictly prohibited. ** The views and opinions expressed herein are those of the authors and do not represent any overarching official policy or opinion on the part of either the Canadian government or the International Centre for Criminal Law Reform and Criminal Justice Policy. Ms. Skinnider thanks Ms. Annemieke Holthuis and Professor Gerry Ferguson for their comments on an earlier draft. Any errors or omissions are solely the responsibility of the authors. *** Professor Ferguson gratefully acknowledges the research and writing assistance of Dmytro Galagan. Corruption in Canada: Reviewing Practices from Abroad to Improve Our Response Table of Contents 1. Introduction ................................................................................................................................................ 5 Part I: Canada and Corruption ......................................................................................................................... 6 2. Scope and Extent of Corruption in Canada ............................................................................................. 6 3. Gaps in the Legal and Policy Framework .............................................................................................. 13 Part II: Learning from Abroad to Improve Canada’s Response to Corruption – Selected Issues ........... 14 4. The Legal Framework .............................................................................................................................. 15 4.1. A New Offence: Failure to Prevent Bribery ....................................................................................... 15 4.2. Other Features of Offences in the UK Bribery Act 2010 ................................................................... 16 4.3. “Books and Records” Provision ......................................................................................................... 17 4.4. Definition of the Offence of Bribing a Foreign Public Official in the CFPOA ................................. 18 5. Jurisdiction ................................................................................................................................................ 19 5.1. Overview ............................................................................................................................................ 19 5.2. United States ...................................................................................................................................... 20 5.3. United Kingdom ................................................................................................................................. 21 5.4. Situation in Canada before and after the 2013 CFPOA Amendments ............................................... 22 5.5. Issues and Concerns in Respect to Expanding Territorial and Nationality Jurisdiction ..................... 23 5.5.1 Territorial Jurisdiction ............................................................................................................... 23 5.5.2 Nationality Jurisdiction .............................................................................................................. 25 6. An Affirmative Compliance Defence....................................................................................................... 26 6.1. Overview ............................................................................................................................................ 26 6.2. What a Compliance Programme Could Look Like ............................................................................ 26 6.3. Compliance Defence in Other States ................................................................................................. 28 6.3.1 Overview .................................................................................................................................... 28 6.3.2 The Codified Compliance Defence in the United Kingdom ...................................................... 28 6.3.3 No Compliance Defence in the United States’ FCPA ............................................................... 29 6.4. Should Canada Create an Affirmative Compliance Defence? ........................................................... 30 7. Facilitation Payments ............................................................................................................................... 30 7.1. What Are Facilitation Payments? ....................................................................................................... 30 7.2. Rethinking Whether Facilitation Payments Should Be Prohibited .................................................... 31 7.3. Arguments to Support Eliminating the Defence of Facilitation Payments ........................................ 33 7.4. Arguments to Support Retaining the Defence of Facilitation Payments ............................................ 34 7.5. Should Canada Prohibit Facilitation Payments? ................................................................................ 35 7.6. Ways to Discourage the Use of Facilitation Payments ...................................................................... 36 3 7.6.1 A “Books and Records” Provisions in the CFPOA .................................................................... 36 7.6.2 “Publish What You Pay” Legislation ........................................................................................ 36 7.6.3 Promulgation of Guidelines Defining Permissible Facilitation Payments ................................. 37 7.6.4 Raise Awareness for Corporate Activism and Institutional Reform .......................................... 40 8. Enhancing Detection through a Voluntary Disclosure Regime ............................................................ 41 8.1. Schemes to Encourage Self-Reporting of Bribery or Corruption Offences ....................................... 41 8.1.1 The Process ................................................................................................................................ 42 8.1.2 The Issue of Waiver of Attorney-Client Privilege ..................................................................... 44 8.1.3 Civil Settlement and Its Benefits ............................................................................................... 44 8.1.4 The Use of Deferred Prosecution Agreements to Encourage Voluntary Disclosure ................. 47 8.1.4.1 Advantages ............................................................................................................................ 48 8.1.4.2 Disadvantages ........................................................................................................................ 49 8.1.4.3 Evaluating This Practice ........................................................................................................ 49 8.1.5 A Proposal for Deferred Prosecution Agreements in Canada .................................................... 50 8.1.6 Private Sector Initiatives ............................................................................................................ 55 8.1.6.1 Mandatory Disclosure Rules .................................................................................................. 56 9. Sanctions and Consequences of Corruption ........................................................................................... 60 9.1. Comparable Sanctions for Domestic and Foreign Corruption Offences ............................................ 60 9.2. Criminal Code Debarment from Public Contracts as a Collateral Consequence ............................... 60 9.3. Debarment as a Civil Consequence .................................................................................................... 62 9.3.1 Model for an Effective Debarment System ................................................................................ 62 9.3.2 Benefits of Mandatory Debarment ............................................................................................. 63 9.3.3 Concerns of Mandatory Debarment ........................................................................................... 64 9.3.4 The Issue of Mandatory versus Discretionary Debarment ......................................................... 65 9.3.5 Enhancing Government Agencies’ Policies Regarding the Use of Debarment ......................... 66 9.4. Debarment in Canada ........................................................................................................................
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