In January, the US Department of Justice (DOJ) issued an opinion to a US company on whether paying a third party for release of its employees would breach the Foreign Corrupt Practices Act (FCPA).[1] The DOJ said it would not bring charges against the company if it made a payment to prevent imminent threat to life.
The DOJ issued its opinion after the company’s cargo ship, captain and crew were detained by a foreign country’s naval forces for allegedly being in their waters illegally. There were serious concerns over the captain’s health condition. A third party claiming to act on behalf of the foreign country demanded US$175,000 to release the captain, crew and ship. Concerned about violating the FCPA, the company consulted with US regulators and asked the DOJ to opine on whether it would bring an enforcement action if the company made the payment.
The DOJ said the proposed payment would not trigger an enforcement action under the anti-bribery provisions of the FCPA because the company would not be making the payment “corruptly” or to ”obtain or retain” business.
Canada: how is the DOJ’s opinion relevant to the CFPOA?
Such opinions are rare in the US; in Canada they are unheard of – both the Canadian Department of Justice and Global Affairs Canada are extremely hesitant to comment on enforcement of the Corruption of Foreign Public Officials Act[2] (CFPOA). The lack of case law interpreting the CFPOA also makes insights a challenge.
Still, there are sufficient similarities between the DOJ’s application of the FCPA in this case, and the purpose of the CFPOA, that mean the DOJ’s approach could assist in interpreting Canada’s legislation:
- The CFPOA prohibits “[anyone] who, in order to obtain or retain an advantage in the course of business, directly or indirectly gives, offers or agrees to give or offer a [benefit] to a [foreign public official].”[3] The CFPOA was passed to implement Canada’s international obligations under the OECD’s Convention on Combating Bribery of Foreign Public Officials.[4] Courts have referred to the Convention’s “anti-corruption policy” when interpreting the CFPOA.[5] Therefore, when reviewing conduct such as the scenario presented here, considering whether there exists a “corrupt” intent remains important and would very likely factor into any decision by Canadian prosecutors.
- The CFPOA is a specific intent offence:[6] the offender must have committed the criminal act for the specific purpose of obtaining an advantage in the course of “business.”[7] Given the CFPOA’s underlying purpose, as well as the structure of the relevant provision, facts that demonstrate the motive for conferring the benefit was not motivated by business considerations are an important factor when reviewing whether a certain action would be caught.
- The DOJ’s opinion also referred to duress. In Canada, the common law duress defence is available where a criminal act is committed “under the compulsion of a threat of death or bodily harm”[8] and includes a serious threat to a third party.[9] In this case, the captain’s health was seriously threatened and the company thought he would suffer significant harm if not released quickly. The DOJ determined that the company did face duress or extortion, which also absolved it of the requisite corrupt intent. While Canadian authorities or courts could take another approach when considering whether conferring a benefit to prevent harm to an individual is prohibited conduct, it remains a reasonable question whether a court would agree that the “crime” was committed under duress.
Disclose before you act?
While the CFPOA does not contain express disclosure provisions, it is still notable that the DOJ acknowledged the company’s engagement with American authorities before making any payment. Such disclosure appears to have influenced the DOJ’s view that the company did not have corrupt intentions.
While the facts set out in this case remain unique, it is food for thought as to how Canadian authorities would handle a similar situation in light of this potential precedent.
[1] For more in-depth analysis of the OPR, please see the following blog post published by our colleagues in the US: https://www.nortonrosefulbright.com/en/knowledge/publications/cf81d46e/rare-us-fcpa-advisory-opinion-sheds-light-on-duress-payments.
[2] CFPOA. https://laws-lois.justice.gc.ca/eng/acts/c-45.2/.
[3] CFPOA, at s 3(1).
[4] See the summary of Bill S-21, An Act respecting the corruption of foreign public officials and the implementation of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and to make related amendments to other Acts, which received royal assent during the 36th Parliament.
[5] R v Karigar, 2017 ONCA 576, at para 40-41.
[6] R v Barra, 2021 ONCA 568, at para 74.
[7] “Business” is defined at s 2, CFPOA.
[8] R v Willis, 2016 MBCA 113, at para 22; R v Ruzic, 2001 SCC 24, at para 47. [Ruzic].
[9] Ruzic , at 24 para 65.
