BILL
NORTHCOTE

Transparency International has a Corruption Perceptions Index, which ranks countries according to the perceived corruption of their public sector— the higher on the list, the least corrupt a country is seen to be. Topping the index in 2011 was New Zealand, while Canada ranked 10th, behind Denmark, Finland, Sweden, Singapore, Norway, the Netherlands, Australia and Switzerland.

The United States was No. 24, while the lowest ranked countries — i.e., those perceived as most corrupt—were North Korea and Somalia. While that may not come as a shock, there were some surprises. For example, Qatar ( 22) was ahead of the U.S., and Botswana (32) was ahead of Poland (41), Brazil (73) and Greece (80).

Reported corruption cases often involve large infrastructure projects in countries rated low on the index.

But Canada can’t be smug. Anecdotal evidence indicates that more domestic fraud is taking place now than before. Why? Technology is constantly improving, corruption is a sign of the world’s economic malaise, and Canada is naïve when it comes to the blending of business and corruption.

Prior to December, 1998, foreign corrupt practices were generally not an offence under Canadian law if the activity took place elsewhere, but now Canada’s Corruption of Foreign Public Officials Act (CFPOA) makes it an offence if there is a real and substantial link between the offence and Canada.

Canada was a signatory to the

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1997 Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. In 1998, Canada enacted its CFPOA to fulfill its obligations under that OECD treaty, but until recently the country has been lax in enforcing the law. Today it is more diligent in enforcing the CFPOA, which may be as result of American pressure.

The CFPOA involves three offences: bribing a foreign public official, laundering property and proceeds, and possessing property and proceeds. The Act also makes it possible to prosecute a conspiracy or an attempt to commit the offences. In addition, it covers aiding and abetting in committing these offences, intention in common to commit them, and counselling others to commit the offences.

Legal counsel should remember that the United States has been more aggressive than Can-

Legal counsel, especially in-house, are custodians of their client’s reputations and must make sure the client’s behaviour is beyond reproach.

“

Bill Northcote, Shibley Righton LLP

Siemens once paid a fine of $1.6 billion to settle charges made by the U.S. and Germany under the FCPA when it allegedly paid more than $1 billion in bribes to win contracts in such countries as Venezuela and Bangladesh. Niko Resources, a Canadian company, pleaded guilty to charges of bribing a Bangladesh official and paid a $9 million fine. Yet another Canadian company, SNC Lava-lin, has been in the news over allegations involving its business links in Libya—no matter what happens, the company has endured a reputational loss from the coverage.

While Canada is a signatory
to the OECD Convention, there
are differences between the
U.S. and Canadian corrupt
practices acts. Under the
CFPOA, unlike the FCPA,
facilitation payments are per-
mitted “if it is made to expedite
or secure the performance by a
foreign public official of any act
of a routine nature that is part
of the foreign public official’s
duties or functions.” These dut-
ies or functions include:
n;issuing a permit or license to
qualify a person to do business;
n;processing official documents,
such as visas and work permits;
n;providing services normally
offered to the public, such as
mail pickup and delivery, tele-
communication services, and
power and water supply;
n;providing such services as
police protection, loading and
unloading of cargo, protecting
perishable products or com-
modities from deterioration, or
scheduling inspections related
to contract performance or
transit of goods.

ada in asserting “long-arm” jurisdiction under the U.S. Foreign Corrupt Practices Act. A company is subject to the FCPA if it has a principal place of business in the U.S., its funds are cleared through the U.S., or its securities (including American depositary receipts) are listed on a U.S. stock exchange.

Bill Northcote is chairman of the business law practice group at Shibley Righton LLP in Toronto, and is the firm’s expert on international law. He sits on the board of directors of MultiLaw, an association of law firms in 56 countries, and has taught at Nankai University in Tianjin, China.

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Officers have a ‘keepers of the gate’ mentality

Border
Continued From Page 14

Canadian medical coverage. This often motivates people to limit stays outside Canada to 180 days.

Cranky borders

Business travellers’ percep-
tion is that the Canadian and
U.S. borders have tightened up
exceedingly, travelling has
become increasingly more diffi-
cult, questions are more wide-
ranging and detailed, and people
are subjected to “secondary”
inspection more frequently. We
have no statistics on this, but
based on frequent reports, it
seems true.