An Overview of Major Foreign Corrupt Practices Acts Antonella Deo - - PowerPoint PPT Presentation

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An Overview of Major Foreign Corrupt Practices Acts

Antonella Deo Head Subsidiary Governance Office RBC August 21, 2012

The Canadian Society of Corporate Secretaries

1 4 th Annual Corporate Governance Conference

The Fairmont Hotel Vancouver | Vancouver, BC | August 19 - 22, 2012

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Agenda

• International conventions
• Overview of anti-bribery and anti-

corruption legislation in Canada

• Key differences in USA and UK

legislation

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International Conventions

• Inter-American Convention Against

Corruption (Organization of American States) - 1996

• Convention on Combating Bribery of

Foreign Public Officials in International Business Transactions (OECD Convention) – 1997

• United Nations Convention Against

Corruption (UN Convention) – 2005

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Legislative Frameworks

• Canada: Corruption of Foreign Public

Officials Act (CFPOA)

– in force 1999 – recent increase in enforcement activity

• USA: Foreign Corrupt Practices Act (FCPA)

– in force 1977 – significant enforcement activity

• UK: Bribery Act 2010 (Bribery Act)

– in force 2011 – increasing enforcement activity – the most stringent anti-corruption legislation

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CFPOA Offences

• W hat: any loan, reward, advantage or

benefit of any kind given or offered, directly or indirectly

• W ho: by any person to a foreign public
• fficial
• W hy: as consideration for or to influence

acts or decisions in order to obtain or retain an advantage in the course of business for profit

• W here: “real and substantial” link to

Canada

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CFPOA Defences

• Lawful in foreign state
• Reasonable expenses
• Facilitation payments
• Mens rea – intention and knowledge

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CFPOA Penalties

• Indictable offence

– no limitation period – maximum 5 year imprisonment – fines within judicial discretion, with no legislated maximum – extraditable – confiscation of proceeds of crime

• Increasing enforcement activity

– dedicated RCMP anti-corruption team – Public Prosecution Service Canada (PPSC)

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OECD Criticisms of CFPOA

• Restricted to business “for profit”
• Ineffective sanctions
• Limited jurisdiction
• Prosecutorial discretion

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FCPA: Key Differences

• Broader range of offences:

– Use of mails or interstate commerce in furtherance of an offence – Obligation for issuers to maintain accurate books and records and a system of internal controls – Senior officer of a company liable if (i) fails to create and implement anti- corruption controls, or (ii) consents or connives in an offence

• Civil enforcement actions of issuers

by SEC

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FCPA: Key Differences

• Broad extraterritorial application:

– Territorial jurisdiction principle – any person or entity undertaking activities in the US (including use of mails or interstate commerce) in furtherance of an offence – Nationality jurisdiction principle – issuers and domestic concerns undertaking activities anywhere in furtherance of an offence

• Includes foreign issuers with securities listed on a US

exchange or registered with SEC

• Includes organizations having a principal place of

business in the US

• Includes acts of foreign subsidiaries where

authorized, directed or controlled the activity

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Bribery Act: Key Differences

• Broader range of offences

– Private sector bribery (domestic and foreign) – Acceptance of bribes – Failure of commercial organization to prevent bribery - defence available if adequate procedures to prevent bribery – Senior officers of a company liable if “consent or connive” in the commission

• f an offence by the company
• Facilitation payments not permitted

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Bribery Act: Key Differences

• Higher penalties:

– Maximum of 10 years imprisonment

• Broad extraterritorial application:

– Nationality jurisdiction principle – connection to UK established based on nationality of offender, wherever the

• ffence may occur

– Extends to any entity formed in the UK

• r carrying on business, or part of a

business, in the UK