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Canada’s Fight against Foreign Bribery

Twenty-first Annual Report to Parliament

Implementation of the Organisation for Economic Cooperation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and the Enforcement of the Corruption of Foreign Public Officials Act

(September 2019 – August 2020)

Highlights – September 2019 to August 2020

• Canada, along with Korea, continued its duties as co-lead examiner for the OECD Working Group on Bribery^{Footnote i} (Working Group)’s Phase 4 review of Australia’s implementation of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Convention). The review concluded with the adoption by the Working Group of Australia’s Phase 4 follow-up report in December 2019.
• On December 18, 2019, SNC-Lavalin Construction Inc. (SLCI) pleaded guilty to fraud contrary to subsection 380(1) of the Criminal Code in relation to payments made to secure construction contracts in Libya for the benefit of SLCI, altering the competitive bidding process and causing a loss or a risk of loss to the Libyan people. The Public Prosecution Service of Canada and counsel for SLCI made joint submissions for a fine of $280,000,000, payable in equal regular instalments over a five-year period. The Court also issued a three-year probation order, with conditions that SLCI cause the SNC-Lavalin Group to maintain, and as required, further strengthen its compliance program, record keeping, and internal control standards and procedures.
• On December 15, 2019, Mr. Sami Bebawi was found guilty by a jury in the Quebec Superior Court of fraud, corruption of a foreign public official, laundering proceeds of crime and two counts of possession of proceeds of crime in relation to payments made to foreign public officials in Libya. On January 10, 2020, he was sentenced to 8 years and 6 months of imprisonment. Mr. Bebawi is appealing his conviction.
• The RCMP continued to deliver its ambitious awareness-raising program, conducting over 19 anti-corruption related training sessions and/or lectures to various target groups during the reporting period.

Background

On December 17, 1997, Canada signed the OECD Convention^{Footnote ii} and Parliament passed the Corruption of Foreign Public Officials Act (CFPOA) to implement Canada’s obligations under the OECD Convention into Canadian law.^{Footnote iii} With the adoption of the CFPOA, which received Royal Assent on December 10, 1998, the Government of Canada deposited its instrument of ratification with the OECD on December 17, 1998, thereby becoming a party to the OECD Convention and triggering its coming into force on February 15, 1999.^{Footnote iv} The CFPOA came into force on February 14, 1999.

The OECD Convention

The OECD Convention aims to stop the flow of bribes and to remove bribery as a non-tariff barrier to trade, producing a level playing field in international business. To date, 44 states have ratified the OECD Convention, including all 37 member states of the and seven non-member states: Argentina, Brazil, Bulgaria, Costa Rica, Peru, Russia, and South Africa.^{Footnote v} Since the OECD Convention entered into force, 615 individuals and 203 entities have received criminal sanctions for foreign bribery, and 53 individuals and 96 entities have been convicted or criminally sanctioned for related offences (false accounting or money laundering). Furthermore, 86 individuals and 108 entities have received sanctions for foreign bribery through administrative or civil proceedings, and 70 individuals and 165 entities have received sanctions for related offences (false accounting or money laundering) through administrative or civil proceedings. Based on the most recent enforcement data published in December 2019, 528 investigations are ongoing in 28 States Parties and 162 prosecutions are ongoing in 12 States Parties relating to offences under the OECD Convention.^{Footnote vi}

• Companion Instruments

The OECD Convention is supplemented by a number of companion instruments:

The 2009 Recommendation – The OECD Recommendation for Further Combating Bribery of Foreign Public Officials in International Business Transactions^{Footnote vii} (2009 Recommendation) was adopted by the OECD Council^{Footnote viii} on November 26, 2009, and released on December 9, 2009 on the tenth anniversary of the OECD Convention. The 2009 Recommendation aims to strengthen mechanisms for the prevention, detection, and investigation of foreign bribery. The Working Group is currently conducting a review of the 2009 Recommendation.

Guidelines for Multinational Enterprises – The OECD Guidelines for Multinational Enterprises (Guidelines), which were updated in May 2011, contain guidance regarding responsible business conduct (RBC) aimed at multinational enterprises. The Guidelines are supported by National Contact Points (NCPs), offices established by adherents to implement and raise awareness of the Guidelines and offer dispute resolution when issues arise regarding a company’s activities. Canada’s NCP reviews allegations of non-respect of the Guidelines both in Canada and abroad. In February 2018, Canada’s NCP underwent a voluntary peer review to map its strengths and accomplishments, while also identifying opportunities for improvement. Canada committed to reviewing its institutional arrangements and procedures in response to the recommendations and reported on its progress to the OECD in November 2019.

Other companion instruments include the OECD Recommendation on Tax Measures for Further Combating Bribery of Foreign Public Officials in International Business Transactions^{Footnote ix}  and the Convention on Mutual Administrative Assistance in Tax Matters;^{Footnote x} the OECD Recommendation on Bribery and Officially Supported Export Credits;^{Footnote xi} and the Recommendation on Anti-Corruption Proposals for Bilateral Aid and Procurement.^{Footnote xii}

• The Mandatory Peer Monitoring Process

The OECD Convention provides for mandatory peer evaluation by Members of the Working Group on the enforcement and implementation, by States Parties, of the OECD Convention and the 2009 Recommendation. The Working Group is comprised of representatives from the States Parties to the OECD Convention.^{Footnote xiii} The purpose of ongoing mutual evaluations of the implementation of the OECD Convention and the 2009 Recommendation is to maintain an up-to-date assessment of the structures put in place to enforce related laws and rules and their application in practice.

The peer review monitoring system has been carried out in four phases. Phase 1 is designed to evaluate whether the legal frameworks through which participants implement the OECD Convention meet the standards set by it.^{Footnote xiv} Phase 2 studies and assesses the structures put into place to enforce national laws and determine their practical application.^{Footnote xv} Phase 3 is intended to be more focused than the Phase 2 evaluation, concentrating on progress made by the States Parties on the recommendations made during Phase 2, on issues raised by changes in domestic legislation or institutional frameworks of the States Parties, and on enforcement efforts, results and other horizontal issues.^{Footnote xvi}

Phase 4 was launched in March 2016. As well as focusing on key horizontal issues, it endeavours to take a tailor-made approach, considering each country’s unique situation and challenges, progress made on weaknesses identified in previous phases of evaluation, enforcement efforts and results, and any issues raised by changes in the domestic legislation or institutional framework of each State Party.

• Canada and the Peer Review Process

As a State Party to the OECD Convention, Canada is committed to, and actively participates in, the peer review mechanism as a lead examiner, evaluated country, and member of the Working Group. Canada’s participation includes the following:

Canada as Lead Examiner – Canada, along with Korea, continued its duties as co-lead examiner for the Working Group’s Phase 4 review of Australia’s implementation of the OECD Convention. This included liaising with the Secretariat concerning the Australian two-year follow-up report. The review concluded with the adoption by the Working Group of Australia’s Phase 4 follow-up report in December 2019. Canada will also serve as co-lead examiner, along with Switzerland, with respect to France’s Phase 4 review, which is scheduled to be presented to the Working Group in December 2021.

Canada as Evaluated Country – The Working Group’s Phase 4 peer review of Canada is scheduled to be presented to the Working Group in June 2023. Preparatory work on the report can be expected to start in 2022. Co-lead examiners will be Austria and New Zealand.

In addition to its ongoing participation in the mandatory peer review process, Canada continues to provide publicly-available information on its law enforcement efforts and on relevant legislative developments in the context of the Working Group’s “Tour de Table” exercise. This information has included updates with respect to developments regarding SNC-Lavalin following a statement of concern issued by the Working Group in March 2019.

The Corruption of Foreign Public Officials Act

The CFPOA criminalizes the bribery of a foreign public official and the maintaining or destruction of books and records to facilitate or hide the bribing of a foreign public official. Canada also criminalizes a conspiracy or attempt to commit those offences, as well as aiding and abetting in committing those offences, an intention in common to commit those offences and counselling others to commit those offences. Laundering property and proceeds of such offences, as well as possession of property and proceeds, are offences under the Criminal Code.^{Footnote xvii}

As described below, Canada continues to take significant steps to further deter Canadian companies and persons from paying bribes to foreign public officials in the course of business. As part of these efforts, the Government of Canada has been conducting outreach to enhance awareness and to encourage companies to adopt measures that can effectively implement their legal obligations with a zero-tolerance approach to the bribery of foreign public officials.

• Investigations and Prosecutions

To date, there have been eight convictions under the CFPOA, three of which are being appealed as outlined in the ongoing matters below. ^{Footnote xviii}

Ongoing Matters

Sami Bebawi, Constantine Kyres and Stéphane Roy – On January 31, 2014, charges were laid against two former SNC-Lavalin executives, Sami Bebawi and Stéphane Roy, with respect to allegations of bribes to foreign public officials in Libya. Sami Bebawi was charged with one count of fraud over $5,000, two counts of possession of proceeds of crime, four counts of possession of stolen property, and one count of bribery of a foreign public official (pursuant to subsection 3(1) of the CFPOA). Sami Bebawi was subsequently charged on September 9, 2014 with one count of obstructing justice. Constantine Kyres, the lawyer of Sami Bebawi, was also charged on September 9, 2014, with one count of obstructing justice and one count of extortion. Stéphane Roy was charged with one count of fraud over $5,000 and one count of bribery of a foreign public official pursuant to subsection 3(1) of the CFPOA. In February 2019, the obstruction charges against Sami Bebawi and Constantine Kyres were stayed as a result of unreasonable delay. In a separate ruling in the same month, charges against Stéphane Roy were also stayed due to a finding of delay. On December 15, 2019, Sami Bebawi was found guilty of fraud, corruption of a foreign public official, laundering proceeds of crime and two counts of possession of proceeds of crime by a jury in the Quebec Superior Court in Montreal. On January 10, 2020, he was sentenced to 8 years and 6 months imprisonment. Sami Bebawi is appealing his conviction.

Robert Barra, Dario Berini, and Shailesh Govindia – On June 4, 2014, U.S. nationals Robert Barra (former Cryptometrics Chief Executive Officer (CEO)) and Dario Berini (former Cryptometrics Chief Operating Officer (COO)) and U.K. national Shailesh Govindia (an agent for Cryptometrics) were charged with agreeing to pay bribes to Indian officials in violation of the CFPOA.  Mr. Govindia was also charged with one count of fraud under section 380 of the Criminal Code. On January 13, 2015, a new information was sworn to replace the fraud charge against Mr. Govindia with a charge of theft under section 334 of the Criminal Code. The charges against these individuals flow from the same events that led to the conviction of Nazir Karigar in 2013. In 2006, Cryptometrics Canada Inc. tendered a contract with Air India for a Biometric Passenger Security System valued at approximately $100 million USD. Evidence gathered and later presented at trial revealed an agreement by Nazir Karigar, an agent for Cryptometrics, to pay millions of dollars in bribes to Indian public officials for the purpose of securing a contract with Air India. While the initial investigation led to a conviction of Nazir Karigar, the second phase of the investigation focused on the activities of the former CEO and COO of the company.

Robert Barra and Shailish Govindia were jointly tried on one count of bribery of a foreign public official. Both were convicted in January 11, 2019 and sentenced on March 7, 2019 to sentences of 2.5 years imprisonment. Both Mr. Barra and Mr. Govindia are appealing their convictions and the Crown is appealing Mr. Barra’s sentence. Charges against Mr. Berini were stayed on November 14, 2019.

Matters Concluded

SNC-Lavalin Group Inc. – On February 19, 2015, Groupe SNC-Lavalin Inc. and two of its subsidiaries, namely, SNC-Lavalin Construction Inc. and SNC-Lavalin International Inc., were charged with one count of bribery contrary to paragraph 3(1)(b) of the CFPOA and one count of fraud contrary to paragraph 380(1)(a) of the Criminal Code. The charges related to the alleged payment of bribes to secure an advantage for the company in relation to major construction projects in Libya. In addition, the company and its subsidiaries were charged with defrauding the Great Socialist People’s Libyan Arab Jamahiriya, the Management and Implementation Authority of the Great Man Made River Project of Libya, the General People’s Committee for Transport Civil Aviation Authority of Libya, Lican Drilling Co. Ltd., and the Organization for Development of Administrative Centers of Benghazi in Libya in the amount of $129,832,830. A preliminary inquiry commenced in October 2018 and concluded on May 29, 2019 with the accused being ordered to stand trial.

The Director of Public Prosecutions (DPP) declined to invite SNC-Lavalin to enter into negotiations for a remediation agreement in the fall of 2018. SNC-Lavalin sought judicial review of this decision in the Federal Court of Canada on October 9, 2018. The DPP then brought a motion to end the application for judicial review. The DPP’s motion was granted and the application for judicial review was dismissed by the Federal Court of Canada on March 8, 2019. On April 4, 2019, SNC-Lavalin filed an appeal in the Federal Court of Appeal of Canada. This appeal was abandoned in January 2020.

On December 18, 2019, SNC-Lavalin Construction Inc. (SLCI) pleaded guilty to fraud contrary to subsection 380(1) of the Criminal Code. In an Agreed Statement of Facts filed with the Court, the company admitted that between 2001 and 2011, $47,689,868 was directed to Saadi Gadhafi. In exchange for the payments, Saadi Gadhafi used his influence as the son of the Libyan Dictator Muammar Ghadafi to secure construction contracts for the benefit of SLCI, altering the competitive bidding process and causing a loss or a risk of loss to the Libyan people.

The money was directed through two representative companies, Duvel Securities Inc. and Dinova International Inc., both of which listed Riadh Ben Aissa, former vice-president and president of SLCI, as the sole beneficial owner.

Additionally, amounts totalling $73,582,219 were paid through the representative companies to Mr. Ben Aissa and to Sami Bebawi, former president of SLCI, for their personal benefit. Mr. Ben Aissa pleaded guilty in Switzerland in 2014 to corruption of foreign public officials, disloyal management of funds, fraud and money laundering in relation to these same events.

The Public Prosecution Service of Canada and counsel for SLCI made joint submissions for a fine of $280,000,000, payable in equal regular instalments over a five-year period. The Court also issued a three-year probation order, with conditions that SLCI cause the SNC-Lavalin Group to maintain, and as required, further strengthen its compliance program, record keeping, and internal control standards and procedures.

Canada and the Fight against Foreign Bribery

A number of federal departments, agencies and Crown corporations play key roles in Canada’s fight against foreign bribery. They work in close cooperation in Canada’s two-pronged approach to foreign bribery, which focuses on enforcement and prevention.

• The Royal Canadian Mounted Police (RCMP)

Enforcement – The International Anti-Corruption Program is managed under the umbrella of the RCMP Federal Policing Criminal Operations (FPCO) directorate. The FPCO provides subject matter expertise internally and externally to national and international partners, including government departments. The RCMP has the capability to track all CFPOA cases and, aided by its exclusive authority (since 2014) to lay an information in respect of CFPOA offences, expects that all credible foreign bribery allegations, including those initially reported to Canadian law enforcement agencies or to other government officials (such as those in foreign missions), will be referred to the RCMP for evaluation and investigation if deemed appropriate.

Among other responsibilities, RCMP investigators in National Division (Ottawa) are responsible for investigating offences under the CFPOA. They are tasked with:

• investigating allegations that a Canadian person or business has bribed, offered or agreed to bribe a foreign public official;
• investigating allegations that a foreign person has bribed a Canadian public official;
• investigating allegations that a foreign public official has secreted or laundered money in, or through, Canada;
• providing assistance on international assistance requests; and
• developing and delivering outreach activities to various target groups.

Allegations of corruption can have serious repercussions in relation to business transactions and international relations. They are taken very seriously by the RCMP and treated with the utmost confidence for reasons of privacy and ensuring the integrity of investigations.

Integrated Approach – Through a tip-line partnership launched in April 2017, the RCMP receives triaged information from the Competition Bureau regarding allegations of bid-rigging, bribery, price fixing, conflict of interest, false invoicing and product switching. This information is analyzed to determine whether or not an investigation is warranted.

The RCMP Headquarters has an established point of contact within the Department of Justice’s International Assistance Group to ensure that priority is given to requests for mutual legal assistance in foreign bribery matters.

Training and Outreach – The RCMP remains firmly committed to its awareness and outreach activities, which it views as a critical component of its anti-corruption efforts. To this end, the RCMP ensures that all corruption-related material on its internal and external websites is kept up to date on an ongoing basis.

The RCMP has been proactive in reaching out to key stakeholders and in developing partnerships with various organizations and institutions to promote its prevention efforts and initiatives. The RCMP continuously seeks to leverage available opportunities, such as the International Anti-Corruption Day, media requests, conferences and selected anti-corruption workshops to promote the force’s efforts to prevent corruption-related offences.

An orientation manual which provides information regarding foreign bribery, various international anti-corruption conventions (OECD Convention, United Nations Convention against Corruption (UNCAC)) and legislation under the CFPOA, including up-to-date contact information, is available to all members.

The RCMP continues its sustained collaboration efforts on anti-corruption initiatives aimed at helping stakeholders and government agencies mitigate exposure risks to corruption. To improve cooperation, the RCMP listens to industry, and has developed an anti-corruption awareness risk assessment tool for partners and stakeholders, and revamped its anti-corruption presentation.

Every year, the RCMP anti-corruption outreach seeks opportunities to promote best practices for Canadian companies that may be exposed to international corruption. Continuous commitment in educating Canadian companies as well as collaborating and engaging in dialogue with federal government agencies and stakeholders is paramount in preventing corruption.

This year, the RCMP made initial outreach efforts in the pharmaceutical industry following an internal intelligence report describing the great risks of potential corruption in these markets and potential illicit gains greater than the mining industry. The RCMP was given the opportunity to present to Trade Commissioners from ¶¶ÒùÊÓƵ posted around the world working with Canadian companies doing business abroad and educate them on the risks.

Initial contact with Health Canada has also been positive and further collaboration is expected in a near future. The RCMP also met management of two associations from the pharmaceutical industry. The message was received as they believe it is an appropriate message for their membership. Due to the COVID-19 pandemic, events in which the RCMP was scheduled to speak were cancelled.

Since September 2019, the RCMP did a total of 16 presentations and meetings. These included two webinars, with a total attendance of approximately 230 people. The Remediation Agreement Regime continued to be a topic of interest this year. The RCMP sat on discussion panels to clarify its limited role in the process and will continue to do so with the Public Prosecution Service of Canada.

The RCMP also undertook to initiate a project aimed at increasing international corruption awareness online through its website and social media. Material related to anti-corruption posted on the RCMP website was updated and revamped, a new pamphlet promoting prevention and anti-corruption was created, and a short anti-corruption video to be displayed during trade shows was posted on social media. An account to directly reach out to and connect with stakeholders from industry was also created.

Again this year, the RCMP collaborated with the Trade Commissioner Services from ¶¶ÒùÊÓƵ in assisting Canadian companies navigate the mining industry. Several Canadian companies requested to meet the RCMP awareness coordinator on anti-corruption and received information on risk indicators for international corruption.

The RCMP will continue to work with its federal partners and find ways to provide tools to the industry to mitigate the risk of exposure to corruption and work within the Guidelines.

• Public Prosecution Service of Canada (PPSC)

Prosecutions – The PPSC prosecutes criminal offences under federal statutes, including the CFPOA, on behalf of the Attorney General of Canada. To ensure a standard approach to the prosecution of offences under the CFPOA, the PPSC has established a subject-matter expert position located in Ottawa for international corruption cases. The subject-matter expert has developed linkages with the FPCO and with other key government interlocutors involved with the enforcement and development of the CFPOA.

Training and Outreach – Internally, training in relation to the CFPOA has been provided to designated contacts in each of the PPSC’s regional offices. These contacts, who are generally senior prosecutors, will act as local points of contact and coordinators in relation to CFPOA matters as they arise for prosecution. In addition, presentations have been made to the PPSC’s Regional Directors in order to increase awareness of the OECD Convention, the CFPOA and the current activities of the RCMP and the PPSC in this area. The PPSC has also made presentations on, and actively participated on panels raising awareness of, Canada’s anti-corruption activities.

• Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)

As Canada’s Financial Intelligence Unit, FINTRAC facilitates the detection, prevention and deterrence of money laundering and the financing of terrorist activities, while ensuring the protection of personal information under its control.

Compliance—In accordance with the first of its two operational mandates, FINTRAC is responsible for ensuring that all persons and entities subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and associated regulations (“reporting entities” (REs)) comply with their legal obligations, including those related to client identification, record keeping and reporting. These include an obligation for financial entities, life insurance companies, securities dealers, and money services businesses to determine whether an individual is a domestic Politically Exposed Person (PEP), a foreign PEP, a Head of an International Organization (HIO), or a family member or close associate of one of those people^{Footnote 1}. Once the RE has made this determination, it must assess whether a domestic PEP, a HIO, or their family member or close associate poses a high risk for committing a money laundering (ML) offence or a terrorist financing (TF) offence and, if required, must undertake other specific measures. Foreign PEPs, their family members, and their close associates must automatically be treated as high-risk clients.

FINTRAC provides comprehensive guidance on domestic and foreign PEP obligations and risk-mitigating measures for high-risk clients to build awareness and ensure consistent internal and external communication of regulatory compliance requirements.

Actionable Intelligence—In accordance with its second operational mandate, FINTRAC, on the basis of its analysis and assessment, produces actionable financial intelligence that it must disclose to police, and to other domestic recipients listed in the PCMLTFA, when specific legal thresholds are met. Prior to disclosing tactical financial intelligence, FINTRAC must have reasonable grounds to suspect that the information it is authorized to disclose would be relevant to investigating or prosecuting a ML offence or a TF offence. In addition to disclosing financial intelligence to domestic recipients, FINTRAC also maintains over 100 Memoranda of Understanding (MOUs) with foreign financial intelligence units, to which it is authorized to disclose financial intelligence relevant to ML and TF. Between September 2019 and May 2020, FINTRAC produced 21 disclosures relevant to ML and TF which also included information related to bribery and/or corruption. Of these, 4 were disseminated to foreign recipients. Furthermore, as part of FINTRAC’s commitment to being a centre of excellence on ML/TF matters, intelligence analysts and compliance officers from the Centre attended training sessions involving corruption in 2018.

Raising Awareness—FINTRAC engages in a variety of means to enhance public awareness and understanding of ML/TF. These include Operational Alerts, Briefs, and Assessments and Public-Private Partnerships (PPPs).  FINTRAC also produces strategic financial intelligence, including specialized research reports and trends analysis on ML and TF, which can be used by police, the Canadian security and intelligence community, federal policy and decision-makers, REs across the country, and other stakeholders.

• ¶¶ÒùÊÓƵ (GAC)

In Canada and Beyond –GAC plays a lead role in representing Canada at international anti-corruption fora, such as the Working Group, in outreach efforts with emerging economies regarding corruption and in coordinating Canada’s whole-of-government approach to meeting its international anti-corruption obligations. In addition, GAC’s personnel at Canadian missions work closely with Canadian companies that do business abroad through the provision of a range of services and support, including making the Canadian business community abroad aware of the CFPOA and promoting responsible business practices and in the management of Canada’s NCP, established under the Guidelines.^{Footnote xix}

Trade, Development, Risk Management, and Reporting Obligations – GAC continues to apply the 2010 Policy and Procedure for Reporting Allegations of Bribery abroad by Canadians or Canadian Companies, which instructs Canadian missions on the steps that must be taken when allegations arise that a Canadian company or individual has bribed a foreign public official or committed other bribery-related offences. Information is conveyed to law enforcement in accordance with Canadian law and established procedures. In September 2014, a Standard Operating Procedure was implemented that relates to Integrity Declarations (previously known as Declarations Regarding Corruption) made in the context of trade advocacy support sought by Canadian businesses abroad. At the end of this reporting period, approximately 1,500 Declarations signed by Canadian companies were in force.

Canada’s International Assistance – In June 2017, Canada launched the Feminist International Assistance Policy, which recognizes that supporting gender equality and the empowerment of women and girls is the best way to build a more peaceful, more inclusive and more prosperous world. Inclusive Governance was identified as one of six Action Area priorities for Canada’s international assistance. Canada is working to help address corruption with our developing country partners through our inclusive governance programs that engage women and girls in decision-making on budgets and public service delivery in local communities. By improving accountability and transparency in the delivery of public services, Canada is helping to address the challenges associated with corruption through the programs and services that matter to people in their communities. Improving the quality of public services is an important entry point to help confront petty corruption (i.e. bribery), and sheds light on instances of grand corruption where these challenges persist.

Canada’s anti-corruption efforts can include: strengthening the capacity of all levels of government and service providers to deliver services through, for example, improved decentralization, improved accountability and transparency arrangements and institutions, stronger local governments; improved citizen engagement in budget processes, including through gender-responsive budgeting, and social accountability initiatives that engage people as the end-users of public services in the design, monitoring, and oversight of public services and initiatives; improved public financial management systems and processes; and strengthened statistical capacity, including analyzing and publishing open data to foster greater transparency.

For example, GAC has funded Transparency International^{Footnote xx} since March 2016 to implement its $13.4 million, “Integrity, Mobilisation, Participation, Accountability, Anti-Corruption and Transparency” (IMPACT) project.  The project helps to address corruption in 12 countries in the Americas and Africa:  Argentina, Colombia, Democratic Republic of Congo, Ghana, Guatemala, Honduras, Jamaica, Mozambique, Nigeria, Peru, Trinidad and Tobago, and Venezuela. The IMPACT project is seeking to empower civil society organizations to effectively fight corruption; improve public institutions’ policy and practice to limit opportunities for corruption; and increase commitment to transparency, accountability and integrity in business practice. The project is now scheduled to end in December 2020.

To advance policy objectives related to inclusive governance and anti-corruption, Canada is engaged with important international organizations and initiatives, such as the OECD Development Assistance Committee (DAC) Network on Governance (GovNet) as well as its Effective Institutions Platform, the Anti-Corruption Task Team and the Addis Tax Initiative, U4 Anti-Corruption Resource Center (U4), among others.

GAC is working on the development of a harmonized and integrated risk management tool (RMT) for all GAC grants and contributions. The framework to promote a consistent and systematic approach to managing risk has been developed, based on internal consultations with key stakeholders (at Headquarters and in the field) with a focus on facilitating knowledge sharing and reducing duplication of effort. The Risk Management Advisory Group is a key platform to engage a broad range of Programs in risk management. The development of the RMT is widely seen as a critical element of the larger departmental Grants and Contributions Transformation process. Availability of resources and timelines, including a solution release date, are expected to be confirmed in fall 2020.

In January 2020, a new Fraud Protocol and Management Framework for grants and contributions was approved for implementation at GAC. The Framework establishes a new governance structure with multi-level representation decision-making and a new Fraud Management Unit (FMU). The FMU is responsible for supporting fraud detection in the department, for managing cases or allegations of loss of public funds and/or crown assets related to GAC’s grants and contributions, and will contribute to the provision of department-wide fraud prevention training.

Since June 2015, Canada has been actively engaged in the global Methodology for Assessment of Procurement Systems (MAPS) initiative, centered on a universal tool used to evaluate the quality of public procurement systems, including specific anti-corruption measures.^{Footnote xxi} The core tool features enhanced accountability, integrity and transparency assessment criteria. Since 2018, assessments of dozens of countries have been undertaken and the tests of specialized modules such as Entity Level Assessment, Sustainable Public Procurement, e-procurement, and PPPs are currently underway. For the Development portfolio, MAPS assessments are used as part of fiduciary risk due diligence when considering programming approaches that rely on the use of country systems. Links to MAPS and other key complementary resources on anti-corruption in public procurement, such as the OECD Checklist for Enhancing Integrity in Public Procurement, are integrated into GAC’s corporate guidance.  Canada is supporting the establishment of an independent Secretariat, hosted by the OECD, to maintain MAPS, ensure quality control, and certify compliance of assessments when requested by countries.

Training and Outreach – GAC personnel, at all levels, including Heads of Mission, Senior Trade Commissioners, and Trade Commissioners, would normally depart on postings during the summer and would receive targeted pre-posting training that includes anti-corruption elements. Due to the COVID-19 pandemic, however, GAC postponed most postings by one year and at the time of writing had suspended all in-person training activities. The pre-posting training normally includes modules on Canada’s international obligations to prevent and combat corruption, promoting RBC, officials’ responsibilities pursuant to the CFPOA, corruption concerns in specific markets, as well as facilitated case studies. From September 2019 to March 2020, GAC delivered some of its training outside of the pre-posting schedule. Approximately 115 Trade Commissioners participated in five offerings of the four-day Core Training Program for Trade Commissioners Workshop, which includes anti-corruption efforts, tools and resources. Between October and November 2019, a total of 83 GAC trade officers and representatives from partner departments participated in three offerings of a Trade Commissioner Service Fundamentals course, which included content on anti-corruption, the CFPOA, and responsible business conduct. At the time of writing this report, GAC was working towards adapting training materials to a virtual environment (with up to 60 Trade Commissioners potentially participating in anticipatory Trade Commissioner Service virtual training sessions). Prior to the COVID-19 curtailment of in-person training activities, between September 2019 and March 2020, RBC training specialists at GAC delivered anti-corruption tools and training to more than 150 GAC personnel through inclusion of anti-corruption material in various in-person courses, webinars, internal conferences and signature events.

As part of Canada's Corporate Social Responsibility Strategy, missions abroad and regional offices in Canada developed multiple initiatives in their respective regions and participated in various anti-corruption activities organized by local and bilateral chambers of commerce, government organizations (local, national, international) and multilateral organizations, such as the UN Global Compact. Trade Commissioners’ participation has reinforced key messaging on responsible business conduct and anti-corruption, with particular emphasis on the CFPOA and how it directly and indirectly affects Canadian companies doing business abroad.

Trade Commissioners regularly brief clients on the CFPOA and its implications while doing business abroad.  Furthermore, in 2019, GAC joined the U4 Anti-Corruption Resource Centre (U4)^{Footnote xxii}, whose mission is to help reduce the harmful impact of corruption on sustainable and inclusive development. The benefits to all staff – at headquarters and in missions – include access to opportunities for online training and for specialized in-country workshops, to the U4 anti-corruption helpdesk, and to an extensive collection of research publications. In 2020, U4 introduced a series of Covid-19 publications and webinars, and will collaborate with the Anti-corruption, Transparency and Accountability for Health Alliance (ACTA) to address corruption challenges in the health sector.  

• Export Development Canada (EDC)

Combating Corruption – As set out in the EDC Code of Conduct, EDC does not support transactions or activities that involve the offer or giving of a bribe, and it exercises reasonable diligence and care not to support such transactions and activities.^{Footnote xxiii} EDC’s Financial Crime Program (which includes the Anti-Corruption Policy Guidelines and other procedure documents) outlines measures that EDC will apply to combat corruption, including (i) possible notification to law enforcement authorities, and (ii) refusal to provide support where, in EDC’s opinion, there is credible evidence that bribery was involved in a transaction. Further, EDC’s Program consists of processes and documentary safeguards, such as the requirement for customers to submit anti-corruption declarations and/or accept relevant provisions in their contracts, to help ensure that EDC upholds its commitments. EDC underwriting and business development staff conduct up-front corruption screening on transactions. If screening reveals concerns, enhanced due diligence is then undertaken by a specialized team.  EDC works closely with Canadian government departments to ensure proper due diligence and alignment in its approach to companies facing corruption-related issues.

In addition to the above, EDC has strengthened its controls, not only as they relate to bribery and corruption but also as they relate to financial crime risks generally. This is part of EDC’s continuous improvement efforts that reflect evolving best practices. During the reporting period, EDC has implemented, or increased the robustness of its standard due diligence for counterparties and transactions, enhanced due diligence for higher risk counterparties and transactions, employee training, program oversight and other controls that support EDC’s ability to detect and deter bribery and corruption among other financial crime risks.

During this reporting period, EDC has also been implementing the new strengthened OECD Recommendation of the Council on Bribery and Officially Supported Export Credits. To that end, EDC participated in the OECD Export Credit Group Anti-Bribery workshop in June 2019 and continues to actively engage on the implementation of the 2019 OECD Recommendation of the Council on Bribery and Officially Supported Export Credits.

Raising Awareness – As EDC assists customers in pursuit of international opportunities, it informs them about conducting business in a socially-responsible and ethical manner. This includes providing information to customers on: a) the risks of bribery and corruption and mitigating practices; b) responsible business conduct; c) the strength of anti-corruption policies and best practices and setting the proper “tone from the top”; d) how to make improvements in corporate governance and compliance practices; and e) how to educate employees about the CFPOA and other legal frameworks that aim to combat bribery in international business transactions.^{Footnote xxiv}

EDC continues to promote ethical business practices through its participation in anti-corruption events and initiatives, as well as by providing customers with information and resources on financial crime risks and EDC’s risk management approach. EDC’s President sends out a letter to new customers informing them of the developments in the fight against bribery, and sharing a copy of an EDC produced anti-corruption brochure. EDC also reports on its practices related to combatting bribery in international business transactions in its corporate Annual Report.

In this reporting period, EDC outreach focused on the creation of the anti-corruption hub which was launched in December 2019 together with the EDC President letter mailout referenced above. The anti-corruption hub is a one-stop resource centre for exporters on anti-corruption and business integrity matters and it is now included in EDC’s onboarding campaigns.^{Footnote xxv} Through ongoing efforts to educate and promote sound ethical conduct, EDC seeks to support companies as they manage risks in existing operations and as they enter into new markets.

• Canada Revenue Agency (CRA)

The CRA has a large network of international partners, with 93 tax treaties and 24 Tax Information Exchange Agreements. Canada is also a party to the Convention on Mutual Administrative Assistance in Tax Matters, which includes 136 signatories. Combined with 17 additional jurisdictions covered by bilateral agreements with Canada, the CRA can exchange tax information with a total of 152 jurisdictions. These instruments facilitate the exchange of information to detect and combat tax avoidance, including ways which may deter the bribery of foreign officials. Also, the CRA is engaged in exchanging non-residents’ financial account information with over 90 jurisdictions under the Common Reporting Standard with account holders’ countries of residence, which resulted in the CRA receiving financial account information from other jurisdictions in respect of accounts owned by Canadian residents.

Since September 2017, with the enhancement of CRA’s policy on serious crime information sharing, the CRA is in position to receive requests from police organizations when they are investigating financial crime, such as major frauds, proceeds of crime, money laundering and corruption. These requests will be limited to instances where it would be in CRA’s interests in the administration or enforcement of the Income Tax Act or Excise Tax Act (i.e., CRA may undertake an audit or investigation of the targets identified by the police).

Prior to sharing client information, the CRA will ensure that the requirements of the serious crimes provisions are satisfied. The CRA will independently review the information received from the police to determine if there are reasonable grounds to believe that the CRA has information that will afford evidence of a listed serious offence. In such cases, the CRA may release information; however, the CRA would continue to be responsible to determine if and what client information would be provided.

In addition, the CRA continues to be committed to the exchange of information through specific, spontaneous and automatic exchange mechanisms that facilitate cooperation and transparency. This includes engaging with Canada’s treaty partners and collaborating with other administrations in numerous OECD Working Groups and bodies, such as the Global Forum on Transparency and Exchange of Information. The CRA is very involved and remains engaged^{Footnote xxvi} in numerous capacity building efforts, such as the OECD’s Global Relations Programme and the International Academy for Tax Crime Investigation, which assist other countries in developing their tax administration expertise. The CRA also participates in the OECD’s Task Force on Tax Crime and Other Crimes and is one of five founding members of the newly-established Joint Chiefs of Global Tax Enforcement (J5), a multi-national group formed to increase collaboration in the fight against international and transnational tax crime and money laundering.

• Department of Justice Canada

International Anti-Corruption Activity – Department of Justice officials participate in international anti-corruption fora, including in meetings of the Working Group.

Mutual Legal Assistance – The Department of Justice’s International Assistance Group (IAG) is Canada’s central authority for mutual legal assistance in criminal matters. Canada has bilateral mutual legal assistance (MLA) treaties with 35 countries, pursuant to which Canada can provide formal assistance in criminal matters. Additionally, the OECD Convention, the United Nations Convention against Corruption (UNCAC), the Inter-American Convention against Corruption, and the Inter-American Convention on Mutual Legal Assistance in Criminal Matters provide Canada with the legal means to provide formal assistance to countries that have signed and ratified those conventions.

The IAG has designated a legal counsel to deal with all incoming and outgoing corruption-related mutual legal assistance requests. This legal counsel works closely with the RCMP and other relevant law enforcement officials and prosecutors. Given the ever-increasing numbers of incoming requests for assistance, the responsibility for corruption-related requests is being shared with other counsel within the IAG, under the supervision of the designated legal counsel, who remains the point of contact for corruption-related requests.

Training and Outreach – The IAG regularly liaises with the central authorities from other countries to educate foreign officials with respect to the Canadian legal requirements to obtain effective assistance in criminal matters. The IAG works closely with foreign officials to provide assistance in drafting requests for legal assistance, which allows them to make more effective requests to Canada in the fight against corruption.  The IAG regularly hosts and attends consultations with foreign authorities to discuss ways to improve the efficiency and effectiveness of the mutual legal assistance process.

Moreover, the IAG provides advice and training to Canadian prosecutors and law enforcement and foreign officials regarding assistance that can be provided to foreign law enforcement and prosecution authorities without the requirement of a formal request.

In terms of outgoing Canadian requests on corruption matters, the IAG also provides advice and training to Canadian prosecutors and law enforcement officials on the legal requirements for seeking assistance from other countries.

Additionally, the IAG maintains a website that provides guidance to foreign officials on making requests to Canada and to Canadian officials on making requests to foreign jurisdictions.

Of further note, in December 2018, Canada’s Mutual Legal Assistance in Criminal Matters Act (MLACMA), Income Tax Act, Excise Act and Excise Tax Act were amended to enhance Canada’s capacity to share tax/excise information with Canada’s bilateral MLA treaty partners for certain serious crimes pursuant to a request made under the MLA treaty. The MLACMA was also amended to include tax information exchange agreements with the definition of “agreement” to which the Act applies.

• Canadian Commercial Corporation (CCC)

Combating Corruption – Anti-bribery and corruption is a key component of CCC’s Responsible Business Conduct Framework, a framework that was enhanced in 2018 to update policies and processes for doing business abroad. CCC’s policies and processes, including its transactional due diligence, form the basis for CCC’s approach to fighting bribery and corruption. CCC periodically reviews its Responsible Business Conduct Framework in an effort to keep its policies up-to-date in accordance with applicable laws and standards.

CCC also works with external resources to bolster its anti-corruption due diligence and practices. CCC is a member of Trace International, a non-profit organization founded to provide members with anti-bribery compliance support and to provide training assistance. CCC provides its employees with annual training regarding its anti-bribery and corruption policy. CCC also regularly consults with its Portfolio partners and other Crown corporations to ensure alignment of policies and procedures.

CCC’s practices to combat bribery include specific references to the NCP and the Guidelines and to promote principles and standards developed on the basis of the Guidelines and the UN Guiding Principles. CCC also notes the cooperation of its Canadian exporter clients in acknowledging the role of the NCP when working with CCC.  

In addition, CCC works closely with Canadian exporters to ensure their commitment and adherence to responsible business practices, especially in the area of corruption of foreign public officials.

• Public Services and Procurement Canada (PSPC)

Combating Corruption – PSPC administers the government-wide Integrity Regime, introduced in July 2015, to help ensure that Canada conducts business with ethical suppliers. The Regime is a policy-based instrument (the Ineligibility and Suspension Policy), enforced through corresponding contractual clauses that incorporate the Ineligibility and Suspension Policy by reference. Under the Regime, Canada may suspend a supplier or declare them ineligible from being awarded a contract or real property agreement if they have been convicted of, or charged with, an applicable listed offence (e.g. offences related to corruption, fraud, bribery) within the past three years, in Canada or a similar offence abroad. The names of all ineligible and suspended companies are published on the PSPC website, as well as those who have entered into an administrative agreement with PSPC.^{Footnote xxvii}  To date, three companies have been declared ineligible and one company has signed an administrative agreement with PSPC in lieu of suspension.

Since its introduction, all departments or agencies identified in schedules I, I.1 and II of the Financial Administration Act have signed MOUs with PSPC to obtain supplier integrity verification services. This allows organizations to verify that a supplier is not ineligible to conduct business with the government, under the Regime, prior to awarding a contract or real property agreement. Additionally, two Crown Corporations have voluntarily adopted the policy and have signed MOUs with PSPC for verification services.

Raising Awareness – PSPC works closely with the private sector, industry partners and civil society organizations to promote ethical business culture and integrity in public procurement. Senior PSPC officials participate as guest speakers and deliver presentations in a range of events on Canada’s approach to combat fraud and corruption in procurement and real property transactions, the government-wide Integrity Regime, and the department’s framework to manage wrongdoing and fraud risk.

The department collaborates with federal partners on measures to prevent, mitigate and address unethical business practices within public procurement and real property. This includes participating in working groups, committees and bilateral meetings.

• Competition Bureau of Canada (CB)

Combating Corruption – In recent years, the CB has observed a close relationship between collusive behaviour and corruption. Given this connection, the CB has, in recent years, taken steps to maintain and improve its relationships with police forces, other anti-corruption officials, and procurement authorities in order to complement each organization’s efforts to promote competition and combat corruption.

In April 2017, Canada launched the Federal Contracting Fraud Tip Line, a dedicated telephone line and online form, to accept anonymous tips from Canadians who suspect fraud, collusion or corruption in federal government contracts and real property agreements. The Tip Line is a joint initiative of the CB, PSPC, and the RCMP, and complements measures already in place to ensure that federal contracts are lawful, ethical and fair.

The information received may be used to conduct investigations, gather intelligence and introduce due diligence measures, where warranted, to protect the integrity of federal government contracts and real property agreements.

Procurement and competition authorities around the world are developing “screens” to detect bid-rigging. The CB and some of its partners are developing pilot projects to analyze bidding data for this purpose. A “Certificate of Independent Bid Determination” has proven to be effective at deterring bid-rigging conduct around the world, by encouraging ethical decision-making by potential suppliers at the point of bid-submission. The CB continues to promote the use of this tool by tendering authorities throughout Canada.

In the past few years, the CB has signed MOUs with several domestic law enforcement partners including: the RCMP, which routinely assists the CB with the investigative powers, including search warrants and wire taps; the Ontario Provincial Police, which has worked closely with the CB’s Ontario Regional Office on a number of matters; and the Bureau de l’inspecteur général de la Ville de Montréal, which has referred cases of suspected collusion in the City of Montreal to the CB.

Raising Awareness – Providing outreach presentations to public procurement organizations at all levels of government has been, and continues to be, a priority for the Cartels Directorate of the CB. The goal of these presentations is to provide procurement officials with the knowledge necessary to detect, prevent and report bid-rigging to the CB. In particular, these presentations cover topics, including the bid-rigging provisions of the Competition Act, common forms of bid-rigging, characteristics that can make an industry particularly susceptible to bid-rigging, and techniques that can be used to prevent bid-rigging.

• Treasury Board Secretariat (TBS)

Enabling the mechanism for disclosure of acts of corruption and the bribery of foreign public officials has assisted in promoting a culture of accountability and integrity. During the reporting period, Canada continued to serve as a member on the OECD Working Party of Senior Public Integrity Officials (SPIO), a sub-group of the Public Governance Committee. The SPIO aims to strengthen public sector governance and institutions involved in policy making related to safeguarding integrity and preventing corruption and the underlying conditions that shape the policy-making process. Recent activities have involved the drafting of papers and recommendations for combating corruption and enhancing public integrity such as the newly-launched OECD “Public Integrity Handbook”^{Footnote xxviii} based on the OECD Recommendation of the Council on Public Integrity, to which Canada has contributed.

In addition to contributing to the SPIO, Canada continues to engage with other countries on an ad hoc basis through on-site visits and providing technical guidance on the promotion of integrity frameworks related to public governance.

In 2017, a statutory review of the Canada’s disclosure regime took place. Canada is continuing to focus on strengthening awareness activities and training for federal public servants, as well as continuous improvements to guidance and reporting related to the internal disclosure process.