Combatting the global crime of bribery: a report on Canadian foreign official anti-bribery policy
| Date | 02 October 2017 |
| DOI | https://doi.org/10.1108/JFC-11-2015-0065 |
| Pages | 496-512 |
| Published date | 02 October 2017 |
| Author | Peter Leasure |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial crime |
Combatting the global crime of
bribery: a report on Canadian
foreign official anti-bribery policy
Peter Leasure
Department of Criminology and Criminal Justice, University of South Carolina,
Columbia, South Carolina, USA
Abstract
Purpose –The purpose of this paper is to provide an updated review of Canadian foreign official anti-
briberypolicy.
Design/methodology/approach –To achieve this objective, seven factors were examined. Several
factors have been emphasized by the Organisation for Economic Co-operation and Development, and others
are original.
Findings –The results indicate that while Canada is making progress towards strengthening itsforeign
official anti-briberypolicy, significant weaknessesstill remain.
Originality/value –This study adds to the literature in this areaby utilizing several new factors which
attemptto gauge the effectivenessof foreign official anti-bribery policy.
Keywords Bribery, FCPA, Corruption, Bribery Act, CFPOA, Corruption of Foreign Public Officials Act
Paper type Research paper
Introduction
The idea that bribery is a potential threat to fiscal, social and general security is being
argued more often in academic scholarship (Williams and Beare, 1999). Research continues
to uncover the severely negativeeffects of bribery in international commercial transactions
(Spahn, 2010;Nichols, 2012). According to World Bank data, corrupt officials in developing
countries receive around $50bn to $80bn annually from partaking in bribery (Pacini et al.,
2002). Furthermore, World Bank projects that the global cost of corruption extends to $1tn
each year (Clevelandet al., 2009).
While financial crimes like corruption are damaging to all countries (Spahn,2010, 2013;
Nichols, 2012), its effects are particularly felt in developing countries(Hansen, 2014;Kofele-
Kale, 2006;Spahn, 2009). For example, corruption diverts public money from public use to
private consumptionbecause proceeds of corruption will generally be spent on itemssuch as
luxury vehicles, personal real estate, art or precious metals insteadof needed services such
as security and justice, health and education,infrastructure and jobs (Leasure,2016a, 2016b;
Hansen, 2014;Schott,2006).
Recognizing the importance of foreign official corruption, a vast majority of
countries have now passed laws aimed at combating this type of corruption, and
Canada is among that majority. However, the Canadian statute has faced substantial
criticism from the international community because of Canada’s lack of enforcement,
as there was only one conviction under the Act between 1999 and 2007.
This paper aims to gauge the current state of Canadian foreign official anti-bribery
policy. While there have been some efforts to explore Canadian policy in this area
(Mijares, 2015), it is important to conduct further analysis with updates and added
JFC
24,4
496
Journalof Financial Crime
Vol.24 No. 4, 2017
pp. 496-512
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-11-2015-0065
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1359-0790.htm
factors. To gauge Canadian anti-bribery policy here, several factors will be utilized.
Factors were conceptualized from points of emphasis noted by the Organisation for
Economic Co-operation and Development (OECD), and some are original. The paper
will first present an overview of the Canadian foreign official anti-bribery law. Then
the paper will address the factors. After reviewofthosefactors,itwillbepossibleto
paintacurrentpictureofCanadianforeignofficialanti-bribery policy.
Overview of the CFPOA
The Canadian foreign official anti-bribery act is contained in the Corruption of Foreign
Public Officials Act (CFPOA) and was enacted in 1998 [Corruption of Foreign Public
Officials Act (CFPOA) 1998]. The purpose of the Act is to recognize “the corruption of
foreign public officials and the implementationof the Convention on Combating Bribery of
Foreign Public Officials in International Business Transactions”(CFPOA Preamble). The
CFPOA makes it illegal for peopleor their agents to seek:
[...] an advantage in the course of business, directly or indirectly gives, offers or agrees to give or
offer a loan, reward, advantage or benefit of any kind to a foreign public official or to any person
for the benefit of a foreign public official. [Corruption of Foreign Public Officials Act (CFPOA),
1998]
There are several entities responsible for CFPOA oversight, investigation and prosecution.
In 2008, the Royal Canadian Mounted Police (RCMP) created two International Anti-
corruption Units which are overseen by an administrator whose position was created in
2005 [Royal CanadianMounted Police (RCMP), 2008]. Also, the Public Prosecution Serviceof
Canada “has created a seniorcadre of prosecutors with expertise in high profile and complex
cases, including foreign bribery”(OECD Phase Three Report Follow Up, 2013). In 2013,
Canada joined with Australian, US and UK agencies to establish the International Foreign
Bribery Taskforce which aimed to enforce corruption-related international obligations
(Osborne, 2013).
The Foreign Affairs, Trade and International Development Canada department also
handles CFPOA-related issues and introduced the Policy and Procedure for Reporting
Allegations of Bribery Abroad by Canadians or Canadian Companies. This group
developed some administrative investigatory and prosecutorial procedures (Mijares,
2015). Other Canadian entities dealing with the CFPOA include Export Development
Canada, the Canadian International Development Agency and the Canada Border
Services Agency (Osborne, 2013)[1].
Overview of international obligations
Canada has formal or informal attachments to several international entities aiming to
combat corruption. First, the Extractive Industries Transparency Initiative (EITI), whose
objective is to increase transparency in financialtransactions by ensuring that the revenues
from the extraction of natural resources benefit all citizens in their respective member
countries, requires member countries to disclose payments received from any oil, gas or
mining companies (EITI Guide,2015). Extractive industry companies doing businesswithin
the EITI member countries are encouraged to implement EITI standards when reporting
their taxes and other payments (EITI Guide, 2015). While Canada is not an EITI member
country, it is listed as a “supporting country”,meaning it participates in a pseudo advisory
role (Mijares, 2015).
Second, the Inter-American Convention Against Corruption (IACAC)was introduced by
the Organization of American States in 1996. Among other things, the IACAC regulates
Combatting
the global
crime of
bribery
497
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