Facilitation Payments Now Prohibited Under Corruption of Foreign Public Officials Act

The Government of Canada has removed the facilitation payment exception in the Corruption of Foreign Public Officials Act (CFPOA). The exception was repealed in 2013 by Bill S-14: An Act to amend the Corruption of Foreign Public Officials Act but was not proclaimed in force until October 31, 2017.

What You Need To Know

  • Starting October 31, 2017, facilitation payments—the payment of a loan, reward, advantage or benefit of any kind to foreign public officials in order to expedite or secure the performance by that foreign public official of any act of a routine nature—will constitute an offence under CFPOA.
  • These payments had previously been exempted from CFPOA's broad prohibition on providing benefits to foreign public officials.
  • Canada's repeal parts ways with the U.S. on this subject because the U.S. Foreign Corrupt Practices Act continues to include a facilitation payment exception.

Acts of a routine nature include:

  • the issuance of a permit, licence or other document to qualify a person to do business;
  • the processing of official documents, such as visas and work permits;
  • the provision of services normally offered to the public, such as mail pick-up and delivery, telecommunication services and power and water supply; and
  • the provision of services normally provided as required, such as police protection, loading and unloading of cargo, the protection of perishable products or commodities from deterioration or the scheduling of inspections related to contract performance or transit of goods.

Background

Under section 3(1) of CFPOA, it is an offence to offer or give 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 as consideration for an act or omission by the official in connection with the performance of the official's duties or functions. It is also an offence to induce the official to use his or her position to influence any acts or decisions of the foreign state or public international organization for which the official performs duties or functions.

Any contravention of section 3(1) is punishable by a term of imprisonment of up to 14 years.

Before its repeal, section 3(4) of CFPOA created an exception to this general prohibition for "facilitation payments." Facilitation payments are payments 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, including the issuance of permits or the processing of official documents.

To discuss these issues, please contact the author(s).

This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.

For permission to republish this or any other publication, contact Janelle Weed.

© 2017 by Torys LLP.
All rights reserved.

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