INTERNATIONAL DIMENSIONS OF ANTI-BRIBERY LAWS

• Jurisdiction: Derecho Internacional

International Mining and Oil & Gas Law, Development and Investment
(Apr 2009)
CHAPTER 22A
INTERNATIONAL DIMENSIONS OF ANTI-BRIBERY LAWS
Cliff Sosnow
Partner
Prakash Narayanan
Associate
Elysia Van Zeyl
Associate
Courtney Fitzpatrick
Student-At-Law
Blake, Cassels & Graydon LLP
Ontario

Cliff Sosnow is a Partner and head of the International Trade & Investment Group at Blake, Cassels & Graydon LLP. Previously, Cliff was senior litigation counsel to the Canadian Department of Foreign Affairs and International Trade and in-house counsel to the Canadian International Trade Tribunal. Cliff advises major corporations, industry-leading associations and governments on cross-border trade and investment issues involving foreign bribery and corruption compliance, compliance with international agreements, bilateral investment treaty arbitration, WTO law, unfair subsidy complaints, antidumping disputes, economic sanctions, export/import licences, and procurement disputes. He litigates before the Canadian International Trade Tribunal, NAFTA investor-state and WTO panels. As well, he was nominated as an arbitrator by Canada to hear NAFTA trade disputes. Cliff's professional activities include: Chair, Inter-Pacific Bar Association International Trade Committee; Vice-chair, Trade Committee of the Business and Industry Advisory Committee (BIAC) to the OECD; Co-chair, Canadian Chamber of Commerce International Affairs Committee; Immediate Past Chair, Canadian Bar Association Section on International Law; Chair of the Board Management, Canada Europe Roundtable for Business; and Immediate Past Vice-chair, Canadian Association of Importers and Exporters. He also received the Queen Elizabeth II Jubilee medal for his service to the Canadian business community. He is a frequent speaker at conferences, has made several media appearance on television and radio, and is routinely published and quoted in newspapers and legal journals. Cliff is recognized as one of Canada's leading international trade and investment lawyers by Chambers Global: The World's Leading Lawyers for Business, The Canadian Legal Lexpert Directory, The Best Lawyers in Canada, and Legal Media Group's Guide to the World's Leading International Trade Lawyers.

Prakash Narayanan is an Associate in the Toronto office of Blake, Cassels & Graydon LLP practising in the Business and International Trade & Investment Groups and is also a member of the Firm's India Practice Group. He has been involved from a corporate and competition law perspective in a number of merger transactions involving major Canadian and foreign companies. He has also assisted clients with international trade matters involving cross-border movement of goods and services and compliance with WTO and NAFTA requirements. Prakash has received his LL.M. in international trade law, and has also completed an intensive course in Europe on trade law and business. He has previously worked for the Canadian International Development Agency and for KPMG, and has published a number of articles in the areas of international trade law, competition law and aspects of the commercial law in India. In 2005, Prakash taught an intensive course on India's new competition law at the National Law School of India, Bangalore. Prakash is a member of the Indo-Canada Chamber of Commerce and sits on the board of the South Asian Bar Association of Toronto. He is a fellow of the CUTS Centre for Competition, Investment and Economic Regulation in Jaipur, India, and has also been called to the bar in India.

Elysia Van Zeyl is an Associate in the Ottawa office of Blake, Cassels & Graydon LLP practising in the Business and International Trade & Investment Groups. She advises corporations, industry associations and governments on cross-border issues, including export and import licences, customs valuation, tariff classification, commodities tax, procurement and compliance with international agreements. She has also acted for clients in antidumping and countervailing duty disputes at the Canadian International Trade Tribunal and in judicial reviews at the Federal Court of Appeal. She has published articles on a number of trade law issues, including the application of the International Traffic in Arms Regulations to Canadian citizens of dual nationality.

Courtney Fitzpatrick is an Articling Student in the Ottawa office of Blake, Cassels & Graydon LLP. She completed her LL.B. at the University of Ottawa and Honours Bachelor of Arts in Political Science at the University of Western Ontario. Courtney has worked as a Co-ordinator at Pro Bono Students Canada and a Credit Analyst at Citi Commerce Solutions. She has volunteered at Pro Bono Students Canada in the Family Law Information Center, Canadian Alliance for Animal Assisted Services, and Immigrant Women Services Ottawa.

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Introduction

The presence of bribery and corruption in international business transactions have not gone unnoticed by the international community. Companies engaged in such practices, whether in Latin America or elsewhere, run a serious risk of steep monetary penalties, reputational damage and potential for the personal liability of individuals who act for the corporation, particularly in light of increasingly vigorous enforcement regimes worldwide. Recent scandals involving major multinational corporations have spurred a renewed focus on corporate compliance strategies in respect of international anti-bribery obligations. Accordingly, companies are well advised to become educated on the restrictions of doing business in international markets. In particular, since domestic anti-bribery legislation that incorporates international agreements on the subject into domestic law purports to extend their reach beyond nationals (individuals and entities) wherever in the world they may be situated, companies operating abroad must be cognizant of the anti-bribery laws of their home as well as their host jurisdictions.

International Anti-Bribery Regimes

Prohibitions on bribery and corruption in international business are codified in a number of multilateral instruments. There is a degree of overlap between these conventions; however, they differ in terms of geographical coverage and the extent of their obligations. Due to the international character of these Conventions, and the fact that they have been incorporated into the domestic laws of signatory states, they impact Latin American companies operating in each others' jurisdictions and a vast array of other international business arrangements, such as Canadian and U.S. companies operating in Latin America and Latin American companies operating in Canada and the U.S.

The OECD Convention

With input from the World Bank, the OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions ("OECD Convention") was adopted by 37 signatory countries in 1997 and officially came into force in 1999.¹ Several Latin American countries have adopted and implemented the OECD Convention including, in particular, Argentina, Brazil, Chile and Mexico. Canada and the U.S. have incorporated the OECD Convention into their domestic laws and based their foreign public officials anti-bribery legislation on the OECD Convention. This paper discusses the Canadian legislation in greater detail in subsequent sections.

The OECD Convention requires its members to criminalize the offering, promising and giving of any undue pecuniary or other advantage, whether directly or through intermediaries, to foreign public officials in order to obtain or retain business or any other improper advantage in the conduct of international business.² Further, each party is required to implement measures

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making complicity in bribery or corruption an offence, thus criminalizing an attempt or conspiracy to bribe a public official.³ The OECD Convention requires that the criminal penalties applicable in cases of bribery be "effective, proportionate and dissuasive" and further calls on parties to "consider" imposing additional civil or administrative sanctions for bribery offences.⁴ Signatories to the OECD Convention are also required to prohibit the creation of off-book accounts and other objectionable record-keeping practices.⁵ Moreover, the OECD Convention provides for the creation of a Working Group to continually monitor the progress of each signatory in implementing the OECD Convention.⁶

There remain a number of lacunae in the OECD Convention, and as a result, it does not provide a complete response to the issues of bribery and corruption. It is limited in scope in that it does not require its signatories to criminalize...