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Can Facilitating Payments be made to Foreign Officials?
Since the 1970's, the United States has prohibited its citizens and all corporations which are subject to its laws from paying bribes to foreign officials, through the Foreign Corrupt Practices Act. In order to level the playing field, the American Government has long tried to persuade other nations to adopt similar legislation.
Bowing to these requests, the Government of Canada passed the "Corruption of Public Officials Act", which came into force over a year ago, in February 1999. That Act makes it an offence to directly or indirectly give or offer to give a loan, reward, advantage or benefit of any kind to a foreign public official to induce that person to use his position or exercise his discretion in a certain way.
While that prohibition is very broad, the legislation is toned down by excluding from the offence any payment "made to expedite or secure the performance by a foreign public official of any act of a routine nature". The legislation then lists a number of acts which are deemed to be of a "routine nature", such as issuing licenses or permits, processing official documents, providing police protection, and scheduling inspections.
Specifically excluded from "acts of a routine nature" are decisions to award new business or to continue business with any party. Payments or offers made to obtain business are clearly illegal. The legislation does not specifically address the liability of directors of a corporation; however, the Criminal Code is very specific in that a person (such as a director) who aids and abets another person (the corporation) in committing an offence is also guilty of that offence. While the Canadian legislation is not as restrictive as the U.S. legislation, directors and other persons dealing with foreign officials should be cognizant of the additional liabilities impaired by this Statute.