One government’s corrupt practices are sometimes another government’s business as usual. But as Canada and foreign governments start cracking down on corruption, it’s best to have a heads-up about how to protect your company and your clients.
Presenters Michael Dixon, a partner with Blake, Cassels & Graydon LLP, Marke Kilkie, Senior Counsel with the Public Prosecution Service of Canada, Samuel Schwisberg, General Counsel & Corporate Secretary with the Canadian Red Cross, and Sean Murphy of Gowling Lafleur Henderson LLP headed a PD session at the recent 2014 CBA Legal Conference in St. John’s that addressed this topic.
Risk identification, they said, isn’t as easy as you’d think: the only time suitcases full of cash are handed over is when the cameras are rolling in Hollywood. Clients and companies operating in foreign companies have to beware of the less obvious bribe, things like:
- Kickbacks
- fees, commissions, “fines” when payable to an individual
- gifts
- hospitality/entertainment
- travel
- employment
- favours or other services
- charitable or political contributions
- retention of certain government-friendly agents and contractors.
They offer these as red flags to watch out for:
- agent is recommended by the potential government customer
- country with reputation for widespread corruption
- unusual or excessive commissions or fees
- requests for cash payment or payment to offshore accounts or request to alter or backdate invoices
- public reports or inferences of improper payments
- unwillingness to involve or inform superiors or to certify compliance
- lack of facilities or qualified staff
- lack of experience or track record in the field or industry
- close relationships or family ties to government officials
- murky ownership structures
There are ways to mitigate the risk:
- hire only reputable, trusted agents
- conducting due diligence
- anti-corruption contractual obligations
- compliance certification
- supervision and ongoing monitoring.
Source: Law and Border: Practical tips for complying with Canada’s foreign corruption laws