Financial Crime World

Title: Canadian Crackdown on Financial Crimes: A Growing Focus on Corporate Misconduct and Foreign Bribery

Canada’s business environment continues to grow and evolve, leading regulatory bodies and enforcement agencies to intensify their efforts in combating improper and unethical business practices. In recent years, this focus has become increasingly pronounced, resulting in numerous legislative and operational changes.

Combating Improper Business Practices in Canada

Businesses operating within Canada and abroad must stay informed and compliant with the country’s complex web of laws, regulations, and governance requirements. To ensure compliance and detect potential violations, companies are advised to consult a team of experienced legal professionals with a national and international reach.

Overview of Selected Areas of Financial Crimes Enforcement

This article offers an overview of selected areas of financial crimes enforcement in Canada, including:

  1. Foreign corruption
  2. Antitrust/competition law
  3. Securities prosecutions

1. Foreign Corruption

The primary Canadian law addressing foreign corruption is the Corruption of Foreign Public Officials Act (CFPOA), enacted in 1998. Similar to the U.S. Foreign Corrupt Practices Act (FCPA), the CFPOA criminalizes offers or gifts intended to influence the actions of foreign public officials. Canada’s jurisdiction is broad, as it applies to both individuals and corporations based in or incorporated in Canada. Penalties for corporations include unlimited fines, probation, debarment, and forfeiture, while individuals can face up to 14 years in prison and unlimited fines.

Since 2011, there has been a marked increase in CFPOA enforcement, leading to several high-profile prosecutions.

2. Antitrust/Competition Law

Antitrust enforcement in Canada revolves around the Competition Act. The Act aims to eliminate anti-competitive conduct and promote market competition. The Act criminalizes price fixing and bid-rigging under sections 45 and 47, respectively, with penalties including imprisonment and fines of up to $25 million for individuals and corporations. Courts have shown a tendency to impose harsh penalties on antitrust offenses, leading to significant reputational and business damage for offending firms.

3. Securities Prosecutions

Securities regulation in Canada is the responsibility of each province and territory. Criminal and quasi-criminal provisions, such as insider trading and securities fraud, are part of the securities statutes. Penalties for securities offenses include imprisonment and fines. The Criminal Code also contains overlapping provisions related to securities offenses, although these provisions are rarely utilized.

As the fight against financial crimes intensifies, businesses must ensure they are prepared to navigate the complex legal landscape in Canada and abroad. Gowling WLG’s White Collar Crime/Corruption team stands ready to provide expert counsel and representation in matters related to foreign corruption, antitrust, securities, and more.

Other Financial Crimes Enforcement Areas

Below are brief summaries of additional areas of financial crimes enforcement in Canada:

  • Fraud: Criminal fraud charges can be brought under the Criminal Code, which includes offenses related to false statements, forgery, and embezzlement. Penalties include imprisonment and fines.
  • Corporate criminal liability: Corporations can be held liable for criminal offenses under the Criminal Code, subject to the “identification principle,” which requires proving that the corporation, as a distinct legal entity, committed the offense.
  • Regulatory prosecutions: Regulatory bodies, such as the Canadian Securities Exchange and the Competition Bureau, can bring administrative or regulatory charges for violating their respective regulations. Penalties include fines and licensing sanctions.
  • Private prosecutions: Private individuals or organizations can bring criminal charges against suspects, subject to certain limitations and requirements.
  • Anti-money laundering and terrorist financing: Financial institutions and designated non-financial businesses and professions are required to adhere to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to prevent money laundering and terrorist financing activities. Penalties include fines and potential jail time for individuals and entities.
  • Whistleblower protections: Whistleblower protections are in place under both provincial labour laws and the Criminal Code, offering anonymity and protection from reprisal for reporting instances of fraud, corruption, or other wrongdoing.

[Editor’s note: To learn more about regulations concerning fraud, corporate criminal liability, regulatory prosecutions, private prosecutions, anti-money laundering, and whistleblower protections in Canada, please refer to the original article.]