It remains illegal under the Canadian Corruption of Foreign Public Officials Act (“CFPOA”) to bribe foreign officials. While this statement may be self-evident, recent developments south of the border prompt this reminder to Canadian businesses that acts of foreign bribery and corruption remain illegal in Canada (as is domestic bribery of public officials and business representatives). Nevertheless, these developments could affect cooperation between Canadian and U.S. law enforcement.
Stikeman Elliott practices only Canadian law and is happy to assist with matters relating to the CFPOA. U.S. counsel should be consulted with respect to U.S. foreign corrupt practices law.
U.S. Executive Order
On February 10, 2025, President Trump issued an executive order (EO) pausing enforcement action related to alleged offences under the Foreign Corrupt Practices Act (FCPA). We understand that, although framed as a pause in enforcement by the U.S. Attorney General pending a review of investigations and enforcement actions, the review can be extended, potentially creating the possibility that FCPA investigations will be a lower priority going forward. Because the United States has long played the leading role in promoting the adoption and enforcement of foreign anti-corruption laws worldwide, the question arises as to whether the EO could lead to a change in Canadian foreign corruption enforcement. In short, we think not but it may have implications for U.S.-Canada cooperation on enforcement actions.
Canadian Law
Other Western countries, including Canada, have not enacted similar reviews and continue to pursue anti-corruption enforcement. For businesses operating outside the United States, the EO obviously does not suspend enforcement of non-U.S. anti-corruption laws. In Canada, these laws include the CFPOA which remains in force and criminalizes the bribery of a foreign public official (defined broadly to include some business representatives) and the maintenance or destruction of books and records to facilitate or hide the bribing of a foreign public official. Violations of the CFPOA remain punishable by imprisonment for up to 14 years for individuals as well as large fines and debarment from government contracts for businesses.
The EO does not affect any of the RCMP’s ongoing investigations and will not prevent the RCMP from laying charges against businesses and individuals in the future. It may however have implications for cooperation between Canadian and US foreign corruption law enforcement which was until the EO generally understood to be robust.
Effects on Canadian Enforcement Efforts
It remains to be seen whether the EO will ultimately affect the number of cases investigated and prosecuted by Canadian law enforcement.
Historically, Canada has been criticized for underenforcing the CFPOA. As part of its 25th report to Parliament in 2024, Global Affairs Canada noted that since the CFPOA came into force in 1999, there have been seven convictions and one remediation agreement (in addition to two current cases in which charges have been laid but not yet concluded and 23 active investigations). The limited number of successful prosecutions has led to substantial criticism of Canada’s anti-corruption regime in the past, although it is worth noting that these criticisms rest on an unproven assumption that there is substantial undetected foreign corruption by persons required to comply with the CFPOA.
The contrast in enforcement records between Canada and the U.S. is stark: as noted, Canada has secured seven convictions since 1999; there were 26 U.S. FCPA-related enforcement actions commenced in 2024 alone (including 16 matters which have concluded with over US$1.7 billion in penalties imposed), with 31 companies under investigation by year end. This is slightly below the 10-year average of 36 FCPA-related enforcement actions per year. The pause on FCPA-related enforcement actions could lead Canada to increase its enforcement of the CFPOA as Canada may not be able to rely on the threat of U.S. enforcement against Canadian companies operating abroad.
Canadian businesses and anyone else within the jurisdictional reach of the CFPOA should at the very least for the foreseeable future operate on the assumption that Canada will continue to investigate and where warranted prosecute foreign bribery and corruption.
Compliance Policies
Finally, businesses may take this opportunity to reflect on their existing anti-corruption compliance policies to ensure that they are up to date and implement a robust risk-based approach detecting and preventing acts of corruption and bribery. A business’ compliance risk is industry and fact specific. An effective compliance policy will be tailored to the specific risk profile of the business.
- Management Buy-In. An anti-corruption policy may effectively detect and deter violations of the law if there is culture of compliance that begins with buy in to the objectives by management. Businesses must ensure that compliance with the law is not only expected but required in the ordinary course at all levels of a company.
- Regular Training and Education. Employees and other stakeholders should receive regular training to ensure they remain knowledgeable about their obligations to properly comply with the law as well as any company policy.
- Effective Monitoring and Reporting. A compliance policy should ensure there are mechanisms in place to properly monitor and report violations of both the policy and the law. There should be a named and designated individual with the responsibility to ensure such monitoring and reporting takes place.
- Policy Review and Update. A policy should be reviewed and updated regularly (often yearly) to ensure it properly incorporates the current state of the law.
Please note that Stikeman Elliott practices Canadian law exclusively and is able to advise on Canadian aspects of the issues discussed above. U.S. counsel should be consulted with respect to issues arising under the EO and FCPA.
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