CFPOA: Delayed Elimination of Facilitation Exception

In terms of the CFPOA, Canada’s Corruption of Foreign Public Officials Act, the Fighting Foreign Corrupt Act now under consideration by Canada’s parliament contains amendments to the CFPOA.  This includes the elimination of the exception for facilitation payments.  Canada’s facilitation payment exception is essentially similar to the facilitation payment exception under the FCPA.  Indeed, it is based upon the FCPA’s facilitation payment exception.

While the elimination of the facilitation payment exception has prompted considerable concern in some sectors of the Canadian business community, often overlooked is the sixth clause of the proposed legislation. Unlike other portions of the Fighting Foreign Corruption Act, the timing of the elimination of the facilitation exception is subject to the determination of the Governor in Council.  This is significant in that all other parts of the proposed legislation will automatically enter into force on Royal Assent.

In Canada, the Governor in Council is the Governor General acting on the advice of the federal cabinet.  By permitting the elimination of the facilitation exception on a day to be fixed by order of the Governor in Council, there is flexibility as to when the elimination for facilitation payments will take place.  In short, the elimination of the exception for facilitation payments will not be automatic.

At least in the near term, facilitation payments under the CFPOA will continue to be permitted.  Ultimately, assuming the Fighting Foreign Corruption Act is adopted in its present form, the CFPOA will prohibit facilitation payments once the exception is eliminated.  But the timing of such a step is apt take into consideration a number of factors, many of which are apt to be practical in orientation from the perspective of Canada’s business community.

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