Bribery is a serious crime in Canada. Bribery refers to offering, promising, giving, accepting, or soliciting an advantage to induce an action that is illegal, unethical, or a breach of trust. Corruption refers to the abuse of power for private gain. Bribery and corruption of foreign government officials represent risks to the rule of law, and rules-based trade and investment.
Canada has enacted laws to fulfill anti-bribery and anti-corruption obligations under the United Nations Convention against Corruption[1] and the Inter-American Convention Against Corruption. [2] The Corruption of Foreign Public Officials Act [3] (“CFPOA”) criminalizes foreign bribery and corruption. The Criminal Code of Canada criminalizes domestic bribery [4]. The Freezing Assets of Corrupt Foreign Officials Act [5] provides powers to seize, freeze, or sequester property inappropriately acquired by foreign public officials.
Under the CFPOA it is an offence for a person, in order to obtain an advantage in the course of business, to offer a loan, reward, advantage or benefit to a foreign public official in return for an act or omission of an official or as an inducement.[6] It is also an offence to maintain deceptive books and records in order to bribe a foreign public official.[7] A person convicted of CFPOA offence may be liable to imprisonment for up to 14 years.
Enhanced Canadian anti-bribery and anti-corruption legislation seems likely. Observers have called for a more protective due diligence, and transparency measures. These new measures may include whistleblower protection, penalties for not preventing bribery, and the publication of investigations and prosecutions.
Managing Partner (Vancouver), Miller Thomson LLP
[1] Canada signed the UN Convention on May 21, 2024 and ratified on October 2, 2007.
[2] Canada signed the Inter-American Convention on June 7, 1999 and ratified it on June 6, 2000.
[3] S.C. 1998, c. 34.
[4] RSC, 1985, C-46. See section 118 (definition of official), section 119 (bribery of judicial officer) and section 120 (bribery of officers).
[5] S.C. 2011, c. 10.
[6] See subsection 3(1) (Bribing a foreign public official).
[7] See subsection 4(1) (Accounting).
On April 24, President Biden signed the Rebuilding Economic Prosperity and Opportunity for Ukrainians (REPO) Act, which allows the President to seize Russian sovereign assets in the United States and use them for Ukrainian reconstruction. Not surprisingly, the Russian government reacted immediately, promising to challenge REPO in court and threatening to retaliate against US assets in Russia. How realistic are these threats?
With respect to legal challenges in the U.S., the REPO Act provides that “any action that is taken under this section shall not be subject to judicial review.” Although the Act makes an exception for Constitutional challenges, it is not clear on what rights foreign governments have under the Constitution. For example, in the case of Republic of Argentina v. Weltover, 504 U.S. 607, 619 (1992), the Supreme Court “assum[ed] without deciding” that a foreign state is a “person” for purposes of the Due Process Clause, but simultaneously cited a Supreme Court decision holding that states of the United States are not “persons” for purposes of the Due Process clause. Moreover, even if the Russian government does have due process rights, as legal scholar Ingrid Brunk has explained, it is not clear that those due process rights are as extensive as the due process rights afforded to individuals before having their property confiscated. As Brunk points out, based on existing precedent, Russia’s property interests might be more similar to social security benefits, the deprivation of which does not require a prior judicial hearing.[1] In short, any legal challenge that the Russian government brings in U.S. court will likely get very complicated very quickly.
The prospects for retaliation under Russian law are also not clear. There are no U.S. sovereign assets in Russia, so an exact symmetrical response is not possible. But there are private U.S. assets in Russia. Even without the REPO Act, the Russian government has used new legislation to nationalize several foreign companies. Therefore, it is not surprising that it has threatened that private U.S. assets in Russia may be the first targets of retaliation. But there is some ambiguity in the official position, presumably the result of a desire to avoid scaring off what little Western investment remains. As former President and current Deputy Head of the Security Council Dmitry Medvedev wrote on his Telegram channel, “this is a complicated story…foreigners came to invest in the Russian economy. And we guaranteed the immunity of their private property rights. But then something unexpected happened – their government declared a hybrid war on us, which includes both legal and judicial aspects.”
In addition to the economic concern, there is also a (nominal) legal obstacle. Article 1194 of the Russian Civil Code currently allows the Russian government to impose “responsive restrictions” on the property of individuals and legal entities from countries that have imposed similar restrictions on Russian property. However, Article 1194 does not allow for complete confiscation. While the Russian government is frequently unconstrained by its own laws, Article 1194 is still worth watching because what the Russian government does with it may provide an indication of its future intentions. For example, Medvedev has proposed expanding Article 1194 to allow for confiscation of assets of “foreign legal subjects” from “unfriendly countries” a long list which, of course, includes the United States. As Medvedev wrote on Telegram, “America and Americans should pay for their criminal decisions.” Therefore, U.S. and other foreign companies with assets in Russia would be well advised to track Russian legislation for proposals and amendments which would allow for complete confiscation.
Partner, Squire Patton Boggs
After Germany launched a national supply chain due diligence initiative, the EU adopted its own supply chain sustainability act: the EU Corporate Sustainability and Due Diligence Directive (“EU CS3D”), likely to ensure common market standards.
The EU law will not only concern the supply chain, but will also cover the entire value chain – including the sales organization (the “chain of activities”). The EU law will address work safety and worker rights requirements, as well as environmental and sustainability requirements. While the EU law is similar to the German LkSG in that it will target smaller companies and require implementation of expectations within the entire chain of activities, the scope of the EU CS3d exceeds the scope of the German LkSG.
Companies subject to EU CS3D requirements will have to pursue a periodical risk analysis and define compliance measures to avoid human rights, environmental, and sustainability risks. Measures include a constant risk monitoring (covering the entire chain of activities), a Due Diligence Policy explaining the company’s human rights, environment, and sustainability approach, a concept and measures to implement the requirements within their chain of activities, a sustainability concept, a catalogue of mitigating measures in case risks materialize, a whistleblower hotline and an annual reporting process. Non-EU companies must appoint an authorized representative based in the EU, and EU Member States must set up supervising authorities, which shall receive the annual reports and monitor compliance with the EU requirements.
Companies will be liable for damages resulting from violations of the company’s human rights, environment, and sustainability approach within their chain of activities. However, companies will not be liable for damages only caused by their business partners if they themselves did comply with EU law. Penalties by supervisory authorities for non-compliance may go even beyond 5% of the global net-turnover (the minimum maximum limit).
Note: The EU CS3D will need to be implemented into the national laws of the EU Member States at the beginning of June 2026 to become effective.
Partner and Co-Head German Compliance Group, Dentons Europe (Germany)