10 | LEXPERT • June 2019 | www.lexpert.ca/usguide
rate practitioner and managing partner
of Burnet, Duckworth & Palmer LLP
in Vancouver.
"It's more important than ever that
companies that do business internation-
ally have strong controls in place that
create a strong audit trail. You have to be
very, very careful who you take as a local
business partner. You can't outsource
bribery. Especially with this new DPA
regime, if you go out of bounds, the stakes
are very serious."
Serious enough that SNC-Lavalin went
to the Federal Court of Canada to apply
for judicial review of the decision not to
offer it a DPA.
In SNC-Lavalin Group Inc.,
SNC-Lavalin International Inc. and
SNC-Lavalin Construction v e Direc-
tor of Public Prosecutions, handed
down in January, the court tossed out
the application.
"e principle of independence
requires that the attorney general act
independently of political pressures from
government and sets the Crown's exercise
of prosecutorial discretion beyond the
reach of judicial review," wrote Justice
Catherine Kane.
Robert Staley, a litigator at Bennett
Jones LLP, says the decision sends a clear
message that input from the government
in deciding whether to negotiate a specific
DPA is not welcome, despite the public-
interest component.
"e court says there's a high degree of
discretion in determining whether or not
to confer this," Staley says. "e decision
also talks about the Constitutional
independence of the attorney general in
making these decisions and whether or
not to interfere. e case says basically it's
going to be very difficult to interfere with
the exercise of prosecutorial discretion in
these agreements.
"is was something a rebuke to anyone
who thought it was okay to interfere with
the attorney general's decision-making.
You can't read it and not conclude that the
court was sending a message that it's not
okay. Deferred prosecution agreements
should be free from political interference.
You really can't read it otherwise."
holders are not destroyed by a few bad
actors who previously ran the company,
and were presumably involved in the
wrongdoing," she says. "With SNC, all
the top executives were gone."
Berman points out Canada's regime
requires the corporation admit wrongdo-
ing and pay significant financial penalties
as well as disgorgement. "If a corpora-
tion were tried and convicted, you would
probably remain somewhere around the
same amount in terms of financial penalty.
"I feel like a lot of people ignore that.
ey think the company's going to get
away with it, no one's going to be held
accountable. I can't understand that, that
somehow a corporation's buying its way
out of responsibility. ey start by admit-
ting responsibility.
"And any company that signs a DPA
it will have a lot of conditions on it for
improvement: enhanced compliance
regimes, a monitor – which can be very
costly – and a duty to report on the imple-
mentation of the conditions to the court."
If the company violates any of the terms,
the criminal prosecution will proceed.
Barman says any corporation
convicted on foreign bribery charges in
Canada is barred from bidding on large
federal projects not just in Canada, but in
many jurisdictions around the world for
five to 10 years, which might well lead to
its collapse.
Jon Levin, a corporate partner at
Fasken Martineau DuMoulin LLP in
Toronto, says "it's not appropriate to
punish innocent shareholders, innocent
employees, innocent retirees or custom-
ers by having a company penalized by a
conviction. It's quite different to penalize
the individual wrong-doers."
Canada's officers and directors are not
included in Canada's deferred prosecu-
tion regime, he says, only the corporation
itself. at means those involved in illegal
actions still face jail time and heavy fines
if convicted.
Mark Andrews, a partner at Fasken
in Vancouver, says he doesn't think the
Canadian public has a proper under-
standing yet of the "very real and heavy
consequences, both financial and other-
wise, of agreeing to a DPA."
e concern is aer the public blowout
over SNC, Canadian prosecutors may be
hesitant to use the new regime for fear of
controversy. In the US, where they've been
used since 1992, there were at least 24 agree-
ments negotiated in 2018, with $8.1 billion
recovered by regulators, according to
Gibson Dunn & Crutcher LLP.
Levin warns if Canadian authorities
unduly limit their use and instead rely
upon criminal prosecutions – which are
slow-moving in Canada with prosecutors
challenged to win convictions – the objec-
tive of remediation will be frustrated and
Canada will pay the price.
"In an internationally competitive
environment where Canada wishes
to attract foreign investment, it is not
helpful to have a less attractive Canadian
criminal law regime than our major
trading partners."
ings may be especially tough for
resource companies, which are forced to
do business where the reserves are — oen
countries where bribery and "facilita-
tion fees" are the norm. But any breach of
the Corruption of Foreign Public Officials
Act may render the Canadian company
ineligible for consideration of a DPA.
"It really affects the mining industry
and international oil and gas industry in
particular," says Grant Zawalsky, a corpo-
Business Issues
"If the organization is alleged to have
bribed a foreign public official, for example,
the prosecutor is not permitted to consider
Canadian economic interests, potential relations
with a state other than Canada or the identity
of the organization or the individual involved."
Carol Hansell, senior partner of Toronto's Hansell LLP
