Deferred prosecution agreement (Canada)

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In Canada, a deferred prosecution agreement (DPA) or remediation agreement refers to deferred prosecution legislation, an enhancement of the Integrity Regime, enacted in June 2018 through provisions in the omnibus budget implementation Bill C-74, that amended the Criminal Code.[1][2] (Criminal Code of Canada (R.S.C., 1985, c. C-46) Part XXII.1 Para 715.3.) Through the DPA, sentencing and remediation agreements are negotiated under the supervision of a judge, between federal prosecuting authorities and a corporation charged with an offence, usually in the context of fraud and/or corruption.

Remediation regime[edit]

In their March 27, 2018 press release, the Public Services and Procurement Canada (PSPC) announced an enhancement of the "government-wide Integrity Regime",[Notes 1] which it described as a "made-in-Canada version of a deferred prosecution agreement (DPA) regime, to be known as a Remediation Agreement Regime".[3]

According to the Law Times, the DPA changes the way Canadian courts prosecute white-collar crime which includes a remediation system whereby offenders can avoid conviction if "they co-operate with the Crown and the courts".[1] The Times, cited Ottawa-based counsel Patrick McCann, who said that the DPA would "bring Canada in line with many other countries that have deferred prosecution agreements, including the U.S., the U.K. and most other European countries".[1] According to McCann, the DPA "addresses the unfairness of the situation when you have a large company that has a rogue senior officer" who has committed a crime with the entire company getting blamed.[1] McCann said that the DPA is fair to investors in companies who are innocent of any wrongdoing.[1]

The legislation states that, in the case of Corruption of Foreign Public Officials Act, the prosecutor "must not consider the national economic interest, the potential effect on relations with a state other than Canada or the identity of the organization or individual involved."[4][5]

Through the regime, companies have added incentives to comply and to "self-report potential wrongdoing".[6] According to John Boscariol, except for a few cases in the early 2010s, Canada has been slow to enforce its anti-bribery law, partially because it lacked the tools, such as a deferred-prosecution agreement regime.[6]

The main purposes of a remediation agreement are to "denounce an organization’s wrongdoing and the harms that such wrongdoing has caused to victims or to the community; To hold the organization accountable for the wrongdoing; To require the organization to put measures in place to correct the problem and prevent similar problems in the future; To reduce harm that a criminal conviction of an organization could have for employees, shareholders and other third parties who did not take part in the offence; and To help repair harm done to victims or to the community, including through reparations and restitution."[7]

Background[edit]

Since the 1990s, the United States has used deferred prosecution (DPA) against corporate corruption through the Foreign Corrupt Practices Act.[8][Notes 2]

In 2014, the United Kingdom introduced DPA legislation "for use by the Crown Prosecution Service (CPS) and the Serious Fraud Office (SFO)" in foreign bribery settlements. In 2017 the UK broadened their use to include tax evasion cases.[9] In France DPA became law in December 2016.[10] The Minister of Justice of Australia introduced a federal DPA regime in 2017.[3]

In 2015, the Canadian government introduced the Integrity Regime, operating under Public Services and Procurement Canada (PSPC) to "ensure the government does business only with ethical suppliers in Canada and abroad."[11]

Discussions about the potential establishment of deferred prosecution agreement (DPA) legislation in Canada began in February 2016. Prior to the DPA, Canada already had "prosecutorial discretion" in place, which "made it possible for offending companies to negotiate a non-criminal penalty for a criminal act".[5]

A July 2017 Transparency International Canada (TI Canada) report entitled, "Consideration of a Deferred Prosecution Agreement Scheme in Canada, compared DPA models in effect in the United States and the UK. Prior to the DPA coming into force, Canadian prosecutors only had two options: "prosecute and charge alleged offenders, or decide not to prosecute alleged offenders".[12][13]

Public consultation process (July - November 2017)[edit]

In September 2017, the Government of Canada announced a public consultation "regarding the possibility of adopting deferred prosecution agreements (DPA) as a new way of addressing corporate criminal liability" and published a position paper entitled "Consultation: Expanding Canada's toolkit to address corporate wrongdoing". [14] PSPC also provided a web page to guide discussion.[15]The consultation was regarding "potential enhancements to the recently implemented Integrity Regime" which could include the implementation of a DPA in Canada, similar to the one adopted in the United Kingdom to respond to corporate wrongdoing.[12] Public Services and Procurement described the potential DPA as a means of ensuring "corporate criminal conduct" is subject to effective, proportionate and dissuasive penalties" while mitigating "unintended consequences associated with a criminal conviction for blameless employees, customers, pensioners, suppliers and investors. Additionally, in some cases, a criminal conviction could lead to job losses and wider negative implications to the economy."[16] During the public consultation period, the government received 75 written submissions and heard from "hundreds of Canadians, industry associations, businesses, non-governmental organisations, and others."[8]

The report on the public consultation process, which was released on February 22, 2018, said that a "majority of Canadian stakeholders supported introducing DPAs using the UK regime as a model."[8] The report noted "widespread support" for the application of a "narrow scope of serious economic offences such as fraud, bribery and money laundering" that was "offered at the discretion of the prosecution, applying aggravating and mitigating factors as specifically outlined in legislation", and supervised by a judge to ensure the DPA is "fair, reasonable, and proportionate". They wanted the DPA to be "transparent and public" and include a "mandatory publication".[8]

DPA in force[edit]

In June 2018 Canada enacted a DPA through provisions in the omnibus budget implementation Bill C-74, that amended the Criminal Code.[17][1][2][18]

According to Dalhousie University's Graham Steele—a Rhodes Scholar, lawyer and former provincial finance minister in Nova Scotia—"investigating and prosecuting...transnational corruption cases can be incredibly difficult, time consuming and expensive".[19] Criminal court cases take years to complete and it is very difficult for prosecutors to prove beyond a reasonable doubt that the defendant is guilty.[19] Steele explained that in Canada, while the "attorney general has to sign off on a DPA", the AG does not initiate or request that a prosecutor initiate a DPA.[19]

SNC-Lavalin[edit]

Quebec construction company SNC-Lavalin was one of the first major companies in Canada to seek the deferred prosecution agreement.[20][21]

Notes[edit]

  1. ^ The Integrity Regime was introduced in 2015 and operates under Public Services and Procurement Canada (PSPC). The PSPC reviews cases to determine "whether a supplier is ineligible to do business with the government" usually in terms of "procurement and real property transactions over $10,000". The Remediation agreement regime, Canada's deferred prosecution agreement, was established as an enhancement of the 2015 Integrity Regime through Bill C-74.
  2. ^ According to Financier Worldwide Magazine in the United States, "DPAs are governed by policy and practice rather than binding regulations. Prosecutors may offer a DPA in respect of any federal offence (with some exceptions)."

References[edit]

  1. ^ a b c d e f Smith, Dale (June 4, 2018). "Bill aims to change way white-collar crime punished". Law Times. Retrieved February 13, 2019.
  2. ^ a b Joseph, Rebecca (February 13, 2019). "Charges against SNC-Lavalin explained — and how the PMO allegedly got involved". Global News. Retrieved February 13, 2019.
  3. ^ a b "Canada to enhance its toolkit to address corporate wrongdoing". Public Services and Procurement Canada (PSPC) (Press release). March 27, 2018. Retrieved February 18, 2019.
  4. ^ Branch, Legislative Services (December 18, 2018). "Consolidated federal laws of Canada, Criminal Code". Retrieved February 18, 2019.
  5. ^ a b Harris, Michael (February 15, 2019). "Why Wilson-Raybould Was Right". The Tyee. Retrieved February 18, 2019.
  6. ^ a b Rubenfeld, Samuel (March 29, 2018). "Canada Unveils Its Version of a Deferred-Prosecution Agreement". Wall Street Journal. Retrieved February 22, 2019.
  7. ^ "Remediation Agreements and Orders to Address Corporate Crime". Department of Justice. Backgrounder. March 27, 2018. Retrieved February 22, 2019.
  8. ^ a b c d "Deferred prosecution agreements to be introduced in Canada". Financier Worldwide. Retrieved 2019-02-22.
  9. ^ Wells, Jennifer (February 15, 2019). "The U.K.'s deferred prosecution agreements are instructive for the SNC-Lavalin drama". The Star. Retrieved 2019-02-22.
  10. ^ "Deferred Prosecution Agreement (DPA) | Practical Law Canada". Retrieved 2019-02-22.
  11. ^ Government of Canada (2016-09-15). "About the Integrity Regime - Government of Canada's Integrity Regime - Accountability - PSPC". Public Services and Procurement Canada (PSPC). Retrieved 2019-02-23.
  12. ^ a b PricewaterhouseCoopers. "Does Canada need a deferred prosecution agreement process?". PwC. Retrieved 2019-02-22.
  13. ^ "Deferred Prosecution Agreements are Coming to Canada". BLG. Retrieved 2019-02-22.
  14. ^ Government of Canada, Public Services and Procurement Canada (2017-09-18). "Consultation: Expanding Canada's toolkit to address corporate wrongdoing - Government of Canada's Integrity Regime - Canada.ca". Retrieved 2019-02-22.
  15. ^ Government of Canada, Public Services and Procurement Canada (2017-09-18). "Expanding Canada's toolkit to address corporate wrongdoing: The deferred prosecution agreement stream discussion guide - Deferred prosecution agreement consultation - Consultation - Government of Canada's Integrity Regime - Canada.ca". Retrieved 2019-02-23.
  16. ^ Government of Canada, Public Services and Procurement Canada (2017-09-18). "Deferred prosecution agreements consultation: Expanding Canada's toolkit to address corporate wrongdoing - Consultation: Expanding Canada's toolkit to address corporate wrongdoing - Government of Canada's Integrity Regime - Canada.ca". Retrieved 2019-02-22.
  17. ^ "Deferred Prosecution Agreements (DPAs) come into force in Canada". Osler, Hoskin & Harcourt LLP. Retrieved 2019-02-22.
  18. ^ "Government Introduces "Made-In-Canada" Deferred Prosecution Agreement framework - Criminal Law - Canada". Retrieved 2019-02-22.
  19. ^ a b c Corbella, Licia (February 14, 2019). "DPAs are good law; Wilson-Raybould's treatment another story". Calgary Herald. Retrieved February 22, 2019.
  20. ^ "What is a remediation agreement? Meet the legal tool sought by SNC-Lavalin | CTV News". Retrieved 2019-02-22.
  21. ^ "What does it take to get a deferred prosecution agreement? - Macleans.ca". Retrieved 2019-02-22.