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Ontario Court of Appeal Upholds Karigar Conviction for Bribery of Foreign Public Official

July 12, 2017 | Milos Barutciski and Sabrina A. Bandali

On July 6, 2017, the Ontario Court of Appeal upheld Nazir Karigar's conviction and three-year prison sentence for agreeing to bribe to a foreign public official contrary to the Corruption of Foreign Public Officials Act (CFPOA). Karigar had acted as an agent of Cryptometrics Canada, an Ottawa-area company, in pursuing a contract to supply security screening equipment to Air India. The trial judge determined that Karigar had agreed with other persons to bribe Indian public officials in order to win the contracts and sentenced Karigar to a three-year imprisonment for contravening section 3 of the CFPOA. The trial judge notably did not conclude that Karigar actually paid a bribe.

Karigar appealed his conviction on three grounds: (i) that there was an insufficient nexus between the elements of the offence and Canada to satisfy the "real and substantial" connection test for territorial jurisdiction; (ii) that a conviction on the basis of an "agreement" to pay a bribe requires the Crown to prove an agreement with a foreign public official; and (iii) that the trial judge erred with respect to the admissibility a co-conspirator's hearsay evidence.

The Court of Appeal rejected all three arguments. The first two issues are the more important for future corruption cases.

First, the Court of Appeal found that the trial judge had correctly applied the test for territorial jurisdiction from the Supreme Court of Canada's decision in R. v. Libman. A Canadian court can take jurisdiction over an offence if a significant portion of the activities that constitute the offence took place in Canada. The Court of Appeal confirmed that this does not mean that all of the elements of the offence must occur in Canada. Instead, the following facts were sufficient to establish the required real and substantial connection between Canada and the activity that gave rise to the offence:

  • Karigar was a Canadian citizen who approached a Canadian company with his corrupt proposal.
  • He acted as an agent or employee of the Canadian company in his negotiations with public officials.
  • The unfair advantages and fruits of the contract obtained through bribery would benefit a Canadian company.
  • The work under the contract would have been performed in Canada.
  • Nearly all of the documents and emails that evidenced the transaction and all of the witnesses were located in Canada.

Karigar had argued that the trial judge should have limited his territorial analysis to the essential elements of the offence and that the judge erred by taking a more expansive approach. The Court of Appeal took a broader view, noting that the bribery could not be hived off from the legitimate aspects of the underlying commercial transaction for the purposes of applying the real and substantial connection test.

The CFPOA was amended in June 2013 to allow the prosecution of Canadian citizens, permanent residents and companies regardless of where the activity occurs (nationality jurisdiction). The Karigar decision will therefore be less relevant for Canadians engaging in foreign corrupt practices after June 2013. However, since the CFPOA bribery offence is not subject to a limitation period, the Court of Appeal's broad view of the jurisdictional threshold will continue to be of relevance for conduct beginning before that date. Moreover, the real and substantial connection test will continue to apply to non-Canadian individuals and companies. As such, foreign executives traveling to Canada on business will potentially expose their companies and themselves to Canadian criminal liability if they engage in conduct in furtherance of a CFPOA offence while in Canada.

The Court of Appeal also adopted a broad interpretation of the substantive bribery offence under the CFPOA. Section 3 of the Act makes it an offence to give, offer or agree to give or offer a loan, reward, advantage or benefit of any kind (a "benefit") to a foreign public official in exchange for a business advantage. While it is clearly an offence to offer or give a benefit to a foreign official in exchange for a business advantage, an agreement to offer or give a benefit does not have to be with a foreign public official. As was the case in Karigar, the agreement may be between persons who wish to obtain an advantage, and who conspire to offer a bribe, regardless of whether any foreign official ever accepts it or is even aware of the agreement. The offence is complete once the agreement is concluded. So long as the agreement concerns a benefit for a foreign public official in the circumstances described in section 3 of the CFPOA, it will run afoul of the CFPOA.

The Karigar case is important for the development of anti-corruption law in Canada. By upholding an expansive application of the real and substantial connection test and a broad interpretation of the word "agree" in the context of the bribery offence, courts are asserting their ability to prosecute corrupt activity that substantially involves or benefits Canadians, regardless of how advanced a conspiracy to commit the crime may be.


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Milos Barutciski
Partner and Co-Head, International Trade and Investment Law
International Trade, Investment and Competition Lawyer at Bennett Jones Toronto

Milos Barutciski practises in the areas of international trade, investment and competition law, and other aspects of economic regulation and compliance. He co-chairs the firm's International Trade and Investment Practice and has represented Canadian and international clients in matters relating to foreign corrupt practices, export controls and trade sanctions, trade and investment treaties (including NAFTA and WTO) and international dispute settlement. He regularly appears in government procurement, antidumping and countervailing duty cases before the Canadian International Trade Tribunal and [...]

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Sabrina A. Bandali
Associate
International Trade, Regulatory and Investment Lawyer at Bennett Jones Toronto

Sabrina Bandali practices international trade, anti-corruption, and investment law. She represents Canadian and international clients in matters relating to customs law, export controls and sanctions, trade remedies, litigation, and investment disputes. She also provides strategic advice related to anti-corruption and regulatory compliance issues. [...]