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Canada Should Say No

To DPAs

TI-Canada Legal Committee


June 17, 2015
Professor Mike Koehler
(C) FCPA Professor LLC
Cheerleaders
Political Actors
FCPA / Bribery Act / CFPOA Inc.
Civil Society
Corporate Actors

(C) FCPA Professor LLC


Time-Out
Starting Premise
More enforcement of bribery and corruption laws is
not necessarily an inherent good
In legal systems based on the rule of law, quality of
enforcement is more important than quantity of
enforcement

(C) FCPA Professor LLC


Fact
Prior to NPAs and DPAs being introduced to
FCPA enforcement in 2004, 90% of corporate
FCPA enforcement actions resulted in a
related enforcement action against company
employees
Fact
Since NPAs and DPAs were introduced to the
FCPA context in 2004, 76% of corporate FCPA
enforcement actions have not resulted in any
related enforcement action against company
employees
Why These Facts Matter
A corporate action can only result from
conduct by real human beings
The DOJ has long recognized that corporate
FCPA enforcement alone is not effective and
has stated on repeated occasions that
individual enforcement is a cornerstone of
its FCPA enforcement program and that it will
aggressively charge individuals
Two Ways To Analyze
Why was nobody charged?
Do NPA and DPAs necessarily represent
provable FCPA violations?
Relevant Data Point
Since NPAs and DPAs were introduced to the
FCPA context in 2004, if a corporate DOJ FCPA
enforcement action is resolved solely with an
NPA or DPA, there is a 9% chance that criminal
charges will be brought against a company
employee.
Conclusion
NPAs and DPAs do not necessarily represent
provable FCPA violations and contribute to a
faade of FCPA enforcement
A way for the DOJ to show results without proving
anything
[Companies] know that they will be answerable even
for conduct that in years past would have resulted in a
declination (DOJ)

(C) FCPA Professor LLC


Conclusion
Risk averse business organizations agree NPAs
/ DPAs regardless of the law or facts because it
is easier, more certain, and more time and
cost efficient than the alternative

(C) FCPA Professor LLC


Policy Rationales For DPAs
Achieve deterrence
Incentivize companies to voluntary disclose
Avoid severe collateral damage

(C) FCPA Professor LLC


Dont Believe the Hype
Deterrence
Legal persons cant be deterred
Measuring the impact of NPAs and DPAs in deterring
the bribery of foreign public officials would be a
difficult task, save providing certain anecdotal and
other circumstantial evidence (DOJ)
Several companies that have resolved enforcement
actions via NPAs or DPAs have since committed
additional legal violations or been under scrutiny

(C) FCPA Professor LLC


Dont Believe the Hype
Incentivize voluntary disclosure
There is no evidence to support this and most
FCPA violations are never disclosed by business
organizations
In any given year, there are approximately 7-10 DOJ
corporate FCPA enforcement actions

(C) FCPA Professor LLC


Dont Believe the Hype
Collateral Damage
The Arthur Anderson Effect is a Myth
Arthur Anderson and the Myth of the Corporate Death
Penalty
DOJ officials have acknowledged the myth
Recent events have debunked the myth
Public companies that have been criminally indicted
Public companies that have agreed to DOJ plea
agreements

(C) FCPA Professor LLC


Corporate Criminal Liability
In the U.S., NPAs and DPAs were a reaction to
the de facto strict liability feature of
respondeat superior corporate criminal
liability

(C) FCPA Professor LLC


Corporate Criminal Liability
The U.K. and Canada do not have respondeat
superior corporate criminal liability
In Canada, generally speaking, a "senior
official" must be involved in the improper
conduct for there to be corporate criminal
liability

(C) FCPA Professor LLC


Question to Address
Why does a legal regime with an exacting standard of
corporate criminal liability need a third option (beyond
the two options of prosecute vs. not prosecute)?
To the extent the conduct at issue was engaged by
someone other than a senior officer, there is no need for a
third option of DPAs because there is no corporate criminal
liability as matter of law
To the extent the conduct at issue was engaged in by a
senior officer, the binary option of prosecute vs. not
prosecute is a just and reasonable option a third option
represents under prosecution of corporate crime

(C) FCPA Professor LLC


Contact Information
www.fcpaprofessor.com
fcpaprofessor@gmail.com
@fcpaprofessor

(C) FCPA Professor LLC