Global Bribery and Corruption: Impact on Canadian Businesses

On July 1, 2011, the new Bribery Act 2010 came into effect in the UK, presenting many Canadian commercial organizations with new risks and challenges. The legislation can extend to any company which carries on any part of a business in the UK, regardless of where the company was incorporated. Canadian businesses with a connection to the UK need to carefully consider their existing anti-bribery procedures and whether their controls are up to the task.


To help you keep track of these developments, Deloitte’s advisory team has analyzed the new Bribery Act and has been carefully monitoring Canadian anti-bribery actions. Deloitte offers extensive anti-corruption advisory services helping clients manage bribery and corruption risks, and has been involved in some of the largest and most complex anti-corruption investigations and remediation efforts.

Download the Deloitte report (Global bribery and corruption and the impact on Canadian businesses) to understand the changing nature of anti-bribery legislation and enforcement, and how you can take steps to ensure your business is protected.

Global Anti-bribery and Corruption Survey 2011

In Canada, managing bribery and corruption risks has not assumed the importance and urgency seen in other jurisdictions. To date, Canada’s Corruption of Foreign Public Officials Act (CFPOA), has received little attention from corporations and enforcement by officials. This is in stark contrast to the situation in the United States where the Foreign Corrupt Practice Act (FCPA) is robustly enforced. However, there have been important developments on the Canadian anti-bribery and corruption (AB&C) front. The new reality for Canadian companies is one of increased AB&C enforcement activity, both at home and abroad.

KPMG Forensic commissioned a survey of 214 executives (106 in the US and 108 in the UK) who consider themselves “one of the most senior persons in charge of day-to-day AB&C matters at their company.” The three most significant AB&C compliance challenges cited by both US and UK respondents are auditing third parties for compliance, difficulty in performing effective due diligence on foreign agents/third parties, and variations in country requirements and local laws on issues, such as data privacy and facilitating payments.

(Read the Global Anti-bribery and Corruption Survey 2011.)

FATF-XXIII Calendar of Events (July 2011 – June 2012)

The Financial Action Task Force (FATF) year begins in July and ends in June. During this period, the FATF holds three plenary meetings, a meeting of experts on typologies and, depending on the focus of current work, inter-session meetings and meetings of various ad hoc groups. The plenary meetings usually take place in October, February and June of each year.

Most FATF Plenaries take place in the conference facilities of the OECD in Paris. The meeting of experts on typologies takes place in November of each year and is usually now held jointly with an FATF-style regional body in the country chosen by that body. All of these meetings are only open to delegations from FATF members, observer jurisdictions and observer organizations. They are not open to the public.

The FATF Calendar of Events includes the major FATF meetings along with the meetings of other FATF-style regional bodies and some international organizations that also deal with money laundering issues.

Risks and Responses to Organized Crime: Moving Beyond Cash

(Presentation by Jeanne M. Flemming, Director, Financial Transactions and Reports Analysis Centre of Canada, to the International Symposium on Economic Crime, Cambridge, England, September 7, 2011)

“The world continues to turn, and organized crime continues to mutate. In its 2010 report on organized crime, the Criminal Intelligence Service of Canada noted the changing nature of organized crime in Canada. Traditionally, organized crime was understood as a hierarchical structure comprised of culturally homogeneous groups, citing the examples of Italian, Russian or Albanian mafia. The new reality they describe is one where many organized crime groups are loosely structured, competitive networks with fluid linkages between members and associates, with a diverse range of leadership structures. I can confirm that we are seeing increasing evidence of these fluid structures in our own cases.”

“What is more, organized crime once involved cash-based crimes almost exclusively. As a response, anti-money laundering regimes were developed to combat the illegal profits from the illicit narcotics trade and the organized criminal networks that rose to global prominence three or four decades ago. The infusion of that criminal cash into the financial system was a grave risk that demanded a response. It gave rise to the creation of financial intelligence units, like the one that I head. It also brought regulatory controls and compliance obligations that will be familiar to those of you who work in banking, insurance and securities. In essence, what we have now is a system that was built to address that particular risk. The rules, like the crimes they were meant to address, were largely focused on cash transactions.”

“The question that it begs is: how well does such a system address other risks? In practical terms, can a system of rules intended to keep drug money out of the financial system be effective in addressing the risks posed by offences such as fraud and corruption or any number of other profit motivated crimes loosely grouped under the rubric of “white-collar crime?”

Laundering the Proceeds of Corruption

The Financial Action Task Force (FATF) has prepared a study, Laundering the Proceeds of Corruption, to show the links between corruption and money laundering. This typology report differs from other such typologies previously produced by the FATF because it draws from publicly available work undertaken by experts. The goal of the project was to better understand corruption, its mechanisms and vulnerabilities, through an AML/CFT lens.


The report identifies key vulnerabilities within the current framework and discusses some of the obstacles to the recovery of corruption. In addition to providing the basis for further examination of related issues, the report will serve as the catalyst for future FATF work in developing guidance or best practices on measures relevant to combating corruption. The FATF will continue to work on issues related to the use of tools in the fight against corruption (also refer to the report on the FATF’s Focus on Corruption).

Stupid fraud tricks

“It’s not uncommon to glamorize fraudsters. They are often clever, charming and cunning. Their schemes are frequently brilliant and breathtakingly bold. Even the words “con artists” used to describe them bestow a degree of respect and admiration for their accomplishments, immoral and illegal though they may be. Not all fraudsters, however, are deserving of our reluctant praise. In fact, for every Frank Abagnale, the master of fraud and false identity portrayed in the film Catch Me If You Can by actor Leonardo DiCaprio, there are myriad examples of bungling, clumsy and downright stupid fraudsters. In fact, the inept ones are more common than the inspired schemers. Nonetheless, they do evoke a certain response from fraud investigators — comic relief.”

(Read the article “Stupid fraud tricks” in the August 2011 issue of CAmagazine online.)

Money Laundering in Canada

Some authorities, including the Royal Canadian Mounted Police (RCMP), have found that money laundering is often related to organized criminal and/or terrorist activity. In recent years, the issue of money laundering has been highlighted as an emerging problem both in Canada and internationally. In Canada, it is estimated that the amount of money laundered on an annual basis is somewhere between $5 and $15 billion. Worldwide, it has been estimated that this figure may be $900 billion to $2.25 trillion (RCMP – Money Laundering, 2011).

According to the Criminal Code, money laundering, also referred to as laundering proceeds of crime, occurs when an individual or group uses, transfers, sends, delivers, transports, transmits, alters, disposes of or otherwise deals with, any property or proceeds of any property that was obtained as a result of criminal activity. This is done with the intent to conceal or convert illegal assets into legitimate funds.

An example of money laundering would involve a person who sells illegal drugs, and then uses the profit to purchase legal goods to sell through a legitimate business. Previous research suggests that money laundering schemes are often associated with the illegal drug trade or the defrauding and manipulation of Canada’s financial institutions.

(To learn more, see the Statistics Canada website and the June 2011 publication Money laundering in Canada, 2009.)