Snc Lavalin Companies House

[Nikita Desjardins]

InFebruary 2015, the Royal Canadian Mounted Police (RCMP) charged leading Canadian construction and engineering company SNC-Lavalin Group Inc in connection with alleged fraud relating to the construction of a Montreal hospital and alleged bribery of foreign officials in Libya. Following the initiation of the investigation, the company replaced its senior management and board and introduced robust compliance policies and procedures. SNC-Lavalin pleaded not guilty to the charges and, in May 2019, a judge of the Court of Quebec in Montreal determined that the Crown had met the evidentiary burden to commit the company to trial. The case is widely expected to set an important benchmark for corporate criminal liability in Canada.

It was expected by many observers of the matter that the recent enactment of amendments to the Criminal Code introducing deferred prosecution agreements in Canada (known as remediation agreements) would lead to a possible negotiated settlement of the charges. However, the company was informed by the Director of the Public Prosecution Service of Canada in early October 2018 that the prosecution was not prepared at that time to initiate negotiations for a remediation agreement.

For offences that require the prosecution to prove fault (apart from negligence), a corporation will be a party to an offence, if, with the intent at least in part to benefit the organisation, one of its senior officers (1) acting within the scope of his or her authority, is a party to the offence, (2) having the mental state required to be a party to the offence and acting within the scope of their authority, directs the work of other representatives of the organisation so that they carry out the act or make the omission specified in the offence, or (3) knowing that a representative of the organisation is or is about to be a party to the offence, does not take all reasonable measures to stop them from being a party to the offence.

The law enforcement authorities most frequently encountered by corporations are the Canadian Competition Bureau (which enforces the Competition Act), the RCMP (which typically investigates alleged breaches of the Corruption of Foreign Public Officials Act as well as complex, multi-jurisdictional terrorist financing and money laundering offences proscribed by the Criminal Code) and the provincial securities regulators (which enforce provincial securities legislation). There are no specific policies pertaining to the prosecution of corporations.

No particular threshold of suspicion is required. However, to take investigative steps that involve compelling the production of documents from the target of the investigation or third parties, the authorities generally need reasonable grounds to believe that an offence has been committed. The one exception is securities regulatory investigations, for which there is no threshold of suspicion necessary for provincial securities regulators to issue a summons.

Subpoenas are generally not a tool that is available to law enforcement authorities at the investigative stage. There is no way to compel individuals to provide statements, and documents can only be obtained from the target of an investigation through a search warrant. The one exception is securities regulatory investigations, for which provincial securities regulators do have the authority to compel individuals to be interviewed by way of a summons and to compel the production of documents.

When the Crown determines that an immunity agreement is not warranted, an individual may still receive leniency as a result of co-operating with the authorities. Co-operation with the authorities is a well-recognised mitigating factor during sentencing and so sentencing judges will regularly take co-operation into account when imposing a sentence on an accused. Section 3.3 of the Public Prosecution Service of Canada Deskbook provides guidance on immunity agreements and sets out the applicable criteria in determining whether the Crown should enter into an immunity agreement, discusses the handling of co-operating information providers and distinguishes the role of the Crown from that of the investigating agency in the immunity process.

Enforcement authority is divided by subject matter, level of government (federal, provincial or municipal) and geographical jurisdiction. As a result, enforcement priorities vary considerably across the country and by subject matter. In recent years, the RCMP has indicated that it is giving priority to organised crime, terrorism and national security and economic crimes. At the provincial level, priorities have varied, with money laundering attracting greater priority in British Columbia and corruption being a key focus in Quebec.

In addition to federal and provincial legislation, various industry regulators, such as the Mutual Fund Dealers Association and the Investment Industry Regulatory Organization of Canada, also publish guidance documents that set expectations for how regulated entities are to address cybersecurity risk. Further, the Canadian Securities Administrators have notified registered firms in Staff Notice 33-321 (Cyber Security) that registered firms should ensure their compliance systems address the risks of cyber threats and cybersecurity.

In June 2019, Desjardins Group, a leading Canadian banking institution, reported a serious data breach in which the social insurance numbers, names, dates of birth and addresses of 2.7 million customers were compromised. As a result of the data breach, the bank is currently subject to a joint investigation by the Privacy Commissioner of Canada and the provincial privacy authority of Quebec into whether it complied with applicable federal and provincial privacy laws. The Privacy Commissioner of Canada has conducted similar investigations into past data breaches at Equifax Inc in 2017 and VTech Holdings Ltd in 2015, which resulted in findings that both organisations failed to implement adequate security safeguards.

The Criminal Code contains a wide variety of offences that authorities in Canada have historically used to combat cybercrime. The RCMP, which is generally responsible for combating large-scale cybercrime in Canada, distinguishes between cybercrime that involves technology as a target and cybercrime that involves technology as an instrument. In the former category, the RCMP includes criminal offences that target computers or other information technologies, such unauthorised use of a computer and mischief in relation to computer data. In the latter category, the RCMP includes criminal offices that are committed using the internet and information technology, such as fraud, identity theft, intellectual property infringements and money laundering.

In addition to the RCMP, cybercrime offences may be investigated by other relevant federal government agencies and local police authorities across the country. The RCMP typically works in partnership with these other authorities to investigate cybercrime issues that fall within overlapping jurisdictions. For example, the Canadian Anti-Fraud Centre is a combined effort by the RCMP, the Ontario Provincial Police and Competition Bureau of Canada to counter internet and mass-marketing fraud.

Cross-border criminal investigations are often hampered by difficulty in obtaining information from foreign sources. Canada has mutual legal assistance treaties (MLATs) with some 40 countries and Canadian legislation allows non-treaty assistance. MLAT requests can be time-consuming and administratively burdensome. Canadian authorities also have enforcement co-operation agreements and memoranda of understanding with counterpart agencies in other countries in matters such as competition law and securities. Informal co-operation also takes place between Canadian enforcement agencies and their foreign counterparts; however, the extent of co-operation is often limited as a result of statutory and policy restrictions on disclosure of confidential information.

Double jeopardy and similar principles apply in Canada to limit the criminal exposure of a defendant that has already been convicted in another jurisdiction of a relevant offence. To determine whether such principles apply, a Canadian court will typically assess whether the foreign offence and the Canadian offence at issue have a sufficiently close legal nexus (i.e., elements of the offences) and factual nexus (i.e., factual basis for the offences).

Canadian enforcement authorities do not, as a general matter, defer to the findings of foreign agencies (absent a double jeopardy issue where the same matter has been definitively determined by a foreign court). That said, Canadian authorities will consider both the fact of and the outcome of foreign investigations when determining priorities for case and resource allocation.

Sanctions are implemented by the government in the form of statutory regulations. The measures imposed on specific states, organisations and individuals may take varying forms, such as arms and related material embargos, asset freezes, export and import restrictions, financial prohibitions and technical assistance prohibitions.

Canadian sanctions measures are in force against the following states: Central African Republic, Democratic Republic of the Congo, Eritrea, Iran, Iraq, Lebanon, Libya, Mali, Myanmar, Nicaragua, North Korea, Russia, Somalia, South Sudan, Sudan, Syria, Ukraine, Venezuela, Yemen and Zimbabwe. Schedule 1 of the Justice for Victims of Corrupt Foreign Officials Regulations lists all designated individuals, which include individuals from Russia, Venezuela, Myanmar, South Sudan and Saudi Arabia. Canada has enacted measures under the Freezing Assets of Corrupt Foreign Officials Act against Tunisia and the Ukraine.

Global Affairs Canada is generally responsible for the administration of Canadian sanctions and works with other agencies in enforcement matters (notably the RCMP and the Canada Border Security Agency).

Canada has enacted the Foreign Extraterritorial Measures Act (FEMA) in relation to the extraterritorial measures of foreign states. FEMA prevents Canadian individuals and companies from complying with foreign laws in Canada and authorises the Canadian federal cabinet to issue orders to block or otherwise counter the effects of foreign extraterritorial measures in Canada.

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