Deferred prosecution agreement (Canada)

In the federal government's 2017 discussion paper, distributed as a guide for the public consultations that took place in the autumn of 2017 "regarding a possible DPA regime in Canada", a comparison was made between the DPAs in the United States since the 1990s and in the United Kingdom since 2014.^[3]: 5

In DPAs in United Kingdom were authorized for use by the Crown Prosecution Service and the Serious Fraud Office for fraud, bribery and other economic crime.^[3][4] Unlike the American model, in Britain the courts have a role in approving proposed deferred prosecution agreements, adding to public transparency.^[5][3][6][7] In 2017 the UK broadened their use to include tax evasion cases.^{[citation needed]}

However, the approach taken by American prosecutors has been criticized by US courts as being too lenient. In spite of these criticisms, the US courts have held that they have only a limited power to review deferred prosecution agreements.^[3][6] In most cases, the courts approve the agreements.^[8]

France enacted legislation authorizing deferred prosecution agreements in December 2016.^[8] The Minister of Justice of Australia introduced a federal DPA regime in 2017.^[9]

According to a February 27, 2019 Financial Post article by Terence Corcoran, internationally, most countries used deferred or negotiated settlements as opposed to turning to the courts when dealing with corporate corruption which has resulted in the payment of billions of dollars in fines. Corcoran said that government prosecutors have used deferred prosecution agreement to negotiate settlements with "Siemens, Walmart, Alcoa, Daimler, Alcatel-Lucent". In 2019 the United States had 130 active cases under negotiation under the U.S. Foreign Corrupt Practices Act (FCPA).^[10] Deferred prosecution agreements in the United States "... are governed by policy and practice rather than binding regulations."^[5] Major cases in included Munich-based Siemens, one of the largest companies in the world,^[11] that had to pay a total fine of $1.6 bill in mid-December 2008—the "largest fine for bribery in modern corporate history."^[11] According to a 2008 NPR article, an FBI investigator said that Seimens' "actions were not an anomaly"...executives in corporations used bribery as a standard operating procedure and a "business strategy" to win contracts.^[12][13]

In July 2017, Transparency International Canada, the Canadian branch of a global anti-corruption non-government coalition, released a detailed report on deferred prosecutions. The report reviewed deferred prosecution legislation in several other countries and discussed the arguments for and against deferred prosecutions. The report concluded that: "On balance, as a means of pursuing greater enforcement of and compliance with anti-corruption laws, we urge the Government of Canada to consider adopting a properly designed DPA mechanism".^[14]: 2

Summarize Timeline Fact Check

In 2015, the Public Services and Procurement Canada (PSPC) department of the government of Canada introduced the Integrity Regime, to "ensure the government does business only with ethical suppliers in Canada and abroad".^[15] Under the Integrity Regime, PSPC reviews cases of alleged corrupt business practices, to determine "whether a supplier is ineligible to do business with the government", usually in relation to "procurement and real property transactions over $10,000".^[16]

Discussions about the potential establishment of deferred prosecution agreement legislation in Canada began in February 2016. Under traditional criminal law, Canadian prosecutors only had two options: "prosecute and charge alleged offenders, or decide not to prosecute alleged offenders".^[17][18]

In September 2017, PSPC announced a public consultation on potential enhancements to the Integrity Regime, and "whether deferred prosecution agreements should be used in Canada".^[19] PSPC published a discussion paper,^[3] and also provided a web page to guide discussion.^[3] The consultation was regarding "potential enhancements to the recently implemented Integrity Regime" which could include the implementation of deferred prosecution agreements in Canada, similar to the one adopted in the United Kingdom to respond to corporate wrongdoing.^[17]

PSPC described the potential deferred prosecution legislation 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".^[3] PSPC also recognized that in some cases, a criminal conviction could lead to "job losses and wider negative implications to the economy."^[3] During the public consultation period, the government received 75 written submissions. PSPC also conducted meetings with approximately 350 interested parties and groups, such as industry associations, businesses, justice sector stakeholders (including law enforcement), non-governmental organizations, and academics.^[3]

The report on the public consultation process was released on February 22, 2018. The report stated that a majority of participants supported having a Canadian regime for deferred prosecution agreements. The majority also favoured an approach based on the United Kingdom regime, which was seen as having greater transparency than the American model.^[20]

The report noted that the "vast majority" of the participants in the consultation believed that deferred prosecution agreements were "best suited for economic offences committed by organizations, such as fraud, offences under the Corruption of Foreign Public Officials Act, bribery, money laundering and, generally, offences under the Competition Act".^[20] Participants stated that deferred prosecution agreements would give the prosecutor more options in dealing with commercial crime, rather than the current binary choice of prosecuting or not prosecuting. However, participants also suggested that the factors which prosecutors should consider in deciding whether to offer an agreement should be specifically set out in the legislation.^[20]

Participants considered that publication of the general terms of a deferred prosecution agreement would be important for purposes of public transparency.^[20] Most participants favoured the British model, with a strong supervisory role by the courts to ensure that a proposed agreement is in the public interest and that the terms of a particular agreement are "fair, reasonable, and proportionate".^[20]

On March 27, 2018, PSPC issued a media release to announce an enhancement of the "government-wide Integrity Regime", which it described as a "made-in-Canada version of a deferred prosecution agreement (DPA) regime, to be known as a Remediation Agreement Regime". It also announced that amendments to the Criminal Code would be introduced to implement the new legal procedure.^[9]

On March 27, 2018, the Government introduced legislation to create a system for deferred prosecution agreements. Although the legislation amended the Criminal Code, it was not framed as a stand-alone amendment to the Code. Instead, it was included in the omnibus budget legislation. The amendments to the Criminal Code were found in Division 20 of Part Six of the budget bill.^[21] The amendments would add a new Part XXII.1 to the Criminal Code to authorize deferred prosecution agreements, termed "remediation agreements".^[22]

The inclusion of the amendments to the Criminal Code in a budget bill attracted some criticism from members of the all-party Finance Committee of the House of Commons, in their review of the budget bill.^[23] Some members of the committee commented that they only became aware of the Criminal Code amendments during the testimony of an official from the Department of Justice, and even one Liberal MP on the committee, Greg Fergus, stated that he was caught by surprise by the provision. Pierre-Luc Dusseault, a New Democrat, said that he thought the provision was tucked into the budget bill to make the change quietly, without much opportunity to debate it.^[23]

Some members of the Finance Committee suggested the proposal should be referred to the Justice Committee of the Commons, which has greater expertise in criminal law, while others suggested that the proposed amendments should be taken out of the budget bill and made into a separate bill. One Conservative MP, Dan Albas, supported these options, stating that: "This is a fundamental departure from the way we handle the Criminal Code".^[23] The Liberal majority on the committee declined to do so. Greg Fergus, a Liberal MP, also stated he had concerns with the substance of the proposed legislation, which would allow those charged with white-collar crimes to avoid serious criminal sanctions: "It seems we're letting those with the means have an easier time of it than those who don't have the means."^[23]

The bill passed the House of Commons on June 6, 2018 and the Senate on June 14, 2018. It received royal assent on June 21, 2018.^[24] The provisions for deferred prosecution agreements came into force ninety days after royal assent,^[25] namely September 19, 2018.

Summarize Fact Check

The federal Department of Justice issued a "Backgrounder" on the new legislation in March 2018. According to that summary, 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 the 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.^{[26][18][27][28]}

The Backgrounder also emphasized that only certain types of organizations could qualify for a deferred prosecution agreement. Government agencies, trade unions and municipalities would not be eligible. Nor would crimes committed by, or at the direction of, criminal or terrorist organizations. As well, only certain types of economic crimes could be considered for deferred prosecution, such as fraud or bribery. Crimes which resulted in death or serious bodily harm, or that damaged national defence or national security, would not be eligible.^[26][27][28] The offences which would be eligible for consideration for a deferred prosecution agreement are specifically listed in a schedule to the Criminal Code.^{[29][18][27][28]}

Part XXII.1 also sets out conditions which must be met before a Crown prosecutor may enter into negotiations with an accused organization. One of those conditions is that the relevant Attorney General must consent to the negotiation of the agreement. Another condition is that a deferred prosecution agreement must be in the public interest.^{[30][18][27][28]} Part XXII.1 then sets out a lengthy list of factors which the Crown prosecutor must consider, such as the "nature and gravity" of the alleged offence, whether the organization has taken internal steps to prevent further misconduct, and whether it has cooperated with the authorities and made reparations for the harm it has caused.^{[31][18][27][28]}

Part XXII.1 also sets out factors which the Crown prosecutor is not permitted to take into account in considering whether to open negotiations. In the case of charges under the 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."^{[32][18][27][28]}