In Step with OECD, Canada Implements Ban on Facilitation Payments

December 19, 2017
Categories: Anti-corruption, Bribery, Compliance, Corruption

As of October 31, 2017, Canada’s Corruption of Foreign Public Officials Act (CFPOA) no longer exclude facilitation payments from the bribery offence, according to an announcement by Global Affairs Canada. This announcement is the realization of a 2013 amendment to the CFPOA, which provided for implementation of the ban at a later date, giving time for organizations to adjust their practices.

Facilitation payments, also known as “grease payments,” are small payments made to government officials to expedite provision of routine government services, such as permits or official documents like visas.

By repealing the facilitation payments exception, Canada joins a number of countries, including the UK, that ban such payments. The U.S. Foreign Corrupt Practices Act, as well as the laws of South Korea, Japan and Australia continue to recognize the exception.

In 2009, the OECD issued a report recommending that member countries still allowing facilitation payments should recognize “the corrosive effect of small facilitation payments, particularly on sustainable economic development and the rule of law,” and “periodically review their policies and approach on small facilitation payments.” The same report urged companies to implement policies that discourage the use of facilitation payments through internal company controls.

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