On July 3rd, 2015, the Canadian government announced a new Integrity Framework (the “Integrity Regime”), which applies to all federal procurement and debars suppliers who have been convicted of “integrity offences” from contracting with the federal government for 10 years. A supplier may have its ineligibility period reduced by five years, if they meet the new disjunctive test and demonstrate that they:
- cooperated with law enforcement authorities; or
- have undertaken remedial action(s) to address the wrongdoing.
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“ Integrity offences” include
- corruption, collusion, bid-rigging or any other anti-competitive activity under the Competition Act;
- money laundering;
- income and excise tax evasion;
- bribing a foreign public official;
- secret commissions;
- prohibited insider trading;
While this is a step in the right direction, any minimum period such as 5 years lacks flexibility. Moreover, as Canada does not have a deferred prosecution program, there is no alternative mechanism to facilitate flexibility. See http://globalcompliancenews.com/deferred-prosecution-why-canada-should-adopt-the-u-k-judicial-model-20150615/
The Integrity Regime has many new features. For example, there is now a separate provision dealing with interim suspension: A supplier may be ineligible to do business with the Government of Canada for up to 18 months if it is charged or admits guilt to one of the listed or similar foreign offences. This wording may cause concern for foreign companies entering into deferred prosecution agreements in the United States or the United Kingdom.
The new Integrity Regime attempts to answer critics by adding a new “Due Process” provision, which addresses the issue of fairness in the process: Suppliers are notified of their ineligibility/suspension and provided information of the process(es) available to them.
A supplier is able to come forward at any time and ask for an advanced determination. Upon a determination of ineligibility, the supplier would see their ineligibility period begin immediately. This will incent suppliers to come forward and proactively disclose wrongdoing. An administrative review process of the assessment of affiliates would be available to the supplier.
This process is also a step in the right direction, as it provides for proactive advance determinations and a review process for the assessment of affiliates, which will oversee the factually complex issue of control, participation or involvement. The due process provision does not appear to cover the decision as to whether the period should be reduced from ten to five years, however
For more, see http://www.canadianfraudlaw.com/2015/07/the-new-integrity-regime-in-canada-revised-debarment-rules-still-too-strict/.
Kenneth Jull is an adjunct professor at the University of Toronto Faculty of Law
