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The Remediation Agreement Regime: Canada Moves To Adopt Deferred Prosecutions for Companies

Canada’s Liberal government recently introduced a bill, known as C-74, that would allow for a type of deferred prosecution agreement called a “remediation agreement” for alleged violations of Canada’s foreign bribery law, the Corruption of Foreign Officials Act. The proposal, referred to as the “Remediation Agreement Regime,” is modeled after deferred prosecution agreements used in the United States and the U.K. And if approved by the Canadian Parliament, it may provide an incentive for companies to self-report any violations of the Foreign Officials Act.

Under the proposal, prosecutors would be required to consider several factors when deciding whether to enter into an agreement, including how the government was alerted to the wrongdoing. If a remediation agreement is granted, the company would be required to admit wrongdoing and cooperate in the prosecution of any individuals involved. The company also may be required to pay a penalty, forfeit any profits, and potentially submit to a monitor’s oversight for some time. Agreements would be subject to judicial approval and oversight.

If adopted, the legislation could increase enforcement of anti-corruption laws. Under Canada’s “Integrity Regime,” companies convicted of bribery face a public contract bar for up to 10 years. This creates a strong disincentive for companies to self-report potential wrongdoing. In addition, prosecutors may have been wary of charging a company due to the long-lasting economic effects of a conviction. As a result, Canada’s enforcement of its foreign bribery law has been historically weak.

The Remediation Agreement Regime may encourage companies to self-report their discovery of wrongdoing and their possible role in corruption without facing a decade-long public procurement bar. Companies also could benefit from more predictable enforcement when wrongdoing is reported. And any remediation agreement granted would require that the company cooperate in the prosecution of individuals, which may result in more convictions of bad actors.
If approved by Parliament, the Remediation Agreement Regime will come into effect 90 days after the legislative amendment receives Royal Assent.

Copyright © by Ballard Spahr LLP

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Partner

Henry E. Hockeimer, Jr., is the Practice Leader of Ballard Spahr's White Collar Defense/Internal Investigations Group. Hank's practice focuses on white collar criminal defense and securities fraud/litigation. He represents businesses and individuals facing investigation by state and federal authorities, and has represented clients in federal and state courts throughout the United States. Hank's jury trial experience is extensive, both in private practice and as a former federal prosecutor. Hank's practice also focuses on complex civil litigation. He has represented large...

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Gretchen Gurstelle, Ballard Spahr Law Firm, Minneapolis, Corporate Law Litigation Attorney
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Gretchen Gurstelle is a skilled advocate and litigator with experience trying cases to juries and judges in federal and state court. Gretchen guides clients through all stages of federal and state civil, criminal, and regulatory proceedings, from responding to government subpoenas and conducting internal investigations to negotiating with government representatives and litigating any resulting claims or charges. Gretchen's practice also focuses on complex civil litigation. She has represented clients in contract disputes, insurance coverage disputes, and False Claims Act cases.

Gretchen formerly ran a well-respected criminal defense practice. Her white-collar experience includes representing clients facing allegations of federal mail and wire fraud, tax fraud, health care fraud, mortgage fraud, theft, and embezzlement. Gretchen is a member of the Office of the Federal Defender Criminal Justice Act panel for the District of Minnesota. She served as a Special Assistant Public Defender in both Hennepin and Ramsey Counties. She also served as a clerk for the U.S. Attorney's Office for the District of Minnesota.

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