TI-Canada recommends a deferred prosecution agreement scheme (with conditions)

A report released Wednesday by Transparency International Canada recommends the government consider adopting legislation to create a deferred prosecution agreement scheme as a way to increase transparency and promote compliance.

"In the Canadian context, DPAs, if properly designed and implemented, have the potential to support increased enforcement of anti-corruption laws and increased self-disclosure and compliance by corporations," TI-Canada said.

Companies can avoid prosecution under DPAs by agreeing with prosecutors to behave in certain ways.  That usually includes full and voluntary disclosure, cooperation, and remediation.

Why should Canada consider a DPA scheme now?

In recent years, the report says,

"Deferred Prosecution Agreements, or DPAs, have gained increasing visibility and prominence in the international fight against corruption. The United States first adopted DPAs in the context of enforcing the Foreign Corrupt Practices Act. Since then the concept has gained acceptance in numerous countries, including the UK and France, with more countries examining incorporating DPAs into their enforcement regimes. "

In a closer look at the United States' experience with DPAs, the report talks about waivers of attorney-client privilege, the meaning of "cooperation," the increased prosecution of individuals, and the appointment and use of compliance monitors.

"The first reported use of a DPA [in the U.S.] was in a 1992 settlement with Salomon Brothers," the report says.

"DPAs in the United States have no statutory basis and are not subjected to any specific legal framework. Rather, they are based on policies issued by the Department of Justice (“DOJ”) and guidelines set out in memos issued by the Deputy Attorney General."

In the UK, the law allowing prosecutors to use DPAs became effective in 2014.

That law -- Schedule 17 of the Crime and Courts Act 2013 -- lists at Section 5 mandatory requirements for every DPA. Those include a statement of facts (which may or may not include admissions by the accused) and an expiry date.

Section 5 list other provisions that can be included in UK DPAs, including requirements to:-

(i) pay the prosecutor a financial penalty

(ii) compensate victims of the alleged offense

(iii) donate money to a charity or other third party

(iv) disgorge any profits made by the accused from the alleged offense

(v) implement a compliance program or make changes to an existing compliance program, such as adding training for employees

(vi) cooperate in any investigation related to the alleged offense, and 

(vii) pay any reasonable costs of the prosecutor in relation to the alleged offense or the DPA.

A UK DPA can also impose time limits for the accused to comply with the requirements of the DPA, and a penalty clause for a failure to comply.

TI-Canada warns that DPAs need safeguards. Above all, they can't seen "as a simple cost of doing business."

And the government shouldn't treat DPAs as a stand-alone measure in the fight against corporate crime.

The debate on a potential DPA scheme should be part of a greater reflection on the state of corporate criminality in Canada and serve as the opportunity to invest the resources required by law enforcement, prosecutors and the judiciary to efficiently combat corporate crime.

The report concludes that any DPA scheme should be enacted "through specific legislation and carried out under transparent judicial purview."

The DPA scheme should also be aimed to achieve certain objectives -- financial reparations, sincere compliance reform, and accountability of individual wrongdoers.

TI Canada’s volunteer Legal Committee produced the report. 

It's available here (pdf).

FCPA Blog | Wednesday, 12 July, 2017
http://www.fcpablog.com/blog/2017/7/12/ti-canada-recommends-a-deferred-prosecution-agreement-scheme.html