Businesses should watch out for potential policy changes around
TORONTO, April 14 /CNW/ - Canadian businesses should be prepared to face
increasingly vigorous fraud investigations after the latest
Organisation for Economic Co-operation and Development (OECD) report
urges Canada to boost its anti-corruption enforcement efforts, says
Ernst & Young.
"Although Canada is generally considered one of the least corrupt
countries in the world, the OECD report identifies some clear areas for
improvement," says Mike Savage, Canadian Fraud Investigation and
Dispute Services Leader at Ernst & Young. "Many Canadian businesses
already conduct their international business safely above the minimum
standards set by law. If Canada implements the OECD recommendations,
the main implications for businesses will be how payments to government
officials are recorded in their books. We can also expect enhancements
to compliance programs and internal controls to prevent or detect
Savage refers to Transparency International's 2010 Corruption Perception
Index, which ranked Canada as the least corrupt country in the
Americas. Globally, Canada placed sixth out of 178 countries.
"Despite low corruption levels, the OECD clearly believes Canada needs
to do more to enforce anti-corruption," states Savage. "One of their
greatest concerns is that Canada has had just one prosecution in the 10
years since its anti-corruptions laws were passed. Among other
recommendations, they're proposing Canada urgently dedicate more
resources to prosecute over 20 active fraud investigations. They also
advise Canada to automatically stop convicted persons from enjoying any
further benefit from government contracts and to identify methods that
will encourage more violations to be reported to law enforcement."
A number of the report's recommendations relate to facilitation
payments, which are made to foreign public officials to speed up or
secure the performance of a routine act. This is a focus area for many
countries. For example, the new UK Bribery Act does not clearly allow for these payments. The OECD recommends Canada
raise awareness of these payments, review its policies and approach on
small facilitation payments, and encourage companies to implement
internal controls to prohibit or discourage its use.
Facing tighter anti-corruption laws and an increased risk of
prosecution, Canadian companies can protect themselves by ensuring they
incorporate these corruption risks into their compliance programs, and
conduct periodic reviews of their international operations in
industries vulnerable to corrupt payments, notes Savage.
"What this means for Canadian businesses is that they'll need to be
extra vigilant when recording the true nature of their accounts and
transactions to defend against accusations of bribery from all ends,"
says Savage. "Depending on how Canada responds to the OECD's report,
businesses may also need to review or realign their organization's
overall fraud risk management strategy."
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