2 By that I mean, no one considered a deal structured that way because it had never been done before.
You could argue that SNC situation was unique and so uniquely creative solution was required.
From legal perspective, deal was very cleverly done.
You could argue that SNC situation was unique and so uniquely creative solution was required.
From legal perspective, deal was very cleverly done.
3 Key features are known from when deal announced, but reading fine print is important - several imp subtleties.
Of course, reading the decision may be a challenge. Though a public document, it is *still* not available through free database like @CanLII - maybe that will change
Of course, reading the decision may be a challenge. Though a public document, it is *still* not available through free database like @CanLII - maybe that will change
4 So basic deal was:
Plea by SLCI to fraud against Libya
Sentence:
1. $280 million fine, payable in equal instalments in 1st quarter of each year for 5 years, starting in 2020. So watch for $56 million to be paid before 31 Mar 2020.
2. 3 year probation.
snclavalin.com/en/media/press…
Plea by SLCI to fraud against Libya
Sentence:
1. $280 million fine, payable in equal instalments in 1st quarter of each year for 5 years, starting in 2020. So watch for $56 million to be paid before 31 Mar 2020.
2. 3 year probation.
snclavalin.com/en/media/press…
5 Something that comes out of the judgment which is important for lawyers is that the sentencing judge accepts the $280 million figure but deliberately chooses not to endorse either the Crown or the defence's justifications for why that number is the right one.
6 This matters because Crown & defence arguments are not the same and are in some ways contradictory. Weighing the mitigating and aggravating factors is an exercise in judgment. Since judge does not say which justifications are most appropriate, we are left hanging. Ambiguous.
7 Two examples:
Crown says cooperation and guilty plea (late in process) - moderate weight
Defense says - cooperation from 2012 (even though no voluntary disclosure, info provided helped get search warrants) and plea - high weight
Crown says cooperation and guilty plea (late in process) - moderate weight
Defense says - cooperation from 2012 (even though no voluntary disclosure, info provided helped get search warrants) and plea - high weight
8 Crown tries to spin this case as really being about foreign corruption (when discussing seriousness of offence), even though charge is fraud. This seems like a finesse and an attempt to draw on corruption cases.
9 Though company accepts liability, it focuses on Bebawi & BenAissa, suggests it was victim of their conduct.
V. problematic. Our corp crim law based on imputation. So liability of corp always tied to individuals. Not a mitigating factor. (absent "fraud on corp" defence).
V. problematic. Our corp crim law based on imputation. So liability of corp always tied to individuals. Not a mitigating factor. (absent "fraud on corp" defence).
10 Decision also will not help in future cases where, for eg., court might need to grapple with how best to calculate the appropriate fine (for e.g. net profit, total gain, total loss to victims, or a combo?).
Plus Crown & defence refer to US guidelines, but use them differently.
Plus Crown & defence refer to US guidelines, but use them differently.
11 Question of victim restitution pretty much dismissed out of hand with no explanation.
Also no comments on victim surcharge - is it included, or not? (In other cases involving foreign bribes (albeit charges under #CFPOA ) victim surcharge of 15% was added.
Also no comments on victim surcharge - is it included, or not? (In other cases involving foreign bribes (albeit charges under #CFPOA ) victim surcharge of 15% was added.
12 Leaving aside calculation of fine, who pays?
Sanction imposed on the offender who pled guilty - that's SCLI.
Now one would expect that the Group implicitly guarantees the payment will be made (and they have every reason to do so).
But legally, obligation is on SLCI.
Sanction imposed on the offender who pled guilty - that's SCLI.
Now one would expect that the Group implicitly guarantees the payment will be made (and they have every reason to do so).
But legally, obligation is on SLCI.
I wrote a further 13 tweets int he thread that Twitter just swallowed up and destroyed. Not sure I have the heart to re-write them now.
13 a few extra comments:
On probation order: the substantive content is, in my opinion, good. Imposes obligation to maintain existing compliance and control measures and enhance as required. Monitor oversees execution and reports on it.
On probation order: the substantive content is, in my opinion, good. Imposes obligation to maintain existing compliance and control measures and enhance as required. Monitor oversees execution and reports on it.
Factually, it is SNC Group that oversees compliance, integrity and controls.
This makes sense - message comes from top - send clear signal about corp culture & values
BUT, obligation to execute order is, legally speaking, one that is imposed on SLCI, because they pled guilty.
This makes sense - message comes from top - send clear signal about corp culture & values
BUT, obligation to execute order is, legally speaking, one that is imposed on SLCI, because they pled guilty.
To connect Group to obligation to execute compliance order, there is some novel language used in order:
"SLCI shall *cause* SNC Group to"
So sub compels parent, or something like that.
No one I have talked to knows exactly what legal effect of words are.
"SLCI shall *cause* SNC Group to"
So sub compels parent, or something like that.
No one I have talked to knows exactly what legal effect of words are.
This obligation is buttressed by an obligation for SLCI to cause SNC Group to enter into an agreement in which SNC Group acknowledges content of agreement and undertakes to comply with same.
(par 3 g of order, if you have a copy).
(par 3 g of order, if you have a copy).
Now Group has said publicly it will abide by the order, so in principle should be no issue. But legally speaking, any breach of the order falls on SLCI. Court has no direct power over Group. Technically, SLCI has remedy by enforcing contract against Group.
Group has also said it will take care of Monitor, who is to be appointed within 30 days of order (around Jan 18). Monitor must prepare first report within 120 days of order (around April 18). A summary of report must be posed on special page under investor tab on Group website.
Interestingly, the order does make specific reference to SNC Group with regard to the costs of the monitor and preparing the report (par 3(d)iii) 3). Either SLCI or the Group pay for it. In reality, it will be the Group.
Full copies of reports go to @PPSC_SPPC and court. Reports are annual.
@PPSC_SPPC So we can see that having a subsidiary plead to the charge does create some complexity. Question is, what that necessary?
Ostensibly, having sub plead was to avoid debarment and issues for parent in future dealings.
But fraud charge to which SLCI pled does not trigger debarment.
Ostensibly, having sub plead was to avoid debarment and issues for parent in future dealings.
But fraud charge to which SLCI pled does not trigger debarment.
Maybe there are other reasons, but one worry is that by allowing sub to plead to a charge that allows parent to avoid a conviction and, perhaps more significantly, the stain of an official finding of "foreign corruption", there will be others who will want a similar deal
Though there is no binding precedent in sentencing, courts do look to comparable cases in assessing what is an appropriate and just sanction.
Will letting a sub plead become the new normal?
Will letting a sub plead become the new normal?
Perhaps more significantly, will this approach also feed into how RAs are structured? Part XXII.1 of the Crim Code is unclear. There is nothing that prevents the argument being made.
This is another reason for @PPSC_SPPC and @JusticeCanadaEN to provide much more guidance.
This is another reason for @PPSC_SPPC and @JusticeCanadaEN to provide much more guidance.
Final comment, for now.
Is there enough transparency about this deal in particular and about this kind of deal in general?
Should we think about a public website where relevant info & documents are catalogued & organized (& explained) so public can read it and understand it?
Is there enough transparency about this deal in particular and about this kind of deal in general?
Should we think about a public website where relevant info & documents are catalogued & organized (& explained) so public can read it and understand it?
One more:
Question of how to mete out consequences on a corporate group composed of many separate legal entities is not new and hotly debated. But where *de facto* $ and control of compliance is w/parent, why engage in artifice of making a sub *de jure* answerable for sanction?
Question of how to mete out consequences on a corporate group composed of many separate legal entities is not new and hotly debated. But where *de facto* $ and control of compliance is w/parent, why engage in artifice of making a sub *de jure* answerable for sanction?
