Archived — Leniency program: Frequently asked questions
This document supplements the Leniency Program Bulletin.
This document does not provide legal advice. Readers should refer to the Competition Act (Act) when questions of law arise and obtain legal advice if necessary. The Bureau may choose to depart from the approach set out in this document in exceptional circumstances.
This document applies to conduct that has already occurred. A party wishing to seek a binding written opinion from the Commissioner of Competition (Commissioner) on the applicability of the Act to proposed business conduct may do so under section 124.1 of the Act.Footnote 1
All discussions regarding the Leniency Program are premised on the assumption that an immunity marker under the Immunity Program is no longer available. The Immunity Program will apply to individuals and organizations that wish to cooperate with the Bureau if an immunity marker has not yet been granted under the Immunity Program.
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Step 1: Requesting a leniency marker
What is a leniency marker?
A “leniency marker” is the acknowledgement given to a leniency applicant (Applicant) that records the date and time of an Applicant’s application to the Leniency Program. It establishes the Applicant’s position in line in relation to other individuals or organizations seeking to participate in the Leniency Program. The leniency marker guarantees the Applicant’s position in line, subject to the Applicant meeting all of the other criteria of the Leniency Program.
As indicated in paragraph 24 of the Leniency Bulletin, an Applicant that receives a leniency marker will be allowed four business days to confirm its intention to participate in the Leniency Program. Once participation is confirmed, the Applicant has a limited period of time, usually 30 calendar days, to provide the Competition Bureau with a detailed statement describing the illegal activity, its effects in Canada and the supporting evidence. This statement is known as a “proffer” and is described in more detail in the responses to questions 16 and 18 below.
For what offences is a leniency marker available?
An Applicant may request a leniency marker for cartel offences under the Act. Cartel offences under the Act are those offences under sections 45 to 49, including conspiracy (sections 45 and 46) and bid-rigging (section 47).
An Applicant may also request a leniency marker for such offences when liability arises from aiding or abetting any of these offences contrary to section 21 of the Criminal Code or counselling any of these offences contrary to section 22 of the Criminal Code.
Can a party request a leniency marker for an offence of obstruction or destruction of records or other things?
No. A leniency marker is not available for obstruction, for destruction of records or other things (collectively records), or for any offence under the Act other than those described in response to question 2 above. Instances of obstruction arising in relation to activity for which leniency is sought should be brought to the attention of the Bureau as soon as possible.
If an Applicant or any of the individuals within the scope of the Applicant’s leniency application engage in obstruction after requesting leniency, they risk expulsion from the Leniency Program and prosecution for both obstruction and the offence for which leniency was sought. Whether they will be expelled from the Leniency Program will be determined on a case-by-case basis having regard to all of the circumstances in question.
Who can request a leniency marker?
An individual or an organizationFootnote 2 can request a leniency marker. Typically, an Applicant’s counsel makes the contact with the Bureau.
Can an Applicant tell others about its leniency marker request or leniency application?
As set out in paragraph 42 of the Leniency Bulletin, the Bureau requires that Applicants keep leniency applications confidential. Confidentiality helps to ensure that the integrity of the Bureau’s investigation is maintained, that evidence is not destroyed, and that targets of the investigation do not become prematurely aware of investigative steps.
An Applicant shall not disclose its application for a leniency marker and subsequent lenient treatment, or any related information, to a third party, other than its counsel or agencies in foreign jurisdictions to which the Applicant has made similar applications for immunity or leniency, unless consent is first obtained from the Bureau. Depending on the circumstances, the Bureau may ask that the Applicant also obtain the consent of the Public Prosecution Service of Canada (PPSC).
The only exceptions to obtaining consent occur if the application is public, or if the Applicant is required by law to disclose the information, whether in Canada or elsewhere. An Applicant that believes that disclosure is required by law must give notice to the Bureau as soon as practicable after becoming aware of the disclosure requirement and consult with the Bureau on how to protect the interests of the Bureau’s investigation in light of the disclosure requirement.
An Applicant must advise the Bureau as soon as practicable of the identity of all third parties, other than its counsel, to whom its application for leniency has been disclosed, including the agencies in all foreign jurisdictions to which the Applicant has made similar applications for immunity or leniency.
If an Applicant or any of the individuals within the scope of the Applicant’s leniency application disclose the Applicant’s leniency application before obtaining consent or otherwise notifying the Bureau, they risk expulsion from the Leniency Program and prosecution for the offence for which leniency was sought. Whether they will be expelled from the Leniency Program will be determined on a case-by-case basis having regard to all of the circumstances in question.
Who should a party call to request a leniency marker?
Leniency markers are granted by the Senior Deputy Commissioner of Competition, Criminal Matters Branch (SDC). Applicants cannot rely on any alternative contact, for example, with a Bureau officer or other Bureau employee, in respect of its application to obtain a leniency marker.
It is recommended that leniency marker requests be made by telephone and that the Applicant clearly state that it is making a leniency marker call. The Applicant should ensure that all information is clearly stated and that it and the SDC are in agreement that a leniency marker has been requested, on the date and time of the request, and on the description of the relevant product. As soon as possible following the request, usually within a few days, the SDC will advise the Applicant whether the requested leniency marker is available to the Applicant and its position in line in relation to other Applicants seeking to participate in the Leniency Program.
Does the PPSC grant leniency markers?
No. The PPSC does not accept leniency marker calls or grant leniency markers to Applicants. Applicants cannot rely on contact with the PPSC to establish a leniency marker. Leniency markers are granted only by the SDC.
Why is it important to request a leniency marker as soon as possible?
The Bureau grants a leniency marker to reflect each Applicant’s position in line. The available discounts and other benefits of the Leniency Program vary depending on an Applicant’s position in line.
The tiered approach to discounts and other benefits based on an Applicant’s position in line and degree of cooperation is intended to encourage individuals and organizations to apply and cooperate early to secure a leniency advantage over subsequent Applicants. Individuals and organizations should come forward as soon as they believe they are implicated in an offence to ensure that they may qualify for the best available recommendation for leniency.
If a party is unsure that an offence has been committed, or what products are involved, should it request a leniency marker anyway?
Yes. Since time is of the essence, the Bureau encourages individuals and organizations to come forward and request a leniency marker as soon as they believe they may be implicated in an offence. If an Applicant later determines that it was not involved in an offence, it should notify the SDC and withdraw its leniency marker.
Where an Applicant’s proffer provides insufficient information that it committed an offence, the Bureau will make no recommendation to the PPSC as to a grant of leniency and will request that the Applicant withdraw its leniency marker. In the event that the Applicant does not withdraw its leniency marker, the leniency marker will be cancelled by the SDC following a minimum of 14 calendar days notice to the Applicant.
Should a party request a leniency marker even if it does not sell products directly or indirectly into Canada?
A party should request a leniency marker if it believes that it has committed an offence in Canada, regardless of whether it sells products directly or indirectly into Canada. In this regard, cartel offences can arise, for example, where a party does not sell products into Canada as part of a market allocation agreement contrary to section 45 of the Act, or where a party agrees not to submit a bid in response to a call or request for bids or tenders contrary to section 47 of the Act.
How does the Bureau treat leniency markers and recommendations for leniency in the context of investigations that it does not intend to further pursue?
The Bureau will not make a formal recommendation for leniency to the PPSC in cases where it does not intend to further investigate the alleged anti‑competitive conduct. In these situations, the Bureau will (a) advise the Applicant of its leniency position, (b) confirm that the Applicant’s leniency position will be respected should the Bureau decide to pursue the investigation at a later time, and (c) describe the scope of the products and conduct that would have been included in a leniency recommendation to the PPSC had the investigation continued. This will be done verbally, unless the Applicant requests that it be done by way of letter.
If the Bureau subsequently decides that it will investigate the alleged anti‑competitive conduct, it will advise the Applicant and take steps to recommend that leniency be granted for the products and conduct previously described to the Applicant, provided that the organizations and/or individuals that would be covered by the recommendation for leniency continue to meet the conditions of the Leniency Program.
Is it true that all leniency cases are international cases?
No. The Leniency Program applies equally to domestic and international conspiracies and the Bureau has, on a number of occasions, recommended leniency in respect of both domestic and international cartels.
What kind of information is the Bureau looking for at the leniency marker stage?
The Bureau requires sufficient information to determine an Applicant’s position in line under the Leniency Program. It does this by comparing the conduct and product description provided by the Applicant to information already in the Bureau’s possession. This enables the Bureau to determine whether another party has requested an immunity or leniency marker for the same conduct and product.
For this reason, it is imperative that the Applicant, when identifying the offence, provide a precise product definition, including a description of any sub-products that may be covered within the scope of the leniency marker request, as well as the time period for the conduct in question. In some circumstances, the Bureau may request more detailed information regarding the offence, the geographic market or the other parties involved to assist it in the determination of whether the requested leniency marker is available.
Can the information provided to secure a leniency marker be hypothetical in nature?
Yes. An Applicant may provide information on a hypothetical basis at the leniency marker request stage—it is not required to reveal its identity to obtain a leniency marker. At this stage, information is often provided by an Applicant’s counsel. However, once a leniency marker is granted, the Applicant will need to identify itself to facilitate the Bureau’s preparations for the Applicant’s proffer and the Bureau’s investigation.
Can leniency markers lapse or be cancelled by the Bureau?
If an Applicant fails to provide its proffer within 30 calendar days after a leniency marker has been granted, or within any extended period of time agreed to by the SDC, the Applicant’s leniency marker will automatically lapse. The Applicant’s leniency marker will also automatically lapse at the end of this period if the Applicant provides a proffer and is subsequently informed by the Bureau that the proffer is incomplete or otherwise insufficient and it has not obtained an extension from the SDC.
There is no obligation on the SDC to notify the Applicant that its leniency marker has lapsed in such circumstances. Rather, it is the Applicant’s responsibility to seek an extension from the SDC in such cases. For information on how to request an extension, see the response to question 21 below.
The SDC may also cancel a leniency marker if the Applicant fails to meet any of the other requirements of the Leniency Program. The SDC’s decision to cancel a leniency marker will be made only after serious consideration of all factors and a minimum of 14 calendar days notice to the Applicant.
Step 2: The proffer stage
What is a proffer?
After receiving a leniency marker, an Applicant must provide the Bureau with a statement known as a proffer. In a proffer, an Applicant describes in detail the illegal activity, its role in the offence for which leniency is sought, and the effect of the illegal activity in Canada. The Applicant must also outline all of the supporting evidence and witnesses that it can provide at that point in time as part of its cooperation under the Leniency Program. Proffers are generally provided on a “without prejudice” basis by an Applicant’s counsel.
When should a proffer be made?
An Applicant should make and complete its proffer as soon as possible after receiving its leniency marker, typically within 30 calendar days after the leniency marker has been granted by the SDC. The SDC will discuss timing requirements with an Applicant during the leniency marker call. The timing of a proffer can affect other steps in the Bureau’s investigation, such as the execution of a search warrant or cooperation with another jurisdiction, where timing can be critical. In certain circumstances, the Bureau may require the Applicant to make its proffer early within the 30 calendar day period.
What kind of information should be provided at the proffer stage?
At the proffer stage, an Applicant must provide a description of the illegal activity for which leniency is sought and outline all of the information it has at that point in time relating to that activity so that the Bureau can determine the full scope of the Applicant’s criminal liability under the Act. Accuracy is critical. The Bureau relies on the information provided to assess the leniency application, to make its recommendation for leniency to the PPSC and to pursue its investigation of other parties to the offence.
At the proffer stage, the Bureau will not accept a bare outline of the conduct or speculation as to the Applicant’s role. The Bureau requires the details of the Applicant’s role and sufficient information to obtain a clear appreciation of the evidence each witness identified by the Applicant can provide about the conduct. Applicants should report as completely and accurately as possible with truthfulness and in a spirit of cooperation.
Applicants have a positive obligation to update their proffered information as they become aware of either new or corrected information. This must be done promptly and on an ongoing basis, regardless of whether or not the Bureau has specifically asked for the information.
Topics to be covered in a proffer may include those set out below. This list is not intended to be exhaustive and the information required will depend on the facts and the relevant offence. For example, evidence of an undue lessening of competition will be required in the case of a conspiracy where some of the conduct pre-dates March 12, 2010 (when the current conspiracy provision came into force).
- a general description of the Applicant and the other parties implicated in the conduct;
- the individuals involved in the offence;
- business ownership structures, including affiliations;
- the Applicant’s share of, and role in, the market;
- membership in, or involvement with, trade or other associations;
- the nature and level of involvement in the offence;
- the physical and technical characteristics of the product;
- the end use and value of the product;
- a general description of the industry and how it functions;
- how pricing in the industry works;
- the regulatory framework;
- the existence and nature of contracts;
- how the product is supplied;
- customer or supplier countervailing power;
- other market participants (domestic or foreign) and their market shares;
- a description of the key customers in Canada and elsewhere;
- the geographic locations of sellers and customers;
Required if the conduct pre-dates March 12, 2010, and the offence requires proof of undueness:Footnote 3
- any product substitutes and their price levels (including transportation costs);
- barriers to entry into the market;
- costs for a customer to switch to an alternate product;
- a description of the conduct, including the nature and timing of communications among competitors;
- the time period of the conduct;
- the geographic scope of the conduct;
- monitoring or enforcement measures utilized in carrying out the offence;
- whether any agreements or arrangements were set out in writing;
- whether other participants continue to engage in the conduct;
- measures taken to conceal the conduct or the identity of the participants;
- abusive or threatening behaviour relating to the offence;
Impact of the conduct
- the volume of commerce affected in Canada, whether directly or indirectly, along with a description of the methodology, data and sources used to make or support that determination;
- pricing and other effects;
- whether customers or potential customers are aware of the conduct or have complained about it;
- a general description of witnesses who the Applicant believes could testify about the conduct and the anticipated nature of their evidence;
- a description of all relevant records available to the Applicant at that point in time;
- identification of any relevant records or witnesses that are unavailable and the reasons for the unavailability, including specifics of any evidence destruction or attempts to obstruct the investigation;
- whether the Applicant has made, or will make, an application for immunity or leniency in other jurisdictions and the identity of those jurisdictions; and
- whether the Applicant is a defendant in any civil actions in Canada, or elsewhere, respecting the conspiracy and the general status of any such civil actions.
At what point will the Bureau consider an Applicant’s proffer to be complete?
The Bureau considers a proffer to be complete when it has received sufficient information to make a leniency recommendation to the PPSC. At the request of the Bureau, the Applicant must advise the Bureau, in a manner that does not waive any legal privilege, of the progress of its internal investigation so that the Bureau can determine if information may be lacking. The Bureau expects that Applicants will continuously provide any new information they become aware of to the Bureau and that Applicants will provide timely responses to any questions the Bureau may have.
What happens after a proffer has been provided and found to be complete?
After an assessment of an Applicant’s completed proffer, the Bureau will present the information to the PPSC in support of the Bureau’s sentencing and leniency recommendation to the PPSC. While the PPSC will give the Bureau’s recommendation due consideration, the PPSC has final independent authority to decide if it will enter into a plea agreement with an Applicant and recommend leniency to the court. The PPSC’s policy on plea agreements is set out in the Federal Prosecution Service Deskbook.Footnote 4
Depending on the circumstances, the Bureau may require further information, including evidence in the form of records or interviews with the Applicant’s proffered witnesses, to complete its leniency recommendation or pursue other investigative steps, such as search warrant applications. Any records provided to the Bureau at this stage are treated as confidential or privileged, as described in Section 6 of the Leniency Bulletin. The Bureau will not return records to the Applicant.
What if an Applicant cannot meet the 30 calendar day deadline? Will the leniency marker lapse or be cancelled?
If an Applicant believes that it is incapable of completing its proffer within 30 calendar days, it must communicate this fact and the reasons for the delay to the SDC as soon as possible. The Applicant should be prepared to provide the SDC with information on the status of its internal investigation, a detailed proposed workplan for completing its proffer, and an update on the status of its cooperation with other agencies.
The SDC will then decide whether any delay in cooperation is reasonable and, where appropriate, establish a revised schedule for delivery of the proffer. Where the SDC has particular concerns with an Applicant’s timing, the SDC may request an undertaking from the Applicant that it will provide the information by a specified date, together with an acknowledgement that its leniency marker will automatically lapse if the undertaking is not fulfilled.
A delay may be warranted in complex cases, particularly where multiple jurisdictions are involved and information is difficult to gather or where a key witness is unavailable. The Bureau will not accept delays solely because an Applicant has commitments arising out of immunity or leniency applications in other jurisdictions or because the Applicant’s counsel is unavailable. Applicants should alert the Bureau to any impediments to complying with the Bureau’s required schedule as early in the process as possible to avoid prejudice to the Bureau’s investigation.
In the absence of an extension to complete a proffer, delays may result in the automatic lapsing of the Applicant’s leniency marker. They may also result in a reduction in the Bureau’s recommended leniency discount for an Applicant.
Are both written and oral proffers accepted?
Yes. The Bureau accepts both oral and written proffers. The Bureau is sensitive to the concerns of Applicants about written proffers and other exchanges and, as a result, it has developed a “paperless process” when dealing with Applicants.
In oral proffers, Bureau staff take detailed notes of the information. Applicants should take special care in an oral proffer to ensure that all information is clearly stated in a manner that allows sufficient time for note-taking and that counsel for the Applicant and the Bureau officers are in agreement regarding the information provided. Accuracy is critical since the Bureau relies on the information to assess the leniency application, to develop its leniency recommendation and to pursue its investigation. As described in the response to question 16 above, proffers are generally provided by an Applicant’s counsel on a “without prejudice” basis.
When should an Applicant raise potential legal defences?
The Bureau expects Applicants to act in good faith with a view to their participation in the Leniency Program, and their intention to plead guilty and resolve their legal liability. If an Applicant believes that it may have a potential legal defence in respect of its conduct, it should raise this with Bureau officers as soon as possible in the proffer process so that the Bureau may assess its position.
If the Bureau concludes that there is evidence of an offence, the Applicant must decide whether or not to pursue its leniency application. The Bureau does not expect that Applicants will complete the proffer process only to raise potential legal defences after a leniency recommendation has been made by the Bureau to the PPSC, such that the requirement to plead guilty is rendered ineffective for all of the proffered conduct.
Step 3: Lenient treatment recommendation to the PPSC
How does the Bureau devise the amount of its recommended fine for Applicants?
Unless there is relevant, compelling and readily accessible evidence to the contrary, 20 percent of an Applicant’s affected volume of commerce in Canada is the relevant starting point for the Bureau’s recommended fine. The 20 percent figure includes two components:
- 10 percent of the affected volume of commerce in Canada as a proxy for the overcharge resulting from the cartel activity and other types of economic harm; and
- 10 percent of the affected volume of commerce in Canada for deterrence and to ensure that the fine is sufficiently large enough so that it does not represent a mere licensing fee or cost of doing business.
The fine level, estimated using 20 percent of the Applicant’s affected volume of commerce in Canada, may be adjusted up or down depending on the weight assigned by the Bureau to relevant aggravating or mitigating factors. Bureau officers will then assign the appropriate discount to the fine (e.g., 50 percent for the first-in Applicant, provided that it meets the requirements of the Leniency Program, including full, frank, timely and truthful cooperation).
In cases where 20 percent of an Applicant’s affected volume of commerce in Canada is greater than the statutory maximum, the starting point of the Bureau’s assessment of the fine level for that Applicant will be the statutory maximum.
How does the Bureau determine its fine recommendation in the case of a market allocation agreement where a party agrees not to sell into Canada?
In the case of international market allocation agreements, the fine recommendation will be fact-specific and determined on a case-by-case basis. In making its recommendation, the Bureau will consider the volume of commerce covered by the relevant agreements or arrangements and the need to deter and denounce market allocation agreements or arrangements. All participants to the agreement or arrangement may be subject to a penalty whether or not they had any sales of the affected product in Canada.
How does the Bureau determine its fine recommendation in a bid-rigging case?
In a bid-rigging case, the fine recommendation will be fact-specific and determined on a case-by-case basis. In making its recommendation, the Bureau will consider the total volume of commerce covered by the relevant agreements or arrangements and the need to deter and denounce bid-rigging. All participants in a bid-rigging offence are subject to a penalty whether or not they submitted a bid or agreed to withdraw a previously submitted bid, and whether or not they were ultimately chosen to supply the product for which they submitted a bid.
How is the Immunity Plus discount calculated?
Where an Applicant qualifies for a recommended Immunity Plus discount, the Bureau will typically recommend that an additional five to 10 percent be added to the Applicant’s leniency discount.Footnote 5 The size of the recommended Immunity Plus discount will depend on a number of factors relating to the conduct for which immunity is available, including the strength of the evidence provided by the Applicant and the estimated significance of the case brought forward by the Applicant, measured in such terms as the affected volume of commerce in Canada, the geographic scope of the conduct in question, and the number of co-conspirator organizations and individuals involved in the conduct in question.
This discount will be applied only where all conditions of cooperation under the Immunity Program and Leniency Program are met by the Applicant.
How is the issue of indirect sales treated under the Leniency Program?
Indirect sales into Canada occur when a cartelized product is used as an input into an intermediate or final product manufactured abroad that is subsequently sold to a purchaser in Canada. Where the Applicant or the Bureau has evidence of indirect sales into Canada, the Bureau expects or may request, as applicable, that an Applicant provide information in its possession to assess the Applicant’s potential liability for such sales. The Bureau will, where necessary, work with the Applicant to develop a feasible methodology to estimate the affected volume of commerce associated with its indirect sales into Canada.
For the purpose of a fine recommendation, the Bureau may choose to apply the approach described in question 24 to an Applicant's indirect sales into Canada. Such sales will be limited to the volume of commerce related to the value of the relevant input into the end product sold into Canada. Information regarding the supply chain will be particularly important in cases involving indirect sales.
Where cartel members are penalized in another jurisdiction for the direct sales that led to the indirect sales into Canada, the Bureau may consider, on a case-by-case basis, whether the penalties imposed or likely to be imposed in the foreign jurisdiction are adequate to address the economic harm in Canada from the indirect sales.
What if an Applicant has evidence that the overcharge was less than the Bureau’s proxy?
Where the evidence is readily accessible, compelling and does not require modelling by the Bureau, the Bureau will consider relevant evidence provided by Applicants on a timely basis that demonstrates a lower overcharge. The Bureau will not accept delays in its usual timelines for the proffer arising from the Applicant’s determination of this overcharge.
On the other hand, where the Bureau has compelling evidence indicating a higher overcharge, it may use this alleged higher overcharge for the purpose of determining its recommended fine for an Applicant. The Bureau will advise the Applicant of the existence of compelling evidence indicating a higher overcharge on a timely basis.
When will the Bureau recommend charges for an individual? How does the Bureau determine fine levels for individuals? When will the Bureau recommend a custodial sentence?
For the first-in leniency applicant, the Bureau will recommend that no separate charges be laid against the Applicant’s current directors, officers or employees, provided that such individuals cooperate with the Bureau’s investigation in a full, frank, timely and truthful fashion. Agents and former directors, officers and employees of the first-in leniency applicant implicated in the offence will also usually qualify for immunity, provided that they fully cooperate with the Bureau’s investigation and any subsequent prosecutions. The Bureau will make a determination regarding agents and former directors, officers and employees on a case-by-case basis, for example, depending on the current employment status of such individuals (e.g., if they are currently employed by another party to the offence).
For the second-in and any subsequent leniency applicant, the Bureau will consider, on a case-by-case basis, whether or not to recommend that a current or former director, officer, employee or agent be charged. In making its decision, the Bureau will have regard to the general sentencing principles in Canada set out in the Criminal Code and the relevant jurisprudence. In particular, without limiting the generality of the abovementioned, the Bureau will have regard to the individual’s role and extent of involvement in the offence (e.g., as the cartel instigator, leader or coordinator, or if they have used coercion, or otherwise monitored or encouraged compliance with the illegal arrangement from other participants); the degree to which the individual benefited from the offence; whether the individual is a recidivist or has a criminal record; and any other relevant aggravating or mitigating factors.
The Bureau is increasingly recommending imprisonment for cartel violations so as to secure sufficient specific and general deterrence and to denounce cartel conduct. Factors that influence a decision to recommend imprisonment include, but are not limited to: the degree to which the individual benefited from the offence; whether the individual was an instigator, leader or coordinator of the cartel conduct; whether the individual used coercion, or monitored or encouraged compliance with the illegal arrangement by other participants to the cartel conduct; whether the individual is a recidivist or has a criminal record; and any further relevant aggravating factors.
The Bureau’s recommendation of an appropriate level of a fine for an individual is based on many of the same factors that influence a decision to charge an individual, including: the individual’s role and extent of involvement in the offence; the degree of personal benefit or gain resulting from participation in the offence; whether the individual is a recidivist or has a criminal record; and any other relevant aggravating or mitigating factors.
Does the PPSC always follow the Bureau’s leniency recommendation?
The PPSC has independent discretion to accept or reject the Bureau’s leniency recommendation. However, the Federal Prosecution Service Deskbook provides that the PPSC should consult with the Bureau and give due consideration to its recommendation. The Memorandum of Understanding between the Commissioner of Competition and the Director of Public Prosecutions sets out the relationship between the Bureau and the PPSC, as well as each organization’s roles and responsibilities.Footnote 6
Step 4: Plea agreement
What is a plea agreement?
A plea agreement between the Director of Public Prosecutions (DPP) and an Applicant establishes the agreed terms and conditions under which the Applicant is granted leniency in sentencing. The agreement sets out the Applicant’s obligations to provide full, frank, timely and truthful disclosure and cooperation throughout the Bureau’s investigation and any subsequent prosecutions. It also states who is covered by the agreement, how information provided by the leniency recipient will be treated and under what circumstances the agreement can be revoked. The PPSC’s policy on plea agreements is set out in Chapter 20 of the Federal Prosecution Service Deskbook.Footnote 7
Can an organization be part of the Leniency Program without pleading guilty to an offence?
No. One of the requirements of the Leniency Program is that an organization be prepared to plead guilty to a cartel offence under the Act. Accordingly, alternative case resolutions and section 34(2) prohibition orders, which do not require a guilty plea, are not available under the Leniency Program.
What if an Applicant is unable to pay the fine?
In cases where the PPSC determines that an Applicant’s ability to pay should be considered, the Bureau will critically assess the claim. Claims must be supported by strong evidence before any reduction in the fine or an adjusted payment schedule will be recommended by the Bureau to the PPSC. An organization will be required to provide financial information about its assets, liabilities, revenues and equity.
To make a recommendation to the PPSC, the Bureau may request that an independent third-party expert accountant review the organization’s financial information at the expense of the Applicant. In the case of an individual, he or she will be required to provide information about his or her financial circumstances, including all sources of income, property, bank and investment records, tax filings and other relevant records necessary to make a determination as to his or her ability to pay.
Step 5: Full disclosure
What information is an Applicant required to provide the Bureau after entering into a plea agreement?
After an Applicant enters into a plea agreement with the DPP, the Applicant must complete the full disclosure process. The Bureau requires full, frank, timely and truthful disclosure of all non-privileged information, evidence or records in the Applicant’s possession, under its control or available to it, wherever located, that, in any manner, relate to the anti‑competitive conduct.
Applicants will be expected to provide all records and other evidence to the Bureau on a timely basis and witnesses will be expected to be interviewed at the Bureau’s request. Applicants are expected to take all lawful measures to secure the cooperation of current directors, officers and employees, as well as any agents or former directors, officers or employees covered by the plea agreement, and to facilitate their ability to appear for interviews and provide testimony in judicial proceedings at the Applicant’s expense. Before communicating any information regarding the investigation to an agent or a former director, officer or employee, the Applicant must seek the consent of the Bureau or the PPSC.
At the full disclosure stage, the topics addressed by an Applicant will generally be the same as those addressed at the proffer stage (see the response to question 18 above), but will be covered in greater detail. The Bureau will want to view and obtain copies of records and interview witnesses. These interviews will, at the discretion of the Bureau, be under oath and recorded on video or audio tape. The full disclosure process can be expensive and time-consuming, and the Applicant must be prepared to dedicate the appropriate resources to support the Bureau’s interest in conducting an expeditious and thorough investigation.
Applicants have a positive obligation to update all information and evidence promptly as they become aware of either new or corrected information, records or witnesses. This must be done on an ongoing basis regardless of whether or not the Bureau has specifically asked for the information.
Accuracy of the information provided to the Bureau is critical. The Bureau relies on this information to pursue its investigation of other participants to the alleged offence. Because timelines in an investigation can be critical, an Applicant’s lack of timely cooperation can jeopardize the Bureau’s investigation. An Applicant that provides false or misleading information to the Bureau or fails to fully cooperate in accordance with its obligations under the plea agreement may face revocation of the plea agreement.
The Applicant may also face a criminal charge of obstructing a Bureau inquiry or examination under section 64 of the Act or of destroying or altering records under section 65 of the Act. Providing false or misleading information can also lead to charges, including perjury or obstruction, under the Criminal Code.
How soon do witnesses and records need to be made available after the plea agreement is signed?
An Applicant is required to provide full, frank, timely and truthful cooperation to the Bureau and the PPSC, at its own expense, throughout the Bureau’s investigation and any subsequent prosecutions. Except for an exceptional circumstance, this means that the Applicant must make records and witnesses available as soon as practicable after the plea agreement is signed.
The Bureau will often want to schedule interviews with key witnesses very soon after a plea agreement is signed. Relevant records may be used in witness interviews and, when requested by the Bureau, should be provided to the Bureau by the Applicant at least two weeks before an interview.
Typically, a schedule for disclosure is established by the Bureau early in the leniency process and production of information and records completed within the disclosure period, normally within a six-month timeline. Unwarranted delays or failure to provide access to witnesses arising from other commitments, including those commitments that arise from immunity or leniency applications in other jurisdictions, may be considered by the Bureau to be a breach of the plea agreement.
Will the Bureau discuss its expectations regarding record production with the Applicant?
Yes. Before providing records to the Bureau, the Applicant must consult with the Senior Competition Law Officer assigned to the file with respect to their relevance and scope, as well as with respect to the form in which they will be provided. Relevant records must be provided in an organized fashion that clearly indicates evidence of an offence. The Bureau does not need or want records that are not relevant to the offence—“record dumps” are not acceptable under the Leniency Program. Applicants are required to discuss their record production with the Bureau on an ongoing basis and to raise any concerns or challenges early in the process.
Do records have to be produced in a certain format?
Yes. The Bureau typically requires that records be produced in electronic format. Applicants must always discuss the general technical requirements with the Senior Competition Law Officer assigned to the file. In many instances, it will be necessary to arrange for direct contact between the technical experts for each side to discuss any issues.
What if the Applicant’s records are in a language other than one of Canada’s two official languages (English and French) or if a witness does not effectively communicate in one of Canada’s two official languages?
When requested by the Bureau or the PPSC, the Applicant is expected to produce professionally translated records and to arrange for a professional interpreter to accompany its witnesses where necessary. Neither the Bureau nor the PPSC will bear the cost of translation or interpretation.
What happens if a witness refuses to cooperate with the Bureau’s investigation?
Paragraph 21 of the Leniency Bulletin provides that the Bureau will recommend that no separate charges be laid against the first-in leniency applicant’s current directors, officers and employees, as long as such individuals provide full, frank, timely and truthful cooperation. Agents and former directors, officers and employees of the first-in leniency applicant will also usually qualify for immunity from prosecution, provided that they fully cooperate with the Bureau’s investigation and any subsequent prosecutions.
The Bureau will make a determination regarding agents and former directors, officers and employees on a case-by-case basis, for example, depending on the current employment status of such individuals (e.g., if they are currently employed by another party to the offence). The cooperation required from such individuals includes, among other things, an obligation to provide full, frank, timely and truthful disclosure of all non-privileged information, evidence or records in their possession, under their control or available to them, wherever located, that in any manner relate to the anti‑competitive conduct. There must be no misrepresentation of material facts.
If a witness refuses to provide full, frank, timely and truthful cooperation with the Bureau’s investigation, the Bureau may make a recommendation to the PPSC that the witness be excluded from the plea agreement and face prosecution. Typically, the Bureau will discuss the situation with the witness and provide the witness with a reasonable opportunity to cooperate with the Bureau’s investigation before making such a recommendation to the PPSC. The PPSC may, as a result of the Bureau’s recommendation, or on its own initiative, exclude the witness from the plea agreement.
Are witnesses required to travel to Canada?
Yes. Witnesses for an Applicant must travel to Canada or another mutually convenient location to be interviewed by the Bureau, unless special circumstances justify an alternate arrangement to which the Bureau must agree. Organizations applying for leniency are required to cover their own expenses and the expenses of any and all witnesses who are covered by the plea agreement.
Can the plea agreement be revoked?
Yes. As set out in the Leniency Bulletin, the failure of an Applicant to comply with any of the terms and conditions in its plea agreement may result in revocation of the agreement.
Where the Bureau becomes aware that an Applicant does not meet or has not met the terms and conditions set out in its plea agreement, the Bureau may make a recommendation to the PPSC that the Applicant’s leniency be revoked. Typically, the Bureau will discuss the situation with the Applicant and provide an opportunity to the Applicant to address any shortfalls in its conduct as quickly as possible before making a recommendation for revocation to the PPSC.
As a result of the Bureau’s recommendation, or on its own initiative, the PPSC may revoke a plea agreement where the Applicant does not meet all of the terms and conditions of that agreement, and take further action against the Applicant as appropriate in the circumstances. Where the PPSC determines that the Applicant has failed to fulfil the terms and conditions set out in its plea agreement, the PPSC will provide a minimum of 14 calendar days notice to the Applicant so that it has an opportunity to remedy its failure before revoking the plea agreement.
If an organization’s plea agreement is revoked, will its directors, officers, employees and agents who are covered by the agreement also lose their lenient treatment?
Revocation of a plea agreement will affect only the individual or organization that is not cooperating or that otherwise fails to comply with the plea agreement. An organization’s plea agreement can be revoked while its cooperating directors, officers, employees or agents who are covered under the agreement retain their protection. Likewise, it is possible for an individual’s coverage under a plea agreement to be revoked while the individual’s organization remains covered.
Step 6: Court proceedings
What is the Bureau’s role at this stage of the leniency process?
The Bureau plays a supporting role to the PPSC at this stage of the leniency process. For further information, please consult the Memorandum of Understanding between the Commissioner of Competition and the Director of Public Prosecutions.Footnote 8
Is the guilty plea public?
Yes, it is public, along with the documents substantiating the plea. A Statement of Admissions and Agreed Facts will be filed with the court and/or oral representations will be made by the PPSC to the court outlining the nature of the cartel offence, the Applicant’s role in the offence and other relevant details, including the relevant product, the duration of the cartel and the affected volume of commerce in Canada. The Statement of Admissions and Agreed Facts and/or the oral representations by the PPSC are used to establish to the court’s satisfaction the commission of the offence and to substantiate the representations made in the joint sentencing submission to the court.
Can an Applicant place conditions on the timing of a plea?
As noted in paragraph 32 of the Leniency Bulletin, the Bureau will not recommend that the PPSC delay the filing of the indictment at the request of the Applicant unless there are compelling reasons to do so and provided that the investigation or prosecution of other parties will not be materially impacted. The Bureau will not recommend a plea delay only because a party does not want to be the first party to plead guilty or because it does not want to be the only party to plead guilty at a specific time. After the plea agreement is executed, the timing of the resulting plea is at the discretion of the PPSC and the courts.
Once an Applicant agrees to plead guilty, the Bureau is committed to pursuing the investigation of the other organizations and individuals that are implicated.
To qualify for leniency, an Applicant is required to stop participating in the conduct in question, but doing so may alert other parties to the offence that the Applicant has approached the Bureau and this may affect the Bureau’s investigation. What should an Applicant do?
Applicants are required to stop participating in the illegal activity to qualify for leniency. At the earliest opportunity, Applicants should raise with the Bureau any concerns they have about what they can or cannot do to comply with this requirement and the possible impact that non-compliance could have on the Bureau’s investigation.
Securing the cooperation of directors, officers, employees and agents may alert other parties to the offence that the Applicant has approached the Bureau and this may affect the Bureau’s investigation. What should the Applicant do?
Organizations should conduct an internal investigation of the illegal activity and secure the cooperation of potential witnesses in a manner that is consistent with confidentiality obligations under the Leniency Program. At the earliest opportunity, and before taking specific steps, Applicants should raise with the Bureau, and if necessary the PPSC, any concerns they have about confidentiality and the possible impact this could have on the Bureau’s investigation.
Will information provided by an Applicant be shared with foreign law enforcement agencies?
As set out in paragraph 43 of the Leniency Program, the Bureau will not disclose the identity of an Applicant or the information provided by that Applicant to any foreign law enforcement agency without the consent of the Applicant or unless required by law (e.g., in response to an order of a Canadian court of competent jurisdiction). This confidentiality protection is an added benefit afforded to Applicants under the Bureau’s Leniency Program.
It is important to note, however, that as part of an Applicant’s ongoing cooperation, without compelling reasons, the Bureau will expect a waiver allowing communication of information with jurisdictions to which the Applicant has made similar applications for immunity or leniency. Such waivers are to be provided immediately and are expected to cover both substantive and procedural information.
Can foreign counsel represent an Applicant before the Bureau or must a Canadian lawyer be involved?
Typically, a Canadian lawyer represents the Applicant in its dealings with the Bureau, although foreign counsel may be present at certain meetings. When in Canada, foreign counsel must ensure that they are acting in accordance with the requirements of the relevant provincial law society or bar association.
What about an Applicant’s obligations as a member of a joint defence agreement in a civil action?
An Applicant’s first obligation is to provide full, frank, timely and truthful cooperation to the investigation and prosecution of the offence for which leniency is sought.
Arrangements entered into in respect of a coordinated defence to a civil action must be subordinate to the overriding commitment owed under the Leniency Program and the terms of the plea agreement. Moreover, the Applicant must keep the Bureau and the PPSC apprised on an ongoing basis of the general status of any civil action in which it is involved.
Can an Applicant provide early disclosure in a civil action to obtain credit for cooperation?
The Bureau has no interest in forestalling cooperation, or in penalizing an Applicant for cooperating in a civil action. In the event that an Applicant wishes to cooperate with a civil litigant in exchange for “credit” in respect of any civil liability that may be owed, this interest should be communicated as early as possible to the Bureau and the PPSC. This will enable the Bureau and the PPSC to determine how the Applicant might provide cooperation in the civil action without jeopardizing the Bureau’s criminal investigation or the PPSC’s prosecution. Failure by an Applicant to advise the Bureau and the PPSC of its activities in this regard may jeopardize the Applicant’s status under the Leniency Program.
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