“Which brings me to the Bureau’s role in promoting compliance. Specifically, the Bureau promotes compliance through enforcement and it provides the education and the tools that assist the corporate community in developing corporate compliance programs. We all know businesses and individuals have a duty to act lawfully — and, the Bureau expects that businesses and their senior management, on the whole, want to comply with the law. It is our hope that by now, it is clear that the legal, economic and reputational risks of non-compliance far outweigh any perceived advantages. Non-compliance costs businesses dearly – not just in terms of financial and legal penalties, but through negative publicity, loss of business opportunities and lost management time.”
(Commissioner of Competition)
On June 3, 2015, the Canadian Competition Bureau (Bureau) finalized its new core competition law compliance materials. They are essential reading for corporate compliance officers, senior management and in-house counsel.
“This bulletin seeks to help businesses of all sizes in the development of a credible and effective compliance program, but the updated bulletin pays special attention to small and medium‑sized businesses. It is designed to help businesses get the solid information they need to reduce their risk of contravening the law.
A compliance program benefits businesses in two ways: it helps them to identify areas of high risk of contravention of the Competition Act and other laws; and it allows them to determine circumstances where they may be the victim of anti‑competitive conduct by other parties.”
The Bureau’s new compliance materials now consist of a competition compliance overview (see here), Corporate Compliance Programs Bulletin, Compliance Programs Pamphlet, three competition compliance fact sheets (see here) and a series of new and recently released compliance videos (see here and here).
Also as part of the Bureau’s new competition compliance approach, it has updated its template Corporate Compliance Program Framework (i.e., template compliance program) and Certification Letter and expanded its due diligence checklist (all as part of its new Corporate Compliance Programs Bulletin).
In addition to these, the Bureau has also updated and issued for comment its new framework enforcement document: Competition and Compliance Framework Bulletin which, once finalized, will replace its prior Conformity Continuum Bulletin.
Underscoring all of the Bureau’s new compliance materials is one message: companies, associations and other organizations need to consider adopting a credible and effective competition compliance program (with the Bureau increasing the incentives to do so).
There are several noteworthy aspects of the Bureau’s new competition compliance materials. These include:
A compliance program can be a mitigating factor in leniency applications: The Bureau will now treat a credible and effective compliance program in place at the time of an offence as a mitigating factor when making sentencing recommendations to the Public Prosecution Service of Canada in connection with a leniency application under its Leniency Program. The Bureau’s Immunity and Leniency Programs are its leading tools for detecting and enforcing criminal competition law violations. This expected shift is the most important aspect of the new compliance package and is rather novel compared to other major jurisdictions. Importantly, the Bureau has set out detailed criteria for evaluating whether a compliance program is credible and effective consistent with its new Compliance Bulletin.
Expanded compliance approach: They represent a significantly expanded approach to competition law compliance in Canada, including in a number of key areas including advertising and marketing, trade association participation and compliance with the merger control provisions of the Competition Act.
More essential elements of a credible and effective compliance program: Consistent with its expanded approach to compliance, the Bureau has now taken the position that there are seven essential elements of an effective competition law compliance program (increased from the former five). These are: (i) management commitment and support; (ii) risk-based corporate compliance assessment; (iii) corporate compliance policies and procedures; (iv) training and education; (v) monitoring, verification and reporting mechanisms; (vi) consistent disciplinary procedures and incentives for compliance; and (vii) compliance program evaluation. The Bureau’s new Corporate Compliance Programs Bulletin provides detailed guidelines to comply with each of these elements.
A more serious and systemic approach to compliance: They signal a more serious approach by the Bureau to competition compliance. This, in turn, emphasizes that companies and associations need to either review existing compliance programs or consider adopting compliance programs where they did not have them in place.
Expanded compliance tools: They provide a number of useful competition compliance tools for companies, associations and other organizations. These include: (i) detailed due diligence checklists in core competition law areas (e.g., in relation to advertising and marketing, cooperating with competitors and mergers); (ii) a new template compliance program; and (iii) employee certification letter.
Emphasis on key areas (e.g., advertising and trade associations): They include a significant amount of information relating to trade associations in particular, including recommendations that associations adopt credible and effective competition compliance programs, companies consider compliance training for personnel attending association events and/or requiring associations to have effective compliance programs as a condition of joining the association. While the Bureau has emphasized in the past the importance for associations to comply with competition law, associations now appear to be a consistent and ongoing priority for the Bureau.
In addition to these key changes, a number of core elements have remained largely the same – for example, the focus on senior management support, effective and ongoing training and education, discipline for employees or other personnel that violate a compliance program and periodic review and auditing of a program and competition compliance generally.
The Bureau has also confirmed that the type of competition compliance program adopted will vary between types of companies/associations, industry sectors and depend on the types of potential competition law risks faced. As such, any compliance program adopted by a company or association must be tailored.
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