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CCCA_V6No1_DawnRaid-FIN_CCCA_V6No1_DawnRaid 2/13/12 10:08 PM Page 26 Cover Immunity and leniency programs There is little honour among thieves. The overwhelming majority of cartel and bid-rigging cases investigated by the Competition Bureau are spurred by whistleblowers. Immunity and leniency programs have created a strong incentive to “encourage offenders to come forward and rat on the oth- ers,” observed John Clifford, a partner and antitrust and com- petition expert with McMillan. Under the Bureau’s immunity program, the first party to dis- close to the Competition Bureau an offence not yet detected or to provide evidence leading to the filing of charges may receive immunity from prosecution from the Director of Public Prosecutions of Canada (DPP) as long as it co-operates. Companies who balked at being the first in line to blow the whistle on a conspiracy may nevertheless be eligible for leniency in sentencing. In general applicants must terminate its participation in the cartel, agree to co-operate fully and in a timely manner, and agree to plead guilty. Timing here is key. The first leniency applicant is eligible to receive a 50 per cent reduction of the fine that would have otherwise been recom- mended to the Public Prosecution Service of Canada, while the second leniency applicant would be entitled to receive a 30 per cent reduction. Subsequent applicants could possibly receive a reduction as well. The Bureau, though, is now playing hardball. It is now going so far as to remove so-called markers, the confirmation given to an immunity or leniency applicant, if they are not co- operating in a timely fashion. “If companies and individuals are looking for the benefits of these programs, they need to comply with the requirements otherwise we will seriously consider revoking the benefits they were receiving because it does impede our investigation,” explained John Pecman, the senior deputy commissioner of criminal matters at the Competition Bureau. The Bureau has revoked markers in the past six months. Immunity or leniency applicants would be expected to pro- vide basic facts about the party’s participation in the cartel. They are also expected to give the Bureau the names of other parties, the kinds of activities that took place, and the loca- tion of potential evidence, explained Graham Reynolds, for- mer senior general counsel for the Competition Bureau and now with Osler, Hoskin & Harcourt. Investigators would then prepare a background document called Information to Obtain (ITO), which has to set out reasonable grounds that will sat- isfy a judge that there is evidence of an offence under the Competition Act and that the evidence will be found in a par- ticular place. The judge will then review the ITO and decide whether or not to issue a warrant to search the premises. 26 CCCA Canadian Corporate Counsel Association SPRING 2012