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Global rules on foreign direct investment (FDI)
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
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Canada | Publication | January 25, 2024
A five-judge panel of the Quebec Court of Appeal recently allowed the appeal of the Director of Criminal and Penal Prosecutions against a Superior Court judgment ordering a new trial for the defendant Adrian Dafinei, accused of having committed a provincial penal offence (the Accused).
The Court of Appeal’s decision in Directeur des poursuites criminelles et pénales v. Dafinei1 is relevant, as the court states at the outset that it sat as a panel of five judges "to clarify the law in Quebec concerning the interpretation of provincial penal offences,"2 particularly with regard to the classification of provincial penal offences. This classification is of interest since, depending on the case, different defenses may be open to an accused entity or person. For example, an offence of strict liability offers the accused entity or person the possibility of raising a defence of due diligence or reasonable mistake of fact, which the offence of absolute liability does not.
At first instance, the trial judge found that the offence allegedly committed by the Accused fell within the category of absolute liability offences and found the Accused guilty.3 On appeal, the Superior Court found that the offence fell within the category of strict liability offences and ordered a new trial.4 The Court of Appeal concluded that the offence was one of strict liability, but allowed the appeal for other reasons.
At the outset, the Court of Appeal pointed out that, in Quebec, there is a presumption stemming from the Supreme Court of Canada’s decision in Sault Ste-Marie5 that all penal offences under provincial jurisdiction are strict liability offences. According to the Court of Appeal, there are two exceptions to this presumption: (1) an offence that requires proof of fault (i.e. a mens rea offence) and (2) an offence of absolute liability. These exceptions can only apply if compelled by (a) express statutory language, or (b) by necessary implication in the legislative context.6 The Court of Appeal also held that this is a general principle, and "[a]ny previous jurisprudence on the classification of provincial penal offences that is inconsistent with it must be considered overruled."7
In the Court of Appeal’s opinion, this general principle eliminates "ambiguity in the characterisation of provincial penal offences in Quebec." Thus, any penal offence in Quebec is a strict liability offence, unless it can, by virtue of a "clear indication of the legislature’s intent" (by express statutory language or because of the legislative context), qualify as a mens rea offence or an offence of absolute liability.8
This recent Court of Appeal decision can be seen as a reaffirmation of the principles of Sault Ste-Marie in Quebec penal law.
In the coming months and years, it will be interesting to see the impact of this ruling on proceedings brought by various provincial regulatory bodies, for example in the area of securities and environmental protection.
For example, in 2018, in Autorité des marchés financiers c. Forget,9 the Court of Appeal had confirmed that the offence of market manipulation provided for in section 195.2 of the Securities Act10 was an offence requiring proof of intent because of the object of the legislation, the specific wording of the provision and the severity of the penalty associated with the offence.11 In our view, this classification is consistent with the clarifications made by the Court of Appeal in Dafinei, since the wording of the offence of market manipulation and its legislative context demonstrate a clear legislative intent to make it an offence of mens rea. However, it is too early to predict what impact Dafinei will have on these other matters.
More developments to come as courts apply these clarifications.
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Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
Publication
On February 2, 2024, the Belgian Presidency of the Council of the European Union confirmed that the Committee of Permanent Representatives had signed the Artificial Intelligence (AI) Regulation, referred to as the AI Act. Approval by the EU Parliament followed on 13 March 2024, and the AI Act is likely to appear in the EU’s Official Journal around May 2024. The AI Act aims to establish a stringent legal framework governing the development, marketing, and utilisation of artificial intelligence within the region, thereby marking a significant advancement in the regulation of this burgeoning domain.
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The private credit market and direct lending have grown and diversified immensely in the past decade, offering alternative sources and terms of debt compared to those historically provided by the syndicated leveraged loan and public issuance markets. Consequently, they are fast becoming pivotal components in the capital ecosystem, so much so that the Bank of England consider that the private credit market is currently responsible for approximately $1.8 trillion of debt issuance, which is four times its size in 2015. This growth has been particularly pronounced in Europe and the US but there has also been significant activity in Asia.
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