Canada agency helped finance deals for exec jailed in Cuba

by Reuters
Monday, 29 September 2014 22:46 GMT

(In first and 10th paragraphs, corrects deals' value to C$155.7 million, makes clear time period is over three years, not four. In paragraph five corrects to "handed" from "handled")

By David Ljunggren

OTTAWA, Sept 29 (Reuters) - A little-known Canadian federal agency helped put in place C$155.7 million ($139 million) worth of deals for firms in Cuba over a three-year period including some for Cy Tokmakjian, the businessman jailed for corruption in Havana last week.

The Canadian Commercial Corporation (CCC) acts as Canada's international contracting and procurement agency, helping Canadian firms bid for procurement contracts with foreign governments.

When acting as a prime contractor the CCC helps mitigate risks by signing a contract with a foreign government and then a separate contract with a Canadian supplier. This ensures that a company does not need to worry about being paid as long as it fulfils the term of the contract.

In Cuba, the CCC helped Canadian businessmen like Tokmakjian by providing trade financing to Cuban government buyers.

In 2010, the agency opened a Latin American office in Havana but in 2013 it stopped arranging trade financing deals with Cuba and handed responsibility for the file to Export Development Canada.

EDC officials said this was because EDC was more familiar with trade financing than the CCC. A spokesman for the EDC said the corporation had had no dealings with the Tokmakjian Group.

The CCC arranged deals for the firm in the sugar industry as well as in the tourism sector, the Tokmakjian Group's vice-president of finance, Lee Hacker, told Reuters on Monday. Hacker did not give details of individual deals.

Cy Tokmakjian, the Ontario company's founder, has been sentenced to 15 years in prison on charges that include bribery, fraud, tax evasion, and falsifying bank documents. His company called the case a "show trial" and a "travesty of justice."

"We would give invoices to Canadian Commercial Corporation. (They) would then give certain financing to the Cubans whether it would be one year, two years or longer, depending, and we would get paid by CCC," said Hacker.

CCC did not immediately respond to a request for details on the value of those contracts. The CCC lists a total of C$155.7 million in Cuban contracts for fiscal years 2010/11 to 2012/13.

The CCC says all of its contracts with Canadian suppliers include a clause specifically forbidding bribery of foreign government officials.

"Should a Canadian supplier be found bribing a government official while under a CCC contract, the corporation reserves the right to impose various sanctions," the CCC says on its website.

($1=$1.11 Canadian) (Additional reporting by Allison Martell in Toronto, editing by Ross Colvin)

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