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The SNC-Lavalin headquarters is seen in Montreal on February 12, 2019.Paul Chiasson/The Canadian Press

SNC-Lavalin Group Inc. has struck a deal with prosecutors to settle criminal charges against the Canadian engineering giant related to a bridge contract in Montreal two decades ago.

The company said in a statement late Friday it reached a remediation agreement with Quebec’s office of criminal prosecutions, known as the Directeur des poursuites criminelles et pénales (DPCP) to resolve charges laid against two company entities last fall. Such deals, sometimes called deferred prosecution agreements, allow companies to avoid a trial in exchange for paying a fine and third-party monitoring of their activities.

As part of a three-year agreement, the engineering firm said it will pay a penalty of $29.6-million. The prosecutor’s office also confirmed the deal in a separate statement. The parties will seek approval of their pact from a judge for the Quebec Superior Court at a hearing scheduled for May 10. No other details were provided.

Quebec prosecutors last September charged two of the company’s business entities – SNC-Lavalin Inc. and SNC-Lavalin International Inc. – and former SNC vice-presidents Normand Morin and Kamal Francis in connection with a long-standing RCMP investigation into bribes paid on a $128-million contract to refurbish Montreal’s Jacques Cartier bridge in 2002.

Michel Fournier, the former head of the Federal Bridge Corp., pleaded guilty in 2017 to fraud-related charges for accepting more than $2.3-million in kickbacks from SNC in the Jacques Cartier bridge case and laundering the funds. He was sentenced to 5½ years, and has since received full parole. The police probe then focused on who arranged the bribes.

The SNC units and the two former executives face charges of forgery, conspiracy to commit forgery, fraud, conspiracy to commit fraud, fraud against the government and conspiracy to commit fraud against the government, the RCMP say. The two men are both over 70; their cases continue.

Quebec prosecutors have previously said that offering SNC-Lavalin the chance to negotiate a remediation deal is the appropriate path to prevent collateral damage to the company’s stakeholders.

“I think it fits” as a solution in this case, said Patrice Peltier-Rivest of the DPCP. “This is an alternative to a more classic sentence – an alternative that allows for a lessening of the effects on employees, on retirees, on shareholders, on the clientele of SNC-Lavalin.”

SNC has said it is the first time a Canadian company has received an invitation to negotiate a remediation agreement. However, Mr. Peltier-Rivest said it is the second time Quebec prosecutors have offered an invitation to negotiate such a deal.

The first instance involved a separate company in the district of Longueuil about two years ago, he said. It was unclear whether a final agreement was reached in that case.

Mr. Peltier-Rivest has said SNC co-operated with authorities during police searches and voluntarily provided relevant information afterward, which contributed to the decision to extend an offer to negotiate a deal. The two former managers cannot benefit from a deferred prosecution agreement because such arrangements do not apply to individuals.

SNC was denied a deferred prosecution agreement two years ago in a separate case in which it was charged with violating Canada’s Corruption of Foreign Public Officials Act and fraud related to its business dealings in Libya when Moammar Gadhafi was in power. Kathleen Roussel, director of federal prosecutions, told The Globe and Mail in 2020 that a deferred prosecution agreement in that case was inappropriate because of the “severity and breadth” of the offence.

SNC undertook an intense lobbying campaign with the federal government to get a deferred prosecution agreement in the Libya case. Allegations that Prime Minister Justin Trudeau and other members of his government improperly pressed then-justice minister and attorney-general Jody Wilson-Raybould to order a settlement engulfed the government in crisis for weeks.

SNC struck a deal with prosecutors in December, 2019, in which the company’s construction division pleaded guilty to a single charge of fraud and the potentially more damaging corruption charge was dropped. The company agreed to pay a $280-million fine and received a three-year probation order, which includes oversight by an independent monitor. The Quebec judge who approved the agreement called it “reasonable” and said that, without such plea deals, Canada’s justice system “would collapse under its own weight.”

The Jacques Cartier bridge investigation, dubbed Project Agrafe (staple), has long been a legal risk for SNC. The company has acknowledged the probe in corporate filings, adding that other investigations into its past business dealings may be continuing, including in Algeria.

The Libya and Jacques Cartier bridge matters are “two different cases completely,” said prosecutor Francis Pilotte of Quebec’s office of criminal prosecutions. “The DPCP is completely independent regarding any cases that might have happened in the past. So it is our sole discretion” to lay charges and offer deferred prosecution agreements, he told reporters last fall.

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