September 29, 2014 / 9:39 PM / 3 years ago

Canada agency financed C$418 million in Cuba deals for Tokmakjian firm

OTTAWA (Reuters) - A little-known Canadian federal agency helped put in place a total of $418 million ($373 million) worth of Cuban deals for a firm headed by Cy Tokmakjian, the businessman jailed for corruption in Havana last week.

A sign is pictured outside the Canadian Commercial Corporation (CCC) headquarters in Ottawa September 29, 2014. REUTERS/Chris Wattie

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.

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.”

The total value of CCC’s Cuban contracts with the Tokmakjian Group between 1992 and 2011 was C$418 million, said corporation spokeswoman Lina Seto.

“No wrongdoings were identified in relation to the CCC contracts involving the Tokmakjian Group in Cuba,” Seto said.

The CCC’s annual report for the 2010/11 fiscal year said the value of all contracts it arranged in Cuba in the previous 20 years was around C$600 million.

The figures provided by Seto indicate the Tokmakjian Group accounted for around two thirds of all CCC contracts in Cuba. Seto was not able to immediately explain why one firm had accounted for so much of CCC’s business.

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.

“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.

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.

Additional reporting by Allison Martell in Toronto; Editing by Ross Colvin and Grant McCool

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