This section contains policy, procedures and guidance that the staff of Citizenship and Immigration Canada (CIC) typically refer to. The authorities have placed this on the website of Citizenship and Immigration Canada (CIC) as a courtesy to stakeholders.
A peer review refers to an independent assessment of a commitment made by a panel of experts. The industry association that typically represents the lead designated entity on the Commitment Certificate is the agency responsible for convening this panel of experts. For instance, consider a situation where a designated angel investor group issues a Commitment Certificate. In this scenario, the National Angel Capital Organisation (NACO) is responsible for organising a peer review panel for evaluating the commitment.
The authorities established the peer review process for building in safeguards. These safeguards aim to:
- Provide protection against fraud and,
- Ensure that the deals made between private sector partners and foreign entrepreneurs remain legitimate
The peer review process would typically come into effect in the following situations:
- For all commitments in which the lead designated entity is a business incubator
- To verify if the designated entity has performed the necessary due diligence according to industry standards to help the officer in making a decision
- This would include the due diligence for the provenance of funds
- When there are concerns about the Commitment Certificate and,
- To assess quality assurance levels on a random basis
For initiating a peer review, the officers would need to complete the relevant fields of the Peer Review Request form i.e. IMM 5765. Then, they would need to send it via secure e-mail (i.e. Entrust) to the industry associated named in the application.
In addition, the officers would also need to provide the panel with:
- The Commitment Certificate
- The term sheet or the client agreement and,
- Any other relevant supporting documentation
The designated entity would need to provide the peer review panel with a copy of its due diligence package. Thereafter, the panel would need to review the package. This would enable the panel to assess whether the designated entity carried out the required due diligence in accordance with industry standards. In particular, the panel would need to check whether:
- The designated entity has clearly articulated aspects such as the business model, the value proposition as well as the sources of actual and projected revenues
- The designated entity has performed a sufficient level of due diligence for demonstrating that the business is a growth-oriented business that is viable in Canada
- The designated entity has provided a current list of shareholders and has carried out the due diligence process by reviewing the shareholder agreements
- The designated entity has performed the due diligence process completely by covering the business’s overall marketing, sales and distribution strategies properly
- The designated entity has, in its due diligence process, reviewed the business’s relevant material contracts in key areas such as sales, distribution & marketing, employee agreements with executive officers and loan agreements with officers, directors and holders of more than five percent of the shares
- The designated entity has, in its due diligence process, appropriately reviewed the control that the business has over the intellectual property and other assets that it needs for operating successfully
- The designated entity has, in its due diligence process, adequately reviewed the audited financial statements and notes, the quarterly financial statements and the capital budget for the current and the coming fiscal years
- The designated entity has, in its due diligence process, adequately reviewed all the agreements that concern the obligations for borrowed money, copies of all binding agreements and the projected use of proceeds from the current financial round
- The designated entity has, in its due diligence process, adequately reviewed all material employment and consulting agreements as well as stock options, bonus structures, retirement plans, profit-sharing, incentives and pension plan details
- The designated entity has, in its due diligence process, performed the required due diligence on the management team
- This would include carrying out a proper assessment of the team’s ability to successfully build and expand the business in Canada
- The designated entity has, in its due diligence process, performed any other due diligence activity or provided any explanation for why it did not complete certain due diligence activities (if applicable)
It is worth mentioning that the designated entity or the applicants would need to be completely unaware of the panelists’ identities in all circumstances. In addition, the panel would need to return the peer review findings to Citizenship and Immigration Canada (CIC) via Entrust.
Officers would need to consider the assessment provided by the peer review panel. However, the officers must not remain confined by this assessment when they make a final decision. As such, they would still need to assess the information completely. Then, they would need to make a decision based on their own findings. In short, the final authority to make a final decision on the case rests with the officers.
Example: Jeremy is a rice farmer with a limited education. The Commitment Certificate on his file indicates that he intends to farm rice in the province of Alberta. Similarly, his application indicates that he intends to cultivate a new type of rice engineered to grow in conditions similar to those found in the province of Alberta. A designated angel investor group such as Biolnno agrees to fund the project. As such, it issues the relevant Commitment Certificate.
The officer reviews the case and feels concerned that this could be a fraudulent case. As such, the officer sends a peer review request to the National Angel Capital Organisation (NACO). The peer review panel investigates and finds that Jeremy has registered a patent for the new rice seed in his home country. In addition, the peer review panel finds that Jeremy has successfully grown the rice in experimental trials as well. Given this backdrop, the peer review panel feels satisfied that sufficient evidence exists to show that Biolnno has taken reasonable measures for obtaining its objectives in the commitment. Similarly, the panel would also review any other factors present in the case. Thereafter, it would conclude that the designated entity has carried out the due diligence necessary in this specific case.
