Bill C-61 (Historical)

Assets of Corrupt Foreign Officials Act

An Act to provide for the taking of restrictive measures in respect of the property of officials and former officials of foreign states and of their family members

This enactment permits, at the request of a foreign state, the taking of restrictive measures in respect of the property of officials and former officials of the foreign state and persons associated with them.

[Rob Nicholson, Conservative, Niagara Falls, ON]

Thank you very much.

I'm pleased to be here today to speak to you about Bill C-61, the Freezing Assets of Corrupt Regimes Act.

As you know, the Government of Canada is strongly committed to working with emerging democracies. These countries in turmoil need assistance, not sanctions. We must work together to ensure that states emerging from repressive regimes are given the assistance they need.

This bill, if passed, will allow Canada, at the request of a foreign state, to take rapid action to freeze the assets of persons who have been in positions of power in their home states and may have misappropriated state assets or illicitly acquired funds by virtue of their office or family connection and moved these to Canada. The capacity to restrain assets would extend to the family and close associates of such people.

This new legislation is designed to assist states experiencing political turmoil by allowing for the rapid preservation of assets. As such, the legislation would allow a country that finds itself in difficult circumstances the time and opportunity to make a request to Canada for the recovery of assets using existing Canadian laws. Due to the situation these states may find themselves in, their authorities may not be able to gather the evidence required to use existing Canadian legal mechanisms that govern asset restraint and recovery.

The proposed legislation is about preservation so the assets are not dissipated during the time it may take a state to put itself in a position to take legal measures in Canada. Bill C-61 will close a gap in Canada's existing capacity to assist a foreign state that finds itself in a position of turmoil with the restraint of assets.

The law in Canada, as enacted by Parliament, requires that certain preconditions be met before alleged criminal proceeds located in Canada may be restrained at the request of a foreign state. In particular, the Mutual Legal Assistance in Criminal Matters Act, which governs such requests, requires that a foreign state provide Canada with a restraint or seizure order issued by their criminal court ordering the freezing of specified property as proceeds of crime. The foreign order may then be filed with the Canadian courts and executed as if it were an order issued in Canada. The Mutual Legal Assistance in Criminal Matters Act also requires that charges be laid in the foreign state against the person whose property is sought to be restrained and/or frozen.

Canada's laws on mutual legal assistance reflect our commitment to assisting our treaty partners in fighting criminality while at the same time protecting the interests of individuals.

As I am sure you will agree, these legal safeguards are fundamental to Canada's criminal justice system. In requiring that a foreign state provide Canada with sufficient information to meet these safeguards, we are protecting the rule of law, a principle that is paramount in a free and democratic society.

Canada's proceeds of crime regime, as set out in our Criminal Code, also allows for the seizure and restraint of alleged proceeds of crime and their subsequent forfeiture. However, our domestic proceeds of crime regime also incorporates preconditions to seizure and restraint. Under our domestic proceeds of crime regime, assets may only be restrained if the following conditions are met: the assets to be restrained and/or frozen are identified; there is evidence linking the Canadian assets to an alleged criminal offence in Canada or in the foreign state; and there is evidence that the Canadian assets are the proceeds of crime.

Generally speaking, our criminal forfeiture system is conviction based. In order to obtain a forfeiture order, the law requires a successful criminal prosecution unless the offender has absconded or died. In those cases an application for criminal forfeiture of the tainted property is possible.

The preconditions of our domestic laws may be difficult for a transitioning state that is still in turmoil to meet. The information and evidence required by Canada may simply not be made available in time to prevent the assets from being diverted or depleted. The Freezing Assets of Corrupt Regimes Act would permit a freezing order without requiring the evidence of criminality or specific identification of assets that now exist under current law.

The freezing of assets would automatically expire after five years, although the period could be extended if circumstances warrant.

To ensure that companies are not put out of business while assets are subject to restrictive measures, the legislation would incorporate safeguards that would permit persons to carry out specified activities or transactions. Where necessary, it would also ensure that affected persons and their dependants have access to reasonable expenses.

We believe that the Freezing Assets of Corrupt Regimes Act will address the existing gap in our laws. We want to ensure that any misappropriated property or illicitly acquired assets are preserved in order to provide a foreign state with the time that is necessary to seek their return and make them available to the new authorities and the people of the states in turmoil.

Thank you, Mr. Chair.

[Lawrence Cannon, Conservative, Minister of Foreign Affairs]

Thank you, Mr. Chair.

Colleagues, I am here to speak today on Bill C-61, the Freezing Assets of Corrupt Regimes Act. Recent events in North Africa and the Middle East have brought home again how quickly the political landscape can change and how important it is that we have the tools in place to be able to respond quickly and effectively to those changes.

In order to be able to support efforts at democratic reform, it is critical that Canada has the ability to ensure that misappropriated property may be frozen to allow for its return to the new authorities and people of the state concerned. It is also critical that we support efforts to hold accountable foreign officials who have misappropriated state funds or inappropriately acquired property as a result of their public office or family, business, or personal connections.

Colleagues, this legislation responds to those needs by creating a new and effective means to allow us to respond to requests from foreign states to freeze the assets of corrupt former officials.

The draft legislation would permit the government to freeze the assets or restrain property of foreign politically exposed persons upon receipt of a request from a state, and where the Canadian government has determined that the state is in turmoil or political uncertainty. Assets would be frozen for a five-year period, which would provide the foreign state with an opportunity to initiate the necessary proceedings to allow for seizure and forfeiture of assets situated in Canada. The time period is open to renewal.

Colleagues, it may be asked why we are creating new legislation instead of imposing sanctions under existing Canadian law or simply proceeding with existing criminal law instruments. If the United Nations Security Council has not imposed sanctions, then Canada can use the Special Economic Measures Act to impose unilateral sanctions. This tool, however, requires a high threshold to be met, namely that there has been a grave breach of international peace and security leading to a serious international crisis.

Another possible tool at the government's disposal is the Mutual Legal Assistance in Criminal Matters Act. This act however requires a foreign state to produce evidence of criminal activity or the existence of legal proceedings or a court order in order for Canadian authorities to be able to act on assets situated in Canada. In the case of a newly emerging governing authority, it may be difficult to come by such evidence on short notice.

The time required to meet the procedural steps under the existing criminal law-based framework in situations where speed is of the essence could potentially allow the foreign national in question to conceal or deplete the assets in question.

Our existing sanctions legislation, while effective in addressing states of concern, is not the appropriate mechanism when the state in question is in the process of democratic transformation. In these cases, using the sanctions tool would punish the whole state and not solely the corrupt former regime. This would not be an appropriate response at a time when the Government of Canada and the international community wish to express their support for democratic transition.

Both sanctions in criminal law-based proceedings will remain available for use in appropriate circumstances. However, it is clear that we need a nimble legislative regime that will permit asset freezes in circumstances where our existing tools are not sufficient.

This new legislation includes a number of procedural and substantive safeguards. It provides that freezes are imposed for a limited period of time and automatically expire if they are not removed. It provides authority to the Minister of Foreign Affairs to recommend the revocation or repeal of an order or regulation if the person does not meet the definition of a politically exposed foreign person. It also provides authority to the Minister of Foreign Affairs to issue permits for dealing with certain property, exempt certain persons and property, issue certificates in cases of mistaken identity, and provide exemptions for reasonable expenses.

It is important to note in this context that this bill is about assets preservation, not seizure. The bill allows the government to help a foreign state, without bypassing ordinary due process in relation to asset restraint or forfeiture.

We encourage the move toward political, economic, and social reforms to create more free and open societies. We are working with other states to promote freedom and democracy in the region, and we stand ready to support peaceful and legitimate aspirations for democracy and justice.

Tyranny and corruption cannot go unchallenged. The Government of Canada does not want to say no to requests for help from emerging foreign democracies, especially when speed is of the essence to avoid allowing a former dictator to conceal or deplete assets that rightfully belong to his people and are needed to assist the state in its recovery from misrule. The government also wants to ensure that individuals who have misappropriated state funds can be held accountable for their ill-gotten gains.

This bill will allow us to meet these important objectives. We hope the committee can swiftly return this bill to the House so we can put this important new tool into place as quickly as possible.

Merci. Thank you.

[The Chair, Conservative, Dean Allison]

This meeting is pursuant to the order of reference of Thursday, March 3, 2011, Bill C-61, An Act to provide for the taking of restrictive measures in respect of the property of officials and former officials of foreign states and of their family members.

I want to welcome both of our ministers here today. We have Minister Nicholson and Minister Cannon. Thank you very much for being here today to talk about the bill. We also have Ms. Nölke who's going to talk, if we have any follow-up questions, for the department, along with Mr. Kessel and Ms. McKey. So thank you very much for being here.

I don't know who's going to go first, but, Minister Cannon, if you'd like to start, you have 10 minutes.

Mr. Nicholson, are you going to speak as well?

Foreign Affairs

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Mr. Speaker, we need to take action now and freeze the assets of the family of former Tunisian dictator Ben Ali, even more so since the Liberals are opposed to passing the new Bill C-61 quickly. The government could, for example, use section 354 and part XII.2 of the Criminal Code, as well as article 54 of the UN Convention against Corruption, to freeze the assets stolen from the people of Tunisia.

Why are the Conservatives protecting Ben Ali's family?

Freezing Assets of Corrupt Regimes Act

[John Baird, Conservative, Leader of the Government in the House of Commons]

Mr. Speaker, I believe you would find unanimous consent of the House for the following motion. I move:

That, notwithstanding any Standing Order or usual practices of the House, Bill C-61, An Act to provide for the taking of restrictive measures in respect of the property of officials and former officials of foreign states and of their family members be deemed to have been read a second time and referred to the Standing Committee on Foreign Affairs and International Development.

(Bill C-61. On the Order: Governments Orders:)

March 3, 2011—Second reading of Bill C-61, An Act to provide for the taking of restrictive measures in respect of the property of officials and former officials of foreign states and of their family members—Minister of Foreign Affair.

Bill C-61--Freezing Assets of Corrupt Regimes Act

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, I would like the government House leader to tell us why they did not go further—why they did not ask that Bill C-61 be passed at all stages?

I said this during question period: the government does not need this bill in order to freeze Ben Ali's assests, but I think it would send an extremely important message to all of the dictators who are currently using Canada, Quebec and even Montreal—we saw that in the news yesterday—to squander money that belongs to various nations.

We would have liked to see a motion asking that Bill C-61 be passed at all stages and sent to the Senate.

[John Baird, Conservative, Leader of the Government in the House of Commons]

Mr. Speaker, I rise on a point of order. I believe if you seek it you would find unanimous consent for the following motion. I move: That, notwithstanding any Standing Order or usual practices of the House, Bill C-61, An Act to provide for the taking of restrictive measures in respect of the property of officials and former officials of foreign states and of their family members, be deemed to have been read a second time and referred to the Standing Committee on Foreign Affairs and International Development.

Tax Havens

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, even though an international warrant has been issued for his arrest, former dictator Ben Ali's brother-in-law continues doing business in Montreal, as though nothing happened. Every hour that passes allows him to transfer millions of dollars to tax havens. Although we support Bill C-61, it is not necessary in order for the government to take immediate action under the UN convention against corruption and under Canada's Criminal Code. It can immediately freeze the assets of the entire Ben Ali family.

Why are the Conservatives continuing to protect them and refusing to take immediate action?

Freezing Assets of Corrupt Regimes Act

[Gordon O'Connor, Conservative, Carleton—Mississippi Mills, ON]

moved for leave to introduce Bill C-61, An Act to provide for the taking of restrictive measures in respect of the property of officials and former officials of foreign states and of their family members.

(Motions deemed adopted, bill read the first time and printed)