Finance Committee on April 16th, 2018

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Okay. Thank you for that clarification. That's interesting.

Mr. Tassé, following a similar point, I think this committee has struggled—at least from the testimony we're hearing—with bringing the legal community under the regime. You suggested in your testimony that we do so. Do you have any opinion, or can you point to any jurisdiction that has done so, given the court ruling?

[Marc Tassé]

I think the law societies are aware of that and they're working toward that. I would say that fewer than 1% of lawyers are doing that, but it's just unfortunate. Technically, what they're doing is totally legal; they're not going against the law. It's the same thing in comparison sometimes with tax evasion, when we have other types of tax planning.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you.

Mr. Gibbs, you talked about third-party purchases. I think the selling, from my perspective, is not as much of an issue; it's money launderers trying to take dirty money and purchase something. In terms of the purchasing in the third-party process, do lawyers often purchase on behalf of clients?

[Andrew Gibbs]

Not in our experience, no.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Okay, perfect.

Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you.

I might mention also that if anybody has a supplementary questions when someone else has already asked a question, just raise your hand and I'll try to catch you. As well, one should never make assumptions, but if you have any real concerns about some of the things that were said in the Department of Finance's paper, certainly lay them on the table before us or make a submission to the Department of Finance. Their deadline is April 30.

Mr. Poilievre, you have seven minutes.

[Pierre Poilievre, Conservative, Carleton, ON]

Thank you.

Madam Saperia, you were speaking about the dangers of the Iranian regime and separately about the issue of structuring, and then you indicated that your time was short, that you wanted to say more. Are there additional comments you'd like to put on the record?

[Sheryl Saperia]

Sure, I'd be delighted to. I'll start talking and you can stop me whenever I run out of time. I can be here all night. I can't actually, as I've got a flight.

[The Chair, Liberal, Wayne Easter]

You have seven minutes, so I'll cut you off.

[Pierre Poilievre, Conservative, Carleton, ON]

If you talk too much you might end up being a politician, so you have to be careful.

[Sheryl Saperia]

Thank you very much for the invitation to share a few additional comments, and I do have some.

I'll start with the fact that the FATF, the Financial Action Task Force, in its report about Canada noted that some of the penalties for violating their AML or ATF laws are not proportionate and are not dissuasive. It recommended that they be changed, which I wholeheartedly agree with.

It also seems to be symptomatic of a larger problem within a number of Canadian laws when it comes to both the enforcement and the penalties. I remember testifying before a committee a few years ago on Canada's export and import compliance issues. There was a case in April 2014 of a company called Lee Specialties Ltd. of Alberta that was fined for the unlawful export of some dual-use goods to Iran. They were charged $90,000, but the company had a revenue of $29 million so it was a very small penalty. This spoke to—and a number of international experts spoke to—Canada's poor rate of prosecution and low penalties for some of these compliance issues.

Another recommendation I had pertained what a previous witness, Mr. Shahin Mirkhan, said. He said, “I'm sure you will direct FINTRAC to check out the Iranian government officials who have dual citizenship in Canada. They are achieving money laundering to Canada from Dubai, Europe, and everywhere else.” That was what he said. He's actually quite correct that Iranian government officials and their family members are using Canada to invest money that has been illegally obtained, particularly through corruption. Iran has one of the most corrupt governments. This is not a point for contention; I can provide endless evidence to that point.

I felt that in respect of this, besides using FINTRAC and our law enforcement agencies to better investigate this type of issue, we should also be using our other existing and complementary laws more effectively. I know that Canada recently passed its own Magnitsky law, as did a number of other countries. I know we imposed sanctions on some Russian officials and some Venezuelan officials, but we haven't imposed any sanctions on Iranian officials under the Magnitsky law. What Magnitsky was created for is exactly what these guys are doing. It has to do with gross human rights abuses. It has to do with profound and systemic corruption. I would just argue that as we study our regime here, we should also focus on the other laws that we already have in Canada and on using them more effectively.

[Pierre Poilievre, Conservative, Carleton, ON]

One of those laws is about the liability of state sponsors of terror for tort actions by the families of terror victims and the victims themselves. You were instrumental in forming a bipartisan coalition to pass that law. Is there anything we could do or recommend as part of this report that would help ensure that victims have more tools to identify state sponsorship and hold those state actors financially liable through that law?

[Sheryl Saperia]

I think that's a really interesting idea and I'd have to think through the implications of that, but I do think it would be a marvellous idea to be able to clearly identify those state sponsors who are involved in terrorism and terror financing, as well as what I mentioned in my introductory remarks about radicalization financing as well. What I didn't get to say there was that it's its own version of money laundering too, because it's often money that's obtained through corruption that's then almost legitimized or cleaned through the process of giving a donation to a Canadian institution that is not necessarily up to good. I think that it's really important.

Your point about identifying those funds for victims speaks to another one of my points, which is that terror victims don't have enough support in Canada. They have no support federally, and they have very poor and inconsistent support from the provinces.

[Pierre Poilievre, Conservative, Carleton, ON]

How much money from the seizure of terrorist assets do you believe we could unlock annually if it were purpose-dedicated to victims of terror as you suggested in your remarks?

[Sheryl Saperia]

Under this particular act, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, I'm not sure how much terror financing money there is. My understanding is that it was extremely low. They have been able to seize money under the AML, but not so much the ATF.

What I would be interested in is how much money they have seized under the Criminal Code provisions for terrorist-related financing and from the properties the government is able to seize. As I've noted, there is a provision that allows for those funds to be directed to terror victims and regulations, but that has never been done, so I don't know if the money is just sitting there. I don't know where it's gone.

[Pierre Poilievre, Conservative, Carleton, ON]

How would we find out?

[Sheryl Saperia]

I would say that would be whoever is responsible for seizing those funds under the terrorism section of the Criminal Code.

[Pierre Poilievre, Conservative, Carleton, ON]

I'm just wondering if the committee chair might consider asking the department if there are dollar figures we could assign to it. If we go forward with a recommendation that those proceeds be made available to terror victims, it would be good for the committee to know how much money is there.

[The Chair, Liberal, Wayne Easter]

We can certainly direct that question to whatever authorities might have an answer. We can chat afterward and see if there is anywhere we can get an answer on that.

With that, we'll have to go to Mr. Dusseault.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Mr. Chair.

Thank you.

I will ask my question in French.

Mr. Tassé, my first question is about beneficial owners.

No, actually, my first question is going to be about you mentioning that it is difficult for the state to lay charges.

[Marc Tassé]

Charges?

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Yes.

It is difficult for the state to lay money-laundering charges because it is difficult to prove. The burden of proof is quite heavy.

Could you describe the current situation for us and tell us how we can improve it?

[Marc Tassé]

At the moment, most authorities have to have a very detailed case for their—

prosecutors.

They often decide that the case is not detailed enough. They have to be able to show a link between the person receiving the money and the sources of money, which can become very complicated. The legislation is such that the level of complexity sometimes dissuades authorities from moving forward.

So we have to try to simplify the approaches and also, I feel, give more power to law enforcement.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Right.

Do you know any countries where it is done more easily?

[Marc Tassé]

Unfortunately, I do not.