Foreign Affairs Committee on March 7th, 2011

[Rob Nicholson, Conservative, Niagara Falls, ON]

It's more of a policing matter, but my understanding is that the resources are already in place. We have ongoing cooperation with international organizations. INTERPOL is another good example of that. These organizations, these investigative tools, are in place, and we continue to cooperate with them.

It's part of our ongoing efforts to make sure Canada is not a repository for these types of assets. It's also part of our international commitment to work with others to make sure that the information is shared. I think we've come a long way, quite frankly, in terms of what I've been able to see, and it will continue. But the resources are there.

[The Chair, Conservative, Dean Allison]

Thank you.

Mr. Goldring, and then Mr. Rae.

[Peter Goldring, Conservative, Edmonton East, AB]

Congratulations, ministers and ladies and gentlemen, for the hard work you've put into this to bring this out in a proposal so rapidly. It's obviously a reflection of the urgency to proceed with it as soon as possible.

I'm looking at what my colleague was just saying, but in a little bit more depth. Under clause 8, “Duty to Determine”, is it my understanding that all of those organizations listed have in place now a mechanism, so it would not be onerous on them to provide this investigative process on any application that's made? Does it cover, too, the various derivatives, identifiers, of various names? How thorough would that be?

[Sabine Nölke]

Thank you, Mr. Chair. I'll respond to this question.

Yes, those tools are already in place. In fact, clause 8 is an exact reflection of existing legislation and regulations dealing with asset issues, including both under the Special Economic Measures Act and the United Nations Act.

The mechanisms are in place. The initial point of contact certainly, for example, for financial institutions is--as was correctly stated earlier--the Office of the Superintendent of Financial Institutions. They put out a notice as soon as a regulation or order has been passed attaching the assets, and it reaches financial institutions immediately. Those are in the position to respond and they have the mechanisms in place. They scan the data banks as soon as new input is received, and they're quite capable of responding to this. They do this on a daily basis. They have done it, for example, with respect to the Libya regulations that were passed just last week.

Concerning the identity of the individuals, obviously since this legislation is based upon receipt of the request by a foreign state that knows whose assets it wishes to see attached, we would rely to some extent on the provision of accurate names. There are some issues sometimes arising out of the transcription of names--for example, from the Arabic or from the Chinese. Transcriptions aren't always consistent, so yes, we would be looking at possible aliases. For example the name of Moammar Gadhafi, even in our media, is spelled three or four different ways on a daily basis. So we would need to ensure that all possible varieties of those names are captured.

Thank you.

[The Chair, Conservative, Dean Allison]

Thank you, and thanks, Mr. Goldring.

We're going to finish with a quick question from Mr. Rae.

Oh, Ms. McKey?

[Erin McKey]

I'm sorry. To add to the answer that's just been given in terms of how onerous this will be on the institutions that are identified, there are currently obligations on our financial institutions. The list is pretty much the same as what you see in this bill.

Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, in relation to politically exposed persons, we didn't make up the name for the purpose of this legislation. It's an internationally recognized class of suspicious or risky individuals per se. So there's already an obligation on banks and institutions in terms of due diligence.

There is a requirement under section 7 of that act as well for reporting suspicious transactions in relation to the assets of those individuals. So there's already an obligation. This may heighten their awareness once certain people are identified in particular, but they should be doing due diligence in relation to the general clause in any event.

[The Chair, Conservative, Dean Allison]

Okay.

Mr. Rae.

[Bob Rae, Liberal, Toronto Centre, ON]

I guess this is really a question for Mr. Kessel as much as it is for the minister, perhaps.

Clause 4 talks about getting a request to freeze the property. Then paragraph 4(1)(b) says, “by order, cause to be seized, frozen or sequestrated”.

Just to be clear, Mr. Kessel, there is provision in this act for the seizure of property. It's not true to say that all we do is freeze. Isn't that true?

[Alan H. Kessel]

We seize it in order to freeze it, meaning that we hold it so that it's not removed. But I'd ask my justice colleague to explain how this works.

[Erin McKey]

Actually, there is a capacity in the legislation for seizure in the event that it is the route the government.... This is framework legislation, so the order in council can contain any of the measures listed here. It may be that seizure is one of the mechanisms. I think what is contemplated, and you heard both ministers speak at the outset, is really a preservation regime to hold things in place. So if people have a yacht, we let them keep it. We don't want them to sell it and transfer the assets out of Canada. If they have an apartment block, there's an ability to create the exemption so that they can continue to have tenants and run it, but they won't sell it and transfer the assets out.

The contemplation, the objective, isn't for the Government of Canada, unlike under the terrorist financing regime, unlike under the proceeds of crime regime, where the thresholds have been met, to be seizing and managing property. The contemplation is that it will really be geared towards preservation. That isn't to say that were a particular case to become known and the assets that are located are, for instance, a bag of diamonds somewhere.... It may be that in certain instances you want to have an ability to seize. So it is in there. It's just the extent to which it will be invoked.

[Bob Rae, Liberal, Toronto Centre, ON]

When you think about it, this is quite a substantive degree of interference. Somebody gets on a list, is listed by a foreign government. I know the bill is called the Freezing Assets of Corrupt Regimes Act, which is all very well, but it doesn't apply only to corrupt regimes; it applies to any government. There's nothing that says any government can't deal with an issue that they say flows from the activities of any of their predecessors. They don't have to give you any court judgments. They don't have to give you any evidence with respect to exactly what this has done. They simply have to say, “We're giving you a request”, and in response to that request, you can pass a regulation to seize that person's property.

This is quite a substantive piece. Now I know that we like to think that the government will not act in an arbitrary, wilful way. We like to think that other governments will be reasonable in their requests. Am I exaggerating the potential here? I hope I'm not, but it seems to me that on the face of it, it's pretty dramatic.

[Lawrence Cannon, Conservative, Pontiac, QC]

I'll refer you to paragraph 4(2)(b), which states, “there is internal turmoil, or an uncertain political situation, in the foreign state”.

[Bob Rae, Liberal, Toronto Centre, ON]

It says “or an uncertain political situation”. Well, I mean, an uncertain political situation.... We're in an uncertain political situation.

[Lawrence Cannon, Conservative, Pontiac, QC]

You are, not me.

[Bob Rae, Liberal, Toronto Centre, ON]

No, no, I'm very secure. My seat's as safe as anybody's.

Yes, that's stretching it a bit. I wouldn't say that.

You see what I'm getting at.

Mr. Kessel, do you see my problem? I'm not asking you to give an editorial opinion. That's one of the reasons I think we need to review this. I think we have to do something, but I think we have to think carefully about whether this is perhaps a measure we're taking because of an immediate situation. On reflection, we might want to think about it a bit.

[Alan H. Kessel]

I'll just refer to your point on clause 4. The first part, the chapeau, does say that the Governor in Council may make the order or regulation only if the Governor in Council is satisfied that (a), (b), and (c) have been met. So there's a certain requirement that you reflect as a government and as the Governor in Council before you act. It's not knee-jerk at all.

[The Chair, Conservative, Dean Allison]

Thank you. Thank you very much, Ministers. Thank you for your time today.

We're going to let the ministers step back from the table, and then we can get to clause-by-clause.

[The Chair, Conservative, Dean Allison]

Could I have everyone back to the table?

Presently we only have one addition, so my question to the committee is, are there going to be any other amendments, or is this the only amendment we're going to have? If there are no issues with clauses 2 through 19, I'm going to propose that we carry them in one fell swoop, if that's okay. Then we can get to Mr. Dorion's additional clause.

Does it sound okay for the committee to proceed in that fashion? I'm suggesting that we look at passing clauses 2 through 19 right in one fell swoop, unless there are any issues with any of those, and then we will come to Mr. Dorion's additional clause. Does that sound okay?

[Some hon. members]

Agreed.

[The Chair, Conservative, Dean Allison]

All right, then.

I'm going to call the question. Is there any discussion?

[Bob Rae, Liberal, Toronto Centre, ON]

Yes, just wait a second.

Can I just be certain that at the top of page 5 it talks about “authorized foreign banks, as defined in section 2 of the Bank Act, in respect of their business in Canada or banks to which that Act applies”? That refers to what we would call banks, what we know of as the big five or six banks?

[Erin McKey]

It's written in the opposite way and it looks more like banks.

[Bob Rae, Liberal, Toronto Centre, ON]

Okay.

[The Chair, Conservative, Dean Allison]

Are there any other questions on clauses 2 through 19?

(Clauses 2 to 19 inclusive agreed to)

Thank you very much.

Let's move now to the amendment, and I'm going to get Mr. Dorion to read his amendment into the record.

[Jean Dorion, Bloc, Longueuil—Pierre-Boucher, QC]

The additional clause would read as follows:

That Bill C-61 be amended by adding after line 39 on page 8, the following new clause:

“REVIEW AND REPORT 20. (1) Within five years after this section comes into force, a comprehensive review of the provisions and operation of this Act must be undertaken by such committee of the Senate and of the House of Commons as may be designated or established by the Senate and the House of Commons for that purpose. (2) The committees referred to in subsection (1) must, within a year after a review is undertaken pursuant to that subsection or within such further time as may be authorized by the Senate or the House of Commons, as the case may be, submit a report on the review to Parliament, including a statement of any changes that the committees recommend.”

Mr. Chair, since some of our colleagues have expressed this wish, I am prepared to accept that the five years be replaced by three years. Therefore, I suggest three years instead of five years, because this bill is strong. It would actually be very good if we could review it after three years.