Foreign Affairs Committee on Oct. 17th, 2016

[The Chair, Liberal, Bob Nault]

Out of the original 289?

[Hugh Adsett]

That's correct.

Originally, it was 123 for Tunisia, 148 for Egypt, and 18 for Ukraine.

[The Chair, Liberal, Bob Nault]

Okay.

Before I go to Mr. Miller, I want to ask a question that I may not get an answer to right off the bat, but I want you to think about it.

We are very interested in having a conversation, and more than just a hypothetical one. It's my interest, as the chair, in making sure the committee is well informed.

I want to ask Global Affairs whether you would be allowed to come in camera to have a discussion, just with the committee if necessary, so we could talk about specifics in order to get a better sense of how this all works. The only way to do that, of course, would be in camera.

I would be interested in your views of that, not necessarily at this moment, but I'd like you to get back to the committee with that particular request, if that's possible.

With that, I'll go to Mr. Miller.

Thank you.

[Marc Miller, Liberal, Ville-Marie—Le Sud-Ouest—Île-des-Soeurs, QC]

Thank you, Gentlemen.

As Bob alluded to earlier, we're beginning an extensive review of these two legislative regimes and their connected acts. Part of the exercise is to figure out, actually, what they do and what they don't do, what they should do, and what is desirable for this committee to recommend if there are holes. They are complicated; they're intertwined. Obviously what has been on the top of our minds, in light of the testimony that's been given in prior meetings of this committee, is the topic of gross violation of human rights, regardless of the country or officials perpetrating them.

The question really is, when you examine the legal regimes that exist in Canada, is there anything that addresses the ability of the government to freeze assets in the presence of a gross violation of human rights by a foreign official or a foreign person in the absence of terrorism? They would not fall under section 83 of the Criminal Code, the proceeds not being from that of crime. Literally, it's assets of a person in Canada, and then in the manifest presence of gross violation of international human rights, as assessed by some standard, which we don't need to go into at this point, that does not rise to a violation or a grave concern for international peace and security.

That sort of scenario takes us out of SEMA, and out of a requesting country under the FACFOA. In my mind, there's a void there, but you're the experts, and I would like you to speak to that.

[Hugh Adsett]

I could maybe give a very factual answer to the question.

I took notes to make sure that I have the paradigm that you have in mind down correctly. Essentially, you're talking about a situation where, although there are gross violations of human rights, it doesn't rise to the threshold of a grave breach of international peace and security. You're talking specifically about freezing assets as opposed to admissibility questions, for example, so situations where an individual may not be admissible to Canada because of the application of the Immigration and Refugee Protection Act.

I'm not aware of an existing legislative instrument that has those specific criteria. As I was saying, with the Special Economic Measures Act, there are a couple of what we call “triggers”, but the trigger for our own autonomous sanctions is the grave breach of international peace and security. That might be in a situation where there are gross violations of international human rights, but that is not the term itself that's used in the act.

The other potential vehicle that exists would be if the Security Council were to make a decision in that context, and then we would have to implement sanctions in that context.

[Marc Miller, Liberal, Ville-Marie—Le Sud-Ouest—Île-des-Soeurs, QC]

Is there anything that prevents the government from just doing it, with respect to foreign nationals and their assets situated in Canada, other than investment treaty protections?

[Hugh Adsett]

Sorry, can you, perhaps...?

[Marc Miller, Liberal, Ville-Marie—Le Sud-Ouest—Île-des-Soeurs, QC]

Can the government just freeze assets of a foreigner situated in Canada?

[Hugh Adsett]

That question probably goes beyond my competence in the sense that.... I'm not aware of an ability of the government simply to freeze assets. It would need a legislative basis of some kind. But I can't speak with any definitiveness either on whether there are instruments out there or on what the full range of instruments might be.

[Marc Miller, Liberal, Ville-Marie—Le Sud-Ouest—Île-des-Soeurs, QC]

As a final question or observation, I would say far be it from Canada to act in a unilateral way in such a sensitive situation. The situation I'm describing is really one in which a large part of the international community could readily ascertain that, as you mentioned or at least alluded to earlier, you would prefer to act in concert in imposing sanctions.

So, if there's a hole of the nature I described that needs to be filled, what are the pitfalls internationally with respect to countermeasures that a country that may be stronger than ours or weaker than ours may enact against our nationals, which would obviously be foreign to them? What measures could be taken on a trade level against Canada should it choose a path that would be truly unilateral as opposed to working with its multilateral partners?

I'd be glad if you would like to comment on that. If it's outside the ambit of your presentation, that fine.

[Marc-Yves Bertin]

With respect to sanctions in general, whether unilateral or not, they always entail some obvious consequences both for the target state and target individuals and for the sanctioning state. These include loss of commerce. Adversity can affect civilians, including in the form of lost jobs and economic hardship.

With respect to the imposing country, the country that is sanctioning, the same is also true insofar as business opportunities for firms can be lost. In fact, if countries institute import substitution programs, the economic implications can be lasting.

There are also implications for citizens who want to send remittances, for example, to a targeted state. You always expose yourself to retaliation by the target state and its allies. If you do something, they'll do something back. That's why we look at these sanctions as an exceptional measure, and that's why we've always used them in a harmonized manner with other countries, as well as in combination with other diplomatic measures.

There's been a bit of an evolution in international practice since SEMA was first instituted. We have gone towards more targeted measures, that is, going after and targeting decision-makers and their associates, for the simple reason that in many respects, there was a concern in the early days of sanctions practice that broad-based embargoes actually had a negative impact on populations. The interesting thing about a more tailored approach, at least as the economic theory goes, is that by taking the targeted approach, you end up mitigating the implications for third parties—other countries and their citizens and entities or private-sector players. That has the virtue, in theory, of reducing and mitigating the desire to defy a sanctions regime.

All that is to say that there are obvious implications with sanctions, whether unilateral or multilateral, and we always have to be prudent in the way we look at them.

[The Chair, Liberal, Bob Nault]

Thank you very much.

I'll now go to Mr. Kmiec, please.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Thank you, gentlemen, for coming in today for the beginning of this study.

I'm going to begin with the Special Economic Measures Act. My first question to you is about the “grave breach of international peace and security”. How is that defined by your department right now? I understand there's a definition that's purely up to the government to decide, but what is the definition the department is using right now?

[Hugh Adsett]

I'm not sure that my answer is going to be entirely satisfactory. The practice is to look at the context. It's to look at the facts of the situation and determine if, in the view of those analyzing the situation, it seems to be one that would be a grave breach of international peace and security. I think that's probably about all I can say about it.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Do you rely on international institutions or on internal analysts who say that the situation is a breach, and then you bring it up to the level of the government?

[Hugh Adsett]

We would always look at the analysis of the situation, not only by our own diplomatic missions but also by other international organizations, whether that's the United Nations, or the Organization for Security and Co-operation in Europe if it's an event taking place in Europe, or the Organization of American States. That kind of reporting that the department receives from its missions abroad, from multilateral institutions, and from public reporting and otherwise would all form part of the analysis of the situation.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

To change pace here, on the Freezing Assets of Corrupt Foreign Officials Act, you mentioned that no request has been denied so far, but are there any requests pending that have not been dealt with yet?

[Hugh Adsett]

Not that I'm aware of.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Okay.

Maybe I'll speak more broadly. On how many countries does Canada currently have broad-based state sanctions?

[Hugh Adsett]

Just give me one moment. I'll make sure I give you the correct number.

[Marc-Yves Bertin]

Under SEMA, we've applied the statute against 11 countries, and there are currently nine active regimes.

[Hugh Adsett]

That's right.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Beyond SEMA...?

[Hugh Adsett]

I was just looking at my notes to see if I had broken this down into SEMA and the United Nations Act, because of course there are UN sanctions as well. I might have to get back to you with the precise number just to make sure—

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Yes, sure.