Thank you.
Thank you so much for inviting me to appear before you today.
My comments are focused on Canada's use of sanctions since 1990 and highlight issues with Canada's sanctioning practices. Canada's rate of application of sanctions has been high since the 1990s as a result of a very active UN Security Council and Canada's obligation to give effect to those measures. Of late, however, Canada's sanctions have been imposed by choice rather than by obligation, and have been applied to demonstrate that it is a good ally to the European Union, the U.S., and others, rather than by requirement of international law.
The committee's focus on just the Special Economic Measures Act and the Freezing Assets of Corrupt Foreign Officials Act is limited, in my opinion. On one hand, I appreciate what an enormous topic this is, but on the other, we risk missing the big picture that is the panoply of sanctions measures.
In 40 cases since 1990, Canadian sanctions have been applied, but the overwhelming majority of them— 34 cases or 85% of them—involve application of the United Nations Act and not the SEMA or the FACFOA. Indeed, there have been only 10 cases involving the SEMA, of which four also involved the UN Act, one involved the Area Control List, and one involved the FACFOA. Only four cases involved the SEMA alone, those against Haiti, Russia, Syria, and Zimbabwe; and only three cases involved the FACFOA, those against Tunisia, Egypt, and Ukraine, of which the latter is also subject to the SEMA.
Now let's consider this list. Haiti was one of the poorest countries in the world when comprehensive sanctions were mandated by the UN, making the lives of Haitians worse, not better. The U.S. military intervention is what compelled the military junta to relinquish control. In the cases of the current measures against Russia, Syria, and Zimbabwe, Canada's sanctions do not enter into the policy calculations of the leaders of these states, nor would more stringent Canadian sanctions. The unintended consequences of more punishing measures would only harm innocent civilians. Likewise, if we consider Tunisia, Egypt, and Ukraine, subject to the FACFOA, there are very few foreign assets in Canada to seize. As Canada does not have extraterritorial reach, all assets to be seized must have a Canadian connection.
The problem, therefore, is not with the acts individually but with multiple standing acts of legislation being applied concurrently. Layering sanctions measures does not make the sanctions more effective or more compelling but rather shifts more of the burden onto Canadian banks and businesses to ensure that Canada's sanction measures are given effect.
Twenty-two of Canada's 40 cases are still active today, including sanctions against Somalia, first applied in 1992. Eleven of the 22 are UN-only sanctions. The other 11 are a combination of UN- and ally-led or ally-only measures. All sanctions until 2006 were UN-led. Belarus, subject to the Area Control List in 2006, started a trend of sanctioning in support of allies. Burma and Zimbabwe quickly followed. Today four cases require the UNA and the SEMA in support of the U.S. and EU, those cases against North Korea, Iran, Libya, and South Sudan; three use the SEMA to support U.S. and EU sanctions against Russia, Syria, and Ukraine; and one supports EU sanctions against Tunisia using the FACFOA. Of course, application of the FACFOA is driven by a foreign country and not by Canada.
This means that, in the case of the SEMA, Canada is picking and choosing not only which cases but with which allies to partner. Surprisingly, Canada has never sanctioned with just the U.S. since 1990. It prefers to sanction, it would seem, with a minimum of 28 other states. This does not mean, however, that Canada has matched all EU sanctions automatically. For example, the EU has sanctions in place against Guinea, and it had measures against individuals from Moldova, but Canada did not follow suit. Nor does Canada necessarily lift sanctions at the same time its allies do. All sanctions against Liberia and Côte d'Ivoire required by the UN Security Council were dropped in the spring of 2016, and yet Canada hasn't created new regulations to lift its measures.
This tendency to layer sanctions complicates compliance with sanctions considerably. Seven Canadian cases require two or more of Canada's five standing acts to deal with sanctions. Of course, this doesn't include the 28 cases that have or have had travel bans, which require invocation of the Immigration and Refugee Protection Act. The acts have different penalties for non-compliance and different definitions for the measures applied, such as the definition for the seizure of “property”. For businesses, it is a constant battle to understand what measures are in effect. This resulted in a company in Red Deer, Alberta paying $90,000 in fines, in 2014, for $15 worth of O-rings.
Given the tendency toward layering sanctions and making compliance even more complicated, Canadian companies and banks have three options.
The first is to spend an enormous amount of money to ensure compliance, which means that the sanctions become a penalty for the company or the bank.
The second option is to factor in paying the fines for inadvertent sanctions-busting as a cost of business, which means that costs for goods and services increase for consumers.
The third is to stop doing business altogether with the state in question, which means that sanctions become far more coercive than originally intended.
The Canadian government potentially has carte blanche in terms of the measures it can enact and the stances it can take. Of course, taking executive action is the prerogative of elected governments, but I would like to highlight six concerns with Canada's sanctioning practices.
First, the unintended consequences of sanctions, especially when layered, can ensnare innocent civilians like Mr. Abdelrazik.
Second is the cost downloaded onto banks and businesses to comply with the number of rules and regulations.
Third, there is a difficulty tracking Canada's current sanctions. One must drill down to access many different regulations on many different sites. Canada's reference to all sanctions as “economic” is also misleading.
Fourth, there are different penalties and definitions, such as for “property”, across the legislation for various sanctions.
Fifth, there is a considerable time lag between the decision to apply or lift sanctions and the necessary Canadian regulations coming into effect.
Sixth is the tendency of Canada to treat sanctions as a tool of compellence and apply more measures. Canada's measures are, at best, a signal of Canada's desire to support collective security and its allies.
This concludes my opening statement, and I look forward to your questions.