Good afternoon. Mr. Chairman and members of the committee, thank you very much for the invitation to participate in your review of sanctions legislation. I'm very sorry that I'm unable to join you in person, but I appreciate the opportunity to discuss sanctions legislation with you.
Given the time constraints, I don't have a statement now, but will be happy to provide my comments and also a statement for the record.
Just on a personal note before I begin, I'm particularly pleased to be addressing this standing committee of the House of Commons because my first and most formative job was as a young staffer on the House foreign affairs committee of the U.S. House of Representatives addressing some of these very issues. I was considerably younger then, but some of the issues still apply.
Mr. Chairman, let me focus my remarks on three aspects of UN sanctions. I think Professor Charron did a good job addressing the Canadian sanctions situation. I want to talk a little bit about UN sanctions. I'm talking about three particular aspects. One is the question of the effectiveness of UN measures, and this is the perennial question of whether sanctions work. The second is the unintended consequences of even targeted measures; all UN sanctions since 1994 have indeed been targeted. The third is the importance of national implementation measures, and this is from the perspective of legal, administrative, and private sector compliance.
My comments don't necessarily reflect those of the Center for a New American Security but do very much address the range of experience I've had in the congressional and legislative branches and more than 15 years at the Watson Institute, where I worked very closely with the Canadian government at times on various sanctions projects.
First, with regard to sanctions effectiveness, earlier this year the result of the targeted sanctions consortium—and this is a multi-year, international research consortium in which Professor Charron participated—released the results of its quite significant assessment of the impact and effectiveness of UN sanctions. Now assessing whether or not sanctions are effective depends on how you define the objectives.
The most popular discussion of sanctions focuses solely on the issue of whether they are effective in changing behaviour, but it's important to distinguish between multiple purposes of sanctions if you're going to assess the effectiveness. The first, of course, is to coerce a change in behaviour, and that's the most commonly assumed reason for sanctions. The second, though, is to constrain activities of individuals or groups and their access to central resources, such as finance, arms, dual-use technology, and people. You can imagine a situation here where al Qaeda or ISIL is not necessarily deterred or coerced by sanctions, but it is indeed important for us to limit the resources that they could use. The third purpose of sanctions is to signal a violation of an international norm and stigmatize the targeted individual.
There are other innovations of the targeted sanctions consortium as well, and one of them is breaking down sanctions into episodes. As Professor Charron noted, in Somalia we've had more than 20 years of UN sanctions, but they have changed over time, so it's important to assess what the different purposes are and how they change.
Let me just give you a brief overview of UN sanctions. They were judged to be effective overall in 22% of the episodes, but what's far more interesting, I think, is that sanctions to constrain and to signal were nearly three times more effective than those cohesive measures. So 27% for signalling and constraining versus 10% for coercing. I think it's important to keep the purpose in mind when you're designing sanctions and to try to take stock of those purposes when you're designing them.
Other important findings of the research include the fact that sanctions are never used in isolation. Sometimes it's referred to as between war and words, but they're almost always accompanied—97% of the time—with other measures. This could be diplomacy, it could be mediation, and it's often used with peacekeeping in the context of UN sanctions in 62%, or the use of force in 62% as well. And sanctions are most effective when they are used in combination. The most effective combination tends to be asset freezes, travel bans, and arms embargoes, and those are the three that are employed most commonly together.
The other interesting aspect is commodity sanctions, which are used primarily in armed conflict and tend to have a high effectiveness.
The second issue that I wanted to talk about is the unintended consequences of sanctions. As you know, targeted sanctions were developed as a reaction to the humanitarian cost of economic sanctions imposed against Iraq. There was a trend and, as I said, since 1994 all UN sanctions have been targeted. However, even as they are targeted, there are unintended consequences.
First, there were concerns about human rights and due process. This is because the UN has designations. For individuals who may be inappropriately or erroneously listed, is there the ability to get off the list? There is lack of judicial review, but over a period of time the Security Council adopted an innovative system of creating an ombudsperson for the al Qaida sanctions committee to review the designation, to which those individuals who are listed can apply for reconsideration. This is an important issue for Canada because a Canadian jurist pioneered and established the procedures, Judge Kimberly Prost.
Second is something I think that Professor Charron alluded to, and that is the broader effect that sanctions have than what's called for in the sanctions themselves, which is over-compliance. This is for lack of understanding of the complicated measures. It's for uncertainty, especially with the multiple layering of regional and unilateral sanctions. Once sanctions are imposed in a country, they have a dissuasive effect on compliance of individual firms.
Third is the de-risking issue. This has been particularly important and pronounced most recently, and that is financial institutions perceiving high-risk customers being correspondent banks, money service businesses, non-profit organizations, and charities, etc. They close accounts, delay wire transfers, etc., but it's had a very chilling effect on the ability to provide humanitarian assistance. There is a report out from the UN—it was leaked, actually—on how sanctions are severely impacting humanitarian assistance to Syria. I'm currently involved in a Gates Foundation study of non-profits and the effect of sanctions, anti-money laundering, and terrorist financing provisions on financial access.
Fourth is a focus on implementation. I think this is particularly important because the UN Security Council can pass measures, but the governments don't actually implement them; the private sector does. Governments can't freeze assets. There was an effort last year, when five member states came together and provided a series of recommendations. It is called the High Level Review of UN Sanctions, and is focused on implementation and not whether or not we're going to have sanctions on Syria—because of Security Council politics, we don't—but once the Security Council makes a decision, it needs to be implemented up and down the line within the UN and especially member states.
This is very important because imposing and removing sanctions is absolutely critical to their effectiveness. Co-operation with the private sector is critical to implementation of sanctions. We've seen a growing need to deal with the private sector to find ways to collaborate on making the sanctions more effective, making the purpose of the sanctions clear, helping to provide the guidance about how to implement the sanctions, and talking about impact or mitigating unintended consequences.
The last point I would just make with regard to implementation is there is a significant need for capacity-building assistance. Many countries don't have the capacity to implement sanctions, and that lessens their effectiveness. One of the recommendations that came out last year was to focus on building capacity in member states. The Canadian government has supported this in the past.
In conclusion, Mr. Chairman, Canada has a very proud history of leadership and innovations in UN sanctions.
Ambassador Fowler was a path-breaker in terms of being chair of the Security Council committee dealing with Angola. Judge Prost has really championed the issue of due process and the rights of individuals, and Canada has been known for being a strong supporter of effective and implementable sanctions.
I commend you for this review. I hope you'll consider the entire range of sanctions in your review and help make national implementation more effective. I would be pleased to assist the committee in any way possible and would be pleased to respond to any questions.
Thank you.