Foreign Affairs Committee on Oct. 24th, 2016

[Peter Fragiskatos, Liberal, London North Centre, ON]

Can you speak to that point?

[Lesley Soper]

This is precisely the legislation we have in place. It is meant to be blind to the event. It is supposed to recognize all aspects of this type of activity.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Okay.

With regard to the minister's powers, the Minister of Immigration, Refugees and Citizenship has the power to determine, on the basis of public policy concerns, that a foreign national is not eligible to become a temporary resident. Human rights violations also fall under that, I believe, as a criterion on which inadmissibility can be granted. Can you speak to that, please?

[Maureen Tsai]

Yes. I believe you are referring to an authority under section 22.1 of our legislation that we commonly refer to as the “negative discretion” authority of our minister. That provides our minister with the ability to look at a range of public policy considerations and, as you said, declare that a foreign national may not become a temporary resident for a period of up to three years.

In addition to our legislative authority, we do have guidelines that are available on our website. They refer to activities or behaviours that could attract the attention of our minister. Under those guidelines, we have three types of activities listed. The first would be individuals who are promoting criminal or other terrorist activity. The second section, which I believe you are referring to, would be foreign nationals from sanctioned countries or corrupt foreign officials. The last category would be foreign nationals who may pose a public health risk to Canada.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you very much, Ms. Tsai.

Mr. LeFrank, in your presentation you spoke about permits. Could you expand on that and tell us a bit about the role CBSA plays in the approval of permits?

[Andrew LeFrank]

Certainly. Essentially the Canada Border Services Agency is responsible for reviewing declarations that are made with respect to goods that are exported from the country to ensure that they're in compliance with the various pieces of legislation, most notably in terms of the Export and Import Permits Act, the United Nations Act, the Special Economic Measures Act, as well as goods on the area control list.

Within that framework, Canada Border Services Agency officers will screen the exports to determine and ensure that any that look like they pose a potential risk to non-compliance are referred over to a Border Services officer in the field, who will an conduct an examination to determine whether or not the goods actually line up with what the export declaration says. In addition, they'll determine whether or not those goods are subject to any types of permits. If they believe the goods are actually subject to permits, they'll ask the exporter of record to provide any additional documentary evidence to ensure that the goods are actually going to where they say they're going, that they're the goods they and the origin certificates say they are, and a number of different types of items.

They then refer that to Global Affairs Canada, which is responsible for the issuance of those permits. Global Affairs Canada will determine whether or not it issues that permit and validate whether or not the permit is the right permit for that. If it's not, then the Canada Border Services Agency will take appropriate action.

[Peter Fragiskatos, Liberal, London North Centre, ON]

It sounds like a very thorough and robust process. Why is it so important, or why has the process been crafted in that way? Why is it so critical? Perhaps the answer is obvious, but I think Canadians want to know as well.

[Andrew LeFrank]

As I mentioned at the beginning, we have a dual role. One is about the facilitation of legitimate trade. Our export industry is significant and important to the prosperity of Canada. In addition to that, though, a number of countries would seek to acquire goods that could represent harm to us or our international partners.

It's very important that the Canada Border Services Agency be very judicious in ensuring that only those goods that represent a risk are not unduly delayed or referred for inspection, and that we take appropriate measures to ensure that any goods, before they do leave, are in compliance and conformity with all of the responsibilities and all the legislation that we enforce.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you very much.

[The Chair, Liberal, Bob Nault]

Thank you, Mr. Fragiskatos.

You have the floor, Ms. Laverdière.

[Hélène Laverdière, NDP, Laurier—Sainte-Marie, QC]

Thank you very much, Mr. Chair.

I would like to thank the witness for his very interesting presentation.

How does the Canada Border Services Agency convey the necessary information to importers and exporters so that they can comply with not only our laws, but also with our regulations and decisions made by the government?

I know the Office of the Superintendent of Financial Institutions has guidelines in this regard, but they have not been updated for six years.

How does CBSA convey this information? Is the agency responsible for providing that information to importers and exporters and, if so, how does it do so?

[Andrew LeFrank]

It's a good question and it's an important question. There are a number of means by which importers and exporters can have access to information.

The agency website has a number of things that help importers and exporters and guide them in terms of what the regulations are, and, probably just as importantly, it shares with them where in fact they need to go and which other particular agencies are involved in ensuring that they're in compliance.

Related specifically to things subject to the Special Economic Measures Act, the Global Affairs Canada website has a list of goods that are subject to export controls and sanctions, and countries that are involved. In combination with that and the information available through the CBSA on our website and through our business information service line that's available for exporters and importers to ask questions, there are a number of ways in which importers and exporters can avail themselves of the appropriate information.

[Hélène Laverdière, NDP, Laurier—Sainte-Marie, QC]

On your website, do you have a complete list of the individuals, countries and everyone who has been subject to sanctions, specifically under the Special Economic Measures Act?

[Andrew LeFrank]

Certainly Global Affairs Canada has on its website a list of any of those goods and/or countries that are subject to special economic measures. As far as a list of individuals goes, I'm not familiar with any.

[Lesley Soper]

Actually, I think Justice publishes in its consolidated statues a list of all goods and persons scheduled under SEMA.

[Hélène Laverdière, NDP, Laurier—Sainte-Marie, QC]

Just out of curiosity, are goods that should not be exported often intercepted at the border?

Is there a difference between small and large companies in this regard? Instinctively I would expect that small companies with very few exports in well-defined niche markets are perhaps less aware of the laws, but that is just an assumption on my part.

Thank you.

[Andrew LeFrank]

Right. I don't think I would differentiate between those large importers or small importers/exporters. All of the regulations and all of the requirements are available for everybody.

Again, the Canada Border Services Agency applies the law equally. It doesn't take into consideration whether it's a small importer or a large importer/exporter. All of the companies that are exporters are required to comply with the law and provide that information.

I would suggest that small first-time exporters/importers are non-compliant with the law probably just as regularly as are large regular importers or exporters.

[The Chair, Liberal, Bob Nault]

Merci.

Mr. Levitt, go ahead, please.

[Michael Levitt, Liberal, York Centre, ON]

Thank you very much.

I'm wondering if you can give us an idea of how many times CBSA has identified inbound and outbound breaches of Canadian sanctions regulations. I ask that because we were a little surprised in one of our earlier sessions to hear of the relatively small number of investigations and prosecutions by another agency.

[Andrew LeFrank]

I brought some figures in anticipation that that might in fact be the case.

[Michael Levitt, Liberal, York Centre, ON]

Sure.

[Andrew LeFrank]

Just to give you an idea of the order of magnitude, in 2015, about $480 billion worth of goods was exported from Canada. The CBSA receives approximately 800,000 electronic export declarations and approximately 44,000 paper declarations each year. However, not all exports are required to be reported, and there are some instances in which goods aren't reported, so that doesn't represent the whole list.

With respect to the enforcement we've done, I can tell you how many investigations we've conducted. We conducted 11 investigations, and as you're aware, there were two prosecutions. But I think it's important to recognize that the goal of the legislation is not so much to necessarily get a prosecution as to prevent the goods from actually leaving and causing harm, or causing benefit to an unfriendly company.

In the past 250 days, CBSA has prevented approximately 250 export shipments to sanctioned countries. Of those, 64 exports were assessed as prohibited under the Special Economic Measures Act; 41 of those shipments were actually seized as forfeit; 112 of these cases involved shipments destined to Iran in violation of the Special Economic Measures Act, Iran regulations; three involved sanctions against Libya, and two, against North Korea.

[Michael Levitt, Liberal, York Centre, ON]

Given the relatively low number—11 investigations and two prosecutions—is this an issue of resources? Is it an issue of priorities? What would you say is the major determinant of that? If more resources were available, could this be more robust? Would we see more investigations taking place? I understand you need to prioritize resources where you feel they can best be allocated.

[Andrew LeFrank]

Right. I wouldn't say that additional resources would necessarily lead to more investigations. However, I would point to the fact that the 2016 audit of controlling exports at the border did find the staffing levels of coverage for export control were not sufficient to monitor or control all exports at all times. The OAG audit found that some export shipments at potential risk were exported before CBSA was able to examine or detain them. Recognizing the importance of enforcing export control, federal budget 2016 has proposed the provision of 13.9 million over five years starting in 2016-2017 to improve export verifications by enabling CBSA to enhance the identification process and increase examination rates of high-risk shipments. The allocation of these funds has not yet been approved by Treasury Board.

[Michael Levitt, Liberal, York Centre, ON]

Thank you for that, and thank you for that level of detail. That's helpful to this committee.

How does your organization coordinate and co-operate with like-minded states and international organizations in the application and enforcement of sanctions measures? Are there best practices or lessons we can learn or adopt from other like-minded partners?