Foreign Affairs Committee on Oct. 31st, 2016

[Prof. Kim Nossal]

I am an anti-unilateralist when it comes to sanctions policy and the Canadian government. My own view is that when Canada engages in sanctions it is most effective when it is as multilateral as possible. There's no doubt that you can take multilateral sanctions and make them harsher, and go out in front of your friends and allies, but in my humble estimation that is, in general terms, not a wise way to go. The ability to act in concert, especially with close friends and allies, is critical, and if you can manage a broader way, all the way to the United Nations, even better.

I must admit that my skepticism about sanctions as a general rule is magnified when it comes to a relatively small actor such as Canada seeking to impose unilateral measures. I simply ask the question: what impact does that kind of unilateral measure have on the international system?

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you.

[The Chair, Liberal, Bob Nault]

Merci, Monsieur Aubin.

I will go to Mr. Saini, please.

[Raj Saini, Liberal, Kitchener Centre, ON]

Thank you very much to both of you for being here today.

Mr. Goldman, I have a few questions for you, because I know that you've written widely on the European judiciary and you've highlighted some points where in the past they've had difficulty getting indictments. One of the facts was that the courts did not have access to classified information. In a lot of the decisions that were made, they only had access to unclassified information.

Also, you've written about the difficulty with judicial oversight with regard to the people on the list. The two famous cases are the Ahmed case and the Kadi case.

You've also said that probably the Americans, through their inter-executive legal and policy review, have a more robust option.

Knowing the issues that they've had in Europe and the sorts of successes they've had in the United States, could you highlight what you would recommend to this committee in terms of judicial oversight or making sure that in terms of people who are predesignated there would be a more effective way of getting an indictment or making sure the sanctions were effective?

[Zachary Goldman]

Absolutely. Thank you very much for your question.

I think judicial involvement in the sanctions process is critical to the integrity and legitimacy of the enterprise. At the outset, I want to make sure that I'm clear about that.

I would say that there are two characteristics of a sanctions regime that are important, and I think this has troubled the EU in some regard. I won't say that the U.S. does it better, but I will say I think the U.S. does it reasonably well.

The first is clarity about the process. What exactly goes into a decision to impose sanctions in the first instance? What institutional actors are involved? What are the legal criteria? What are their burdens of proof? What are the evidentiary thresholds? I think it's important that there's clarity about these issues and that they are foreseeable, and that this in some measure helps protect the due process rights of designated individuals.

Second, I think it is important that the courts have some ability to review classified information, information that's provided in confidence by the executive branch, but again, in order to protect the due process rights of sanctions targets, it's important that the sanctions targets know enough about the underlying conduct for which they have been designated that they can mount an effective defence.

These are the two principles that I would articulate as being important, and at least in the U.S. context, I would say we do reasonably well. There's always room for improvement, but I think we do these reasonably well, and they are important to focus on moving forward.

[Raj Saini, Liberal, Kitchener Centre, ON]

Thank you very much for that.

The second question I have highlights a case in England, the Law Lords and Ahmed case, where they decided that the judicial oversight through the ombudsperson model was not effective, and after Resolution 1267 in the United Nations, they decided to form the office of an ombudsperson.

Is this something that you would recommend domestically also to provide more effective judicial oversight?

[Zachary Goldman]

The ombudsperson at the UN, do you mean?

[Raj Saini, Liberal, Kitchener Centre, ON]

Well, they have one at the UN level.

[Zachary Goldman]

Right.

[Raj Saini, Liberal, Kitchener Centre, ON]

At the domestic level, do you think it's something that would be effective?

[Zachary Goldman]

Yes. As you know, I'm sure, the ombudsperson at the UN for a long time was a Canadian judge, Kim Prost, who did an exceedingly fantastic job. I think there are two important things I would focus on. I'm less concerned with the particular institutions than with the functions they serve. To me, the important thing is that designated individuals have a meaningful opportunity to contest the sanctions that have been imposed on them and that the process is perceived as fair.

Different systems will have different ways of accommodating those two objectives. Given where the U.S. is, for example, I don't know that an ombudsperson would add a tremendous amount to the system that we currently have in place. I believe the system now allows for two different kinds of review. You can petition OFAC directly to reconsider a designation or you can file suit in court to have a designation reviewed by the judiciary. In that context, my sense is that this is an effective series of mechanisms to review a sanctions determination.

For example, speaking for the U.S., I don't know that an ombudsperson would add a tremendous amount to the already existing context. It may be the case in the Canadian context that an ombudsperson would add some measure of due process protections for designated individuals.

[The Chair, Liberal, Bob Nault]

Thank you, Mr. Saini.

That will take us to the next round.

Mr. Sidhu.

[Jati Sidhu, Liberal, Mission—Matsqui—Fraser Canyon, BC]

Thank you, Mr. Chair.

Thank you both for sharing your wisdom and experience with us today.

I have a question for you, Professor Nossal. You suggested that sanctions tend to be more successful when placed on liberal democratic states rather than authoritarian regimes. For example, in your article “Liberal-democratic regimes, international sanctions, and global governance”, you wrote:

...the record of sanctions failures shows clearly that military dictatorships...human-rights abusing governments, and indeed all regimes with illiberal forms, generally find it easy to resist the punitive impact of sanctions.

What's your take on this?

[Prof. Kim Nossal]

That conclusion was reached largely because, if I use Professor Goldman's terms, it's difficult, generally speaking, to change the cost-benefit calculations of certain kinds of governance.

Among the interesting cases of sanctions success historically, two cases are usually held up. One involves the sanctions imposed against the State of Israel by the Eisenhower administration in 1956. It was a threat of sanctions rather than the actual imposition of sanctions. The Eisenhower administration threatened to revoke the State of Israel's status under U.S. income tax law, as a tax-deductible donation, as a mechanism for forcing Israel to shift its policies on the Sinai. The Israeli government moved immediately.

The second case of a liberal democratic government sanctioning another liberal democratic government was in the aftermath of the French bombing of the Greenpeace ship in Auckland harbour in the mid-1980s. The New Zealand government seized the French agents. France let it be known to New Zealand that if these agents were not released into French custody, New Zealand exports to the EU would be negatively affected. New Zealand understood entirely what that threat involved. The agents who had planned and executed that bombing were released into French custody, released by French authorities, and indeed given medals for their behaviour.

There aren't that many cases where you get those kinds of sanction episodes, but in the case of liberal democratic governments, it seems to me that you do find, especially if there is dependence, a sensitivity there that just simply isn't the case in authoritarian or military dictatorships.

[The Chair, Liberal, Bob Nault]

Thank you, Mr. Sidhu. I'm going to cut you off because we're really tight on time and I want to go to Mr. Allison.

[Dean Allison, Conservative, Niagara West, ON]

Thank you very much, Mr. Chair.

As well, thank you very much to our witnesses.

We have heard also from other witnesses that looking at some of these overarching sanctions sometimes doesn't work. We talked about whether we're trying to send a message or some of these other things.

My question is for you, Mr. Goldman. Obviously in the States you're familiar with Magnitsky. It was something that Mr. Kent was talking about with Mr. Nossal. I want to get your comments on Magnitsky as it relates to the U.S. and where—and if—you feel that it's been successful. I know that we're certainly aware of some of the unintended consequences, such as the refusal for adoptions by Americans who want to bring in Russian babies, etc.

As we look at some of the testimony that even we have heard about individuals and sanctions targeting, we've heard people say that it's either too expensive or it doesn't work, or they ask if people really put their money in Canada. I want to refer you to an article written last week by Daniel Leblanc, who basically talked about the fact that Mr. Browder, out of the U.K., has looked at some of these things, and already we're seeing money flow into Canada. What may be even more troubling is that for some of these individuals and the companies that were set up to take advantage of the fraud and what's happened, there's actually money flowing out of Canada in large amounts as well.

It is a reality. We realize that if we act unilaterally, it probably doesn't work, but as we move forward and other countries look at this, I think the whole purpose of Magnitsky is to say, listen, if you're going to take advantage, if you're going to rip off your own governments, you're not going to find a place in the western world where you can actually safely take that money, store it, spend it, and keep it safe until such time as you want to take advantage of that.

Very quickly, what are your thoughts on what has happened with Magnitsky and the U.S. and on whether you feel it's moving in that direction? I realize that maybe other countries need to move on this if we're going to have the desired effect that we want to have on multiple countries.

[Zachary Goldman]

I'm in wholesale agreement with three broad points you made. One, having the kinds of preventive measures in place to prevent being a destination for illicit capital is incredibly important. Two, countries, particularly western democracies, are better together, which is to say that in targeting particular problems, whether it's human rights abuses, WMD proliferation, or counterterrorism—you name the sort of illicit activity—western democracies and others are far more effective when they act in concert. Three, I think Magnitsky is a particular example of two things, one being the importance of reputation and the effect that imposing sanctions can have on reputation and in reinforcing the idea that human rights abuses are unacceptable, and the second, and sort of in relation, is the breadth of the activity in concert with allies.

There were unintended consequences. No action in the international arena is without a consequence, and sometimes there are unintended or unanticipated consequences, but that doesn't mean that the act in the first instance is inappropriate.

[Dean Allison, Conservative, Niagara West, ON]

Thank you.

[The Chair, Liberal, Bob Nault]

Thank you, Mr. Allison, Mr. Goldman, and Professor Nossal.

Unfortunately, Mr. Goldman and Professor Nossal, our time is up. On behalf of the committee, I want to thank both of you. As you know, this study is a very important one for Canada, and a very important discussion and debate about how sanctions apply and how effective they are. We very much appreciate your learned opinions. If there is other information for the committee that you think would be useful in our discussion and study, please feel free to forward it to us. We would be very receptive to that.

Again, thanks very much to you, Mr. Goldman, on video, and also to you, Mr. Nossal. One of my favourite universities is Queen's, so I'm glad to see you here today.

[Prof. Kim Nossal]

Thank you.

[The Chair, Liberal, Bob Nault]

Colleagues, we are going to take a five-minute break and then go right to two more witnesses for the next hour.

[The Chair, Liberal, Bob Nault]

We're now ready to move forward with our agenda this afternoon.

In our second set of witnesses, we have Clara Portela, who is a professor at Singapore Management University. She is in Singapore, where it is four in the morning. The second witness is Mr. George Lopez, a professor at the University of Notre Dame. Mr. Lopez is on the phone, so you won't see him, but you will be able to hear him.

We'll try to get the technical glitches out of the Singapore call and start with you, Mr. Lopez.

[Professor George Lopez, University of Notre Dame, As an Individual]

Thank you. Can you hear me?

[The Chair, Liberal, Bob Nault]

Yes, Mr. Lopez, we can hear you.

The process for the committee will be for you to start off with your presentation. If we can hook up with Singapore, we'll have Ms. Portela give her presentation and then go right to questions.

I'll turn the floor over to you for your opening comments.

[Prof. George Lopez]

Thank you very much, Mr. Chairman, for this opportunity to appear before you today.

I'm honoured by the chance to answer questions that have been prompted in your investigation of this legislation, and also to appear with many people whose work I admire, those who appeared last week, and those who are appearing now.

The use of multilateral sanctions, particularly by the UN Security Council, has been increasingly advocated—