Thanks so much, Mr. Chair and members of the committee. I'm pleased to be able to testify before the standing committee in your comprehensive review of the Special Economic Measures Act and the Freezing Assets of Corrupt Foreign Officials Act. I'll discuss my perspective on each of those laws in turn.
First, as you know, FACFOA was enacted in 2011, in the midst of the Arab Spring, as a tool for supporting states in political turmoil that were trying to transition toward democratic rule. FACFOA allows Canada to temporarily freeze the property of corrupt current or former foreign officials, as well as that of their families or associates, when the foreign state formally requests that Canada do so, all with a view toward ultimately recovering those assets for the foreign state. Given this relatively narrow scope, however, FACFOA has been utilized only a handful of times to sanction corrupt foreign officials, in the cases of Tunisia, Egypt, and Ukraine. I note that the Ukrainian sanctions were jointly authorized under SEMA.
In my view, the major problem with FACFOA as enacted is that it relies on a foreign state claiming that a politically exposed person from that state has stolen funds and then formally requesting that Canada act. The expectation that governments will be eager to call out corruption within their own ranks is not consistent with the reality that many of the world's countries are not free. Indeed, the organization that Mr. Kramer formerly ran, Freedom House, in its “Freedom in the World 2016” report, concluded that only 86 countries can currently be considered free, while 109 countries are either partly free or not free at all.
The effect of this reality is to limit FACFOA's usefulness to penalizing corrupt former officials when corrupted governments have changed, rather than productively sanctioning corrupt current officials, as foreign heads of state, in many cases, are often themselves complicit in or benefiting from corruption. Indeed, authoritarian governments that run on endemic corruption are thus totally outside the reach of FACFOA.
Let me illustrate the problem.
I serve as pro bono counsel to Mohamed Nasheed, the first democratically elected president of the Maldives, the small island nation in the Indian Ocean. He was overthrown in a coup, and in February and March of 2015 was abruptly arrested, tried, convicted, and sentenced to 13 years in prison on terrorism-related charges. The UN found that his detention was arbitrary and in violation of international law. With immense pressure brought against the Maldives by the international community, he was released in January 2016 and permitted to travel to the United Kingdom for medical treatment.
In September 2016, just a few months ago, the largest corruption scandal in the history of the country was uncovered. Nearly $80 million from the state-owned tourism firm was reported stolen, with President Abdulla Yameen at the centre of the scandal. Documents found on the electronic devices of the now disgraced and imprisoned former vice-president, Ahmed Adeeb, revealed a clandestine system whereby top Maldivian officials, including Yameen, senior ministers and aides, and members of the judiciary, received bribes and stolen money. Senior judges were reported to have received money and luxury flats and to have met regularly with the president and his deputy, who then fixed the outcomes in prominent court cases, including that of Nasheed. Yameen himself allegedly received bags of cash filled with up to $1 million.
Additionally, the documents uncovered a plan for the president's ministers and aides to launder up to $1.5 billion with the help of the country's central bank and a few foreigners. Other leaked documents accuse Yameen of corruption and fraud in state-owned entities, with a value of $150 million. This involved the selling of oil to the then military dictatorship of Burma in the early 2000s, when it was under Canadian and international sanctions. Yameen has publicly apologized for the scandal, but has refused to admit his responsibility.
Yet under FACFOA, Yameen and his ministers get a free pass and have total assurance that not only will Canada not sanction them for this corruption, but even worse, as long as their political party remains in power—I note that he and his half-brother, Maumoon Gayoom, have ruled the country for 33 of the last 38 years—Canada may actually be a safe haven where he can transfer and maintain his stolen assets for safekeeping in Canadian banks.
Why does this matter? In short, corrupt governments often stand against against the values and priorities of Canada and other western countries. In the case of the Maldives, President Yameen returned his country to autocracy, has strongly aligned his country with China, and has allowed it to become a hotspot for Islamic State recruitment, with more than 200 fighters estimated to have travelled to Syria and Iraq. That would be the equivalent on a per capita basis of Canada sending 21,000 fighters to ISIS. In my view, all of these are developments that are contrary to Canada's interests.
I understand and appreciate that in adopting the law initially Canada considered it easier to act when a foreign government had explicitly assessed evidence of corruption and requested assistance. Nevertheless, I believe that for the most egregious of examples of the kind that I have described, it would benefit Canada to consider amending FACFOA so that it could have the flexibility to act without the request of a foreign government and could stand publicly against grand corruption when it occurs on this kind of scale.
Second, with regard to the Special Economic Measures Act, while the law provides for a much more robust sanctioning capability than FACFOA, it too has room for improvement. Currently, the Canadian government can take unilateral action under SEMA only when “a grave breach of international peace and security has occurred that has resulted or is likely to result in a serious international crisis”. However, this threshold is significantly higher than that given by the UN charter, which empowers the UN Security Council to impose economic sanctions when there is merely “the existence of any threat to the peace, breach of the peace, or act of aggression”.
As Canada readily employs the United Nations Act to join on to the UN's sanctioning of regimes, there is no reason that Canada should require a separate and higher threshold to trigger economic sanctions absent a UN regime, especially given that vetoes of China and Russia have arbitrarily blocked the imposition of UN sanctions, especially in the case of mass atrocity crimes.
To remedy this inconsistency, I would respectfully request that Parliament consider amending subsection 4(1) of SEMA to include a third justification for economic measures, in addition to the “international organization” and “grave breach of international peace and security” justifications that are already present, by adding this language, “or to prevent or respond to actual or imminent mass atrocity crimes including genocide, war crimes, ethnic cleansing, and crimes against humanity”. An expansion of the language in this manner would give teeth to Canada's principled international leadership on human rights.
Lastly, I should note that as Canada reviews its sanctioning capabilities I very much hope that Parliament will consider amending SEMA and the Immigration and Refugee Protection Act to authorize your government to impose entry and property sanctions against any foreign person or entity that's responsible for extrajudicial killings, torture, or other gross violations of international human rights.
In March 2015, a resolution advanced by Irwin Cotler was adopted by Parliament, unanimously supporting the creation of such human rights sanctions, but efforts to enact these amendments analogous to the U.S. global Magnitsky act have languished. In my view, having such authorities at the government's disposal would provide it with maximum flexibility to sanction the most egregious human rights violators around the world.
Thank you very much for the opportunity to appear before the standing committee today, and of course I'm also happy to answer any questions you might have.