Foreign Affairs Committee on Nov. 21st, 2016

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

Could you highlight any changes to SEMA or the Freezing Assets of Corrupt Foreign Officials Act that would make more effective legislation? Do you know of any recent changes to SEMA? You said you have been on the job for the last couple of months. Is somebody else going to have to—

[Alison LeClaire]

That's on Russia. On SEMA I would refer to my....

[Marc-Yves Bertin]

Sure. Perhaps I could understand the question a bit better. Are you asking whether I am aware of or have views on improvements to SEMA, or are you asking how the use of SEMA has evolved over time?

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

I'm more concerned about any changes you have seen.

[Marc-Yves Bertin]

The chair will know that our role here as public servants is to explain, if you will, the “how” of the legislation as opposed to the “what” and “why,” and whether or not we should be servicing potential amendments to the act. At this point, it would probably be premature for me to speak to you about any changes to the act, or I should say, it would be inappropriate for me to speak to you about any potential changes to the act.

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

Thanks, Mr. Chair.

[The Chair, Liberal, Bob Nault]

Okay. Since there are still another four minutes left in Mr. Sidhu's time, I'll go to Mr. Miller.

[Marc Miller, Liberal, Ville-Marie—Le Sud-Ouest—Île-des-Soeurs, QC]

Thank you.

Mr. Adsett, previously when you met with us, we discussed the holes that may exist in the current legislation, particularly with respect to gross violations of human rights. It's a topic that flows throughout the discussion we've been having at committee.

You mentioned that there is no perfect fit, obviously, whether it's in SEMA, FACFOA, or the current legislation that exists in the Criminal Code, and there seems, again, to be some confusion as to where the holes are.

A lot of people discuss the ability to freeze assets that are the product of crime, or proceeds of crime, and that legislation exists. Then in the context of a threat against international peace, obviously, the instruments under SEMA exist. Some of the concerns that have been raised are more in the nature of law enforcement. That is probably something, unless I'm mistaking the roles, you couldn't answer.

The question, then, is on the hole that does exist with respect to freezing legitimate assets or the proceeds of crime, but let's focus on legitimate assets that may exist within Canada with respect to gross human rights violators.

There are a number of concerns with plugging that hole, namely, due process, the ability to seize those assets—again, more in the realm of law enforcement—and also the nature of unintended consequences and repercussions of the state that may be involved that is backing the people who are violating human rights in a gross fashion.

I want to focus on more of a legal question. If you can't answer it, I'll submit it to you and perhaps you could submit a written response to the committee. What prevents, right now, the minister, by order in council or otherwise, from finding that a person abroad has violated human rights in a gross indecent fashion and freezing their assets in Canada? Again, I'm not talking about a Canadian national. I'm talking about a foreign national.

[Hugh Adsett]

Let me give a caveat at the very beginning. It wouldn't be appropriate for me to try to give legal advice to the committee, but maybe I can give some information, if that would be of use.

I think the question you're posing, if I can word it slightly differently, is, what would be the basis in Canadian law that would allow the minister to freeze the assets of an individual who is not a Canadian national, is abroad, and is a national of a foreign state? It's just the broad description, I think, of the issue or the question.

Currently your basis in Canadian law would be essentially the United Nations Act, the Special Economic Measures Act, or the Freezing Assets of Corrupt Foreign Officials Act, if you meet the criteria in that legislation. With the United Nations Act, of course, that's a Security Council resolution. With the Special Economic Measures Act, it could be one of two possibilities. The one most commonly discussed is a grave breach of international peace and security, but there's also another trigger under that act, which is essentially a resolution or decision of an association of states of which Canada is a part. That's actually how we implemented sanctions against the former Yugoslavia. It was a G7 decision or resolution.

Then with the Freezing Assets of Corrupt Foreign Officials Act, again, within the terms of that legislation, that's on the request of a foreign state to freeze the assets of corrupt foreign officials in the circumstances that are defined therein. Those would be the basic legislative tools that are currently available.

I know the committee, in a letter that was sent to the Minister of Justice, asked for information about the suite of legislative tools that might be available. There will be a response, I understand, from the Minister of Justice to that question that may assist, perhaps, as well.

[Marc Miller, Liberal, Ville-Marie—Le Sud-Ouest—Île-des-Soeurs, QC]

Again, I can't afford your billable rate on my salary—

[Hugh Adsett]

You can afford it.

[Marc Miller, Liberal, Ville-Marie—Le Sud-Ouest—Île-des-Soeurs, QC]

—so I'm glad you're now providing legal advice.

Let me ask how that is or is not precluded by an order in council, simply the minister deciding that this event has occurred and that action needs to be taken.

[Hugh Adsett]

Again, without venturing into a domain in which I would get into trouble, to have an order in council, you would generally need to have some kind of legislative basis or some kind of legal authority in some manner, as well. The question, I think, would be, what is the legal authority to issue that order in council?

[The Chair, Liberal, Bob Nault]

Thank you, Marc. We'll get back to you.

We will now go to Madame Laverdière, s'il vous plaît.

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

Thank you very much, Mr. Chair.

I thank the witnesses for this detailed presentation on the three groups of sanctions.

The committee is also very interested in knowing how the system functions, how the sanctions are implemented and if there are gaps in our legislation; in brief in everything that involves a systemic approach to the issue.

Since we will be able to ask several questions, I would like to follow up on what Mr. Kent raised. I would also like to emphasize that it was a pleasure to listen to him speak about the cases of Mr. Sechin, Mr. Chemozov and Mr. Yakunin. These are issues we had raised repeatedly under the former government.

That being said, after those 10 seconds of political intervention, I would like to continue on the topic of a consolidated list. Is there a reason why some countries have a consolidated list that is easy to consult by large and small enterprises, but Canada does not? Is this a practical issue, that is to say do we not have the necessary resources, or is it a legal matter? In short, why do we not have such a list?

[Hugh Adsett]

I have noted that the question of a consolidated list has come up a couple of times in the committee.

We currently don't have one. It's a question that has been raised by stakeholders as well, and one on which there will be further reflection.

I would say that one of the challenges with a consolidated list is that it is essentially an administrative list. At the end of the day, in order to have a fully solid sense of what the binding list is, it is necessary to return to the Department of Justice regulations themselves. That is one limitation of a consolidated list; at the end of the day, it's necessary to turn back to the regulations themselves as the source of the list in the first place.

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

Thank you.

Even without a consolidated list, businesses are obliged in any case to consult the regulatory texts. The consolidated list would simply be one less step. Have I understood the situation?

[Hugh Adsett]

Indeed.

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

Thank you.

Regarding the regulatory instruments, other countries offer legal services to help businesses. I am thinking particularly of smaller businesses for whom it is more difficult to understand the regulatory texts and be able to apply the sanctions effectively.

Is that something Canada could consider? If so, which department would be responsible for that service?

[Hugh Adsett]

That question, I think, probably goes back to the question that was posed earlier about the manner in which we have organized ourselves to respond to queries from the public, and generally to respond to sanctions.

I would say that, currently, we do have limits on our ability to provide advice to the public. What we have done, to date, to try to meet the demands for advice from the public has been, among other things, to make sure that we have what we hope is a clear website, which is set up in a manner that is meant to at least make it easier for small businesses and others to understand the sanctions regime and to break down the areas where we impose sanctions, not only by country but also by the types of sanctions that are imposed. It's a website that anybody can visit and click through to see what the scope of particular sanctions is. We've tried to do it in a fairly plain language kind of approach, because we understand that these issues can be very complex and complicated.

That's what we've done so far. As with other issues, we are taking good note of comments that have come, not only previously but during the committee hearings as well.

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

I would next like to know who is responsible for ensuring the follow-up of sanctions regarding businesses that work abroad. I am thinking for example of the Streit Group, that violated the Canadian sanctions and those of the United Nations. Who is responsible for monitoring the actions of Canadian companies abroad on the ground, to verify whether they are in violation of Canadian sanctions or those of the United Nations? What is the process for possible suits or sanctions regarding these companies?

[Hugh Adsett]

I can try a fairly high-level response to that question without, again, dealing with specific companies or specific concerns that might have been raised.

As a general approach, the enforcement of sanctions depends on, essentially, law enforcement agencies. That's the RCMP, and to a certain extent, the Canada Border Services Agency as well. If the department becomes aware of information that there are allegations that sanctions have been violated, that information can be passed on to law enforcement for them to take appropriate action. But it's very much a decision for law enforcement to make.

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

Are we proactive in monitoring what Canadian companies are doing abroad to ensure that illegal acts are not being committed? When we talk about companies who sell arms or sensitive materials, what are we doing in this regard? Are we actively ensuring that Canadian companies are not violating the sanctions that exist, or on the contrary, do we learn about this by chance or in the newspapers, and is that when we call on the RCMP or another police force to intervene?

[Hugh Adsett]

There's an expectation that Canadian companies operating abroad will comply with Canadian law; it's a general expectation and assumption that Canadian companies will do so. I would say that's probably the case in most circumstances. There are, of course, enforcement agencies, including the Canada Border Services Agency, that can probably talk more specifically to how they ensure that Canadian exports are done in a manner that is consistent with Canadian law, including Canadian sanctions law. There's not, to my knowledge, a monitoring program as such, but certainly, if we become aware of allegations or concerns, that information can be passed on to law enforcement as appropriate, as it would be, I suppose, with any other matter of law enforcement.

My colleague, Marc-Yves is....

[Marc-Yves Bertin]

Yes.

I would add that there are Department of Finance agencies, in particular the Office of the Superintendent of Financial Institutions, and also FINTRAC, that send information to clients, that is to say to the private sector, to keep them abreast of new regulations. In addition, there are the means of communication Mr. Adsett alluded to previously. There are, as you say, proactive measures to help the private sector comply with the law.