Foreign Affairs Committee on Dec. 5th, 2016

[The Vice-Chair, Conservative, Dean Allison]

I call the meeting to order.

Pursuant to the order of reference on Thursday, April 14, 2016, and section 20 of the Freezing Assets of Corrupt Foreign Officials Act, which requires a statutory review of the act, I want to welcome everyone to our meeting here today. I want to also welcome those of you who are joining us via video conference from the east and west coasts.

Joining us from Switzerland but actually in New York today is Gretta Fenner, managing director of the Basel Institute on Governance. Gretta, welcome. We're glad to have you here today. We'll get your testimony very shortly.

Then, as an individual, we have Gerry Ferguson, distinguished professor of law, Faculty of Law, University of Victoria, via video conference from Victoria, British Columbia. Gerry, we're glad to have you here as well.

Our normal custom and procedure is to start with your opening testimony, and then we'll go around the room over the next hour to ask questions back and forth from the government and from the opposition, based on your testimony.

Mr. Ferguson, I'll have you start first. The floor is yours; we'll turn it over to you. We look forward to your testimony, and then we'll move over to Gretta after that.

[Professor Gerry Ferguson, Distinguished Professor of Law, Faculty of Law, University of Victoria, As an Individual]

Thank you very much for the invitation to be here. Since I'm a lawyer, it won't surprise you that I'm going to start with a disclaimer.

My disclaimer is that when I was initially asked to speak, I declined on the basis that I did not have any specific knowledge about the two acts that your committee is reviewing. When I responded in that fashion to your clerk, she persuaded me that you were interested in hearing from me because of my general interest and knowledge about global corruption. I just want to lay that disclaimer out to you. I'm not intimately familiar with the application of FACFOA or SEMA, which you are now about to review, but I do have a few comments on it as it fits into the larger picture.

I want to leave a main message with you. I'll start, however, by saying I have prepared a brief. The brief was just submitted this morning. It needs to be translated, so you don't have a copy in front of you. The clerk will be giving you that later. It's about 45 pages in a PowerPoint style. I won't be able to touch on a lot of the detail today, but that information will be there.

I did also just want to mention in terms of detail that much of my knowledge on global corruption, asset recovery, and all matters related can be found in a two-volume book that I wrote just a year and a half ago and am currently updating for another release in January. That book is called Global Corruption: Law, Theory and Practice. It looks at global corruption largely from the international perspective and then compares Canada, the U.S., Britain, and the U.K. in terms of how we have or have not implemented our convention requirements.

I mention that book to you because it is about 780 pages, and there is a lot of detail in it. I designed it so it would be available to all interested parties. It is free. It's open access. It's on five websites, one of which is Transparency International Canada, and it was done under the auspices of the United Nations Office on Drugs and Crime, so it's available there as well.

Going back to what I want to say, my main message is that I think creating and maintaining an efficient, fair, and effective system for both freezing and ultimately returning corrupt foreign assets that are situated in Canada to lawful owners is obviously both a moral and international legal obligation. I believe that Canada has to step up its game and take those obligations more seriously.

Creating such a system—efficient, fair, and effective—is easy to say and I know difficult to create, but it's not impossible. I want to emphasize for you why I think it's so important that we have this effective system.

I start from a proposition. My main interest is global corruption, the largest topic. To me, it's a pernicious evil in our society. In my paper and my book I spend a lot of time talking about why global corruption is such a concern and what the devastating consequences are. One has to start by being convinced that, yes, it is a big problem.

The second point is that if we get to the point of accepting that global corruption is indeed a pernicious and devastating concept or activity or practice, what flows from that is grand corruption of the sort that you're interested in and I'm most interested in. Grand corruption can flourish when officials from these foreign countries can launder the proceeds of that corruption in other foreign countries and convert those proceeds into things such as real estate or luxury items in our country. You all are aware of the fact that there are certainly allegations of this happening substantially in the Vancouver region in the housing market.

My point here is that money laundering is really the lifeblood of corruption. It allows corruption, this grand corruption, to flourish. It seems to me that of maybe 10 things that are essential to grappling with corruption, one of those is that we have to try to choke out the personal profit and gain that arises out of this grand corruption. One of several important ways of doing so is creating this effective and efficient money-laundering and asset recovery law.

As I understand it, FACFOA is a very small but nonetheless important piece in the creation of an overall effective system for the recovery of assets. However, with respect, it seems to me that reviewing just FACFOA is like swatting a flea while ignoring the elephant in the room. FACFOA is important, but the real elephant in the room is global corruption and the absence of a fair and efficient way of attacking it from several points of view, including a good asset recovery system.

My hope is that you will find some room in your committee report of FACFOA and SEMA to convince other parliamentarians and the public of the fact that global corruption is indeed a devastating plague, with disastrous consequences far greater than most of us appreciate here in Canada, or I dare say worldwide.

There is indeed a pressing need to tackle global corruption on many fronts, including effective anti-money-laundering and asset recovery systems. I think Canada needs to seriously re-examine how well it are doing on both fronts. My assessment is that it are not doing well at all.

Finally, to me, one of the most urgent aspects of improving our asset recovery system is to move towards a beneficial ownership registry, just as the United Kingdom has in April of this year. We talk about returning assets, and I want to also ask the committee for some specific information about FACFOA and its success, which seems to me to be pretty small. The point is that if we are attempting to ascertain whether corrupt officials own property when 70% of that property is held in shell companies and we can not even ascertain who the true beneficial owner is, it's little wonder that we're not returning many corrupt proceeds.

If there's a point that leads directly into what you're doing, although it's clearly not in FACFOA, I think it's that Canada has to very seriously—as a few other countries are, England especially—create a beneficial ownership registry. It would be open to the public, but more importantly to investigative officers, to ascertain whether Mr. Gadhafi or somebody else actually owns that property in the name of company X. His name would not appear, and it would be deeply hidden.

The rest of my presentation really goes in that direction. I'm not going to go through it. However, the first part of my presentation tries to convince you that global corruption is indeed a very serious problem with disastrous consequences. I don't think the Canadian public appreciates that fully; hence there is less motivation on the part of the public, and hence on the part of our parliamentarians. That's the first part: trying to convince you of the importance of taking action against global corruption.

As I said, one of the very important pieces of taking action is creating a system that helps to prevent foreign corrupt officials from laundering their money through Canada, and in fact parking their money here and converting it into luxury items such as houses, etc.

There are many things that need to be done with regard to that system, but I think the one most required at the moment is for Canada to start studying, hopefully quickly, the creation of a beneficial ownership registry so that we can better determine who in fact is in possession of these potentially corrupt proceeds.

I think I'll stop there. I'd be happy to answer questions on any aspects of my opening statement.

[The Vice-Chair, Conservative, Dean Allison]

Thank you very much, Mr. Ferguson.

We're going to now turn to Ms. Fenner for her presentation.

[Gretta Fenner, Managing Director, Basel Institute on Governance]

Thank you very much. Ladies and gentlemen, good afternoon.

I'm not a lawyer. My disclaimer, however, is the same, and I'm not even Canadian, so I'm certainly no specialist on the Canadian criminal law. I speak to you from the perspective of a not-for-profit organization based in Switzerland but working pretty much around the world with developing or transitional countries as well as financial centres in efforts to recover stolen assets through the hands-on law enforcement work we do with our partner countries, as well as at the Global Policy Forum, where we try to promote the issue.

This is really my perspective. I understand you're looking at two specific pieces of legislation, but I have been asked to give you a bit more of a broader perspective on asset recovery. I'm very pleased that I can speak to you today. It is nice to see that your committee, and I imagine the House of Commons, is interested in the topic of corruption and asset recovery. For me, it is still very important, and I think Gerry and I speak the same language in that we realize that it's not just the responsibility of certain countries. It is very much a product of globalization, as well as a threat to globalization, so it is very much an issue we should be concerned about and work together on globally.

I'd like to speak about two elements in my opening statement. First I'll give you a message that you might want to use or not in talking to your colleagues in Parliament and government about why returning stolen assets is important and why Canada should care. Then I'll say a few words about what I think Canadian lawmakers and politicians should do to improve Canada's track record in asset recovery and to make a more active contribution to the global efforts.

First of all, why is it important? You may or may not have heard of the estimates that between $20 billion U.S. and $40 billion U.S. is stolen every year from developing countries through corruption. If you consider the broader term of illicit financial flows, there are estimates that $1.1 trillion U.S. in illicit assets flows out of developing countries every year. These are mind-boggling figures that should alert everyone to the seriousness of this issue.

The most obvious reason that asset recovery is important is that these monies should not be stolen and taken out of developing countries. Instead, they should be invested for the purpose of development in these countries.

I would, however, like to point out that this objective in itself should not be overestimated at this point. Gerry said we're not very successful globally at this point in recovering assets in huge sums. Rather, asset recovery, in my view, has an importance because it gets across the message that impunity for corruption, even for those powerful and rich, is no longer accepted. We take, in a sense, a very preventive approach to asset recovery, because by taking away the stolen assets from criminals, we succeed in taking away the incentives for these crimes. If we are more systematic with asset recovery, we will also have a preventive and not just a law enforcement effort. Because the whole chain of law enforcement and the judicial system is involved in asset recovery efforts, we also succeed in strengthening the rule of law, particularly in developing countries, thereby contributing to global development and stability. I think this is really important to understand. We're not just talking about specific cases; we're talking globally about a much more systemic impact when we talk about asset recovery.

If you look at why Canada should care, my personal view is that if the assets flow out of developing countries, they have to flow into some other country, and these are typically well-developed financial centres like Canada and Switzerland—my own country—as well as the U.K. and others. As a consequence, asset recovery, in my view, is very much is a shared responsibility between developing countries and financial centres. We can always blame the poor developing nations for having bad governance, having a lack of control over corruption; our financial centres, however, and the banks in our financial centres, contribute just as actively to these horrendous cases of money laundering and corruption as the badly governed regimes, so I think it is really the responsibility of every country with a significant financial centre to contribute to global asset recovery.

I'd also like to point to one last issue, and that is very much something that has been coming out in the last couple of years.

Corruption—and asset recovery really is just one measure against corruption—significantly is seen to lead to political instability and undermines economic development. These are direct threats to security that don't stop at borders. They do lead to immigration issues. They lead to terrorism. They have negative consequences on global trade. Again, when we talk about asset recovery, I would just like us all to realize we're talking about something much broader, something that affects many interests and issues at the core of Canadian foreign policy and domestic policy interests. This is the global context.

Now I have just a few words about what I believe a country like Canada—again, I'm not a Canadian and I'm not a Canada expert—should do.

On the preventive side—which, of course, I think should always be our preferred way of operating—it is absolutely essential that Canada fully implement and especially enforce a very strict anti-money-laundering regime.

In this regard, your committee should look at what has come out in the September 20, 2016, report of the Financial Action Task Force on Money Laundering. The report finds that Canada has a relatively adequate legal framework, but that there is one particular significant loophole, which I recommend you look at. It is that the money-laundering regime in Canada excludes in many respects legal counsels and legal firms. We all know that in large corruption deals legal counsel, legal firms, play a very important role as intermediaries.

What is also very significant in the asset recovery context is that the report also finds quite serious shortcomings in relation to investigating and prosecuting financial crime, especially money laundering and corruption. Canada does not have the level of investigative prosecutorial activity in relation to financial crime that it should have when you compare this activity to the significance of Canada as a financial centre.

I absolutely join Gerry—and I don't have to say more than that, really—in encouraging Canada to set up beneficial ownership registries that are publicly accessible. This also is a preventive measure. It is also, however, an important measure to strengthen law enforcement activity and thereby asset recovery.

Canada has made significant commitments in the context of the G20, in the context of the Cameron anti-corruption summit in May this year, and it will be great to see Canada follow through with these efforts.

I believe something that is very positive in the Canadian context and globally, comparatively speaking, is the fact that you have a form of administrative freeze. I believe this is in the FACFOA law, which is really considered internationally good practice. Together with Switzerland and the European Union, Canada is one of the few countries that provides an opportunity in law for administrative freezes. We have seen in the context of some of the Arab Spring cases and in the Ukrainian cases that I'm very personally involved in that this has meant Canada was able to act more quickly than other jurisdictions, and I encourage you to maintain and ideally to strengthen this provision and follow-up activity.

I'm jumping a little bit ahead here. I think that a country like Canada, which has significant capacity to investigate complex international financial crime, should help international efforts by itself more proactively investigating financial crime and corruption cases. That is one thing that should be encouraged through legislation or policy.

Oftentimes I see that investigators and prosecutors in countries like Canada are not very proactive. I understand why. These cases are extremely complicated, very slow, and success rates are very low. On top of that, you're supposed to co-operate with law enforcement agencies in other countries and developing countries, which are oftentimes much less efficient, and potentially with judicial systems that are very corrupt themselves.

There is not a huge incentive for law enforcement agencies in many countries, and I believe in Canada too, to actually follow through with what seems to be a government policy that anti-corruption governance is important. I emphasize that we need to find a way—you as lawmakers, as politicians—to translate these government commitments down to the actual enforcement level much more proactively, giving this tone from the top and setting the scene for Canada to be one of the leaders in this domain.

I would like to make two more points in relation to asset recovery, the first one more technical and the other more policy-oriented.

The first point relates to the fact that today we agree internationally that proceeds of corruption, assets that have been stolen from the state, do need to be returned to the country of origin that they have been stolen from. That is codified in an international treaty, the UN Convention against Corruption. What is more debated is whether proceeds of other forms of corruption—in particular, foreign bribery—should also be subject to potential repatriation or asset recovery.

As an example, a Canadian company—a fictitious case, of course—is found guilty of bribing a minister in another state to obtain a construction contract. The company in Canada is made to pay a fine to pay back the profits it made out of this case. These assets will stay in Canada at this point, and I'm not saying Canada is any different; other countries deal with it the same way.

However, the damage that was created by the bribery of this company is not so much in Canada; it's actually in the country where they have bribed someone and obtained a construction contract under dubious circumstances.

I strongly encourage Canadian lawmakers and politicians, as I do with other countries around the world—this is very much being debated at the moment—to consider recovering and returning or giving some of these assets that the companies have acquired through bribery in another jurisdiction to the victim states. That's one of the points.

My last point is one that I'm particularly passionate about. Anti-corruption and asset recovery oftentimes are seen as responsibilities of the judicial system, of law enforcement agencies, and in your case, of your development agency, because you do contribute significant amounts of money to governance and corruption programs. If, however, anti-corruption and asset recovery isn't understood as a whole-of-government agenda in the Canadian context, it can only be effective to a certain point, because additionally it will potentially hurt foreign trade objectives, foreign policy objectives, etc.

I see that over and over again. I really encourage you to be consistent and coherent in the implementation of an anti-corruption agenda as a whole-of-government approach, rather than just outsourcing it to justice and development.

I'm happy, obviously, to take any questions. I tried to give a bit of context here about the global agenda, and I hope that was, in some form or another, useful.

Thank you.

[The Vice-Chair, Conservative, Dean Allison]

Thank you very much, Ms. Fenner.

Go ahead, Mr. Kent, for six minutes.

[Peter Kent, Conservative, Thornhill, ON]

Thank you very much, Chair, and thank you both for your appearance before us today.

Beyond asset recovery under FACFOA, the committee has also been hearing about the detection, the seizure, and the blocking of attempts to move funds into Canada by corrupt foreign officials in the sense of the Magnitsky Act passed by the U.S. Congress and the proposed global Magnitsky Act being considered by the Americans and the Parliament at Westminster.

What are your thoughts with regard to naming and shaming and ostracizing the perpetrators of human rights abuse who attempt to move their ill-gotten gains into a variety of countries? How effective would unilateral or individual national laws be to act against this, in the sense of the Magnitsky Act in the U.S., the probable Magnitsky-type act in the U.K., and perhaps the addition of a Magnitsky act or a global Magnitsky act of some sort in Canada?

Perhaps Professor Ferguson could answer first, and then Ms. Fenner.

[Prof. Gerry Ferguson]

Thank you very much for the question.

I'm all in favour of greater enforcement, including naming and shaming and every other possible way that we can attempt to keep corrupt funds from being processed or laundered through our Canadian financial institutions. As well, in many cases the money is not just passing through our institutions on its way elsewhere but is actually being parked in Canada by the buying of real estate or other luxury items.

As you've heard, I'm not familiar with the Magnitsky Act, but it sounds very much like it's part of prevention of money laundering at the international level. For me, the problem in Canada is our lack of enforcement of the mechanisms that are already in place.

Let me just take two examples. Financial institutions are required to do reporting to FINTRAC. FINTRAC gets a lot of information, but has very few resources to actually do anything with that information. Secondly, we're told that the financial institutions' reporting, other than maybe the big six banks, is very thin.

You probably know that the Federation of Law Societies of Canada avoided being brought into the proceeds of crime act or the money laundering act in the Supreme Court of Canada on the basis of privilege, etc. Those law societies now feel.... British Columbia, for example, has a set of regulations that lawyers are supposed to follow. The problem is not that the regulations are terrible, but that the law society is not proactive in ensuring that those things are happening.

In the case of the real estate market, there were lawyers in British Columbia who were obviously facilitating those huge purchases of luxury houses in Vancouver, and to my knowledge at least, there has been no policing of that. Now that it has hit the news, we might find a little, but, basically the law society is not proactive.

I see the enforcement side of this as a bigger problem than the legal framework side.

[Peter Kent, Conservative, Thornhill, ON]

Thanks, professor.

[Gretta Fenner]

Thank you very much.

I think the Magnitsky Act is probably an important symbolic act. I'm not entirely sure it will have a massive consequence in the broader scope in terms of all of a sudden stopping a huge amount of illicit international flows of assets. In terms of sending the right signals to say that Canada is definitely not going to be a safe haven for these assets, I certainly support that, but I do agree with Gerry that other measures, such as beneficial ownership registries, will in the end have a much more significant impact.

If I had to choose, I would certainly go for a beneficial ownership registry rather than a Magnitsky Act, but if I had the privilege of having both, obviously I'd certainly support both.

[Peter Kent, Conservative, Thornhill, ON]

We've certainly heard abundant testimony about the lack of capacity in Canada and sometimes the lack of priority in investigating the possibility of funds, but we've heard questions about evidence and how that evidence might be gathered about corrupt foreign officials in places that are either too dangerous or not accessible to Canadian investigators.

Would you recommend or suggest that we might consider accepting openly sourced evidence or evidence provided by other countries, other sources?

Again, professor, you can start first.

[Prof. Gerry Ferguson]

I am a criminal law professor. I think my students would say I'm slightly oriented toward the defence bar on many of these issues, but here's an issue where I think I swing clearly in the other direction. I think that we have to look at the context, as we're always asked to do, with each crime, and here we have to look at the context of the type of crime we're investigating. Here is a type of crime for which there was global knowledge, and one might say global knowledge of just how corrupt this government that we're referring to has been. There are all sorts of evidence, as you referred to, which I think is credible.

One of the mechanisms that certainly is possible is another very interesting and controversial approach that Britain introduced on October 13. They've introduced the very broad Criminal Finances Bill. It's in the legislative process now and being considered.

There are five important initiatives in that bill, all related to money laundering, asset recovery, and that flow of money. One of those initiatives is called an “unexplained wealth order”. If this bill passes, then not every police force, but their designated major crime police forces such as the Serious Fraud Office or their customs office, which investigates these matters, will have the ability to apply to a high court judge to ask for and to have ordered this unexplained wealth order. An example could be when person X is in possession of a $10-million house and there appears to be no apparent explanation of where they got the $10 million.

It is controversial. It will be controversial. It moves in the direction I'm talking about.

I think the burden of proof has to be shifted in a very significant way for persons who are notorious and for regimes that are notorious. Any NGO's assessment on these matters can show just how corrupt a regime has been. I think that giving that regime every due process item that we give to our poorest citizens, who are subject to the power of our state, is really misguided. I think we have to take the exact opposite view, which is that in the face of very strong evidence of corrupt behaviour, we really reverse the process and have them account for their ownership in our country of this property.

[The Vice-Chair, Conservative, Dean Allison]

Thank you very much.

We're going to move over to Mr. Sidhu, please.

[Gretta Fenner]

Thank you.

A person relating to the—

[The Vice-Chair, Conservative, Dean Allison]

Sorry, that's all the time. Sorry, Ms. Fenner. I apologize for that. We'll try and catch you at the next one. We have to move over to the next round.

Mr. Sidhu is going to take over the floor.

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

Thank you, Mr. Chair. Thank you both for your testimony today. You're very knowledgeable.

I had a chance to read parts of the Global Corruption Book. It says that the effectiveness of general deterrence is seriously questioned in the research literature on sentencing. I'm referring to this Regina v. Drabinsky corporate security fraud case in the Ontario Court of Appeal. I find this relative to global sanctions on foreign officials as well. The question is, would harsh sanctions against the foreign officials, in your academic opinion, deter individuals or groups from participating in illegal activities such as money laundering?

I'll start with you, Mr. Ferguson, and then Ms. Fenner can add her two bits on it.

[Prof. Gerry Ferguson]

I'll try to be brief so that Gretta can also get her two bits in.

Deterrence is something that I look at as a criminal law professor. Indeed, in our regular criminal justice system, which deals mostly with street crime and with people who are not motivated largely by a rational weighing of pros and cons, deterrence, as the literature shows, is of a questionable value.

Where deterrence does have the most powerful influence, according to the research, is in dealing with large-scale economic crime, where those persons have the most to lose by being investigated and found guilty. The difficulty with deterrence with even that group, however, is the second proposition that's very well known in deterrence literature. That proposition is that it's not the size of the penalty that is the biggest deterrent; it's the probability of actually getting caught. The bigger the offence, the more enforcement you have, and then the higher the probability of being apprehended, the more likely it is that the business person is going to say, “No, I'm not prepared to take that risk.”

When we have low enforcement, even if we have big fines, we don't have the real deterrent value that we need. I'm not speaking against high sanctions for those individuals—they should have them—but it's not really going to deter others effectively unless we can also demonstrate that we are serious about catching you and have the resources to catch you. At the moment, these persons know that the risk of getting caught is very low.

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

Ms. Fenner, do you have a take on that? Since you've touched on money laundering in your presentation, do you have a different take on this?

[Gretta Fenner]

Practically, what we see—and as I said, we work with law enforcement pretty much around the world—is that the challenge still is that although police are investigating corruption, they oftentimes do not actually trace assets. People may go behind bars and after 10 years come out of their prison cell and still have amazing amounts of money stashed away in other jurisdictions. That really doesn't deter anyone. In some countries, it's actually quite all right to live in a prison, especially if you can bribe your way out of it every weekend. I do think that taking the money away is an extremely important deterrent; if there's anything, this is the most effective.

In terms of some of the countries we work in, we have recently seen, through the work we've done in one country in Africa—in Kenya, actually—a 4,000% increase in successful corruption cases that we have brought to court, with similar amounts of assets confiscated, for the first time in the history of Kenya. This is now making headlines in the newspapers almost every day. You can imagine that maybe they are not entirely scared yet, but certainly they are starting to listen a little more. I do think that this is the most effective deterrent, yes.

Can I just add two words on the evidence and the intelligence, if I may?

I would like to encourage you to look into a number of ways of working with other jurisdictions to actually get access to evidence and intelligence from other jurisdictions. There are plenty of opportunities, including the FIU-to-FIU channels and joint investigation teams. You can work through vetted teams, as the U.S. does a lot in financial crimes in Africa and in countries that are harder to access. There are numerous well-established law enforcement practices that can be used. That refers to the previous question, but I think that in practice there are numerous ways of dealing with this issue.

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

Mr. Ferguson, since you're writing another book on the corruption here, what do you see as the end goal of these sanctions, in your experience?

[Prof. Gerry Ferguson]

The end goal always with sanctions is, number one, to provide an appropriate response to those who have violated our laws. Global corruption is violating human rights laws with huge impact, so the first function is to deal sternly with those who create such violations of human rights.

Secondly, though, the sanctions are also there to deter, to the extent that deterrence is possible. As I say, we also have, I think, a moral obligation as a country. We are a relatively wealthy country. We do have the capacity to do more to try to stem global corruption and view it as very much a human rights issue, not just an economics issue. The greatest sufferers of this global corruption are of course the poorest countries, and the first part of my paper and my book concentrates on that aspect. I think we have a moral obligation to do more.

I'm not sure if you've heard testimony yet from the RCMP who are responsible in this area. They did nothing and they had zero resources put into international apprehension and investigation until they were embarrassed into doing something. In 2007 they were embarrassed into creating two units of seven officers each, one in Ottawa and one in Calgary. Then just less than a year ago, in January, the commissioner, either before your committee or another committee, was honest in saying he had had to drag most of those people out of the ordinary bribery cases, and the only ones they're really red-flagging right now are the terrorist-financed cases.

I hope that as a committee you're cross-examining our officials. I'm not blaming the RCMP. They're not getting funding from the federal government, extra money to pursue that. I'm throwing out some pretty big accusations. I'm not wrong on the seven and seven and what the commissioner said in January of this year, but the problem is—and I'll have to be judicious and not say it's a joke—that we're really not playing our part. As Gretta says, we should be playing a leading role, and we're playing very much a back seat role in terms of investigating matters of this sort.

[The Vice-Chair, Conservative, Dean Allison]

Thank you. Thank you very much, Mr. Sidhu.

We're going to turn now to Madame Laverdière, please.

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

Thank you very much, Mr. Chair.

I would also like to thank the two witnesses for their presentations, which were very interesting.

I completely agree that corruption is a kind of cancer that undermines democratic development, as well as international security and stability.

To pick up on your last comment, Mr. Ferguson, I would say this committee has heard very clear testimony about the lack of resources at the RCMP, and elsewhere as well, and that the RCMP is hardly even investigating these matters. Since the risk of getting caught is very low, so too is the deterrent effect.

My question is for Mr. Ferguson, but I might go back to Ms. Fenner after.

As I recall, the OECD published a report three or four years ago about Canada's role in relation to the OECD convention on fighting corruption. Among OECD countries, Canada was not doing very well in its efforts to fight corruption.

From what you have seen, has any progress been made since then or have things stagnated?

[Prof. Gerry Ferguson]

No. We were admonished by the OECD when they did the evaluation of our Corruption of Foreign Public Officials Act, and then the government responded by creating these units.

Three years ago we were told by the RCMP that they had two big cases, and we saw $9 million and $10 million penalties. We saw charges in a third case. We were told that the RCMP had active investigations under way on 34 other cases. We have not heard anything about those other 34 cases, and I dare say that if you cross-examine them, you will discover that either the cases have disappeared or they simply don't have any resources to work on them.

I would say we've slipped from, say, 2014 to 2015. Certainly from 2015 on, I would say we've slipped in terms of our enforcement of the Corruption of Foreign Public Officials Act.

As you all know, there's one very big case, SNC-Lavalin. That's going to go on for a long time because they are looking for an administrative remedy rather than a criminal sanction, and we haven't officially moved in that direction. I'm not opposed to our moving in that direction, by the way, but Canada hasn't.

We have another SNC-Lavalin case that isn't really their case, because they weren't charged, but Mr. Wallace and the corruption involved in the Bangladesh bridge are also in process. There are two big cases going on, both connected, but nothing else whatsoever is really percolating.

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

Thank you very much.

Sorry; I'll transfer to English, because I've listened to you in English and all my notes are in English. Sometimes I have trouble translating into my own language. Also, thank you to our Swiss friends, who sometimes were more proactive than Canada itself regarding arrests of people involved in money laundering or other kinds of activities.

Ms. Fenner, you talked about returning assets to countries. We had a case here in Canada a few years ago involving assets from a former Tunisian official who had houses in the eastern part of Canada, this time. I'm just trying to remember off the top of my head. Canada's decision, after seizing those assets at the time, was to return about 25% of the money to Tunisia and keep the rest for administrative costs here in Canada. I was somewhat flabbergasted—and that's a word I like—when I heard that.

I wonder what the general practice is in other countries when you freeze and take over assets and return them to developing countries, in particular. Is it 100%, or just a fraction of the amount?

[Gretta Fenner]

Thank you for the question, Ms. Laverdière.

If I may, I will answer in English. It will be easier for me.

Thank you very much for the question. This is something I'm very passionate about. It's an unsolved issue, but I certainly am also flabbergasted to hear that only 25% was returned to Tunisia.

The issue is that under the UN Convention against Corruption, assets stolen through corruption or any crime defined in the UN convention must be returned to the country of origin. The convention says that you can keep a small percentage to pay for your administrative costs and your own law enforcement actions. Good practice internationally would say that this is never more than 5%.

That said—and I must admit that I am not 200% on top of the case, which was, I think, around the son-in-law of former president Ben Ali—