Foreign Affairs Committee on June 6th, 2023

[Dr. Erica Moret]

The first thing is to learn what not to do. What we've seen happening with U.S. sanctions in the past 10 years or so is a consequence of overcompliance in financial sector de-risking. That has very broad-ranging ramifications that go way beyond the intended functions of sanctions. The first lesson is to find a very delicate balance between compliance—that means ensuring correct compliance—and not falling onto the other side of the scale, which would be overcompliance.

Again, I come back to the point that OFAC depends on hundreds of people. That extends to other government agencies, as well. There's an extremely close working relationship, as I understand it, between different government departments within the U.S.

That, again, is a key issue: working together with others that play different roles. We see how that's not always the case when the decision-making, or at least the responsibility for enforcing sanctions, falls to one particular part of government. It's vital to work across the board, as well.

[The Chair, Liberal, Ali Ehsassi]

Thank you, Ms. Moret.

For the last minute and a half, we'll go to Madame McPherson.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you very much.

This has been very interesting and informative. Thank you to the witnesses for being here for us.

One of the things I'm picking up on from some of your testimony, Ms. Moret, is the need for clarity and transparency. Currently, it's a bit opaque—how people are selected and put on the list, how that is being enforced and what that looks like.

I'm wondering whether you could talk a little about best practices and what Canada could do to ensure civil society is engaged, ensure diaspora communities are engaged and ensure it is a more transparent and effective system.

[Dr. Erica Moret]

Absolutely. This is very much the focus of my work elsewhere.

The first point is to have regular interactions and dialogue in a way that can be done in a trusted forum where a common language is established, because it takes time. My experience has shown that it can take a number of years to build up the trust required for different sectors to communicate with one another effectively on these delicate topics. That's the first point. That can include representatives of groups of NGOs, as well, as a way of streamlining some of this type of interaction. The same should also apply, of course, to banks and the wider private sector in terms of things such as trade, global supply chains and so on, where Canada has played a role.

The second area is thinking about harnessing some of the technology. In Canada, you have a fantastic fintech sector and fantastic innovation. There is a lot that can be done to harness some of the positive sides of tech in terms of helping bring down due diligence obligations, increasing transparency and even facilitating humanitarian fund transfers and so on.

The third point is having a point of contact where NGOs, civil society and so on are able to get in touch when they have questions. It's the same for banks and so on, when the nature of commissionable activities isn't clear to them and where wording may not be clear and so on.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

I believe I'm out of time.

[The Chair, Liberal, Ali Ehsassi]

That concludes our questions.

Allow me to thank Ms. Kadian, Mr. Kyaw and Ms. Moret for their expertise. As you could tell from the members, your session here today was very helpful.

Before I adjourn, I want to let members know that today we will dispense with the 10 minutes of business for the committee, because everyone agreed to make some changes to the schedule.

It was agreed by all the members that for the remainder of this session we will be focused on the sanctions regime, with the exception of next Tuesday, when, for the first hour, we will be hearing from GAC officials regarding the Wagner Group. For the second hour, we will be hearing from the Lithuanian vice-minister of foreign affairs as part of our ongoing study on Ukraine. That's for next Tuesday.

Also, given the change in the schedule, we are now moving back the submission of recommended witnesses for the Wagner Group study to next Tuesday by the end of the day.

Does anyone have any questions? Is it all good?

The committee is adjourned.