Foreign Affairs Committee on June 15th, 2023

[The Chair, Liberal, Ali Ehsassi]

Welcome to meeting 72 of the House of Commons Standing Committee on Foreign Affairs and International Development.

Today's meeting is taking place in a hybrid format, pursuant to the House order of June 23, 2022. Members are attending in person in the room as well as remotely using the Zoom application.

I would like to make a few comments for the benefit of the witnesses and members.

Please wait until I recognize you by name before speaking. Those of you participating by video conference can click on the microphone icon to activate your mike. Please mute yourself when you are not speaking. With regard to interpretation, those of you on Zoom have the choice at the bottom of your screen of floor, English or French. Those in the room can use the earpiece and select the desired channel.

Although this room is equipped with a powerful audio system, feedback events can occur. These can be extremely harmful to the interpreters and can cause serious injuries. The most common cause of sound feedback is an earpiece worn too close to a microphone.

I remind you that all comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as best we can, and we appreciate your patience and understanding in this regard.

In accordance with the committee's routine motion concerning connection tests for witnesses, I am informed by the marvellous clerk that all witnesses have completed the required connection tests in advance of our meeting.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Wednesday, September 21, 2022, the committee is resuming its study of Canada's sanctions regime.

It is now my great pleasure to welcome our first two witnesses. As an individual, we have Ms. Elisabeth Braw, senior fellow at the American Enterprise Institute. We also have, from the United Transitional Cabinet of Belarus, Mr. Vladzimir Astapenka, deputy representative for foreign affairs.

Each of you will be provided with five minutes for opening remarks, after which we will open it up to the members for any follow-up questions. I should add that, once we get very close to the time limit, I will hold up a card. That means you should be wrapping up as soon as possible. It doesn't just apply to your opening remarks; it's also when the members are asking you questions.

Madam Braw, we will start with you. You have five minutes. The floor is yours.

[Elisabeth Braw, Senior Fellow, American Enterprise Institute, As an Individual]

Thank you, Mr. Chairman.

Thank you to the committee for inviting me again to address the subject of sanctions.

I think what is so important to recognize now in the year 2023, when we are assessing the effect of the western collective sanctions, is how different the environment is today compared to the last round when we applied sanctions, or, I should say, in the last generation when we applied sanctions. That was during the Cold War, when we, the collective west, applied sanctions against countries like South Africa.

The reason we could successfully apply sanctions during the Cold War was that we, the collective west, were such a powerful economic force. That, of course, shifted with the end of the Cold War. The end of the Cold War delivered an incredible increase in globalized business.

That matters so much, because today when we apply sanctions, either as a deterrent or as a punishment, countries that aren't willing to toe the line with us, that don't support our use of sanctions, that are indifferent or that simply want to take advantage of another country's predicament because it is under sanctions are in a position to undermine our sanctions. I think that is the biggest challenge we face in administering our sanctions. Yes, we can do so, and we can be very meticulous in designing the sanctions, but there are always countries waiting around the corner to expand their trading relations—I'm talking about economic sanctions—with a country that is under sanctions.

That's what we are seeing, to such a large extent, happening with Russia. We are primarily seeing China increasingly expand its trading relations with Russia. However, it's not just China. India is doing the same. Other countries are doing the same. That, of course, has the effect that our sanctions are not as powerful as they would be if applied against a background of no other business activity with a sanctioned country.

That doesn't mean we shouldn't sanction countries, but we should bear in mind that the effectiveness of what we can do through economic sanctions is not what it was during the Cold War. It's not that we are not going to return to the sort of economic power we had during the Cold War any time in the near future. This is something we have to bear in mind with all sanctions we apply against Russia or any other misbehaving country today and in the near future.

Another thing to bear in mind is why we apply sanctions. Do we apply them as a deterrent or do we apply them as punishment? Of course, in the case that you're discussing in the committee—i.e. Russia—the west has been applying sanctions both as a deterrent and as a punishment.

Before the invasion of Ukraine, we applied sanctions against Russia to warn it against invading Ukraine. If it invaded Ukraine, our message was that there would be much stronger sanctions, and that's what we did. We imposed stronger sanctions, and it is phenomenal that the western alliance has stuck together in imposing those stronger sanctions.

The second main thing I'd like the committee to bear in mind is that sanctions are such an obvious instrument of deterrence and punishment that the leaders of a misbehaving country factor this punishment into their cost-benefit analyses when they consider whether to pursue the action that we, the west, are trying to deter. Russia and the Russian leadership had very clearly factored the risk of substantial devastating western sanctions into their cost-benefit analysis before invading Ukraine and decided they'd do it anyway. That is one of the really big challenges of sanctions. They are such a useful tool that they are still extremely predictable, and that makes them less powerful as a deterrent.

In connection with that, a really important thing to bear in mind is that the leaders of a country that has been put under sanctions—or that is about to be put under sanctions—may not care whether their country suffers as a result. I have found over the years that selfishness prevails everywhere. Leaders of countries will think first of themselves and second of their country. If we, the west, threaten to impose economic sanctions against Russia as a whole, it may not faze Vladimir Putin that much. It may not faze the leader of another country against which we threaten sanctions because they themselves don't suffer too much or they're willing to pay the price.

[The Chair, Liberal, Ali Ehsassi]

Ms. Braw, could I ask you to conclude your remarks in the next 15 seconds, please?

[Elisabeth Braw]

They're willing to bear that punishment, whereas if we can design sanctions that target them individually as a deterrent, that may achieve more effect in a future sanctions package.

Thank you, Chair.

[The Chair, Liberal, Ali Ehsassi]

You were considerably over, but you will have an opportunity to elaborate when MPs pose questions to you.

We now go to Mr. Astapenka.

You have five minutes, as well, for your opening remarks. The floor is yours.

[Vladzimir Astapenka, Deputy Representative, Foreign Affairs, United Transitional Cabinet of Belarus]

Good morning to you, Mr. Chair and all the members of the committee. I am appearing for the first time before this distinguished body, and I am very honoured to have such an opportunity.

I represent the United Transitional Cabinet of Belarus. It is a body established by the national leader Sviatlana Tsikhanouskaya in August 2022 in order to represent, as we believe, the real national interests of Belarus.

Of course, it is widely known that, after the falsified presidential elections in August 2020, Lukashenko lost all legitimacy and the legal possibility of representing our country and people in the international arena. This election caused mass protests—which were peaceful, I should stress—in the streets of Minsk. These lasted about one year, I would say. All of those peaceful protests were brutally repressed by the cronies of Lukashenko, and thousands of people were arrested, tortured, disappeared and even killed. Those actions in autumn 2020 caused a modest reaction, I would say, in the international community, but I should stress that Canada was among the first countries to introduce personal sanctions against the regime of Lukashenko and those officials who were responsible for massive systematic violations of human rights.

Unfortunately, this didn't stop the dictator, who went on to the act of air piracy against an Irish civil jet flying from Athens to Vilnius. It's a well-known story from May 2021, when this jet was forced to land in Minsk and some opposition figures were arrested. That caused another round of sanctions, including sanctions on the part of Canada. I should stress, as well, that as with the first round, this one was coordinated with the European Union and the United States. That is a much more effective way of introducing sanctions against the regime of Lukashenko. Unfortunately, this has had little effect, I would say, on the behaviour of the regime, because it is still fighting against the protests felt all over the country of Belarus.

In response to the European sanctions, Lukashenko instrumentalized the migration crisis on the border of the European Union—on Belarus's borders with Poland, Lithuania and Latvia. Basically, this crisis is still going on. Daily, we have reports saying that 50, 100 or 150 illegal migrants are trying to cross the border between Belarus and Poland or other neighbouring countries. Again, there was another round of sanctions on the part of Canada and the European Union for this development.

Here we come to February 2022, when Putin and Russia invaded Ukraine. The main strike at that time came from the territory of Belarus. As you know, Lukashenko was complicit with Putin in this war of aggression and contributed, to the best of his capacity, to the movements of troops and to logistics, repairs, technical support and infrastructure.

Naturally, the western countries responded to this aggression with another round of sanctions. Belarus was included, but this time, we should admit, they were not that coordinated, since most of the sanctions applied to Russia but not to Belarus. That gave Lukashenko an additional chance to benefit from the situation. Some products that could not be directly supplied to Russia were supplied through Belarus.

I would share the view expressed earlier by the first witness that, indeed, neighbouring countries are trying to benefit from any loophole left in this sanctions regime, if it is not coordinated. In the global world, we believe that for the sanctions to be smart, they need to be coordinated. Otherwise we promote evasions of the sanctions; we promote black or grey schemes to provide the goods.

This is what is happening right now, in the post-Soviet space, when we have the figures for the exports or imports from such countries as Armenia, Kirghizia and Kyrgyzstan skyrocketing in respect of trade with Russia or trade with Belarus.

[The Chair, Liberal, Ali Ehsassi]

Mr. Astapenka, I would ask that you conclude in the next 15 to 20 seconds, please.

[Vladzimir Astapenka]

I've concluded my statement. I'm very open to answering any questions you might have.

Thank you so much, Mr. Chair.

[The Chair, Liberal, Ali Ehsassi]

Thank you very much, Mr. Astapenka.

We now go to MP Epp. You have five minutes.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you, Mr. Chair.

Thank you to our witnesses this morning, or this afternoon, depending on where you are.

I'll begin with Ms. Braw.

You made the statement that the effectiveness of sanctions is dependent on the degree of co-operation from the collective west, or they have been in the past. Can you comment on what degree of asset flight occurs or how common is it in response to a series of Canadian sanctions? For my follow-up question to that, is that degree of flight somewhat dependent on the size of the economy of the country imposing those sanctions?

[Elisabeth Braw]

I hope I understood your question correctly. You'd like to know the effect of Canadian sanctions on capital flight as it relates to Canada's sanctions against Russia.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

That's correct.

The secondary, follow-up question right away is whether that degree of flight from countries imposing sanctions.... Do we see that in response to the size of the economy of those countries and, obviously, the size of trade with the country being sanctioned?

[Elisabeth Braw]

The big advantage we have as liberal democracies is that we have a safe business environment where the rule of law prevails. As a result, we haven't seen a lot of flight of the kind that you brought up. We haven't seen a lot of that occur simply because we are very attractive as countries for businesses to operate in.

The challenge we have more as western countries is that our efforts are essentially in vain because other countries can buy up whatever the country under sanctions is trying to sell or needs to buy. This is really the unintended consequence and huge dilemma of globalization. We have countries that don't operate according to the same value standards that we, the west, espouse and that we thought other countries would espouse too, as they developed market economies with our assistance. We could say that it was arrogance to assume they would adopt the value system on the international stage. Either way, it didn't happen and now they are major players and can absorb whatever damage or harm we are trying to impose.

I don't think we need to worry that much about capital flight from our countries, but we need to worry about the effects of our sanctions on the to-be-sanctioned country. We should also remember that other countries will look at Russia and see that they didn't do too badly despite these unprecedented western sanctions because other countries stepped in and essentially blunted the harm. The other countries are going to say they're not going to be deterred by the threat of western sanctions when they want to do something that the west, thinking itself to be speaking for the global community, is trying to prevent them from doing.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

You also mentioned that Putin and other countries that are being sanctioned often do a cost-benefit analysis and then go ahead for exactly the reasons you just articulated, making our sanctions less effective.

I'm assuming the answer is no, but I'll ask this for the record. Are you seeing any kind of a cost-benefit analysis from our Canadian side or the collective west? Are they doing that kind of an analysis on the retribution consequences of us imposing sanctions? To be quite frank, Minister Joly articulated that it was part of the analysis when we were considering expelling a Chinese diplomat for other reasons. Are you seeing any of that creep into our own analysis of applying sanctions?

[Elisabeth Braw]

The cost-benefit analysis is most common on the side or in the country that is planning to do something that it knows other countries won't approve of. When it comes to countries imposing western sanctions, they too look at the cost-benefit analysis or conduct a cost-benefit analysis.

Not being part of the Canadian government, I don't know exactly what has been going on. I would think that the Canadian government has conducted a cost-benefit analysis, not just with regard to the diplomat's expulsion but also with regard to the sanctions more generally, and also with regard to any action it takes in protesting any actions by the Chinese government, because the Chinese government, unlike most other governments, is willing to engage in instant retribution, not against the government that it feels has offended it somehow but against companies. I think this is another area where we have to bear in mind what sort of consequences our sanctions can have.

If we were—

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

I just want to get one more question in.

[The Chair, Liberal, Ali Ehsassi]

I'm afraid you don't have time. You're well over.

We now go to MP Sarai.

You have five minutes, MP Sarai.

[Randeep Sarai, Liberal, Surrey Centre, BC]

Thank you, Chair.

My first question will go to Ms. Braw.

How has Russia responded to Canada's sanctions? What is their response? Have you noticed anything in particular?

[Elisabeth Braw]

Russia has officially responded to the collective western sanctions of which Canada is a key part by essentially shrugging its shoulders and saying, “You can try whatever it is you want to achieve. We'll just go ahead with our plans anyway.” This is a nightmare for diplomats, frankly. We, the west, use sanctions first, as discussed, to deter the hostile actions we are trying to prevent, and then to punish them.

What do we do if the country doesn't care, or rather the country's leadership doesn't care? That's exactly the behaviour that Russia is demonstrating at the moment—demonstrating it not just by continuing to fight this war against Ukraine, in Ukraine, but also by expanding relations with countries that are willing to undermine our sanctions. It's essentially telling us, the wider west, “You can keep trying, but we'll put up with whatever the temporary harm is. We'll expand our relations with other countries, and on top of that, we may punish some of your companies.” I know there is an ongoing dispute between Russian and Canadian companies regarding aircraft that were seized after the invasion.

This is, frankly, a nightmare for diplomats. I don't have an answer to it. I just know that regimes today can afford to be very arrogant when the collective west imposes sanctions.

[Randeep Sarai, Liberal, Surrey Centre, BC]

You brought up airplanes, and their seizing of them. You might have read recently that the Canadian government is disposing of a Russian aircraft. How do they perceive that? Russia has said that was a very critical point in the relationship or, I guess, an infringement upon our relationship. What do you see that their reaction to that could be?

[Elisabeth Braw]

It's a dangerous juncture. I remember vividly that when Russia invaded, last year in February, I thought, “Well, does this mean now that western companies doing business in Russia will be punished?” It didn't take long for Russia to seize all those aircraft that were western-owned but leased to Russia, aircraft that happened to be in Russia. You can do that if you're a country that doesn't respect international rules, conventions and etiquette.

Now, as you mentioned, Canada has seized a Russian aircraft as part of its sanctions and has a legal basis for doing so, but Canada is a country that follows rules and regulations and the letter of the law. It will seize one aircraft because it sees a legal basis for doing so, but Russia doesn't operate according to the same rules.

I think if I were a Canadian company, I would worry that I could now become the target of Russian anger and retaliation, just as China has responded to various western government actions by harming random western companies.

[Randeep Sarai, Liberal, Surrey Centre, BC]

Thank you.

My next question is for Mr. Astapenka.

Maybe you can tell us what the missing links are in the global sanctions. We're seeing neighbouring countries that are allied to Russia being able to circumvent or increase their relations and their trade with them. What more do you think is needed? Is it in terms of the neutral countries, like India, China and South Africa, or is it to put more pressure on those who are actively trading with Russia?

We can't hear you, Mr. Astapenka. I don't know if you're on mute.

[Vladzimir Astapenka]

I'm sorry. I missed the first part of the question due to technical problems with the connection, but I understand the question is where the effort should be directed, to which countries, in order to fight the avoidance of the sanctions.

Is that right?

[Randeep Sarai, Liberal, Surrey Centre, BC]

That's correct.

Are there any gaps or is there anything that's missing in the global sanctions?

[Vladzimir Astapenka]

There are many gaps, of course.

I should mention that the Lukashenko regime has been living under that level of sanctions, basically, since the beginning of the century, so they have their own know-how. They know much better than we do how to avoid the sanctions, including the special operations he made with the Russian products as well. It was a special changing of the codes of different oil products from Russia in order not to pay to the Russian budget, but to keep money for themselves.

They know how to arrange the schemes and they are open to doing it basically anywhere, but of course, they normally start with the neighbours, I would say, who speak a common language, like the Russian language, for example. In the first row, there are countries of the former Soviet Union and the companies from those countries, but with the global world and with global trade, you can imagine they may have some special companies—