Foreign Affairs Committee on June 15th, 2023

[Prof. Michael Nesbitt]

I am terribly sorry if that was unclear. I believe what I said was that they're the only ones enforcing sanctions in a meaningful way. If somehow that became unclear, I sincerely apologize.

[Rob Oliphant, Liberal, Don Valley West, ON]

We need to be very careful about impugning the reputation of those institutions, which may or may not be acting. If they're not acting, we want to know, so I think that is important. I need some proof that they're not doing something, as opposed to casting an aspersion.

[Prof. Michael Nesbitt]

Again, I am absolutely not saying that.

[Rob Oliphant, Liberal, Don Valley West, ON]

Okay.

When asked by Mr. Hoback about Global Affairs' role in the enforcement, you said that it was “a black box”.

We've had testimony here that it's very clear that Global Affairs does not do enforcement. That is not its legislative responsibility. It's the legislative responsibility of bodies under Public Safety, which are CBSA and the RCMP, as well as the regulators of the financial institutions.

Is it clear to you who does enforcement? You sort of said that Global Affairs wasn't doing it, as though Global Affairs was inaccurately doing its job, but it's not their job to do anything on enforcement.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

I have a point of order, Mr. Chair.

It seems to me that the member is attributing words to the testimony of our witness that he didn't say. In fact, it was quite clear to me from his testimony—perhaps Mr. Oliphant missed it—that Global Affairs was not responsible for enforcing. He made that very clear in his testimony.

It seems a little like badgering, Mr. Oliphant.

[Rob Oliphant, Liberal, Don Valley West, ON]

Your point is taken.

I wanted it to be very clear, because it wasn't clear to me. There were two things. When a “black box” was mentioned, it was as though the black box is somehow a mystery of what Global Affairs is not doing. It needs to be really clear that Global Affairs does not have the responsibility for enforcement. That's all. I wanted it very clear.

[Prof. Michael Nesbitt]

If I am given an opportunity to respond, which I think I have the right to in this situation, I will simply say that I was very clear in my statements that CBSA, RCMP and PPSC, which are doing the enforcement, also require both monetary assistance and greater involvement in this because they are the ones that do the enforcement.

Again, if that was somehow unclear, I apologize.

My intention was to make it very clear that I am aware—and everyone else who studies this is aware—that CBSA and the RCMP are doing it at the front end, and PPSC, the Public Prosecution Service of Canada, will be the one that will prosecute it at the back end.

[Rob Oliphant, Liberal, Don Valley West, ON]

I think it was also said that there was no sanctioning done under Magnitsky, when there actually has been a sanction under Magnitsky in Canada with respect to Myanmar. I wanted to make sure that was on the record.

[Prof. Michael Nesbitt]

I said there was no enforcement that I knew of. If you're aware of a criminal case, I'd be happy to hear it.

[Rob Oliphant, Liberal, Don Valley West, ON]

We have had a Magnitsky sanction. I wanted to make sure we have on the record that we have used Magnitsky.

[Prof. Michael Nesbitt]

Again, we have sanctioned under Magnitsky. What I was speaking about was enforcement.

I haven't seen that, but I'm happy to be corrected in that regard, if we've had a criminal prosecution.

[The Chair, Liberal, Ali Ehsassi]

Thank you, Mr. Nesbitt.

We now go to Mr. Champoux.

You have five minutes, sir.

[Martin Champoux, Bloc, Drummond, QC]

Thank you, Mr. Chair.

It is now my turn to thank the witnesses for being with us today.

Mr. Nesbitt, I'm going to continue with you on the same subject. In the hour prior to your arrival at the committee, we were discussing the effectiveness of sanctions, particularly with regard to the relationship between Russia and Belarus. The witness who spoke to us about this was referring to the lack of coordination which in some cases renders sanctions all but ineffective.

Listening to your testimony and the questions from my colleagues, I also remember the answers of some officials who came before the committee to testify on the application and implementation of the various sanctions. There seemed to be a vagueness as to who was doing what in all this.

This leads me to ask myself a question, which I'm going to ask you too, because I imagine you may have an answer: If Canada's sanctions are poorly applied abroad, where they should be applied, and they're poorly managed or poorly understood in Canada, don't our efforts amount to a shot in the dark, as we say?

[Prof. Michael Nesbitt]

I would leave that to the government.

The point of my testimony is merely to say that the other side of having sanctions in place, of saying that it's important that we recognize wrongdoing abroad, that we don't contribute to it and that we don't have Canadians or those operating from our territory contributing to it, is to ensure we enforce it. That's important from a rule of law perspective and from a messaging perspective to our partners.

I don't think that means they're useless. That's a personal opinion. I do think the other half of the equation for Canada is that it's beyond time that we start to take that seriously and really look at how the complex issue of enforcement can take place here.

[Martin Champoux, Bloc, Drummond, QC]

Thank you, Mr. Nesbitt.

Ms. Strayer, when the committee did its legislative review a few years ago, in 2016-17, it was said that sanctions could be used to compel a target country to change its behaviour, to limit its ability to act, or to express our disagreement with a violation of an international norm by that country. In your opinion, does Canada's sanctions regime achieve at least one of these three objectives, be it coercion, hindrance or expression of our disapproval?

[Amanda Strayer]

It's an area that we're studying a lot at the moment in terms of how to best evaluate the impact of sanctions. Obviously it's a very case-specific evaluation and can be a little bit difficult to overgeneralize.

We find that governments use sanctions for a variety of different reasons, as you mentioned. Sometimes it's to try to deter the behaviour of actors overseas. Sometimes it's to signal or to send strong messages of solidarity with victims or to build international consensus around a particular condemnation for a particular set of abuses or efforts to try to disrupt corrupt networks, for example.

I think one area in terms of impact that we're seeing would be really beneficial for governments to continue to focus on is improving the multilateralization of their sanctions under the Magnitsky regimes that they have. Right now, there's not a lot of overlap between the U.S., Canada, the U.K. and the EU in how they're using these sanctions. That creates gaps for perpetrators of these abuses that they then get to exploit.

For example, I mentioned earlier in my testimony Bangladesh's Rapid Action Battalion, which was sanctioned by the U.S. in 2021. Those sanctions were not replicated by Canada, the U.K or the EU. We later found information that members from that unit had travelled to the U.K. and to the EU to obtain training and different types of services that they would then use in law enforcement back in Bangladesh and, presumably, to further their role in repression in Bangladesh. That's an area where, if the U.S.'s partners—Canada, the U.K and the EU—had taken action to step up and sanction members of the Rapid Action Battalion in the same way the U.S. had, they would not have been able to travel to the U.K, the EU or even Canada to continue to obtain the kinds of services and support they needed to be a more effective repressive unit back in Bangladesh.

[Martin Champoux, Bloc, Drummond, QC]

Thank you both so much.

I think my time is up, Mr. Chair.

[The Chair, Liberal, Ali Ehsassi]

Thank you, Mr. Champoux.

Next we go to MP McPherson.

You have five minutes.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you, Mr. Chair.

Thank you to our witnesses for being here today and sharing some of this information. It's very interesting to me.

Mr. Nesbitt, I'm going to start with you. You spoke a little bit about some of the research that has been done by others on the number of sanctions. I know that my colleague Mr. Oliphant was questioning that. You said that there was some documentation and that one of your colleagues was doing some research.

Would you be able to table that or share that with the committee so that we would have that information, if you can? I hate to impose upon you.

[Prof. Michael Nesbitt]

I will do my best.

I just want to be clear on that: I was doing my best to add up every individual over a 30-year period, not at any one given time. If I'm wrong on that, I apologize. I will certainly look out, but I would commend her work to you as well.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you. That would be great.

The testimony you gave us today echoes some of the things I have felt with regard to our sanctions regime. A lot of that is lack of transparency. You referred to the sanctions regime writ large as a “black box”; it's very hard hard to get information about it. I've put Order Paper questions forward, and I've asked questions in the House and have not been able to get any of that information, either, as a member of Parliament, as a member of the opposition, so I hear what you're saying there.

I also hear what you're saying with regard to enforcement. We put a lot of folks on our list. It's a big part of our foreign policy. If there is no enforcement, do you believe those being sanctioned around the world by the Canadian government know and are very aware of the lack of enforcement in our sanctions regime?

[Prof. Michael Nesbitt]

Honestly, I haven't studied it, so I can't say that.

I can say that we've probably been criticized enough at this point. It's probably evident enough that we don't have a whole lot, at least in terms of the criminal prosecution enforcement side, and that it is not happening.

To answer that, one of the things I worry about is that a lot of the “enforcement”, as I alluded to earlier, is being done by the big banks but also smaller institutions with less capacity to do so. That's downloading a lot onto the private sector, including the cost to ensure compliance. That's understandable, but it has to be met by a government commitment to do that same level of enforcement that we're demanding from the private sector, which we're lucky to have in Canada, as they are good actors.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

I think one of the things we heard in our testimony from the last panel was the idea of the cost benefit, and that those being sanctioned are weighing that cost benefit. Obviously, if they see Canada not enforcing its sanctions, then weighing that cost benefit must be different. The reality is just that.

You also spoke a little bit about the resourcing of ways in which we could do this and how other countries are doing that resourcing better. When we had RCMP and CBSA representatives at committee, it became clear that there are significantly fewer resources allocated here than there are in other regions. Can you talk a little bit about the resourcing, for example in the U.S. with the office of foreign assets control?

[Prof. Michael Nesbitt]

Oh boy, where to start?

There is the office of foreign assets control within Treasury, which really has the expertise on the business side, the following-the-money side, the following-corporate-structure side, to assist the State Department and others in coming up with those lists and to ensure that when we come up with those lists there is due process backing up our justification for the individuals on those lists so they can be enforced. That's the purpose of those. At least it has been my experience that they have individuals with real background in this sort of stuff—accounting, business acumen and so on.

One of the problems for Global Affairs—and it's one of these problems that just need close attention and human resourcing—is that you're talking about diplomats, largely, who haven't necessarily been trained for it. I'm sure Global Affairs is trying to work on some training. We're also talking about an organization that people move in and out of every couple of years. Ideally, you're going to go away on a posting somewhere. It's going to be harder to maintain and build that sort of expertise than it would be in a permanent organization, such as OFAC. We just don't really have that equivalent in Canada to provide the links between those at the RCMP—who will want to know about the corporate structure, the money and how it's happening for their enforcement—and those at Global Affairs, who will know about the names on the list, the foreign countries and that sort of stuff.

I think that's the best I can tell you in that regard.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

That echoes the idea that we need this to be a domestic issue, not a global one—