Foreign Affairs Committee on Sept. 27th, 2023

[The Chair, Liberal, Ali Ehsassi]

I call this meeting to order.

Welcome to meeting number 74 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, so members are attending in person in the room, as well as remotely by using the Zoom application.

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

Before speaking, please wait until I recognize you by name. Those participating by video conference can click on the microphone icon to activate their mikes. Please mute yourselves when you are not speaking. For those in the room, your mike will be controlled as normal by the proceedings and verification officer.

You may speak in the official language of your choice. Interpretation services are available for this meeting. You have the choice, at the bottom of your screen, of either floor, English or French. Those in the room can use the earpiece and select the desired channel. If interpretation is lost, please inform us immediately.

In accordance with the committee’s routine motion concerning connection tests for witnesses, I am informed by the clerk that all witnesses appearing before us virtually have completed the required connection tests in advance of the meeting.

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

I would now like to welcome our witnesses.

As individuals, we have Andrea Charron, professor, University of Manitoba; Madame Sophie Marineau, Ph.D. candidate; and Dr. Craig Martin, professor of law. We also have Tom Keatinge, director, Centre for Financial Crime and Security Studies.

Each of our four witnesses will be provided with five minutes for their opening remarks.

I would ask that you pay attention to the monitor, because when you're getting very close to the five minutes, I will hold up a sign. We would be grateful if you could wrap it up within 30 seconds of that. The same goes when members are asking you questions. Each member is allotted a particular time frame. When they are approaching that time frame, I will hold up the sign.

We will start off with Madame Andrea Charron from the University of Manitoba.

Are you ready to take the floor?

[Dr. Andrea Charron, Professor, University of Manitoba, As an Individual]

I'm ready.

[The Chair, Liberal, Ali Ehsassi]

Excellent. You have five minutes.

Thank you.

[Dr. Andrea Charron]

Thank you for the opportunity to present my recommendations.

I have three immediate ones that have been outlined in numerous reports, including the latest report published by the Senate in May 2023. I note that this current review is limited to Canada’s autonomous sanctions legislation, but a review of the machinery and architecture of all of Canada’s sanctions legislation and procedures—for multilateral situations, autonomous sanctions and the Freezing Assets of Corrupt Foreign Officials Act, which applies to Ukraine and Tunisia—is recommended for the future.

The three priorities are to better coordinate with our legislatively closest allies, the EU and U.K.; to report publicly on measures of effect and effectiveness in a yearly report to Parliament; and to develop Canadian-specific training and proactive guidance.

First, the EU and the U.K. have autonomous legislation similar to Canada's. They do not have extraterritorial reach, as does the U.S., and they sanction for reasons similar Canada's, but there are differences. The EU has matched nine of the 11 SEMA regimes, the Special Economic Measures Act regimes, and has also sanctioned states that Canada has not, such as Bosnia-Herzegovina, but it no longer has sanctions against Sri Lanka and it sanctions China differently from Canada.

Canada recently adopted a 50% ownership rule, but the rule matches the U.S. for 50% or more and not the over 50% rule in the EU and the U.K. The EU and the U.K. provide public reports on sanctioning activity and publish far more information on targets, and the information is more easily searchable than the information in Canada.

While variation among the sanctions regimes is expected, particular attention should be paid to targets listed by some states and not by others. This encourages sanctions-busting shopping, whereby targets seek to export, import or store assets in the non-sanctioning states, delegitimizing western resolve and coordination. A recent study by me, Dr. Tilahun and Ms. Cherpako in 2021 found that only eight individuals and one entity out of over 2,000 listings, or a 0.4% congruence rate, were the same in both Canada and the EU for human rights abusers.

Next, Canada needs to publish and review measures of effect against the target and effectiveness for the sender on a regular and consistent basis. For too long, Canada has sought to improve the efficacy of sanctions by creating more legislation and adding new requirements, such as a mandatory inadmissibility clause, in sanctioning thousands of targets, but the government cannot answer the question: Are its sanctions effective?

Easily attained measures of effect can include import and export changes with the target state; the gender of targets; the type of entity sanctioned, whether state-based or private; what types of goods or services they produce; the number of delisting requests versus success rate or denial rate; and the number and type of retaliatory sanctions against Canadians.

Effectiveness measures include but are not limited to objectives: Are they to protest undemocratic changes to government or decry human rights abuses? What's the purpose? Is it to coerce, constrain, signal or stigmatize? Are the targets elites or state-owned entities?

Another measure is the number of permits sought and issued by Global Affairs Canada to authorize activities otherwise prohibited and requested. By whom are they requested? Categories could include individuals, businesses or NGOs, and the activity.

Finally, what about the number of court proceedings vs. prosecutions or dismissals?

Finally, as part of establishing a specialized sanctions bureau, it is incumbent upon the Government of Canada to ensure that the officials involved in administering Canada’s sanctions receive training on the specifics of Canada’s sanctions regimes and sanctions research generally.

I agree with Lawrence Herman that Canadians and Canadian businesses need proactive written guidance on sanctions application. After all, they are the first enforcers. Training and guidance will improve policy-making and enforcement. A number of academics are ready to assist and provide such curricula in their law, business and public affairs courses.

Thank you.

[The Chair, Liberal, Ali Ehsassi]

Thank you very much, Professor Charron.

We will now go to Madame Marineau.

You have five minutes.

[Sophie Marineau, PhD Candidate, International Relations, As an Individual]

Thank you very much, Mr. Chair.

Study and analysis previous international sanctions regimes have shown that sanctions do not stop wars. However, sanctions regimes are still widely used by Western governments, even if results are always uncertain. If war is not an option, sanctions show that, even without binding means, it is possible to express disagreement, at least symbolically and diplomatically.

Sanctions are a relatively inexpensive political instrument in comparison to armed conflict. Nevertheless, it's impossible to define the exact level of measures required to have a real impact on the sanctioned state's policy.

However, certain factors are decisive in determining the effectiveness of a sanctions regime.

The most important factor is certainly the economic cost imposed on the sanctioned state. The higher the cost, the more likely it is to change its policy.

The second factor is the type of political regime in the sanctioned country. Sanctions are far more effective when imposed on a democracy than an autocracy.

The third factor is stability. A state that is rather weak or facing economic woes will be more vulnerable to the application of a sanctions regime. Even a dictator with little concern for the welfare of their people will have trouble managing a country on the brink of chaos.

The fourth factor has to do with ties between the sanctioning state and the sanctioned state. For sanctions to be effective, the sanctioning state must have a significant and well-developed economic relationship with the sanctioned state. If trade is significant, the sanctioned state will lose a more important source of revenue than if trade is limited.

The fifth factor relates to international cohesion. The majority of the sanctioned state's economic partners must impose sanctions to maximize their chances of success. In the absence of international cohesion, the sanctioned state may find alternative suppliers to those who are imposing the sanctions.

A phenomenon like rallying around the flag tends to limit the effectiveness of sanctions regimes. In some cases, if civil society decides that their country should not be placed under sanctions, national unity can strengthen around power.

This can also happen in entirely different circumstances: If the people are too reliant on their leaders for food and basic necessities, civil society may rally around the leaders because, as Moscow University law professor Andrei Kolesnikov explains, people prefer to support the hand that feeds them because if it were to disappear, they might not be fed at all.

Finally, time is also a major variable in determining the effectiveness of sanctions regimes. Sanctions often force sanctioned states to turn inward and develop their own industries to become self-sufficient, or to find new economic partners to replace those lost as a result of sanctions. In the long term, this makes the state more able to function as a dictatorship or less dependent on imports and goods from sanctioning states. The effects of sanctions then become extremely limited.

In the specific case of Russia, I'd like to quote the analyst Perun to show what can be expected from a sanctions regime:

“Sanctions don’t so much stop production as force you to spend the time and the money to evade them. They are not so much bullet wounds as mosquito bites.”

Sanctions become effective through the cumulative effect of all these inconveniences.

Right now, around 70% of Russian banks' international assets are subject to sanctions and have been made inaccessible. At the same time, some 20 billion Euros in assets of more than 1,500 sanctioned individuals and entities have been frozen. In the past year, Russian exports have fallen, while imports have risen. Almost a third of Russia's budget is now devoted to military spending, which has slowed down its economic development.

It's certainly hard to determine what effects can be attributed to sanctions alone, let alone Canadian sanctions on their own. However, because international cohesion is paramount to the success of a sanctions regime, Canada's efforts must be analyzed in a more global perspective where the efforts of all partner states count.

Thank you very much.

[The Chair, Liberal, Ali Ehsassi]

Thank you very much, Ms. Marineau.

We now go to Dr. Martin.

Dr. Martin, you have five minutes for your opening remarks.

[Dr. Craig Martin, Professor, Law, As an Individual]

Thank you, Mr. Chairman, and honourable members of the House, for the invitation to appear before you today. It's really an honour to be here. At the outset, I would like to applaud the work that you are doing in conducting this important review of Canadian economic sanctions law and policy.

By way of overview, my focus is on the broader international law issues implicated by the Magnitsky law and SEMA. I believe I was invited because of my policy report, “Economic Sanctions Under International Law: A Guide for Canadian Policy”, which was published in 2021 by the Rideau Institute and the University of Ottawa Human Rights Research and Education Centre. I do commend the report for your review, as I can't possibly do justice to the nuance and complexity of all of the issues that were analyzed in there.

In short, I suggest that there's a tendency in the Canadian sanctions discourse to simply accept that autonomous sanctions—that is, sanctions that are not authorized by the UN Security Council or some other international legal organization—are lawful. There is this assumption that if all our allies are imposing similar sanctions regimes, they must be legitimate and they must be lawful. Indeed, the view is that such sanctions are not only lawful but virtuous and are the best way to peacefully enforce human rights and other international legal obligations.

This view was largely echoed in the recent Senate committee report, based on hearings that it conducted last year, and while I commend some of the recommendations that the report made for improving the Canadian sanctions regime, it too largely accepts this assumption that autonomous sanctions are lawful under international law. This somewhat uncritical view neglects serious questions that are being asked in international institutions, in international law scholarship, and in the statements and practice by states in other regions of the international community regarding the legality of certain kinds of autonomous sanctions. Indeed, there are sharp questions as to whether certain kinds of sanctions, including the kinds of sanctions that Canada participates in, often imposed in the name of human rights and the international rule of law, do not themselves violate international law obligations in various ways.

First, for instance, there's whether they do not themselves actually violate human rights norms and obligations, whether in terms of comprehensive embargoes that cause humanitarian suffering in target populations in a manner that violates human rights law or in terms of targeted sanctions that may violate the due process rights of individuals who are being targeted.

Second, there's whether they may constitute unlawful intervention in the sovereign affairs of target states in violation of well-established principles of non-intervention, or third, there's whether some targeted or secondary sanctions may violate international law principles on jurisdiction that prohibit the extraterritorial application of domestic law, all of which potentially, rather paradoxically and ironically, undermine the international rule of law that sanctions are trying to enforce.

These questions are even sharper with the recent suggestion that Canada would not only freeze the assets of certain targeted individuals but actually expropriate those assets and convert them for purposes of reparations to victims such as those in Ukraine, all in the absence of any trial or other process, which is viewed by many international law experts as being inconsistent with well-established international law on expropriation.

What is more, critical arguments about sanctions are most strongly made by states in the Global South, precisely where Canada has traditionally tried to champion the rule of law and human rights compliance. There are thus potential tensions between the human rights objectives of Canadian sanctions law and policy—the effectiveness of which are often very much in question—and the possibility that such law and policy cause real harm, undermine Canada’s broader foreign policy objectives, make Canada vulnerable to charges of hypocrisy, and are indeed inconsistent with Canada's own constitutional values.

In closing, let me just say that this is only been a thumbnail sketch of what are really a very complex set of arguments and analyses. I'm happy to address questions on any of the issues in more detail in response to questions.

I don't want to overstate the case; many of these questions that I addressed regarding the lawfulness of sanctions are unsettled and contested. However, the unsettled nature of these issues calls for caution. The primary point I would like to leave you with is that the Canadian government has not done enough to publicly address these questions and explain how its sanctions law and policy comply with international legal obligations.

I would suggest that there are ways in which Canadian law and policy may not be consistent with international law or with certain Canadian values and that doubts regarding Canadian non-compliance can operate to undermine Canadian efforts to strengthen human rights and the international rule of law. Thus, in my view, Canadian lawmakers and policy-makers need to be more sensitive to these international law implications, develop and implement economic sanctions law and policy more fully informed by the relevant principles of international law, and provide a fuller and more detailed public explanation of how such law and policy are compliant with international law.

Thank you, and I look forward to your questions.

[The Chair, Liberal, Ali Ehsassi]

Thank you very much, Mr. Martin.

We now go to our last witness.

Mr. Keatinge, the floor is yours. You have five minutes.

[Tom Keatinge, Director, Centre for Financial Crime and Security Studies, Royal United Services Institute]

Thank you very much. Thank you for inviting me to speak to you this evening.

As mentioned, my name is Tom Keatinge. I run a—

[The Chair, Liberal, Ali Ehsassi]

Mr. Keatinge, wait one second, please.

I'm so sorry. The clerk wants to advise us of something.

Mr. Keatinge, we just heard from the interpreters that they're having a hard time hearing you. As I understand, you received headphones from the House.

[Tom Keatinge]

No, I didn't, because I've been on holiday. I came back at midnight last night in order to participate. I'm wearing a Logitech headset, which I have owned for a couple of years.

[The Chair, Liberal, Ali Ehsassi]

Then you do not have access to House-issued headphones. The clerk is advising me that this is against the regulations of the House.

Can we still ask questions of the witness?

I apologize.

[Tom Keatinge]

I went through a sound test 45 minutes ago, and I was cleared to participate.

[The Chair, Liberal, Ali Ehsassi]

Yes, that was my first question to the clerk, as well. However, I'm afraid we've been advised that we can't proceed with your opening remarks because the interpreters are having difficulties. Those are the rules. I'm terribly sorry about this, Mr. Keatinge.

Obviously, we would very much like to hear your views. Would it be possible for you to submit your remarks for the members' consideration?

[Tom Keatinge]

I already submitted them in advance last night, having written them on holiday at the request of your clerk. I'm now having my time wasted. I take a pretty dim view of that.

[The Chair, Liberal, Ali Ehsassi]

I'm terribly sorry. Those are the regulations and rules here.

Do the members have anything to say?

Yes, go ahead, Mr. Aboultaif.

[Tom Keatinge]

Do you want any perspective from across the Atlantic, or shall I go?

[The Chair, Liberal, Ali Ehsassi]

We're trying to sort this out. I will have to rely on the members to provide suggestions.

Yes, go ahead, Mr. Aboultaif.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

With the permission of all members, if we can all gather what the professor is trying to say to us in English, let's allow him to do his presentation. Again, that's with the permission of everyone.

[The Chair, Liberal, Ali Ehsassi]

Mr. Perron, you have the floor.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

I can't agree to that, Mr. Chair. I'm very sorry for the witness Mr. Keatinge, but we can surely invite him to appear again.

This is covered in our guidelines. It's also out of respect for the interpreters. The interpreters' auditory health is constantly at risk in a hybrid Parliament. In fact, that's why our political party wanted to limit the number of hybrid meetings.

Therefore, I'm truly sorry but I can't agree.

[The Chair, Liberal, Ali Ehsassi]

I'm terribly sorry, Mr. Keatinge. Given that those are the House rules, we cannot override them. I apologize to you. I understand there were unique circumstances you faced in not being able to receive them, but I'm afraid—

[Tom Keatinge]

Without any doubt, one hour ago I did a test with the interpreters, who approved my participation. Now you're basically humiliating me in front of the Canadian Parliament with this decision. I cannot tell you how embarrassing this is.

[The Chair, Liberal, Ali Ehsassi]

I can assure you that it is not the objective. The rules state that we're not allowed to proceed—