THE STANDING SENATE COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE
EVIDENCE
OTTAWA, Wednesday, October 26, 2022
The Standing Senate Committee on Foreign Affairs and International Trade met this day, with videoconference, at 4:00 p.m. [ET] for a comprehensive review of the provisions and operation of the Sergei Magnitsky Law, and the Special Economic Measures Act.
Senator Peter M. Boehm (Chair) in the chair.
[Translation]
The Chair: Honourable senators, my name is Peter Boehm. I am a senator from Ontario and the Chair of the Committee on Foreign Affairs and International Trade.
[English]
Before we begin, I wish to invite committee members participating in today’s meeting to introduce themselves.
Senator Ravalia: Good afternoon. Welcome to the Senate of Canada. My name is Mohamed Ravalia, and I represent Newfoundland and Labrador.
[Translation]
Senator Gerba: Amina Gerba; I represent Quebec.
[English]
Senator Greene: Stephen Greene from Nova Scotia.
Senator Woo: Yuen Pau Woo from British Columbia.
Senator Coyle: Mary Coyle from Nova Scotia.
Senator M. Deacon: Marty Deacon from Ontario.
Senator Richards: David Richards from New Brunswick.
Senator Boniface: Gwen Boniface from Ontario.
The Chair: Thank you all, especially Senator Deacon. I wish to welcome all of you, as well as people across our country who might be watching us today.
Today, we begin our review of the provisions and operation of the Justice for Victims of Corrupt Foreign Officials Act, also known as the Sergei Magnitsky law, and of the Special Economic Measures Act pursuant to section 16 of the Sergei Magnitsky law. The committee received this mandate from the Senate on October 17, 2022. Today, we are welcoming government representatives and entities that play a role in Canada’s sanctions regime.
For the first part of our meeting, we are pleased to welcome officials from Global Affairs Canada: Alexandre Lévêque, Assistant Deputy Minister, Strategic Policy; Lynn McDonald, Director General, International Economic Policy; and Stephen Burridge, Director, Sanctions Policy and Operations Coordination. Welcome to you all and thank you for being with us.
Colleagues, before we hear remarks and proceed to questions and answers, I wish to ask members and witnesses in the room to please refrain from leaning too closely into your microphone or removing your earpiece when doing so. This will avoid any sound feedback that could negatively impact the committee staff and others in the room who might be wearing the earpiece for interpretation purposes. I want to underscore that this is extremely important. We had a horrible incident last week in the Senate, and we really have to be mindful of this.
[Translation]
We are now ready to hear your opening remarks, which will be followed by questions from senators.
Alexandre Lévêque, Assistant Deputy Minister, Strategic Policy, Global Affairs Canada: Thank you very much. Honourable senators, it is a pleasure to be here before the committee as part of this review.
[English]
Given Canada’s robust sanctions response to recent global events, this is, indeed, a very timely opportunity to reflect on the lessons we’ve learned over the last five years. Today, I would like to provide you with a snapshot of Canada’s autonomous sanctions legislation.
The Chair: Can we interrupt for a moment? We are having an interpretation issue, I believe. Mr. Lévêque, if you could straighten your microphone so that it is directly in front of you, that might help us. Just say a few words.
We have translation? All right. Apologies. Please continue.
Mr. Lévêque: Not at all. I want to make sure I am heard and understood throughout, leaving nobody behind.
Today, what I would like to do is to provide you with a snapshot of Canada’s autonomous sanctions legislation, what we have accomplished since 2017, some of the lessons we’ve learned and offer a few reflections on themes that this committee may wish to further explore as you begin your work.
As you know, Canada has two pieces of legislation for imposing autonomous sanctions. The one we are gathered to speak about today, the Justice for Victims of Corrupt Foreign Officials Act, or JVCFOA, and as you said, commonly known as the Magnitsky act; and the Special Economic Measures Act, or SEMA.
The JVCFOA allows Canada to explicitly target foreign nationals responsible for or complicit in gross violations of human rights and acts of significant corruption.
SEMA allows Canada to impose sanctions on a foreign state, its individuals and its entities either due to a grave breach of international peace and security, a call from an international organization on its members to impose sanctions, gross systematic violations of human rights or cases of significant corruption.
Currently, there are SEMA sanctions on 13 countries, including in responses to situations in China, Iran, Russia, Belarus and Nicaragua.
[Translation]
In the five years since the release of the last review of the Special Economic Measures Act, the department has taken significant action to improve the management and coherence of Canada’s sanctions regime. In response to the review and the expansion of Canada’s autonomous sanctions powers with the passage of the Justice for Victims of Corrupt Foreign Officials Act, the department established dedicated capacity for sanctions policy and operations following an announcement in Budget 2018. This capacity has allowed us to accomplish several things, such as the following.
First, we were able to bring stronger coherence and coordination to the Government of Canada’s approach to sanctions policy and bolster Canada’s engagement with key like-minded allies.
Second, we established a dedicated sanctions e-mail mailbox and phone line for members of the public to seek guidance on Canada’s sanctions.
We created more streamlined processes for permit, delisting and certificate applications and their assessments and ensured they are considered in a timely manner. We were also able to increase the awareness of the Canadian public and private sectors as to how to engage in international business in compliance with Canada’s sanctions.
Since late 2007, the Special Economic Measures Act has been used on 120 occasions to respond to human rights violations and threats to international peace and security. Since 2017 alone, over 2000 individuals and entities have been sanctioned through the Special Economic Measures Act.
Since 2017, the Justice for Victims of Corrupt Foreign Officials Act has been used to sanction 70 individuals, including for the most egregious violations of human rights such as the extrajudicial execution of Jamal Khashoggi in 2018.
[English]
These are significant accomplishments. However, at the same time, the global landscape has changed dramatically and, with it, the sanctions environment has undergone an unprecedented transformation.
Over the past five years, Canada’s use of sanctions as a targeted diplomatic tool of last resort has shifted to become an option of preference utilized early on to address the most pressing international issues.
With this shift, the demand and challenges associated with implementing, enforcing and regulating Canada’s sanctions regime have expanded exponentially.
In this way, I would be remiss not to talk specifically about the use of sanctions since February of this year following Russia’s unjustifiable invasion of Ukraine.
Since that time, Canada has imposed new sanctions on more than 1,400 Russian, Belarusian and Ukrainian individuals and entities under the SEMA through 40 sanctions packages. Given the expected protracted nature of the conflict, we anticipate that this will continue.
Since January 2022, Canada has also imposed sanctions to respond to situations in Myanmar and Iran. Taken together with sanctions related to Russia’s war in Ukraine, in 2022 alone, Canada has imposed more than 44 rounds of autonomous sanctions, representing an overall 83% increase in the use of this foreign policy tool over the previous four years combined.
A significant new development came in June of this year when SEMA and JVCFOA were amended to allow the government to seize, forfeit, dispose and redistribute assets belonging to sanctioned individuals. Canada is the first country in the world to pass this kind of legislation. The implementation of this new and untested tool is requiring care, due diligence and a whole-of-government approach.
[Translation]
The government has responded to this increased use of sanctions. On October 7, the Prime Minister announced new funding to support the creation of a dedicated sanctions bureau at Global Affairs Canada.
This will bring the resources that Canada dedicates to sanctions design and implementation more in line with those of our closest allies who have sanctions tools similar to our own.
Our colleagues are focused on setting up this new bureau to deliver an even more robust and comprehensive approach to sanctions administration.
[English]
This review, as I said, provides a timely opportunity to explore whether further adjustments to Canada’s sanctions regime may be warranted and to examine the associated pros and cons. The committee may wish to consider, for example, issues related to the process by which sanctions are imposed. Under both SEMA and JVCFOA, sanctions are imposed through a Governor-in-Council regulatory process. The consideration that should be kept in mind is the right balance between efficiency and thoroughness or, put in a different way, between expediency and risk tolerance. We observe around us a number of different models from like-minded countries and could potentially learn lessons from their experiences, both in terms of best practices and, of course, challenges.
Another aspect of the current global environment is the rise of new and emerging threats, such as hostile actions of non-state actors, malicious cyber activities and chemical weapons attacks. In some cases, like-minded countries already have tools in place to respond to some of these threats, such as cyber-threats and chemical weapons attacks. What has been their experience in this regard? Are there lessons for Canada in this area as well?
In closing, in many ways, this review could not have been more timely. As you know, the events of the last year have taught us a lot and have given us more to think about in terms of the future of Canada’s sanctions tools. I hope that the initial thoughts and reflections that I have been able to share with you today will be a useful foundation to assist this committee as it embarks on your review.
[Translation]
I’ve appreciated this opportunity to be here, and I look forward to your findings. I would be pleased to return if you think this could be useful. I’m happy to take your questions.
The Chair: Thank you very much, Mr. Lévêque.
[English]
As usual, colleagues, I wish to inform members that you will each have a maximum of only four minutes for the first round of questions. That includes both the question and the answer, so my suggestion to you is to keep your preamble as short and concise as you can.
Senator Ravalia: Thank you, Mr. Lévêque.
Regarding sanctions against Russia — and you mentioned more than 1,400 individuals and entities being involved — the speculation was that this would very rapidly cripple the Russian economy. We initially saw the ruble tanking, and then things stabilized. Currently and paradoxically, the economic effects on the globe seem to be even harsher than they are in Russia, from what we can gather. In your opinion, to what extent, if at all, does the available evidence suggest that international sanctions have produced a behavioural change in Russia? Do we have any idea what impact these sanctions are having on the Russian people? Thank you.
Mr. Lévêque: Thank you very much for the question, Mr. Chair. This is a central question. Obviously, why impose such measures if we are not able to measure their impact?
First, the imposition of sanctions is one among several tools in our international tool kit to help modify behaviour. It cannot act alone. We cannot act alone. Sanctions are only effective when they are done along with a number of other countries. Maximum coordination leads to the maximum impact. But, of course, it has to be done alongside other methods of engagement — diplomatic pressures, diplomatic isolation, using international organizations, et cetera.
And, of course, the fact is that Canada and a number of other countries, in the case of Russia, are also supporting Ukraine militarily, which is an important part of the pushback against Russia.
Having said all of that, there is evidence that there are significant impacts on the Russian economy. Russia’s Ministry of Finance, itself, has reported the sharpest decline in the Russian economy since 2009, for instance. The economy is projected to fall even further in 2023. Already more than 1,000 companies have stopped doing business in Russia. Russia, we know, is facing critical shortages in advanced goods and technologies, which are having direct effects on its military machinery and war efforts.
This puts in perspective the short-term impacts versus long-term impacts. We can tell from the current impacts on the Russian economy that it will suffer in the long term. The supply chains that provide for the most sophisticated elements of the Russian economy will absolutely be affected and not just for six months but probably for the better part of a decade, as estimated by most economists.
In the meantime, of course, Russia benefits enormously from revenue from natural resources. As much as Canada and a number of other sanctioning countries have minimized and in many cases stopped purchasing those commodities, other countries continue to purchase them. That is why we repeat that only maximum coordination and maximum alliances, if I can call them that, among countries, will have the best impact on countries we wish to sanction.
Senator Woo: Welcome again. Let me pick up on Senator Ravalia’s question which is about performance measurements essentially. How have we framed the purpose of sanctions on Russia?
You have spoken about the long-term impacts on the Russian economy, and you are absolutely right. Russia is going to be set back for many years, but I would have thought that the more immediate goal was to try and stop the war, stop the fighting. Do we articulate a specific objective when we impose sanctions in the way that I am trying to describe? Because if we don’t, I’m not quite sure what we’re measuring. Are we really trying to ruin the Russian economy for the next fifty years?
Mr. Lévêque: I thank you, senator, for the question. What we’re trying to do is impose as high of a cost as possible to, of course, deter the current regime from pursuing its very aggressive military posture.
There is a secondary element which is a deterring effect. What is a little bit unique here, and where I think we have all witnessed a first, is the level to which mostly Western countries were prepared to coordinate and to go much, much further on imposing sanctions, to be honest, in a way that also sometimes hurts on the home front. The Prime Minister at some point said if it doesn’t hurt us, it is because we’re not quite doing it right, which means imposing maximum costs.
Is that cost-efficient in the immediate future? You never know until you try it, and we have maximized, as you heard from my statistics, the imposition of sanctions like never before.
The hope is also that other countries are watching this and are taking note of the fact that when the international community witnesses truly egregious acts, we are prepared to step up, and we are prepared to do so in a way that can even be painful for our own economy. Obviously, we try to minimize the impact on our own economies, and we try to minimize the impact on civilian populations and the most vulnerable, which is why we have certain flexibility within the sanctions legislation, but it is a blunt tool, especially when we use it in such large numbers, like 1,400 Russian individuals and entities in the last seven months alone.
Senator Woo: Let me at least get the question in. I was struck by your comment that we use sanctions much more now than just a few years ago — a very dramatic increase in frequency. Is that because experts, having had experience with sanctions and having seen them be very successful in changing behaviour — both behaviourally and deterrence-wise — recommend to the foreign minister and the political class to use sanctions more? Have they been taking your advice, or is it for some other reasons?
The Chair: A short answer, please. We have just under a minute.
Mr. Lévêque: I think it is probably more organic than a chicken-and-egg situation. I think it is something of a general observation and a trend — a trend that is global right now. We’re certainly not the only country to be imposing an exponential amount.
Senator Woo: Is it a trend because it has been proven to be successful by the record that you and your experts in the department and other foreign ministries have observed? Is it fair to say that?
Mr. Lévêque: It’s not as black and white as that.
Senator Woo: Okay.
Mr. Lévêque: However, growing evidence is demonstrating that it can be impactful if done in a certain way.
Senator M. Deacon: Thank you for being here again. I’m just going to take a little time out on Senator Woo’s line of questioning, but we’ll come back to that as we proceed.
I’m wondering about the regulations made pursuant to the Special Economic Measures Act. Do we have experience yet with illicit individuals who can apply to the Minister of Foreign Affairs to have their name removed? That is one of the things we know but do not talk about too much. I wonder if there have been any cases of foreign nationals making an application and, if so, have they been successful? Is there any intelligence you can share with all of us?
Mr. Lévêque: Thank you, senator. That is definitely a provision of the legislation. Yes, it has been utilized in the past. We have received applications to be delisted. It is a lengthy process and one where the legal threshold to demonstrate that an individual should no longer be on the list needs to be demonstrated.
I would have to get back to you as to whether that has actually been completed in the past. I do not know if my colleagues might know. We would need to make sure, but it definitely has been. We have received applications in the past.
Senator M. Deacon: I would like to get that feedback.
The other question I was going to ask might also be straightforward in some sense. Looking at this Consolidated Canadian Autonomous Sanctions List, there are about 500 Ukrainians listed. I was surprised to see so many individuals on the sanctions list from the country that wasn’t the aggressor in the war. Are these groups and individuals from the occupied regions of Ukraine, for instance? I know this conflict has been a real litmus test or the first test for both of these acts. I think they are examples that could be useful for us in understanding how they are applied.
Could you share any insight on that with me?
Mr. Lévêque: Absolutely, thank you, senator and Mr. Chair. You are exactly right. The Ukrainian nationals who were listed under the current rounds of sanctions have everything to do with the Russian occupation, and they are basically Ukrainian enablers. They are more than sympathizers. I want to say they are collaborators with the Russian regime in the annexed and occupied regions of Crimea, Donetsk and Luhansk. They are very much the Russian proxies operating in Russian-occupied Ukrainian territory.
Senator M. Deacon: Thank you.
The Chair: You have a little bit more time, senator, if you would like it.
Senator M. Deacon: Thank you. Part C or D from my colleague Senator Woo — just looking at those numbers and the changes in sanctions. Are we diverting from much of what our allies and the UN are doing in terms of sanctioning entities and individuals, or does our list still broadly correspond with our allies at the UN and the Commonwealth? I am trying to get at these numbers.
Mr. Lévêque: Thank you, senator. There is an enormous amount of coordination between the handful of countries. It is really a small number of countries that imposed autonomous sanctions the way we do. Essentially, it comes down to the U.S., the U.K., the European Union and Australia to a certain extent. Also, I believe Japan does it but at a much more limited level. So there is close coordination particularly, I would say, between Canada, the EU, the U.S. and the U.K.
We have very different sanctions regimes. They aim to do the same thing, but the mechanisms — the processes — that are used are quite different and therefore the timelines can be quite different. As I said if my remarks, we have an Order in Council process that requires many different steps: policy covered by the Prime Minister or cabinet, a Treasury Board decision and a signature and agreement by the Governor General. So there is a fair amount of process and time involved.
The U.S., for example, does it through presidential executive order.
The Chair: Thank you very much. We’re out of time on that segment, but I’m sure we could come back to that particular point. If I could ask you, Mr. Lévêque, to just ensure that you get back to the clerk, Madam Lemay, in writing on the question that Senator Deacon had about applications for delisting. That would be helpful. As I recall, you volunteered to provide that information, so we’ll hold you to that.
Senator Richards: My question has been asked and, in a way, answered. It was about coordination of the Magnitsky act in other countries and the effect on sanctions in Russia. I will pass on to Senator Boniface.
Senator Boniface: My question kind of kicks off from Senator Woo’s question. Five years into it, when you look back at it — you yourself indicated that we’re faced with a shifting landscape — can you give me your assessment of the effectiveness of the Magnitsky act, given that shifting landscape, as both a legislative and policy tool?
Mr. Lévêque: Thank you. Mr. Chair, this is the million-dollar question.
As part of our own assessment, we do quite a bit of documentation scanning, studies and working with academics and various stakeholders to try to better pinpoint what measures of success could be identified and really define what success means.
Are we really talking only about modified behaviour? Are we considering that sanctions must be effective over a six-month period only and then, if not, we consider them to be a failure? How do we measure the deterring effect? How do you measure what you have managed to deter and, therefore, what never happened? It is obviously a complex affair. I am not saying this in a way to escape a complicated question. I think we are all struggling with various ways of measuring the final impact and, therefore, the effectiveness.
We do have output measures. That is not necessarily the measure of a result or an outcome. But in the case of Russia, what is significantly different from other cases is the level at which countries coordinated, the intensity with which measures have been imposed and definitely the medium- to long-term impacts on an economy.
In a way, it is kind of an experiment in progress. We are collecting important data to be able to answer that question better. I do not think anybody with intellectual honesty could give a complete answer to this question.
Senator Boniface: In your reference to different processes by different countries, are you monitoring that as well? I appreciate that the structure of Canada as a federation and the processes we go through may differ, but are you able to measure, as you go forward, what is working better in other countries?
Speed is not always the answer in terms of getting these things through. I am just interested in how you watch the rest of the world on this front.
Mr. Lévêque: Absolutely. Thank you, senator. In a way, that gives me a chance to finish my answer to Senator Deacon’s question, and I appreciate the opportunity.
Yes. First of all, we do compare. As I was saying, our processes and timelines are different, but ultimately we list names and entities the same way other countries do. We have charts of thousands of pages tracking which countries and, in the case of the European Union, which entities list what names. We try to bridge the gap. We try to see the speed and the methods that, of course, they use to get to a certain result.
We do draw inspiration from one another, not just because it’s nice to be in good company but because, again, sanctions will only be effective if we stop the gaps. If I’m a Russian oligarch, and I have my assets in the U.K. and my assets are under sanctions, I’ll move those that haven’t yet been found to the EU or to Canada. If we all “close the fence,” that has maximum effectiveness, which is what I mentioned earlier.
Senator Coyle: Thank you very much to our witnesses for being with us.
I’m interested more about the process. You’ve talked a little bit about some of the elements of the back end of the process. You’ve talked a bit about scanning our global partners and who they’re sanctioning, et cetera.
But could you describe for us — and maybe there is no typical situation — but in the decision-making process involved in sanctioning an individual or an entity under either the Magnitsky law or SEMA, first of all, how or who initiates it? What evidence is used? Where does that evidence come from? Can you tell us a little bit about that end of the spectrum?
Mr. Lévêque: I’m glad to be given this opportunity to clarify a bit of the mystery that goes into the cooking of such products.
It all starts with open-source information. We have embassies and missions on the ground as well as partners, stakeholders and civil society that observe. We ourselves, through our embassy in Russia, have knowledge of individuals — to use that as an example — who we know are so-called oligarchs and who have significant ties to the Kremlin or the Putin regime.
So we start by having a draft list like this, and then we do extensive searches for information to maximize our knowledge and our confidence that who we think they are and their connections are indeed accurate. It’s about observing due process and giving procedural fairness, even to foreign nationals. Again, it’s a blunt instrument, and falling on the wrong side of sanctions can have significant financial and other consequences.
Once we have developed such a list and we have assured ourselves of the clear linkages, we work closely with the Department of Justice, which also plays a bit of a challenge function, to make sure that the threshold of information that we have gathered is sufficient to be listed under our SEMA or JVCFOA legislation.
Once we have provided this body of evidence and data, then the order-in-council process begins where we prepare the documentation; it gets submitted to Minister of Foreign Affairs, who then requests consent from the Treasury Board to send this as an order-in-council to the Governor General; the Governor General signs it; and it becomes a regulation and, therefore, an amendment to the sanctions legislation.
Senator Coyle: You’ve mentioned that the experience of the last year has taught us so much because we’ve been so active in this process. You’ve talked about how it would be good to study adjustments, pros and cons, et cetera. Is there anything you can tell us now from your existing experience about the kinds of adjustments or areas of adjustment that you think we should be looking into?
Mr. Lévêque: Thank you, senator.
As I alluded to in my remark, the pace at which we’re now identifying individuals and the desire we have to increase the pressure on the regimes we hope to influence are such that what used to be a very lengthy regulatory process is often crunched in very little time. That’s what I meant by getting the right balance between expediency and thoroughness, and the risk taking versus the ability to act quickly.
I don’t have the perfect answer to what that balance is, but I do know that our current legislation was designed for a different time and is, therefore, very apropos that we study and, through your future witnesses, perhaps ask those very questions.
But on the tool itself, is this the right tool? We can look at what other countries are doing — again, the pros and cons.
[Translation]
Senator Gerba: Thank you, Mr. Lévêque, for this information which really clarifies a number of questions we have about the operation and coordination between the two or three acts.
Businesses often have difficulty navigating most of the government sanctions that are adopted by Canada. The process of compliance is complicated because there is no information that comes through, or finally gets to the companies.
You mentioned earlier, in your opening statement, that your department had taken action on this. Can you give us some details on the measures taken to make it easier for businesses, especially in terms of compliance?
Businesses, when they are in the thick of things, don’t ask about their customers to know who they should or shouldn’t sell to, or whether they are compliant; sometimes it’s the bank that tells them that no, they can’t do such a thing. How do you do that and what solutions have you found?
Mr. Lévêque: Thank you very much for the question, senator. It is a question that comes up often from stakeholders, entrepreneurs, Canadian companies and the Canadian legal sector.
Since the last review of this legislation, and since the expansion in 2018 of our sanctions coordination, we have established several mechanisms to communicate with stakeholders and with Canadians.
I briefly mentioned a website that we are responsible for where already a lot of information can be found. A fairly detailed FAQ section can also be found on this website.
On this website, we advertise a particular email address and phone number; stakeholders and companies can then contact us so that we can give them the best advice possible. Of course, we cannot give them legal advice. We can inform them of what the law prescribes, but that is as far as we can go.
We also do a lot of stakeholder work. We interact a lot with the financial sector, among others. The financial sector is pretty much the first line of defence, especially for financial transactions. I have to say that because of the anti-terrorism and anti-corruption laws, the financial institutions are very well equipped to act as a net to stop transactions that would be on the wrong side of the sanctions.
We do some outreach; we have discussion and information sessions with the legal sector. There are a number of lawyers in Canada who have become specialists in this area, because the more complex a sanctions regime is, the more opportunities it gives them. A specialization has developed within a small group and we also interact a lot with its members to inform them and explain as much as possible about our sanctions regime.
The Chair: Thank you very much.
[English]
We’ll have a second round, but I’ll use my prerogative as chair to make one comment. Witnesses and colleagues will know we’re all very interested in the sanctions regime, not just because we are now engaged in a review of the legislation but also because every one of the members of this committee has been sanctioned by the Russian Federation. That concentrates our thinking a bit.
Mr. Lévêque: A badge of honour, Mr. Chair.
The Chair: Is it a badge of honour? Perhaps. This is the question I really wanted to ask. Having read some of the literature on sanctions, sanctions laws, Magnitsky-act-type laws in different countries, academics have indicated that part of the issue is trying to get regimes to match. Mr. Lévêque, you alluded to that in your opening statement but also in an answer. That can include everything from how an individual is listed by name, whether it is the same individual in one country or the other. I would like to ask you if there is a lot of back-and-forth consultation going on now, which may not have existed before, to ensure that the information is accurate and that basically lists could be interchangeable in terms of the comprehension that different governments would see or would have?
Mr. Lévêque: Mr. Chair, absolutely. This is a new aspect of the consultations and the comparisons of notes that we have with a number of countries. I’ll give you one very blunt example. The U.K. recently adopted legislation that I call the copycat legislation that basically says, “If a trusted country has imposed sanctions, it is good enough for us; we’ll do the same.” I don’t want to say it circumvents, but it skips through a large part of the due diligence that they assume has been conducted by other countries.
That’s one form which I don’t necessarily advocate in favour of because there are obviously pros and cons in doing this, but between that and sharing lists, which we do with like-minded partners, we face the spelling of names. Obviously, if you write in Fārsī, if you write in the Cyrillic alphabet, if you write with kanji or Mandarin characters, transliterating that into English or French, there can be subtle nuances in the way you spell a name that can miss a certain individual or that can, unfortunately, list individuals who have done nothing wrong done to begin with.
So, yes, this is absolutely an important part. Really it is part of the due diligence that we must take our time to conduct.
The Chair: Thank you very much. Most of us have now learned the Cyrillic spellings of our names; I think so.
[Translation]
Senator Bellemare: In terms of your ability to monitor whether sanctions are being properly enforced, has the advent of bitcoin and digital currencies caused you any concerns? Do you have an order of magnitude to give and are you able to counter that?
Mr. Lévêque: That is an excellent question, senator. I would say that, on the face of it, as an entity and as a department that manages and monitors the sanctions regime, we have not had any challenges related to the kind of currency that is used. On the other hand, if I had to guess, I would say that it presents perhaps a slightly more significant challenge for financial institutions.
In the course of your study, I am sure you will take the initiative to invite people from the financial sector. In all humility, I would recommend that you do so because they are absolutely essential partners in the monitoring of financial transactions. This is a question I would like to ask them myself and I will monitor the work of your committee.
So for us, directly, I would say no. We are really relying on individuals and entities, not the means by which they engage in financial transactions, whether it be outright financial transactions like the purchase of movable or immovable assets, or even for the shares they may hold in companies.
[English]
Senator Ravalia: Mr. Lévêque, do you feel that the imposition of sanctions potentially creates a global division between nations that are firmly committed to bringing Russia to task versus those who, for a variety of reasons, have chosen to remain relatively ambivalent. I’m not convinced the UN General Assembly vote truly reflects the position on the ground. We’ve recently seen Iranian drones being launched out of Crimea and causing absolute havoc on the electrical and water grids in and around even Kyiv. Are we kind of entering a period where the world is becoming dichotomous?
Mr. Lévêque: Thank you, senator. It is very much a concern and not just in the world of sanctions, but cleavages between the north and south, east and west, rich and poor, have and have-not — these, we know, are growing. I can tell you that it is a foreign policy preoccupation on a daily basis.
What you’re alluding to is also the fact that there are countries that, at the end of the day, will choose to ignore, to look at their shoes, when a global actor is wreaking havoc and others that are prepared to take action.
I’ll take it one step further. Some countries are actively benefiting from this. It comes back to, again, what I was saying earlier, that the best thing we can do is continue to advocate for coordination to have maximum impact. Without naming any country, we know that some countries by policy refuse to adopt sanctions. Of course, if the EU and the U.K. stop buying Russian oil, there are a number of countries that will be all too happy to buy it perhaps even at a bargain. That’s a gap that, unfortunately, no sanctions regime can bridge. However, the other part of what we do is the diplomatic engagement.
That’s why I go back to, in order to implement change or influence change of the regime, sanctions cannot be the only tool in our tool kit, and diplomatic union activity with like-minded and less like-minded is absolutely essential.
Senator Woo: I’ll start with a brief commentary on performance measurement to close the discussion we had earlier. If you’re having trouble measuring the success of a sanction under the two criteria that are most obvious for you — the behavioural change and deterrence — I think it’s partly because the law hasn’t given politicians a clear direction of why we need sanctions. Because the other two objectives of sanctions, which are punishment and political favour, are always on the positive side of the ledger, which you, rightly, do not measure. So we have a responsibility in our review to think about that issue.
My question is this: You started at the beginning to say that sanctions are one tool among many tools. Keeping that in mind, can you tell us if the use of sanctions has precluded or diminished or made less effective some of the other diplomatic tools that Global Affairs would have considered using in resolving an international or bilateral issue?
Mr. Lévêque: Thank you senator. That is a very good question. I would say that, generally speaking, when you engage with an interlocutor and have a huge baton or club behind your back, whatever you offer is a little bit more difficult to be taken at face value. Has it limited our ability to negotiate? Fundamentally, I think states act not on the basis of emotions but on their interests. When we interact with other states — and we, the diplomats, being only the voice, the interlocutors — we are usually able to come down to our fundamental interests. If there continues to be a possibility to negotiate or to have a dialogue, we use that, despite having used these — and Russia has imposed sanctions on us. It has imposed sanctions on you.
That doesn’t mean that we should completely stop all dialogue if and when the opportunity is right. We continue to have diplomatic relations, even if they are rather frosty at the present time, but that is always a channel that must remain for the day when we will start having the ability to look at a return of peace between Russia and Ukraine. In the meantime, our view is that the aggression is of such an outrageous nature that it is very difficult if not impossible to engage on those terms.
Senator M. Deacon: Looking back on the last five years, this is the first five-year view of the Magnitsky Act, and you’ve had five years to use this as a tool in our sanctions regime. I’m hoping in your experience and in the information you are pulling together, you can articulate how effective it has been in filling the gaps that SEMA was unable to cover. I ask that question knowing that Canadians, politicians and others still may not really understand the difference between the two. We have to acknowledge that as part of this question.
Mr. Lévêque: Thank you so much for this question. I’ve been dying to contribute to the clarification of the nuances, the differences between SEMA and JVCFOA.
The first thing that is important to remember is that when JVCFOA was adopted five years ago, SEMA was amended. SEMA was amended to add the same two triggers that Magnitsky, JVCFOA listed — so the acts of corruption, or violations of human rights. These triggers did not exist under SEMA before 2017.
This closes a significant gap because the two pieces of legislation are not identical. They are heavily complementary and with a significant amount of overlap. The consequences are exactly the same. It prohibits dealings with sanctioned individuals. It prohibits Canadians from dealing with sanctioned individuals.
One does not punish or dissuade or deter more than the other. The consequences are exactly the same. The triggers, there are four for SEMA, two for JVCFOA, but there’s an overlap. One gap that remains — and that is in the course of being addressed — is the question of inadmissibility to Canada, because the two triggers under each legislation that automatically lead to inadmissibility are acts of corruption and violation of human rights. The grave breach of international relations under SEMA does not automatically lead to inadmissibility to Canada. But that is what we understand Bill S-8, which will amend the Immigration Refugee and Protection Act, will aim to close. After that, you do not have identical — but the Venn diagram between the two is at 90% similar. The triggers are a little bit different on the human rights violation. In SEMA it has to be connected to a state. In JVCFOA you can list an individual directly without having gone through listing the state first, and then the person you’re sanctioning has to have deliberately targeted human rights defenders. Those are the nuances.
The Chair: Thank you very much.
Senator Coyle: Thank you to my colleague for that question. I wanted to hear that answer as well.
Here we are, we’re looking at these two acts. We’re reviewing the two acts. We’re looking deep into them, but we’re also looking at them in the context of other things, because as you said, I believe, is this the right tool now? I think Senator Woo also started to get at this.
Could you speak a little bit more about: Is this the right tool now and is this the right tool for where we’re going in the world? We’re seeing big shifts, and you’ve addressed those yourself here. Could you talk a little bit more about that fit for purpose side of things.
Mr. Lévêque: Thank you. In all honesty, what I would really like to do is have the benefit of further time and reflection, not on making recommendations directly on whether this is the right tool, but on making sure that whatever the result of this study and therefore, hopefully, recommendations to enhance the current sanctions regime. I go back to this right balance, it’s to get the balance right between expediency and due process. The rule of law and procedural fairness must absolutely prevail, but combined with the fact that we are in a world where expectations to act swiftly, sanction bad actors, are higher than ever.
I don’t have the answer on what that right balance is yet, but, again, my humble suggestion is to invite part of your reflections to be around this balance, and then looking at whether the current tools, whether it’s the Governor-in-Council or other mechanisms are the ones that are fit for purpose. But I would love to reflect a little bit more on that and come back to you.
Senator Coyle: I appreciate that, thank you.
[Translation]
Senator Gerba: Mr. Lévêque, you spoke earlier about the funds that the government has mobilized to create a new office that would assist in the implementation of sanctions.
What are the specific needs that this office will focus on?
Mr. Lévêque: Thank you for the question, senator.
First, there is volume. The volume is exponentially higher, as I said; it’s an 83% increase, but not year on year, it’s this year compared to the four years. The volume is such that setting up an office with resources that can just handle this much higher volume is absolutely necessary. We’re not just talking about the volume of new individuals to be sanctioned, we’re talking about the volume of permit applications.
As I said, sanctions are a tool that can be quite far-reaching. For example, when sanctions are imposed on a Russian bank, all banking transactions passing through this bank to Canada are automatically frozen by the Canadian financial institutions. This means that someone completely innocent, a Russian aunt who wants to send some money to her nephew somewhere in Calgary and goes through a sanctioned Russian financial institution, will have her payment stopped in Canada.
We’re catching a lot of “little fish,” if you will, that have absolutely nothing to do with, and no connection to, Putin’s regime. This means that we receive literally hundreds of applications for permits because people are asking for their funds to be released as they are not involved. It’s a huge volume that we have to deal with.
Of course, there is the new seizure and confiscation regime that was introduced last June, which means, as I said in my remarks, that we will be the first country in the world to do this. The volume of work and the governance around it will be enormous. It is primarily for these functions that the Prime Minister has decided to provide us with the funding to set up a much more robust entity.
[English]
The Chair: There’s one minute left so that allows me to ask a question. In the last Budget Implementation Act, there were elements about repurposing seized assets. A lot of that work had taken place in the Senate earlier, on a public bill that was sponsored by Senator Omidvar. Is there active thinking going on now, about how some of these seized assets could be repurposed? It goes hand in hand, obviously, with sanctions policy, and perhaps, also towards a future rebuild of Ukraine. So I’m not really asking what the policy is, because you’re probably working on it, but are you doing some thinking about that, because that is potentially a very useful tool?
Mr. Lévêque: Thank you, Mr. Chair, that is indeed the next frontier, I dare say, when it comes to sanctions regimes, because we’re the first ones to actually venture down that path of any G7 country, and then a few other ones. Yes, we are very, very actively — more than just starting — we are already quite far along the reflection and the development of cases in order to identify which first assets we would like to use this new legislation, this new amended legislation to target.
Repurposing will come at the very end of this, there’s seizure, forfeiture and eventually repurposing. This will have to go through the courts. Essentially, for the categories that have been created, we will use the repurpose funds for the reconstruction of a state adversely affected by a grave breach of international peace and security. So in this case something that would benefit the Ukrainian victims. The restoration of international peace and security writ large or, more specifically, the compensation for victims themselves, all of this will be a part of the mix at the end of the line.
The Chair: Thank you very much.
Senator Housakos: I want to know what mitigating steps has the department taken to deal with oligarchs and regimes using family members and even distant family members in order to hide the assets and proceeds they make here in Canada. I have a bill that I have tabled in the Senate, Bill S-247, that deals specifically with that. If you can give us a little bit of background what steps have been taken so far.
Mr. Lévêque: Thank you, senator.
You are pointing to something absolutely critical, senator. One of the steps to mitigate this — we do this sometimes — is to pre-empt that by actually listing family members as well. We do not only target oligarchs, but we target their immediate families. But you are pointing to a classic evasion technique and I would extend that not just to family members but to shell and numbered companies. That makes it very difficult to actually trace down assets.
This is something we are actively discussing with law enforcement partners. As I said, in the case of seizure and forfeiture this is very much a whole-of-government affair. Global Affairs Canada is not an enforcement agency, but we now have the mechanisms in place to exchange information and to look for ways to get that information and that includes working with provinces. A beneficial ownership of assets, whether they be land or equities in companies, is not something that is often federally listed, so we need partners around the country in order to get to that information.
You are absolutely right that this is a key challenge and a bit of a cat-and-mouse game.
The Chair: Thank you very much. I would like to, on behalf of the committee, thank our witnesses, Mr. Lévêque, Ms. McDonald and Mr. Burridge, for joining us today. This is an important subject. We appreciated your comments, your thoroughness. We will be returning to this at some point and may hear from you again.
[Translation]
We will now hold the second part of our meeting. We have with us, via video conference, representatives from the Canada Border Services Agency, including Mr. Richard St. Marseilles, Director General, Immigration Policy and External Review.
[English]
From Canada Border Services Agency: Dan Anson, Director General, Intelligence and Investigations; Richard St. Marseilles, Director General, Immigration Policy and External Review; and Sean Hoag, Director General, Commercial Programs. With us in the room, we welcome from the Royal Canadian Mounted Police, Superintendent Denis Beaudoin, Director, Financial Crime. Mr. Anson, the floor is yours and Superintendent Beaudoin will follow.
Dan Anson, Director General, Intelligence and Investigations, Canada Border Services Agency: Good afternoon, chair. My name is Dan Anson. I’m currently Director General of Intelligence and Investigations at the Canada Border Service Agency, or CBSA.
The agency facilitates the free flow of legitimate travellers and trade and enforces more than 100 acts and regulations that keep our country and community safe. With respect to the import and export of commercial goods, the CBSA carries out seizures, enforces monetary penalties and investigates those who violate the rules and the regulations. The CBSA’s enforcement efforts also allow us to identify and stop state and non-state actors that engage in potentially illicit activity. We enforce sanctions and export patrols that are used to prevent sensitive goods and technologies from reaching illicit procurement networks, where they could be used to produce weapons of mass destruction or conventional weapons.
Since Russia’s invasion of Ukraine, the government imposed sanctions under the Special Economic Measures Act, or SEMA, on almost 1,200 individuals of Russia, Ukraine and Belarus. More recently, the government also imposed sanctions under the SEMA against Iranian officials in response to the Iranian regime’s ongoing breaches of international peace and security and gross human rights violations.
The Immigration and Refugee Protection Act, IRPA, defines when a person is inadmissible to Canada and establishes the applicable criteria for all foreign nationals and permanent residents who seek to enter or remain in Canada. Pursuant to the IRPA sanctions issued against foreign nationals under the Justice for Victims of Corrupt Foreign Officials Act and certain sanctions issued against foreign nationals under the SEMA are grounds for inadmissibility. This allows immigration and border officials to identify and deny access to Canada by certain sanctioned foreign nationals, whether it be through the refusal of visas abroad or removal from Canada, should an inadmissible, sanctioned person arrive in Canada.
While this framework works well, opportunities to improve it have been identified and are currently before Parliament for deliberation. Under Bill S-8, which was tabled in the Senate last spring and recently passed first reading in the House of Commons, proposed amendments to IRPA and its regulations better align government-imposed sanctions, with authorities related to immigration enforcement and access to Canada. For example, many SEMA sanctions are issued against individuals on the basis of a grave breach of international peace and security; however, this particular sanction provision does not result in inadmissibility pursuant to the IRPA. This means that most individuals sanctioned pursuant to SEMA may nevertheless have unfettered access to Canada and may enter or remain in Canada if they are not otherwise inadmissible.
Bill S-8 would close this known gap and help immigration and border officials better manage access to Canada by those who have been sanctioned irrespective of the grounds for which that sanction has been issued.
Once again, Mr. Chair, I would like to thank you for this opportunity to appear before the committee today. We would be happy to respond to any further questions from the honourable members. Thank you.
[Translation]
Superintendent Denis Beaudoin, Director, Financial Crime, Royal Canadian Mounted Police: It is a pleasure to appear before this committee as part of its review on the operations of the Special Economic Measures Act. I am Superintendent Denis Beaudoin, the Director for Financial Crime within Federal Policing Criminal Operations.
Protecting Canada’s economic integrity and national security has long been a federal policing priority for the RCMP. The RCMP works with partners across Canada in both the public and private sectors in pursuit of these priorities.
As a result of Russia’s illegal invasion of Ukraine, as well as the human rights violations committed by the Iranian regime against its own people, the use of sanctions as a geopolitical tool has come into the spotlight.
I would like to take a few minutes to explain the RCMP’s role in Canada’s sanctions regime.
[English]
As my colleagues from Global Affairs Canada have explained, the Minister of Foreign Affairs is responsible for the administration of the act. The RCMP undertakes a number of activities to support the minister in this work, as described in both the acts and the regulations. Those roles include the receipt of information in accordance with regulations, providing assistance to the minister and conducting investigations into potential breaches of SEMA, mostly in relation to export control.
[Translation]
If a person or entity meets the conditions as described in the act, that person or entity can be designated by the Minister of Foreign Affairs.
As per the regulations, every person in Canada and every Canadian outside of Canada must disclose to the RCMP the existence of property believed to be controlled by a designated person.
Under the regulations, there are also mandatory disclosures about financial transactions or proposed transactions related to property controlled by a designated person. The RCMP gathers and analyzes this information to establish ownership, value, and location of any potential property owned or controlled by a designated person or entity, whether directly or indirectly.
As the members of the committee might expect, the majority of disclosures the RCMP receives originate from financial institutions, but some disclosures come from private companies dealing with physical property.
[English]
After the analysis of this information, the RCMP can share it with the Minister of Foreign Affairs for them to determine appropriate actions on seizure and forfeiture. This information-sharing is solely for the purpose of assisting the minister, as clearly described under section 6.2 of the act.
The RCMP is not involved in the decision-making process to seek any forfeiture or seizure orders; rather, we provide analytical and intelligence support to Global Affairs to make that decision and to make the application to the court. If a judge is satisfied with the evidence provided by the minister and makes an order for seizure or forfeiture, the RCMP may provide further assistance by ensuring public safety when those orders are carried out.
It is also a criminal offence to willfully contravene orders or regulations, or to fail to comply with them. As part of our duty to preserve the peace, the RCMP is responsible to investigate and apprehend offenders of the act and regulations. Criminal proceedings against any person the RCMP apprehends are initiated with the consent of the Attorney General of Canada.
[Translation]
The members of the committee may be interested in knowing what the RCMP has reported to the minister in support of this work.
Since February 24, I can confirm that there are assets in Canada equivalent to more than $121 million that have been frozen as a result of the prohibitions under the Special Economic Measures Regulations against Russia.
In addition, transactions equivalent to more than $290 million have been blocked. Those numbers are subject to change as updates come in, but they are the most up-to-date that I can provide today.
[English]
The act and regulations are tools that Canada possesses to take actions against those who would abdicate their responsibility to maintain global peace and security, and preserve human rights. I have highlighted the role of the RCMP in the application of these tools in Canada. The RCMP will continue to work with the public and private sector to support the work of the Minister of Foreign Affairs with its policy decisions regarding the Special Economic Measures Act.
I thank the committee for the opportunity to stand before you and welcome the chance to answer any questions.
The Chair: Thank you, Superintendent Beaudoin.
Colleagues, as before, we will go with four-minute rounds.
Senator M. Deacon: Thank you all for being here this afternoon. We appreciate it.
We have heard that after Russia’s invasion of Ukraine the number of sanctioned individuals has increased immensely. It’s one thing to put a name on a list, but it is another to actually enforce the law on this.
I am wondering if both the RCMP and the CBSA have the resources to seize any assets that might exist in Canada and also monitor for any Canadians or Canadian entities who might be in contravention of these acts by dealing with a sanctioned entity.
Mr. Beaudoin: I can confirm that the work that we do in regard to SEMA has really increased to support the minister.
We welcome additional funding for resources, and we intend to use them strategically to assist the minister in the way that it needs to.
Senator M. Deacon: Before proceeding to another person to answer, when you say “significant increase,” can you give us a numerical sense of that “significant increase”?
Mr. Beaudoin: It is hard to really provide a number, but previous to the current sanctions, we would seldom receive disclosures. The way the regime is done is that a third party, a bank, for example — if they realize they are in possession of something of a listed person, they need to freeze it and disclose it to the RCMP.
We would seldom receive disclosures from banks or other entities. Since February, it has grown significantly, to the point where we need to assign specific resources just to do this on a daily basis.
Senator M. Deacon: Thank you.
Mr. Anson: Thank you for the question, senator. We appreciate that.
We have seen an increase in the number of persons subject to sanctions. The way we approach that with the CBSA is through our intelligence and targeting programs. Specifically, as Global Affairs provides and populates different lists of individuals subject to sanction, that allows us to incorporate into our own systems for people who are travelling to or from Canada for potential lookouts or targets to ensure that we have an enhanced degree of awareness, should someone intend to travel to Canada.
I would say there are limited opportunities for those opportunities to arise, given that sanctioned individuals would not be eligible for a visa for the ability to travel here. But in certain circumstances, should someone arrive, that gives us an enhanced ability to adjust our posture or what we do in terms of decision-making space should someone arrive here.
The first part of your question did speak to increased volumes and whether we have the right number of people. I would say we have absorbed some additional work and effort. However, I would not say, of the people who have been listed under any of the sanctioned regimes, that those people are necessarily travelling to Canada on an ongoing basis. I would not say that this necessarily creates those volumes.
If I may, for the second part of your question, senator, regarding assets, I mean, we do again apply export controls for things departing from our ports of exit. For any types of commercial products that are potentially leaving, we do receive advanced potential commercial information that allows us to vet and risk-assess goods and equipment that are destined for countries abroad.
In that case, there is a bit more pressure that we provide the risk assessment, and in some cases, we would refer certain goods for additional examination. In those circumstances, our intent is to ensure that assets that are potentially destined for abroad are not what we would deem, based upon the application of the regime, sensitive or dual-use technologies that would be a concern, should it fall into the hands of any of the entities or nations subject to the sanctioned regime.
The Chair: Thank you very much.
Senator Boniface: My question will start with Superintendent Beaudoin, but if I can first extend my condolences to your force for the loss of Constable Yang. I know that all Canadians are feeling that. I want to assure you that we are thinking of you and your organization at this time.
It is a follow-up to Senator Deacon’s question, because I think that financial crime, as people see it, has such a breadth, which I know is a huge responsibility within the RCMP.
Could you talk about the breadth of issues that your organization deals with, and how this fits within that responsibility?
Mr. Beaudoin: Yes. It is a question that I could spend more than four minutes answering.
Senator Boniface: I am sure.
Mr. Beaudoin: If we try to stick with the sanction piece here, I think that the analytical portion of it is of importance.
Some of the questions asked earlier of our colleagues from Global Affairs, the use of virtual assets or the use of shell companies to hide beneficial ownership of assets are definitely one point. Those challenges, whether they apply to sanctions or financial crime in general, are newer than virtual assets, the use of companies and everything. But it certainly is easier than before to move property around the globe. What we are doing right now is studying these trends and trying to keep up with them. So for our expertise, we have people dedicated to this, and their expertise can be applied as much to a sanctioned regime and to the criminal side of financial crime.
Those are just two examples that were mentioned earlier, but there is definitely some challenge in financial crime.
Senator Boniface: You hit on where I was going in terms of levels of expertise given the changing environment, all of those issues.
How are you as a unit working on bringing in the expertise or trying to make sure that you stay up to date with what you need for expertise to be able to do that?
Mr. Beaudoin: Yes. We have a long-term agreement with FAMG, the Forensic Accounting Management Group of the government, to provide expert advice, and they provide advice on virtual asset tracing and auditing. They definitely bring expertise to the table.
Another example — virtual asset, I just mentioned — so we are developing units across Canada to provide support to our investigations in this regard. It is a domain that is changing on a weekly basis.
Another example is that in the last year we created a new civil investigator program to target those individuals that may not want to do everything that policing is about but may contribute to specific areas. Two areas that were targeted at the beginning: one is financial crime to, hopefully, bring experts in this field as peace officers and also in cyber crime, because we all know that this is quite complex, and there is a need to hire.
Not going to break any news to you, but the job market is quite competitive right now, whether in the public or private sector. We are competing against private firms also trying to hire their own experts internally. There are certainly challenges.
The Chair: Thank you very much.
Senator Woo: Superintendent Beaudoin, thank you for appearing.
I think that you said that the value of assets seized from Russian entities since the recent round of sanctions was $121 million; is that correct?
Mr. Beaudoin: Exactly. There is a difference there. One hundred and twenty-one million dollars has been frozen. Those properties still belong to the people who are listed, but right now, the cash, for example, the banks are holding it. They are freezing it, but the rightful owners are still those people.
Senator Woo: Super. That’s a perfect explanation for the next part of my question, which is: Can you give us a sense of the composition of those assets? You mentioned cash, which is presumably a big part of it. Are we talking about securities, real property and businesses?
Mr. Beaudoin: Not getting into too many details, but the bulk of it is really cash, bank accounts. The bulk of the disclosure has been coming from the financial institutions, so the majority is from this, but we have had reports of tangible assets also.
Senator Woo: Perhaps the reason why most of it is cash is because you have the clearest line of sight to reporting from the banks. I’m just guessing. Would it be correct to say it would be more difficult to trace properties or yachts or other kinds of assets?
Mr. Beaudoin: The way the law is drafted right now, the onus is on the third parties to disclose to the RCMP. Banks are a good example. They are in possession of money from a third party, and they have a mechanism in-house to comply with the AML regime, anti-money laundering regime, so that is done quite easily.
If you take, for example, a house that is owned by a listed person, that property is not in the hands of a third party. That person is certainly not going to disclose it to the RCMP, so then it becomes a mechanism of trying to find this, understanding that we do not have access to the tools, because it is not a criminal process, so we do not have access to production orders or search warrants or any other thing — even a mutual legal assistance request that we would make in criminal cases to foreign countries.
Real property, I do not think, would come to us. There could be instances, for example, of a lawyer facilitating a transaction or someone maintaining a property maybe disclosing it to us. I think those are some of the complexities.
Senator Woo: Quickly, would it also include companies that are owned in part or in whole by sanctioned individuals? Yes? And that would be relatively easy to track?
Mr. Beaudoin: To track? Well, nothing is easy, but, yes, if it is disclosed to us, then it would be easier to track, especially if we stay within Canada.
Senator Ravalia: Thank you to our witnesses.
Superintendent Beaudoin, I am going to take a slightly different line with respect to your international involvement. The RCMP is, obviously, stationed across many of our embassies around the world, and you work closely with Global Affairs.
How closely do you liaise with Global Affairs in monitoring global flashpoints with respect to the egregious activity that is carried out against civilian populations? The situation in Ukraine and Myanmar are pretty obvious, but we know that there are a whole host of other flashpoints where activities are going on, where civilian populations are being attacked and are vulnerable.
Do you have the ability to track some of those and then by extension get the bad actors onto the Magnitsky act?
Mr. Beaudoin: We have a close relationship with Mr. Lévêque and his team. At different levels we speak to Global Affairs probably many times every week on sanctions, so we certainly have a close relationship.
We have to understand that the sanction regime is a policy decision by the government, not a criminal process where the police would investigate somebody committing a crime. I’m not saying we’re not monitoring the situation internationally, we are, but it’s up to the government to make policy decisions as to what situation it wants to influence and which regime they want to take action on.
Senator Ravalia: Straight through Global Affairs to the foreign ministry.
Mr. Beaudoin: Absolutely.
Senator Ravalia: Thank you. I have no further questions.
The Chair: Thank you. I don’t see any other senators who have put their hands up, so I will ask a question before we go to round two. It really follows on Senator Deacon’s and Senator Coyle’s observations. I would like both CBSA and the RCMP to respond to this.
Everybody wants more budget. What you really want are FTEs, so full-time equivalents; you want positions and bodies. Part of the challenge, of course, is getting them. Mr. Beaudoin, you mentioned there’s a lot of competition out there. There also has to be training involved.
This is a rapidly moving piece. The sanctions industry, if I can call it that, in this form is relatively new. Sanctions have been around for a long time but, in this way, using these particular tools is relatively new.
My question is whether we’ve heard that Global Affairs has established a bureau exclusively for this. Are you looking at something quite that big in terms of future asks — if that’s a fair question?
I would put the same one to Mr. Anson as well, please.
Mr. Beaudoin: Thank you. We are probably not as big as Global Affairs because, as I’ve just said, they’re really the leader on this.
The positions that we hoped to create within my office is on asset tracing and providing the support to Global Affairs, and also across the country, to some degree, to assist in maintaining peace should Global Affairs seize tangible assets, to assist in this regard.
Yes, we’re looking at creating a centre of expertise within my office in Ottawa to assist Global Affairs.
The Chair: Mr. Anson?
Mr. Anson: Yes. Thank you, Mr. Chair. For the first part of the answer, I would ask my colleague Mr. St. Marseilles to kick on.
Richard St. Marseilles, Director General, Immigration Policy and External Review, Canada Border Services Agency: Thank you for your question.
With respect to the immigration and admissibility portion of the CBSA’s responsibility, we have already established a coordination function; it was funded through Budget 2018 when the Magnitsky act came in.
What that did, it gave the CBSA resources to establish a coordinating function with Global Affairs so that we can maintain a watch board list of individuals who are sanctioned who would be inadmissible. That information is entered in immigration systems of records by the CBSA for both CBSA and IRCC.
Given our experience since Magnitsky came into force, it’s been quite effective. Everyone who has been identified as intending to travel to Canada has been identified abroad and stopped abroad.
We’re not seeing a need on the immigration and admissibility side for additional incremental coordinating resources, given our experience administering the framework to date.
I’ll turn it back over to my colleagues to speak to the customs enforcement side of things.
Mr. Anson: Thank you, Mr. Chair. Again, I don’t have much more to add to that in terms of the customs enforcement aspect. I’m not aware personally of any of the resource asks at this time.
I would say that it’s a natural inference that the more that we are required to continue to enforce any types of export controls or sanctions at our ports of exit and then, obviously, related to passengers and travellers who are potentially arriving here, I would say that it is natural to expect that, as the volumes increase, there might be a requirement that should we continue to deliver on the intent behind the aligned legislation that there might be a resource ask. I’m not aware of one at this point. I can’t speak to it with any degree of specificity. Thank you very much.
The Chair: Mr. Anson, on that very last point, that means that you would also not know whether you were going to put more people into the field, for example, for liaison purposes with allies as a result of pressures on this particular legislation.
Mr. Anson: Right. I wouldn’t know, Mr. Chair. Thank you again for the opportunity.
I would say that obviously, to the first part of the last question, we do rely quite heavily on our awareness, on our global presence, to ensure that we’re tracking any international developments.
To use Haiti, as an example, that would allow us to predict and be in a position to react to any types of irregular migration flows. Regarding whether or not that would be something that we want to invest in, I’m not sure. I’m not capable of speaking to that.
I would say that the true front line of the CBSA, the border services officers who are out doing the operational work at our ports of entry and on the borders are the ones who are absolutely delivering on the real operational intent behind this range of legislation.
I do note that, obviously, there are tremendous pressures there and that there is a need to continue to prioritize what our operational activities will be.
As the activity or the business related to customs enforcement, sanctions, export control lists and monitoring and tracking of any types of goods and equipment that are going out of Canada by the many different modes of travel, as that continues to increase in this ever-changing world that we’ve discussed through this and the last presentation from Global Affairs, I would say that it would be difficult not to anticipate any types of increased resource demands.
I’m just not aware of anything that we’re seeking at this point. I do know that we have a range of cabinet business before Parliament.
The Chair: Thank you very much.
Senator Coyle: Mr. Beaudoin, you were talking about setting up a special unit that handles these investigations, the analytical work, the intelligence work.
I’m curious if you have relationships with other police entities in other countries where you share both expertise as well as information on individuals or entities?
Mr. Beaudoin: Thank you for the question. Yes, we are part of a group with INTERPOL where we communicate with other police agencies around the world on asset tracing. That’s definitely a mechanism that can be used. Yes, to the extent that has been set up recently, I think in March, we maintain contact there.
Again, we need to wait until Global Affairs decides to, for example, seize assets or decide on a direction before really providing additional intelligence and use these mechanisms.
Senator Coyle: Thank you.
Senator Richards: Thank you very much, Mr. Chair, and thank you for being here.
I’m wondering if you have any mechanism in place to mitigate any mistakes that might occur with individuals, property or with anything else because there’s never been a law that is foolproof.
I remember a few years ago when my son, Anton, was put on the no-fly list at 10 years of age. I fully support your work.
I would like you to comment on this. Is there any ready-made way in place to mitigate any mistakes or to keep an eye on so that these things that are being done legally and above board?
Mr. Beaudoin: Thank you for the question, senator.
Yes, there are processes in place. To explain this, as I said, once a property is disclosed to the RCMP, it’s going to include a set of information; it could be name, date of birth or anything like this.
We are going to check our internal records to corroborate it, to the extent that we can. After that, we are going to share this with Global Affairs. Often, Global Affairs will come back to us to seek additional information, at which point we’re going to seek international cooperation, for example.
There are many mechanisms available there and used to ensure that the right person is listed. Our communication with Global Affairs is that when they list individuals is to be as precise as possible. Listing a name without a date of birth, for example, makes it a lot harder to trace assets in Canada.
Senator Richards: Would anyone else like to comment on that?
Mr. Anson, would you like to comment on that? Is there anything you have to say or add?
Mr. Anson: Thank you very much, senator. Specific to our role and mandate within the CBSA, we do, obviously, have an internal system of targets and lookouts that allow us to track potential travellers of risk or concern, as well as commercial goods flowing in and out of Canada. What I would say is that specific to the example that you give, which is obviously a very personal and extremely important one, that I think illustrates a much greater challenge that we’re constantly trying to resolve at the agency and among partners, is that we try to ensure that all the information we have or anything we action has the greatest amount of fidelity and the most number of details and selectors in order to populate any of our targets or lookouts.
In doing so, and in vetting and verifying anything that we would input into our systems that might result in an enforcement action or a secondary examination, we ensure it’s well substantiated and based on information or intelligence that is credible and recent.
I think it also bridges back into the previous question about how we interoperate with our allies. Both domestically and abroad, we do have very robust and productive collaborative arrangements with our allies, within the authorities granted to us, for information and intelligence sharing to ensure we have the most accurate information, when choosing to potentially enforce or interdict a person or an item for commercial import or export.
Senator Richards: Thank you very much.
The Chair: We’ve come to the end of round two. On behalf of the committee, I would like to thank our four witnesses for being with us today. I want to emphasize that in terms of this review, this was our first meeting today, so we’re just starting off. We might have some more questions for you later on, depending how things go. But thank you for your testimony today. It’s deeply appreciated.
Colleagues, before we adjourn, just two quick items. Our meeting tomorrow, continuing with Magnitsky and SEMA, will be just for one hour, so from 11:30 to 12:30. I will not be here, unfortunately, but, barring unforeseen circumstances, our deputy chair, Senator Harder, himself unable to be here today because of a Legal Committee meeting at this very time, will chair tomorrow.
Since I won’t be here tomorrow, I also wish to thank members who responded, and all quite positively, to my email from last Friday, October 21, regarding moving ahead with the process of changing our committee’s name. I intend to give notice in the Senate next week for a motion referring this to the Committee on Rules, Procedures and the Rights of Parliament.
Colleagues, if there are no other questions or comments, we’re adjourned.
(The committee adjourned.)