THE STANDING SENATE COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE
EVIDENCE
OTTAWA, Wednesday, May 6, 2026
The Standing Senate Committee on Foreign Affairs and International Trade met this day at 4:14 p.m. [ET] to study Bill S-214, An Act to amend the Special Economic Measures Act (disposal of foreign state assets).
Senator Peter M. Boehm (Chair) in the chair.
[Translation]
The Chair: My name is Peter Boehm. I am a senator from Ontario and the chair of the Committee on Foreign Affairs and International Trade.
I now wish to invite the committee members to introduce themselves.
[English]
Senator Woo: Yuen Pau Woo, British Columbia.
Senator MacDonald: Michael MacDonald, Cape Breton, Nova Scotia.
Senator Al Zaibak: Mohammad Al Zaibak, Ontario.
[Translation]
Senator Gerba: Amina Gerba from Quebec.
[English]
Senator Ravalia: Mohamed Ravalia, Newfoundland and Labrador.
Senator Harder: Peter Harder, Ontario.
Senator Wilson: Duncan Wilson, British Columbia.
Senator Adler: Charles Adler, Manitoba.
Senator Coyle: Mary Coyle, Antigonish, Nova Scotia. Welcome.
Senator Dasko: Donna Dasko, Ontario.
The Chair: Thank you and welcome, senators. I would like to welcome everyone who may be watching us across the country on Senate ParlVU.
I would also like to take this opportunity to introduce Valérie Chevrier-Marineau. She is one of the new analysts who will be working with this committee alongside Brian Hermon.
Colleagues, we are meeting today to continue our examination of Bill S-214, An Act to amend the Special Economic Measures Act (disposal of foreign state assets).
Today, we have the pleasure of welcoming to the committee, as an individual, Fen Hampson, Chancellor’s Professor, Carleton University, and President, World Refugee and Migration Council.
From the Ukrainian Canadian Congress, we welcome Danylo Korbabicz, Chief Executive Officer and Executive Director; and Orest Zakydalsky, Senior Policy Advisor.
Welcome to all of you, and thank you for taking the time to be with us today.
Before we hear your opening statements and proceed to questions and answers, I would ask everyone present to please mute notifications on your devices and also kindly observe the instructions that are on the card in front of you regarding use of the microphone and the earpiece so that we can protect our technical staff and interpreters.
We are now ready to hear your opening remarks. As per usual, they will be followed by questions from senators and your answers.
Professor Hampson, you have the floor, followed by Mr. Korbabicz.
Fen Hampson, Chancellor’s Professor, Carleton University, and President, World Refugee and Migration Council, as an individual: Thank you, Mr. Chair.
Bill S-214 closes a serious gap in Canada’s sanctions regime, enabling the lawful forfeiture or direct exercise of custodial control by the Government of Canada of another state’s assets under exceptional circumstances, as laid out in the Special Economic Measures Act, or SEMA.
The bill does not undermine state sovereignty. It reflects the modern understanding that sovereignty entails enforceable obligations and cannot shield against grave breaches of international law.
If you go back to the Peace of Westphalia — conventionally regarded as the origin of modern, non-interference-based sovereignty — European princes in the Holy Roman Empire were nonetheless bound by limited obligations to respect the rights of religious minorities. Territorial authority was never entirely unconstrained. In the centuries that followed, understandings of sovereignty shifted from a predominantly non-interference norm to a conception today that links sovereign authority to responsibilities toward populations under a state’s jurisdiction.
That is reflected in the prohibitions against the use of force in the UN Charter; the responsibility to protect principle, which was endorsed unanimously by the UN General Assembly in 2005; and contemporary law of state responsibility, together with the postwar human rights regime.
Finally, I would draw your attention to the law of state immunity itself. Historically, foreign states enjoyed absolute immunity from legal action in other countries’ courts, with no exceptions. Over the 20th century, as states became active commercial players, the law has shifted to a more restrictive approach: States retain immunity for sovereign acts but lose it for commercial or private law conduct.
Bill S-214 operationalizes the international law doctrine of countermeasures in response — in this case that we may talk about — to Russia’s aggression against Ukraine. I will not dwell on that, as it has already been discussed by other individuals who have appeared before this committee.
Beyond the legal argument, however, lies a compelling public interest argument. The issue is whether Canadian taxpayers should continue to bear the costs of Russia’s war or whether Russia’s own assets should fund Ukraine’s efforts and recovery.
As you all know, Canada has already committed billions in loans, grants and military assistance to Ukraine. Meanwhile, hundreds of billions in Russian sovereign assets remain frozen in various G7 jurisdictions.
Canada’s allies are moving ahead on controlling and repurposing Russian state assets. And Canada, I would argue, risks becoming an outlier if it fails to modernize its own legislative tool kit. The United States, as you may know, passed dedicated legislation — the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act, or the REPO Act — that allows Russian sovereign assets held under U.S. jurisdiction to be seized and redirected to the Ukraine Support Fund, and U.S. lawmakers have gone further by proposing follow-up measures that would provide for the regular transfer of those resources to Ukraine.
The European Union and key European states are progressively hardening their own approach, from temporary freezes to indefinite immobilization and the use of interest revenues to explicit legal preparations to draw on frozen principal to cover reparations if Russia does not pay.
An international compensation fund for Ukraine is being developed under the auspices of the Council of Europe, with the Register of Damage for Ukraine already operational, and the new International Claims Commission and compensation fund are in the process of being established. As this architecture is completed, there will be scope for Canada to channel forfeited or controlled Russian assets into that mechanism, subject to the final design of the fund and Canada’s own international commitments.
By providing cabinet with a clear executive pathway for the forfeiture of certain Russian state-owned assets, Bill S-214 would allow Canada to act under its own laws rather than relying solely on what might be protracted litigation.
It is important to reduce the risk that those assets become tied up in legal proceedings and leave Canadian taxpayers to shoulder an increasingly large burden of the costs that we but also the people of Ukraine are experiencing.
Thank you.
The Chair: Thank you, Professor Hampson.
I would like to acknowledge that Senator Marty Deacon of Ontario has joined the meeting.
We will now go to Mr. Korbabicz.
Danylo Korbabicz, Chief Executive Officer and Executive Director, Ukrainian Canadian Congress: Distinguished chair and members of the Standing Senate Committee on Foreign Affairs and International Trade, thank you for the invitation to appear before you today.
The Ukrainian Canadian Congress, or UCC, is the voice of Canada’s Ukrainian community. Together with its member organizations, the UCC has been leading, coordinating and representing the interests of the 1.4 million-strong Ukrainian community in Canada since 1940 and has been instrumental in shaping Canada’s social, economic and political landscape.
We are here to discuss Bill S-214, An Act to amend the Special Economic Measures Act (disposal of foreign state assets). We are deeply grateful to Senator Donna Dasko for introducing this important legislation and to this body for their thoughtful and important debate on it.
The UCC stresses that the adoption of this bill — which would vest within the government the power to seize assets of states that perpetrate breaches of international peace and violate human rights — is an important and, indeed, essential step in holding those states to account for their heinous crimes.
The example of the Russian Federation is instructive. For 1,532 days, Russia has tried to annihilate the Ukrainian state and destroy the Ukrainian people, their identity, their language and their culture. Both the House of Commons and the Senate have recognized that Russia is committing genocide against Ukraine.
Hours ago, Russia bombed a kindergarten in Sumy. Overnight, Russia murdered 26 civilians and injured over 100 more, bombing residential areas of Ukrainian cities.
Senators, this horror is an everyday reality for every Ukrainian. Russia has abducted thousands of Ukrainian children. Russia has destroyed hundreds of Ukrainian cities and towns. Russia is committing systematic rape, torture and murder.
These are not random crimes. They are deliberate and systematic. They are Russian policy. These crimes are the means by which Russia seeks to destroy the Ukrainian people. This cruelty is not incidental. The cruelty is, in fact, the point.
We have seen the indictment of Putin by the International Criminal Court for the abduction of Ukraine’s children. Ukrainian investigators have identified over 230,000 war crimes committed by the Russian Federation since February 2022.
Putin and the cabal of war criminals who run Russia remain at large, but what we can do right now is take their money because they keep a lot of it in Western financial institutions. It is estimated that approximately $300 billion in Russian assets — much of which are Russian state assets — are currently frozen.
The vast majority of these assets are held in jurisdictions other than Canada. The RCMP has reported just under $200 million in Russian assets immobilized in Canada. There are likely to be more assets that need identifying.
Why, then, do we believe that the powers that would be granted to the government by Bill S-214 are so important? Because Canada can set a precedent. Canada can lead the way and show other like-minded allies the path forward.
The European Union recently agreed to provide Ukraine with a €90-billion loan — backed by frozen assets — that will be critical for Ukraine’s war effort and to allow the Ukrainian government to ensure the functioning of the state itself.
The provision of this loan was held hostage for months by former Hungarian Prime Minister Orbán and released only upon his defeat in a general election.
The assistance to Ukraine’s war effort provided by Western countries ought not be subject to the vagaries of day-to-day politics. The fight is too important and not only for Ukraine.
The recent budget implementation act has a provision that allows the Governor-in-Council to require financial institutions to report to the Minister of Finance any holdings owned by a sanctioned individual, entity or foreign state and on any profits realized from that holding — profits which can be seized by the minister. We ask the Minister of Finance to do so. This provision will greatly assist in identifying Russian assets held in Canada.
When coupled with Bill S-214, this creates a significant opportunity for the government to provide Canadian leadership on a global stage on this critical issue. In so doing, the government would have the strong support of the Canadian people. Recent polling from Abacus Data shows that 70% of Canadians support seizing frozen Russian assets in Canada and using them to fund Ukraine’s defence and reconstruction. The UCC calls on this committee to do so as well.
Thank you very much.
The Chair: Thank you, Mr. Korbabicz, for your commentary.
[Translation]
Honourable senators, I wish to remind you that you will each have a maximum of three minutes for the first round. This includes questions and answers. Therefore, to members and witnesses, please be concise. We can always go to a second round if we have time.
[English]
Senator Harder: Thank you to our witnesses. My question is for Professor Hampson.
The academic and former diplomat Edward Fishman has written a rather interesting book called Chokepoints, where he reviews what he calls economic warfare conducted by the West, principally led by the United States, with respect to Russia, China and Iran.
While he was intimately involved and certainly supports these measures, he raised the prospect of how economic warfare has had unintended consequences in terms of strengthening the capacity of the belligerents that we’re targeting to get around the sanctions with very creative responses of their own, including with banking and other economic forces.
Could you comment on the unintended consequences that we are working and living through and how and to what extent this bill will either accelerate or blunt some of those?
Mr. Hampson: There is a whole range of potential unintended consequences, one of which is that authoritarian regimes that are concerned about, shall we say, the health of their assets in foreign jurisdictions will probably and, in fact, have moved their assets to more friendly jurisdictions. That is unquestionably a consequence of even the existing sanctions regime and freezing of assets.
Second, I think we have to be aware that there may well be retaliation against Canadian investments in Russia.
We may also come under pressure from other jurisdictions that hold Canadian bonds, which might well themselves — as has already been the case for some European countries — come under pressure from foreign bondholders, with the threat that they will dump those bonds. That will obviously have monetary policy consequences.
A third potential consequence is what might be called an investment chilling effect. If you pass such legislation, holders of foreign sovereign investment funds who want to invest in Canada might say that this is not a particularly friendly jurisdiction.
Those are risks, but I think they are manageable risks under the current legislation. The current legislation — I’m talking about SEMA here, not the amendments — does not give an unrestricted hunting licence to the executive authority. There are many guardrails in that legislation. This is a hammer that will not be going looking for nails.
The Chair: Thank you very much. I’m sorry; we are over time on that segment.
Senator MacDonald: We have heard a lot about Russian assets. Could you define them a little better for me? It is a very broad term. How would Russian assets be defined around the world, and what form would they come in?
Orest Zakydalsky, Senior Policy Advisor, Ukrainian Canadian Congress: There are several definitions of assets. One is state assets. Others are frozen assets of individuals and entities that are abroad.
When we talk about state assets, they are usually either bonds or money held by the Russian central bank that are in other jurisdictions. Private assets would be property owned by Russian oligarchs or Russian state officials or things like yachts, land property, money in accounts, planes, mansions, et cetera.
Mr. Hampson: There are assets that are held by the Bank of Russia, but there are also various state-owned companies which, to all intents and purposes, are organs of the Russian state, so that also falls under that umbrella.
In the case of Canada, the big money is $22 billion roughly, which is about 11% of the Russian holdings with Euroclear that are in cash deposits and bonds with Canadian financial institutions. It could be our chartered banks. It could also be the Bank of Canada.
They are on deposit, which is to say the title is with Euroclear and its depositors. That’s a fairly substantial sum of money. I believe if you look at Euroclear’s public accounts, which are available online, there are still pretty substantial Canadian holdings there.
Senator Woo: Russia’s illegal aggression against Ukraine is egregious and indefensible, and the application of this law to Russia as the first test case, if you will, is powerful from a legal, moral and public interest perspective. But this is not the only gross violation of international law that is taking place in the world right now. Do you have any confidence this law can and will be applied to other examples of gross violations of international law that are taking place right now?
Maybe Dr. Hampson could respond, followed by our Ukrainian colleagues.
Mr. Hampson: That depends on the government in power.
Senator Woo: What if we don’t apply the same standard to blatant violations of international law that are taking place right now? What does that do for our credibility?
Mr. Hampson: Well, that is a policy issue. The issue, as I understand it, when it comes to this bill is to give the government tools.
I agree with you, senator, that there are other egregious cases. In fact, when the World Refugee and Migration Council proposed this idea to go after foreign assets, we were not looking at Russia. We were looking at Venezuela and Maduro’s holdings of real estate and government holdings in Canada and to repurpose those assets to help forcibly displaced persons in Colombia. That is another example, potentially.
But as I said in my remarks, yes, you need the hammer, but the nails that you look for is a policy question and, ultimately, it’s one for the Government of Canada and the policy-makers and the advocates who believe that action should be taken in those cases.
Senator Woo: Will our Ukrainian colleagues support, say, Palestinians and others who would advocate for the same to be applied to Israel in solidarity with another group that is being severely oppressed currently?
Mr. Korbabicz: I would echo the professor’s point, and I would only say that our desire is that these tools be used judiciously. I would also say to the previous senator’s question that I wouldn’t be so convinced that in terms of unintended consequences, the alternatives to investment in Western states are particularly attractive. I suspect they might face bigger challenges than in Western institutions.
Senator Al Zaibak: Thank you to our witnesses for being here today.
Professor Hampson, you have provided a very compelling opening statement. Thank you so much for that.
You referred to other countries moving forward with applying the same kind of mechanism. Are you aware of other countries that have adopted the kinds of measures being proposed in Bill S-214, and do you have any other examples from other jurisdictions where courts have successfully authorized the seizure and repurposing of foreign state assets despite claims of sovereign immunity?
Mr. Hampson: I would make two comments. I’ll try to be brief.
The first is that the REPO Act of the United States — which has a fancy name that I can never remember, and it’s the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act — is pretty similar. It has not been used as yet. There is legislation that members of Congress have brought forward, but that ultimately is a decision of the executive.
I would say that Iraq provides a powerful precedent for using frozen or controlled state assets to compensate victims of aggression. After the 1990 invasion of Kuwait, the United Nations Security Council created the United Nations Compensation Commission that was financed by a percentage of Iraq’s oil revenues, which ultimately paid out about $52.4 billion in reparations to the victims over three decades.
After the 2003 invasion, the United States vested $1.7 billion in frozen Iraqi government assets and, together with other coalition members, channelled Iraqi oil revenues into a development fund to finance Iraq’s budget and reconstruction efforts. What’s interesting there is even after formal sovereignty was restored to Iraq, as some of you may know, Iraqi oil revenues remained deposited — and continue to remain deposited to this day — with the Federal Reserve Bank of New York. Every dollar earned from oil that passes out of Iraq that’s produced there passes through American hands before it goes back to Baghdad. There’s been no formal seizure, but I would argue custodial control is being exercised by the United States over Iraq’s oil revenues.
The Chair: Thank you very much.
Senator Ravalia: Thank you very much to our witnesses. Professor Hampson, are you concerned that this bill affords executive overreach, due process gaps and international law risks? The context that I’m thinking about is Euroclear has approved a €90-billion loan, not a €90-billion forfeiture. These are our closest allies. Is there any risk in us seeking forfeiture versus taking an alternative approach?
Mr. Hampson: By the way, we are contributors too. We are providing a major loan ourselves. I think it’s, what, $5 billion as part of the G7 $50-billion loan to Ukraine.
The Europeans are clearly moving in the direction of seizure in the event that reparations are not paid by Russia. The loan and the collateral that sit in Euroclear are tied to reparations. It’s not outright forfeiture. The legislation that is being proposed here would give the Canadian government the $22 billion — and that’s somewhat complicated — or the $200 million, and we would essentially be applying that under similar conditions.
As I said earlier, there are lots of safeguards in the legislation itself under SEMA, and ideally we would do it under UN authorization. But if UN authorization is not available because the Security Council is deadlocked, then you do it with your coalition partners.
There isn’t any suggestion in this case, and I would submit that would be the case in other potential cases going forward because it would have to be any kind of forfeiture or exercise of custodial control, right? For the two examples I gave earlier, you don’t have to confiscate in order to repurpose. You can do it with custodial authority, but in order to have that custodial authority, you still need Bill S-214 because the executive otherwise will not be able to exercise that custodial authority.
So there is a spectrum here. Obviously, forfeiture is the most extreme case.
The Chair: Thank you.
Senator Coyle: Thank you to our witnesses. This is really helpful to us at this juncture as we’re studying this bill. Of course, when you’re later in the questioning, many of my colleagues have asked my earlier questions.
Dr. Hampson, I’m going to ask you about all of the readiness elements. You’re saying we need the authority in Bill S-214 that closes the gap on the missing pieces and gives the hammers and whatever we need for our executive to exercise authority. You’ve mentioned the infrastructure: the preparation of the international compensation fund and the International Claims Commission. Those are pieces of the puzzle. Is there more to it that needs to be in place that Canada needs to participate in within the whole ecosystem, if you like, of elements that need to be in place to act quickly and to move money in the direction it needs to go in order for Ukraine to rebuild?
Mr. Hampson: The short answer — and I’ll try to be short — is that if you don’t have this important piece of legislation, you will not be able to go after state-owned assets. That’s not just the Bank of Russia but also potentially other state-owned companies that have squirrelled away or have holdings in Canada, and they could be physical assets too. I gather there is some debate over that airplane that sits at the end of Pearson Airport, whether it’s a state-owned or privately held aircraft. I think we would all like to see it go. The short answer is that this is an important tool, and if we’re going to follow with our allies, the Europeans in particular, who in the worst-case scenario — and we’re talking about the worst-case scenario. If Russia pays reparations, then it’s no problem, right, because the loans are tied to those reparations. One can consider an unintended consequence of regime change in Russia, where you have a democratic leader who says, “We’re going to pay up here for our sins.” Germany did that after the Second World War to a degree. Then you don’t have to exercise it. But this is the worst-case scenario. Why should the Canadian taxpayer be stuck with the bill, right? If you really want to get political about it: Why should they be stuck with the bill if there is money sitting to be used for that purpose?
The Chair: Thank you very much. I would like to acknowledge that Senator Hébert of Quebec has joined us.
Senator Dasko: Thank you, witnesses. With the Russian state assets frozen in many countries in the world and now after four years of freezing, it would seem highly unlikely that anybody would want to be returning these assets to Russia in any foreseeable scenario except in a scenario of paying back the damage that has been done.
Professor Hampson, I wonder if you could comment on that. Some people have been saying it’s not if we seize or confiscate the assets but a matter of when. Would you characterize the current situation that way? That would be my first question.
My second question to you is: In your opening comments, you suggested that perhaps the current situation we have is much more open to litigation, and with Bill S-214, we would provide clarity for Canada and, therefore, we may not be subject to as much litigation going forward. I picked that up as a possible implication of what you said earlier.
First of all, the question is: It seems unlikely we are going to give all that money back to Russia. Would you agree with that?
Mr. Hampson: Well, if the day comes, senator, when there is a peace agreement, there would certainly be pressure to lift sanctions. As soon as you lift sanctions, the money goes back.
There is also, I would submit, the related question about Ukraine’s needs now. There is a lot of damage now. There is reconstruction that needs to take place now, and you have a fairly substantial chunk of money that can be used for that purpose, not to mention to allow Ukraine — which is under, I would say, fairly dire economic circumstances itself — to buy military equipment and other things that it needs to fight against Russia. This instrument gives you the flexibility to do that when it comes to state assets.
In the case of individual assets, yes, as we know, litigation is taking place, and that is part of due process. It’s not tidy and it’s not quick, but that’s what distinguishes a democracy from an autocratic regime, and it’s why the legislation is structured the way it is.
[Translation]
Senator Gerba: Welcome to the witnesses. Thank you for your insightful contributions.
My question is for Mr. Hampson and it has to do with the use of powers. It follows up on Senator Ravalia’s question.
In our most recent committee meetings, some witnesses shared their concerns about abuse of power, particularly by the executive branch. They talked about the importance of parliamentary oversight. I am thinking of Mr. Lim and Ms. Braw. Ms. Braw said that there could be an abuse of power if a future government decided to make use of this legislation.
I would like to know whether you share the opinion of those two witnesses. Mr. Lim proposed more direct parliamentary oversight and Ms. Braw suggested closer scrutiny of this power.
[English]
Mr. Hampson: First, let me say that is a risk. It’s always a risk when you confer executive power. It’s a risk, as we’ve seen in debates about the exercise of the Emergencies Act, but I would submit this does not go nearly as far as the authority that is granted under that particular legislation to the executive.
First, there has to be a major breach of international law by another state, including — and it’s very specific about it — territorial aggression. You can’t just sort of willy-nilly turn to this instrument to start confiscating the assets of another country.
I’m also struck by the fact that were this legislation to pass, it would have all-party support, and I think that sets an important precedent in terms of parliamentary practice that even in the event of aggression, you would look for all-party support to exercise the authority under this legislation.
Senator Adler: Before being appointed to this chamber, I was in the rhetoric business for my entire adult life. My question is for our Ukrainian-Canadian guests.
We’re talking specifically about Canada here, but we could talk about the message to the world. Do you think that the rhetoric matters? Do you think that the rhetoric has been dampened by the overuse of words that are, at the moment, words that don’t have much impact on average human beings? It’s words like “war,” “conflict” and even the word “genocide,” which is now repeated by so many faces in so many places that it, tragically, does not have the impact it once did.
I wonder if one needs to be more specific about the rhetoric and the visuals behind the rhetoric. We hear about kidnappings. That’s a serious word. We don’t see pictures or videos, not of the children and not of the parents. There are murders outside of bombings where we don’t see the victims, whether it’s the corpses or the families. “Rape” is a serious word, but once again, we don’t see what needs to be attached to make those words stick to have an impact.
The Russian war against Ukraine is not just a war, and it’s not just a conflict. It’s all of these other things. I’m wondering if it’s anything that you think about when it comes to the question of how much impact the Ukrainian community is having on the world.
Mr. Korbabicz: Thank you for your comments, senator. I appreciate them.
The Ukrainian community and the general public become desensitized to these things. We saw the international community move quite quickly when the horrors of Bucha were exposed, and now it’s an everyday drum. I suspect that until the conflict is over and until people see the scale with their own eyes, as many international leaders did when they went there, it’s hard to motivate people and keep it top of mind.
It’s a bit shocking for me when you mention to policy-makers that, in fact, there are mobile crematoriums, and it brings images of the Holocaust forth, but there is very little reaction. That’s a shame.
So I would agree with your comments. It’s discouraging, but we do important work in reminding people, even with rhetoric, that it’s important to not lose sight of the heinous crimes that are taking place every day.
Senator Adler: Do you think the world is seeing the crematoriums and, once again, not to rehash the visuals of all these important words, but the actual visuals? Once again, it’s kidnappings. A kidnapping when you don’t see a picture of the kid isn’t the same when it comes to conveying the message and trying to impact minds.
Mr. Korbabicz: It is a product of the current media cycle and the way that those images get transferred. It’s very difficult to get on the agenda after many years.
The Chair: Thank you.
Mr. Korbabicz: Thank you.
Senator M. Deacon: Thank you to my colleague Senator Adler. My question was similar to his, but now I’m going to take it to sanctions.
Thank you, of course, for being here.
For our colleagues at the Ukrainian Canadian Congress, as you know, Canada has heavily sanctioned Russia since the outset of this war of aggression, but there are those who think it might be all bark and no bite in terms of the impact. If we are looking at these sanctions and repossessions, at a time where you say Ukraine needs it and they are desperate, will this have an impact with Ukraine on the ground?
Mr. Korbabicz: To echo Professor Hampson’s comments, yes, it will have an impact. Some of you brought up the plane. I spoke to the Minister of Justice the other day, and he updated us on what is going on with the plane. There are 50 shell companies involved with the plane and numerous appeals.
You need resources in order to target these sophisticated schemes. This is just another tool in the bucket that the government can use to pursue some of these assets.
Senator M. Deacon: Thank you.
The Chair: Mr. Korbabicz, the Ukrainian Canadian Congress is well known, and you have been before this committee and other committees, but you also have links to similar associations and organizations outside the country. How much does this issue of frozen assets and repurposing figure into your discussions with related groups?
Mr. Korbabicz: I don’t want to draw comparisons, but our sister organizations around the world have varying degrees of sophistication, resources and ability to influence government policy. Our cousins in the States have a bit of a different battle than we do here, and we, of course, are very grateful for the environment we find ourselves in.
Mr. Zakydalsky: This is an issue that Ukrainian communities across the world are currently seized with. The debate came to the forefront in Europe over this €90-billion loan and the fact that the European leaders agreed to give it and then it was stalled for months for other political reasons. That issue itself made it more urgent to actually seize the asset so that single governments that are part of our allied support for Ukraine cannot unilaterally stop a policy that is supported by everyone else.
Our Ukrainian communities in Europe are certainly part of efforts convincing governments to move quickly there. For the U.S., we don’t need to talk much about the Trump administration here. I know that everyone here knows the impact of that, and that is something our colleagues in the States have to deal with more directly than we do. The short answer to your question is for all Ukrainian communities around the world, this is a pressure point that they are trying to impress upon their governments.
The Chair: Thank you, Mr. Zakydalsky.
Senator MacDonald: Did we make any distinction between state-owned assets and privately owned assets, or should we make any distinction? If it is a private investor from Russia or somewhere else — let’s assume there are good people everywhere — should they be treated the same way as state actors and state assets?
Mr. Korbabicz: It depends on whether those assets were stolen from the Russian people and then employed through an oligarchic scheme. We distinguish between individuals or oligarchs who have profited from Russian state corruption.
Senator MacDonald: Is there a way to determine that?
Mr. Zakydalsky: Our foreign affairs minister sanctions individuals based on their connection with the Russian government and actions that they take in support of it. There is no blanket ban or blanket seizure of Russian private assets. There is only freezing of assets that are connected to someone or a company that is engaged in support of the Russian government and Russia’s war.
There is a distinction as well between private assets and state assets in our law. In the Budget Implementation Act, 2022, No. 1, the Canadian government has the power to seize privately held assets. For example, a Russian oligarch who has assets in Canada can be subject to seizure, and this bill would simply extend that authority to sovereign state assets as well.
Senator Al Zaibak: Professor Hampson, in your assessment, could Bill S-214, if enacted, be applied in Canada to victims of Russian aggression beyond Ukraine, whether it’s states or individual victims? For example, there are cases such as Africa, Libya and Syria, where reconstruction and accountability remain urgent but under-resourced. What would be the risks and opportunities there?
Mr. Hampson: Theoretically, yes, but it has nothing to do with the act itself. That would be an executive decision that, presumably, the Prime Minister and the cabinet would make in terms of how the assets are to be repurposed. That is a policy question.
In the case of individual assets, again, it is a policy question. It is one of the reasons why there is an argument to be made to create some kind of international mechanism, such as an international anti-corruption court, that could deal with these kinds of cases where different claimants could come forward to make their claims, but we are not there yet.
Senator Coyle: Dr. Hampson, my colleague Senator Harder asked a question about unintended consequences. We talked about the possible negative risks associated with this. What would be the unintended consequences of not doing this?
Mr. Hampson: That’s a great question. One of the consequences could be that the war ends, and Europe has decided that there are no reparations coming from Russia, so it is going after the money. For the holdings that are in cash deposits with Canadian financial institutions under Euroclear, the Russians could decide to litigate that and say that money doesn’t go back to Euroclear but rather it goes to Russia because Euroclear is under Belgian law and Belgian jurisdiction and European Union jurisdiction.
However, if those account holdings are held with Canadian financial institutions, they are subject to Canadian law.
We could find ourselves as the odd man out there, where the Europeans say they are confiscating and the money that is in Canada, such as the $22 billion, goes back to Russia because sanctions are being lifted and the war is over. That is potentially an unintended consequence.
The Chair: Thank you.
[Translation]
Senator Gerba: I’d like to quickly circle back to the issue of abuse of power. Do you have any prevention or oversight mechanisms to recommend in connection with Bill S-214? Today, the executive branch may be supportive and take appropriate action, but that could change in the future.
[English]
The Chair: Before you answer, I will ask Senator Dasko to ask her question and then both can be answered because we are running out of time.
Senator Dasko: My question is a reverse question of Senator Coyle’s question. As an unintended positive consequence, perhaps taking this move would enhance our international reputation if we pass Bill S-214?
Mr. Hampson: I don’t want to hog the mic here. I’m sure my colleagues on the panel have views on both the abuse of power and the international consequences. I know the question was directed to me, but I have said quite a lot.
Mr. Korbabicz: I would echo the professor’s messaging on this. We expect the government to be judicious. We appreciate that there is all-party consent and we would expect that the implementation is, in a similar vein, taken very seriously. However, I don’t think it is for us to determine what the guardrails should be regarding the concerns about abuse of power. That is for the senators and the government to figure out. We will echo the position that we think this should be used judiciously.
Mr. Zakydalsky: I would add one thing to that. If we look at similar legislation in Canada, like on sanctions, there have not, to my knowledge, been any examples of abuse of that power by the executive. The minister has wide breadth to sanction individuals and entities and has done so fairly, judiciously and correctly, to the extent that we have seen. There has not been a flurry of courts overturning these decisions that would lead one to think that the minister is abusing this authority.
Mr. Hampson: SEMA has clear thresholds in terms of how executive power is to be exercised. It involves threats to international peace and security and gross violations of human rights. This is not an unrestricted hunting licence for the executive to go confiscating assets.
The Chair: Thank you very much. This has been a very useful session for the committee. On behalf of the committee, I would like to thank our witnesses — Fen Hampson, Danylo Korbabicz and Orest Zakydalsky — for being with us today.
Colleagues, we are ready to move on to our next panel. For our second panel, we welcome the following witnesses:
From the Royal Canadian Mounted Police, we welcome Guy Paul Larocque, Inspector, Financial Crime.
From Global Affairs Canada, we welcome Robert Brookfield, Director General, Sanctions Bureau; and Halleh Koleyni, Acting Executive Director, Sanctions Policy Division.
From the Department of Finance Canada, we welcome Safeena Alarakhia, Director, Financial Crimes Governance; and Matthew Shannon, Senior Economist.
Thank you for being with us today. We are ready to hear your opening remarks. Mr. Brookfield, you have the floor, followed by Mr. Larocque.
[Translation]
Robert Brookfield, Director General, Sanctions Bureau, Global Affairs Canada: Honourable senators, thank you for giving me the opportunity to speak to you today as part of your study on Senate public Bill S-214, which seeks to amend the Special Economic Measures Act, or SEMA, to facilitate the implementation of a regime for the forfeiture of foreign state assets.
I know that the committee is familiar with the provisions of SEMA relating to asset forfeiture, particularly following the 2023 review of the laws that allow Canada to impose autonomous sanctions. However, I believe that it would be useful to review some key aspects of SEMA, the changes that Bill S-214 would make to it and the measures that have been taken to date under that regime.
[English]
Canada’s asset seizure and forfeiture authorities were established in 2022 through changes to SEMA and the Justice for Victims of Corrupt Foreign Officials Act. It allows the government to freeze and take property owned, held or controlled — directly or indirectly — by sanctioned individuals and entities. This includes both private and sovereign assets.
Specifically, the Governor-in-Council can, on the recommendation of the Minister of Foreign Affairs, make an order for the seizure or restraint of that property in Canada. This initial order does not result in a change in the ownership of the property. Once seized or restrained, the Minister of Foreign Affairs can apply to the applicable provincial court for an order for the property to be forfeited to the Crown. In other words, the property then becomes the property of the Government of Canada.
If forfeited, the forfeited property or its proceeds may be used for the purposes of compensation or reconstruction.
Bill S-214 would maintain this process for private assets, but it would modify the approach for sovereign assets to skip the step of applying to court for forfeiture of assets once seized and allow the Minister of Foreign Affairs to make a recommendation to the Governor-in-Council for a decision directly to forfeit. That decision could still be challenged by way of judicial review, but it would not automatically require a court application by the government. If there were to be a judicial review, one of the issues before the court then could be whether this new process respects procedural fairness or whether state immunity prohibits that forfeiture decision.
[Translation]
I would also like to note, as did other witnesses who have already appeared before the committee, that the process set out in the bill for the forfeiture of foreign state assets raises important considerations at the bilateral and multilateral levels, particularly with regard to international law and reciprocity.
I will now discuss the measures that have been taken to date under the current legislation. The act requires that any sanctionable funds or assets located in Canada be disclosed to the RCMP and CSIS. According to the latest available information, they have received reports of the presence in Canada of approximately $185 million in Russian assets, $150,000 in Belarusian assets, $80,000 in Iranian assets and $1,500 in Haitian assets.
[English]
Much of those frozen assets are small amounts that would be challenging and expensive to pursue. For larger values, the government has acted. Since the authorities were introduced in 2022, Canada has issued two orders, both in relation to the Russian regime. The first was in December 2022 when an order was issued for the restraint of US$26 million from Granite Capital Holdings Ltd. The company is believed to be owned, held or controlled by a sanctioned individual, Roman Abramovich. The second was in June 2023 when Canada announced the seizure of a Russian-registered cargo aircraft, an Antonov AN-124.
[Translation]
The Government of Canada remains committed to using confiscated Russian assets to help rebuild Ukraine. I understand that, as with any legal proceedings, especially when new procedures are involved, things are not straightforward, but the government has actively pursued its legal action. For example, on March 18, 2025, government filed a forfeiture application before the Ontario Superior Court of Justice in relation to an Antonov cargo aircraft. The case is ongoing.
The government is exploring other ways to provide direct support to Ukraine while continuing to implement the Canadian seizure and forfeiture regime.
[English]
The government also remains committed to increasing pressure on Russia. Since 2014, Canada has imposed sanctions on more than 3,400 individuals and entities that are complicit in the violation of Ukraine’s sovereignty and territorial integrity and in gross and systematic human rights violations. Canada has also sanctioned more than 600 vessels involved in Russia’s shadow fleet transporting sanctioned property and goods.
More broadly, the government continues to identify and implement means to improve our sanctions regime. This includes recently in Bill C-15, enacting a made-in-Canada version of the European windfall profit mechanism.
We look forward to your questions.
The Chair: Thank you very much, Mr. Brookfield. Mr. Larocque, you have the floor.
Guy Paul Larocque, Inspector, Financial Crime, Royal Canadian Mounted Police: Thank you, chair and honourable senators, for the opportunity to appear before you today.
My name is Inspector Guy Paul Larocque, and I am appearing on behalf of the Royal Canadian Mounted Police. I appreciate the invitation to speak to issues related to the RCMP’s role in supporting Canada’s sanctions and asset seizure framework within Canada’s sanctions regime, particularly as it relates to Bill S-214.
[Translation]
Financial crime continues to evolve in scale and complexity, particularly where it intersects with foreign state activity, sanctions evasion and illicit financial flows.
State-linked actors increasingly rely on sophisticated financial structures, layered ownership arrangements and opaque jurisdictions to hide, protect or move assets. These techniques not only frustrate enforcement efforts, but they also expose Canada’s financial system to misuse and undermine the integrity of international sanctions regimes.
[English]
From an RCMP perspective, sanctions-related financial crime is rarely isolated. It is often connected to broader threats such as corruption, kleptocracy, money laundering, fraud and the misuse of legitimate financial channels for illegitimate ends. Foreign state assets — particularly those held or controlled indirectly — can form part of that ecosystem, serving as instruments to preserve value, exert influence or avoid accountability. Addressing these risks requires authorities that are sufficiently flexible to respond to complex and rapidly changing threat environments.
In this context, Bill S-214 speaks to a legislative gap: the challenge of managing and ultimately disposing of assets seized under sanctions measures where traditional judicial forfeiture pathways may not apply or where assets are clearly linked to foreign state actors subject to restrictive measures.
Enhancing the legal framework around forfeiture and disposal has implications for Canada’s ability to deny safe haven to assets connected to illicit or destabilizing state conduct.
[Translation]
The RCMP’s role in this space is supportive and operational. We assist in the implementation of orders, the seizure or restraint of property and, where applicable, in matters related to forfeiture. This work relies heavily on financial intelligence, inter-agency cooperation and partnerships with domestic and international counterparts.
We do not act in isolation, and effective asset seizure and management depend on coordinated efforts across government, including finance, foreign affairs and asset management authorities.
From a financial crime standpoint, one of the key objectives of strengthened asset forfeiture and disposal authorities is disruption. Seizing and ultimately disposing of assets reduces the ability of sanctioned actors to leverage those resources for further wrongdoing. It imposes costs for engaging in financial crime by disrupting the most sophisticated processes used for evading enforcement action. In that sense, forfeiture is not merely punitive; it is preventative.
[English]
At the same time, the RCMP recognizes that expanded authorities must operate within clear legal boundaries and with appropriate safeguards. Financial crime investigations are complex, resource-intensive and frequently contested in the courts. Decisions related to seizure and forfeiture carry legal, reputational and diplomatic implications.
For law enforcement, clarity of authority and process are essential to ensure actions are defensible, proportionate and consistent with rule of law principles.
Another important consideration is transparency and confidence in the financial system. Canada’s enforcement posture sends signals both domestically and internationally. Demonstrating that Canada can effectively identify, restrain and manage foreign state assets connected to sanctions violations or illicit finance reinforces the credibility of our financial controls and aligns with broader international efforts to counter kleptocracy and sanctions evasion.
[Translation]
Operationally, these cases depend on timely access to financial information, strong information-sharing mechanisms and cooperation from reporting entities and financial institutions. The RCMP’s experience shows that indirect ownership and control — often exercised through proxies, shell entities or state-influenced actors — remains one of the most significant challenges in financial crime enforcement. Legal frameworks that recognize and respond to those realities enhance our ability to act effectively.
[English]
In closing, the RCMP views Bill S-214 through the lens of financial crime disruption, sanctions integrity and operational clarity. We stand ready to support the government and Parliament with the authorities provided, and we welcome questions from the committee on how these measures would intersect with law enforcement realities.
Thank you, chair. I look forward to your questions.
The Chair: Thank you very much, Mr. Larocque. We have only three senators who have indicated a wish to ask a question, so please don’t hold back.
Senator Ravalia: Thank you very much to our witnesses.
Inspector Larocque, I’ll ask you a question that perhaps may seem a bit tangential. In your mind, what are the risks of corruption in repurposing Russian assets to Ukraine in the context of large inflows of assets that could be diverted within Ukraine through weak procurement, inflated contracts, kickbacks and politically connected intermediaries? Is that something we would have a handle on?
Mr. Larocque: This would be difficult to answer. In short, to answer your question, I don’t think it’s something we can have an easy handle on.
Senator Ravalia: Are any other members of the panel able to comment on it?
Mr. Brookfield: I would note that any payment-added proceeds to forfeited assets, whether private or state assets, are subject to section 5.6 of the Special Economic Measures Act. It provides that payments will be made after consultation with the Minister of Finance on any terms and conditions that the minister considers appropriate. Presumably, any payments out would be made under a process under which we could be assured they will be spent appropriately.
Senator Ravalia: Do we have the means of monitoring that at all if we’re talking about large amounts of seizure and forfeiture?
Mr. Brookfield: We have provided over $25 billion to Ukraine in various other formats. We have not yet forfeited or had assets to provide in this other context, but I would suggest if we can provide $25 billion, we can provide smaller amounts in similar mechanisms.
Senator Ravalia: In a way that would not be of concern of any misappropriation in that regard? Thank you.
[Translation]
Senator Gerba: Thank you for your very enlightening remarks.
You mentioned some countries that this legislation could apply to. Although it was not an exhaustive list, could you elaborate on how the law could be imposed on the countries that you mentioned? In your view, what legal, diplomatic or economic constraints might limit the application of the mechanism proposed in Bill S-214?
Mr. Brookfield: In answer to the first part of your question, there is not a lot of money in the other regimes, so we did not file a complaint with the Canadian courts to seek to freeze those assets. In theory, if there were an appropriation process, then we could do the same thing as what we did in the two cases involving Russia.
Senator Gerba: If we take the case of Sudan, for example, the United Arab Emirates is funding and playing an active role in the war in Sudan. We could also look more closely at that case.
Mr. Brookfield: To be clear, the assets in Canada must be frozen, and all Canadians, including banks and other entities, have an obligation to inform the RCMP. If Sudanese assets were found in Canada, then the RCMP should have been notified, but that hasn’t happened. That means that either someone has broken the law because there are assets here that were not reported or else there are no assets here. That could become a diplomatic issue. There are also other reasons for the sanctions. This is not just about freezing assets. As for Sudan’s assets, there is nothing here to use.
Senator Gerba: Thank you.
I only got a partial answer to my second question. What legal, diplomatic or economic constraints might limit the application of the mechanism proposed in the bill?
Mr. Brookfield: That is a very difficult question to answer in just a few minutes. However, very briefly, there are internal legal issues specific to each country. This legislation must be a procedure for avoiding situations where the first step in the restriction process involves filing a complaint against a country. If countries appear in court, then we are talking about service issues.
Sovereign immunity issues may also arise during the initial stage or in cases where a country or another party with an interest in the assets files a legal complaint. At the international level, for example, Iran filed a complaint against Canada and the United States before the International Court of Justice concerning matters related to sovereign assets. I know that you have heard from legal experts who told you about counter-measures and that sort of thing. It is complicated.
The Chair: Thank you very much.
[English]
Senator M. Deacon: Thank you to all of you for being here today. Mr. Larocque and Mr. Brookfield, those were very informative opening remarks.
Mr. Brookfield, in part of your opening remarks, you mentioned the 3,400 or 3,500. We’ve been busy. There have been 3,400 or 3,500 seizures, assets or sanctions — just sanctions?
Mr. Brookfield: More than 3,400 individuals and entities have been listed, plus 600 vessels.
Senator M. Deacon: That leads into my question. I’m trying to get a sense of the on-the-ground aspects of this law from your departments. If you received an order to seize and redistribute an asset, what does this look like from start to finish? Does adding this provision about cabinet orders add a wrinkle that you would have to adapt to or need more resources to fulfill?
Mr. Brookfield: Very briefly, the process is we have regulations in place and approved by cabinet for a particular country. Then individuals or entities are listed. Then there are assets that are notified or not that we become aware of, either directly by those listed or that which they control. For example, Mr. X may control 80% of a company. That company’s assets are also frozen. Then we can apply to the court to have it restrained or seized.
This bill would require us to do that for state assets, however defined. It would not be required for the forfeiture step. Then the forfeiture step would need to be taken. Under this bill, we would not have to go to court. It would be a cabinet decision. That could still be judicially reviewed because all cabinet decisions could be. If we go through court proceedings, as we are now with the Antonov case, and if we get the asset, then we can sell it or give it over, as section 5.6 of SEMA provides.
This bill provides a different avenue. It raises some questions. It may have some advantages. It may have some disadvantages. The government, as I understand it, has taken no position, so nor do I.
Senator M. Deacon: With the 3,400 or 3,500 that we talked about initially, is it reported, reviewed or monitored how far we’ve gotten or if it is finished and closed? I’m trying to get a sense of the front end and the work you’re doing and how it is recorded at the back end.
Mr. Brookfield: We don’t identify targets because they have assets in Canada. Most of them don’t. We identify targets because we want to curb, compel or condemn their activities. For many of them, we do it with allies. We try to list them so that they can’t come to Canada and have assets here. We also have the value of having them listed because it causes problems elsewhere. A number of oligarchs with no assets in Canada are suing to be delisted because they don’t want the opprobrium that occurs when Canada — and in some cases, it’s only Canada — has them listed. For those that do have assets in Canada, as I mentioned, we bring litigation when we think it’s feasible to do so.
Senator M. Deacon: Thank you.
Senator Harder: When we last reviewed SEMA, some of you and some of your predecessors were here to talk about the coordination of Global Affairs Canada and Finance internationally. Have you reviewed with your international colleagues how this amendment — should it be incorporated — would fit in with the international regime that is being coordinated? Could you give us any sense of the gaps of the international regime that are left unaddressed that we should be aware of?
Mr. Brookfield: We do meet regularly with our counterparts at different levels and on different topics. Last week, I was in Brussels for a sanctions coordination meeting chaired by the EU. We discussed some of these things. On the specific issue of this legislation, there is nothing comparable other than in the United States, which has not been used. To clarify, there has been some suggestion the EU has followed a similar mechanism, and it’s important to emphasize that the EU planned to use this mechanism. Belgium and Euroclear fought hard against it. The loan that was eventually given was not against these assets but was against the EU budget and against the loan.
No other country has actually gone forward against sovereign assets, but the United States has a mechanism that would allow it to do so. When we speak to countries, there is a lot of reticence — for various diplomatic and practical reasons — to go against sovereign assets. There is concern about counterattacks.
When the European Union proposed to go against the Euroclear assets, Russia brought a claim first in Russian court and then in European court, and the Belgian Prime Minister publicly said he had concerns about litigation in Russia but also in third countries that could go against Belgian or Euroclear assets.
Senator Harder: Are there risks in such litigation involving Canada?
Mr. Brookfield: Yes. I have no specific evidence, but it is reasonable to suppose that Russia would act against Canada the way it has against the European Union and against potential asset holders. If a bank’s funds were frozen just like Euroclear’s — if there were to be any such funds — and if they were forced to give it over, they could potentially be sued in third countries, as has happened now with respect to frozen transactions by private parties.
Senator Harder: Thank you.
[Translation]
Senator Hébert: Senator Adler stole my question.
I will continue with Global Affairs Canada. I would like to know why what we are trying to do here was not included in the original bill or in the subsequent amendments to the Special Economic Measures Act. Were there any discussions at Global Affairs Canada on this issue when past amendments were made? If so, what was the nature of those discussions?
Mr. Brookfield: It is very unlikely that there were any discussions at GAC about this process in particular. We implemented the current process quickly in response to Russia’s invasion of Ukraine. We likely should have done some things differently. Now, we are having problems with the Antonov aircraft, for example.
Sovereign immunity is a major political and practical issue. From what I understand, GAC did not examine this or try to find solutions. Of course, there are several approaches that could be taken in such cases.
Senator Hébert: What is the best approach?
Mr. Brookfield: As a public servant, it is not my place to say.
Senator Hébert: Let me put it another way. Based on the studies that you have been carrying out internationally on the various approaches taken by different countries, if you have done such studies, which do you think are the most effective approaches?
Mr. Brookfield: To my knowledge, no such studies have been conducted. I know there is a lot of hesitation around dealing with sovereign assets, particularly by central banks, for economic reasons and out of fear of possible retaliatory measures. It is mostly the United States, the European Union, the United Kingdom and sometimes Australia that have a regime in place and that try to at least freeze assets or, in some cases, take things further. It is very complicated because this is new for everyone, except the United States, which has adopted a different approach with Iran and Cuba in recent years. Otherwise, this sort of thing is rather new for most countries.
Senator Hébert: The United States does have a rather unusual way of doing things these days, to put it mildly.
Thank you.
[English]
Senator MacDonald: Last week, Preston Jordan Lim, Assistant Professor of Law at Villanova University, told the committee that the bill could open Canada up for retaliation from Russia and increase the risk of capital flight. He posed the question: “Do we have the kind of fiscal room to be driving out that kind of investment right now?” In your opinion, how significant is the risk that Bill S-214 could trigger capital flight from Canada, particularly from foreign state investors?
Mr. Brookfield: The risk of retaliation is quite significant. We’ve seen Russia already threaten within Russia and potentially in third-country litigation. As to the risk of capital flight, I’m not sure if my colleagues from Finance are in a position to express a view.
Safeena Alarakhia, Director, Financial Crimes Governance, Department of Finance Canada: Thank you for the question, senator. I don’t know that I could comment in the abstract on that. That would be specific to the reaction on the magnitude of any application of these measures should the amendments pass.
Mr. Brookfield: I can perhaps add that publicly there were comments by the Belgian Prime Minister and some in Belgium about concerns, in the Euroclear context at least, where there were significant amounts of funds such that it could impact that particular institution and its involvement in third countries, including China and India, for example.
Senator Al Zaibak: Inspector Larocque, from an enforcement perspective, what are the practical challenges in identifying, tracing and securing sanctioned foreign state assets held through complex financial structures or proxies?
Mr. Larocque: Thank you for your question. On asset information, often we rely on the information that’s being disclosed to us by individuals in Canada or Canadians outside of Canada as per the obligations that they have to mandatorily report the existence of property in their possession or their control.
Of course, we’ve seen trends where there is layering being done to be able to obfuscate or to try to create some degrees of separation to make it a little bit more challenging. As part of our investigation, we do proceed with asset attribution, but only when it is directly connected to an investigation. We do receive reporting from financial institutions in a large majority of instances. Based on that information, we are able to also share that information back to Global Affairs Canada.
Senator Al Zaibak: I was surprised by the numbers that Mr. Brookfield mentioned before with respect to frozen non-Russian assets. I’m talking about Iranian assets, for example.
Given the history or the relationship between Iran and Canada, are there some more claims that have not been considered on Iranian assets? Are there assets that exist but have not been really seized with respect to the Iranian regime or Iranian-related individuals and entities?
Mr. Brookfield: Well, perhaps I can say that we deal very regularly with financial institutions. They are very aware of their obligations, and they report even the smallest amounts of thousands of dollars. I’m fairly certain that financial institutions would not be in a situation where they’re not reporting.
For individuals or companies, I’m less confident, frankly, that they are reporting. They’re not necessarily, perhaps, aware of their obligations, or if they are, there are some of them who might not be good actors. That’s a broader concern.
I don’t have any information. It’s purely speculation, but I would take the opportunity to say that with respect to the suggestion of $22 billion in assets in Euroclear here, if there were such assets in Canadian financial institutions, they would be reporting it. The fact that they have not, I think, is indicative that those assets are not here, as well as other information we’ve got, including when I personally met with Euroclear last year.
Senator Al Zaibak: Thank you.
Senator Woo: I would like to make an observation, and I would like Mr. Brookfield and, perhaps, the Department of Finance Canada to respond to it.
The observation is that the global practice of unilateral sanctions is being rethought, I believe, for three parallel reasons: The first is the world is more multipolar, and countries that are sanctioned directly or through secondary sanctions have the ability to either evade or retaliate through countermeasures and so on. We saw this most recently not just in China but also in Europe with the blocking of U.S. sanctions against them.
The second development is the question of double standards, where sanctions are applied in some situations which are egregious but not in other similarly egregious situations.
The third is a growing awareness of the harms of unilateral sanctions. You may be aware of a recent study in The Lancet, which reported approximately 700,000 excess deaths in countries that are the subject of unilateral sanctions. My question is whether there is any thinking within Global Affairs Canada and maybe the Department of Finance Canada on the use of sanctions as a foreign policy tool and whether we are looking at other ways in which we can achieve some of our foreign policy objectives?
Mr. Brookfield: Certainly, I think it’s a continuing debate and discussion from a policy and practical perspective about when sanctions are appropriate and when they are not and by which mechanism. The gold standard is, of course, the United Nations Security Council sanctions. That’s what we used to do all the time. They’re not available anymore for particular reasons.
In terms of autonomous sanctions, it will vary depending on what the nature of the sanction is. Is it targeted against certain individuals, or is it going against economic sectors? Certainly, within Global Affairs Canada, with our colleagues in the Department of Finance Canada and across the Government of Canada and with other stakeholders, we try to analyze the impacts.
Some of those can be mediated. For example, we get applications for permits when sanctions may cause impacts on the Canadian economy, and those are given from time to time as appropriate. I would say it is a challenging situation for both us and our like-minded countries and other countries that take different approaches to determine when they think certain sanctions are appropriate or not.
One interesting example to me is South Korea which, until recently, did not use autonomous sanctions. Recently, they put sanctions against a scam centre in Cambodia called Prince Group.
Different countries make their own calculations as to what is appropriate.
Senator Woo: Are you faced with the accusation of double standards in terms of how we apply sanctions in some situations but not in others that are equally egregious?
Mr. Brookfield: Certainly. Russia and China, for example, have a whole narrative of unilateral coercive measures, which is the term they like to push at the United Nations. It’s not one that we accept. We think it should be done in appropriate circumstances. Obviously, there are political, practical and other decisions about when those are appropriate to be decided.
It’s for the government of the day to decide whether to do that in a particular circumstance within Canada and for us as public servants to assist in the advice and implementation of those decisions.
Senator Woo: Good answer.
The Chair: We have fine public servants here.
Senator Dasko: Thank you, witnesses, for being here today. It’s very interesting and very helpful.
I go back to the testimony from our previous panel, and this is with regard to the question of risks.
Professor Hampson had a comment about risks, and he concluded by saying that the risks for Canada taking this action are manageable. He said, “manageable risks.” I just want to put that on the table for a moment.
Mr. Larocque, in your comments a few minutes ago, you talked about state assets being part of a larger ecosystem, and you also said that we’re not acting in isolation. I just want to take that to the level of Canada acting, which is often now especially focused on acting with other countries, such as within the EU — mainly the EU, of course. In speaking to the issue of risk, I would also suggest that when we act with others, we are also mitigating the risk to Canada in terms of repercussions or actions that might be taken.
I wonder if you might assess those two comments: manageable risks and acting with others mitigates risks. I wonder if you might have a comment on that.
Mr. Brookfield: Well, I can start. Certainly, in terms of working with others, that’s what we prefer to do, both because sanctions are more effective when we work with others and, as you note, they mitigate the risk.
Conversely, one of the most effective ways, arguably, that Canada acts is by listing oligarchs that no one else has because then we get litigated over it because they want to go against us. But we are, perhaps, taking action that others are not willing to.
In terms of this specific bill, as I mentioned in my opening statement, it provides a slightly nuanced approach in terms of process that may have pros and cons. As some of the witnesses have spoken to, the real risk would be if we were to, in fact, try to seize and forfeit Russian sovereign assets or Russian assets owned by the Russian state, however that’s defined. That may vary depending on the amounts, the value to the Russian states and where it’s located.
As I mentioned, there are very limited assets in Canada that have been reported. My understanding is for the Euroclear assets, while there was one statement that suggested that the Russian assets were in Canadian dollars, all evidence points to that being Canadian-denominated bonds in Europe and there were never funds in Canadian deposits.
There are limited funds here that we could go against at the present time. Of course, that could change.
Senator Dasko: Certainly, a lot of people think that the $22 billion is accessible to Canada, but I appreciate your comment.
The Chair: I’m going to ask a question. I appreciate that you’re in a delicate position as public servants in terms of what you can say. I know exactly where you are because I used to be there.
We are moving forward toward a G7 summit in Évian-les-Bains, France. There is a finance track. There is a foreign policy track. The subject of sanctions — and particularly the war in Ukraine — has dominated that agenda for the past several years.
I’m wondering whether that trend line for discussion is still there or whether the war in Iran and the easing of oil sanctions by the United States on the Russian Federation have had any impact in the deliberations that you undertake with your colleagues from those countries.
Mr. Brookfield: I can say when Canada held the G7 presidency last year, we put increased effort into the issues of sanctions. There was the G7 Sanctions Working Group, which I chaired. We had the G7 Shadow Fleet Task Force dealing with the Russian shadow fleet. Arguably, it could also apply to other shadow fleets, such as the Iranian, the Venezuelan and the North Korean.
I would say that different countries, obviously, have different perspectives depending on the focus of the day. I don’t think it’s appropriate for me to comment on their particular views, but I think in looking at the news, it is fair to say that some countries — the United States — are, perhaps, less focused on Russia now than they were and more focused now on Iran or Venezuela.
As a general point, all of the G7 continues to actively debate and discuss measures that could be taken with respect to Russia and other problems in the world.
I would note that, last year, the United States did list Lukoil and Rosneft on their sanctions regime, which is arguably one of the most significant sanctions actions taken in the last calendar year.
[Translation]
Senator Gerba: Mr. Brookfield, in December 2025, the European Union and 34 countries signed the Convention establishing an International Claims Commission for Ukraine. The commission will be the administrative body for deciding on compensation claims. What is Canada’s position on this claims commission? How might the asset forfeiture regimes established in various jurisdictions interact with this claims commission?
Mr. Brookfield: I’m sorry. I don’t know the government’s position on that particular body. However, I can say that Canada wants to help Ukraine and ensure that the assets and funding it provides are put to good use, whether they come from frozen Russian assets or from Canadian assets.
There are several agreements that could be ratified to establish joint commissions or claims commissions. That would be a matter for Ukraine and also likely for Russia in that we hope that they will reach an agreement at some point.
Senator Gerba: Thank you.
[English]
Senator Harder: I’m going to enter into the delicate questioning of the chair by suggesting that, as you indicated, Mr. Brookfield, the executive has not commented on this bill, and you haven’t either other than to explain it in terms of support. The whole sanctions regime rests very much on the discretion of the executive. The power we have given the executive as parliamentarians is quite extensive.
Should we worry about amendments to the regime that don’t come from the executive but from the legislative branch upon which the executive has not taken a view? Are we at risk of making it more difficult for the regime itself, which you are part of coordinating internationally, to be viewed as effective, appropriate and governed by the responsibilities of the executive rather than the voices of Parliament?
Mr. Brookfield: The other place is debating another bill to change the Special Economic Measures Act. I am appearing at committee there tomorrow. I would suggest, as a humble functionary, that as a general point, each piece of legislation would be wise to look on its merits. If it improves the system and with appropriate controls, either by Parliament, the judiciary or other mechanisms, then that would be useful. If it adds complications and does not, then perhaps not.
Senator Harder: To push you a bit, it seems that those who are running the system should tell us whether that is helpful, and that would guide us on whether it is an amendment we should be moving. Just saying there are ups and downs doesn’t guide our thinking.
Mr. Brookfield: To be a bit more precise without taking a position, this bill would certainly simplify some procedural elements. We would not need to go to court for forfeiture. It would complicate others in that there would be issues of potential claims at the International Court of Justice, as an example, which Iran has already done against Canada in the context of terrorist financing.
It may also introduce complications in terms of the difference between these provisions and the existing process which does, on its face at least, allow the seizure of sovereign assets.
Senator Harder: Thank you.
The Chair: I think we had to get that out there, so thank you, Senator Harder.
Senator Dasko: Mr. Brookfield, I just wanted to get back to your comments about the European opinion. You did express the views of concern from Belgium, which is where Euroclear is located, and there are concerns that they have expressed over the past year. I would also note that the President of the European Commission, Ursula von der Leyen, has pushed for the confiscation of Russian assets. Perhaps we could view the European opinion as being more divided than might appear, just by mentioning Belgium’s position that Europeans are divided, but eventually they move together in some way because of the diverse opinions — but in this case, they have moved quite decisively with the €90-billion loan from Europe which, specifically in that agreement, is backed by the Russian assets that they say they can claim legally if they need to down the road.
I just wanted to mention that point.
Mr. Brookfield: I regret to say otherwise. That was the plan of the European Commission; you’re quite right about that. Ms. von der Leyen and other European statespeople were very interested in using those assets as backing for a loan to Ukraine. However, in the face of the opposition by Belgians and others potentially, that is not the mechanism that was used in the end. The loan was not backed by frozen Russian assets. It was backed by the budget of the European Union.
Senator Dasko: Yes, but in the agreement, they have specifically noted that the Russian assets can be used down the road if the arrangements are not brought together.
Mr. Brookfield: My understanding is that their approach is the same as ours: The hope is that, at a certain point, there will be an end to the conflict between Russia and Ukraine and there will be a peace agreement. Those funds would be used as reparations, but that would be by agreement of the Russian state as part of that final agreement. The problem with the Belgian Prime Minister and Belgium is that they did not want to go ahead with that before it was agreed. The concern was that if the Russians did not agree to that in the end, Belgium and Euroclear would be exposed to liability in the meantime.
Senator Dasko: Yes, for sure. Whether Russia will pay reparations is something many people are doubtful about, so that scenario is less likely than the other.
Mr. Brookfield: Certainly, the frozen assets give leverage in terms of any final agreements. However, they could be litigated for years to come, whether that is sovereign assets or private assets.
Senator Dasko: Thank you.
The Chair: We have come to the end of the panel. On behalf of the committee, I would like to thank Guy Paul Larocque, Robert Brookfield, Halleh Koleyni, Safeena Alarakhia and Matthew Shannon for appearing today as witnesses. Thank you for your testimony, and thank you for the work you do as excellent public servants for our country.
Colleagues, clause-by-clause consideration of Bill S-214 will take place tomorrow during the first hour of our meeting. For our second hour, we will discuss the situation in Haiti.
(The committee adjourned.)