Good afternoon to everyone. As indicated, I will provide some comments based on my experience as Ombudsperson for the Security Council Al-Qaida Sanctions Committee for five years. I note that while that was an international role, I believe it had a lot of important lessons in terms of sanctions in a national context.
I will comment on both pieces of legislation that were referred to me. I'll start with some brief comments directly on the Freezing Assets of Corrupt Foreign Officials Act before I make some more general comments on the Special Economic Measures Act and the sanctions issue more generally. I do that because in addition to my background in sanctions, I did serve as Canada's head of the international assistance group at the Department of Justice for 10 years, working on mutual legal assistance and extradition, including assistance with asset freezing.
I've been away from Canada for several years, and I have to say that I was, and remain, a bit puzzled by the Freezing Assets of Corrupt Foreign Officials Act. I suppose my puzzlement is with regard to why, in Canada, we would need legislation of this nature when we have such a robust system for the restraint and forfeiture of assets, of proceeds of crime, and where we have a mutual legal assistance regime and a scheme of mutual assistance treaties.
I understand, because I practised in the area for many years, that dealing with the proceeds of crimes committed outside the country and dealing with freezing assets in the context of foreign officials who have corruptly taken assets is very challenging and can be very frustrating, but that's because the legislative scheme that's in place has checks and balances that even out the quest for the restraint and forfeiture of assets with the protection of individual rights. It seems to me, to address the frustrations, it would make more sense to work on amendments within the existing regimes, which have all these protections, rather than through a piece of legislation that, to me, just presents parts of restraint and forfeiture legislation and parts of mutual assistance but does not contain in any way a scheme of protections.
I would specifically note three things that struck me about the legislation: the very surprising absence of any requirement for the request from the foreign state to provide any information, if not evidence, as to the basis for the assertion that the funds were misappropriated or inappropriately obtained; the absence of any details, then, as to what the individual is said to have done in terms of misappropriation or inappropriate obtaining of the assets; and finally, the absence of the ability to challenge on the merits, as opposed to challenging status.
Those were just comments specific to that act. Now I will speak more broadly to the Special Economic Measures Act and the approach to sanctions.
As the first of two caveats, my comments will focus very much on the use of SEMA and the use of sanctions in a targeted fashion when they are directed at individuals, because that is the area where the question of rights arises. It's not in the context of state or sector sanctions, which of course bring into play political issues but not the same question of rights.
Second, I would emphasize that in principle—particularly today, with the very fractured, divided Security Council that is operating in New York—it is very useful and very appropriate for a country like Canada to have a power whereby it has the flexibility, as part of an international organization, collectively by agreement or even individually, to use a sanction power to address threats to international peace and security.
However, there are some very specific lessons I learned from working as the ombudsperson as to how that power can very much be called into question in terms of its credibility and its strength. There are three principles that certainly the Security Council has been criticized for, in terms of its sanction regimes. I think some of them have resonance in relation to this legislation and the current approach.
The first point I would make is that there are very specific purposes and policy reasons that underlie the use of sanctions, particularly in the context of international peace and security. I've looked at some of the previous testimonies. You've heard from some of the leading specialists in the area of sanctions, so I'm sure you've heard it repeated that the three basic aims of sanctions are to prevent, of course, the threat from materializing; to stigmatize the individuals; and perhaps most significantly, to change the conduct at which the sanctions are directed. Those are the policy reasons that sanctions legislation must be designed to address and must be used to address.
Unfortunately, sometimes sanctions are instead used as a replacement or a substitute for criminal investigations or criminal prosecutions, or for asset restraint and confiscation, by virtue of the fact that the restraint lasts for so long. The sanction regimes, quite simply, are not accompanied by the standards, the evidence, or the procedural protections that are central to those criminal and asset restraint processes and that provide a protection for rights.
The second and very related question is that when you're using a sanction power, it needs to be very carefully crafted, and that's particularly the case when you're targeting individuals. You need to be addressing a specific defined threat, using objective criteria that are predefined, in particular, when you're going to target individuals. It's not just about having a threat in place; there must be criteria that define when the individual becomes a part of or responsible for that threat, in whole or in part. You need to be able, then, to measure the individual's conduct against those criteria to a defined standard. That was the whole aim of the ombudsperson position. It was what I had to implement effectively in practice, and it was critically important.
The third point, of course, is that while it is at a much lower standard than in criminal proceedings, there must be very clear procedures that ensure fair process is given to those targeted individuals and entities, those listed. That includes the fundamentals of fair process: notice, although it can be after the freezing or the action is taken or the economic measure is taken; specific reasons that the individual has been listed: an opportunity to address those reasons and to be heard by the decision-maker; and, most importantly, an independent review by a body that can provide an effective remedy.
It's very challenging to try to achieve those principles at the international level, but it should not be in Canada, where there is a fully functioning legal and judicial system.
On applying those principles, I will just give a few brief comments on some of the concerns I see in SEMA and what it reflects in terms of the.... It's also applicable in many ways to the Freezing Assets of Corrupt Foreign Officials Act.
The first of the concerns is with the criteria on which the sanctions could be imposed, which are extremely broad and vague—the references to “grave breach” and “serious international crisis”, and in the other context, these concepts of misappropriation.
If you want to have this kind of broad reach, then at the very least, the orders and regulations underneath the legislation, and specific orders, must explain how the specific situation addresses or falls within the overall threat to international peace and security. I don't see any requirement for that in the legislation, and I don't see the orders doing that or explaining that connection.
Far more gravely, there are simply no criteria set out as to how the individuals then end up on the list. What are the criteria against which their conduct is measured, and, most significantly, what are the specific facts in either piece of legislation as to why that person is listed?
The second concern, and it's very related, is that if this is really sanction legislation with sanctions, aims, and purposes, you need to be demonstrating that in the legislation. I don't think this legislation does that. I put it this way—and it's something I said often when I was dealing with the AQ system—it's very difficult to use sanctions to get people to change their conduct if you don't tell them what the conduct is that you want them to change. I find that to be a glaring issue here.
Finally, on the third issue, the one that I've highlighted, the fair process requirements, I have to give a caveat. I've been out of Canada for many years, and I didn't refresh my administrative law. I suspect there is a judicial review path from a ministerial decision, because there is a ministerial review provided for. If there is not, then this legislation is worse than what I found when I got to New York in 2010 and looked at the al Qaeda regime, because it would have no objective review or effective remedy.
Even if it is available, what is very surprising is that none of the other aspects of fair process—notice, reasons, and things of that nature—are specified in the legislation, Also, you're taking actions and economic measures against individuals in foreign countries. It is appropriate to set out very clearly in the legislation, on the face of it, what the fair process protections are and what course of action that individual can take. I emphasize that a ministerial review is not going to meet the criteria of an objective and independent review as contemplated in fair process.
I'm going to leave it there because I'd much rather address whatever questions you might have. I know you've been working on this for a while and you've heard from many people. Having struggled for five years to protect these principles in an atmosphere not at all conducive to or equipped for fairness, I would simply urge this committee and the government, my government, to ensure a scheme of effective sanctions and sanction policy across both these pieces of legislation that can achieve the important policy aims while still safeguarding individual rights.
Thank you, Ms. Prost, for your testimony before us.
I was listening to your testimony. What we're trying to accomplish is that we're trying to figure out those people who are grave human rights abusers. Obviously, there probably hasn't been an investigation. The context was around a global Magnitsky law, as passed in the United States and contemplated in other countries. That's part of the problem, right? First of all, the country isn't going to have an investigation, more or less.
I guess my question to you is, how do we work around that? You say sanctions are no substitute for an investigation if there's a cover-up or those kinds of things. Our concern is those individuals who would take advantage of their country and then put those assets in Western democracies where at some point in time they or their families could have access to them. We hear the argument that it doesn't actually happen, but it does happen, maybe not as much in Canada and maybe more so in places like the United States, the U.K., or some of the European countries.
I'd like your thoughts around that. We're struggling trying to figure out how we do this, and I'm hearing you say maybe that more amendments would need to be made, more definitions, and things like that. The end that we're trying to achieve is, where there's not that due process.... I can appreciate that if this is coming from a highly democratized country and there are already issues in place that arbitrarily throw people on a list or sanction them, having not gone through due process would not always make sense. Some of these countries don't always have that in place, so I'd like your comments around that.
You gave us some good things to think about. Is there any way around that, in your mind, that would strengthen it and make it fair and reasonable?
Yes, those are very good questions, because that is the dilemma. We do want to be able to take action, especially in dealing with the corruption issue. It's is a major challenge for a great many countries, and very paralyzing, so certainly we do want to assist and be able to return assets.
Just focusing on that, I'll speak a little bit about the sanctions element, because they are two very separate things for me.
If you're dealing with a situation of individuals who are suspected or believed to have taken money from their country or inappropriately obtained it and you want to go after those assets, a number of measures already exist to attack the assets. Using the criminal conviction proceeds of crime approach is very difficult when it's foreign assets, but in several provinces—when I left, I think it was three, but there are probably more now—there are mechanisms for attacking the assets.
Therefore, you bring proceedings directly against the assets. You don't need the individual and you don't need the criminal offence; you attack the assets, and there is where you use mutual assistance to try to at least get information from the country as to what they believe the individual did or how the individual took the money out. It's not easy, but at least you get a better balance then, because you can go after the assets and at the same time have some modicum of protection.
The other problem that arises in these cases, and we've seen it in many situations, is you get one political regime ousted and then there's a new political regime; it can involve corruption, but it can also just involve a political fight, if I could put it that way.
My strong urge is to look very carefully at the already existing pieces of legislation and practice that Canada has. That's also consistent with the international approach. The United Nations Convention Against Corruption has a whole chapter aimed at that. That's what I would say on that side.
Then, if you're talking about trying to sanction people whose conduct is of concern or to prevent more international humanitarian violations, there you do have a much reduced standard. We're not talking about the kinds of standards you need for criminal proceedings. You can impose the sanctions on....
I used a test of whether there was sufficient information to provide a reasonable and credible basis for listing this person. You don't have to get a lot of information, and there's often intelligence that can be used, but it's just then allowing the person, if they want to, to be able to challenge it ultimately. It's providing a mechanism that most of the time doesn't get used, but at least you have the protection there in case a person wants to try to be delisted.
Those are some of my thoughts on the questions. I hope that's of some help.
Thank you, Chair, and thank you very much, Ms. Prost, for testifying in front of us today. It was a very interesting presentation.
I have a question that builds on Mr. Allison's question, about sanctions that would tend towards a human rights perspective.
Obviously with the legislation that we have in place now, specifically with respect to SEMA, there is a focus on international crises, a focus on violations of international peace and security. You spoke about and underlined the fact that even now, the way the legislation is phrased is quite vague. There has been an emerging current of thought, especially in the United States, that says that human rights ought to also be factored into sanctions legislation.
I wonder, though, if we go down this road, how one would phrase the wording in legislation so that it's not vague, so that it's quite specific. I wonder if we're trapped right from the outset, because human rights language is bound to be vague unless you specify it so that you're capturing quite systemic violations of human rights, the highest crimes—for example, genocide, war crimes, crimes against humanity. However, if you were so specific, those crimes would already be considered—by most, at least—to constitute violations of international peace and security, so I wonder if it even makes sense to go down that road, if you understand where I'm coming from.
I would ask you to speak to the danger of being vague in legislation if we're going to focus on human rights, and then also on the efficacy of going forward with sanctions legislation that would make human rights its primary target. I'm quite interested in those two issues.
That has been a growing question in the international sphere.
Traditionally the council has generally used its powers—except in the case of apartheid in South Africa, where it was very directed at those policies—in cases of conflict and in response to conflict and in trying to end conflict, and also in the terrorism context. Increasingly, though, it has been in the context of violations of international humanitarian law and in gross violations of human rights. There is certainly scope for having sanctions legislation that gives you the flexibility to use it in human rights situations and in cases of gross violations of human rights or even violations of international humanitarian law.
The trick to it, though, is.... There's nothing wrong with having those broad terms in the legislation and including human rights specifically in those broad-scope gross violations and so on. Then if you have a system of specific orders, as you do—which I think is a good one—you can define it very specifically in the situation toward what you're aiming at, whether it's a violation of particular types of human rights or a particular scenario where you want to be more specific.
The difficulty for me is that there's nothing in between this broad statement about threats to international peace and security—which I think could include human rights, because the council certainly interpreted it that way—and an order in relation to a country. There's nothing in between explaining why it's a security breach, even just preambular language to the order, to say there have been these kinds of violations reported and we believe that's the situation. Then you take it one step further when you're targeting the individuals, and you have to say what they've done: they're leading the army or they're leading rebel groups, or whatever it might be, and in that role or that kind of thing.
I very much believe the legislation should give you the flexibility to do it, but then it becomes a decision of when you use it and how you use it, and that's probably the hardest part.
I think there are two issues, and let me be very clear. Canada has very good mutual assistance legislation and very good legislation dealing with proceeds of crime and freezing of assets. It's getting better, but it's never going to be foolproof. It's never going to be able to deal with all the cases, especially those involving corrupt officials who are being protected by their governments.
My view is that rather than trying to build specific pieces of legislation for every gap we run into—and we will continually run into gaps—we need to focus on fixing the regime as a whole. Is there more we could do in the mutual assistance provisions to make it clearer how we could freeze assets faster in situations where they don't have court orders? Maybe that's one thing that could be done.
Is there something that could be done in the definitions of “proceeds of crime”? Are there more things we can do in terms of going after assets and attacking assets through civil proceedings?
That's just on going after the assets, and I think that if you're talking about trying to go after the assets and corrupt officials, we have very good tools. To me, the best approach is to try to strengthen those tools, because they already have built-in protections and schemes.
The second thing that can be considered is the other side of this, which is sanctions. In the case of a corrupt official, if we're not going to be able to get to his assets, prosecute him, or get the government to properly prosecute him in the other country, then we can see whether there is a policy or a threat here that Canada wants to address.
The third option is simply to accept that it is not something that Canada can address, either through asset freezing or through a sanction, because it is outside Canada's reach. I think we also have to accept that there are some things we don't like that are just outside the reach of our legislative ability.
I had many problems when I arrived—actually, the whole time I was there, but that's part of the job.
One of the two particular problems I had was that the Security Council had not been specific about what kind of review it expected from the ombudsperson, so the choice was either to do a post-review, as you would in judicial review classically, where you ask if the original decision to list this person was justified based on the information available at the time the person was listed, or to do more of a de novo consideration of the case now, asking if there is a sufficient basis to maintain this listing now, when the person has asked to be de-listed.
I think I chose wisely, in retrospect, because I might have been unemployed very quickly if I had gone the other way. I chose the present-day test. Basically, I was never asking about the original decision to list; I was asking, based on all the information we had now, whether this person should be on the list or not, today.
There was a real advantage to that, in the sanctions context. I had several cases—which was a bit of a surprise—of individuals who were actually prepared to admit their involvement or their links to al Qaeda, but had changed circumstances. Traditional judicial review would never have allowed me to look at those cases properly, and the approach of taking a de novo look, at the present time, did work. That's now been accepted by the committee. It's in the resolution.
The second issue was—sorry; did you want to...?
Ms. Prost, I want to focus a little more intensively on the standard that you came up with. You raised concerns which we echo concerning the rule of law, due process, whatever you want to call it. As a democratic country we don't have the luxury that some other countries may have of putting people on our list and doing certain things to them that we might want to do, but we can't, because we respect the rule of law.
I may be overstating the case as well, because there is a tendency immediately to jump to a more criminal standard and burden of proof, which may not be necessary in cases.
To back up, what we're examining is the potential holes in SEMA or FACFOA or concurrent criminal legislation with respect to gross violations of human rights and the ability to put someone who may have committed these gross and indecent acts on a list and freeze their assets in Canada, whether they're ill-gotten or not.
Some of the legislative tools that we have exist in Canada already, and they're subject to the standard review, more often than not by the courts. In SEMA that may not be the case; in FACFOA it may not be the case, and you have rightly highlighted that. As well, there is the UN act that is implemented here. The standard of administrative review through administrative action, on the other hand, might be too low a threshold.
I'd like to put this kind of tension in your hands and see what you think is a proper venue for a piece of legislation that would contemplate freezing the assets of someone who, on the balance of probabilities, has in fact committed such acts and whose assets are situated in Canada, and what sort of safeguards would be desirable.
It's an interesting question.
My challenge was that I wanted to use a standard that wasn't attributable to one legal system or another. I had the big challenge of not wanting to take a common law standard or a civil law standard. What I researched were the different standards, and then I tried to draw concepts out of them to make a standard that wasn't specific to either system. That's where I got the idea of sufficient information to provide a basis that's reasonable and credible. Those are some of the components of all the standards.
If I were doing it in Canada, knowing the standards that are applicable in Canada, I'd probably use the search warrant standard of reasonable grounds to believe. Certainly, the criminal standard is not appropriate for sanctions, because you're not employing the kinds of measures that you are criminally.
I agree with you; I don't think the JR standard of reasonableness alone is sufficient. I think it's something in between. I think the search warrant standard is probably pretty good.
Also, I like what I came up with, but as I said, that was very much to mix the two legal systems. I think that's very important.
On the protections side, you just have to provide that remedy and the basics. You have to notify them and you have to give them reasons so they know what the case is against them. That's all pretty straightforward to do in the situations you're talking about. Then you have to give them, if they choose to pursue it, a means of accessing some kind of review—ombudsperson, JR, or whatever it may be. That should be up front in the legislation. It gives it credibility.
Colleagues, that wraps up our first hour of witnesses.
On behalf of the committee, I want to thank Ms. Prost for taking time to give us her wisdom as it relates to her background and to some of the challenges that she's had at the Security Council.
Ms. Prost, if there is anything else that you would like the committee to be aware of, please feel free to correspond with us through the clerk, and we will certainly have a look at it.
One issue in particular that you did speak to that we didn't have a chance to talk about is the FACFOA part of our work. It is intended to be a review based on a piece of legislation that's been here for roughly five years, and after five years had a review clause in it.
One of the questions I've been asking whenever I get a chance is whether this piece of legislation is worth keeping on the books. Nobody seems to think that highly of it, at least from a witness point of view. You yourself didn't seem to think it was all that necessary. I'd be very interested in that, because one of the things we will recommend to the government, through the House, is whether we renew it, whether we put another review clause in it, or whether we just suggest that it should be removed off the books if it's not of any relevance to the government and the process of sanctions of some kind.
Those are the questions we have to ask ourselves when we report back to the House, so I'd be very interested in your views. I know we don't have enough time today, but I'm sure that you have a strong view of that as well.
On behalf of the committee, thank you very much for appearing this afternoon.
We would like to thank the committee for inviting the Canadian Bankers Association to provide the banking industry's perspective on your review of the Freezing Assets of Corrupt Foreign Officials Act and SEMA.
The CBA works on behalf of 59 domestic banks, foreign bank subsidiaries, and foreign bank branches operating in Canada, and their 280,000 employees.
First I would like to emphasize that the CBA and its members do not have a position with regard to the policy objectives or the effectiveness of economic sanctions as a form of policy instrument. Those decisions are firmly at the discretion of the federal government. Banks do, however, play an important role in their implementation. Banks are on the front line of Canada's economic sanctions regime, as our institutions must restrict financial transactions or freeze the assets of individuals or businesses that have been designated by the government.
We believe that the committee's review of these two acts is timely. Our focus today is on how the administration of the economic sanctions regime in Canada can be improved to ensure that the government, as well as the private sector, is well equipped to respond to the expansion of sanctions programs over the last several years.
Banks have extensive and sophisticated control systems in place to ensure that they are compliant with the laws and regulations dealing with economic sanctions. As the banking industry's prudential regulator, the Office of the Superintendent of Financial Institutions has a mandate to ensure banks and other financial institutions are in sound fiscal condition and compliant with their governing statutes and supervisory requirements. This includes a legislative requirement imposed by the two acts currently being reviewed by the committee.
With respect to economic sanctions specifically, OSFI last issued guidance in 2010, outlining how banks are expected to comply with the legislative and regulatory requirements. Banks must demonstrate to OSFI that their control measures are capable of continuously searching records for individuals and entities subject to financial sanctions, determining whether the bank is in possession or control of property of designated persons, preventing prohibited activity with respect to property of designated persons, monitoring for and preventing prohibited transactions, disclosing information to the RCMP and CSIS concerning property of designated persons in the bank's possession or control, and reporting to OSFI monthly on the aggregate value of property of designated persons in the bank's possession or control.
The legislative and regulatory requirements associated with the economic sanctions regime are significant and require a substantial amount of resources to ensure compliance. This can be especially challenging for smaller financial institutions that are expected to meet the same requirements as larger ones.
We would like to share with the committee our recommendations, which we believe could help improve the effectiveness and the efficiency of the economic sanctions framework in Canada.
First, we believe additional comprehensive guidance from the government would assist financial institutions in complying with the laws and regulations with respect to economic sanctions. OSFI has issued guidance to enhance the understanding of existing laws, but that guidance has not been updated since 2010.
Further guidance from Global Affairs Canada to assist the private sector would be consistent with the approach used in other jurisdictions such as the U.K., the U.S., and the EU. Many Canadian businesses are now looking to those other jurisdictions for information on how to interpret similar measures implemented domestically. The increasing complexity of the sanctions regime, which includes not only list screening but also activity- and sectoral-based sanctions, reinforces the need for more comprehensive guidance and a collaborative approach between the government and industry.
Second, building on the theme of additional guidance from the government, we believe the framework for economic sanctions would benefit from increased collaboration between the government and the private sector. Greater dialogue would facilitate a deeper understanding by the private sector regarding the interpretation of the laws and regulations. In addition, the government would gain greater insight into the challenges faced by other stakeholders.
Options to consider could include the appointment of a financial services industry liaison to address issues specific to financial institutions, and the availability of telephone or online assistance to respond to questions from the public. This would be consistent with the approach used in the U.S. and would provide an open line of communication to facilitate compliance.
For example, when financial institutions are having difficulty determining whether an individual or a business has been flagged by the regime and what measures must be implemented to meet the expectations of the sanctions program, having direct and real-time assistance from the government would greatly assist in compliance with the regime. On another front, it would be beneficial if the private sector had a better understanding of the permit application process, in which there are often significant delays.
Third, we strongly believe that there should be one consolidated list of designated persons to which financial institutions can refer. Today, banks must refer to 19 separate lists of sanctioned individuals and entities. The absence of a systematic method of communicating the continuous updates to these lists imposes an unnecessary burden on the private sector and creates greater risk of non-compliance, which undermines the entire regime.
In closing, we believe that these recommendations would improve Canada's current economic sanctions regime, which would ensure that the government's foreign policy objectives can be achieved, while not impeding valid business transactions. Although our recommendations do not provide specific legislative amendments, they would nonetheless improve the efficiency and effectiveness of the current framework, as well as the compliance of the private sector, by providing greater guidance and clarity.
Banks take their responsibilities with respect to economic sanctions very seriously in an effort to ensure that they are fully compliant with the requirements. Banks in Canada recognize that economic sanctions are an important foreign policy tool for the government, and no bank wants to undermine the government's objectives or risk its reputation by being non-compliant with the various laws and regulations that comprise the regime.
Once again, thank you for inviting the CBA to be here today. We look forward to taking your questions.
I really can't answer that, being from a chartered bank. I can appreciate perhaps some of their frustration. I mentioned in my earlier testimony that there is a significant cost to compliance. We're not just looking at the Canadian regulations. We also have to look at other international regimes where we do business. When you layer that on top of Canadian requirements, it is fairly onerous.
A point that we wanted to make, though, quite frankly, is that Global Affairs Canada in the last few years hasn't made it much easier. Going back to 2010—no, I won't go that far back. I'll go back to 2013, when I first assumed my role. It was at a time when Global Affairs, DFAIT at the time, was much more collaborative. When there was an introduction, say, of a new sanctions regime, or a new country was added, they would host a conference call, and they would invite industry. They would do separate calls for banking, and I believe they did a separate call for credit unions at the time. They would answer questions fairly openly and would provide some much-needed guidance, because you won't see anything published, as you're aware. At Global Affairs, they don't publish frequently asked questions, as OFAC does in the U.S.
We found it frustrating, because since 2015 it's almost been radio silence. Earlier I could pick up the phone and speak to a lawyer in the economic law division and be able to get at least an indication if that sounded like something we'd need a permit for or if we were on the right track in our interpretation. Now, since 2015, there's nothing. They don't even provide that limited guidance. They'll say to submit an email or submit a permit application.
Well, we'd send an email without any real guidance. Basically their response would be, “You need to seek independent legal advice.” We've heard from lawyers in the industry; it's circular. They don't have the advice. They need to go back to Global Affairs.
Ultimately it comes back to a permit process. You submit something, you ask for general advice, and they say, “No, we can't give you a general answer. It has to be specific.” We wait for a transaction, a live transaction. We have clients waiting. They want to do a letter of credit, and you have to submit an application.
We've been waiting 16 months.
That's an excellent question.
I would reiterate that yes, in our view, there are certainly things that the Canadian government can do. A large part is around some of the points we have already raised. It's around administration. It's around guidance. We don't find significant or material flaws in the legislation itself; it's just in support around that legislation, be it a consolidation of lists or being able to provide guidance on interpretation. That could help alleviate some of those issues.
Quite frankly, if there were an outlet, an ability for us to approach the government in those instances, to say we're not exactly sure with respect to these students and these new sanctions that came into force at that time—if we had that opportunity to have a dialogue with somebody in the government to allay those fears, etc., I'm sure it would not have had the same kind of consequence.
With respect to international sanctions, yes, there are concerns. Quite frankly, you raised Iran as an example. Although Canada has lessened the general sanctions regime against Iran, the United States, for the most part, hasn't, so we still have to be very concerned about any transactions that might be done in U.S. dollars. Some of the banks may have had or may continue to have restrictions on the ability to open up U.S. dollar accounts. Why? It's because U.S. dollar items need to clear through a U.S. correspondent bank, and they have to be concerned about the implication of sanctions.
Our belief—and we've made this clear in our position—is that the government could do more in supporting administration and infrastructure. If you were to look at Australia, you would see it is a good example of a jurisdiction where they do outreach. The government actually has a national road show twice a year. They meet with companies and industry to give guidance on sanctions. They actually attend conferences.
I've been to four international conferences in the last two years. There were two in Toronto, one in Washington, and one in New York, and they were organized by the American Conference Institute. I know directly, because I've spoken at each one of these conferences. They've asked me, “Who would you like to see attend from the Canadian government, as a Canadian representative, in addition to lawyers?” I said to each one of them, “Please invite Global Affairs Canada.” They've been invited four times. They have not appeared at any of these conferences.
It's not just Canadians who are participating, but the international community. You have lawyers. You have banks. They want to hear what the position is on Canadian sanctions.
When new sanctions are introduced, typically we will learn about them when they're published. We subscribe to various services. Global Affairs will give email updates through RSS, and we scan all the sites every day.
It's interesting you raised that, because some of the names, when they are first published, appear in various sources. Sometimes...and we'd never seen this before, but it was through a news release on the Prime Minister's website. That was new for us, and we didn't even think to look there. We typically just look at the Global Affairs website every day. We do look at the Justice Department website every day.
We may or may not receive notification. I think that when the Russian sanctions came down, I believe we got a heads-up from OSFI because they knew that they were coming, and that was nice. I also have my team. I have five lawyers on my team, and we have a legal department. We each pore over them and we analyze the impact.
If it's just adding to a list, then it's fairly simple. They're added to this list, and we ingest them. Either our service provider does it, or we do it manually. Then it goes into our system, and it's done usually the same day, or the very next day. If we get a hit, or blocks, then we take appropriate action. We freeze property or assets. If we get a false positive and we can't reconcile that, then we go back to the client and ask for additional information. We may ask for additional information from a remitting bank or an originating bank, if it's a wire type of transaction.
For something like sectoral sanctions.... Let's say they're opening a whole new sector. Let's say they want to add fishing somewhere. We hadn't seen that before, so usually we'll convene a CBA meeting. We'll have members get together and we'll talk as an industry and figure out what to do. We may reach out to our legal service providers and ask them for their interpretation, and we do our best.
It would be fantastic if we could go to Global Affairs, have them host the call, and have them walk through the new sanctions. That would be ideal. Those are some of the things that we're asking for. That's what other jurisdictions do. Then they can publish frequently asked questions that could come up, or they could even anticipate questions in advance. That would be great.