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House of Commons Emblem

Standing Committee on Foreign Affairs and International Development



Thursday, June 8, 2023

[Recorded by Electronic Apparatus]



     I call the meeting to order.
    Welcome to meeting number 70 of the Standing Committee on Foreign Affairs and International Development.
    Today's meeting is taking place in a hybrid format, pursuant to the House order of June 23, 2022. Members are attending in person in the room, as well as remotely through Zoom.
    I'd like to make a few comments for the benefit of the members.
    Please wait until I recognize you by name before you speak. For those participating by video conference, click on the microphone icon to activate your mike, and please mute yourself when you are not speaking. Interpretation for those on Zoom is at the bottom of the screen. You have a choice of either the floor, English or French.
    Pursuant to Standing Order 108(2) and the motion adopted by the committee on Wednesday, September 21, 2022, the committee is resuming its study of Canada's sanctions regime.
    Now, we're very grateful that we have three distinguished witnesses before us. We have Senator Andreychuk, who needs no introduction to anyone in Ottawa. She is a distinguished jurist, a distinguished diplomat and a senator. Anyone who is familiar with foreign affairs is very familiar with her. In addition, we have Professor Cardwell with us today—we're very grateful, Professor Cardwell—and Mr. Benjamin Schmitt, who has appeared before us previously and is a senior fellow in the Department of Physics and Astronomy as well as being at the Kleinman Center for Energy Policy, both at the University of Pennsylvania.
    You will each be provided with five minutes for your opening remarks, after which we will open it to the members for questions.
    As I understand it, Professor Cardwell, you will be going first, followed by Professor Schmitt and then Senator Andreychuk.
    Thank you, Mr. Chairman and members of the committee, for the invitation to speak. It's a great honour for me to be in Ottawa with you today.
    If I may, I will briefly present an outline of my research interests and expertise in relation to sanctions. I am an EU law academic, working at the interface of law and politics in the EU. My specific focus is on the external relations of the European Union, which is "EU-speak" for what's generally covered by the foreign policy of a nation-state.
     I've been particularly interested in the institutional questions and the place of law in what's generally assumed to be a political domain. There has been, since the EU's treaty of Maastricht, 1992, a growing amount of EU law relating to external relations as the EU has attempted to gain a greater voice in international affairs. There's been a gradual, partial move away from the characterization of EU foreign policy from intergovernmental to supranational.
    My interest in sanctions is thus as an expression of the EU's foreign policy. I published an article entitled “The Legalisation of European Union Foreign Policy and the Use of Sanctions” in 2015 in the Cambridge Yearbook of European Legal Studies. I argued there that the EU is far from being ineffective as a foreign policy actor, which is a claim that's frequently been applied to the EU since its inability to respond to the breakup of Yugoslavia in the early 1990s.
    The willingness that the EU has shown to put in place autonomous sanctions demonstrates its ability to do things as well as say things, most notably, of course, on Russia, since 2014. The process of imposing sanctions, which cover internal market aspects of the EU and thus the legal competence of the EU institutions, is one that fuses legal and political aspects but often has gone unnoticed. The institutional difficulties in seeking agreement between 27 member states should also not be understated. If there is agreement, the EU is capable of being powerful, but if there's no internal agreement, much less so.
    My most recent work on sanctions was published in 2022, with Dr Erica Moret, whom you met earlier this week. It focused on a trend since the mid-2000s to invite third states around the EU's borders to align with EU sanctions. Such states include closely integrated but non-EU members, including Iceland, Norway, Liechtenstein, applicants for membership in the western Balkans, Turkey, Ukraine, Moldova and Georgia, and other members of the EU's eastern partnership, Armenia and Azerbaijan.
    We looked at the EU's 30-plus sanctions regimes and the hundreds of instances where sanctions have been imposed or built upon. We found that typically five to 10 additional states that are not EU members undertake publicly to align themselves. EU sanctions regimes, therefore, cover not only the 27 member states but also up to 35 to 40 states altogether, almost a third of the UN members.
    Leaving aside the key question of whether sanctions do in fact make a difference, the place of autonomous, non-UN sanctions as the go-to foreign policy instrument of the EU demonstrates its success in putting together foreign policy. We also found some evidence that the potential weight of EU sanctions provides an opportunity for strengthened co-operation with other countries such as Canada, and groupings, including the Arab League.
    Finally, as a U.K.-based academic, I've had to confront the reality of Brexit and the requirement to pass legislation and policy independently of the EU. The U.K. now has no formal institutionalized framework for foreign and security policy with the EU. It has its own post-Brexit sanctions regime, the Sanctions and Anti-Money Laundering Act 2018. The early signs here are that there is little difference in practice between U.K. and EU sanctions in terms of content or geographical scope, though this might be changed in the future.
    I apologize in advance that my expertise does not extend specifically to Canadian law and policy, but I hope I will be able to answer your questions relating to my research.
    Thank you.
    Thank you very much, Professor Cardwell.
    Next we will go to Professor Schmitt.
    Professor Schmitt, you have five minutes. The floor is yours.


     I should just say that I have a Ph.D., but I'm not a professor, so thank you for the promotion.
    Hello, distinguished members of the Canadian Parliament. Thank you for the opportunity to testify today on the vital need to continue to expand and tighten export controls against the Russian Federation in response to its ongoing brutal invasion of Ukraine.
     My name is Dr. Benjamin L. Schmitt. I've previously served as European energy security adviser at the U.S. Department of State. I'm currently a senior fellow at the University of Pennsylvania, a fellow for democratic resilience at the Center for European Policy Analysis in Washington, and a co-founder of the Duke University Space Diplomacy Lab.
    We meet today less than 48 hours after the very latest unthinkable terror was unleashed by Putin's Kremlin against the Ukrainian people: the destruction of the Nova Kakhovka dam and hydroelectric power plant in Russian-occupied Kherson. This act unleashed widespread energy and water insecurity and ecological disaster, and sharply exacerbated the Russia-fabricated humanitarian nightmare that is unleashed across Ukraine.
    Although shocking, Moscow's latest attack on Ukrainian critical infrastructure shouldn't take us by surprise. It is just the most recent example in its campaign of kinetic strikes against Ukrainian energy facilities over the past 16 months and a clear extension of Russia's years-long policy of weaponizing energy supplies against the European democracies.
    We also meet here at a historic inflection point during Russia's war in Ukraine, a moment in which heroic Ukrainian defenders are already in the opening stages of a highly anticipated military counteroffensive aimed at ending Russian military occupation within Ukraine's internationally recognized sovereign territory.
    The success of the counteroffensive will not just come down to the unparalleled bravery of Ukrainian service personnel. It will also be the military hardware and materiel that we, as western democracies, have been able to supply that will play a decisive role. This is why countries like Canada must continue to rapidly improve the pace and supply and scope of military systems it's sending to Ukraine, and ensure that increasing Canada's technical capacity for defence manufacturing and procurement is prioritized in Ottawa's highly anticipated defence policy update.
    However, while supporting the success of Ukraine's military counteroffensive is essential, global democracies supporting Kyiv have the duty to lead a counteroffensive of their own, a counteroffensive of sanctions to further ratchet up economic and supply-chain pressure to degrade Russia's capability to wage war against its democratic neighbour.
    With this in mind, we can look at three critical lessons that we've learned over the past year or so on the Russian sanctions regime.
    First, the answer to the perennial question “Are Russian sanctions working?” is yes, but given the wide range of measures deployed, we need to also consider the proper time scales required for these various classes of sanctions to have their desired impact. For example, while banking restrictions and energy sanctions might take longer to result in broad macroeconomic failures in the Russian economy, technology export controls on component and systems-level military and dual-use hardware have resulted in more immediate impediments to Russia's military industrial capacity, forcing it to seek equipment from countries like Iran. Regardless, both sanctions tracks must be strengthened and held in place for the long term to live up to the transatlantic pledge of increasing costs on Putin's Kremlin in support of Ukrainian victory.
    Second, the transatlantic community can never again be fooled by dubious Kremlin schemes and disinformation campaigns to waive existing prudent sanctions measures. Both during the run-up to the Kremlin's large-scale invasion of Ukraine and during its first year, sanctions measures either already enforced or on the books to be enforced were waived, avoided or otherwise unutilized. This includes the Biden administration's July 2021 decision to waive sanctions on the Kremlin-backed Nord Stream 2 pipeline, sanctions that were legally mandated by an overwhelming bipartisan majority in both chambers of U.S. Congress for years.
    It also includes the Biden Administration's decision later in 2021 to avoid sanctioning a vessel called Blue Ship. This vessel was engaged in sanctionable activities in the construction of Nord Stream 2, but sanctions were waived, citing the ship's ownership by an entity that was quasi-owned by the German state government of Mecklenburg-Vorpommern, though principally funded by the Gazprom-owned Nord Stream 2 consortium, an entity cynically called a “climate foundation”. The ship and its owner remain unsanctioned today.
    It, of course, also includes last year's decision by the Canadian government to waive Russian technology export controls measures on a set of Siemens gas turbines that the Putin regime erroneously claimed were technically needed to end its politically motivated cuts of Nord Stream 1. Thankfully the Trudeau government ultimately reversed its decision, in part due to the great work of this very committee.


    Strategic errors like these, along with many further examples, will only serve to embolden Putin's Kremlin to set up schemes to undermine the western sanctions consensus, and if left uncorrected could cause grave harm to broad counter-threat financing programs developed by global democracies.
    Third, and finally, simply announcing strong sanctions measures without equally strong tracking and enforcement action of would-be sanctions evaders will not get the job done. The wide array of Russian sanctions and export control measures that have been announced by the G7, European Union and beyond over the past 16 month are commendable, but must be rigorously increased and enforced until the Kremlin relents in its war of choice against Ukraine. It's no exaggeration that the scale and scope of sanctions already in place against the Russian Federation represents perhaps the largest single sanctions regime ever undertaken in history, in large part due to the sheer size of Russia's landmass, economic activity and global connections.
    Mr. Schmitt, could I ask you to conclude in the next 20 seconds, please.
    There are many sanctions measures that need immediate rollout. I will provide a menu during this hearing.
    In closing, the biggest lesson we should have learned over the past 16 months is that the cycle of incrementalist measures to support Ukraine, whether it be on the supply of weapon systems urgently needed by Kyiv or on sanctions measures, needs to be broken. The time for incrementalism is over. A western sanctions counteroffensive with stronger and wider restrictions on the Russian Federation can and must be deployed immediately. Global democracies must do this, not only to support the future resiliency of a free Ukraine, but also to make it abundantly clear to the realist “it's just a commercial deal” bloc, that there cannot be a return to business as usual with the Putin regime. It's a vital message that authoritarian regimes around the world will need to hear as well.
    Thank you for your attention and I look forward to your questions.
    Thank you, Mr. Schmitt.
    We now go to Senator Andreychuk.
     Thank you, Mr. Chair. I will look to you to cut me off, because the clock is behind me, and having served in Parliament, I know it's a danger to go over the time.
    I want to start by thanking the committee for accepting to hear from me again on the issues of the Magnitsky bill and the sanctions in general. It was from the hard work of parliamentarians in Canada over numbers of years in trying to increase attention on sanctions and particularly human rights abuses that the Magnitsky bill came to fruition. I was very pleased to introduce the bill and have both houses of Parliament pass it unanimously. It is to your credit that we are at least at the stage we are now. Hopefully, this committee will continue to build on that.
    Much has been said.... You can read what I've said over at the Senate. I recently testified before them on the same issue. I'm not going to talk about Russia—I think it's been adequately covered—and will say why the Magnitsky bill was important.
     We had SEMA, the Special Economic Measures Act, but it was really geared for trade violations and economic sanctions, when in fact there was a feeling in the view of many Canadians that we needed human rights to be raised to an equal status in foreign policy and that the rights of those who have to defend their countries deserve the same attention as those who are working within the trade field, so the Magnitsky bill came to.... What I want to talk about is that it was intended to entrench human rights as an equal pillar with the foreign policy aspects.
     Secondly, it was to be universal. There was much talk even then about Russia and that threat, but those of us who worked in foreign policy knew that the threats could come from anywhere at any time and that we should be ready with a regime that can be easily accessed by the government. The universality is very important.
    It was also intended to support human rights defenders in general. Mr. Magnitsky was certainly the example, but he's an example of so many others around the world who have sacrificed their lives, been jailed and tortured and have suffered innumerable losses—and their families—due to the fact that they stood up for what was right and just in their country. These human rights defenders need to be supported. That was one other reason for the Magnitsky bill.
    The thrust of the bill is to ensure first and foremost—and that gets lost because of the Russia issue—that we are not aiders of and abettors to any of the crimes that are committed by these perpetrators in other countries and have it spill over to us. We do not want their money parked in banks in Canada. We do not want it parked in real estate in Canada. We do not want them to be in our countries. The part that has been missing in the Magnitsky bill and should have more attention paid to it is the fact that we can limit their access to coming to Canada. There's also the question of whether that should include their families or not, but that would take a further inquiry, I would say.
    What we want, as Mr. Kara-Murza said, who languishes now in one of the worst jails with none of the attention that he requires medically and otherwise, testified before all of our committees is.... If we don't take these steps within our own borders, how can we then issue sanctions and talk to others?
     What the gap was in our sanction regime up to this point was that we didn't look to what we do in this country to ensure they are not within our borders. That would be the first step to protecting the human rights defenders and having credibility on this sanctions issue.


    I agree that sanctions take a long time. The other reason for having the Magnitsky bill and the SEMA bill together, I should say, is that it was a compromise. It was intended to be the first stage. It was not intended to be a fait accomplibill. It was to be an all-inclusive look at sanctions and to see where the Magnitsky bill fits and where SEMA fits but also to see what else we need in the sanctions area.
     Further, we should not look only at sanctions. We have many levers in foreign policy that we should exert and utilize in these cases. How sanctions fit into that has not really been studied by me and many others as much as we should, and I think we will do so.
    Just to finish, the government has leaned on SEMA because it has been there for quite some time. It has a definition to do, but it is about international issues, not specific in the way the Magnitsky is. What those of us who have worked in the human rights field were hoping for and still appeal to the government for are the policies and the practices known to Canadians and internationalists so that we could work more co-operatively with others. We would also be in the ready when an issue erupts.
     It isn't just Russia. We know we're in a very interesting world, and perhaps sanctions or other foreign policy are necessary elsewhere. If a broad-based look at foreign policy is done, we can then see if we should use sanctions or not, and we have a scheme ready to go rather than being behind and trying to catch up.
    Thank you.
    Thank you very much, Senator.
    We will now go to the members for questions. We start off with MP Chong.
     You have four minutes.
    Through you, Mr. Chair, I first of all want to thank my former colleague Madam Andreychuk for appearing in front of our committee today.
    We miss you in Parliament and the work that you do, but your legacy lives on in the bill you introduced that is now law, the Magnitsky act. Thank you for your opening remarks.
    I'd like to focus my questions on enforcement. Just three months ago, The New York Times had a headline on their social media platforms that said that “Canada is such an attractive place for money laundering that there's even a special name to describe the activity here: 'snow washing'.”
     I make that as my opening remark so that we can focus on what I think is a major problem, which is the lack of enforcement. We can announce all the sanctions we want, but if we're not enforcing them, they're of no use.
    At the last meeting, we focused on the U.S. enforcement of sanctions through OFAC in the Department of the Treasury. This meeting, I'd like to talk a little about U.K. enforcement, because we have very similar systems of government.
    The United Kingdom, like Canada, announced a U.K. financial crimes agency. I'd like to ask Professor Cardwell about that.
    Can you tell us when this agency will be operational? Do you know when it's going to be stood up?


    There have been indications from the U.K. government that a sanctions enforcement unit will be housed within that agency. Do you know anything about where the U.K. government is at with the establishment of this agency?
    My understanding is that “soon” is the official word. It has been complicated by other things going on, and, of course, the clock is light, because we are expecting an election, without doubt.
     I don't think this is an issue where there would be a great difference between whichever party is next in power. I think there is a certainly a question of resourcing, as well, against the background of some of the institutional changes we've had, given the changes in prime ministers and ministers, which has generally slowed down the process of creating things like this in a number of areas.
    In Canada, it's clear that the lead within the Government of Canada for making a decision about designating individuals or entities for sanctions is the Department of Foreign Affairs. That's clear. Where there is ambiguity is regarding who the lead is within the Government of Canada for the enforcement and administration of sanctions. “Administration” is probably the better word to use. There's ambiguity about who the lead is within the government for the administration of sanctions that have been applied to individuals and entities.
     In the U.K. government, who is the lead for the administration of existing sanctions for interdepartmental and agency co-operation? Who is the lead within the U.K. government for that?
     My understanding—but I can check, as I am not a U.K. expert on this—is that it is the foreign office.
    Again, there have been institutional changes and ways in which parts of departments are being shifted, particularly relating to trade, which of course this impacts directly.
    If you wouldn't mind, once this meeting is done, consulting with your colleagues and providing the chair of the committee with that answer over the next couple of weeks, that would be very helpful for us.
    I'd like to ask a few questions—
    I'm afraid you're out of time.
    We next go to MP Sarai.
    You have four minutes.
    Thank you, Chair.
    Senator Andreychuk, thank you for joining us today. You've been a tireless advocate for human rights and the Ukrainian people for many years now.
    Given your important work on behalf of the Ukrainian people, and your experience most notably as Canada's permanent representative to the United Nations Commission on Human Rights, can you please discuss the importance of holding the Russian regime and Putin accountable through sanctions and other means, how it's been effective and how do you think it will affect the Russian regime going forward?
    I'll start midstream. I think from the start, any sanctions that have been imposed anywhere take time, as has been said. They, in themselves, will not move a marker on any autocratic leader who decides to go a certain way. It should be noted that there's a military response, and there's a sanctions response. The most important response is from within the country.
    Building on that, the sanctions have been successful in the sense that they have brought attention to the fore of human rights defenders within Russia and what has happened to them. As the war evolves, you can see the pressure come forward more and more, but that's the risk for the people who want the war to stop within. I'm not going to speak any further about that.
    My concern in Canada has been that we should look at the sanctions. Sanctions are the step that you take as an imposition against another country. But as has been pointed out by Mr. Chong, we have all kinds of activities that lead to the sanctions—there's are the problems of illicit money coming into Canada and human trafficking. Then there's the confusion that comes when you deal with some of these foreign actors, if you're in business, is how do you know whether they're in compliance or not? How do you comply?
    This is where the attention of the government really has to be on putting out a generic—that's using the term loosely—principle that they are going to follow, or principles or policy when they look at sanctions, so that it isn't targeted to a specific country but has some relevance for any situation.
    What is then the basis of that? Evidence. You need to have those pieces in place. You need a lead agency, but you need to work with your intelligence, and you need to lead with your citizens too. Some of the best information that comes forward on sanctions comes from groups and individuals who know the countries. You've pointed out Ukraine; I also know Russia, Belarus, etc. You can weigh what would work, what might not work, and you might be able to provide evidence.
    Using your resources within the community, which are great.... Particularly in a country like Canada we all have links somewhere—we travel, we're mobile, we get information. But we have a lot of NGOs and a lot of professional groups and businesses working around the world who need to feed in. They need to know what is legit or not.
    In one of the previous hearings, someone said to give us the rules and make them clear because when we're dealing with a foreign business we need to know whether we're within bounds or without bounds. Giving advice, for example, as a lawyer is what you do, but you need to know how the sanctions are going to be implemented. If we don't know that, we're at risk. There has been a plea from many quarters to have more exchange and dialogue, but also to set in place some terms that will be understood, and a place to go to seek advice.


     Are there any cases or scenarios you know of that Canada is missing sanctioning, for example, in the Russia—
    Mr. Sarai, you're considerably out of time.
    Next we go to MP Garon. You have four minutes.


    Thank you, Mr. Chair.
    Thank you to the witnesses for being here today.
    I'll start with you, Senator Andreychuk.
    If I understand correctly, you're among those who supported the Magnitsky act. You did a lot of work on the legislation. It hasn't been used by Canada since 2018. You told the Senate committee studying the sanctions regime that the government should explain why it's hardly used the legislation. You also said that the reason it's not being used enough is a lack of information needed to apply it.
    This is my question: Is Canada transparent and accountable enough when it comes to the effectiveness of the sanctions? I have to tell you that I was rather surprised, because these are things that can be measured. When you look, though, you find very little in the way of measures for sanctions effectiveness.
    Don't you find that troubling?


    I think it's being studied, to answer your question directly. This is the field that I and others are starting to look at in terms of how we can make sure there is accountability. I'd refresh everyone's memory that in some of the original bills that came through and did not pass, it was a reporting mechanism directly to Parliament—disclosure and involvement. Sanctions will not work if all Canadians are not involved, and particularly all parliamentarians. The bill came in with all-parliamentary support, and I think there needs to be more transparency—the word we use often these days—and openness to share the experience.
    We need to know how we can support the government better, how we reach for the information, whom we talk to, how we can ensure that those who talk to us are not then targeted, because that is another factor. You've hit the nail on the head—what we need is more information for the government. I'm going one step further in saying that the government should put in place certain aspects of sanction-dealing that would be generic, and that needs to be known by all of us.
    My final point on that is that the evidence is easier I think in SEMA. I noticed that all of the Russian ones talk about violations of “international peace and security”. That's a phrase that needs to be defined more. Whereas in Magnitsky, we're reaching for internationally recognized human rights abuses. Corruption is more defined. In that sense, I would think it would have been easier for the government to deal with it, particularly if you're going into forfeitures, which is a whole different difficulty and has yet to be tested. If you go into forfeiture, where's the evidence, how is it applied, and are you only using your own skill as a foreign minister and your government, or are you really trying to build a coalition for those who want to abide by human rights?



    Very quickly, I have one last question for you. I have just a few seconds left.
    You said that information was missing. What specifically do you recommend to bring about the institutional changes to improve that dimension? What exactly do you have in mind?


    When this bill started—l'll go back to that, and I'm not a psychologist—I know there was resistance to the Magnitsky bill, because it was a whole new topic, a whole new area that would need to be explored. There is a hesitancy to start new ventures.
    That is why this bill.... All the people who helped me sat down and said it's a starting point. We know what we want: we want to stop the abusers. We don't want them in Canada, but we don't want them.... We want the right signals to go to our partners and to the broader community and to those who really suffer on the ground in other countries. I said that's the part we know. How to apply it is within the domain of civil servants, within the domain of the government. Surely with the fine minds and expertise there, that is where they could tell us how they could accomplish the ends we want.
    They may be doing it now to a certain extent, and I think they are, but they could do more in relaying it to the general public, because it is not the kind of information that is confidential. In some cases, it might be, if it's in money laundering or something else; but in other cases, we have talked about what we do want to further human rights, and we could do that here. We need to report, and we need to have Parliament involved.
     Thank you, Senator.
    We now go to MP Green.
    MP Green, welcome to committee. You have four minutes.
    In light of the constrained timelines, I will ask that you provide your comments as briefly and succinctly as possible, but I would love for you, Senator, to carry on that thought. Even with this legislation having been passed, you mentioned it wasn't a fait accompli and that more needed to be done. As you watch and observe how the government is responding to your legislation, what would you like to see implemented or what could we recommend through this committee now to get to that gold-standard level of legislation given the international uncertainty we have?
    Just quickly, I would hope the government would pay attention to the recommendations out of the Senate committee, which I was not involved in making, and this committee, as in the past. That would be my first step.
    Second, I think to have it go ahead is to understand what implementation will mean when we get to the level beyond seizure. If it's forfeiture, who gets the amount? We have an act that deals with the freezing of assets. We need to look at that again. That act came in very quickly. I was involved in that one. But we knew that it was our first attempt, and it was as a result of a crisis, and then it was amended and amended. I think this is what the government has to do—involve more consultation and dialogue to get the evidence. The evidence is all those other parts.


    Thank you.
    Professor, you've come a long way, so I would like to pose a question to you, sir. Since February 2022, the 27-member EU has agreed to 10 packages of sanctions in response to Russia's aggression against Ukraine. How have the EU sanctions packages against Ukraine evolved since Russia launched its full-scale invasion of Ukraine?
    Thank you very much.
    Essentially the evolution is more and more finding who to sanction and how and on what and trying to pick up on examples we've heard of where things maybe have slipped through the net. It's clear in the latest messages from the European Commission that the focus has to go back to what we were saying a moment ago. There has to be a shift to enforcement as well within the member states.
    Again, one of the problems when you try to ramp up the sanctions and you need that political focus to keep the European populations on side is that in the context of this multinational organization—where you have elections coming up in states, which might shift the balance a little bit—you have to ensure that the EU is still responding to that and is still doing things, which means finding those to sanction—
    Let's explore that a little bit further.
    What compromises, if any, can be seen in the packages of sanction measures adopted by the 27 states?
    It terms of compromises, again you're talking about the EU with 27 member states and with different interests, and some of the sanctions themselves, especially when you're talking about a large neighbour like Russia, will impact more heavily, for example, on bordering states, but of course the bordering states are the ones that have been pushing the hardest for the sanctions. There have been others further in the west, perhaps, on which they have been lighter, with one or two exceptions, notably, such as, of course, Hungary.
    Another thing to take into account, if we go back to before the invasion but when further sanctions were imposed on Belarus, which of course was also envisaged here, was that some of the sanctions packages were held up because one member state was trying to get something else on something completely different as well. So the impact of compromise comes into something that is far bigger than the actual substance of the sanctions on which generally there is political agreement, but there is also the question of the intelligence and where that comes from, how that's fed up from populations, from NGOs and of course through the member states themselves.
    Thank you.
    Thank you.
    Now we go to the second round of questions. For the second round, each member will get three minutes. We start off with MP Epp.
    Thank you, Mr. Chair.
    I'll continue with Professor Cardwell.
    You talked about the complications of coordinating 27 member states. You also talked about reaching out with autonomous sanctions in alignment with third party states close by. Can you comment about the relationship with Canada? We have autonomous sanctions. Is there a coordination process going on now within the EU, and how does it look, under Brexit, specifically from the U.K.?
    Thank you. The examples that I used in my research were of a rather different scenario from that of Canada and of the U.K. Largely this arose from the enlargement process, whereby states that have applied to join have to be brought into the system of thinking, so the opportunity to align was part of that. Then it was extended to these other countries in partnership countries in the western Balkans. It's a way of sensitizing them to EU foreign policy generally, but the focus has been on sanctions.
    With Canada and the U.K. now, it is rather different. The situation is also one in which it's more difficult for an outsider to find information, mainly because when you're talking about individuals, you need to keep that information as tightly controlled as possible.
    You have the institutional difficulty with the EU not being a state and relying on information that comes from national agencies as well.
     Thank you. I'm sorry. My time is so limited.
    Senator Andreychuk, in your opening comments, you talked about inadmissibility and that sanctions need to be coordinated. Bill S-8 was a bill that addressed that.
    Can you comment on the gaps that linger? Does that address most of them or not? Answer very briefly.
    My very brief.... I can follow up, if you want, in writing later.
    It opens more issues than it closes.
    Following on just one point—and that is coordination on all of this—we have to keep in mind that some of the activity and the actors in sanctions are not like Russia and Ukraine. They're also actors within our own states. That's why the Magnitsky bill is important. It is one that I think needs more attention from government, and that's where the coordination really should be coming from.
    The second part, which I don't think we've focused on, is there's a large community that isn't involved with these sanctions for various reasons in other regions, and my focus has always been to try to get universality. We need to think about the way we approach sanctions and the way we approach—


    Thank you, Senator. I'd appreciate something in writing.
    I want to get one question in to Mr. Schmitt.
    On technology sanctions, there have been reports that Russia's been circumventing some of the sanctions by acquiring parts through breast pumps and washing machines, etc., through third parties.
    Can you comment? Should the sanctions be extended?
    Absolutely. Technology export controls restrictions for components, systems-level technologies and a wide range of technology development software has to be remembered. CAD, CAM and BIM platforms need to be tightened, especially those that can be directly or indirectly used in the Russian military campaign. The goal of western democracies needs to be to degrade significantly the Russian military, aerospace and space sectors, in this case.
     On how to track these, I think the one thing Canada can help with a lot is working with its private space sector and private space sector actors around the world to more rapidly release geospatial imaging satellite data to help fill in the “dark ship” problem. We can do this using multiwavelength data to find ships that are evading sanctions, as well as ship-to-ship oil transfers and things like this. It's using not only optical satellites that have open-source use from the commercial sector, but synthetic aperture radar, RF—radio frequency—and other domains.
    This will really help and it will build capacity, because then you can have—because these are all open source datasets—civil society, NGOs, academics and the investigative journalist community work to build capacity and then flag for governments like Canada who to enforce on and how to get this done.
    Thank you.
    We now go to Dr. Fry. You have three minutes.
    Thank you very much.
    I must say that three minutes isn't a lot to get questions asked.
    Welcome, Senator Andreychuk. I haven't seen you for ages. I want to thank you for your work on Magnitsky, but I want to ask a really important question.
    We were looking at sanctions to do three things: to change behaviour, to create constraints on any kind of future behaviour and to look at human rights violations. Would you say that sanctions have been working against Russia?
     While they may have dealt with behaviour and looked at trade—we looked at economic sanctions—Russia is still taking children from Ukraine, and it's actually almost a cultural genocide. There are children being brainwashed into becoming Russian citizens. That's one huge human rights violation that's going on. The rape of women in Ukraine is another human rights violation that's going on.
    Can we say that sanctions are actually working? What do we need to do to move them forward—especially when we have rogue nations like China, Belarus, India and Iran around the area, also trading with Russia at the moment to give it an input—as much as you would like to do so?
    You said it takes time—and I agree—but in the interim, while we're taking time, what do we do?
     I'm looking at the Organization for Security and Co-operation in Europe, which is 57 nation-states, of which Russia and Belarus are two. How do we deal with the central Asian countries in the OSCE? They're silent because they're so dependent on Russia for their well-being and, in fact, their economies.
    What do we do about some of those things? Can you tell me how we deal with all of those challenges?
     Thank you, Dr. Fry, and thank you for saying we're old friends—
    Hon. Hedy Fry: Sorry about that.
    Hon. Raynell Andreychuk:—my having just retired from the Senate.
    There's no easy answer. In any situation, you can have influence and an impact on people, and short of military intervention, everything else is up for grabs. You want to use every lever you have to impress upon those who are committing the violations to stop; but if you can't stop them, then you look to accountability, and it is after the fact.
    One case that I'm following very closely is that of the children who have been taken to Russia. We don't even know how many were taken. We don't know what's happening to them. We only have little snippets of knowledge, but the International Criminal Court has already pursued that issue, so it isn't just sanctions working alone. It is all of our levers impressing upon a government or individuals to stop the actions they are taking. We want in time to have an impact, but there is no guarantee. We simply have to keep moving.
    The apartheid issue and sanctions is a good lesson to look at. We imposed sanctions. Canada was on the forefront of continually being there. Persistence is important, but also imagining new levers, not just sanctions, not just the International Criminal Court. What else can we do?
    In my case, I would say we involve more of the world to know the consequences to them.
    Thank you.


    We now go to MP Garon. You have a minute and a half.


    Thank you, Mr. Chair.
    Mr. Cardwell, you wrote an article about regional leadership in sanctions, entitled “The EU, sanctions and regional leadership”. You've looked at groups of major western countries. As compared with the U.S. or the EU, Canada wields less economic influence, so I'd like to know what that might look like.
    I wish I could give you more time to answer, but since the committee is running so late, you have only a minute.
    Thank you.
    I think the difference between the EU and Canada is definitely size. That is also what makes it hard for the EU's 27 member states to reach a consensus on the application of sanctions. Of course, they all have very different interests.
    Another difficulty is maintaining the sanctions once they are in place. As I said earlier, that is sometimes the result of internal factors. For example, a newly elected government in a member state may not be fully in favour of maintaining sanctions.
    I think that is the risk the EU faces as an international organization, unlike a country.
    I want to use my remaining 17 seconds to ask a quick question.
    Is there a region where Canada could exert or show more leadership?
    The short answer is I don't know, but I will think about it.


    We will now go to MP Green.
    You have a minute and a half, please.
    Thank you.
    Dr. Schmidt, your point about incrementalism is well taken. Could you provide the committee with a list of people, entities or countries that you believe should be on our sanctions list?
    Yes, absolutely.
    What I mean by that is that we've taken steps, but we could have gone a lot faster on them in terms of sanctions. Again, it's not just announcing the sanctions policies; we actually have to have them in force. As I said earlier, space technology can really help on the high seas.
    In terms of the actions that can, should and must be taken, we need to impose sanctions against Russian hydrocarbon companies as well as Gazprombank, while developing sanctions to encourage full divestment of existing western technology service providers that are still operating in the Russian Federation. That is absolutely unacceptable.
    In the financial sector, we have to impose sanctions on the 10 largest banks and set deadlines for foreign banks still operating in Russia to exit the country. Finally, especially with the events of this week—let's be clear—we have to designate Russia as a state sponsor of terrorism or a terrorist state itself. This is absolutely overdue. It's something that's been called on for over a year.
    Furthermore, we must transfer the roughly $300 billion in frozen Russian central bank assets held by the west to support the Ukrainian military effort as well as future Ukrainian reconstruction.
    Assets from Putin's Russia should be used to help Ukraine, not just fall solely on taxpayers from western democracies, because the perpetrator of the crime needs to pay for the crime.


     Mr. Chair, I would just invite the witnesses to submit lists as well, if they think there are other entities.
    Thank you, Mr. Chair.
    Thank you, MP Green.
    Our time is over.
    Thank you very much, Professor Cardwell. We're very grateful.
    Senator Andreychuk, it's always great to see you.
    Mr. Schmitt, thank you very much for your expertise.
    I am certain that all of your observations will find their way into our final report. Thank you.
    We'll suspend for approximately three or four minutes.



     Welcome back, everyone.
    We will now resume our study of Canada's sanctions regime.
    For the second hour, it is my great pleasure to welcome two witnesses.
    First of all, from the National Resistance Front of Afghanistan, we're grateful to have Mr. Ali Maisam Nazary. Some of you are familiar with him. He comes to Ottawa, but regrettably today he is joining us by video conference.
    In addition to him, from Project Ploughshares, we have Kelsey Gallagher.
    Mr. Nazary, we will start off with you. You have five minutes for your opening comments. As soon as your time is getting very close, I will hold this up as a signal. We would be grateful if you wrapped it up then, and then we will go to our second witness after that.
    Mr. Nazary, the floors is yours. You have five minutes.
    Honourable members, it is truly a pleasure and honour to be part of this meeting today.
    I am here today with profound gratitude for the steadfast support and assistance Canada has extended towards Afghanistan over the decades. Canada remained one of the most significant partners and donors for Afghanistan until the unfortunate fall of the democratic republic.
    The rigorous sanctions regime that your country has imposed on the Taliban is a testament to your commitment to justice and freedom, as well as a firm stand against terrorism. We deeply appreciate and applaud Canada for refusing to recognize and legitimize the Taliban, which is a group that has ushered in a reign of terror, tyranny and chaos in Afghanistan.
    Such sanctions are not just punitive measures, but a powerful tool to restrain the barbarity of the Taliban, which has been the cause of multi-faceted crises—political, humanitarian, security, economic and social crises—ever since their rise to power two years ago.
    The Taliban has exhibited an overwhelming drive to obliterate and destroy state institutions, not to build and strengthen them as statesmen. Their incapacity to govern has plunged Afghanistan into a vortex of division, which is carving the country into fiefdoms, shifting the political centre to Kandahar, monopolizing power in the hands of a few extremists and uneducated clerics from only a few tribes within an ethnic group, and escalating internal strife. Moreover, their rule been has been a terrifying spectacle of tyranny, human rights violations and oppression, which is ruthlessly erasing women from public life and robbing them of their basic human rights. They have not just created a gender apartheid, but an ethnic one as well, as they are actively persecuting Afghanistan's ethnic groups and seeking to erase our cultural, religious and linguistic diversity.
    Yesterday's report by Amnesty International about the Taliban's war crimes in Panjshir and our own reports, with evidence shared with international organizations including the UN, shed light on the Taliban's unrelenting war crimes and atrocities that have been committed in many provinces, such as Panjshir, Baghlan, Badakshan, Daykundi and other provinces. These acts of violence and persecution have spurred a massive displacement of people, ethnic cleansing and a severe humanitarian crisis.
    While we appreciate the international community's efforts in providing aid to Afghanistan, it's critical to recognize that aid alone cannot alleviate or resolve this crisis. The Taliban, in their self-serving ways, manipulate aid distribution, fostering a lifeline for their rule while millions starve. Their discriminatory practices, based on ethnicity, region and political affiliations, ensure that the majority of the country is deprived of vital assistance. The only plausible solution to end the humanitarian crisis and salvage the people of Afghanistan is to end the oppressive reign of the Taliban.
    Their return to power in August 2021 also compromised our territorial integrity and national sovereignty, transforming Afghanistan into a breeding ground and hub for 21 regional and international terrorist groups, and more than 13,000 foreign fighters. This state of affairs is a grave threat to regional and global security.
    For these reasons, we advocate for maintaining and strengthening the sanctions on the Taliban and other terrorist groups. These measures apply pressure to them, weaken their grip on power and prepare the ground for their potential demise. The people of Afghanistan, particularly the democratic forces and freedom fighters of the National Resistance Front, rely on partners like Canada to stand firm in our shared commitment to humanity, democracy, pluralism, freedom and justice.
    We remain hopeful, despite our hardships, and we implore Canada and the international community to sustain their support and to lend their strength to the people of Afghanistan.
    Thank you for standing by us, for hearing us today and for your continued commitment to peace, justice and human rights.
    Thank you.


     Thank you very much, Mr. Nazary.
    We now go to Mr. Gallagher.
    Mr. Gallagher, you likewise have five minutes.
    Thank you for the invitation to present here today.
    My name is Kelsey Gallagher, and I am a researcher with Project Ploughshares, where I focus on Canadian military exports and the international arms trade. My intervention today will focus on transparency and regulatory gaps facing Canada's export of dual-use technologies and military goods.
    Russia's 2022 invasion of Ukraine has demonstrated the need for effective regulations on transfers of dual-use goods. Despite the efforts of western states, dual-use goods have been found integrated into numerous weapons systems that Russia has deployed in its ongoing assault on Ukraine. A Norwegian risk consultancy firm recently found that, since last February, eight billion euros worth of sanctioned products had entered Russia, rerouted through third countries. Much of these goods were reported to be dual-use.
    In February, 2022, Canada revoked export and brokering permits to Russia for controlled goods, which included conventional weapons, dual-use goods and all other categories of technology listed under Canada's export control list.
    Although not without its flaws, Canada's reporting record on arms exports is relatively transparent. However, it publishes almost no information on its actual export of dual-use goods, unlike a number of like-minded states.
    Canada's export of dual-use goods requires greater scrutiny and transparency. To this end, Global Affairs Canada should begin publishing comprehensive data on Canadian exports of dual-use goods, as it does for other military goods. This information, at the very least, should include the value of those exports, descriptions of the goods, and their authorized end users. Such data, particularly on transfers to destinations that have been identified as conduits to bypass export controls, would provide greater insights on the potential proliferation of sensitive Canadian technology abroad.
    An examination of the extraterritorial application of Canadian sanctions could also reveal other weaknesses in Canada's regulatory regime. Of particular interest are alleged sanctions violations by companies with deep Canadian roots that also perform operations abroad.
    The Streit Group, an armoured vehicle manufacturer established in Toronto in the 1990s, is perhaps Canada's most controversial arms supplier. It now claims to be one of the largest privately owned armoured vehicle manufacturers in the world.
    While maintaining a Canadian headquarters in Innisfil, Ontario, it has established parallel manufacturing centres in several countries with weak export control regimes. The largest is in the UAE. It has been suggested that the Streit Group engages in jurisdiction shopping to identify export control havens that it uses to supply military goods to its most problematic customers and evade arms embargoes.
    The Streit Group has openly breached arms embargoes by shipping weapons to Libya, Sudan and South Sudan. In 2020, its vehicles were used by Belarusian security services to quell internal democracy protests. It has exported military goods to a host of other problematic locations.
    The company's activities have drawn scrutiny and led to investigations by the U.S. Department of Commerce and the United Nations. While an RCMP investigation was reportedly launched in 2016 following allegations of sanctions violations, no findings have been made public and there is no public record of any subsequent action.
    A 2017 publication by the Rideau Institute determined that “there is no doubt that the Streit Group's sale of armoured vehicles to Sudan violated Canadian sanctions” and that “the Canadian owner of the Streit Group, Guerman Goutorov, should have been investigated and—if sufficient evidence of law-breaking emerged—prosecuted under the United Nations Act.”
    The Streit Group stands as an example of significant weakness in Canada's export control regime. It appears that companies that want to circumvent sanctions only need to establish supply routes in third states, while making the tenuous claim that there is no connection between Canadian and foreign facilities.
    This case study illustrates a significant issue that must be addressed, and this issue is not location or company specific. As a prolific Canadian sanctions violator, the Streit Group provides a road map for other arms suppliers who may wish to dodge Canadian export controls and sanctions.
    The Government of Canada must double down on its efforts to confront the offshoring of arms production and maintenance, which allows for free flows of weapons to sanctioned states and actors. Efforts could include a study on the extent of this problem. Another recommendation would be to conduct a review of the effective enforcement of Canada's brokering controls, which were incorporated into the Export and Imports Permits Act in 2018. These controls aim to regulate the extraterritorial trade and transfer of conventional arms by Canadians and Canadian entities.
    I look forward to any questions. Thank you very much.


    Thank you very much, Mr. Gallagher.
    Now we will open it up to questions from members. For the first round we have five minutes.
    Mr. Genuis, the floor is yours.
     Thank you very much to the witnesses.
    I think the point is so important that Canada must maintain its commitment to Afghanistan in advancing freedom and democracy in Afghanistan and honouring the sacrifices of so many Canadians who fought and died in Afghanistan for Afghanistan's freedom, but also honouring those we fought alongside.
    Mr. Nazary, thank you for being here. I want to ask you three specific questions. I will ask them together.
    First, how can we in the present context pursue the advancement of freedom and democracy in Afghanistan? I think many Canadians would be feeling a little bit pessimistic right now. Perhaps you can help us chart the course to some optimism—not blind optimism, but some good, concrete action that we can take towards that goal.
    Second, can you share a little bit with us about the National Resistance Front? Are there ways in which you think we should be supporting you directly?
    Third, we're dealing in an ongoing way with Bill C-41, which in part is about trying to get humanitarian support to the people of Afghanistan while not in any way supporting the Taliban. How can we address the humanitarian crisis in Afghanistan and help the Afghan people in the immediate circumstances while still intensifying the sanctions and the consequences for the Taliban regime in response to the violence they are inflicting?
    I will hand it over to you. Thank you again.


    Thank you, Mr. Chair.
    To answer your first question, about how to support the people of Afghanistan during the bleakest hour of Afghanistan's history, I believe it's not giving up on Afghanistan's people, which I see is becoming a trend in the international community today. The people of Afghanistan did not bring these terrorists to power. They did not have any authority or any role in the transformation that happened in August 2021 with the collapse of the republic and the rise of the Taliban.
    The people of Afghanistan are still fighting for their freedom. They are still struggling for democracy, even though the international community, specifically NATO, left Afghanistan. They have shown this in many ways. One is the bravery of Afghanistan's women on the streets of Kabul and other cities in Afghanistan. Internationally, women are today struggling for their freedom and for their rights as human beings and as citizens in Afghanistan. At the same time, there's the political resistance the people of Afghanistan launched after August 2021, whether it was keeping the doors of the embassies open without any support or without any material assistance from anyone. We have had diplomats who have resisted succumbing to the Taliban. At the same time, they have kept their doors open in order to have a piece of Afghanistan free of terrorism and to represent Afghanistan on the international stage.
    To transition to your second question, there's also the National Resistance Front. From August 15, 2021, as the republic collapsed and as NATO was ending its presence in Afghanistan, thousands of Afghanistan's military forces—those who, as you mentioned, fought alongside Canadians, who fought alongside other NATO forces—were trained and advised by the international community for 20 years. They did not give up the struggle for democracy, for human rights, for pluralism, for justice and so forth. They continued it under a new banner known as the National Resistance Front.
    The National Resistance Front since then has been able to prove the international community false in their claim that the people of Afghanistan are tired of struggling for freedom and democracy and are tired of basically—
    We're just about to run out of time. What would the National Resistance Front like from us? How can we help you?
    Please be very brief.
    Of course.
    The National Resistance Front at this juncture needs the moral and political support of the international community, especially from partners like Canada. This is the least that we are asking for today. We need especially political support in order to further our cause in creating political consensus and a democratic alternative for Afghanistan, which we've started it in a political process in Vienna, Austria. So—
     Thank you, Mr. Nazary. I'm afraid I'm going to have to cut you off. You're over the time.
    MP Zuberi, you have five minutes.
    I'd like the thank the witnesses for being here today and for helping us to make our sanctions regime better.
    We know that we have three main sanctions regimes or instruments that work together around sanctions: one, we have UN sanctions that we apply here, which can include multilateral sanctions; two, we have SEMA, which has existed for a while, on special economic measures; and, layered on top of that, not wholly but in part, are the Magnitsky sanctions, which say that SEMA should be applied not only with respect to economic measures but to having a human rights lens when applying it.
    That being said, Mr. Nazary, you are involved in relief work. I know that you're involved in Afghan relief work. Importantly, you spoke about the current situation in Afghanistan, and you support robust sanctions on the Taliban regime.
    I would just like to know, given your humanitarian work, if you can tell us about the impacts, if any, on the people of Afghanistan with respect to these sanctions. Related to that, are our sanctions, the regimes that are in place, hitting those that we're intending on hitting?


    Thank you, Mr. Chair.
    To make it brief, the humanitarian crisis hasn't been caused because of these sanctions, whether on the international level or by individual countries. The humanitarian crisis is a direct consequence of the rise of the Taliban, of a terrorist group coming in and taking over a whole country, holding a whole population hostage and trying to exploit as much as possible from the situation. We don't see the sanctions themselves as the cause of this crisis or the reason for this crisis to continue or exacerbate.
    What we've seen is that the Taliban use this as an excuse on the international stage to receive concessions. At the same time, they are using the humanitarian crisis as a reason to relieve that burden of statesmanship and the responsibility to provide for the population of Afghanistan...onto the shoulders of the international community.
    Thank you.
    That is helpful. We are looking at doing at a cut-out for humanitarian relief within Afghanistan and other places to speak to what you're saying, and that's I think helpful what you just shared.
    I want to shift gears for a moment and go to Mr. Gallagher.
     If you can speak about what you were saying with respect to Canadian border controls, you were suggesting a study on that. Do you want to flesh out that idea a bit in your testimony here?
    Yes, it's my pleasure.
    One of our recommendations was for the Government of Canada to review how effective its implementation of brokering controls is. Brokering controls were implemented into the Export and Import Permits Act in 2018. That happened after Canada acceded to the Arms Trade Treaty, or the ATT—or due to that, I should say. That bill passed beforehand.
    What these regulations do is apply an extraterritorial layer on Canada's export control regime, so that if there's a Canadian entity or a Canadian citizen that is brokering an arms deal between a foreign exporter and a foreign importer, they are subject to Canadian controls. One of the reasons this was introduced is that brokering has been identified as a major driver of insecurity in the international arms trade.


    I think that's helpful.
    You said something about third states and arms suppliers. Can you, in 20 to 30 seconds, talk about that?
    Sure. The issue this is trying to address is actors who are actively trying to skirt Canadian controls, right?
    Canadian regulations are comparatively quite tight, so if an actor who we wouldn't want to export to needs a certain type of weapon, they could go to a country that doesn't have the same level of export controls that Canada has. That's really what these regulations are trying to address.
    I hope that answered the question.
     Thank you, Mr. Gallagher.
    We will now go to Mr. Garon.
    You have five minutes.


    Thank you.
    I'm going to start with you, Mr. Nazary. Like the NDP member, I would ask you to keep your answers brief since we have less time.
    Canada imposed sanctions on the Taliban regime under the regulations implementing the United Nations resolutions on Taliban, ISIL (Da’esh) and Al-Qaida. We know that countries have imposed sanctions on the Taliban regime independently of the measures taken by the UN. My question is twofold.
    First, how effective are the measures taken under the UN resolutions?
    Second, could Canada follow the lead of countries that decided to impose sanctions independently, on the basis of different triggers?


    Of course, I believe sanctions are a very important tool to use against the Taliban and other terrorist groups operating inside Afghanistan, and we have to remember that it's not only the Taliban.
    These sanctions will create the leverage needed by individual countries and the international community vis-à-vis the Taliban and other terrorist groups basically at a time when the international community has left the country, leaving them with $7 billion worth of arms and equipment and creating a situation where human rights are being violated. Half of the population, women, are being erased from public life, and other atrocities are happening. As I mentioned, the Amnesty International report came out yesterday. There has to be leverage against this terrorist group.
    If we give up on this leverage, what else do individual countries or the international community have against this oppressive regime, this terrorist group, that has taken the whole country hostage and is oppressive and tyrannical?
    It is very important to strengthen the sanctions regime, whether it's in the UN or individual countries, as long as the Taliban are acting in such a way that is not in the interest of Afghanistan's people or the international community.


    Thank you.
    Through Bill C‑41, Canada is in the process of amending the Criminal Code so that humanitarian organizations operating in Afghanistan can continue working on the ground without being seen as providing financial support to a terrorist group. Understandably, that has benefits. I'm curious about two things.
    One, is that something Afghan civil society has called for?
    Two, what risks might there be?


    Of course we believe that international aid and assistance should be delivered to Afghanistan. Millions, basically three-fourths of the population, are in need of international aid.
    In the past two years, billions have been delivered to Afghanistan. We haven't seen the humanitarian crisis alleviated; we've seen it exacerbated. There is a problem with how international aid and assistance is being distributed.
    The Taliban, of course, have a role in how it's being distributed. We've seen discriminatory policies where aid isn't reaching every community that needs it. This allows the Taliban to exploit the assistance, as we've seen in many reports coming out from the U.S. Congress such as SIGAR. We've seen that aid isn't going to communities that are in need.
     The National Resistance Front especially, for the past two years, because the international community hasn't been able to deliver aid to many of the communities, has taken up the responsibility. We've provided aid for more than 200,000 individuals within the country in communities where aid packages haven't been delivered and, basically, who are being deprived. Even when it comes to individual NGOs in Afghanistan, we've seen problematic mechanisms in place.
    We believe that international aid should continue, but there should be better mechanisms in place to prevent terrorist groups from exploiting the aid that comes in and for aid to be equally distributed throughout the country.


    Thank you very much, Mr. Garon.
    Mr. Green, you have five minutes.
     Thank you.
    Mr. Gallagher, I'm going to try to put three questions to you in a rather rapid-fire way.
    In your remarks you said that the Canadian-owned Streit Group is skirting sanctions in South Sudan and Libya. Expert UN panels monitoring sanctions have condemned the Streit Group for this. Under the last Conservative government, Global Affairs awarded a sole-source contract to them. When New Democrats raised concern about the lack of enforcement during the 2017 study at this committee, the RCMP could neither confirm nor deny whether investigations were taking place.
    Can you tell us more about this situation? Are there failures in Canada's sanctions enforcement or potential gaps in how we apply the Arms Trade Treaty when a Canadian-owned company is clearly contributing to international insecurity and skirting sanctions?
    To start off, with regard the RCMP, this is clearly another instance where there's not enough transparency. I'm assuming that it's the same instance of an RCMP investigation of this company. If my memory serves me, we only learned about this through the press. There should really be a greater degree of transparency when Canadian officials are investigating potential sanctions-busting, which I note other witnesses have suggested in this study.
    In terms of sanctions under the ATT, the ATT states that parties cannot transfer weapons systems. Article 6 of the treaty prohibits transfers if a state is under a UN arms embargo—so a sanction, obviously.
    This is where it gets more complicated: This company, the Streit Group, has insulated itself from Canadian export regulations, seemingly quite successfully, because the Canadian government is either incapable of doing something about this or is unwilling.
    That's why we point to brokering controls. This is an instance where.... These are innovative sets of regulations that aim to address sanctions violators that exploit offshore export havens. If the current tool kit isn't working, then the tool kit has to be amended. We think that this is a place where Canada could be innovative in looking at how something like brokering controls could apply.
    Are there any international examples that have stronger, gold-standard legislation on that?
    With brokering, it's hard to say. This is not a new problem, but it's a new set of controls. The Arms Trade Treaty, which made brokering a regulated act, at least for ATT-state parties, only recently celebrated its 10th anniversary since entering into force. This is relatively new stuff. At this time, I wouldn't be able to point to a gold standard.
    Fair enough.
    In August, it was revealed that the CBSA disrupted an attempt to send dual-use goods—you referenced that—to Russia in violation of sanctions imposed following the invasion of Ukraine. Last week, the CBSA confirmed to this committee that it has seized a number of shipments with Russia as the declared end destination. Could you tell us more about the problem of dual-use goods and whether there are problems with designated end-users?
    Dual-use goods are somewhat of a hot topic right now. It's because of the war on Ukraine. Russia and other states are seeking dual-use goods because their supply chains have been cut off.
    Going back to our recommendations.... We really don't know the extent of this problem because there is almost zero transparency on Canada's export of dual-use goods. The only type of information that we have is when Global Affairs Canada has authorized permits for dual-use exports. However, we don't have the end-user; we don't have values. The only specific type of information that we have on dual-use permits is when they've been denied.
    We know that last year Canada denied 22 permits to Russia following the invasion of Ukraine, but over the prior five years, there was only one permit denied, which does suggest that dual-use goods were, indeed, flowing to Russia. We, obviously, can't say that for sure, but that's what the data would suggest.
    Briefly, beyond transparency, what would we be doing to prevent Canadian-made weapons or systems of dual-use goods from getting into the wrong hands?
     I would say that Canadian officials should look at systems right now that are actually not deemed to be dual-use but certainly are. These are sometimes referred to as “commercial off-the-shelf” items or COTS items. These are actually marketed as such to suppliers because suppliers know that these are not caught up in red tape.
    There are, certainly, military goods made in Canada that are not deemed to be dual-use, and we would absolutely argue that they should be.
    Thank you.


     Thank you.
    We now go to the second round of questioning.
    We start off with the honourable MP Chong. You have four minutes for this round.
    Thank you, Mr. Chair.
    Through you, Mr. Chair, I'd like to focus on enforcement as it relates to the machinery of government.
    Currently, as you know, applications for permits under the Export and Import Permits Act are done by a specific unit within Global Affairs Canada, the Export and Import Permits Act unit—I don't know the exact title.
    Then, separate and distinct from that is the criminal, security and diplomatic law division within Global Affairs, which handles permits or certificates under the Freezing Assets of Corrupt Foreign Officials Act and other acts.
    There have been suggestions that these two entities should be combined into one unit within Global Affairs. What's your view?
    Thank you for the question.
    It's the export controls division that was referenced.
    I don't know the current size of the latter enforcement mechanism mentioned. It—
     Well, the Government of Canada has announced $75 million for beefing up this particular unit—the criminal, security and diplomatic law division. Some of that is going to the RCMP, but I understand the bulk of it is going to this division, separate and distinct from the unit that handles permits under the Export and Import Permits Act. It seems to me there would be economies of scale in combining the two, and also better coordination.
     Sure, there is merit in the suggestion, particularly as they would sometimes be looking at certain things. The export controls division doesn't operate vis-à-vis sanctions the same way that other organisms of the Canadian government do. When Canadian officials are looking at whether or not to authorize an export permit, the first thing they look at is whether or not the proposed destination or actor is sanctioned. If they are, then that permit is obviously not approved.
    There could be merit to the idea that they could be combined. That's all I would have to say.
    Thank you, Mr. Chair. I don't have any other questions.
    You have a minute remaining.
    It's okay.
    I can take it, Mr. Chair.
    The Chair: Okay.
    Mr. Garnett Genuis: Thank you.
    Perhaps I can give the additional time to Mr. Nazary. He was speaking about something going on in Vienna at the end of my last question around the work of the NRF, and a coming together there.
     I wonder if you could share a bit more on that.
    Of course, Mr. Chair. Thank you.
    Because of our assessment that the Taliban haven't been able to form state institutions, haven't been able to provide for the people and haven't been able to provide security and stability in the country, we foresee that their disintegration will happen much sooner than anticipated. Once this happens, it will create power vacuums throughout the country. It is very important for us to start preparing politically for the future, to politically unite the opposition, the democratic forces, whether inside or outside Afghanistan, and to create the political consensus that can lead to a democratic alternative that can fill the power vacuum once it is created in the next year or two, or whenever it does happen in the foreseeable future.
    So, in Vienna, Austria, we have started a political process to unit the opposition. We had our second round last month, and we are very much on a trajectory to achieve a democratic alternative for Afghanistan's future.


    Thank you, Mr. Nazary.
    We next go to Mr. Sidhu.
    You have four minutes.
     Thank you, Mr. Chair.
    Thank you to our witnesses for being with us here today.
    I have a question for Mr. Gallagher.
    Mr. Gallagher, in your opening, you briefly mentioned improvements that could be made to our sanctions regime. Now that we have a bit more time to delve into this, what are some of your suggested improvements or changes to Canada's sanctions regime and to its respective legislation that you would suggest to our committee here today?
    I would again look back at means to enforce the current controls that we have. We know there are Canadian companies, or companies with Canadian connections, that are openly busting sanctions. Any effective export control regime would find every means possible to interrupt those violations of sanctions.
    Again, I will point to brokering as a potential means to do this. This is a new control measure within Canada's tool set. We honestly do not have a very good understanding of how this works. We've followed up with Canadian officials more than once. We've even brought up the name of the company mentioned in my opening statement, and we still fail to get a comprehensive understanding of how Canadian brokering controls work currently and of why they wouldn't work for those companies that we know are actively busting sanctions by providing arms to countries under embargo.
    I would say to look at pouring resources into the tools that we already have to upscale their effectiveness. I would say to look at other states parties to multilateral treaties like the ATT and other arms control treaties, such as the Wassenaar Arrangement, to find best practices in applying the regulations that we already have. We accede to these treaties for a reason. The reason we acceded to the Arms Trade Treaty was to interrupt the human rights violations posed by the international arms trade.
    We should look to make the tools at our disposal as effective as they could be.
    Thank you for sharing your thoughts.
    Mr. Nazary, do you have anything to add to this?
    I do not have a specific answer to this. Thank you.
    No worries. Thank you.
    You spoke briefly about Afghanistan and the humanitarian situation that's happening there. I know we are working with humanitarian multilateral organizations to ensure that we're able to provide assistance. Education in Afghanistan, that's something I'm hearing a lot about from constituents and other Canadians. The Taliban regime there is preventing women from getting an education.
    Do you have any thoughts on this and on what Canada can do to help?
    As I've mentioned before, I believe that better mechanisms should be adopted by the international community when it comes to supporting the civil society in Afghanistan.
    Since you raised this matter, strengthening education, especially clandestine education for girls and women, has to be done in a very clever way to support and strengthen as much as possible those organizations that are providing such education for Afghan girls and women
    Thank you.
    Mr. Chair, how much time do I have left?
    I'm afraid you're out of time, Mr. Sidhu.
    We will next go to Mr. Garon.
    You have two minutes.



    Thank you, Mr. Chair.
    This is for you, Mr. Gallagher.
    From an international relations standpoint, Canada has like-minded partners that have developed tailored sanctions regimes for particular issues—weapons of mass destruction and cybersecurity, for instance. Those partners have additional triggers under their legislation that is equivalent to Canada’s Special Economic Measures Act.
    In a world where quick action is often needed and unforeseen circumstances arise, are the triggers under Canada’s sanctions legislation broad and flexible enough for us to meet our foreign policy objectives quickly?


    I would say yes, when there is the political will to do so....
    Very quickly following Russia's 2022 invasion of Ukraine, Canada announced a position. As far as I understand, this wasn't legislated. This wasn't a regulation, but a new position that Canadian officials were going to immediately stop the further issuance of export permits for any controlled goods to Russia and actually revoke existing permits. That is essentially as far, typically, as our officials will go as it relates to export controls. This happened in a matter of days, I would say.
    When something happens, there certainly are mechanisms to stop the future provision of weapons and to cancel permits that allow any weapons exports that have been approved.
    Other examples where this has happened would be Belarus in 2019, as well as Turkey in 2019 and further in 2021.


    Thank you.


    I'm afraid you're out of time. It's been over two minutes.
    It's over to you, Mr. Green. You have two minutes.
    Mr. Gallagher, in its May 2023 report on Canada's autonomous sanctions, the Standing Senate Committee on Foreign Affairs and International Trade called for more consistency in Canada's application of sanctions in response to human rights violations.
    Would you agree that Canada has imposed autonomous sanctions in response to human rights violations inconsistently? If so, which countries do you think have so far evaded appropriate sanctions?
    Certainly sanctions are necessary in many of the instances where Canada has leveraged them. In other instances, Canada has failed to leverage sanctions and has continued to provide a huge amount of weapon systems to countries that are known to misuse them. The prime example here would be Saudi Arabia, which continues to be the second-largest consumer of Canadian weapons, only behind the United States.
    Using the term “sanctions” broadly there, I think a sanction on the provision of weapons to Saudi Arabia is necessary, as continued exports is a breach of the Arms Trade Treaty and EIPA. That's speaking broadly on sanctions. There are certainly other states—
    Mr. Matthew Green: Do any come to mind?
    Mr. Kelsey Gallagher: Another would be the UAE. Certainly the UAE has been shown to have a callous disregard for the protection of human life throughout its bombing campaign in Yemen.
    The newest annual report on military exports was tabled last week on May 31, so we have all the new data on Canada's annual exports in military goods for last year. There is a list of countries, certainly, that we should stop exports to.
    For my last question, should Russia be added to Canada's area control list?


    That list is a mechanism whereby a state is listed and everything that goes to that country can only be sold, basically, with an export permit. There's certainly merit in that idea, if we wanted to look at stopping the provision of anything to Russia. This is quite a blanket approach.
    The only country that's currently on the area control list is North Korea. The area control list has not been updated since Belarus was taken off of it a number of years ago.
    It's certainly a mechanism that could have merit in stopping the provision of weapons—things like dual-use goods that might sneak under the rug, and also commercial, off-the-shelf items that should be listed as dual-use but are not for whatever reason.
    Thank you. I'm out of time.
    Thank you very much.
    We now go to Mr. Genuis. You have four minutes.
    Thank you, Chair.
    Mr. Gallagher, I'm very concerned about the phenomenon whereby big international companies such as McKinsey & Company do work for western militaries. They develop knowledge about structures and organizations. They also then work for the militaries of hostile powers.
    In these cases, we're not talking about the transfer of weapons or technology. We're talking about the subtle ways in which know-how is developed and then used to facilitate learning and greater effectiveness by actors that are abusing human rights and contrary to our values.
    Do you have thoughts on how the government or sanctions regimes could address this more intangible transfer of knowledge?
    We might refer to it as "knowledge transfer", and this is actually a permanent activity. Training would come under knowledge transfer. Any sort of conversations that you and I would have would be knowledge transfer, as well as things like the transfer of intellectual property.
    That is certainly controlled—
    To jump in on that, though, we're not talking about explicit transfer of information.
     McKinsey would say that they're protecting their clients' proprietary information; they're not transferring patents or anything like that. However, I think it's clear that they are learning practices in terms of how to work in a certain space and then they are applying that learning in other places.
    Would or could that still qualify as a controlled activity, or do you think it would fall outside of the scope of current understanding?
    It would have to be for a military end use. I am not familiar enough with the company to give an informed answer on that in particular.
    Certainly if it's for military end use, then yes, it should be deemed controlled—absolutely.
    Okay. I think that's very interesting.
    To go back to Mr. Nazary, you spoke about a scenario in which we could see a Taliban collapse essentially opening up space for an alternative democratic government to take power.
    That's very interesting.
    Do you have thoughts on a prospective timeline for that? How can targeted sanctions accelerate that prospect of effective Taliban collapse?
     What we see, because of the multi-faceted crises that Afghanistan is facing and because the Taliban isn't a monolithic group—it's divided into warring factions that are competing over power and resources—is that the rift of the past two years has deepened. What is happening today is leading to their disintegration, and as long as this continues their grip on power will weaken.
    At the same time, what the international community can do is to increase its pressure through sanctions that can weaken it. This will give the democratic forces of Afghanistan space. It will give us the opportunity to be able to form that alternative for our future, which is needed establish a democratic government that treats every single citizen, regardless of their gender, religious beliefs and ethnicity, equally.
    Thank you.
    In the 30 seconds I have left, I would like to ask you to follow up in writing regarding specific kinds of sanctions that could be helpful in bringing about that Taliban collapse.
    Finally, could you clarify whether you are in the process of trying to build, then, a government in exile, and are you looking for military support from allies and partners?
    Thank you.
    Mr. Nazary, could you kindly submit responses to those two questions, as we're almost out of time?
    For the final question, we go to Ms. Bendayan.
    Ms. Bendayan, you have the last question. Do you not have your headphones?
    [Technical difficulty—Editor]
    Do any of the Liberal members wish to speak?
    Yes, Mr. Sidhu. You have four minutes.


    If I may, I would ask the witnesses for final thoughts on improving SEMA or the Magnitsky act?
    I know that time is running late, but could someone add some comments on that, perhaps Mr. Gallagher?
    Was the question on how we can improve the Magnitsky act and SEMA?
    That's correct.
    Again, we're focused mostly on export controls, but there is certainly overlap with sanctions there.
    We would bring it back to transparency. If there are instances where Canadian officials have investigated alleged violations of sanctions busting, this is very serious stuff. That is why this committee is meeting on this topic.
    Our immediate response would be to engage with a much higher level of transparency so that we can actually understand the scope of the problem.
     Mr. Nazary...?
    Mr. Nazary, do you have anything to add to this before we wrap up?
    Thank you. I have no comment.
    At this point, I'd like to thank Mr. Nazary and Mr. Gallagher. We are very grateful for your time and expertise. We will certainly be in touch going forward.
    We would be grateful if you could provide any responses that you undertook to provide to members of the committee.
    Before I adjourn, I want to confirm that there is unanimous consent for the proposed budget in the amount of $30,950 for the study of Canada's sanctions regime. That proposal was distributed to all of you this morning.
    The last thing I want to point out is that we're very grateful that we have two distinguished guests here in the audience with us. We have Elias and Lévi. They are luminaries here. They are the clerk's sons, whom everyone in this committee has heard from.
    Some hon. members: Hear, hear!
    With that being said, the meeting stands adjourned.
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