Speech on Bill S-217: The Frozen Assets Repurposing Act

On December 7, 2021 Senator Omidvar spoke to Bill S-217, An Act respecting the repurposing of certain seized, frozen or sequestrated assets. This bill was known as Bill S-226 and Bill S-259 when it was introduced in previous Parliaments. Watch her speech:

Hon. Ratna Omidvar: Honourable senators, I rise today to speak to Bill S-217, An Act respecting the repurposing of certain seized, frozen or sequestrated assets, which I will refer to as FARA. I have tabled this bill twice and I hope the third time works like a charm. I find myself again battling the dinner clock and I will try my best to bring it in under.

Before I begin to share the details of this bill with you, I would like to thank the institution that has come up with this proposal and it is the World Refugee & Migration Council, which has tasked itself to be a catalyst, catalytic, to think of out-of-the-box solutions and face some of the most significant crises in the world today, which is the crisis of the forcibly displaced people of the world, those who flee their countries for safety and those who are internally displaced because they cannot flee their country. I am a very proud member of this council along with noted academics, former heads of state, former ministers, Nobel Peace Prize winners and activists.

I would also like to take a moment to thank our colleague, former senator Raynell Andreychuk. As we all know, she was the one who shepherded the Magnitsky Act through this chamber, through the House of Commons and it was called into law. This bill rests on her shoulders and builds on it.

In addition, in the last election this proposal was included in the policy platform of the Conservative Party, as they recognized that it is one key way of dealing with corruption. The Liberal Party platform of 2018 also included it in their platform and, in fact, this was in the mandate letter of then foreign minister, global affairs Minister Champagne. If FARA is called into law, Canada will be able to seize the frozen assets of corrupt foreign officials held in Canada through court order and repurpose them back to alleviate the suffering of the people who have been harmed most by their action. In this way, it squares the circle.

Why is this important? For one, the world is facing a forced displacement calamity; there are over 82 million people affected around the world. Half of them, colleagues, are children who have fled their homes because of armed conflict, violence, persecution and human rights abuses. This is the second-highest number of the forcibly displaced since the Second World War and the numbers continue to rise daily. This has created a significant strain, especially on those jurisdictions that border the places they came from, and they themselves are challenged to meet the needs of their own citizens, let alone thousands of arriving refugees.

Colleagues, I speak to this partly from personal experience. As someone who had to make the decision to leave a country and a home in the middle of the night, a decision to flee is never an easy one. It is fraught with peril and, frankly, it paralyzes you with fear. I can still remember what it was like to cross the border from Iran into Turkey in 1981. I can still smell the fear that was pervasive in the room that we were being processed through. It was our fear, of course, but there was also the fear that I sensed in the Revolutionary Guards who were surrounding us. Here is the difference, however: They were barely 14 or 15 years old, but they had weapons and bayonets. I think we all recognized what a toxic combination fear and weapons can be.

I shared this story with you once again, colleagues, because I want you — I need you — to walk in the shoes of those people and feel their fear, loss and helplessness.

Of course, I’m one of the lucky ones. I was able to come to Canada, and I have had a productive life with my family. That is not always the case for the people who are forced to flee. The displaced people of the day live in squalor. There is little food. Fresh water is scarce. Disease and danger lurks everywhere. Sex and human trafficking are growth industries in such settlements.

Resettlement, an option that Canada is rightfully proud of, only applies to a slim 10% of the world’s refugee population. It is countries like Bangladesh, with the Rohingya refugees; Uganda, with the South Sudanese; or Colombia, with the Venezuelans that are most at risk. Now it is true for Pakistan, with the Afghan refugees. All have opened their doors to let people in, some more than others, but let’s not forget that it has put an enormous strain on them, their communities, their economies and their social fabric.

In addition, let me note that forced displacement is no longer a temporary phenomenon; on average, it lasts 20 years — whole generations of human beings knowing nothing more than living a protracted existence on the margins.

Clearly, we need more money, but money for refugees is hard to come by. There is simply not enough money in the system. The UNHCR, as one example, is only ever able to reach 60% of its annual budget. These are not just numbers but lives at risk.

Yet there’s a whole lot of corrupt money floating around. Anyone who has read the news about the Paradise Papers, the Pandora Papers and the Panama Papers know that corruption is a growth industry. The World Bank estimates that $20 billion to $40 billion in development assistance money is stolen by public officials every year. According to the United Nations Secretary-General, embezzlement, tax-dodging, bribes and payoffs worldwide cost roughly $3.6 trillion every year.

Even more pertinently, it is estimated that corrupt leaders of countries with large populations of refugees have deposited billions of dollars in cash and assets in foreign jurisdictions. It is reasonable to assume — in fact, it is reasonable to be certain — that some of this money is parked right here in Canada because of our reputation as a country with good financial governance.

So how would this bill work? As I noted, Canada already has a number of sanction regimes that permit us to freeze the assets of corrupt foreign officials. The decision on whether to take the next step and seek a court order for confiscation, which would repurpose the assets back to the victims, would be made exclusively by the Attorney General of Canada. Only the Attorney General or someone with the AG’s consent could make an application to a provincial superior court.

How would the AG come to this decision? The AG would act on behalf of the government as a whole. They would no doubt confer with their colleagues, including the Minister of Global Affairs. They would be informed by reports and documents, and by lists of frozen assets that are already there from other reputable sources, such as journalists, academics, fact-finding missions, et cetera.

The AG would then make an application to the court. The court would then decide, based on evidence, if the confiscation should proceed. The court would give notice, hear witnesses and weigh evidence, including from representatives of foreign officials. The court would make a decision based on the balance of evidence.

If the court decides that confiscation should proceed, then it would also, in the ruling, set out the criteria and the plan for the distribution of the assets. The court would decide to whom and how the assets should be distributed. Should they go back to the country of origin? Should they go to the UNHCR, Doctors Without Borders or the World Bank? Should they go to the neighbouring country that is dealing with the massive influx of refugees?

The court would also decide on the means to monitor the implementation of the order, thus providing accountability and transparency.

Let me play this out in real life. Canada has already frozen the assets of military generals in Myanmar who have committed genocide against the Rohingya and forced a million people to flee to Bangladesh. Canada, through the court, would be able to confiscate their assets and repurpose them back to help the Rohingya, who are currently in really dire and miserable situations in the refugee camps in Bangladesh. It would be the court’s decision whether to repurpose the money to an NGO, to Bangladesh or any other institution.

There are other examples, but I will skip them. I want to speak briefly to the principles of the bill.

The first principle relates to accountability. Dictators, human rights abusers and kleptocrats have acted with impunity for far too long. They need to be held to account. They have purloined the wealth of their nations, leaving a trail of victims in their wakes.

The second principle is justice by seizing the ill-gotten gains and repurposing them back in support of those whose lives have been destroyed. I hope you will see moral symmetry at play here. Actions have reactions, and there must be consequences. Without consequences, we are left with words full of sound and fury signifying, possibly, nothing.

The third principle is due process. The bill proposes that the seizure of assets of corrupt foreign officials take place through court order. Only a judge will decide, based on the balance of evidence provided to them whether to proceed on the matter. Only a judge will decide whether the seized assets are returned to the source country or to another jurisdiction. That requirement adds transparency, because the application and evidence will be public, the hearing will be open and the results, with reasons, will be published. In addition, a court hearing will ensure that anyone who has a potential interest in the frozen assets can come before the court and make their case.

The fourth principle — and an important one — is openness and transparency. Canadians and the public will know, through a public registry, not just the names of the corrupt officials but also the value of their frozen assets.

The fifth principle is compassion, but with an edge. With a heavy dose of pragmatism, we can empathize and sympathize, and use lofty words for all the plight, but the displaced of the world need housing, safety, education, health care, food and water. All of that comes with a cost, and the UNHCR, we know, is not able to meet the growing demand, with the growing numbers of displaced people. By repurposing stolen money back to those who have suffered the most, this bill will create a new source of financing to provide urgently needed resources for the victims of the unfortunate phenomenon of displacement. This is compassion linked to action.

Finally, this bill is about good governance. Canada should not and must not be a safe haven for ill-gotten gains. In this chamber, we are looking at other avenues of hidden corrupt money. This bill sends a strong message to corrupt leaders that, “You and your money are not welcome in this country. This is not a place where you can hide it or grow it.”

Honourable senators, some of you have asked whether the courts are, in fact, the right vehicle for this bill. To that, I offer two responses. First, the courts have the expertise to deal with such matters. The courts are regularly called upon to deal with issues of asset confiscation, albeit in different circumstances. Currently, the courts oversee the confiscation and distribution of proceeds of crime from drug cartels, gangs or other criminals.

My second observation is that the involvement of the courts will guarantee openness, impartiality and fairness. The courts are well positioned to be the principal actors in this bill.

Some of you will be thinking of the million-dollar question that we are always faced with: Does this legislation conform to the Canadian Charter of Rights and Freedoms?

The Hon. the Speaker: I’m sorry to interrupt you, Senator Omidvar. Lately, you’ve been in conflict with the six o’clock rule. You will be given the balance of your time. My apologies.

Hon. Ratna Omidvar: Honourable senators, I sadly lost the challenge to the dinner clock, but I hope I have moved your hearts and minds. We were at the spot where I was talking about Charter challenges and constitutionality. Let me pick it up from there to briefly reconfirm what I have said, because my memory is frail, and if you’re like me, your memory is frail too.

My bill will seek to seize frozen assets and repurpose them back through court order to victims of corruption, in particular, victims of mass human rights violations and forced displacement. So the question really is: Is this Charter-proof?

Let me quote from a policy paper published on this particular question by the World Refugee & Migration Council, which was prepared by a noted lawyer, no less than former Attorney General of Canada and former Canadian ambassador to the United Nations Allan Rock. He says:

The section of the Charter that could potentially be invoked to attack asset freezes and confiscation is section 7 — the right to life, liberty and security of the person. . . . Although this section has been held by the courts to be very broad, the jurisprudence has also made clear that section 7 generally does not protect and apply to the economic rights of the applicant.

This is further underlined by Justice Gagné, who ruled in the case involving the freezing of the assets of former President Ben-Ali of Tunisia. She noted, “. . . generally, neither the right to hold employment nor the economic interests of the applicants are protected by the Charter.”

The paper concludes on this point:

. . . it is unlikely that an applicant would be successful in challenging Canadian legislation providing for the freezing and confiscation of the assets of corrupt foreign officials on the ground that it contravenes the Charter.

I would like to point out another very important aspect of this bill. Currently, we do not know the value of the assets that have been frozen in Canada. We know the names of the individuals, but we actually do not know whether they have any assets in Canada. There is no public transparency, since the government is not yet obliged to provide this information. This bill will raise the curtain, make it less opaque and compel the government to list not only corrupt foreign officials but also provide the value of their assets. In the absence of this information, Canadians are not able to advocate for confiscation and opportunities to achieve the benefits that I’m talking about.

Finally — and I’m glad I have the time to talk about this a little bit more — this legislation is not unique. We are following best practice from where? Switzerland, the original home of all assets held by all kinds of people in secrecy forever.

In 2015, Switzerland, to clean up its reputation, enacted the Foreign Illicit Assets Act. Under that law, the Swiss government can apply to their federal court to confiscate foreign assets. If granted, Switzerland can send the assets to the country of origin or another entity for the purpose of improving the lives and conditions of the inhabitants of the country and supporting the rule of law in the country, thus contributing to the fight against corruption.

In fact, I think they repurposed stolen assets back to Kazakhstan by court order and used a foundation to provide education for children in Kazakhstan. Both the United Kingdom and France are currently looking at similar legislation. The EU, which recently enacted Magnitsky, is also looking at this legislation as the next step in their fight against corruption.

This brings me to the final reason I believe this legislation is important. If Canada succeeds in passing it, I believe that others will follow. We followed the example of the U.S. in calling the Magnitsky Act into life, and former Senator Andreychuk improved on the U.S. version once it came to Canada.

The same narrative may well follow this act. This bill, I believe, will ignite the imagination of other jurisdictions by providing a concrete example of how individual jurisdictions can act. Others will pick it up and improve on it, and Canada will be the transformative leader.

In conclusion, colleagues, for far too along corrupt foreign officials have acted with impunity. They have not only stolen mass wealth but have created significant hardship for their people. Their actions have contributed to the displacement and misery of millions of people. Calling them out is simply not enough. We have to make them pay, and FARA will accomplish precisely that.

Thank you, honourable senators.

Some Hon. Senators: Hear, hear.

Hon. Pierre J. Dalphond: Honourable senator, will you take a question?

Senator Omidvar: Of course.

Senator Dalphond: If I understood what you said, you proposed we deal with these assets the same way we deal with what we call the Proceeds of Crime Act in Canada, not in a criminal proceeding but in a civil proceeding where it’s the balance of probability and not the higher level of evidence that is required, and where we confiscate, and the judiciary will give an opportunity to everybody to speak. Then the assets will be handed over to an organization that the court will decide based on whatever the Crown or the Attorney General will propose.

As a judge, I’ve been involved in cases where we had seized money. It’s often more effective than criminal actions, because we take the money; we take the property; we take the gold, the jewellery and so on, and that hurts.

I certainly support your bill. It’s a great opportunity to go after criminals who are living beyond our jurisdiction but have assets here. As you said, if it’s corruption, it’s a crime. If a crime was committed, it’s the proceeds of a crime.

If I understand well, you will propose civil proceedings similar to what we have for criminal money. I certainly support that. Thank you.

Senator Omidvar: Thank you, Senator Dalphond. I always dread questions from the lawyers in the room, because I’m not a lawyer. This one I’m grateful for, because you got it completely right. It is not a criminal court proceeding but an administrative court proceeding.

Thank you for your support. I hope you will help me pass this and get it to the Foreign Affairs Committee so we can very quickly get witnesses, discuss this and bring it back to the chamber. Thank you.