OTTAWA — A Senate committee says Canada needs to sort out the intent of its sanctions before assessing whether they’re working, and must undertake major upgrades to put its system on par with those of Ottawa’s allies.
The report by the Senate foreign-affairs committee, tabled Tuesday in Parliament, urges Ottawa to focus on "due process, procedural fairness and transparency" — and finds gaps with its approach to each.
The study follows testimony that suggests Canada is seen as a laggard, since it publishes significantly less information about who has been sanctioned, why those decisions have been made and what companies should do to comply.
The committee chair, Sen. Peter Boehm, said the report comes after a year of Ottawa drastically expanding the number of people it has targeted, due to Russia's invasion of Ukraine and paralysis within the United Nations system that is used to implement global sanctions.
Ottawa's main sanctions law came into place in 1992, and was used just twice by 2006. But in 2022 alone, Ottawa has issued 44 rounds of sanctions under that mechanism, and listed more than 1,600 individuals and entities associated with Moscow.
"Government reaction has been done on the fly after the invasion of Ukraine, and the amount of consultation (with other countries) is unprecedented," Canada's former top diplomat for international summits said in an interview.
"It's as if there is a new rules-based order that's appearing, and that is the one of sanctioning and enforcement. Because through the Security Council at the UN, it's just not going to happen, for obvious reasons."
Russia continues to hold a permanent seat — and a veto — on the council.
Multiple experts told the committee they're not sure to what degree Ottawa is actually enforcing the sanctions it chooses to impose, with just one person and one business being charged with breaching sanctions laws in more than three decades.
The senators say this gives barely any legal precedence to help companies interpret the rules.
Legal experts testified that an overall lack of clarity puts Canada at a disadvantage, because companies aren’t sure when they are barred from doing business with a company.
The U.S., Britain and the European Union specify the percentage of ownership by a sanctioned individual that bars people from doing business with an entity.
But there is no stated threshold in Canadian law.
Experts said that means companies try to guess, or take a cautious approach that puts them at a disadvantage against their peers in countries that have clear laws.
Senators say Ottawa could amend its laws to require the issuance of guidance on complying with sanctions.
They also say Canada should regularly review who is listed for sanctions, since the resources required to monitor thousands of people could outweigh the impact of keeping sanctions in place.
One option to address that would be creating a five-year sunset clause when sanctions are issued, the senators suggest. The government would need to formally extend the sanctions for an individual to be subject to the embargo past that time.
Boehm said that overall, Canada could do a better job collaborating with like-minded countries on how best to apply pressure to human-rights abusers — including those that get less attention in Ottawa.
Clara Portela, a sanctions expert with the University of Valencia in Spain, warned senators that sanctions can amount to a public-relations exercise when there is no guaranteed follow-through.
"Sanctions might be imposed — not with the idea of bringing about a policy change — but with the objective of showing that administrations are proactively dealing with an international crisis," the report quotes her saying.
Canada has also been accused by leaders in Haiti and Sri Lanka of sanctioning high-profile elites as a sop to diaspora voting blocs, though the Senate report does not make that suggestion.
Senators do accuse Ottawa of issuing "broad statements of intent" for sanctions without saying what behaviour they are trying to incentivize. They say the lack of a stated goal makes it impossible to measure whether the sanctions are actually working.
"The government of Canada should specifically outline the objectives associated with a given sanctions regime and clearly communicate those objectives to the public," the senators argue.
The government has promised to hire more people to enforce Canada's sanctions regime.
But more should happen, senators say. They argue that Ottawa should issue press releases and regulatory notices in a more timely way when sanctions are issued, and publicly report on how many assets are frozen and seized annually.
Senators also recommend that Ottawa produce a consolidated, searchable, public listing of all entities facing sanctioned, including "the reason why" — and create a clearer process for removing people from the list.
The way the system stands now, firms seeking exemptions must apply for waivers through a cumbersome and unclear process, senators say.
They argue Canada should follow other countries in issuing blanket waivers. For example, U.S. companies can contact Russian finance officials in order to protect intellectual property rights.
Beyond their recommendations on the finer points of Ottawa's sanctions regime, senators are raising concerns about its overall fairness.
The government is not currently required to tell people when they've been put on the list, give them the reasons why or inform them how they can appeal the decision.
Last October, a Global Affairs Canada official testified that Ottawa has had 18 people ask to be taken off sanctions lists since 2018. One of those requests was rejected, the official said. The rest never got a reply.
Thanks to legislation passed last June, Canada is among the first countries that can seize cash and divert it to people victimized by human-rights violations.
As of Monday, Ottawa has yet to follow through on a promise Foreign Affairs Minister Mélanie Joly made five months ago to try using the law to confiscate and divert assets held by Russian oligarch Roman Abramovich.
But the report urges caution.
Proceeding could put Canadian companies abroad at risk and undermine the rule of law if it is not done with due process, senators say.
They are urging Ottawa to "proceed prudently with respect to any forfeiture process to both ensure due process and to mitigate any unintended consequences" and work in lockstep with allies.
The House of Commons foreign-affairs committee has pledged to undertake its own study of Canada’s sanctions regime after hearing from multiple witnesses that the system does not seem effective or transparent.
This report by The Canadian Press was first published May 16, 2023.
Dylan Robertson, The Canadian Press
