SPEECH: Bill S-259, Frozen Assets Repurposing Act at Second Reading

Watch Highlights from Senator Omidvar’s speech on the Frozen Assets Repurposing Act:

Honourable senators, I rise today to speak on Bill S-259, the frozen assets repurposing act, which I will refer to as FARA.

Before I begin to share the details of this bill with you, I would like to thank the originators and thinkers behind this proposal. They are the World Refugee Council, which was called into life three years ago by the Centre for International Governance Innovation, or CIGI. It tasked itself to be a catalyst and to look at transformative and out-of-the-box solutions to address one of the most significant crises in the world today, the crisis of the forcibly displaced people of the world: Those who flee their countries for safety, and those who are internally displaced and cannot flee their country. I am a very proud member of this council, along with noted academics, former heads of states, former ministers, Nobel Prize winners and activists.

The World Refugee Council released its report entitled A Call to Action: Transforming the Global Refugee System this January at the United Nations. It urges nation states, regional organizations and multinational institutions to do more than just talk; it urges them to take action. This bill is a direct response to the call for action. Repurposing frozen assets of corrupt foreign officials is one of the recommendations, and I am very pleased to bring it to you in the form of legislation today.

I would also like to thank Senator Andreychuk. As you all know, she was the one who spearheaded the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law), or the Magnitsky Act, through Parliament and into law. That act ensures that foreign leaders do not find a safe haven for their ill-gotten gains — at least not in Canada.

The bill I am speaking to today stands on the shoulders of the Magnitsky Act, and I, in turn, Senator Andreychuk, stand on your shoulders. They are slim but, metaphorically, very broad.

If Bill S-259 is called into law, Canada will be able to seize the frozen assets of corrupt foreign officials through court order and repurpose them to alleviate the suffering of the people who have been most harmed by their actions. In this way, it will square the circle.

Why is this important? For one, the world is facing a forced displacement calamity. There are nearly 70 million people around the world. Half of them, colleagues, are children who have fled their homes because of armed conflict; violence; persecution; and human rights abuses, including torture, sexual assault and exploitation. This is the highest amount number of the forcibly displaced since the Second World War, and the numbers continue to rise daily. Over 25 million are refugees who have left their homes and crossed international borders, but another 45 million are internally displaced within their own countries. This has created a significant strain, especially on those jurisdictions that border these places and are themselves challenged to meet the needs of their own citizens, let alone thousands of arriving refugees.

Colleagues, as someone who had to make the decision to leave a country 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. I will never forget trying to pack one bag. What should I put in it? Should I pack books, photos or medicine? I think there is a bit of sanity in me that prevailed, and in the end, I packed the most important things, which were baby formula and diapers.

I can still remember what it was like to cross the border from Iran into Turkey. I remember. I can almost still smell the fear that was pervasive in the room. It was our fear, of course, but there was also the fear that I sensed in the revolutionary guards who were surrounding us. But here is the difference: They were barely 14 or 15 years old. They had weapons, and they had bayonets. We all recognize what a toxic combination fear and weapons can be.

I share this story with you because I want you to walk in the shoes of these people who feel their fear, feel their loss, and their helplessness. As Senator Coyle so eloquently said today, no one leaves home unless the home becomes the mouth of the shark.

I am, of course, one of the few lucky ones. I was able to come to Canada. I have had a very productive life with my family. That is not always the case for the people who are forced to flee. The displaced of today 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. And resettlement — an option that we are rightfully proud of in this country — only applies to a slim 10 per cent of the world’s refugee population.

It is countries like Bangladesh, with the Rohingya refugees, Uganda, with the South Sudanese or Columbia with the Venezuelans who are most at risk. All have opened their doors to let people in. But this has put an enormous strain on them, their communities, their economy and their social fabric.

There is another reality that I would like you to consider. 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, uncertain life. Clearly, new streams of funding are necessary to deal with this growing need. As the World Refugee Council has pointed out again and again in its report, there is just not enough money in the system. Simply put: More funds are needed.

The UNHCR, as one example, is only ever able to reach 60 to 65 per cent of its annual budget. In 2017, at the height of the crisis, it actually only reached 57 per cent. These are not just numbers. I hope I’m not just painting a picture of numbers, but painting a picture of lives at risk.

And yet, there is apparently a whole lot of corrupt money floating around. The World Bank estimates that $20 billion to $40 billion per year are stolen by public officials. Even more pertinently, it is estimated that corrupt leaders of countries with large numbers of refugees, or of countries whose population has been displaced, have deposited billions of dollars in cash and assets in foreign jurisdictions. It is reasonable to assume that, in fact, it is reasonable to be certain that a lot of this money is parked right here in Canada.

Let me describe to you how this bill would work. As I noted, Canada already has a number of sanctions regimes that permit the freezing of assets by corrupt foreign officials. There is the Magnitsky Act, there is also the United Nations Act, the Special Economic Measures Act, and the Freezing Assets of Corrupt Foreign Officials Act.

The decision whether to take that next step and seek a court order for confiscation would be made exclusively by the Attorney General of Canada. Only the Attorney General or someone else 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 be acting on behalf of the government as a whole, and will no doubt have conferred with colleagues including the Minister of Global Affairs. Clearly, he or she would be motivated by reports and documents, by the list of frozen assets that is already there, from other reputable sources, journalists, academics, fact-finding missions, et cetera, concerning the individual in question, their role in corruption, the impact of their actions on people and whether they fall into the description of section 6 of FARA. The AG would then make an application to the court. The court would decide, based on evidence, if the confiscation should proceed. The court would give notice, would hear witnesses, weigh evidence, including from the representatives of the foreign official. The court would make a decision based on the balance of evidence.

If the court decides that the assets should be confiscated, then it would also, in the ruling, set out the criteria and the plan for 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? Or should they go to the UNHCR or another recognized NGO, like Médecins Sans Frontières? Should they go, in fact, 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 give you a practical example — we’ll make it real. Canada has already frozen the assets of the military generals in Myanmar who committed a genocide against the Rohingya, and forced a million people to flee to Bangladesh. Canada, through the court, will be able to confiscate their assets and repurpose them to help the Rohingya who are currently in the refugee camps in Bangladesh. The court could decide whether the money goes to Bangladesh, whether the money goes to an NGO or another entity. That would be the court’s decision. Another example is Venezuela. The UNHCR has said — and this is a stunning factoid that I would like to drive home to you — 5,000 people left Venezuela every day in 2018 in search of protection. All told, that’s 3.4 million people who have left since the crisis started. I’m sure we can imagine how the sudden influx is straining the host communities in Colombia and Peru.

Canada has already frozen the assets of President Maduro. If this bill is passed, the courts would be empowered to confiscate those assets and repurpose them to help Venezuelans in need, whether they are in Columbia or neighbouring countries. As well, the court would also decide to whom the funds should be dispersed, how they would be dispersed and how the accountability would be ensured.

The same example could apply to South Sudan as well. The names of two warlords are currently on the list of frozen assets, so if this bill is passed, the law would apply to that context as well.

I hope the principles of this bill are apparent to you.

The first principle relates to accountability. Dictators, human rights abusers, cleptocrats have acted with impunity for far too long. They need to be held to account. They purloin the wealth of their nations, leaving a trail of victims in their wake whose lives are devastated. As the World Refugee Council has pointed out, in considering accountability, it is important to remember that forced displacement is often the result of bad governance, violent and oppressive regimes, or those who fail or refuse to protect their own people are responsible for much of the forced displacement in the world today. These are very often the same regimes that are corrupt. They steal from their treasuries and place the money in other assets offshore for the unlawful benefit of the rulers and their associates.

The second principle is justice by seizing the assets and repurposing them back in support of those whose lives have been immeasurably harmed, destroyed perhaps for a lifetime, perhaps over multiple generations. I hope you will see the moral symmetry at play here. I hope you will appreciate it. Actions have reactions. And there must be consequences. Without consequences, we are left with words, full of sound and fury, but signifying possibly nothing.

The third principle is due process. This 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 her or him, 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, and in this way, the bill makes certain that political motivations for seizing assets are removed. This 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 asset can come before the court and make their case.

The fourth principle is openness. Canadians and the world will know, through a public registry, not just the names of the foreign officials, but also the value of their frozen assets.

The fifth principle is compassion; but compassion with an edge, with a heavy dose of pragmatism. We can empathize and sympathize with the victims of displacement, but they need housing, safety, health care, food and water. All of this comes with a cost. As detailed by the World Refugee Council in its report, the UNHCR is not able to meet the growing needs of 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 and provide urgently needed resources for the victims of this unfortunate phenomenon. That is compassion, but linked to effective action.

Finally, this bill is about good governance. Canada should and must not be a safe haven for ill-gotten gains. In this chamber, we’re looking at other avenues of hidden corrupt money, such as Senator Wetston’s inquiry into beneficial ownership. This bill sends a strong message to corrupt leaders: You and your money are not welcome in this country. This is not a place where you can hide or grow it.

Colleagues, some 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 the issues of asset confiscation albeit in different circumstances. Currently, the courts oversee the confiscation and distribution of the proceeds of crime from drug cartels, gangs and/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 provide considered and just solutions, and to oversee a transparent and accountable process.

Some of you may be thinking about the million-dollar question we always ask: If this legislation conforms to the Canadian Charter of Rights and Freedoms. Let me quote from a policy paper published on this question by the World Refugee Council, which was prepared by a noted lawyer, former Attorney General of Canada, and former Canadian ambassador to the United Nations, Allan Rock.

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.

Justice Gagné ruled in a case involving the freezing of the assets of former President Ben-Ali of Tunisia and 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 whose assets have been frozen, but we don’t know their value or their nature. There is no public transparency, since the government is not 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 to 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 of FARA may be lost.

Finally, I would like to tell you that this legislation is unique, but it is not unprecedented. In 2015, Switzerland enacted the Foreign Illicit Assets Act. Under that law, the Swiss government can apply to their Federal Court to confiscate frozen 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 that country and supporting the rule of law in the country of origin, thus contributing to the fight against impunity. Both the United Kingdom and France are currently looking at similar legislation.

This brings me to the final reason why 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 Senator Andreychuk improved on the U.S. version once it came to Canada.

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

In conclusion, colleagues, for far too long 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 of millions of people that continue to grow daily. The principles that this bill are based on, the principles of accountable, justice, due process, openness, compassion coupled with pragmatism, and good governance will ensure that words lead to action and that action leads to consequences. Calling them out is not enough. We have to make them pay. FARA will accomplish precisely that.

Thank you, colleagues.