Canada’s Parliament Debates Addition of Property Confiscation Provisions to Sanctions Legislation

In this put up we describe the components of Bill C-19 that, if handed into regulation by Parliament, will introduce a property confiscation regime into the Special Economic Measures Act and the Sergei Magnitsky Law.

As mentioned beneath, the important thing factors are:

• At this level the proposed laws is in a invoice earlier than Parliament; it’s not but regulation.
• The check within the invoice for forfeiture of belongings would simply be met and depart little discretion for the court docket.
• There could be some safety for harmless third events.
• The implications for capital flows out and in of Canada are unsure.

Bill C-19

Bill C-19, the Budget Implementation Act, 2022, No. 1, was launched within the House of Commons by the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance. First studying of Bill C-19 was on April 28, 2022. Second studying was on May 19, 2022. The invoice is presently in committee within the House of Commons and on the pre-study stage within the Senate.

Confiscation Provisions

Section 5, Division 31 of Bill C-19 proposes amendments to the Special Economic Measures Act (“SEMA”) and the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law) (the “Sergei Magnitsky Law”) that can set up an financial sanctions forfeiture regime for belongings of international nationals, primarily amounting to asset confiscation on the discretion of the Government of Canada.

Both statutes could be amended to within the following methods:

• Courts could be required to make a forfeiture order (a “Judicial Forfeiture Order”) on software by the relevant Minister the place a two-part check is happy.
  • The first half of the forfeiture check could be that the property that’s the topic of a forfeiture software is described in an order (an “Executive Seizure Order”) made beneath the relevant statute.
    • Each statute provides the Cabinet (Canada’s government authorities) the authority (as amended by Bill C-19) to make an Executive Seizing Order inflicting to be seized or restrained any property in Canada that’s owned or is held or managed, instantly or not directly, by a international nationwide of a jurisdiction in respect of which Canada has enacted sanctions (a “Foreign National”).
  • The second half of the forfeiture check could be that the property that’s the topic of a forfeiture software is owned by the Foreign National referred to within the Executive Seizure Order or is held or managed, instantly or not directly, by that Foreign National.
• Before making a Judicial Forfeiture Order the court docket listening to the appliance could be required to require that discover be given to any one that, within the court docket’s opinion, seems to have an curiosity in or proper to the property. The court docket would give you the chance to hear from any such particular person earlier than making a Judicial Forfeiture Order.
• Any one that would declare an curiosity in property that has been the topic of a Judicial Forfeiture Order would have 30 days after the order was made to apply for an order that their proper or curiosity wouldn’t be affected by the order and directing the relevant Minister to pay to that particular person an quantity equal to the worth of their curiosity.
• The Royal Canadian Mounted Police could be empowered to help the relevant Minister in respect of the making of Executive Seizure Orders and functions for Judicial Forfeiture Orders.
• There could be a brand new provision authorizing the relevant Minister to require any particular person to present to the Minister any data that on cheap grounds could be related to the making of an order or regulation beneath the statute.
• In the case of SEMA, the relevant Minister would give you the chance to pay the web proceeds from the disposition of forfeited property to:
  • The reconstruction of a international state adversely effected by a grave breach of worldwide peace and safety.
  • The restoration of worldwide peace and safety.
  • The compensation of victims of a grave breach of worldwide peace and safety, gross and systemic human rights violations or acts of important corruption.
• In the case of the Sergei Magnitsky Law, the relevant Minister would give you the chance to pay the web proceeds from the disposition of forfeited property to compensate victims of:
  • Gross violations of internationally acknowledged human rights.
  • Acts of important corruption.

Key Points

Bill C-19 raises many points together with:

• It would give the Canadian authorities a really robust instrument to pursue international coverage targets and probably redress wrongs as perceived and decided by the Canadian authorities.
• The check for forfeiture is a remarkably low bar, primarily based mostly on governmental determinations as to which Foreign Nationals advantage this remedy.
  • No judicial discovering of wrongdoing by a Foreign National is required.
• The proposed amendments probably impact Foreign Nationals of many jurisdictions.
  • Currently there are sanctions on 12 completely different international locations beneath SEMA together with Russia, Belarus, the PRC and Iran.
  • Nationals of 5 international locations together with Saudi Arabia and Russia are presently sanctioned beneath the Sergei Magnitsky Law.
• There could be some protections for harmless third events, together with the fitting to be heard and a court docket listening to for a Judicial Forfeiture Order however there could be a really brief interval to apply for compensation after a Judicial Forfeiture Order is made.
• The implications for capital flows out and in of Canada are unsure.

Conclusion

Canada has been persevering with to improve its sanctions responses to Russia’s invasion of Ukraine. The proposed amendments to SEMA and the Sergei Magnitsky Law are being launched right now by a Minister who has been deeply concerned in Canada’s international coverage relating to Ukraine. Although it could be logical to count on that property of designated Russian individuals is the doubtless instant focus if Bill C-19 turns into regulation, the invoice shouldn’t be restricted to Canada’s Russia sanctions program. It would have a lot broader potential software.

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