Canada-U.S. Blog Trade Lawyers Cyndee Todgham Cherniak and Susan K. Ross

Canada’s Magnitsky Act Will Pass Third Reading Today

Posted in Canada's Federal Government, Export Controls & Economic Sanctions, Exports

Today, Canada’s House of Commons will pass at third reading Bill S-226 “An Act to provide for the taking of restrictive measures in respect of foreign nationals responsible for gross violations of internationally recognized human rights and to make related amendments to the Special Economic Measures Act and the Immigration and Refugee Protection Act”. Bill S-226 will be officially known as the “Justice for Victims of Corrupt Foreign Officials Act” and generally called “Canada’s Magnitsky Act”.  Third reading is scheduled for 3:00PM (with other bills).  You may watch on ParlVu.  Watch this historic event as it unfolds.

The object and purpose of Bill S-226 is to make sure that human rights violators and corrupt foreign public officials do not use Canada as a safe haven.  James Bezan MP said before the House of Commons that “his bill first and foremost is focused on human rights violators as well as corrupt foreign officials who are taking advantage of their citizens and abusing their positions of power. We have to make sure that those individuals do not use Canada as a safe haven.”  James Bezan went on to say that “this legislation is about anti-corruption. It is about protecting human rights and protecting Canadian values. It is really not just about sanctions and travel bans; it is about ensuring that Canada cannot be used as a safe haven by those criminals.”

Canada does not want to do business with human rights abusers and corrupt foreign officials. James Bezan MP said that Canada has “to ensure that we are not used to educate these criminals’ children, to hide their families and their extra-marital affairs here in Canada, to buy homes and properties over here, or to make use of our very strong banking system.”  James Bezan went on to say that “Canada and its partners will ensure that we shut down their ability to launder their money, hide their families, and enrich themselves by benefiting from Canada’s strong financial institutions and assets, whether it is real estate, businesses, or investments.”  Mr. Wayne Stetski said in the House of Commons that “Canada should not have any role in assisting government corruption abroad. This bill will ensure that Canada can no longer be an unwitting accessory to such acts, and it sends a strong message to corrupt officials everywhere: we are watching, we are paying attention, and we will not help you get away with it.”  Mr. John MacKay said in the House of Commons that “Now there will be no place in Canada for gross abusers of human rights: no condos, no companies, no stocks, no banks, no access to bonds or investments, nothing. They can take their filthy blood money and keep it.”

Bill S-226 does not target Russia. On the contrary, it targets any listed corrupt foreign officials and human rights abusers wherever they are in the world and from any country.  When Canadian parliamentarians spoke to Bill S-226 on October 2, 2017, many statements were made about the global nature of Bill S-226 and which countries and persons may be listed in regulations:

Mr. James Bezan (Conservative Party) said:

  • “It was not just about Russia, but other countries that are human rights abusers, with the people getting rich by being human rights abusers, which is atrocious.”
  • “Bill S-226 would put another tool in the tool box for the Government of Canada, so that we can project our Canadian values and ensure that Canada is not being used as a safe haven by corrupt foreign officials and human rights abusers. This would enable Canada to go after other countries and entities that are human rights abusers. It is not just about Russian aggression and the war in Ukraine. It is not just about Crimea’s illegal annexation. This is also about the torture of political prisoners in places like Iran, the human rights abuses that we have seen in Vietnam, and the current genocide that is taking place in Myanmar with the Rohingyas.”
  •  “We talked about some of the examples of where we are seeing human rights abuses outside of Russia. I already mentioned what is happening in Myanmar, with the genocide being committed against the Rohingyas. There are individuals who are responsible for that. We should be going after the current military leadership in Myanmar: Sen. General Min Aung Hlaing; Lt.-Gen. Sein Win, who is the minister of defence; Vice Senior General Soe Winn. These are individuals who are carrying out genocide, ethnic cleansing, and they need to be held to account. Canada can act unilaterally and do that.   In Venezuela, with President Maduro and everything that is happening, they are clamping down on human rights and there is no freedom of the press. We are talking about a recession and skyrocketing costs and inflation impacting everything from food to medicine to medical supplies. He is capturing his political dissidents, and imprisoning and torturing them. The Venezuela regime needs to be sanctioned. This is all about making sure that all the political leaders, military leaders, and police agencies are being held to account. The United Nations Human Rights Council says that just since April, 5,000 people have been detained, and 1,000 of them are still in custody. Bill S-226 would be able to put proper economic sanctions in place, as well as travel bans, to send a message to Maduro and his regime that this is not warranted.  In Iran, President Rouhani continues to not just imprison his political dissidents, but to executive them. Under Rouhani, who everyone thinks has this charm offensive, political executions have increased by 55% under him versus under Ahmadinejad. This individual cannot be trusted, and the Iranian regime must be held to account. He is imprisoning not just political prisoners, but ethnic and religious minorities. He continues to push out their theocracy and impugn thousands of people all the time. We cannot forget that under Ayatollah Khomeini back in 1988, 30,000 political prisoners were killed in one summer. Those who orchestrated and participated in that, who are responsible, still serve today in the current regime. They have never been sanctioned. We could do that now with Bill S-226. We cannot forget about what is still happening in Ukraine, in Russia, and in Chechnya. We see the human rights violations. There were 200 men who were rounded up and put into detention centres, based upon their sexual orientation. Those individuals who belong to the LGBTQ community had their rights violated, and at least three of them were killed. Those Chechen leaders who are responsible for it, especially Ramzan Kadyrov, have to be held to account. These individuals are no different than any of the other ones we want to sanction.”

Mr. Borys Wrzesnewsky (Liberal) said:

  • “We seem to be entering a world of disorder in which there are those who believe they can disregard the human rights of their citizens, flaunt international law treaties and agreements, or undermine the stability of their neighbours. It is not coincidental that the worst human rights violators, from Syria to North Korea, are also major threats to international peace and security. It is no surprise that a kleptocratic Russia, which killed Magnitsky, has militarily supported both of these states and militarily invaded and illegally annexed neighbouring Ukraine’s territory. This has important and dangerous consequences for all of us.”

Ms. Linda Duncan (New Democratic Party) said:

  •  I do not want to repeat what everyone else said. I too had the privilege of meeting Bill Browder and hearing the story of Sergei Magnitsky. It is important for us and those following the proceedings to keep in mind that this is about more than a couple of corrupt actors in Russia. There are reprehensible actions that occur around the globe, and the purpose of this legislation is to protect Canadians from receiving corrupt dollars and, frankly, to prevent Canadians from interacting with and having financial dealings with those who seriously violate human rights, are severely corrupt, and may resort to torture. It is important for us to recognize that we are addressing very clear and sordid examples with this legislation. I stand by that.  It was a very sad tale and sad to say that there are many such tales around the world. It is long past time that we have strong legislation in this country so that our government can move forward expeditiously when it wants to take action to prevent this kind of sordid investment coming here, and to send a message to officials around the world and to those who deal with officials around the world who may be involved in severe violations of human rights, torture, and corruption.  This legislation would also prevent laundered money coming here from around the world. This is something that we can do as one more step to stop this kind of action. It is our way of protecting people in other countries so that corrupt officials cannot get away with their sordid actions.  The purpose of this legislation is to enable us to act in a way that would prevent people from immigrating to this country or coming here to do business, as well as preventing them from investing the profits from their sordid activities. Both are extremely important. It is important that people recognize that we will be able to do twice as many things with this legislation.”

Bill S-226 / The Justice for Victims of Corrupt Foreign Officials Act is a public welfare statute.  James Bezan said it well when he said in the House of Commons that “Canada always talks the talk, but we do not always walk that talk. This bill gives us the ability to do it.  Canada has always been looked up to as a country that stands up for human rights and tries to stand in the way of corrupt foreign officials.”  Bill S-226 give Canada another tool to take meaningful action in a targeted manner.  The Governor-in-Council upon advice from House of Commons and Senate Committees can add names to Canada’s list by way of regulation.

Today is an important day.  Lists are being drawn behind closed doors (but some names are discussed in public).  After third reading today in the House of Commons, Bill S-226 returns to the Senate for the House of Commons amendments to be approved.  As set out above in the statements made by Members of Parliament (MPs) in the house of Commons, Bill S-226 has support of all Canadian federal political parties. Soon, there will be a list made pursuant to the Justice for Victims of Corrupt Foreign Officials Act.  Soon, Canada will join the chorus of voices in the United States, the European Union, the United Kingdom, Estonia and elsewhere.

Canada is becoming more hawkish in terms of economic sanctions enforcement.  The sanctions that will be imposed under The Justice for Victims of Corrupt Foreign Officials Act are important for reasons of human rights and rule of law.  Behind some names of the list will be stories of inhumane treatment of our fellow person.  More than the other sanctions, these sanctions will profound meaning (which I personally hope is not hidden from Canadians as Canadians support will grow with understanding).

For more information about Canada’s economic sanctions laws or to arrange for a diagnostic of your compliance program, please contact Cyndee Todgham Cherniak at 416-307-4168 or at Cyndee@LexSage.com. If you would like assistance in managing the process, Heather Innes, formerly in-house counsel at a company with export controls processes, would be happy to assist. Please call Heather at 416-350-1234.