Canada’s Seizure And Forfeiture Provisions: A New Government Power – Human Rights

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Canada has taken a number of measures in response to Russia’s ongoing invasion of Ukraine under the Law on Special Economic Measures(“SEMA“) and the Regulations on special economic measures (Russia).(“Russia regulations“). These measures are intended to put economic pressure on the Russian government.

In furtherance of Canada’s commitment to help end the conflict, SEMA was recently amended to allow the Secretary of State (the “minister“) to apply to the court for an order confiscating a sanctioned person’s property located in Canada. SEMAonly allows property to be confiscated or frozen. The new asset forfeiture power is supported by changes that allow government agencies to share, collect and compel disclosure of information relevant to a Section 4 order SEMA. The new powers of forfeiture apply to the growing number of persons and organizations sanctioned under the Russia regulations.

Purpose and Property

The governor in council may order the confiscation and subsequent forfeiture of property if:

  1. a serious violation of international peace and security has occurred;

  2. Gross and systematic human rights violations have been committed in a foreign state; or

  3. significant acts of corruption have been committed involving a national of a foreign state.

The amendments expand the definition of “property” to include “any type of property, whether real or personal, immovable or movable, or tangible or intangible, corporeal or incorporeal, and includes money, funds, currencies, digital assets and virtual currencies.”

Property covered by the amended definition, i.e. “owned – or directly or indirectly held or controlled…” may be forfeited by the sanctioned person.

confiscation orders

Before a confiscation order can be issued, the court must establish that the Minister has described the property in a confiscation order and that the property is owned, directly or indirectly held or controlled by the person named in the confiscation order. In addition, any person who has an interest in or a right to the property in question must be notified.

After the forfeiture, the government may pay out the proceeds from the disposal of the forfeited property for:

  1. the reconstruction of the foreign state marred by a serious violation of international peace and security;

  2. the restoration of international peace and security; and

  3. Compensation for victims of serious violations of international peace and security, gross and systematic violations of human rights or serious acts of corruption.

Administration and Enforcement

In order to assist the Minister in implementing the new regulations, several measures have been taken to support the collection and disclosure of information. Currently the Russia regulations Require that every person in Canada and Canadians outside of Canada voluntarily disclose information about property owned or controlled by sanctioned persons. The changes regarding SEMA enable the Minister to compel any person to provide information about an order.

In addition, the RCMP officer may assist the Minister in making an order under SEMA or applying for a lapse under SEMA. The RCMP reported that between February 24 and June 7, 2022, assets in Canada totaling approximately $123,031,866.85 were lost as a result of the Russia regulations.

The changes also allow different people to share and disclose information that could assist the Minister in administering, enforcing or issuing an order SEMA and its regulations. These individuals include the Treasury Secretary, the President of the Canada Border Services Agency, and the Director of the Canadian Security Intelligence Service.

No formal guidance has been issued on the application or interpretation of the amendments. Therefore, people should exercise caution when dealing with foreigners.

Co-authored by Michael Hanuman, summer student 2022

The content of this article is intended to provide a general guide to the topic. In relation to your specific circumstances, you should seek advice from a specialist.

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