Canadian Legislation to Permit Use of Stolen Assets for Humanitarian Relief

Ontario Senator Ratna Omidvar has introduced legislation to allow the Canadian government to use frozen assets for humanitarian end. The Frozen Assets Repurposing Act (Loi sur la réaffectation des biens bloqués) would authorize the Attorney General or a designee to request the court where an asset is frozen to seize it. If after a hearing the court is satisfied on the balance of probabilities that the asset is “associated with a foreign national who is responsible for or complicit in” corruption or human rights violations, the asset would be liquidated and the proceeds paid into the court. The court may then distribute the funds to any person, organization, or foreign state for a “just and appropriate” purpose.

The Senator’s bill solves a problem both Canada and the European Union faced in the wake of the Arab Spring.  Canada’s federal government and EU executive both had the power to freeze assets where there was evidence that they were obtained through corruption. But the law allowed them to do no more.  The laws of both assumed the governments from which the assets had been stolen would initiate return proceedings in accordance with chapter V of UNCAC.  But thanks to some combination of a lack of capacity and political wherewithal, successor governments in Egypt, Libya, Tunisia, and Yemen did not. The freezes either ended and the funds went back to the crooked leader or they remain frozen indefinitely.

Although the legislation leaves it to the court to decide how to use the confiscated funds, Senator Omidvar’s bill explicitly states that consideration be given to helping foreign states accommodate refuges. She suggests for example that the frozen funds of Venezuela’s corrupt rulers could be distributed to Colombia and other neighboring countries to alleviate the suffering of Venezuelans who have sought refuge in them.

The confiscation process follows that in the U.K.’s Unexplained Wealth Order law. The holder of the asset would be given the opportunity to show he or she had obtained it through lawful means.  Only if the holder failed to convince the court that it was would confiscation follow.

The legislation was inspired by this 2018 World Refugee Council paper.  The Senator’s “Make Corrupt Foreign Officials Pay,” an article in the online journal Policy Options Politique, makes a strong case for its enactment.  The arguments are not Canada-specific. Perhaps legislators in other countries where the corrupt hide their money will be inspired to copy her bill?  The text is here.

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