Legislation in Canada Could Change How the World Deals With Frozen Assets of Corrupt Foreign Officials

Several countries have laws on the books that enables governments to freeze the assets of corrupt foreign officials. Canada is one of those countries, and now one Canadian Senator is trying to take that law one step further by redistributing the frozen assets to those harmed by the actions of the corrupt official.

Ratna Omidvar is an independent Senator from Ontario to the Senate of Canada. She is the author of legislation that is starting to make its way through the Canadian Parliament called the Frozen Assets Repurposing Act. The bill would seize the assets of corrupt and abusive foreign officials and redeploy those assets to the very people harmed by those foreign officials. This includes people displaced by the actions of corrupt and violent regimes.

We kick off discussing Senator Omidvar’s personal history of displacement before having a longer conversation about the contours of this legislation. This includes an extended discussion about how legislation in Canada can influence other parliaments of liberal democracies around the world.

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What’s up first?

When Senator Ratna Omidvar was young she went to University in West Germany and met her life partner. He was from Iran and after they finished their education in 1974, they decided to move to there. Six years later, with their lives in immediate danger, they were forced to flee. Therefore, Omidvar has always empathized with those forced to leave their homes. Luckily, Omivar was able to emigrate to Canada and make a life for herself. However, most people displaced today are bereft of hope or choice. There are generations that only know the existence of displacement. This is a global problem and one that must be addressed in different ways.

Can you introduce your Frozen Assets Repurposing Act?

This act will seize the assets of corrupt foreign officials and those assets will be redeployed back to serve the people who have been harmed most. In many cases, one can draw a direct line between those who are displaced, corrupt and violent regimes, and the corruption of those individuals who steal from their people and country. Basically, by following the money, we will hold them accountable and provide a small measure of justice.

Your act builds on the Magnitsky Act. Can you describe this act? How does it empower governments to seize assets from corrupt officials?

Magnitsky was an accountant in Russia who was investigating corruption but ended up murdered in prison. The Magnitsky Act firstly prevents corrupt officials from entering the country. There are four versions of this act in the US, Canada, UK, and Estonia. The act in Canada applies to foreign officials anywhere in the world. However, the Magnitsky Act only freezes assets, it does not seize and reallocate them. This ties up the assets for a long time, and meanwhile, countries are trying to manage massive influxes of refugees, like Bangladesh from Myanmar. So the Frozen Assets Repurposing Act would take the next step and not just freeze but seize and redeploy assets.

How much money are we talking about?

Canada does not know how much money it holds as there is no public registry of the value of official’s assets. There are more than 72 individuals from a range of jurisdictions on the Canadian sanctions list. If the new legislation is passed then there would be a public registry of those values, meaning more transparency. If you steal money from your people and then deprive them of basic freedoms, there will be accountability.

When crafting this law, did you look to other foreign governments with similar legislation?

Yes, there was a law in Switzerland. In 2015 they enacted the Foreign Illicit Assets Act. This act allows for assets deposited in Switzerland to be confiscated and reallocated. Switzerland returned assets to Kazakhstan following a criminal bribery case. To avoid directly returning it, they set up an independent non-profit to monitor the return. Therefore, there is some proof of concept.

How does a senator’s proposal become law? What are some obstacles?

Firstly, note that senators are appointed, not elected, in Canada. The bill is initially tabled by a senator, then the legislation would need to go to the committee in the Senate and then come back to be debated again. After any amendments, it would hopefully get approved. It would then travel to the House of Commons, the elected house, and repeat the same process.  These are two very articulated, separate processes in the two chambers that a bill needs to go through. This process assures that bills are debated and consulted on, and further, that civil society and organizations can weigh in before it becomes law.

What are some of the broader political forces informing how this would proceed?

For anything worth value, people will line up to reap the benefits. The court review here will be very useful. Like minded jurisdictions will, hopefully, look at the broader political implication of addressing displacement.

We are potentially talking about a lot of money here. This could be an innovative source of funding.

There are roughly 20 to 40 billion dollars worth of stolen money that can be traced back to corrupt officials. That is a huge amount, even if just a portion could be provided to the humanitarian relief agencies of the world. The UNHCR has only ever been able to reach 60% of its budget because its financed by voluntary contribution. The displaced people of the world cannot sit around and wait for charity. In a sense, this is their money.

What should people be looking to in the future when it comes to this piece of legislation?

Hopefully, people will think about this with aspiration as this act provides justice to those who appear to act with immunity. Think about generals in Myanmar and warlords in South Sudan. They clear millions of dollars and their names are on the Canadian sanctions list but yet nothing is done with their money. On a more pragmatic level, this act gets money to the agencies and NGO’s doing the necessary work on the ground to help those people who are impacted.

There are 17 million people displaced in the world which makes 17 million reasons to do this.

Read more about this legislation here and follow its progress here.

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Shownotes by Lydia DeFelice