Canada’s move to seize assets from Russian oligarch could test charter law: trade lawyer | 24CA News

Canada’s try to seize and forfeit a Russian oligarch’s holdings might be a significant check of how the federal authorities balances sanctions and Charter rights, says an Ottawa commerce lawyer.

On Monday, Foreign Affairs Minister Melanie Joly stated she plans to make use of a brand new regulation to confiscate and divert property held by individuals who have been sanctioned.

The first case entails Roman Abramovich, an ally of Russian President Vladimir Putin who partially owns the metal firm Evraz, which has amenities in Regina and Calgary. Abramovich can also be the previous proprietor of the Chelsea Football Club in England.

Canada will attempt to seize and forfeit US$26 million, or about C$36 million, from Granite Capital Holdings Ltd., a agency Abramovich owns, and divert the cash to the reconstruction of Ukraine.

William Pellerin, an Ottawa-based commerce lawyer with the agency McMillan LLP, stated the case might elevate questions of constitutional regulation and jurisdiction and form future makes an attempt at extracting money from sanctioned people.

“It’s not yet happened in any G7 country, or Australia,” Pellerin stated. “We’re really leading the charge here.”

Pellerin’s shoppers embrace companies navigating Canada’s sanctions on Russia, and he stated Ottawa’s transfer represents a significant shift, since sanctions are usually meant to vary behaviour as a substitute of punishing somebody.

“The idea is the oligarchs apply pressure on the Putin regime to stop the invasion and if the war goes away, you unfreeze the assets and whoever had money or property in Canada, that property gets unblocked and everyone goes off on their merry way,” he stated.

“There won’t be an incentive to change behaviour anymore, because the money is gone.”

Pellerin stated the financial institution holding Abramovich’s money would have frozen his property again on March 10 when he was sanctioned. It most definitely reported the cash to the RCMP, who would have then knowledgeable Global Affairs Canada, Pellerin stated.

An order-in-council reveals the cash was held by Citco Bank Canada and suggests somebody froze an try to maneuver the money to a financial institution within the Cayman Islands. Citco’s mother or father firm in London, England wouldn’t affirm the way it proceeded.

“Due to our commitment to confidentiality, we are unable to comment on our clients – past or present – or their underlying investors,” spokesperson Millie Fairbairn wrote in an e-mail.

“However, Citco has robust screening processes in place to scan our systems in order to identify any sanctioned parties and report to the relevant authorities as required.”

What comes subsequent?

Ottawa’s first step might be to file an utility at a courtroom in whichever jurisdiction the cash is held, most definitely the Ontario Superior Court, Pellerin stated.

Government attorneys will then need to show to a decide what proportion of the funds are owned by Abramovich, to persuade the courtroom to have the cash forfeited to the Crown.

Abramovich will have the ability to have his counsel contest that transfer and Pellerin stated he anticipates a couple of grounds for argument.

The attorneys would possibly argue that the transfer breaches Charter rights surrounding privateness and the reasonableness of search and seizures, which do not apply to foreigners exterior Canada however can apply to their firms and holdings in Canada.

They additionally would possibly argue that Ottawa lacks jurisdiction, since provinces usually govern property rights and the case doesn’t contain prison regulation, which is a federal accountability.

“That’s an interesting question for constitutional scholars. I’m not one of them,” Pellerin stated.

He additionally stated attorneys might argue that the transfer breaches the investment-protection settlement that Canada and Russia signed a long time in the past. This kind of settlement permits expropriation for public coverage causes, which usually contains compensation. Previous circumstances contain issues like shopping for out land to be able to construct a freeway, and never seizing financial institution accounts.

Pellerin stated that any of those three arguments might make the proceedings right into a check case that may form how Ottawa proceeds with clawing again funds held by different sanctioned folks.

Possibility of Russian retaliation

He additionally famous that Russia could retaliate, a transfer that’s simpler to do when one nation has tried forfeiting property — versus multilateral sanctions, the place all United Nations members refuse dealings with somebody concerned in terrorism or drug trafficking.

Moscow could attempt to freeze Canadian-owned mines, for instance.

“There would be easily a quid pro quo of Canadian assets in Russia, or of assets with a with a strong Canadian nexus,” Pellerin stated.

Russia’s ambassador to Canada stated Joly’s announcement this week quantities to “an attempt of robbery in broad daylight” and warned that others will concern their investments are in danger if folks have views that do not align with Ottawa.

“The embassy advises not to carry on business (within Canada) for the foreseeable future,” Oleg Stepanov wrote Monday on social media.

“As a trade partner for Russia, Canada’s value now unfortunately equals to zero.”

Joly stated on Monday that the RCMP is independently pursuing investigations of individuals Ottawa has sanctioned who maintain property in Canada.

She stated Canada has sanctioned so many Russians partly to maintain consistent with restrictions imposed by allies in Europe and the U.S., in order that these sanctioned do not strive shifting the cash into Canadian accounts.

Joly stated she hopes European international locations observe swimsuit on attempting to forfeit oligarch money, however Pellerin famous the continent has a lot nearer financial ties with Russia.