Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law)

Contents

Whereas human rights and the rule of law are integral to international law and Canada has repeatedly asserted its commitment to promoting international justice and respect for human rights;Whereas signatory States to international human rights agreements have committed themselves to the obligations and responsibilities set out in those agreements;Whereas Sergei Magnitsky, a Moscow lawyer who uncovered the largest tax fraud in Russian history, was detained without trial, tortured and consequently died in a Moscow prison on November 16, 2009;Whereas no thorough, independent and objective investigation has been conducted by Russian authorities into the detention, torture and death of Sergei Magnitsky, nor have the individuals responsible been brought to justice;Whereas the unprecedented posthumous trial and conviction of Sergei Magnitsky in Russia for the very fraud he uncovered constitute a violation of the principles of fundamental justice and the rule of law;Whereas legislation and motions adopted by legislative assemblies in the United States, the European Parliament, the United Kingdom, the Netherlands, Italy, Poland and Canada have condemned the mistreatment of Sergei Magnitsky as “a violation of the principles of fundamental justice and the rule of law” and called for sanctions against any foreign nationals responsible for violations of internationally recognized human rights in a foreign country when authorities in that country are unable or unwilling to conduct a thorough, independent and objective investigation of the violations;Whereas the Litvinenko Inquiry report, presented to the United Kingdom Parliament on January 21, 2016, found that two Russian agents, Andrei Lugovoi and Dmitry Kovtun, were responsible for the assassination of Alexander Litvinenko and that there was a “strong possibility” that they were acting on behalf of the Russian Federal Security Service;Whereas Russian opposition politician Boris Nemtsov was assassinated outside the Kremlin on February 27, 2015, and to this day no thorough, independent and objective investigation has been conducted by Russian authorities;Whereas the Senate, on May 5, 2015, and the House of Commons, on March 25, 2015, by unanimous resolutions called upon the Government of Canada to explore and encourage sanctions against any foreign nationals responsible for the detention, torture and death of Sergei Magnitsky and to explore sanctions as appropriate against any foreign nationals responsible for violations of internationally recognized human rights in a foreign country, when authorities in that country are unable or unwilling to conduct a thorough, independent and objective investigation of the violations;Whereas member of the Ukrainian Parliament Lieutenant Nadiya Savchenko and other Ukrainians were illegally convicted and imprisoned in Russia in violation of international norms and fundamental justice;Whereas the Special Economic Measures Act authorizes the Government of Canada to take economic measures against a foreign state or national for the purpose of implementing a decision, resolution or recommendation of an international organization or association of states, or in cases of a grave breach of international peace and security that resulted or is likely to result in a serious international crisis;Whereas adding gross violations of internationally recognized human rights as a ground on which sanctions may be imposed against foreign states and nationals would further Canada’s support for human rights and advance its responsibility to protect activists who fight for human rights;Whereas it is important to acknowledge and remember Sergei Magnitsky’s sacrifice, as well as the sacrifice of other victims of gross violations of internationally recognized human rights;And whereas all violators of internationally recognized human rights should be treated and sanctioned equally throughout the world,Now, therefore, Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

Short Title

1Short Title#

This Act may be cited as the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law).

Interpretation

2Definitions#

The following definitions apply in this Act.

Canadian means a person who is a citizen within the meaning of the Citizenship Act or a corporation incorporated or continued by or under the laws of Canada or of a province. (Canadien)

entity means a corporation, trust, partnership, fund, an unincorporated association or organization or a foreign state. (entité)

foreign national means an individual who is not

(a)a Canadian citizen; or

(b)a permanent resident under the Immigration and Refugee Protection Act. (étranger)

foreign public official has the same meaning as in section 2 of the Corruption of Foreign Public Officials Act. (agent public étranger)

foreign state means a country other than Canada, and includes

(a)any of its political subdivisions;

(b)its government and any of its departments, or the government or any department of any of its political subdivisions; and

(c)any of its agencies or any agency of any of its political subdivisions. (État étranger)

Minister [Repealed, 2022, c. 10, s. 444]

person means an individual or an entity. (personne)

prescribed means prescribed by regulation. (version anglaise seulement)

property means any type of property, whether real or personal or immovable or movable, or tangible or intangible or corporeal or incorporeal, and includes money, funds, currency, digital assets and virtual currency. (bien)

2.01Deemed ownership#

(1)If a foreign national controls an entity other than a foreign state, any property that is owned — or that is held or controlled, directly or indirectly — by the entity is deemed to be owned by that foreign national.

(2)For the purposes of subsection (1), a foreign national controls an entity, directly or indirectly, if any of the following criteria are met:

(a)the foreign national holds, directly or indirectly, 50% or more of the shares or ownership interests in the entity or 50% or more of the voting rights in the entity;

(b)the foreign national is able, directly or indirectly, to change the composition or powers of the entity’s board of directors; or

(c)it is reasonable to conclude, having regard to all the circumstances, that the foreign national is able, directly or indirectly and through any means, to direct the entity’s activities.

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Minister

2.1Minister#

(1)Subject to subsection (2), the Minister of Foreign Affairs is responsible for the administration and enforcement of this Act.

(2)The Governor in Council may, by order, designate one or more Ministers of the Crown to discharge any responsibilities that the Governor in Council may specify with respect to the administration or enforcement of any of the provisions of this Act or any order or regulations made under this Act.

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Her Majesty

3Binding on Her Majesty#

This Act is binding on Her Majesty in right of Canada or a province.

Orders and Regulations

4Orders and Regulations#

(1)The Governor in Council may, if the Governor in Council is of the opinion that any of the circumstances described in subsection (2) has occurred,

(a)make any orders or regulations with respect to the restriction or prohibition of any of the activities referred to in subsection (3) in relation to a foreign national that the Governor in Council considers necessary; and

(b)by order, cause to be seized or restrained in the manner set out in the order any property situated in Canada that is owned — or that is held or controlled, directly or indirectly — by a foreign national who is identified in an order or regulation made under paragraph (1)(a).

(2)The circumstances referred to in subsection (1) are the following:

(a)a foreign national is responsible for, or complicit in, extrajudicial killings, torture or other gross violations of internationally recognized human rights committed against individuals in any foreign state who seek

(i)to expose illegal activity carried out by foreign public officials, or

(ii)to obtain, exercise, defend or promote internationally recognized human rights and freedoms, such as freedom of conscience, religion, thought, belief, opinion, expression, peaceful assembly and association, and the right to a fair trial and democratic elections;

(b)a foreign national acts as an agent of or on behalf of a foreign state in a matter relating to an activity described in paragraph (a);

(c)a foreign national, who is a foreign public official or an associate of such an official, is responsible for or complicit in ordering, controlling or otherwise directing acts of corruption — including bribery, the misappropriation of private or public assets for personal gain, the transfer of the proceeds of corruption to foreign states or any act of corruption related to expropriation, government contracts or the extraction of natural resources — which amount to acts of significant corruption when taking into consideration, among other things, their impact, the amounts involved, the foreign national’s influence or position of authority or the complicity of the government of the foreign state in question in the acts; or

(d)a foreign national has materially assisted, sponsored, or provided financial, material or technological support for, or goods or services in support of, an activity described in paragraph (c).

(3)Orders and regulations may be made under paragraph (1)(a) with respect to the restriction or prohibition of any of the following activities, whether carried out in or outside Canada:

(a)the dealing, directly or indirectly, by any person in Canada or Canadian outside Canada in any property, wherever situated, of the foreign national;

(b)the entering into or facilitating, directly or indirectly, by any person in Canada or Canadian outside Canada, of any financial transaction related to a dealing referred to in paragraph (a); and

(c)the provision by any person in Canada or Canadian outside Canada of financial services or any other services to, for the benefit of or on the direction or order of the foreign national;

(d)the acquisition by any person in Canada or Canadian outside Canada of financial services or any other services for the benefit of or on the direction or order of the foreign national; and

(e)the making available by any person in Canada or Canadian outside Canada of any property, wherever situated, to the foreign national or to a person acting on behalf of the foreign national.

(4)The Governor in Council may, by order, authorize the Minister to

(a)issue to any person in Canada or Canadian outside Canada a permit to carry out a specified activity or transaction, or class of activity or transaction, that is restricted or prohibited under this Act or any order or regulations made under this Act; or

(b)issue a general permit allowing any person in Canada or Canadian outside Canada to carry out a class of activity or transaction that is restricted or prohibited under this Act or any order or regulations made under this Act.

(5)The Minister may issue a permit or general permit, subject to any terms and conditions that are, in the opinion of the Minister, consistent with this Act and any order or regulations made under this Act.

(6)The Minister may amend, suspend, revoke or reinstate any permit or general permit issued by the Minister.

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Forfeiture Orders

4.1Definitions#

The following definitions apply in sections 4.2 to 4.4.

judge means a judge of a superior court of the province where property described in an order made under paragraph 4(1)(b) is situated. (juge)

Minister means the Minister responsible under section 2.1 for the administration of an order made under paragraph 4(1)(b). (ministre)

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4.2Forfeiture#

(1)On application by the Minister, a judge must order that the property that is the subject of the application be forfeited to Her Majesty in right of Canada if the judge determines, based on the evidence presented, that the property

(a)is described in an order made under paragraph 4(1)(b); and

(b)is owned by the foreign national referred to in that order or is held or controlled, directly or indirectly, by that foreign national.

(2)Before making the order in relation to the property, the court must require notice to be given to any person who, in the court’s opinion, appears to have an interest in or right to the property, and the court may hear any such person.

(3)The notice must

(a)be given in the manner that the court directs or that may be specified in the rules of the court;

(b)specify the period that the court considers reasonable or that may be set out in the rules of the court during which a person may, before the order in relation to the property is made, make an application to the court asserting their interest in or right to the property; and

(c)set out a description of the property.

(4)Any person — other than a foreign national described in any of paragraphs 4(2)(a) to (d) — who claims an interest in or right to property that is forfeited to Her Majesty under subsection (1) may, within 30 days after the day on which the property is forfeited, apply in writing to a judge for an order declaring that their interest or right is not affected by the forfeiture, declaring the nature and extent of the interest or right and directing the Minister to pay to the person an amount equal to the value of their interest or right.

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4.3Not a Crown corporation#

If the property that is the subject of a forfeiture order consists of all of the shares of a corporation, the corporation is deemed not to be a Crown corporation as defined in subsection 83(1) of the Financial Administration Act.^note

4.4Payment out of Proceeds Account#

After consulting with the Minister of Finance and the Minister of Foreign Affairs, the Minister may — at the times and in the manner, and on any terms and conditions, that the Minister considers appropriate — pay out of the Proceeds Account, as defined in section 2 of the Seized Property Management Act, amounts not exceeding the net proceeds from the disposition of property forfeited under section 4.2, but only to compensate victims of the circumstances described in subsection 4(2).^note

Tabling in Parliament

5Order or regulation#

A copy of each order or regulation made under paragraph 4(1)(a) must be tabled in each House of Parliament within 15 days after it is made. It may be sent to the Clerk of the House if the House is not sitting.^note

Duty to Determine

6Determination#

Each of the following entities must determine on a continuing basis whether it is in possession or control of property that it has reason to believe is the property of a foreign national who is the subject of an order or regulation made under section 4:

(a)authorized foreign banks, as defined in section 2 of the Bank Act, in respect of their business in Canada or banks to which that Act applies;

(b)cooperative credit societies, savings and credit unions and caisses populaires regulated by a provincial Act and associations regulated by the Cooperative Credit Associations Act;

(c)foreign companies, as defined in subsection 2(1) of the Insurance Companies Act, in respect of their insurance business in Canada;

(d)companies, provincial companies and societies, as those terms are defined in subsection 2(1) of the Insurance Companies Act;

(e)fraternal benefit societies regulated by a provincial Act in respect of their insurance activities and insurance companies and other entities engaged in the business of insuring risks that are regulated by a provincial Act;

(f)companies to which the Trust and Loan Companies Act applies;

(g)trust companies regulated by a provincial Act;

(h)loan companies regulated by a provincial Act;

(i)entities that engage in any activity described in paragraph 5(h) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act if the activity involves the opening of an account for a client;

(j)entities authorized under provincial legislation to engage in the business of dealing in securities or to provide portfolio management or investment counselling services; and

(k)other entities of a prescribed class of entities.

Disclosure

7Duty to disclose — supervising and regulating agencies#

(1)If it determines that it is in possession or control of any property referred to in section 6, an entity referred to in that section must disclose without delay, and once every three months after that, to the principal agency or body that supervises or regulates it under federal or provincial law the fact that it is in possession or control of the property, the number of persons or dealings involved and the total value of the property.

(2)Every person in Canada and every Canadian outside Canada must disclose without delay to the Commissioner of the Royal Canadian Mounted Police or the Director of the Canadian Security Intelligence Service

(a)that they have reason to believe that property in their possession or control is owned, held or controlled by or on behalf of a foreign national who is the subject of an order or regulation made under section 4; and

(b)any information about a transaction or proposed transaction in respect of property referred to in paragraph (a).

(3)No proceedings under this Act and no civil proceedings lie against a person for a disclosure made in good faith under subsection (1) or (2).

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7.1Sharing of information#

The following persons may assist the Minister in matters relating to the making, administration or enforcement of an order or regulation referred to in subsection 4(1) and, for that purpose, may collect information from and disclose information to each other:

(a)the Minister of Foreign Affairs;

(b)the Minister of Finance;

(c)the Minister of Public Works and Government Services;

(d)the Minister of Public Safety and Emergency Preparedness;

(d.1)the Minister of Transport;

(d.2)the Minister of National Revenue;

(d.3)the Minister of Justice and Attorney General of Canada;

(d.4)the Minister of Citizenship and Immigration;

(e)the Director of the Canadian Security Intelligence Service;

(f)the Chief of the Communications Security Establishment;

(g)the President of the Canada Border Services Agency; and

(h)the Superintendent of Financial Institutions.

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7.2Rcmp#

(1)The Commissioner of the Royal Canadian Mounted Police may assist the Minister in matters related to the making of an order under paragraph 4(1)(b), the seizure or restraint of any property that is the subject of such an order or the making of an application for forfeiture of the property under section 4.2 and, for that purpose, may collect information from and disclose information to the persons referred to in section 7.1.

(2)For greater certainty, nothing in subsection (1) is to be construed as affecting the powers of a peace officer that are conferred under legislation or the common law.

^note

7.21Fintrac#

The Minister may disclose to the Financial Transactions and Reports Analysis Centre of Canada any information that is relevant to the making, administration or enforcement of an order or regulation referred to in subsection 4(1).^note

7.3Provision of information#

(1)The Minister of Foreign Affairs may require any person to provide to that Minister any information that that Minister believes on reasonable grounds is relevant for the purposes of the making, administration or enforcement of an order or regulation referred to in subsection 4(1).

(2)Every person who is required to provide information under subsection (1) must comply with the requirement within the time and in the form and manner specified by that Minister.

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Rights of Foreign Nationals Who are the Subject of an Order or Regulation

8Application#

(1)A foreign national who is the subject of an order or regulation made under paragraph 4(1)(a) may apply in writing to the Minister to cease being the subject of the order or regulation.

(1.1)A foreign national whose property is the subject of an order made under paragraph 4(1)(b) may, unless the property is the subject of a forfeiture order, apply at any time in writing to the Minister to request that the property cease being the subject of the order made under that paragraph.

(2)On receipt of the application, the Minister must decide whether there are reasonable grounds to recommend to the Governor in Council that the order or regulation be amended or repealed, as the case may be, so that the applicant or their property ceases to be the subject of it.

(3)The Minister must make a decision on the application within 90 days after the day on which the application is received.

(4)The Minister must give notice without delay to the applicant of any decision to reject the application.

(5)If there has been a material change in the applicant’s circumstances since their last application under subsection (1) was submitted, he or she may submit another application.

Application for a Certificate

9Mistaken identity#

(1)Any person in Canada or any Canadian outside Canada whose name is the same as or similar to the name of a foreign national who is the subject of an order or regulation made under section 4 may, if they claim not to be that foreign national, apply to the Minister in writing for a certificate stating that they are not that foreign national.

(2)Within 45 days after the day on which the application was received, the Minister must,

(a)if he or she is satisfied that the applicant is not the foreign national, issue the certificate to the applicant; or

(b)if he or she is not so satisfied, provide a notice to the applicant of his or her determination.

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10Reasonable expenses#

(1)A foreign national who is the subject of an order or regulation made under section 4 may apply to the Minister in writing for a certificate to exempt property from the application of the order or regulation if the property is necessary to meet the reasonable expenses of the person and their dependents.

(2)If the Minister determines that the property is necessary to meet the reasonable expenses of the applicant and their dependents, the Minister must issue a certificate to the applicant.

(3)The Minister must make a decision on the application and, if applicable, issue a certificate within 90 days after the day on which the application is received.

Offences

11Offence and punishment#

Every person who knowingly contravenes or fails to comply with an order or regulation made under section 4

(a)is guilty of an indictable offence and is liable to imprisonment for a term of not more than five years; or

(b)is guilty of an offence punishable on summary conviction and is liable to a fine of not more than $25,000 or to imprisonment for a term of not more than one year, or to both.

General

12No civil liability#

A person who, in relation to any property that is the subject of an order or regulation made under section 4, acts reasonably in taking, or omitting to take, measures to comply with the order or regulation is not liable in any civil action arising from having taken or omitted to take the measures if they took all reasonable steps to satisfy themselves that the property was property that is the subject of the order or regulation.

13Ranking#

All secured and unsecured rights and interests in any property that is the subject of an order made under paragraph 4(1)(b) that are held by a person are entitled to the same ranking that they would have been entitled to had the order not been made, unless

(a)the person is a foreign national described in any of paragraphs 4(2)(a) to (d); or

(b)the property is forfeited to Her Majesty in right of Canada under section 4.2.

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13.1Costs#

Any costs incurred by or on behalf of Her Majesty in right of Canada in relation to the seizure or restraint of property under an order made under paragraph 4(1)(b) or the disposal of property forfeited under section 4.2 are the liability of the owner of the property and constitute a debt due to Her Majesty in right of Canada that may be recovered in any court of competent jurisdiction.^note

13.2Agreements#

The Minister of Foreign Affairs may, with the approval of the Governor in Council, enter into an agreement with a person respecting the use by the person, for the compensation of victims of the circumstances described in subsection 4(2), of amounts that may be paid out under section 4.4.^note

14Proceedings not precluded#

The making of an order or regulation under section 4 does not preclude the commencement of proceedings under any Act of Parliament other than this Act, or any civil proceedings, in respect of any property that is the subject of the order or regulation.

15Regulations#

The Governor in Council may make regulations for carrying out the purposes and provisions of this Act.

Review and Report

16Review#

(1)Within five years after the day on which this section comes into force, a comprehensive review of the provisions and operation of this Act and of the Special Economic Measures Act must be undertaken by the committees of the Senate and of the House of Commons that are designated or established by each House for that purpose.

(2)The committees referred to in subsection (1) must, within a year after a review is undertaken under that subsection or within any further time that may be authorized by the Senate or the House of Commons, as the case may be, submit a report on the review to Parliament, including a statement of any changes that the committees recommend.

(3)Committees of the Senate and the House of Commons that are designated or established by each House for that purpose may conduct a review concerning the foreign nationals who are the subject of an order or regulation made under this Act and submit a report to the appropriate House together with their recommendations as to whether those foreign nationals should remain, or no longer be, the subject of that order or regulation.

Related Amendments

Special Economic Measures Act

17 #

[Amendments]

Immigration and Refugee Protection Act

18 #

[Amendments]

Federal laws of Canada reproduced under the Reproduction of Federal Law Order (SI/97-5); not the official version. Source: Justice Laws Website.