SECU Committee Report

The ATA amended the Criminal Code to create criminal offences and imposed other requirements related to the financing of terrorism, implementing international obligations under Resolution 1373 of the UN Security Council and the International Convention for the Suppression of the Financing of Terrorism.

Section 83.1 of the Criminal Code requires everyone in Canada and Canadians anywhere to disclose to the Commissioner of the Royal Canadian Mounted Police (RCMP) and the Director of the Canadian Security Intelligence Service (CSIS) the existence of property in their control or possession that they know is owned or controlled by or on behalf of a terrorist group as well as any information about transactions or proposed transactions related to that property. Representatives of the legal profession have compared the section 83.1 requirement with anti money-laundering standards and have expressed concern that it could in some circumstances be inconsistent with solicitor-client privilege. The Subcommittee recommended that an amendment be made to exempt lawyers providing legal services. Long-established international standards against money-laundering require the reporting of suspicious transactions and elements of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) which implement those standards are based on reasonable grounds to suspect. The purpose of section 83.1 of the Criminal Code, on the other hand, in combination with section 83.08, is to freeze terrorism-related property and support seizure, and later forfeiture, measures. It requires reporting only where the subject actually knows that the property involved is owned or controlled by or on behalf of a terrorist group. In the area of terrorism, strong measures are needed to ensure Canadian conformity with international legal obligations and, as a matter of policy, the Government does not believe that the solicitor-client privilege should be used to conceal property or transactions if the solicitor has knowledge that they relate to terrorism. Therefore, the Government does not propose to make the recommended change.

Section 83.08 of the Criminal Code deals with freezing of terrorism-related property. Section 83.12 makes it an offence to knowingly deal in such property, engage in or facilitate transactions in respect of such property, or provide services in respect of such property for the benefit of or at the direction of a terrorist group. The Subcommittee recommended that a due diligence defence should be provided for this offence. While a due diligence defence applies in respect of strict liability offences, this is a criminal offence. In this case, the mens rea of knowledge is required. This is because for criminal offences, a subjective fault element is generally required. Thus, to establish that the accused “knowingly” dealt in terrorism-related property, for example, it would have to be proved beyond a reasonable doubt that he or she actually knew that the property was owned or controlled by a terrorist group.

The Subcommittee has also recommended that the words “wilfully and” be deleted from section 83.02 of the Criminal Code. However, the Government proposes to keep the present wording that is consistent with the wording found in the International Convention for the Suppression of the Financing of Terrorism and in UN Security Council Resolution 1373.

Preventing terrorists from using the global financial system to further terrorist activity is essential for the suppression of international terrorism. A key element of the response of the international community has been to impose measures to prevent the concealment and transfer of funds or assets used to finance terrorism, and to designate individuals and other entities to whom these measures are to be applied by placing them on lists.

As a Member State of the United Nations and State Party to the United Nations Charter, Canada is legally obliged to give effect to measures imposed by binding resolutions of the Security Council; including the measures required by Resolution 1267, its successor resolutions and Resolution 1373. Canada has responded by establishing a process for the listing of terrorist entities in order to apply specified measures, such as the freezing of assets, to those who are listed. This process has taken the form of three distinct, yet complementary terrorist listing mechanisms.

The first mechanism, the United Nations Al-Qaida and Taliban Regulations (UNAQTR) were made in 1999 under the United Nations Act to freeze the assets of entities belonging to or associated with the Taliban and Al-Qaida. These entities have been listed by the Committee of the UN Security Council mandated to enforce Resolution 1267 and its successor resolutions, and the list is updated by that committee from time to time.

The second mechanism, also made under the United Nations Act, consists of the more general Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism (RIUNRST), which create a Canadian list of terrorist entities not restricted in geographic and affiliative scope as is the UNAQTR. These implement more general requirements to suppress the financing of terrorism pursuant to Resolution 1373, which was adopted shortly after the attacks on the United States on September 11, 2001. This involves the application of measures mandated by the Security Council but, in the absence of an international consensus as to the identification or designation of the entities involved, the Council has left the decision as to which entities should be listed to Member States.

The third mechanism, established under the Criminal Code, enables the Government of Canada to apply appropriate criminal measures to entities, including those not necessarily listed by the first two mechanisms.

Taken together, the three mechanisms advance domestic security interests and support Canadian conformity with a range of international obligations, including those under Resolutions 1267 and its successors, Resolution 1373, as well as the International Convention for the Suppression of the Financing of Terrorism which the ATA enabled Canada to ratify.

The Subcommittee recommended that the Government consider further integration of the three listing mechanisms. In this regard, it should be noted that the Minister of Foreign Affairs is the responsible minister under the United Nations Act and as such is accountable to ensure that obligations imposed by Security Council resolutions on Canada are effectively implemented in Canada including through recommending listings under the RIUNRST. For his part, the Minister of Public Safety is responsible for law enforcement and intelligence activities and, therefore, is accountable for recommending listings under the Criminal Code. Accordingly, the Government is organized to support and deliver on these complementary ministerial accountabilities through Foreign Affairs and International Trade Canada, and Public Safety Canada.

It should be noted that Cabinet is collectively responsible, given that under both the Criminal Code and RIUNRST, the decision to list or de-list rests with the Governor in Council based on the recommendation of the accountable Ministers. Governmental process ensures that the full interdepartmental coordination takes place to allow for informed Cabinet decision-making.

The relationship between the law of Canada and applicable international legal instruments means that the mechanisms for listing and de-listing, as well as the consequences of listing, are different in each case.

The list of terrorist entities incorporated through the UNAQTR was created and is maintained by the UN, specifically the Al-Qaida and Taliban Sanctions Committee. Entities on this list are automatically incorporated into Canada’s UNAQTR. The RIUNRST allows Canada to meet its obligations under UN Resolution 1373 to freeze “without delay” the funds and other financial assets of terrorist entities under the RIUNRST that have been listed by Canada, not by the United Nations. For these two lists, the consequences of listing are limited to those required by the Security Council and consist primarily of the freezing of assets and a prohibition on fundraising.

The third listing mechanism in the Criminal Code is established exclusively in Canadian law but nonetheless is an important element of Canada’s implementation of the International Convention for the Suppression of the Financing of Terrorism and Resolution 1373. This mechanism contains additional measures beyond those which implement the Security Council Resolutions. Any individual or entity listed becomes a “terrorist group”, thereby triggering the potential laying of charges and prosecution under many of the Criminal Code terrorism offences, and some non-criminal measures such as the de-registration of a charity or the refusal to register an organization as a charity. In addition, there are provisions for the seizure and forfeiture of terrorist property.

As a result, the Criminal Code listing regime carries a higher standard, that is, the belief that the subject has knowingly been involved in a terrorist activity or acted on behalf of a terrorist entity. In contrast, the standard for the RIUNRST mechanism is based on the requirements of Resolution 1373.

Therefore, while a fully integrated listing regime would, on its face, appear to be desirable, the considerations set out above illustrate that these three mechanisms are aligned to an appropriate degree and offer complementary tools to counter terrorism and the financing of terrorism. In dealing with the same considerations of domestic and international law, other countries with legal systems similar to Canada’s, such as Australia, the United States and the United Kingdom, have also established and maintained separate listing regimes.

With respect to the House Subcommittee’s recommendation that more direct access to the courts be provided to challenge listing decisions, the Government would note that the role of Ministers is essential to ensure that decisions can be made as quickly as possible based on accurate and current security intelligence information. As such, enabling an entity to make a direct application for judicial review under the Criminal Code regime without first applying to the Minister of Public Safety would run counter to the goal of effective and timely decision-making. Furthermore, instituting a mechanism that automatically de-listed individuals or entities after a set period of time — either within the context of a request or as part of the two-year review of the Criminal Code list — could result in Canada failing to comply fully with its international obligations. Given the significant implications this could carry for Canada’s domestic security and international obligations, it is important that the current processes be maintained.