Vol. 148, No. 6 — March 12, 2014

Registration

SOR/2014-33 February 28, 2014

FREEZING ASSETS OF CORRUPT FOREIGN OFFICIALS ACT

Regulations Amending the Freezing Assets of Corrupt Foreign Officials (Tunisia and Egypt) Regulations

P.C. 2014-163 February 28, 2014

Whereas Egypt has asserted to the Government of Canada, in writing, that each of the persons listed in the annexed Regulations Amending the Freezing Assets of Corrupt Foreign Officials (Tunisia and Egypt) Regulations has misappropriated property of Egypt or acquired property inappropriately by virtue of their office or a personal or business relationship and Egypt has asked the Government of Canada to freeze the property of those persons;

Whereas the Governor in Council is satisfied that each of those persons is a politically exposed foreign person in relation to Egypt;

Whereas the Governor in Council is satisfied that there is internal turmoil, or an uncertain political situation, in Egypt;

And whereas the Governor in Council is satisfied that the making of the annexed Regulations Amending the Freezing Assets of Corrupt Foreign Officials (Tunisia and Egypt) Regulations is in the interest of international relations;

Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of Foreign Affairs, pursuant to subsections 4(1) to (3) of the Freezing Assets of Corrupt Foreign Officials Act (see footnote a), makes the annexed Regulations Amending the Freezing Assets of Corrupt Foreign Officials (Tunisia and Egypt) Regulations.

REGULATIONS AMENDING THE FREEZING ASSETS OF CORRUPT FOREIGN OFFICIALS (TUNISIA AND EGYPT) REGULATIONS

AMENDMENTS

1. Items 9, 19, 47 to 51 and 122 of Schedule 2 to the Freezing Assets of Corrupt Foreign Officials (Tunisia and Egypt) Regulations (see footnote 1) are repealed.

2. Schedule 2 to the Regulations is amended by adding the following in numerical order:

121. Mounir Saleh Moustafa Sabet, born on October 29, 1936

APPLICATION BEFORE PUBLICATION

3. For the purpose of paragraph 11(2)(a) of the Statutory Instruments Act, these Regulations apply before they are published in the Canada Gazette.

COMING INTO FORCE

4. These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

1. Background

On March 23, 2011, the Governor in Council made, pursuant to the Freezing Assets of Corrupt Foreign Officials Act, the Freezing Assets of Corrupt Foreign Officials (Tunisia and Egypt) Regulations, SOR/2011-78 (Regulations). The Regulations give effect to written requests from Tunisia and Egypt to freeze the assets of former leaders and senior officials or their associates and family members suspected of having misappropriated state funds, or obtained property inappropriately as a result of their office or family, business or personal connections. The Regulations were updated on December 16, 2011, and December 14, 2012, to add and remove names thereby bringing the number of designated persons subject to having their assets frozen in Canada to 256 persons — 133 for Egypt and 123 for Tunisia.

2. Issues

Egypt has requested in writing that Canada amend Schedule 2 of the Regulations by adding a person who is subject to legal proceedings in Egypt for corruption and by delisting eight persons cleared of wrongdoing by the Office of the Public Prosecutor of Egypt. As a result, Schedule 2 of the Regulations should be amended to give effect to the requests.

3. Objectives

The regulatory action aims to

4. Description

The Freezing Assets of Corrupt Foreign Officials Act permits the freezing of assets or the restraint of property of politically exposed foreign persons upon receipt of a written request from a state, where the Governor in Council has determined that the state is in a state of turmoil or political uncertainty, and where the making of the order or regulation is in the interest of international relations. The Regulations deal specifically with Tunisia and Egypt.

The written requests from Egypt that are the subject of these amendments pertain to politically exposed foreign persons. The amendment to add a person pertains to Mr. Mounir Saleh Moustafa Sabet who was removed from the list of designated persons in error on December 14, 2012, due to confusion between the names of family members listed under Schedule 2 of the Regulations. In addition, Egypt has requested that Canada delist eight persons cleared of wrongdoing by the Office of the Public Prosecutor of Egypt, which rendered a decision that quashes the assets freezing order in Egypt against these persons. As a result, Schedule 2 of the Regulations should be amended to give effect to the requests.

5. “One-for-One” Rule

The “One-for-One” Rule applies to these Regulations as they would require that the assets of one additional designated person be frozen, if they are located in Canada or are under the control of a Canadian outside Canada. However, the minimal administrative burden associated with these Regulations is carved out from the “One-for-One” Rule as they address exceptional circumstances.

6. Consultation

The Department of Foreign Affairs, Trade and Development drafted the Regulations following consultations with the Departments of Justice, the Office of the Superintendent of Financial Institutions and the Royal Canadian Mounted Police.

7. Small business lens

The Regulations may affect Canadians or Canadian companies that conduct business with designated individuals. However, the Minister of Foreign Affairs is authorized to issue permits to allow those affected by the Regulations to undertake activities that would otherwise be prohibited.

8. Rationale

Egypt remains in the midst of a complex political transition characterized by political uncertainty and serious economic concerns. On March 6, 2013, an administrative court suspended the call for elections in Egypt as invalid and referred the new elections law to the Supreme Constitutional Court (SCC) for review. The government had indicated that it will appeal the ruling, which will effectively suspend elections until the case is decided. In response, the National Salvation Front (NSF), a key opposition party, announced it would boycott any parliamentary elections under the new electoral law arguing that the law and recent changes to electoral districts unduly benefit the Muslim Brotherhood. Against this backdrop, there have been large scale demonstrations both for and against recent amendments to the constitution and judicial verdicts imposing the death penalty on persons involved in the February 1, 2013, Port Said soccer riots.

Considering Canada’s continued support for accountability, the rule of law and a transition to democracy in Egypt, amending the Regulations as requested by Egypt to reflect decisions by the Office of the Public Prosecutor of Egypt will ensure that the Regulations remain accurate, comprehensive and legally consistent with judicial developments in Egypt. Further, Egypt’s requests to remove persons from the list negate the legal basis upon which a person may be listed pursuant to Freezing Assets of Corrupt Foreign Officials Act.

9. Implementation, enforcement and service standards

Compliance is ensured by the Royal Canadian Mounted Police. Every person who contravenes provisions of the Regulations is liable, upon conviction, to the punishments set out in section 10 of the Freezing Assets of Corrupt Foreign Officials Act.

10. Contacts

Mr. Masud Husain
Director
Criminal, Security and Diplomatic Law Division
Department of Foreign Affairs, Trade and Development
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 613-995-8508

Mr. Marcus Davies
Legal Officer
Criminal, Security and Diplomatic Law Division
Department of Foreign Affairs, Trade and Development
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 343-203-2542