Canada is set to embark on a groundbreaking initiative to expropriate assets held by the Russian government and sanctioned Russian citizens, aiming to bolster Ukraine's ongoing war effort against Russia's aggression. This significant move marks a pivotal moment in international relations and could test the boundaries of international law, particularly the doctrine of countermeasures.
The Canadian government has been at the forefront of an international campaign to redirect Moscow's financial resources to aid Ukraine since the onset of Russia's full-scale invasion in February 2022. Prime Minister Justin Trudeau recently announced that Ottawa would soon take action to seize Russian assets, following years of advocacy and coordination with allies.
At the beginning of 2022, Russia's central bank held approximately $24 billion in Canadian dollar-denominated assets. As of January 15, 2023, the Royal Canadian Mounted Police (RCMP) had seized $140 million in assets under Canada's sanctions against Russia. However, Canada has yet to initiate a court case to reclaim funds from frozen Russian assets, an unprecedented move that may pave the way for future actions.
The proposed process for expropriating these assets involves issuing a cabinet order to seize them, followed by a request to a provincial superior court for forfeiture to the Crown. Legal experts note that while there are substantial sanctions against seizing private assets, government-owned assets may be treated differently under international law.
The urgency surrounding this initiative is underscored by calls from the World Refugee and Migration Council for countries to utilize expropriated Russian funds to support Ukraine's defense. Unlike Canada, the European Union has shown reluctance to adopt similar measures, though some allies are considering redirecting interest accrued from frozen accounts to assist Ukraine.
William Pellerin, a legal expert, highlighted Canada's proactive stance, stating, "Canada is really at the forefront of this." He noted that the implications of these actions extend beyond geopolitical considerations, affecting global business dynamics. "It does have business effects and considerations for Canadian businesses," he added, emphasizing the intricate interconnections within the global economy.
The RCMP has blocked approximately $317 million in transactions related to Canada's sanctions against Russia. However, concerns about the broader impact of these restrictions linger. "That forces us to be particularly cautious because at times our sanctions regime is more aggressive than those of other jurisdictions," Pellerin remarked.
Despite the momentum behind the initiative, skepticism remains regarding the speed and transparency of the government's actions. Mark Kersten, an expert on international law, expressed frustration with the perceived lack of progress. "The government talks a big game and then apparently is moving at a glacial pace — and not being transparent with the public as to what it’s actually doing and where things stand," he said.
Oleg Stepanov, Russia's ambassador to Canada, dismissed claims suggesting that Ottawa might generate revenue from frozen Russian assets as "sheer disinformation." This statement underscores the complexities surrounding the narrative of asset expropriation and its potential ramifications on diplomatic relations.
