Ottawa actually did nothing to extort millions from the Russian oligarch

Two years after Foreign Minister Mélanie Joly announced he was taking the unprecedented step of seizing millions of dollars from a sanctioned Russian oligarch with assets in Canada, the government didn’t actually start legal proceedings to confiscate the money, let alone turn it over to rebuilding Ukraine — and it may never happen.

The federal government announced on December 19, 2022 that it had ordered the freezing of $26 million held in a Canadian bank account by an offshore investment fund, saying the money ultimately belonged to Roman Abramovich, a high-profile ally of the Russian president. Vladimir Putin.

It was Ottawa’s first use new legislative powers not only sanctioning certain people and companies, but confiscating their money and selling their assets based solely on those sanctions – something no other major Western economy has attempted.

The government promised that the funds claimed by Abramovich would be used “for the reconstruction of Ukraine and compensation for the victims of the illegal and unjustified occupation of the Putin regime.” The oligarch, who previously owned the Chelsea soccer team in the English Premier League and owns a stake in a steel company with plants in the Prairies, is already hit with sanctions By Canada in early 2022.

However, more than two years later, the Liberal government has not taken any of the necessary steps, including going to the Supreme Court to effectively confiscate the $26 million she had in her Citco Bank Canada account.

“We haven’t seen any of that, and it’s certainly a mystery. I wish I knew what was going on,” said Donna Dasko, an independent senator involved in the Russia sanctions document. the now-defunct Bill S-278, which would have further expanded the government’s sanctions powers.

“It took a long time,” Dasko said. “And we really need transparency on this.”

Risk Canada may have to compensate oligarch

Global Affairs Canada would not say why it has not yet moved to seize the funds. In a brief emailed statement last month, it said it simply did not have to do so “for a period of time.” The department, however, would not provide additional information, citing privacy concerns made a statement to the press About plans to confiscate Abramovich’s assets.

The American law firm representing Abramovich did not respond to emails seeking comment.

A number of lawyers with expertise in sanctions and international trade say the government may have bitten off more than it could chew when it announced it would seize millions.

There is a risk that according to Ottawa the money Manticore Fund (Cayman) Ltd. since it is in an account belonging to an offshore investment fund called , it cannot actually be linked directly enough to Abramovich.

“The issue of ownership and control is a difficult one,” said Clifford Sosnow at the Canadian-based international firm Fasken. “There are a number of hurdles they have to work through to move on.”

After that, there is a chance that Abramovich could challenge the asset forfeiture on the same grounds as in 1991. Canada-Russia investment protection agreementSosnow noted that under its terms, Canada requires it to be compensated for any “expropriation” or “nationalization” of its investments.

John Boscariol of Canadian law firm McCarthy Tétrault said the fact that Canada took the unprecedented step has other countries “watching to see our success,” which may explain the delay in action.

“I think the Canadian government is very cautious in what it’s doing, knowing that this is a precedent,” Boscariol said.

Other countries are using Russian assets abroad to help Ukraine, but in a less direct way. For example, there is the European Union directed profit It was created by the frozen funds allocated by the Central Bank of Russia to Ukraine for military and reconstruction purposes, but so far they have not confiscated the funds themselves.

There are also G7 countries announced A $50 billion (Cdn 68 billion) US loan package to Ukraine, secured against interest from frozen Russian Central Bank assets. Canada allocated 3.7 billion US dollars (5 billion Cdn) for this.

The giant cargo plane won’t be flying anytime soon

Canadian assets worth about 140 million Cdn have been frozen under Russian sanctions. RCMP said in his final assessment.

But the Liberal government has committed to only one other Russian asset seizure: in June 2023. ordered to catch An Antonov An-124 transport plane belonging to Russia-based Volga-Dnepr Airlines has landed at Pearson Airport in Toronto.

The cargo plane, one of the world’s largest cargo planes, has been sitting idle on the tarmac for nearly three years now, costing more than $1 million in aircraft parking. There is a government of Ukraine was pointing to his desire owning the plane, but any transfer would face numerous hurdles, including the fact that the plane has not flown since 2022 and may no longer be airworthy.

Meanwhile, the Russian company that owns it has raised numerous disputes with the Canadian government. Like the first “Toronto Star” reported on this last week, it filed a federal court petition in November asking a judge to lift Canada’s sanctions on the company and also said it has filed a $100 million arbitration claim against the United States under the Canada-Russia investment pact.

Orest Zakydalsky, senior policy advisor to the Ukrainian Canadian Congress, said the lack of progress in actually seizing these Russian-owned assets is disappointing.

“We’ve been talking about the government saying it’s a priority for years and then frankly, we’re not seeing much action on it – or frankly,” he said. “There’s a press release and not much after that.”