Confiscating assets of Russian oligarch not without risk, expert says | War in Ukraine

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Confiscating assets of Russian oligarch not without risk, expert says | War in Ukraine

By wanting to show its support for the Ukrainian people, the Trudeau government could open a Pandora's box with potentially harmful consequences for Canadian businesses and taxpayers. Interview with an international trade lawyer.

Russian billionaire Roman Abramovich, a friend of Vladimir Putin, owns 26 million dollars in a Canadian bank account.

Ottawa wants to confiscate the assets of the Russian oligarch Roman Abramovich, in order to redistribute them to Ukraine to compensate the victims of the war. Legal proceedings are underway to seize the 26 million dollars that this friend of Vladimir Putin holds in a Canadian bank account. An unprecedented gesture in Canada and around the world, but not without risk.

The Trudeau government is exposing itself to a long legal battle, opening the door to reprisals against Canadian companies in Russian territory and, ultimately, may have to reimburse the investments confiscated from Roman Abramovich.

Radio-Canada spoke with William Pellerin, international trade lawyer and partner at McMillan. He was also a lawyer for six years at the Department of Foreign Affairs.

William Pellerin, international trade lawyer and partner at McMillan

How badly this decision by Canada to confiscate the assets of a Russian oligarch, based on his relationship with Vladimir Putin, is she setting a precedent?

It is a new way of using international sanctions. Usually, these kind of sanctions have mainly a deterrent objective, to change the behavior of the Russian government and the oligarchs with regard to the invasion of Ukraine.

Now, Canada is changing its tune. He wants to act in a punitive way, against the regime of Vladimir Putin and those who support him, who are complicit. And use the seized assets to compensate the Ukrainian victims. This way of doing things has never been used in the past, neither by Canada nor by its G7 allies.

Why is Canada punishing Roman Abramovich? Did he do anything illegal or criminal, contrary to Canadian law?

There are no criminal charges in Canada against M Abramovich. He is accused of being an accomplice of President Putin and the Russian regime who participate in the unjustified invasion of Ukraine. His name has been on the register of persons sanctioned by decree by the Trudeau government since March 2022.

He is considered persona non grata. It is forbidden to do business, transactions with him. But if he could come to Canada, he wouldn't go to jail.

If Ottawa now wants to confiscate his assets and redistribute them to Ukraine, he must s to address to the Court. What does the process look like? What does the Attorney General have to prove?

The government has no great arguments to make. It is a process created by special law which makes it very easy. All the Attorney General has to do is prove that the property in question really belongs to Mr. Abramovich and that it is owned or controlled, even indirectly, by him.

What are the possible remedies for Roman Abramovich?

His lawyers could invoke section 8 of the Canadian Charter of Rights and Freedoms, which protects against unreasonable searches and seizures. The Court will have to consider whether the seizure was reasonable and whether it respected his privacy, for example.

The other possibility would be to argue that Ottawa does not have jurisdiction in this case, since it is not a question of criminal law, but rather of civil law. So it's the provincial power, in terms of the confiscation of property rights and all that, that comes into play.

There is a whole rather interesting constitutional question about this division of powers that could arise and take a long time to settle. But the burden of proof will then be on Mr. Abramovich, and not on the federal government.

Russian billionaire Roman Abramovich was present in Istanbul during the signing of the agreement on the export of Ukrainian wheat between Moscow and kyiv.

Even if Ottawa won its case, could it have to reimburse the assets confiscated from Mr. Abramovich?

Yes. He would have recourse under international trade law. Canada and Russia (the USSR) signed the Agreement on the Promotion and Protection of Investments in 1991.

The agreement notably protects investors against expropriation. And one of the clauses states that if ever an expropriation is justified, the government must offer compensation.

So we can expect Mr. Abramovich to say: You see, my money held in Canada has effectively been expropriated, and requires international arbitration.

If the court rules in his favor, Canada should return his $26 million. It would be a bit weird as a development of course, but it is possible.

Until then, what are the chances of Russia retaliating against Canada?

Very careful. The risks of reprisals are real. Faced with unilateral action by Canada, Vladimir Putin could feel justified in giving him back his own coin.

Russia could also decide to target people from Russia. Canadian businesses or companies that have assets in Russia, mining companies, for example. Russia could sanction them and, subsequently, decide to confiscate their property.

Ministers Joly and Freeland are trying to convince European leaders to follow Canada's lead in the confiscation and resale of Russian assets. What are the chances that other countries will follow suit?

I'm not sure Canada's call changes much for Europe . I think there are a lot of close ties between Europe and Russia. There are all sorts of fundamental questions that affect the production of energy necessary for the functioning of Europe. Some countries are really in a very difficult situation.

I am not sure that Canada's action on the issue of confiscations is enough to change the idea of the European community. There are probably too many risks to step into this terrain.

The comments from this interview have been condensed for brevity.

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