Canada is increasingly using international trade sanctions. These sanctions target foreign individuals and entities, and compliance has become increasingly complex and important for companies operating abroad. What happens when you have been added to a sanctions list and want to be removed? We consider below two recent cases on this topic.
- Former prime minister of Haiti files legal challenge in Federal Court
Recently, sanctions have been imposed in response to the activities of criminal gangs and their supporters that are fueling violence and insecurity in Haiti. These sanctions are imposed under the United Nations Act (UN Act), as well as the Special Economic Measures Act (SEMA). In the first three months of 2023 alone, Canada has amended its sanctions against Haiti three times: on January 12, 2023, February 15, 2023, and March 23, 2023.
Canadian sanctions relating to Haiti include lists of those subject to bans. In addition, the regulations adopted regarding Haiti allow sanctioned persons to request that their names be removed from the applicable list. This administrative process allows sanctioned persons to challenge the basis for their inclusion on the sanctions lists. According to the regulations concerning Haiti, the Minister must respond to such a delisting request within 30 days.
On November 17, 2022, Canada determined that the situation in the Republic of Haiti remains a serious breach of international peace and security, and ordered the addition, among others, of Laurent Salvador Lamothe, the former Prime Minister of Haiti, in the schedule to the Special Economic Measures (Haiti) Regulations (SOR/2022-226) (the Regulations). Mr. Lamothe does not appear to have used the available administrative process to challenge his addition; he instead chose to file an application for judicial review in the Federal Court of Canada on December 22, seeking to have his name removed from the Schedule. Although Mr. Lamothe asked Global Affairs Canada (GAC) to provide the evidence that led to this decision, it is not clear whether Mr. Lamothe formally asked the minister to be removed from the list before filing his application with the Court.
The application for judicial review
The application for judicial review filed by Mr. Lamothe before the Federal Court challenges the decision to add his name to the Schedule to the Regulations (the Decision). Mr. Lamothe maintains that the Decision was not communicated to him, having become aware of it through social networks on November 21, 2022. The Decision was subsequently published in the Canada Gazette, Part II, volume 156, number 25, in December 2022. In his motion, Mr. Lamothe asks the Federal Court to a) declare that the addition of his name to the Schedule violates the rules of procedural fairness and natural justice and b) to issue an order setting aside the addition of his name to the Schedule to the Regulations.
Mr. Lamothe’s request includes the following grounds:
(a) He has never been subject to any law, regulation, ordinance, decision or by any other legal measure in Haiti suggesting that he supports, directly or indirectly, armed gangs in Haiti;
(b) He is also not under investigation in Haiti for any alleged links to armed gangs;
(c) As Prime Minister of Haiti, he made the fight against insecurity one of his main priorities by developing and then implementing a policy of zero tolerance against armed gangs;
(d) During his tenure, the government of Haiti dismantled the two largest kidnapping networks in Haiti, imprisoned their leaders and eliminated lawless zones;
(e) As Prime Minister, he also encouraged a strengthening of national security by purchasing arms and equipment for the Haitian National Police, whose quality armored vehicles are still in service; and
(f) He has supported and continues to support the adoption in Haiti of laws against corruption, against money laundering and against the financing of the activities of criminal organizations.
Mr. Lamothe alleges that the Decision is, therefore, not based on any verified or verifiable data and that it contradicts the acts of Mr. Lamothe during the exercise of his functions as prime minister as well as after the end of his mandate.
In his request, Mr. Lamothe explains that on December 12, 2022, he gave the Minister formal notice to allow him to respond to the allegations and accusations concerning him, failing which the Minister would have to remove his name from the schedule or provide the reasons and the documents that founded the addition of his name. According to Mr. Lamothe, the Minister did not respond to his letter of formal notice. Consequently, the decision to sanction him was made in contravention of the principles of natural justice and procedural fairness that the Minister was required to respect. As a result, the Minister failed in his obligation to verify at least the information which was or could have been transmitted to him and which tends to incriminate Mr. Lamothe or to cast doubt on his credibility, before recommending the imposition of sanctions.
According to Mr. Lamothe, the decision contravenes the principles of procedural fairness since he had no opportunity to defend himself against the allegations made against him.
On January 6, 2023, the Attorney General of Canada responded that the government intends to oppose the application. The Attorney General has not yet filed a statement of defense before the Court.
2. Formula 1 driver Dmitry Mazepin – judicial review in Federal Court
More recently, a Russian Formula 1 driver applied to the Federal Court for judicial review of his listing under the Russian regulations. The driver, Nikita Mazepin, and his father, Dmitry Mazepin, were added to the Russian regulations in May 2022.
Shortly after being placed on the sanctions list, on June 27, 2022, Nikita Mazepin asked Global Affairs Canada to provide him with the reasons for his listing. He subsequently filed an access to information request. On December 8, 2022, having received no response from GAC, Mazepin filed his request to be removed from the sanctions list with the Minister of Foreign Affairs.
On March 29, 2023, 109 days since the filing of its request for withdrawal, Mazepin submitted an additional request asking the Minister to render a decision no later than April 3, 2023, given that the latter failed to render a decision within the prescribed deadlines. The Special Economic Measures (Russia) Regulations (the Russia Regulations) require the Minister of Foreign Affairs to decide on a delisting request within 90 days of receiving it.
The Minister did not respond within the deadline set by Mr. Mazepin and on April 17, 2023, Mazepin filed an application for judicial review in Federal Court. Then, on April 21, 2023, the Minister responded to the March 29 request by rejecting it. The Minister’s April 21 decision does not mention any grounds for removal from the list, but is based solely on the fact that Mazepin is the son of Dmitry Arkadievich Mazepin, who, according to the Minister, is a close associate of Vladimir Putin.
In the application to the Federal Court, Mazepin argues that there must be a connection between his behavior and the situation in the “foreign state” which justifies the adoption and maintenance of the sanctions. Punishing someone solely because of their DNA would be a violation of the rule of law. Notwithstanding Mazepin’s arguments, the Russia Regulations specifically provide for the sanctioning of family members and associates of government officials, perpetrators of human rights abuses and persons engaged in activities which, directly or indirectly, facilitate a violation or attempted violation of the sovereignty or territorial integrity of Ukraine or provide support or financing or contribute to such violation or attempt or which hinder the work of international organizations in Ukraine.
The notice states that Mazepin is a “young sportsman and professional racing driver who is in no way involved in the aggression suffered by Ukraine” nor engaged in economic sectors providing substantial income to Russia. Sanctions, and the Minister of Foreign Affairs failing to respond in a timely manner, prevent Mazepin from racing in Canada or having any dealings with Canadians, which “catastrophically reduces” his eligibility for a return to the Formula 1 circuit next year, according to the request.
In his opinion, Mazepin asserts that the Minister failed to observe the principles of natural justice by not giving him any opportunity to be heard on the decision relating to his listing and by not providing him with any reason for it.
The Attorney General has not yet filed with the Court a response to Mazepin’s application.
In Canada, the process for adding and removing a name from a sanctions list is unclear and opaque. In this respect, Canadian sanctions differ from the parallel sanctions of many of our allies. For example, in the UK, the minister publishes a summary of reasons when an individual is sanctioned. In the United States, authorities publish guidelines on how sanctions work and on accepted justifications for challenging the addition of a name to sanctions lists.
In Canada, when an individual wants to be delisted, they must submit a request to GAC with the relevant information. Nevertheless, GAC does not provide any material or information providing support for the decision to list an individual or entity. The sanctioned person, therefore, has no access to the reasons of the Minister relied on in including the person or entity on a sanctions list. This complicates any challenge to the listing – it is, obviously, difficult to challenge a decision when it is impossible to know why it was taken.