ARCHIVED — Vol. 147, No. 1 — January 2, 2013

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Registration

SOR/2012-284 December 14, 2012

FREEZING ASSETS OF CORRUPT FOREIGN OFFICIALS ACT

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

P.C. 2012-1713 December 13, 2012

Whereas Egypt has asserted to the Government of Canada, in writing, that each of the persons listed in sections 1, 2 and 4 of the annexed Regulations Amending the Freezing Assets of Corrupt Foreign Officials (Tunisia and Egypt) Regulations has misappropriated property of Egypt or has acquired property inappropriately by virtue of their office or a personal or business relationship and 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 Egypt has asserted to the Government of Canada, in writing, that each of the persons referred to in the items listed in section 3 of the annexed Regulations has not 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 lift the freeze on the property of those persons;

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. Item 9 of Schedule 2 to the Freezing Assets of Corrupt Foreign Officials (Tunisia and Egypt) Regulations (see footnote 1) is replaced by the following:

9. Rachid Mohamed Rachid (also known among other names as Rachid Mohamed Rachid Rached), born on February 9, 1955 and former Minister of Trade and Industry

2. Item 43 of Schedule 2 to the Regulations is replaced by the following:

43. Mohamed Magdy Hussein Rasikh (also known among other names as Mohamed Magdy Hussein Rasik), born on December 23, 1943

3. Items 74 to 81, 84 to 87, 116, 121 and 124 of Schedule 2 to the Regulations are repealed.

4. Schedule 2 to the Regulations is amended by adding the following after item 145:

  • 146. Fouad Madbouly Mohamed Mohamed
  • 147. Mohamed Ahmed Mohamed Abdel Dayem
  • 148. Ezzat Abdel Raouf Abdel Kader El Hag

APPLICATION BEFORE PUBLICATION

5. 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

6. 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 (Regulations), SOR/2011-78. 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, adding more names, thereby bringing the number of designated persons subject to having their assets frozen in Canada to 268 persons — 145 for Egypt and 123 for Tunisia.

2. Issue

Since the making of the Regulations and the consequent amendments, Egypt has requested in writing that Canada amend Schedule 2 of the Regulations by adding three persons convicted of corruption in Egypt. Egypt has also requested that Canada delist 15 persons cleared of wrongdoing pursuant to a decision by the Office of the Public Prosecutor of Egypt that quashed the asset-freezing order in Egypt against these persons. These requests have also provided additional spellings for the names of persons already listed. Consequently, Schedule 2 of the Regulations needs to be amended to give effect to the requests.

3. Objectives

The regulatory action aims to

  • ensure that misappropriated assets held by officials of the former government can be seized so that politically exposed foreign persons may be held accountable; 
  • signal Canada’s support for accountability, rule of law and a transition to democracy in Egypt.

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 additional written requests from Egypt pertain to individuals who are politically exposed foreign persons. The three individuals whose names have been recently submitted by Egypt to be added to the list of designated persons are former senior public officials who have been convicted of corruption in Egypt. The requests from Egypt to delist 15 individuals pertain to persons who were designated as politically exposed persons under the Regulations on December 16, 2011, but who have now have been cleared of wrongdoing and had the asset-freezing orders against them in Egypt quashed by the Office of the Public Prosecutor of Egypt.

5. Consultation

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

6. 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.

7. Rationale

The situation in Egypt has improved, but a degree of political uncertainty remains. Mohamed Morsi, the candidate of the Muslim Brotherhood, was declared the winner of the second round of the presidential election on June 24, 2012, over former Mubarak-era prime minister Ahmed Shafiq, by a margin of only about 1 million votes. On August 12, 2012, President Morsi abrogated the constitutional declaration issued by the Supreme Council of the Armed Forces (SCAF) in June 2012, which dissolved the parliament (on the grounds that the way in which members were elected was unconstitutional) and granted the SCAF sweeping legislative and executive authority. This move by President Morsi effectively moves full executive and legislative authority to the Office of the President, pending the adoption of a new constitution by a popular referendum expected before the end of 2012, and new parliamentary elections to be held within two months of the adoption of the new constitution. Egypt’s economy continues to suffer the effects of the revolution. A loss of tourism dollars is draining the economy due in part to security concerns.

Considering the subsequent requests made by Egypt since the Regulations were made and Canada’s continued support for accountability, rule of law and a transition to democracy in Egypt, amending the Regulations in accordance with the decision of the Egyptian authorities and Egypt’s request will ensure that the Regulations remain accurate, comprehensive and premised on the rule of law.

8. 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.

9. Contacts

Mr. Wendell Sanford
Director
Criminal, Security and Diplomatic Law Division
Department of Foreign Affairs and International Trade
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 613-995-8508
Fax: 613-944-0870

Mr. Marcus Davies
Legal Officer
Criminal, Security and Diplomatic Law Division
Department of Foreign Affairs and International Trade
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 613-944-2071
Fax: 613-944-0870