Canada
News and blog
Holding the corrupt to account: the promise and potential of corruption sanctions
When states fail to hold corrupt actors to account, ordinary citizens pay the price. Corruption sanctions were born from the idea that no one should be above the law, no matter where they are in the world. In a new Working Paper, Dr Anton Moiseienko explores how these tools have evolved and offers recommendations for their more effective and legitimate use. Here we share the foreword to his paper by the Basel Institute's Andrew Dornbierer, Head of Policy and Research, International Centre for Asset Recovery. Foreword Every state has an obligation to investigate and prosecute corruption within their jurisdiction. Unfortunately, many states around the world are not willing to fulfil this responsibility. As a result, the very individuals within these states tasked with serving the public interest are instead given free rein to commit acts that not only serve themselves but also corrode the fabric of the state. And ordinary citizens have no alternative but to endure the ensuing economic and social damage. The development of sanctions tools targeting corruption stemmed from the idea that justice should be universal; that no one in any society around the world should be above the law. They are powerful tools, built on powerful principles. States introducing them understand that unchecked corruption will always suffocate a state’s ability to provide security, fairness and prosperity to its citizens. Comparatively though, corruption sanctions are still an underdeveloped concept and are far from perfect. Only a handful of states have introduced them, and those that have are not often using them to their full potential. They also spark valid concerns surrounding due process. These criticisms shouldn’t be ignored: they offer an insight on how these tools could be further developed and enhanced to ensure that they are more credibly and consistently applied. In his paper, Anton Moiseienko provides an excellent and well-researched overview of how corruption sanctions could be designed and employed to better achieve their potential. He explains how these tools have evolved over the last two decades and how they could be further refined to be more effective and achieve a wider range of impact. Critically, his paper is an indispensable resource for those looking to understand exactly how such sanctions can help states deter, disrupt and debilitate the notoriously corrupt that are unreachable through standard criminal justice tools. Learn more Read Dr Anton Moiseienko’s Working Paper “Corruption sanctions: What governments need to know” for a deeper analysis of the topic and key policy recommendations. Get a brief introduction to corruption sanctions from our related Quick Guide. Register for our public webinar "Corruption sanctions – reaching those beyond the law" on 18 June 2026, marking the launch of Dr Moiseienko's Working Paper.
Working Paper sheds fresh light on the sanctions and confiscation debate
As the war in Ukraine intensifies, calls are growing for states to confiscate Russian assets frozen under sanctions and redirect them to provide support to Ukraine. Our latest Working Paper argues that states can and should do this by enhancing the effectiveness and scope of established asset recovery measures – not by introducing new untested mechanisms that risk inviting future legal challenges, defeating the purpose of sanctions and violating the rule of law. Go straight to Working Paper 42: From sanctions to confiscation while upholding the rule of law or read the key takeaways: Executive summary In light of recent world events, political leaders around the world have questioned whether it is justifiable to confiscate assets frozen under financial sanctions in order to redirect them to the victims of state aggression. Some states have even sought to introduce legislative mechanisms to make it possible to confiscate an asset frozen under sanctions, purely on the basis that the asset has been made subject to a sanction. One state – Canada – has already done so. The intention behind these mechanisms is clear: assets frozen under sanctions could be confiscated and repurposed to provide assistance and compensation to the victims of the sanctioned target. In the context of the Ukraine war, for example, proponents argue that these measures will allow states to permanently confiscate Russian-linked assets under sanction and redirect them to provide support to Ukraine. The debate Should states be able to confiscate sanctioned assets\ purely on the basis that they have been sanctioned? The justifiability and legality of mechanisms such as Canada’s is currently the subject of debate. Two key issues include whether the confiscation of assets in such circumstances: is acceptable in the context of established legal rights and norms; defeats the primary purpose of sanctions as a tool of coercion. Issues of property and due process rights With regards to the first point, the lack of adequate judicial oversight included in such mechanisms, and the fact that these mechanisms aim to permanently deprive sanctioned targets of their assets, raises serious questions surrounding property and due process rights. If such a mechanism was introduced in Europe for example, it is likely to be challenged on the grounds that it violates Protocol 1 Article 1 as well as Article 6 of the European Convention on Human Rights. If such mechanisms were also applied to state-linked assets such as sanctioned assets belonging to central banks then this would also raise concerns regarding a possible infringement of domestic and international laws relating to state immunity. Undermining the purpose of sanctions With regards to the second point, permitting the confiscation of sanctioned assets arguably annuls the coercive purpose of sanctions regimes to act as a tool to persuade targets to cease their adverse behaviour. If states are permitted to confiscate sanctioned assets and make it impossible for a target to retrieve their frozen assets then this effectively removes any incentive for the target to change their behaviour. In such cases, rather than operating as tools of coercion, sanctions would instead primarily operate to punish a target and provide compensation to the victims for the harm that has been caused. Of course, some have argued that there is a greater need for these latter objectives, particularly in the context of the war in Ukraine where financial assistance is required urgently. Others however argue that despite the urgency this situation presents, the long-term objective of sanctions should remain coercion, particularly if sanctioning states wish to compel the aggressing state, Russia, to contribute to post-war reconstruction efforts in the future. Other options through which to confiscate assets under sanction There are, in addition, several established avenues for seeking war reparations that should also be explored. Such established measures that states could adopt and apply to target sanctioned assets include: Traditional conviction-based confiscation measures, including ‘extended confiscation’ mechanisms Non-conviction based confiscation NCB measures Unexplained wealth laws These measures could be used to target: Assets that are involved in sanctions violations Sanctioned assets that are also the proceeds of crimes unrelated to the sanctions regime, such as corruption or organised crime offences Unexplained wealth Maximising effectiveness of established asset recovery mechanisms While these avenues may be limited, and can only result in the permanent confiscation of a portion of sanctioned assets, states could take various steps to maximise their effectiveness. For example legislative amendments could be considered to broaden the scope of relevant terms like ‘money laundering’ and to specifically permit confiscated assets to be redirected to the victims of state aggression. Domestic and international coordination could be improved by creating dedicated law enforcement bodies for example, or through participating in international coordination initiatives. Importantly, these avenues target established criminal activity and/or include defined judicial processes through which a targeted person can challenge any attempts to confiscate their property. Therefore they can be applied without unacceptably infringing on legal rights. Moreover, if states take measures to enhance the effectiveness and scope of established asset recovery measures, additional benefits can be derived for the broader fight against financial crime and kleptocracy. The bottom line: maintaining the rule of law Opting for mechanisms that abide by established legal rights will not only significantly increase the chance of recovering assets without subsequent legal challenges. It will also ensure that the very reason for targeting the assets in the first place – namely to seek justice and compensation for acts of aggression – is not undermined through the erosion of the rule of law. \ The term ‘sanctioned assets’ is used as a shorthand to refer to assets of a sanctioned person or country. Learn more Download the Working Paper. Watch or read the main takeaways from a December 2022 panel discussion on asset recovery developments since the start of the war in Ukraine.
Targeting unexplained wealth in British Columbia and beyond – new analysis
“Money laundering is a significant problem requiring strong and decisive action,” concluded Honourable Austin F. Cullen in the final report of his widely discussed Commission of Inquiry into Money Laundering in British Columbia in June 2022 . Despite the billions of dollars of illicit funds estimated to be laundered in British Columbia alone each year, the Commission’s final report found that the “value of assets seized through the asset forfeiture system in British Columbia is shockingly low.” The “failure to vigorously pursue these assets”, the report says, is “a missed opportunity to disrupt and deter the activities of organized crime groups and others involved in serious criminality.” The Report outlines 101 recommendations to reduce the amount of illicit funds flowing into British Columbia, and to more effectively seize those that do. The 101st of these outlines that the Province should: …proceed with its plan to develop an unexplained wealth order regime in British Columbia. The Commission recommends the UK’s controversial unexplained wealth order UWO as a model. If implemented, this mechanism would empower the British Columbian Civil Forfeiture Office to seek court orders that obligate a person to provide information on how they legally acquired assets suspected of being connected to criminal activity. If the person fails to comply with the order, a presumption would be made in a separate civil recovery action that the assets are criminal proceeds – potentially subjecting them to forfeiture – despite the fact that no one has been convicted of a crime. What would a UWO mean for British Columbia? As part of a collaboration between the Basel Institute on Governance and the Vancouver Anti-Corruption Institute, we have developed a Working Paper that analyses the feasibility of Recommendation 101. How would a UK-style UWO support efforts to investigate financial crimes and recover illicit proceeds in British Columbia – or indeed in the rest of Canada? Would this mechanism be too powerful, or not powerful enough? What models from other countries could also be emulated? And what constitutional and charter factors should legislators consider to ensure the UWO has the best chance of success? Our Working Paper explores these issues, and brings in examples from the UK and other jurisdictions that have implemented some form of unexplained wealth mechanism to date. In brief, we are doubtful that a carbon copy of the original UK UWO would result in the identification and recovery of substantial amounts of illicit funds in British Columbia, particularly given the limited success of the UK’s mechanism so far. To bolster the chances of success however, lawmakers could adapt certain elements of this model to the British Columbian context, and also consider adopting elements from other legislative models present in Australian and Ireland. … and beyond? Additionally, due to the fact that money can be laundered with ease across both provincial and international borders, we believe policy makers should couple any British Columbian initiatives to counter money laundering with wider-reaching initiatives, particularly those recommended by the Commission. Enhancing dialogue between Canada’s provinces would, for example, help to develop more consistent and coordinated approaches to both UWOs and civil forfeiture mechanisms more generally. At the federal level, it would be useful to explore the feasibility of introducing illicit wealth provisions in the criminal law, to bring the country into line with international anti-corruption treaties, or to include UWO provisions into existing legislation such as the Special Economic Measures Act or the Magnitsky Act. The findings of the Commission are clear. British Columbia – and Canada – need tools and powers to help uphold the rule of law and prevent the detrimental impacts of organised crime and money laundering on citizens. As stated in the report, “…there can be few things more destructive to a community’s sense of well-being than a governing regime that fails to resist those whose opportunities are unfairly gained at the expense of others.” It is therefore essential that government take decisive action to counter this, including through the introduction of new and stronger mechanisms to target proceeds of crime. More Download the Working Paper. The collaboration was facilitated by the International Academy of Financial Crime Litigators, an independent, non-partisan global centre that shapes and advances financial crime litigation practices for the future. The Academy’s co-founder Lincoln Caylor, Partner at Canadian law firm Bennett Jones, has written the foreword. Andrew Dornbierer’s open-access book Illicit Enrichment: A Guide to Laws Targeting Unexplained Wealth , was published in open-access format in 2021 by the Basel Institute on Governance and is available in English, French and Spanish. See illicitenrichment.baselgovernance.org or order the paperback via Amazon at cost price.
Quebec Construction Association's Integrity Program: a tool for re-establishing trust through Collective Action
In Québec, construction is a major industry, with investments in 2014 of nearly $48 billion CAN$ , or 13% of the province’s GDP. Québec construction association Association de la construction du Québec or ACQ represents more than 60% of the province’s builders. But Canada’s second largest province has been through a major crisis of confidence after investigative journalists uncovered corruption and collusion in public construction contracts. This led authorities to launch a public Inquiry in 2011. The Commission of Inquiry on the Awarding and Management of Public Contracts in the Construction Industry, also known as the Charbonneau Commission, uncovered various collusion and corruption schemes, whose main consequences were distorting the free market and open competition, increasing costs, and impacting public finances – to say nothing of the reputations of those who were directly or even indirectly involved. These manoeuvres also cost the industry very dearly in terms of the reputation and respect of tens of thousands of contractors and workers who saw their reputations tarnished and their pride undermined by unscrupulous individuals. These people have also been the target of anger, indignation, exasperation, cynicism and contempt from a growing number of citizens. For the ACQ, clearly, there needs to be recognition that due to the nature of the crisis, no legislative, regulatory or structural change can forever eradicate the potential for collusion and corruption, nor can such measures rebuild integrity, a sine qua non condition of citizens’ trust in institutions. Inspired by this pragmatic message, the ACQ created an integrity program, which is the outcome of a rigorous, in-depth process and that led its president, Ms Manon Bertrand, to conclude: “While we are all responsible for our actions, the industry must be proactive in order to project an image that truly reflects its values and its essential contribution to Québec society. In practice, all stakeholders need to equip themselves with appropriate tools for best using their judgment and assuming the obligations incumbent upon them with full transparency.” ACQ made a commitment to change ------------------------------- Since 2010, the ACQ has committed to finding solutions to help the industry. As such, it tasked the Centre interuniversitaire de recherche en analyse des organisations Centre for Interuniversity Research and Analysis of Organizations — CIRANO with a research assignment that identified various methods for detecting and preventing collusion in public markets. Right away, the tool proved to be of interest, but for the ACQ, we needed to take it further. As such, in January 2013, the ACQ tasked CIRANO with a second mandate: to suggest solutions that will help honest entrepreneurs to demonstrate their integrity. One year later, CIRANO submitted its report executive summary , in which it recommended the creation of a collective action model to fight industry corruption. The approach it proposed is inspired by a guide developed by the World Bank Institute, which in turn showcases a model put into place by the Bavarian Building Industry Federation in Germany Bauindustrie Bayern, EMB Werte management . This proposal led to an effective partnership, which enabled the ACQ to implement: an integrity program tailored to the realities of Québec’s construction industry; a professional assistance service for companies; easy-to-use tools tailored to the industry; an independent certification process. The steps of the ACQ integrity program -------------------------------------- The ACQ integrity program is a unique model in Québec that combines tangible business management tools with training on ethics-related decision-making. To ensure that the integrity program is tailored to Québec realities, pilot projects were carried out with six companies of different sizes and types of expertise. The analysis carried out by the CIRANO team, completed in February 2015, indicates that this experimental phase helped “strengthen the integrity program’s credibility.” The program’s main steps are: Commitment from management Appoint program managers integrity agent Carry out the initial diagnosis Determine values Develop a charter of values and a code of conduct Define the risk Create simple yet rigorous process Train high risk people Inform and raise awareness among all employees Certification on audit and renewal Since more than 80% of construction companies comprise five or fewer employees, many of them do not have the time, materials or resources to put such a system into place. For this reason, the ACQ’s assistance service is a crucial element in implementing the program. ACQ professionals have created an “Integrity Kit,” a turnkey product, Templates to personalise for each of the suggested documents, In the spring of 2014, six ACQ member companies – varying in size from 5 to 500 employees – agreed to take part in pilot projects. Participants of the pilot projects had the opportunity to share a brief summary of their experience in these videos. Here is one of these testimonials French audio with English subtitles . ACQ Integrity Program - Why ACQ Integrity Program - How ACQ Integrity Program - Lessons Learned The certification process ------------------------- The certification program is currently being developed. The ACQ favours the creation of an independent, not-for-profit organisation tasked with auditing, checking and certifying the businesses that take part in the program. These experiences seem to prove that a crisis such as the one our industry is currently undergoing is, to be sure, a significant problem with clearly felt consequences; but, at the same time, it has served to challenge the lax approach and social disengagement that had too long guided certain business practices. While contractors must win back lost trust by implementing healthy governance practices, this culture change must be driven by effective methods that rely on principles of sustainable development in order to foster companies’ economic longevity. To accomplish this, all stakeholders must contribute, so that the new rules of the game truly fit with the construction industry’s values and needs. Still in its infancy, this collective action will grow quickly, guided by those who choose to get involved in the project rather than stand on the sidelines. The ACQ now wants to ensure engagement by clients in both the public and private sectors. There remains much to accomplish, and new partnerships are key. Clients need to have a voice in this process, among others by getting involved in managing the independent organization that will lead, audit, certify and re-evaluate the set of processes that entrepreneurs must follow. Let’s learn from our experiences, and let’s all put our shoulders to the wheel to help the Québec construction industry – a key pillar of our economy – in its recovery. ACQ’s team has been at been at work mobilising stakeholders and the certification project is getting more support each day. Since the official a launch of the program in June 2015 and the publication of a white paper, many more construction companies have since started to implement the integrity program. The Charbonneau Commission will publish its recommendations after 3 years of inquiry on November 30th at the latest. We yet have to find out if the Commission will recognise the effort made by the ACQ. Whatever the outcome, ACQ plans to follow through with the projects. Find out more about the Québec construction association integrity initiative. www.twitter.com/acqprovinciale
Publications
Quick Guide 43: Corruption sanctions
How can governments respond to serious corruption when those responsible are beyond the reach of the law?
Weak institutions, political protection or limited law enforcement capacity can make it difficult to investigate or prosecute powerful individuals suspected of corruption. In response, some governments have turned to corruption sanctions.
Corruption sanctions allow governments to impose restrictions on people suspected of serious corruption even without a criminal conviction.
This Quick Guide introduces corruption sanctions, explains how they work and highlights both their potential and the concerns they raise.
About this Quick Guide
You are free to share and republish this work under a Creative Commons BY-NC-ND 4.0 Licence. It is part of the Basel Institute on Governance Quick Guide series, ISSN 2673-5229.
Working Paper 62: Corruption sanctions: What governments need to know
How can governments respond to serious corruption when those responsible are beyond the reach of the law? Some governments have turned to corruption sanctions to address this issue.
This Working Paper examines how corruption sanctions – tools that allow governments to impose asset freezes and travel bans on individuals suspected of corruption without any finding of guilt in a court – have evolved over the past decade, and offers recommendations for their more effective and legitimate use.
Download the Working Paper hereAdvantages and limitations of corruption sanctions
Corruption sanctions emerged primarily to address situations where notoriously corrupt individuals enjoy impunity within their own legal systems. Their key strengths lie in their flexibility and versatility:
- they can be applied regardless of any geographical link between the sanctioning state and the alleged corruption, based on relatively low evidentiary thresholds; and
- they can serve a wide range of objectives – from disrupting and deterring corrupt activity to condemning corruption, facilitating asset recovery and signalling support for another country’s law enforcement efforts.
However, the paper also highlights important limitations. Corruption sanctions are often wielded without a clear post-imposition strategy. And: their inherent flexibility comes with due process trade-offs, including broad governmental discretion and limited judicial oversight.
Recommendations
Drawing on an extensive analysis of the experiences of key jurisdictions – including the US, UK, EU, Canada and Australia – the author puts forward nine recommendations for governments on how to design and maintain credible and effective corruption sanctions regimes. These include publishing clear criteria for high-priority targets, strengthening transparency around licensing and delisting decisions, and exploring sanctions against professional enablers in major financial centres.
The paper is aimed primarily at policymakers but will also be of interest to anti-corruption activists, private-sector financial crime specialists and academics.
About this paper
This paper is published as part of the Basel Institute on Governance Working Paper series, ISSN: 2624-9650. You may share or republish it under a Creative Commons BY-NC-ND 4.0 International Licence.
This is a publication of the International Centre for Asset Recovery (ICAR) at the Basel Institute on Governance. ICAR receives core funding from the Governments of Jersey, Liechtenstein, Norway, Switzerland and the UK.
The contents are the sole responsibility of the author and do not necessarily reflect the official position of the Basel Institute on Governance, its donors and partners, or the University of Basel.
(Forthcoming) Working Paper 49: Dirty deals – Case studies on corruption in waste management and trade
Waste management is an essential public service and a huge industry at the local, national and international levels. Getting it right is essential if we are to achieve a circular economy and the Sustainable Development Goals.
Complex legal frameworks and their weak implementation open up spaces for criminals to profit from illegally managing or trading in waste. The consequences on the environment and human health can be severe. The role of corruption in crimes involving waste is unexplored.
An initial analysis shows the potential for corruption to play a role in:
- influencing policy decisions involving waste management;
- corrupt deals involving the selection of waste management companies linked to powerful elites;
- schemes to gain lucrative waste management contracts through systematic bribery;
- illegal imports of hazardous substances for profit, avoiding or suppressing formal controls.
The report explores five case studies (Albania, Lebanon, North Macedonia, Canada–Philippines, US–South America) and proposes a typology of corruption patterns in crimes involving waste management and trade.
About the report
This report is part of the Environmental Corruption Deep Dive Series, a multidisciplinary research project of the Green Corruption programme at the Basel Institute on Governance. The series is made possible by the generous support of the Principality of Liechtenstein.
It is also part of the Basel Institute on Governance Working Paper Series, ISSN: 2624-9650. You may share or republish the report under a Creative Commons CC BY-NC-ND 4.0 licence.
[Forthcoming] Working Paper 42: Confiscating assets frozen under sanctions without undermining the rule of law
This paper will be released on 21 February 2023.
Written in the light of Russia’s war of aggression in Ukraine, the Working Paper explores whether it is justifiable to confiscate assets frozen under financial sanctions in order to redirect them to the victims of state aggression.
The paper first explores the concept of sanctions and financial sanctions (asset freezes) and what they mean in practice.
Using the example of Canada, which has introduced a legislative mechanism for this purpose, the paper analyses whether states should be able to confiscate sanctioned assets purely on the basis that they have been sanctioned.
It then looks at more established measures that states could adopt and apply to target sanctioned assets, including:
- Traditional conviction based confiscation measures, including ‘extended confiscation’ mechanisms
- Non-conviction based confiscation (forfeiture) measures
- Unexplained wealth laws
The paper recommends ways to maximise the effectiveness of these alternative avenues for recovering assets, which are much less controversial and can arguably be applied without infringing on legal rights.
Opting for mechanisms that abide by established legal rights will not only significantly increase the chance of recovering assets without subsequent legal challenges. It will also ensure that the very reason for targeting the assets in the first place – namely to seek justice and compensation for acts of aggression – is not undermined through the erosion of the rule of law.
About this Paper
This Working Paper was prepared by the Basel Institute on Governance.
It is part of the Basel Institute on Governance Working Paper Series, ISSN: 2624-9650. You may share or republish the Working Paper under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY-NC-ND 4.0).
Suggested citation: Dornbierer, Andrew. 2023. ‘Confiscating assets frozen under sanctions without undermining the rule of law.’ Working Paper 42, Basel Institute on Governance. Available at: baselgovernance.org/publications/wp-42.
Acknowledgements
The Basel Institute would like to thank Isys Lam and the law firms of Bonifassi Avocats (France), Hengeler Mueller (Germany), Bennett Jones (Canada) and Rogério Alves & Associados (Portugal) for their support in providing research for this paper.
The Basel Institute would also like to thank Stefan Lenz, Stefan Cassella, Maria Nizzero, Nicola Bonucci and Oscar Solórzano for their support in reviewing the content of the paper and recommending amendments.
Working Paper 41: Targeting unexplained wealth in British Columbia
The final recommendation of the Commission of Inquiry into Money Laundering in British Columbia (‘the Commission’) urged the government to legislate an unexplained wealth order (‘UWO’) as part of a wider approach to counter the prevalence of money laundering and proceeds of crime in the province.
This document analyses the feasibility of this recommendation. It:
- briefly explains the concept of unexplained wealth and how it can be targeted through legislative instruments;
- outlines the reasons for which the Commissioner proposed a UWO for British Columbia;
- explains how a UK-style UWO works and assess the probability that a mechanism of this kind would successfully recover unexplained wealth in British Columbia;
- addresses the constitutional issues that may arise if a UK-style UWO was introduced, as outlined by former Supreme Court Justice, the Honourable Thomas A. Cromwell C.C., in his annexed opinion to the report;
- explains other legislative options that target unexplained wealth (including those in Western Australia and Ireland) and assess their constitutional compatibility and potential effectiveness as compared to a UK-style UWO;
- explores the legal rights issues that may arise if either a UK-style UWO or a traditional UWO was introduced; and
- outlines the legislative safeguards that could be put in place to reduce the risk that any such mechanisms would negatively impact on established legal rights.
About and acknowledgements
This document has been prepared by experts working with the Basel Institute on Governance, an independent not-for-profit organisation dedicated to countering corruption and other financial crimes, and the Vancouver Anti-Corruption Institute, an organisation devoted to anti-corruption efforts and legislative change. The collaboration was facilitated by the International Academy of Financial Crime Litigators, an independent, non-partisan global centre that shapes and advances financial crime litigation practices for the future.
Open-access licence and citation
The publication is part of the Basel Institute on Governance Working Paper Series, ISSN: 2624-9650. It is licensed for sharing and republishing under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY-NC-ND 4.0).
Suggested citation: Dornbierer, Andrew, and Jeffrey Simser. 2022. “Targeting unexplained wealth in British Columbia: An analysis of Recommendation 101 of the Final Report of the Commission of Inquiry into Money Laundering in British Columbia.” Working Paper 41, Basel Institute on Governance. Available at: baselgovernance.org/publications/wp-41