Under Canada’s regime of economic sanctions, Nader Kalai, a businessman from Halifax was expected to be the first person to face a trial after violating Canada’s sanctions in Syria. However, the trial ended abruptly in January 2021 as the Crown declined to offer any evidence and asked the Court for an acquittal.
On May 24, 2011, Canada announced that targeted sanctions, in response to the humanitarian crises and resulting breach of international peace and security in the region, would be imposed against members of the current Syrian regime under the Special Economic Measures Act (SEMA). The Special Economic Measures (Syria) Regulations impose sanctions against members of the current Syrian regime. In addition to the restrictions on dealings with designated persons, the Regulations prohibit any person in Canada and any Canadian outside Canada to:
As a backgrounder to the proceeding, Kalai was accused of violating SEMA and initially, his trial was set for May 2020. The hearing was then delayed to the following month as a result of the COVID-19 pandemic. The three-day trial starting on August 18, 2020, was to be judge-alone and much of it was to be done by video-conferencing. The trial was expected to be unique as only one person has been prosecuted under SEMA since its introduction in 1992 which at the time resulted in a guilty plea and a small fine for the accused, a company.
The accusations against Kalai of violating the measures imposed on Syria included making a payment of 15 million Syrian pounds (approximately C$140,000) to a company called Syrialink, a Syrian company, on November 27, 2013. The Crown alleged that the transaction took place when Kalai was in Canada.
An earlier ruling by the Supreme Court of Nova Scotia shows that the presiding judge held that while the evidence before the Court was admissible, Crown had produced little or no evidence in support of the documents being admitted for the truth of their contents and the Crown did not meet the threshold for substantive reliability.
In June 2018, the Canada Border Services Agency (CBSA) laid the charges against Kalai for violating the Canadian sanctions regime. After a two-year-long investigation into Kalai, the CBSA claimed that he had misled Citizenship and Immigration Canada in acquisition of his status as a Canadian permanent resident. Had he been convicted, Kalai would have faced up to five years in prison.
Kalai, who has been placed under the European Union sanctions regime, was described by a European court as being a “leading businessperson operating in Syria with significant investments in the construction industry.”
The efficacy of the Canadian sanctions regime appears to be in stark contrast with respect to its American counterpart. The United States Department of Justice laid charges against three individuals, including two residents of Ontario, Canada in an indictment with conspiracy to export U.S. goods to Iran resulting in extra-territorial arrests (See, International Sanctions lead to charges being laid in Canada and Iran by US Authorities).
The lawyers at Tereposky & DeRose have significant experience in the design and implementation of sanctions-related compliance programs, including policies, procedures, employee training, and internal control mechanisms. They also regularly assist both Canadian and international businesses, financial institutions, and individuals with internal investigations when “red flags” appear and provide advice on compliance in these areas. Where breaches have occurred, they have worked closely with their clients in making voluntary disclosures and in engaging with the ensuing investigations conducted by the RCMP and Global Affairs Canada.