Originally posted by jwab
Canada’s Banks Pressed Into Effort to Quell Protests
Under an emergency order, Canada is deploying tools designed for use against money launderers and terrorists against demonstrators
By Richard Vanderford
Feb. 17, 2022 8:13 pm ET
Canadian banks have begun cutting off financial services to people linked with ongoing anti-vaccine-mandate demonstrations in Canada, an unprecedented use of financial power following an emergency order from the government. ...
"Ms. Freeland declined to directly address whether donors would be targeted, but the person in the banking industry familiar with the matter said banks have been instructed to flag large donations that came in the wake of the announcement of emergency measures this week. Accounts involved in suspect transactions are expected to be frozen immediately, after which suspicions can be brought to law enforcement, the person said.
The order essentially requires the application of the pre-existing sanctions and suspicious activity rules to new targets, said Zain Rizvi, a lawyer at the firm Davies Ward Phillips & Vineberg LLP who advises financial institutions.
“It’s unusual, it’s something that’s never been done in history, but the actual requirements that they’re imposing on financial entities are not really new requirements,†Mr. Rizvi said.
The emergency order bars lawsuits against the banks, but the institutions face risks to their client relationships and reputations as they work to comply.
Canada’s Emergencies Act, passed in 1988, had never been invoked before, and its predecessor legislation was used only once in peacetime. Prime Minister Justin Trudeau’s father, Prime Minister Pierre Trudeau, declared an emergency to allow law enforcement to round up individuals suspected of supporting French Canadian separatist militancy following the kidnapping of government officials in 1970.
U.S. law likely wouldn’t allow the government to take similar steps to deal with an analogous domestic situation.
Using sanctions law, the U.S. Treasury Department can mandate the freezing of accounts of designated individuals suspected of involvement in certain illegal activities such as terrorism and drug trafficking, but those activities must have a foreign tie, said David Stetson, a former senior lawyer at Treasury who now practices at the firm Steptoe & Johnson LLP.
It would be “particularly unlikely in the U.S., and I might even say could offend the sensibilities of people who are accustomed to a system where the government has to be involved before citizens are deprived of access to their property,†Mr. Stetson said. “It’s unusual that Canada’s framework doesn’t seem to be recognizing some constraints.â€
Write to Richard Vanderford at richard.vanderford@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved.
Comment