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A Chinese flag is illuminated by sunshine in the Hall of Honour as Chinese Premier Li Keqiang visits Parliament Hill in Ottawa, Thursday September 22, 2016. (Adrian Wyld/THE CANADIAN PRESS)
A Chinese flag is illuminated by sunshine in the Hall of Honour as Chinese Premier Li Keqiang visits Parliament Hill in Ottawa, Thursday September 22, 2016. (Adrian Wyld/THE CANADIAN PRESS)

CHRISTINE DUHAIME

An extradition treaty with China sends a message about corruption Add to ...

Christine Duhaime is a lawyer at Duhaime Law, with a specialized practice in anti-money laundering, counterterrorist financing and asset recovery.

The topic of an extradition treaty between Canada and China is at the forefront among the news media, government officials and the public these days. Indeed, it should be, because it’s a topic that’s important to both countries.

There are a lot of experts telling us what’s wrong with an extradition treaty with China.

We are told that Canada can’t sign an extradition treaty with China because China has capital punishment. But that’s never been a bar to entering into an extradition treaty. Canada has extradition treaties with the United States, Japan, Zimbabwe, Singapore and the Maldives, all of which have capital punishment.

We are told that Canada can’t enter into an extradition treaty with China because its human-rights record doesn’t match Canada’s. If that were an impediment, Canada would have no extradition partners whatsoever, because it’s hard to imagine a country that has a better overall record for the protection of human rights.

Then there is the notion that the rule of law would be violated if Canada entered into an extradition treaty with China. Not so – the rule of law will prevail if Canada enters into an extradition treaty with China.

The rule of law is a legal principle that includes legal transparency, accountability to the law, procedural fairness, the enactment and enforcement of laws that are responsive to the collective (as opposed to a powerful elite), and the inculcation of a culture of lawfulness.

As a country, we have gotten into hot water with China because we have ignored the rule of law in our own country in one specific area: money laundering. Our laws against money laundering are based on international policies and are designed to prohibit and prevent people from moving the proceeds of crime from other countries into Canada.

But in its recent Mutual Evaluation of Canada, the intergovernmental Financial Action Task Force raised suspicions that Chinese officials may be laundering the proceeds of corruption through Vancouver’s real estate sector, and suggested that Canada isn’t doing enough to prevent the proceeds of crime from entering the country.

Meanwhile, recent news stories have alleged that some investors from China living in Vancouver are earning income but not reporting it or paying taxes properly. According to statistics from Immigration and Citizenship Canada, a refugee reports a larger income, and ergo pays more taxes, after 15 years settled in Canada than a wealthy immigrant investor does.

If we are turning a blind eye to the proceeds of corruption being used to buy Canadian real estate, the problem is one of unfairness. It is unfair when the tax-paying middle class cannot afford a house in Vancouver because of a handful of wealthy investors who do not pay taxes here, or who immigrate with money derived from criminal activities and are buying and flipping houses for profit.

The rule of law does not prevail when enforcement of the law protects the wealthy elite but is not responsive to the collective middle class. Selective enforcement or non-enforcement of financial crime breeds lawlessness by suggesting to the population that criminality pays.

The Globe and Mail recently published a story about a foreign national who bought houses in Vancouver using third parties to obtain mortgages. That practice, if not disclosed to the banks in advance, would cause the banks, realtors and insurers conducting legally required due diligence to unwittingly file reports to the Financial Transactions and Reports Analysis Centre of Canada with the wrong persons identified as conducting financial transactions.

The resulting (unwitting) systematic filing of reports with the wrong persons identified would stand in the way of FinTRAC’s efforts to process information accurately, jeopardizing our security against money laundering and terrorist financing. The rule of law would not prevail if there were an absence of legal transparency – the public would be defrauded of the delivery of a vital public service by a few foreign homeowners and we would all be placed at risk.

I believe China is after just one thing in an extradition treaty with Canada – the return of the people who have absconded with the treasury of its people. Corrupt officials who steal millions or billions from taxpayers wreak incredible havoc on their countries’ economies – take Ukraine, which went bankrupt after $70-billion (U.S.) was allegedly removed by former administration officials, including a president who amassed a fortune on a salary of $2,000 a month.

How can we hold our heads high and say that the rule of law prevails in Canada if we may be keeping the treasury of the people of China parked in Vancouver real estate and we may be harbouring those responsible?

An extradition treaty with China would go a long way toward ensuring that Canada is not a safe haven for money launderers. And it would send a crystal-clear message that in this country, fairness and the rule of law prevail.

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