Canada and China signing deal to share ‘corruption’ assets

 

 

BY SAM COOPER, THE PROVINCE JUNE 5, 2015

 

 

In a recent interview with Chinese media, Canadian ambassador Guy Saint-Jacques confirmed the two governments are finalizing plans to share the money and property of Chinese fugitives who have fled to Canada.

Photograph by: THE CANADIAN PRESS , Jason Franson

Canada and China are in the process of signing a groundbreaking deal to share the money-laundered homes, cars and funds of Chinese corruption suspects, while China also seeks to race ahead with alternative asset-seizure plans.

Canadian ambassador Guy Saint-Jacques has confirmed the two governments are finalizing plans to share the money and property of Chinese fugitives who have fled to Canada. Saint-Jacques was not available for an interview, but in a statement the Department of Foreign Affairs told The Province Friday that both countries are now completing internal processes needed to bring the agreement into force. The department would not comment on details of the agreement. Chinese reports have suggested 80 per cent of any fugitive’s identified assets would be shared. The long-anticipated deal — which sources say will be finalized within months when Canadian agencies are staffed and trained to enforce the plan — is China’s first such agreement and a model for other countries, according to Saint-Jacques and Chinese officials.

In a recent story speculating on the pending asset-sharing deal China Daily quoted Saint-Jacques as saying Canada is investigating prominent Vancouver developer Michael Ching, a.k.a. Muyang Cheng, who is wanted in China on corruption allegations. Michael Ching denies all allegations. As The Province has reported, Ching has donated heavily to the Liberal Party of Canada, the B.C. Liberals, and a number of politicians including Richmond Mayor Malcolm Brodie and Vancouver Mayor Gregor Robertson.

As China exerts diplomatic pressure for extradition of suspects in Canada, the U.S. and Australia — the three so-called “paradises” for China’s corruption suspects — Canada’s anticipated asset-sharing deal will ramp up pressure on B.C. suspects, Canadian money-laundering lawyer Christine Duhaime said.

But China’s unannounced alternative plans could impact alleged suspects like Michael Ching and the Canadians who have handled their money even faster, according to Duhaime.

Duhaime says that China is reaching out to foreign lawyers in efforts to freeze the business activities and seize the property and funds of corruption suspects.

“I’ve heard China will go with whatever is quickest, and they are not convinced a government to government asset-recovery program with Canada will be quickest,” Duhaime said Thursday. “So they are looking at ways they can launch private actions.”

That means that development projects associated with suspects in B.C. could be halted and financial institutions could face questions about whether they adequately vetted transactions involving “politically exposed” suspects, Duhaime said.

China’s efforts to recover some of an estimated $200 billion in corruption money abroad is a secondary goal, according to Duhaime. China really wants publicity about actions taken against suspects in Canada and other countries, Duhaime said, in order to deter the vast flow of hot money currently leaving China to be laundered in foreign real estate, high-end cars and jewelry.

“Michael Ching has an enourmous amount of assets, from what I understand, in Vancouver,” Duhaime said. “So let’s say he did remove assets from China, it would be the Chinese government actually placing liens on his assets and his construction projects is the type of thing they want to do, because it would be a huge news event in China, and also freeze his activity in Canada. ”

Ching and about 25 suspects that China believes are in Canada were outed in China’s Sky Net list, a new global information campaign aimed at smoking corruption suspects out of hiding.

Chinese government media reports on Sky Net feature bold quotes from officials that support Duhaime’s understanding of the government’s goals.

"Even if we cannot catch them right now … maybe by releasing the list to the world, their assets could be frozen,” one official told Xinhua.

"By doing this, China can turn fugitive officials into rats in the street,” another said.

The Province has found one case that seems to suggest the Chinese government may already be unrolling in B.C. the private asset siezure strategy which Duhaime is hearing of.  

In the case, a Chinese national filed a B.C. Supreme Court case seeking to freeze a property sale connected to Richmond resident Li Wenge, a tax collection official in China’s Kun Ming City. Sky Net information from China Interpol says a 46-year-old tax collection official named Li Wenge was charged with “contract fraud” by the Kun Ming Public Security Bureau two days before Li Wenge sold his Barnard Drive property in Richmond for $1.38 million.

scooper@theprovince.com