The world watches as Canada moves to seize a Russian cargo jet for Ukraine

When Prime Minister Justin Trudeau briefed reporters in Kyiv last weekend on plans to seize a Russiancargo plane that has been stranded onthe tarmac at Pearson Internationalfor over a year, hemerely confirmed what trade lawyers and aviation industry watchers had been expecting for weeks.

When Ukrainian Prime Minister DenysShmyhalgot back frommeetings inCanada with Trudeauand FinanceMinister Chrystia Freelandin April, he took to his Facebook page to point outhowCanada's latestsanctions targeted Volga-Dnepr a Russian cargo airline a Ukrainian court had already groundedfor alleged safety violations.

"Preparing for the confiscation of the [Antonov-124]planeand other assets of the aggressor in Canada and [transferring]them to the benefit of Ukraine,"Shmyhalwrote.

Canada added both theVolga-Dnepr Group and Volga-Dnepr Airlines to its list of sanctioned Russian entities on April 5. But officials said very littleabout seizing thiscargo planeuntil Foreign Affairs Minister Mlanie Joly confirmed Canada's intentionsas part of another assistance package for Ukraine announced duringTrudeau's recent surprisetrip.

"Should the asset ultimately be forfeited to the Crown, Canada will work with the Government of Ukraine on options to redistribute this asset to compensate victims of human rights abuses, restore international peace and security, or rebuild Ukraine," says a news release issued Saturday by Global Affairs Canada (GAC).

Notwithstanding this apparent slow walk to anofficial announcement, Trudeau said his government'splan isto makethis forfeiture happen "as soon as possible."

"We are one of the first countries to bring in specific legislation that allows us not just to ground this plane but to actually seize it and ensure that it is never used by Russia again in the war effort or any other efforts," Trudeau told reporters.

"There is a process. This is one of the early processes we're going through. I can tell you the Ukrainians are very pleased that the path is started, not just for Canada but hopefully for other countries as well."

Budget billused forsanctions law

The federal government gave itself thepowerto seize and sell Russian assets throughbudget implementation legislation a year ago.

At the time, Freelandwas toldthe seizure powerscould be risky for Canada.

Some warned that the new powersplayed a bit loose withinternational law. Some predicted that selling off or transferring Russian assetsto help rebuildUkraine (or pursue other worthy causes) would openthe door tohostile governmentsretaliating byliquidating Canadian-owned assets putting the foreign investments of Canadian citizens and companies at increased risk whenever foreign relations turn sour.

Canada didn't use its new powersimmediately.

Its first move came last December 19, withan order-in-council to seize $26 million US infinancial assets held byGranite Capital, a company believed to be owned by sanctioned Russian oligarch Roman Abramovich.

Saturday's order seizingVolga-Dnepr's Antonov-124 is only Ottawa'ssecond use ofthispower.

Sanctionsusually freezeassets as a (hopefully) temporaryincentive to change behaviour. When assets are soldaspunishment, theycan't be returned if andwhenthe harm stops. Trade experts saythat'sa significant departure from past practice.

"Canada is really being viewed as the test case," said John Boscariol, a Toronto lawyer who represents individuals and businesses affected by sanctions regulations. To date, theU.S. has gone after Russian oligarch money only in connection with criminal activities.

"They're going to be very careful to dot the i's and cross the t's," Boscariol said. "The last thing they want is for this to be a failure."

No court filing yet

Issuing an order-in-council to seize an asset is only the first step. Under Canada's law, these assets remain the property of their Russian owners until a Canadian court orders aforfeiture.

At the time this article was published, the federal government had yet to confirm anything has been filed in an Ontario court oneither the cargo plane or the seizure of Abramovich's assets. Case watchers must diligently check and check again for progress.

Procedural fairness requiresthe Russian owners to be represented in court. But it's not yet clear how that would work.ACanadian law firm mightrequire special permission from Joly to act on behalf of a sanctioned entity or individual, as commercial dealings (like being paid for legal services) are otherwise prohibited.

GAC declined to answer questions from CBC News on whether ministerial permits to allow for such legal representation have been granted or are in the works.

A certain amount of uncertainty and chaos comes with any unprecedented legal process. But the Trudeau government's latest attempt to crack down on Russian President Vladimir Putin's enablers imposesnew burdens ona Canadian sanctionsregime that practitionerslike Boscariolhave long claimedfails toprovideeffective guidance on how companies and individuals can avoid violations in theirbusiness dealings.

This spring's budget bill now in the Senate following passage by the House of Commons last week includes attempts to clarify previousvague definitions of ownership that now become more critical ifthe government intendsto begin seizing assets that may be partly, but not entirely, held or controlled by peopleor companies on Canada's sanctions list.

COVID delivery landed plane in Toronto

The only reason this planeis even in Canada nowis thatit wascontracted to deliver massive shipments of COVID tests for the federalgovernment.

Its arrival at Pearsoncoincided, and then collided, with the swift and firm response of Western allies to Russia's invasion of Ukraine.

Within hours of offloading itspandemic procurement, Canada closed its airspace to all Russian aircraft.

That left one of the world's biggest cargo planes stranded at Toronto's busiest airport. Other Russian transport jetswere also grounded in Germany bysimilar actions.

Parking a plane thissize at Pearson carries a hefty price tag, reportedlynorth of $1,000 USa day.

That means the company may now owethe airport authority hundreds of thousands of dollars. Does Volga-Dnepr have any incentive to pay the bill for a plane it's about to forfeit?

It's also unclear whetherthe aircraft remains airworthy. Massive jets big enough to airliftLeopard tanks for the Canadian militaryaren't intended to sit on the tarmac for months. It's not clear it is even legal to be paid toconduct maintenance on a sanctioned asset.

This Anatov-124 nicknamed the "T-Rex of heavy lift aviation" takes 24 wheels tosupport its weight. Having that sinking intoin the same pavementfor monthstakes a toll on already-strainedcargo infrastructure.

On Monday, Deborah Flint, president and CEO of the Greater Toronto Airport Authority,thanked Transport Minister Omar Alghabra for his "leadership on this file" without specifying exactly what will happen next. The airport authority puntedthose questions back to the federal government.

Nevertheless, Flint said, "this action will eventually allow us to begin using the parking space currently occupied by the aircraft for operations."

"While the asset is seized, Public Services and Procurement Canada will take control of and manage the asset in accordance with that order," GAC spokesperson Jason Kung said in response to questions fromCBC Newslate Sunday. "Public Services and Procurement Canada manages seized property in accordance with federal regulations and disposes of it should the courts declare forfeiture."

In its coverage of this announcement, Kremlin-friendly Russia Today referred to the plane as "stolen" by Canada.

"The world is watching," Boscariol said. "Whenever you set a precedent like this, there's going to be accusations that you're not doing something in accordance with the international order."

"I think they now need to be worried about Russia taking action against Canadian investments within the territory of Russia" or making claims under its bilateral investment treaty, he said.

"This won't be without consequence," he added.

"At the same time, from the Canadian government's perspective, the optics of the government acting to seize assets of major Russian corporations in Canada is they think, at least very positive. I won't be surprised to see more like this."