By Terrance S. Carter, Nancy E. Claridge, Sean S. Carter and Urshita Grover

The anti-terrorist financing provisions of the Criminal Code (the “Code”) are the critical elements of Canada’s counter-terrorism efforts. However, the Taliban’s takeover of Afghanistan in August 2021 drew attention to the difficulties in delivering international assistance in areas controlled by terrorist groups without violating provisions of the Code. To address these serious shortcomings that have been a reality for Canadian international charities for decades, Bill C-41, An Act to amend the Criminal Code and to make consequential amendments to other Acts, was passed on June 20, 2023, amending the anti-terrorist financing provisions in section 83.03 of the Code to allow humanitarian exceptions and the establishment of an Authorization Regime (as described below) for specific activities in terrorist-controlled areas. An explanation of the two exceptions in Bill C-41 was previously set out in our AML/ATF and Charity Law Alert No. 53, in August 2023.

In our Alert No. 53, we explained that subsections 83.03(1) and (2) of the Code (and their predecessors, subsections 83.03(a) and (b)) make it an indictable offence, liable to a term of not more than 10 years imprisonment, for any person who directly or indirectly makes available property or financial or other related services for terrorist purposes or for use by terrorist groups. As mentioned above, the language in these provisions was broad enough to include circumstances where Canadian charities and not-for-profits (“NFPs”) wished to provide humanitarian aid in Afghanistan following the return to power of the Taliban.

Bill C-41 modified the anti-terrorist financing offences found in subsections 83.03(1) and (2) of the Code by specifying that such activities may not be done “wilfully and without lawful justification or excuse”. This amendment to the Code provides some element of comfort to charities and NFPs that provide humanitarian aid and other essential services with a “lawful justification”. Examples of what constitutes potential lawful justifications include the two exceptions listed in section 83.03 being: (1) a blanket exception for “humanitarian assistance activities” (the “Humanitarian Assistance Exception”), and (2) a narrower exception for certain activities that is dependent on an organization applying for and receiving an authorization from the federal government to carry out certain activities in a geographic area controlled by a terrorist group (the “Authorization Regime”).

For nearly a year, charities and NFPs that wished to take advantage of the exceptions provided by Bill C-41 were without any guidance on how to proceed, as there was nothing to explain how the Minister of Public Safety (the “Public Safety Minister”) and law enforcement agencies would treat charitable/humanitarian organizations wanting to work under the new legislation. This led to a precarious position where groups were reluctant to provide assistance for fear of falling outside the new exceptions.

As an accountability measure under subsection 83.0392(1) of the Code, the Public Safety Minister is required to prepare an annual report detailing the operation of sections 83.031 to 83.0391 for the previous calendar year. As a result, the Department of Public Safety Canada released the “2023 Annual Report of the Minister of Public Safety Concerning Criminal Code sections 83.031 to 83.0391: A Regime to Authorize Certain Activities in a Geographic Area that is Controlled By a Terrorist Group” on April 19, 2024 (the “2023 Annual Report”). The 2023 Annual Report, while providing a basic overview of the Authorization Regime, as well as the progress of operationalizing the Authorization Regime and setting out the role of various government partners, including Global Affairs Canada, Immigration, Refugees and Citizenship Canada, Royal Canadian Mounted Police, Canada Revenue Agency and Finance Canada, provided only limited information concerning the application of the two exemptions provided for in Bill C-41.

However, on June 19, 2024, the Department of Public Safety Canada officially launched the Authorization Regime and has now started accepting applications for authorization from eligible members of the public and/or organizations. In doing so, the Department of Public Safety Canada released an operational policy guidance titled Authorization regime and humanitarian exception for activities in terrorist group controlled areas - Section 83.03 Criminal Code (the “Guidance”). The Guidance provides clarity concerning the two exceptions provided by Bill C-41 and, most significantly, the process for applying for the narrow exception for certain activities under the Authorization Regime.

Those interested in submitting an application under the Authorization Regime can fill out and submit the form, but organizations are advised to consult with legal counsel before doing so because of the complexities involved in the application process and the risks of noncompliance.

This AML/ATF Alert summarizes the contents of the Guidance and explains what is required from the Public Safety Minister to ensure that charities and NFPs can provide legitimate aid without fear of prosecution under the Code. To read the balance of this Alert, please see AML/ATF and Charity Law Alert No. 54.

​Read the June 2024 Charity & NFP Law Update