Canada Wants to Make Nice With Iran, But There’s One Problem: It Sold All Tehran’s Stuff

Canada is getting ready to repair burnt bridges with the Islamic Republic of Iran, but things may get awkward when Ottawa has to explain why it seized millions of dollars worth of Iranian assets to satisfy a bevy of international lawsuits against the regime.

When Iranian diplomatic staff return to Ottawa, their bank accounts may be empty.

Canada severed diplomatic relations with Iran in 2012. Since then, it has embarked on a campaign to grab any Iranian assets that aren't bolted to the ground, and sell them off, funnelling the proceeds to the victims of terrorism and their families.

While it's not clear what's left, Iran once had significant assets in Canada's capital. A public list of assets owned by Tehran includes three properties, a condo, 15 bank accounts, a credit card, and over $300,000 CAD, in the possession of the Canadian courts.

While the government did not know the value of most of those accounts when it published that list, it says that four different accounts — one listed in Euros, with another listed as an education fund — worth nearly $3 million CAD ($2.1 million USD)

But this week, Foreign Affairs Minister Stephane Dion confirmed the government was moving to to eliminate sanctions against Tehran brought in by the previous government, in light of news that Iran has kept its promises to dismantle large parts of its nuclear program. The next step will be normalizing diplomatic relations and re-opening Canada's embassy in Iran, and vice versa.

"We'll do it in a speedily fashion," said Dion when asked about about the timeline about dropping the sanctions. "But we'll do it effectively because I would say that the approach of the former government was ideological and irrational."

Related: Canada and Iran Still Aren't Friends — Even as Tehran Buddies Up to the West

The opposition Conservatives, however, have stuck by their decision.

"The intention of the federal Liberal government to lift sanctions against Iran is 180 degrees in the wrong direction," said foreign affairs critic Tony Clement.

When asked directly whether Canada would remove Iran from the list of state sponsors of terror, ministers refused to say.

Trudeau, in the House of Commons, recognized that Iran was responsible for terror attacks abroad.

"We will continue to work alongside our allies to ensure security in the world and to engage with Iran in a responsible way that highlights both the human rights abuses at home, and its sponsorship of terrorism abroad. We need to engage in a respectful, responsible way, and we will do exactly that," the prime minister said.

Trudeau's move to end those sorts of lawsuits may not go over well in his own office. Mathieu Bouchard, a senior advisor to the prime minister, took a lawsuit against the Iranian government to the Supreme Court of Canada, seeking $17 million in damages over the state's torture of Iranian-Canadian photographer Zahra Kazemi, who died in custody.

"To this day, no one has been convicted or held accountable in Iran for the arrest, detention, torture, sexual assault and murder of Ms. Kazemi," reads the application that Bouchard and his co-counsel submitted in then case. Ultimately, that lawsuit failed, as the law only considered victims of terrorism — not torture.

The Liberals' rapprochement of Iran may hurt victims of terrorism, however, who are still vying to get a piece of Iran's considerable assets. Over 90 victims are before the Ontario Superior Court this week, seeking compensation from Iran for its role in training, arming and financing groups like Hamas and Hezbollah.

Related: Iranian Hackers Infiltrated a Canadian Government System

It's also possible, however, that Tehran simply has no assets left in Canada. A court victory in 2014 awarded $7 million in Iranian assets to an American dentist who was held captive by Iranian-trained militants in 1986. While the judgement was passed down in America, where Iran has no assets, it was enforced in Canada — Ottawa cleared out one of the bank accounts, and seized two properties to pay for the judgement.

The Justice for Victims of Terrorism Act, introduced in 2012, and the addition of Iran to the list of states sponsors of terror, empowered victims to sue those who commit acts of terror and their supporters, including foreign states, by stripping immunity in civil lawsuits from states that support terrorism.

American lawyer John Laskin came to Canada to try and collect $300 million in damages for his client.

"The phenomenon of terrorism is an extraordinarily damaging thing, so why wouldn't there be extraordinary awards to deter terrorism and those who sponsor it?" Laskin told the National Post.