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Canada's cannabis policy makes it an international rebel on drug treaties – CBC.ca

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While many Canadians have focused on the supply problems and overly optimistic business projections that have marred Ottawa’s marijuana legalization project, it’s also left behind some international loose ends that still haven’t been tied up.

Not all other countries have accepted Canada’s right to forge a new path on cannabis law. And the ending of Canada’s 95-year ban on cannabis appears to have accelerated the demise of a worldwide consensus and treaty regime that, for decades, underpinned the global war on drugs.

A year after legalization, Canada remains in flagrant violation of UN drug treaties that it signed — an uncomfortable situation for a country that likes to see itself as a stickler for international laws and treaties.

“The Government of Canada has contributed to weakening the international legal drug control framework and undermining the rules-based international order,” says the UN’s International Narcotics Control Board (INCB).

On Dec. 13, INCB President Cornelis de Joncheere reminded nations that the UN “has repeatedly and publicly spoken out that these (legalization laws) are in violation of the obligations under the conventions.”

Bolivian manoeuvres

A heavily-redacted memo that appears to have been signed by Ian Shugart as deputy minister of Foreign Affairs in March — just a month before cannabis became legal — discusses “withdrawing Canada’s objections to treaty actions by Bolivia under the Single Convention on Narcotic Drugs, 1961, in advance of the entry into force of the Cannabis Act.”

When Bolivia tried to join the convention in the 1980s, it faced a dilemma. Those were the boom days of the cocaine trade and the coca plantations of South America were seen as the source of the scourge. But the people of the Andean nations had been chewing coca leaves for generations, so Bolivia negotiated a 25-year exemption for coca leaf.

A woman takes part in the “gran acullico,” or “the great chewing of coca,” in La Paz, Bolivia, Tuesday, March 19, 2019. (Juan Karita/The Associated Press)

As the 25 year deadline loomed, the government of former coca farmer Evo Morales tried to persuade other countries to change the treaty.

Other signatories weren’t willing to change the convention, and the Bolivians weren’t willing to ban coca leaf, so in 2012 they decided on a bold stroke: Bolivia would crash out of the three international drug treaties and then apply to re-enter with its own permanent exemption for coca leaf, now enshrined in a new Bolivian constitution as part of the nation’s Indigenous heritage.

Canada says no

The move was opposed by the US, already deeply suspicious of the leftist president who had banned the Drug Enforcement Administration from his country four years earlier. But objections also came from some of the world’s most progressive countries on drug policy — such as Portugal and the Netherlands — who saw it as a bad-faith way to get around the treaty that would set a dangerous precedent.

“Canada was among a group of 18 states parties to that convention that did not support Bolivia’s proposal at that time,” said Guillaume Berubé of Global Affairs Canada.

But Bolivia had studied the UN rules carefully, and knew its opponents would be unlikely to get one-third of treaty members to raise a protest. Without that, the objections would not stand. And so, by 2013, Bolivia was back in the treaties, now with a permanent exemption for coca leaf.

Today, Canada finds itself in much the same position Bolivia did in 2012 — openly violating the treaties it signed. Its Bolivian objection now looks like hypocrisy.

In the end, said Berubé, Ottawa never formally withdrew its objection.

Bolivia “was successful in re-acceding with a reservation to certain obligations to permit traditional coca leaf practices in its territory. With that step by Bolivia, no further action has been required by states parties with respect to the matter.”

And yet, as the redacted memo shows, Canada was still debating at the highest levels whether to formally withdraw that objection years after Bolivia’s actions.

John Walsh of the Washington Office on Latin America testified as an expert before the Senate committee that examined the international effects of Canada’s legalization plan.

“They’re interested in finding a solution that reconciles their domestic policy changes — from which they’re not retreating — with their international treaty obligations,” he said. “Getting to that point is the not-easy part.”

Russians lead the charge

Walsh said Canada is facing steady pressure from other signatories to the drug treaties, particularly Russia.

“”For Russia, it’s a tantalizing opportunity not just to bash Canada but to call the West on its hypocrisy on the rules-based international order, and sow divisions among the West, which it sees as antagonistic and oppressive of its interests,” Walsh told CBC News. 

“I think they take some glee in being able to point to Canada and say, ‘The West seeks to impose this rules-based order on us, but when it comes to following their own obligations, they’re à la carte, which is contrary to what international law requires.'”

Russia and Japan led the objections earlier this year when Canada and Uruguay joined a World Health Organization-supported initiative to downgrade cannabis from its Schedule IV classification.

“Because the US has sidelined itself on this issue, Russia sees itself as stepping into the void and has been able to rally a lot of like-minded prohibitionist countries in Africa and Asia,” Walsh said.

Opening Pandora’s box

Russia’s objections may have something to do with scoring points — but they also reflect the country’s very different approach to drug policy.

“The new drug policy of Ottawa contradicts the 1969 Vienna Convention on the Law of Treaties,” Vasily Kutlyshev told CBC News on behalf of Russia’s foreign ministry. Under that convention, he said, “the Canadian side is obliged to perform in good faith its international legal obligations and has no right to invoke its internal legislation as a justification for its failure to perform the international treaty.”

Deputy Prime Minister Chrystia Freeland has acknowledged that the new cannabis law does selectively violate the treaties, although Berube said the approach “is consistent with the overarching goals of the UN drug conventions, namely to protect the health and safety of citizens.”

The Russians aren’t buying that argument.

“The decision adopted by Canada in fact opens the ‘Pandora box’ by introducing [a] selective approach toward the implementation of the UN drug control conventions,” Kutlyshev said.

“There exists real danger that some other countries may follow the example set by Canada, which would lead to the erosion and even dismantling of the whole international legal foundation of our fight against narcotic drugs.”

Legalization spreads

That fear seems to be coming true —at least in the Western Hemisphere, where courts and governments are chipping away at the architecture of prohibition.

“Someone has to go first,” Uruguay’s President José Mujica said in 2013, when his country led the way by fully legalizing marijuana.

In the U.S., marijuana is now fully legal in 11 states and fully illegal in only 10, with medical exemptions or decriminalization statutes in the rest.

Two women smoke cannabis vape pens at a party in Los Angeles on June 8, 2019. (Richard Vogel/The Associated Press)

Several years ago, Walsh said, Canada could have expected intense pressure from Washington not to legalize — but the U.S. has given up its role as world policeman of drug enforcement.

“The International Narcotics Control Board already sees the U.S. as out of compliance,” he said. “Because of the outsized role of the U.S. in insisting on enforcement of the drug treaties, everybody understands the significance of the fact that the U.S. is now sidelined from bludgeoning back against Canada.”

Meanwhile, a growing number of Mexicans are asking why their army continues to uproot plants that are now legal right across the border.

Mexico has not legalized like Uruguay or Canada; it drew the line at decriminalization of personal possession. But it has gone further by applying that decriminalization of personal possession to other drugs, such as cocaine (0.5 grams), heroin (50 milligrams) and methamphetamine (40 mgs).

Colombia was for years the epicentre of the cocaine trade and birthed three of the world’s richest and most powerful drug cartels in the 1980s and 90s.

Today, every Colombian has the right to cultivate up to 20 marijuana plants. In Canada, the limit is four.

Brazil and Ecuador no longer criminally sanction possession of small quantities. Argentina’s Supreme Court has started tossing out convictions for possession of marijuana. Similar court rulings led to Uruguay’s decision to legalize.

Walsh said Ottawa knows “it is a serious matter to be in violation” of the treaties — but “it also knows it faces no immediate material consequences.

“I don’t see Canada backing down, nor do I see Uruguay backing down.”

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Latest worldwide spread of the coronavirus

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Russia has tightened curbs in major cities as authorities blame the new Delta variant for spiking cases and deaths, while neighbouring Ukraine has registered its first two cases of the more infectious virus type.

DEATHS AND INFECTIONS

* Eikon users, see COVID-19: MacroVitals https://apac1.apps.cp.thomsonreuters.com/cms/?navid=1592404098 for a case tracker and summary of news

EUROPE

* The European Centre for Disease Prevention and Control has said the more contagious Delta variant, first identified in India, will represent 90% of all SARS-CoV-2 viruses circulating in the European Union by the end of August.

* Spain has vaccinated half of its 47 million population with at least one dose and nearly 32%, or over 15 million people, have been fully inoculated.

* The share of infections caused by the Delta variant of the coronavirus has doubled in Germany in a week and is likely to gain more traction over other variants.

* Greece will end the mandatory wearing of face masks outdoors and ease other remaining restrictions.

ASIA-PACIFIC

* Japan is suspending approval for companies to inoculate staff amid concerns that an increase in such applications will hamper smooth delivery of vaccines.

* Alcohol, high-fives and talking loudly will be banned for the reduced numbers of Olympic ticket holders allowed into venues.

* Australia’s largest city of Sydney reintroduced “soft touch” curbs to contain a widening outbreak of the Delta variant.

AMERICAS

* A Brazilian Senate committee has formally approved a request to call representatives of Google, Facebook and Twitter to testify in an ongoing probe into the government’s handling of the pandemic.

* Canada will further relax border restrictions in the weeks to come as long as the science supports such a move, Prime Minister Justin Trudeau said.

* Federal authorities have seized at U.S. airports unauthorised versions of remdesivir destined for distribution in Mexico, the Wall Street Journal reported. [nL2N2O51U0]

MIDDLE EAST AND AFRICA

* South Africa’s health regulator said it had received documentation for China’s Sinopharm vaccine and will evaluate the data to assess the efficacy of the shot.

* Israel empowered health officials to quarantine anyone deemed to have been exposed to the especially infectious Delta variant.

* Bahrain will extend by three months a government support program for businesses hard hit by the pandemic.

MEDICAL DEVELOPMENTS

* Rare cases of heart inflammation in adolescents and young adults are likely linked to vaccination with the Pfizer/BioNTech and Moderna shots, a group of doctors advising the U.S. Centers for Disease Control and Prevention said.

* Vaccines made by AstraZeneca and the Pfizer-BioNTech alliance remain broadly effective against Delta and Kappa variants. [nL3N2O43IN]

* The University of Oxford said it was testing anti-parasitic drug ivermectin as a possible treatment for COVID-19.

ECONOMIC IMPACT

* Wall Street and global equity markets were broadly higher on Wednesday after reassurances from U.S. Federal Reserve Chair Jerome Powell that the central bank is not rushing to hike interest rates, while European stocks remained under pressure. [MKTS/GLOB]

* A period of high inflation in the United States may last longer than anticipated but should still ease over time as the economy settles back to normal, two U.S. Federal Reserve officials said.

* Euro zone business growth accelerated at its fastest pace in 15 years in June as the easing of lockdown measures unleashed pent-up demand and drove a boom in the dominant services sector but also led to soaring price pressures.

(Compiled by Ramakrishnan M. and Juliette Portala; Edited by Arun Koyyur)

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Canada’s M&A boom fuels hiring spree, higher pay

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Record-breaking dealmaking in Canada is encouraging investment banks to beef up staffing, but the increased demand for bankers is forcing some to pay up in unique ways to attract new hires.

Canadian mergers and acquisitions (M&A) year to date surged to a record $206.5 billion and IPOs hit an all-time high of $5.6 billion, according to Refinitiv, after the pandemic crushed dealmaking in the first three quarters of 2020.

HSBC, JPMorgan Chase & Co and National Bank of Canada are expanding their M&A teams.

“It continues to be an active market with lots of active discussions with clients going on as well, and so that has absolutely spurred on a need to fortify the ranks within the teams,” said Scott Lampard, head of global banking for HSBC Bank Canada.

HSBC plans to boost overall investment banking headcount by 20%-25%, mainly at the analyst level to support pitching and executing deals, Lampard said.

PENT-UP DEMAND

With the pace of transaction expected to continue at pace, banks are paying more to hire and retain existing teams, offering a range of new services, like sending in a consultant to create the ideal home office, recruiters say.

“We’ve been doing this for nearly 20 years and we’ve never seen a market like this,” said Bill Vlaad, CEO at recruitment firm Vlaad and Company. “Everybody is scrambling,”

“Many of the banks have increased base salaries quite dramatically, mostly in 2021,” he said, adding salaries had increased 20%-40% across M&A roles.

“Now if you want to attract, you have to put something else on the table.”

To poach talent, banks are adding signing bonuses, extra vacation days, healthcare increases, special programs for mental wellness and home office perks, all tailored to individual requests, Vlaad said.

TD Securities, Barclays, CIBC World Markets are the top M&A advisers year to date. All three declined to comment on hiring plans.

Of the top deals announced this year, Rogers Communications Inc’s C$20 billion ($16.2 billion) bid for Shaw Communications Inc and Canadian National’s bid $33.6 billion offer for Kansas City Southern are the two biggest.

Despite the pandemic, five of the top six Canadian banks paid an average of C$3.1 billion ($2.50 billion) in total bonuses last year, up from C$2.9 billion ($2.34 billion) in 2019, an analysis of filings by Reuters showed.

Headcount at National Bank Finance will be up by four or five people in M&A versus the same time last year, David Savard, head of M&A at the bank, told Reuters.

That put the team at 28 for the large-cap M&A team and 10 for the mid-market team, he said, adding both areas were “booming”.

“There seems to be some pent-up demand for entrepreneurial-led companies and private companies doing M&A coming out of COVID,” he said.

David Rawlings, CEO for JPMorgan Canada, agreed headcount would be likely higher in the near future.

“We think activity will continue to be strong and are currently looking to selectively hire with a particular focus on senior diverse candidates,” said Rawlings.

($1 = 1.2453 Canadian dollars)

(Reporting by Maiya Keidan; Editing by Denny Thomas and Lisa Shumaker)

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French court overturns ruling saying sale of cannabidiol is illegal

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France’s highest appeals court on Wednesday overturned a ruling that stores in the country can’t legally sell cannabidiol (CBD), a non-psychotic compound related to cannabis that is being researched for a variety of medical applications.

Based on the free trade of goods within the European Union, the Cour de cassation ruled that judges could not find the sale of CBD in France illegal if it had been legally produced in a member state of the bloc.

The Court of Justice of the EU ruled last year that no national law can prohibit the sale of CBD legally produced in a member state, the French court also said.

“Without considering whether the substances seized had not been legally produced in another member state of the European Union, the court failed to provide a basis for its decision,” it said, referring to a ruling of a lower appeals court.

The Cour de cassation did not rule whether selling CBD in France was legal or not, and ordered a lower court to rule again on a case involving the owner of a shop selling CBD.

“We are happy”, CBD shop owner Mathieu Bensa, who was not involved in the case, told Reuters after the ruling.

“We did not understand why France was the last country in the European Union that had not given access to the sale of hemp plants”, he said.

Derived mainly from the hemp plant, CBD is increasingly used as a relaxant.

Cannabis stocks have attracted growing interest on world stock markets, particularly on the Toronto stock exchange after Canada became one of the first major economies to legalise the recreational use of marijuana.

Cannabis use is outlawed in France but the country has one of Europe’s highest consumption rates.

(Reporting by Matthieu Protard, Benoit Van Overstraeten and Ardee Napolitano; Editing by Mark Potter)

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