Sanctions related to Russia were imposed under the Special Economic Measures Act in order to respond to the gravity of Russia’s violation of the sovereignty and territorial integrity of Ukraine. On March 17, 2014, the Special Economic Measures (Russia) Regulations (“the Regulations”) came into force.
The Regulations were amended on March 19, March 21, April 28, May 4, May 12, June 21, July 24, August 6, September 16, December 19, 2014, February 17 and June 29, 2015, and March 18, 2016.
The Regulations impose an asset freeze and dealings prohibition on designated persons, which include both individuals and entities. It is prohibited for any person in Canada and any Canadian outside Canada to:
deal in any property, wherever situated, held by or on behalf of a designated person whose name is listed in Schedule 1;
enter into or facilitate, directly or indirectly, any transaction related to such a dealing;
provide any financial or other related services in respect of such a dealing;
make any goods, wherever situated, available to a designated person listed in Schedule 1; and
provide any financial or related service to, or for the benefit of, a designated person listed in Schedule 1.
The Regulations also impose restrictions on certain sectors, such as the financial and energy sectors. With some exceptions, they prohibit any person in Canada and Canadians abroad from dealing in new debt of longer than 30 days maturity in relation to persons listed in Schedule 2, or 90 days maturity in relation to persons listed in Schedule 3. Additionally, the Regulations prohibit any person in Canada or Canadians abroad from dealing in new securities in relation to persons listed in Schedule 2.
The Regulations also prohibit the export, sale, supply or shipping of goods listed in Schedule 4, to Russia or to any person in Russia for their use in offshore oil (depth greater than 500m), shale oil or Arctic oil exploration and production. This includes a ban on the provision of any financial, technical or other services related to the goods subject to this prohibition.
Causing, assisting or promoting prohibited activities is likewise prohibited.
The Regulations provide a review mechanism to remove names from the schedule upon receipt of an application from a designated person.
Exceptions to the above-noted asset freeze and dealings prohibition are available for the following:
payments made by or on behalf of designated persons pursuant to contracts entered into prior to the coming into force of the Regulations, provided that the payments are not made to or for the benefit of a designated person;
pension payments to any person in Canada or any Canadian outside Canada;
transactions in respect of accounts at financial institutions held by diplomatic missions, provided that the transaction is required in order for the mission to fulfill its diplomatic functions under the Vienna Convention on Diplomatic Relations, or transactions required in order to maintain the mission premises if the diplomatic mission has been temporarily or permanently recalled;
transactions by international organizations with diplomatic status, agencies of the United Nations, the International Red Cross and Red Crescent Movement, or Canadian non-governmental organizations that have entered into a grant or contribution agreement with Foreign Affairs, Trade and Development Canada;
transactions necessary for a Canadian to transfer to a non-designated person any accounts, funds or investments of a Canadian held by a designated person on the day on which that person became designated;
financial services required in order for a designated person to obtain legal services in Canada with respect to the application of any of the prohibitions in the Regulations; and
loan repayments made to any person in Canada or any Canadian abroad in respect of loans entered into before the coming into force of the Regulations, enforcement of security in respect of those loans, or payments by guarantors guaranteeing those loans.
Permits and Certificates
The Special Economic Measures (Russia) Permit Authorization Order, made pursuant to subsection 4(4) of the Special Economic Measures Act, authorizes the Minister of Foreign Affairs to issue to any person in Canada or any Canadian outside Canada a permit to carry out a specified activity or transaction, or any class of activity or transaction, that is restricted or prohibited pursuant to the Regulations. Further information is available on the “Permits and Certificates” page.
In November 2013, the refusal of then-Ukrainian President Viktor Yanukovych to sign a landmark association agreement with the European Union set off major protests in Kyiv, leading to the fall of the Yanukovych government.
In March 2014, Russian forces occupied the Crimean peninsula of Ukraine. Following the unconstitutional “referendum” on March 16, 2014, President Putin signed a treaty purporting to incorporate Crimea into the Russian Federation on March 18, 2014. Canada, along with the international community, continues to condemn Russia’s illegal annexation of Crimea.
In the wake of the illegal annexation of Crimea, Russian-backed militants quickly gained control of significant portions of the Donetsk and Luhansk regions of eastern Ukraine, declaring the creation of the ‘Donetsk People’s Republic’ and the ‘Luhansk People’s Republic’. Fraudulent so-called “independence referendums”, initiated by pro-Russian separatists, were held on May 11, 2014, but gained no international recognition. In the months following, violence increased as Russian-backed insurgents clashed with Ukrainian government forces.
Peace agreements were reached at talks held in Minsk, Belarus, in September 2014 and in February 2015. The February ‘Package of Measures’ contains 13 commitments, including: an immediate and complete ceasefire in the Donetsk and Luhansk regions; the full withdrawal of heavy weaponry by both sides; full exchange of prisoners; pullout of all foreign armed formations; and the regaining by Ukraine of control of its border with Russia, amongst other measures.
Despite ongoing diplomatic efforts to seek a resolution to the conflict, Russia continues to sponsor violent pro-Russian separatist groups in the Donetsk and Luhansk regions of Ukraine, including by maintaining troops and providing support to the insurgency in eastern Ukraine. In particular, Russia has failed to make any significant progress on disarming illegal groups, relinquishing control over the Ukrainian side of the border, and withdrawing armed formations, equipment and mercenaries.
Canada has been a consistent supporter of the Minsk peace process and believes that it represents the only feasible path to a durable and peaceful solution to the conflict in Ukraine. Canada continues to call on both parties, in particular Russia, to fully implement their commitments and obligations under the Minsk agreements.
Russia’s direct military involvement in Ukraine and clear violation of Ukraine’s sovereignty and territorial integrity continue to be a grave concern for the international community.
Please be advised that Global Affairs Canada cannot provide legal advice to members of the public. For this reason, we cannot deliver an opinion as to whether or not a specific activity or transaction would contravene sanctions legislation. You should consider seeking legal advice in relation to an activity that may contravene a Canadian sanction law.