Canada

Global sanctions guide

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  1. http://blg.com/enDoes Canada have a sanctions regime in place?

Canada has various sanctions in place against a number of countries, as well as against specific individuals and entities identified as being associated with terrorist activities.

  1. Does Canada implement UN sanctions?

Canada’s United Nations Act enables the Canadian government to give effect to decisions passed by the UNSC. If the UNSC determines that an act of aggression or a breach of peace has occurred, it may decide what measures member states shall take to restore or maintain international peace and security. These measures are generally economic and trade sanctions. Such a decision imposes a legal obligation on Canada as a UN member to introduce the required measures into domestic law. This is done by enacting regulations under the United Nations Act.

  1. Does Canada implement an autonomous sanctions regime?

In addition to sanctions imposed under the United Nations Act, Canada implements an autonomous sanctions regime under the Special Economic Measures Act (“SEMA”). In order to maximize the effectiveness of a sanctions regime, Canadian policy seeks to ensure, whenever possible, that sanctions are applied multilaterally. Absent a UNSC resolution, SEMA allows Canada to impose sanctions in either of the following situations:

  • where an international organization of states or association of states of which Canada is a member calls on its members to take economic measures against a foreign state
  • where a grave breach of international peace and security has occurred that has resulted in or is likely to result in a serious international crisis

Non-UN sanctions are generally imposed by enacting regulations under SEMA. Canada may also impose export/import restrictions on specific countries under the Export and Import Permits Act (“EIPA”).

  1. What is the nature of the sanctions regime in Canada?

Sanctions imposed by Canada on specific countries, organizations, or individuals vary and can encompass a variety of measures, including restricting or prohibiting trade, financial transactions or other economic activity between Canada and the target state or the seizure or freezing of property situated in Canada.

Examples of sanctions include:

  • arms and related materials embargoes
  • asset freezes
  • export/import restrictions
  • financial prohibitions
  • technical assistance prohibition

Canadian sanctions laws apply to all persons in Canada and all Canadians outside Canada, including entities formed under the laws of Canada or a province. Exceptions to these restrictions or prohibitions may include transactions with UN agencies, Canadian nongovernmental organizations, or other aid agencies. Exemptions may also apply to food; medical supplies; goods used for public health purposes or disaster relief; or goods required under pre-existing contracts. The specific exemptions are listed in the regulations for each set of sanctions.

  1. Does Canada maintain a list of sanctioned individuals and entities?

When the UNSC decides to impose sanctions in response to a threat to international peace and security, a Security Council Committee is created to oversee implementation of the sanctions. Each committee publishes the names of individuals and entities affected by the corresponding sanctions, as well as the specific measures that apply to each listed name. With the exception of the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism (“RIUNRST”), regulations made under the United Nations Act refer to the names of listed persons published by the relevant Security Council Committee. The consolidated United Nations Security Council Sanctions List, located on the UN’s website, provides a searchable list of all individuals and entities designated by the UNSC that are referred to in regulations made under the United Nations Act. The names of persons listed under RIUNRST are published in the Schedule to the regulations.

When sanctions are imposed under SEMA the list of designated persons specific to a particular regulation is published in a schedule to that regulation. In general, all prohibitions described in a regulation apply to all individuals or entities named in its schedule. Where a regulation includes more than one schedule, the prohibitions may apply selectively. Names may be added to or removed from a list by an amending regulation. While each SEMA regulation has a list of designated individuals or entities under that particular regulation, the Canadian government does not maintain a single list of all sanctioned individuals or entities.

  1. Are there any other lists related to sanctions?

Canada may also impose additional restrictions related to sanctions under the following laws:

  • Criminal Code: The Governor in Council may, on the recommendation of the Minister of Public Safety, place an entity on the list of terrorist entities if there are reasonable grounds to believe that:(a) the entity has knowingly carried out, attempted to carry out, participated in or facilitated a terrorist activity(b) the entity is knowingly acting on behalf of, at the direction of or in association with an entity referred to in (a)The listing of terrorist entities under the Criminal Code enables Canada to apply appropriate criminal measures to entities, including those not necessarily listed by the United Nations Al-Qaida and Taliban Regulations or the United Nations Resolutions on the Suppression of Terrorism. The list of terrorist entities is published on the Public Safety Canada website. In addition, names subject to the regulations made under the Criminal Code and UN Regulations have been combined into the lists currently posted on the Office of the Superintendent of Financial Institutions website:

    http://www.osfi-bsif.gc.ca/eng/fi-if/amlc-clrpc/atf-fat/Pages/default.aspx

  • Freezing Assets of Corrupt Foreign Officials Act (“FACFOA”): Canada may agree to a demand by a country in turmoil to freeze the assets or restrain the property of certain of its government officials or politicians. Unlike sanctions, which are generally punitive, FACFOA restrictions are a form of assistance that Canada provides to the requesting country. Canada implements regulations in line with FACFOA in order to freeze the assets of identified individuals and entities

  • Immigration and Refugee Protection Act: Canada promotes international justice and security by denying access to Canadian territory to persons who are security risks or serious criminals or imposing travel restrictions on individuals. Canada can also issue security certificates which are immigration proceedings for the purpose of removing from Canada non-Canadians who are inadmissible for reasons of national security, violating human or international rights, or involvement in organized or serious crimes. Only permanent residents or foreign nationals can be subject to a security certificate

  • Export and Import Permits Act: Imposes export and import trade controls with respect to specific countries or specific types of goods via the Area Control List, the Export Control List and the Import Control List

  1. Does Canada have a licensing or authorization system in place?

Canadian sanctions regulations generally include mechanisms for the Minister of Foreign Affairs to issue permits or certificates to authorise specified activities or transactions that are otherwise prohibited:

  • permits: Permits can be granted on an exceptional basis in respect of activities that are prohibited under SEMA. Permits can also be granted to deal with goods covered by the Export Control List of the EIPA
  • certificates: The types of certificates that may be applied for are set out in the relevant regulations under the United Nations Act and may include property for basic or extraordinary expenses. They may also be issued by the Minister of Foreign Affairs in respect of certain other situations; for example, in the case of mistaken identity
  1. What are the consequences for a breach of sanctions in Canada?

Failure to comply with the applicable requirements under Canadian sanctions laws is an offence which can result in fines, imprisonment or both. In addition, property that has been dealt with contrary to the laws and regulations may be subject to forfeiture. Any publicity on this issue, particularly related to non-compliance, is likely to have an adverse impact on reputation.

  1. Who are the relevant regulators in Canada and what are their contact details?

Department of Foreign Affairs, Trade and Development
Economic Law Section (JLHB),
125 Sussex Drive,
Ottawa ON,
K1A 0G2
Canada

F: (+1) 613 992 2467
E: sanctions@international.gc.ca


UN Regulations and SEMA require anyone in Canada, as well as Canadians outside Canada, to disclose to the Royal Canadian Mounted Police (“RCMP”) and, in the case of regulations under the United Nations Act, the Canadian Security Intelligence Service (“CSIS”) the existence of any property in their possession or control that they believe is owned or controlled by, or on behalf of, anyone on the UN List or other sanctions list. This includes information about any transaction or proposed transaction relating to such property. Such information should be sent to:

RCMP – by fax to: RCMP Federal Policing Criminal Operations: 613-825-7030 or by mail to: Federal Policing Operations – Intake Unit, RCMP, 73 Leiken Drive, Ottawa, ON, Canada K1A 0R2

CSIS – CSIS Security Screening Branch, Project Leader Government Operations, unclassified fax: 613 842 1902.


In addition to the disclosure to the RCMP and CSIS, the reporting persons and entities subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, including financial institutions and securities dealers, must also report such property to the Financial Transactions and Reports Analysis Center of Canada (“FINTRAC”).

FINTRAC
24th floor, 234 Laurier Avenue West
Ottawa ON
K1P 1H7
Canada

T: (+1) 866 346 8722
F: (+1) 613 943 7931
E: guidelines-lignesdirectrices@fintraccanafe.gc.ca


The laws require financial institutions and other financial entities, including securities dealers and portfolio managers, to report information monthly to their primary regulator about frozen property of designated persons, including the aggregate dollar value of the property held.

The Office of the Superintendent of Financial Institutions regulates Canadian federally regulated financial institutions (“FRFI”) and their compliance with sanctions. FRFI’s must complete and file OSFI Form(s) 525 with respect to property frozen pursuant to requirements of the laws concerning terrorism. OSFI Form(s) 590 must be completed and filed with respect to property frozen pursuant to requirements of the laws concerning specific countries with respect to nuclear proliferation activities.

255 Albert Street
Ottawa ON
K1A 0H2
Canada

T: (+1) 613 990 7788, (+1) 800 385 8647
E: information@osfi-bsif.gc.ca


Securities dealers and portfolio managers are regulated by the various provincial and territorial securities regulatory authorities. Securities dealers and portfolio managers have reporting obligations under CSA Staff Notice 31-317 (Revised) – Reporting Obligations Related to Terrorist Financing, and must file a monthly suppression of terrorism and UN sanctions report with their principal securities regulator. The monthly reporting obligation is entirely separate from, and must not be confused with, the obligation to immediately disclose detailed information to the RCMP and CSIS.

Contributor law firm

John Godber, Graeme A. Hamilton, Borden Ladner Gervais LLP, Bay Adelaide Centre, East Tower, 22 Adelaide Street West, Toronto, Ontario, Canada, M5H 4E3

T: (+1) 416 367 6000
F: (+1) 416 367 6749
info@blg.com
www.blg.com/en