On November 22 2011, in response to an assessment of Iran's nuclear programme by the International Atomic Energy Agency, Canada imposed new sanctions under the Special Economic Measures Act.(1) Among other things, the Regulations Amending the Special Economic Measures (Iran) Regulations(2) prohibit financial transactions with Iran, subject to limited exceptions. For example, the prohibition on financial transactions does not apply to payments made pursuant to contracts entered into before November 22 2011. In addition, Canadians with relatives living in Iran can still send funds to family members, provided that those relatives are not specifically listed individuals and the transactions do not exceed C$40,000.
However, these exceptions are of limited benefit to many Iranian citizens who may be seeking permanent residence under one of Canada's immigrant investor programmes. Iranians applying under the Federal Immigrant Investor Programme, the Quebec Investor Programme and even investor streams under various provincial nominee programmes may be subject to these economic sanctions.
On January 20 2012 Citizenship and Immigration Canada issued Operational Bulletin 378, which provides instructions on how these economic sanctions will apply. According to the bulletin, immigration offices are instructed to continue processing applications for permanent and temporary residence of Iranian nationals and persons residing in Iran in accordance with normal procedures. However, in cases where applicants need to demonstrate that they can or have transferred funds to Canada (eg, the Federal Investor Class), applicants will be informed that they may face restrictions in transferring funds to a Canadian financial institution and will be referred to the text of the regulations.
The bulletin further states that persons affected by the sanctions on financial transactions - whether they be visa applicants abroad or applicants already in Canada - may apply for permits from the Department of Foreign Affairs and International Trade that authorise specified activities or transactions that are otherwise prohibited under the sanctions. This permit process should be taken into consideration by immigration officials when assigning a deadline for submitting evidence that funds can be transferred to Canada or an investment can be made, before refusing an application from an Iranian national or person in Iran for failure to transfer the required funds or investments.
The economic sanctions do not appear to prohibit Iranian citizens from qualifying as immigrant investors through the investment of funds held in third countries. Iranian applicants with access to such funds should not be affected by the regulations.
For further information on this topic please contact Henry J Chang at Blaney McMurtry LLP by telephone (+1 416 593 1221), fax (+1 416 593 5437) or email ([email protected]).
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