On March 18, 2016, marking the second anniversary of the Russian occupation of the Crimean region of Ukraine, the Canadian government expanded its sanctions against Russia and Ukraine by adding 19 entities and individuals to its lists of designated blacklisted persons. The amendments also provide a new basis for which entities may be blacklisted under the Russia sanctions. Companies doing business abroad should ensure that they review and revise their compliance and screening controls to reflect these latest changes.
Stéphane Dion, Canada’s Minister of Foreign Affairs, has noted that these latest sanctions measures are intended to align with recent steps taken by the United States and European Union and has reiterated that Canada will not consider any easing of sanctions until Russia fully implements its commitments under the Minsk agreements.
Canada’s Russia and Ukraine Sanctions
Under the Special Economic Measures (Russia) Regulations (the “Russia Regulations”) and the Special Economic Measures (Ukraine) Regulations (the “Ukraine Regulations”) Canada imposes broad prohibitions against engaging in activities involving 277 entities and individuals listed as designated persons, including these present additions. More specifically, the following is prohibited:
- dealing in any property, wherever situated, held by or on behalf of a designated person;
- entering into or facilitating, directly or indirectly, any transaction related to such a dealing;
- providing any financial or other related service in respect of such a dealing;
- making any goods, wherever situated, available to a designated person; and
- providing any financial or related service to or for the benefit of a designated person.
Further, under its sectoral sanctions set out in the Russia Regulations, Canada has imposed narrower prohibitions against engaging in transactions involving debt or equity financing in relation to another 12 listed entities in the energy, financial and defence sectors.
Under its Ukraine sanctions, Canada also imposes a broad trade embargo against the Crimea region of Ukraine, including investment, supply, sourcing, services, and technical data prohibitions.
The Russia Regulations also contain prohibitions on the export or diversion of certain listed items, used heavily in the oil and gas industry, to Russia or any person in Russia for use in offshore, arctic, or shale oil exploration and production. Services associated with such goods are also prohibited.
Further details on Canada’s existing Russia and Ukraine sanctions measures can be found in these articles:
- Russia/Ukraine Economic Sanctions Update: New Measures Target the Energy, Financial and Defence Sectors
- Key Developments in Economic Sanctions and Export Controls and What to Watch for in 2015
- New Canadian Sanctions Target Russian Oil Exploration and Production Activity
Listing of Additional Individuals and Entities
With these latest changes, the Canadian government has listed a range of Russian and Ukrainian individuals and firms that are now subject to the broad prohibitions described above under the Russia and Ukraine Regulations. The following entities have been added to these lists:
- Inresbank OAO (also known as Investment Republic Bank LLC)
- PAO Mosoblbank (also known as Moskovskiy Oblatstnoy Bank)
- OAO Volgogradneftemash
- Izhevsky Mekhanichesky Zavod JSC
- JSP SPA Izhmash
- Joint Stock Company Foreign Economic Association Tekhnopromexport (also known as JSC Tekhnopromexport)
- Technodinamica Holding, JSC
- JSC Tecmash (also known as Tehmash)
- Ruselectronics, JSC
- Shvabe Holding, JSC
- State Enterprise Evpatoria Sea Commercial Port
- State Enterprise Feodosia Sea Trading Port
- State Enterprise Yalta Sea Trading Port
- Yalta Film Studio
The following individuals have been added to these blacklists:
- Oleg Konstantinovich Akimov
- Aleksandr Igorevich Kofman
- Petr Savchenko
- Eduard Ioffe
- Aleksander Omelchenko
New Basis for Listing
In addition to listing further persons and entities, the amendments provide a new basis for listing persons or entities for purposes of the broad prohibitions described above (these persons are listed in Schedule 1 of the Russia Regulations). Previously, the listing of entities owned and controlled by, or acting on behalf of, a designated person did not include persons listed solely because they were an associate or family member of a designated person. This distinction has been eliminated, and now entities owned or controlled by, or acting on behalf of, an associate or family member of a designated person may be listed in Schedule 1.
Canada’s Trade Controls Regime
At the present time, Canada imposes trade controls of varying degrees on activities involving the following countries (and over 2,000 listed entities and individuals associated with them): Belarus, Burma (Myanmar), the Central African Republic, Côte d'Ivoire, Cuba, the Democratic Republic of the Congo, Egypt, Eritrea, Guinea, Iran, Iraq, Lebanon, Liberia, Libya, North Korea, Pakistan, Russia, Somalia, South Sudan, Sudan, Syria, Tunisia, Ukraine, Yemen and Zimbabwe.
Any involvement of these countries or any designated or listed person in proposed transactions or other activities should raise a red flag for further investigation to ensure compliance with export and technology transfer controls and economic sanctions.