On March 17, 2014, the federal government introduced two new regulations under Canada’s Special Economic Measures Act imposing an asset freeze on senior government officials and other individuals and entities in Russia and Crimea in connection with the recent developments in Crimea. On March 18 and 21, the federal government amended these regulations to designate additional names, including one Russian bank. The Special Economic Measures (Russia) Regulations and the Special Economic Measures (Ukraine) Regulations (New Regulations), together with the subsequent amendments, came into force immediately. The New Regulations follow the designation of certain members of the former Ukrainian government under the Freezing Assets of Corrupt Foreign Officials (Ukraine) Regulations on March 5, 2014.
Similar to the March 5, 2014 Regulations, the New Regulations apply to every person in Canada and every Canadian outside Canada and prohibit:
- dealing in any property, wherever situated, held by or on behalf of any person designated under the New Regulations;
- entering into or facilitating, directly or indirectly, any transaction related to such 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 or in respect of a dealing in the property of a designated person.
The New Regulations also prohibit anything that is intended or causes, assists or promotes the contravention of the prohibitions under the New Regulations.
Some limited exemptions apply.
The government also introduced a Special Economic Measures (Russia) Permit Authorization Order and a Special Economic Measures (Ukraine) Permit Authorization Order, which authorize the Minister of Foreign Affairs to issue permits to carry out specified activities that are restricted under the New Regulations.
Regulated financial institutions are required to determine, on a continuing basis, whether they are in possession or control of property that they have reason to believe is the property of a designated person.
All businesses are required to disclose without delay to the Royal Canadian Mounted Police property reasonably believed to be that of a designated person under the New Regulations, together with information about any related transaction. Financial institutions are not required to separately report their search results under New Regulations to their principal regulator.