In late November, Canada implemented targeted sanctions under the Justice for Victims of Corrupt Foreign Officials Act (Act) against seventeen Saudi nationals linked to the murder of Jamal Khashoggi. The Act is one of several, federal legislative measures (Federal Provisions) against terrorist financing. It applies to, among others, registrants, entities engaged in the business of dealing in securities pursuant to exemptions from the dealer registration requirement (exempt dealers) and entities engaged in the business of providing portfolio management or investment counselling services pursuant to exemptions from the adviser registration requirement (exempt advisers). The new sanctions effectively freeze the assets of the listed individuals in Canada.
Registrants, exempt dealers and exempt advisers should consider carefully the names on this list because the penalties for doing business with any individual or entity listed or designated in a Federal Provision (Designated Person) are severe. The Federal Provisions generally require registrants, exempt dealers and exempt advisers to review their records on a continuing basis to determine whether or not they are in possession or control of any property owned or controlled by or on behalf of a Designated Person and report their findings on a monthly basis to their principal securities regulator.
As we discussed in our February 2018 Bulletin, the Canadian Securities Administrators have published a notice and guidance document to assist registrants in understanding their obligations (including compliance and reporting obligations).