On June 29, 2015, the Canadian Government announced the imposition of additional sanctions against Russian individuals and organizations. This expansion of Canada’s economic sanctions against Russia is a response to what Prime Minister Stephen Harper has described as continued aggression in Crimea.
The new amendments expand the list of both “Schedule 1” and “Schedule 3” designated persons and entities. The prohibitions applicable to “Schedule 1” designated persons and entities are much more onerous than the prohibitions applicable to “Schedule 3” designated persons.
The following individuals have been added to the “Schedule 1” designated persons list:
- Aleksandr DUGIN
- Pavel KANISHCHEV
- Andrey KOVALENKO
The following entities have been added to the “Schedule 1” designated entities list:
- Eurasian Youth Union
- JSC Sirius
- JSC Tula Arms Plant
- JSC United Aircraft Corporation
- Marshall Capital Fund
- Night Wolves Motorcycle Club
- OAO JSC Chemcomposite
- OAO Wysokototschnye Kompletski
- OJSC Stankoinstrument
- OPK Oboronprom
The Canadian sanctions prohibit persons in Canada and Canadians abroad from:
- dealing in any property, wherever situated, held by or on behalf of a Schedule 1 designated person or entities;
- entering into or facilitating, directly or indirectly, any transaction related to such a dealing;
- providing any financial or related service in respect of such a dealing;
- making goods, wherever situated, available to a Schedule 1 designated person or entity; and
- providing any financial or related service to or for the benefit of a Schedule 1 designated person or entity.
Unless an Exemption Order is obtained from the Canadian Government, or the transaction falls within an exemption (which are very limited), Canadians are effectively prohibited from carrying on business with any Schedule 1 designated person or entity.
Schedule 3 to the Regulations has also been amended by adding the following entities.
- 3. OJSC Gazprom
- 4. OJSC Gazprom Neft
- 5. OJSC Surgutneftegas
- 6. Transneft OAO
Sanctions applicable to these Schedule 3 entities only prohibit persons in Canada and Canadian citizens abroad from entering into certain types of debt financing transactions. The prohibited financing transactions include certain types of bonds, loans, debentures, extensions of credit, loan guarantees, letters of credit, bank drafts, bankers’ acceptances, discount notes, treasury bills, commercial paper or other similar instruments that have a maturity date longer than 90 days. Canadians are permitted to continue to do business with Schedule 3 entities so long as it does not involve prohibited financing.
The economic sanctions do not prevent Canadian companies from continuing to do business with Russia. However, these economic sanctions impose a greater burden on Canadian companies conducting business in Russia, or with Russian business partners outside of Russia, to ensure that they maintain compliance with Canadian law.