Canada

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1. Does Canada have a sanctions regime in place?

Canada has various sanctions in place against a number of countries, as well as against specific individuals and entities identified as being associated with terrorist activities.

2. Does Canada implement UN sanctions?

Canada’s United Nations Act enables the Canadian government to give effect to decisions passed by the UN Security Council (“UNSC”). If the UNSC determines that an act of aggression or a breach of peace has occurred, it may decide what measures member states shall take to restore or maintain international peace and security. These measures are generally economic and trade sanctions. Such a decision imposes a legal obligation on Canada as a UN member to introduce the required measures into domestic law. This is done by enacting regulations under the United Nations Act.

3. Does Canada implement an autonomous sanctions regime?

In addition to sanctions imposed under the United Nations Act, Canada implements autonomous sanctions under the Special Economic Measures Act (“SEMA”). In order to maximize the effectiveness of a sanctions regime, Canadian policy seeks to ensure, whenever possible, that sanctions are applied multilaterally. Absent a UNSC resolution, SEMA allows Canada to impose sanctions in any of the following situations:

  • where an international organization of states or association of states, of which Canada is a member, calls on its members to take economic measures against a foreign state
  • where a grave breach of international peace and security has occurred that has resulted in or is likely to result in a serious international crisis
  • where gross and systemic human rights violations have been committed in a foreign state
  • where a national of a foreign state who is a foreign public official or associate of such an official is responsible for or complicit in ordering, controlling or otherwise directing acts of significant corruption

Canada also implements autonomous sanctions under the Justice for Victims of Corrupt Foreign Officials Act (“JVCFOA”). JVCFOA allows Canada to impose an asset freeze and a dealings prohibition against individuals who are responsible for or complicit in gross violations of internationally-recognized human rights or are foreign public officials, or their associates, who are responsible for or complicit in acts of significant corruption.

Non-UN sanctions are generally imposed by enacting regulations under SEMA or JVCFOA. Canada may also impose export/import restrictions on specific countries or types of goods under the Export and Import Permits Act (“EIPA”).

4. What is the nature of the sanctions regime in Canada?

Sanctions imposed by Canada on specific countries, organizations, or individuals vary and can encompass a variety of measures, including restricting or prohibiting trade, financial transactions or other economic activity between Canada and the target state or the seizure or freezing of property situated in Canada. Examples of sanctions include:

  • arms and related materials embargoes
  • asset freezes
  • export/import restrictions
  • financial prohibitions
  • technical assistance prohibition

Canadian sanctions laws apply to all persons and entities located in Canada and all Canadian persons and entities located outside Canada, including entities formed under the laws of Canada or a province. Exceptions to these restrictions or prohibitions may include transactions with UN agencies, Canadian nongovernmental organizations, or other aid agencies. Exemptions may also apply to food; medical supplies; goods used for public health purposes or disaster relief; or goods required under pre-existing contracts. The specific exemptions are listed in the regulations for each set of sanctions.

5. Does Canada maintain a list of sanctioned individuals and entities?

When the UNSC decides to impose sanctions in response to a threat to international peace and security, a UNSC committee is created to oversee implementation of the sanctions. Each committee publishes the names of individuals and entities affected by the corresponding sanctions, as well as the specific measures that apply to each listed name.

With the exception of the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism (“RIUNRST”), regulations made under the United Nations Act refer to the names of listed persons published by the relevant UNSC Committee. The consolidated UNSC Sanctions List, located on the UN’s website, provides a searchable list of all individuals and entities designated by the UNSC that are referred to in regulations made under the United Nations Act. The names of persons listed under RIUNRST are published in the schedule to the regulations. When sanctions are imposed under SEMA, the list of designated persons specific to a particular regulation is published in a schedule to that regulation. In general, all prohibitions described in a regulation apply to all individuals or entities named in its schedule. Where a regulation includes more than one schedule, the prohibitions may apply selectively. Names may be added to or removed from a list by an amending regulation.

The foreign nationals designated by JVCFOA are listed in a schedule to the regulations under the statute. Names may be added to or removed from the list by an amending regulation.

The Consolidated Canadian Autonomous Sanctions List, published by the Government of Canada, lists individuals and entities subject to specific sanctions regulations made under SEMA and JVCFOA.

6. Are there any other lists related to sanctions?

Canada may also impose additional restrictions related to sanctions under the following laws:

  • Criminal Code of Canada: The Governor in Council may, on the recommendation of the Minister of Public Safety and Emergency Preparedness, place an entity on a list of terrorist entities if there are reasonable grounds to believe that: (a) the entity has knowingly carried out, attempted to carry out, participated in or facilitated a terrorist activity; or (b) the entity is knowingly acting on behalf of, at the direction of or in association with an entity referred to in (a)

The listing of terrorist entities under the Criminal Code enables Canada to apply appropriate criminal measures to entities, including those not necessarily listed by the United Nations Al-Qaida and Taliban Regulations or the United Nations Resolutions on the Suppression of Terrorism. The list of terrorist entities is published on the Public Safety Canada website

  • Freezing Assets of Corrupt Foreign Officials Act (“FACFOA”): Canada may agree to a request by a country undergoing internal turmoil or political uncrtainty to freeze the assets or restrain the property of certain of its government officials or politicians. Unlike sanctions, which are generally punitive, FACFOA restrictions are a form of assistance that Canada provides to the requesting country. Canada implements regulations in line with FACFOA in order to freeze the assets of identified individuals and entities
  • Immigration and Refugee Protection Act (“IRPA”): Canada can issues security certificates, which are immigration proceedings for the purpose of removing from Canada non-Canadians who are inadmissible for reasons of national security, violating human or international rights, or involvement in organized or serious crimes. Only permanent residents or foreign nationals can be subject to a security certificate
  • Export and Import Permits Act (“EIPA”): The EIPA imposes export and import trade controls with respect to specific countries or specific types of goods via the Area Control List, the Export Control List, and the Import Control List

7. Does Canada have a licensing or authorization system in place?

Canadian sanctions regulations generally include a mechanism for the Minister of Foreign Affairs to issue permits or certificates to authorise specified activities or transactions that are otherwise prohibited:

  • Permits: Permits can be granted on an exceptional basis in respect of activities that are prohibited under SEMA or JVCFOA. Permits can also be granted to deal with goods covered by the EIPA
  • Certificates: The types of certificates that may be applied for are set out in the relevant regulations under the United Nations Act and may include property for basic or extraordinary expenses. Certificates may also be issued by the Minister of Foreign Affairs in respect of certain other situations; for example, in the case of mistaken identity

8. What are the consequences for a breach of sanctions in Canada?

Failure to comply with the applicable requirements under Canadian sanctions laws is an offense which can result in fines, imprisonment or both. In addition, property that has been dealt with contrary to the laws and regulations may be subject to forfeiture. Any publicity on this issue, particularly related to non-compliance, is likely to have an adverse impact on reputation.

9. Who are the relevant regulators in Canada and what are their contacts?

Global Affairs Canada Sanctions Police and Operations Coordination Division (PER)

125 Sussex Drive Ottawa, Ontario Canada K1A 0G2 T: (+1) 833 352 0769 F: (+1) 613 995 9085 E: sanctions@international.gc.ca

Regulations under the United Nations Act and SEMA require anyone in Canada, as well as Canadians outside Canada, to disclose to the Royal Canadian Mounted Police (“RCMP”) and, in the case of regulations under the United Nations Act, the Canadian Security Intelligence Service (“CSIS”) the existence of any property in their possession or control that they believe is owned or controlled by, or on behalf of, anyone on the UN Supression of Terrorims List or SEMA sanctions list. This includes information about any transaction or proposed transaction relating to such property. Such information should be sent to: RCMP – by unclassified fax to: RCMP Anti-Terrorist Financing Team: (+1) 613-825-7030 CSIS – by unclassified fax to CSIS Financing Unit, unclassified fax: (+1) 613 369 2303.

255 Albert Street

Ottawa ON K1A 0H2 Canada T: (+1) 613 990 7788, (+1) 800 385 8647 E: information@osfi-bsif.gc.ca

The Office of the Superintendent of Financial Institutions (“OSFI”) regulates Canadian federally regulated financial institutions (“FRFI”) and their compliance with sanctions. FRFI’s must complete and file OSFI Form(s) 525 with respect to property frozen pursuant to the listing of terrorist entities under the Criminal Code. OSFI Form(s) 590 must be completed and filed with respect to property frozen pursuant to JVCFOA.

255 Albert Street, 12th Floor Ottawa Ontario K1A 0H2 Canada

T: (+1) 613 990 7788, (+1) 800 385 8647 E: information@osfi-bsif.gc.ca

FINTRAC

234 Laurier Avenue West, 24th Floor Ottawa, Ontario K1P 1H7 Canada

T: (+1) 866 346 8722 F: (+1) 613 943 7931 E: guidelines-lignesdirectrices@fintraccanafe.gc.ca

In addition to the disclosure to the RCMP and CSIS, the reporting persons and entities subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, including financial institutions and securities dealers, must also report such property to the Financial Transactions and Reports Analysis Center of Canada (“FINTRAC”).

Securities dealers

Securities dealers and portfolio managers are regulated by the various provincial and territorial securities regulatory authorities. Securities dealers and portfolio managers have reporting obligations under CSA Staff Notice 31-352 – Monthly Suppression of Terrorism and Canadian Sanctions Reporting Obligations, which in some cases may require the entity to file a monthly suppression of terrorism and sanctions report with their principal securities regulator. The monthly reporting obligation is entirely separate from, and must not be confused with, the obligation to immediately disclose detailed information to the RCMP and CSIS.

Contributor law firm

John Godber

Partner

Graeme A. Hamilton

Partner

Borden Ladner Gervais LLP,

Bay Adelaide Centre,

East Tower,

22 Adelaide Street West,

Toronto, Ontario, Canada, M5H 4E3

T: 416 3676736

GHamilton@blg.com

T: 514 954 3165

JGodber@blg.com

T: (+1) 416 367 6000 F: (+1) 416 367 6749 info@blg.com http://www.blg.com/en

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