Canada announces new sanctions on Russia

On March 24, 2021, Canada’s Minister of Foreign Affairs announced new sanctions against 9 Russian officials under the Special Economic Measures (Russia) Regulations (Russia Regulations or Regulations)in response to “gross and systematic violations” of human rights in Russia. The sanctions come in response to the poisoning and prosecution of Kremlin critic Alexey Navalny, most prominent critic of Russian President Vladimir Putin. The Minister stated that “the Russian government has repeatedly shown its unwillingness to respect the basic rights of its own people and address concerns raised on multiple occasions by the international community.”

Who is targeted?

Those targeted under the Russian Regulations include:

  • Aleksandr Vasilyevich Bortnikov, director of the Federal Security Service, Russia’s principal security and counterintelligence agency;
  • Aleksandr Petrovich Kalashnikov, director of the Russian Penetentiary Service;
  • Sergey Vladilenovich Kiriyenk, the first deputy chief of staff in the Putin administration;
  • Igor Viktorovich Krasnov, Russia’s prosecutor general;
  • Aleksey Yurievich Krivoruchko, a deputy minister of defence in Russia responsible for weapons and military equipment;
  • Sergey Ivanovich Menyaio, the plenipotentiary representative of the President of the Russian Federation in the Siberian Federal District;
  • Pavel Anatolyevich Popov, deputy minister of defence responsible for research;
  • Andrey Veniaminovich Yarin, first deputy chief of staff of the Presidential Executive Office, and
  • Viktor Vasilyevich Zolotov, current Director of the National Guard of Russia and a member of the Security Council of Russia.

Sanctions

In addition to being inadmissible to Canada under the Immigration and Refugee Protection Act, the Russia Regulations impose an asset freeze and dealings prohibition on designated persons listed in Schedule 1. These sanctions are equally applicable to both individuals and entities. Under the Russia Regulations, any Canadian outside Canada or any person in Canada is prohibited from:

  • dealing in any property, regardless of its location, held by or on behalf of a listed person;
  • directly or indirectly entering into or facilitating any transaction related to such a dealing;
  • with respect to such a dealing providing any financial or other related services;
  • making any goods from anywhere available to a listed person, and
  • providing any financial or related service to, or for the benefit of, a listed person.

Financial and Energy Sectors

The Regulations also impose restrictions in connection with certain sectors, such as the financial and energy sectors. Specifically, with certain exceptions, in relation to persons listed in Schedule 2, the Regulations prohibit any person in Canada and Canadians abroad from dealing in new debt of longer than 30 days maturity. The prohibition increases to 90 days maturity in relation to persons listed in Schedule 3. In relation to persons listed in Schedule 2, the Regulations also prohibit any person in Canada or Canadians abroad from dealing in new securities.

Additionally, the Regulations also prohibit the export, sale, supply or shipping of goods listed in Schedule 4, to Russia or to any person in Russia for their use in offshore oil where the depth is greater than 500m, shale oil or Arctic oil exploration and production. This includes “a ban on the provision of any financial, technical or other services related to the goods subject to this prohibition.”

The Regulations provide some exceptions to the asset freeze and dealing prohibition on persons listed under Schedule 1.

Permits and Certificates

The Special Economic Measures Act under subsection 4(4), authorizes the Minister of Foreign Affairs to issue to any person in Canada or any Canadian outside Canada, a Special Economic Measures (Russia) Permit Authorization Order, to carry out a specified activity or transaction, or any class of activity or transaction, that is restricted or prohibited pursuant to the Regulations.

What’s next?

Taking precautions that will keep your business protected and compliant with the Canadian sanctions regime is extremely important. Businesses should mitigate the risk of corporate criminal liability by having a compliance program in place, including revised screening protocols for purposes of conducting due diligence prior to and throughout a commercial transaction.

The lawyers at Tereposky & DeRose have significant experience in the design and implementation of sanctions-related compliance programs, including policies, procedures, employee training, and internal control mechanisms. They also regularly assist both Canadian and international businesses, financial institutions, and individuals with internal investigations when “red flags” appear and provide advice on compliance in these areas. Where breaches have occurred, they have worked closely with their clients in making voluntary disclosures and in engaging with the ensuing investigations conducted by the RCMP and Global Affairs Canada.

Vince DeRose
613.237.8862
vderose@tradeisds.com

Jennifer Radford
613.237.9777
jradford@tradeisds.com

Umair Azam
613.237.1208
uazam@tradeisds.com

Canada launches public consultation on trade negotiations with the United Kingdom

On March 19, 2021, Canada’s Minister of International Trade announced that Canada will ratify its Trade Continuity Agreement (TCA) with the United Kingdom. The announcement came after the Canadian Minister held a call with the United Kingdom’s Secretary of State for International Trade, Elizabeth Truss. It is anticipated that Canada and the UK will implement the agreement by April 1, 2021.

On December 9, 2020, Minister Mary Ng introduced Bill C-18: An Act to implement the Agreement on Trade Continuity between Canada and the United Kingdom of Great Britain and Northern Ireland. On March 17, 2021, the Bill received Royal Assent and became law. As Canada and the UK negotiate a more expansive free trade agreement, the TCA is intended to be operate as an interim measure, maintaining preferential market access for Canadian businesses in the UK market and vice versa, including the elimination of tariffs on 98% of trade in goods (see Preparing For Brexit – Canada And the United Kingdom Clinch a Transitional Trade Continuity Deal).

Until the TCA is ratified and implemented, the trade relationship between Canada and the UK is governed by an MOU that provides reciprocal tariff preferences on goods shipped between both countries (see Maintaining the Status Quo – The Canada-United Kingdom Trade Continuity Remission Order, 2021).

On March 12, 2021, the Government of Canada launched public consultations in order to chalk out priorities from the Canadian perspective to shape the future trade negotiations with the UK. The public consultations will remain open until April 27, 2021 (see Canada Launches Public Consultation on Trade Negotiations with the United Kingdom).

Tereposky & DeRose regularly provides advice on the interpretation, application, and implementation of international trade agreements. Should you have any questions regarding the CUKTCA, CETA, CPTPP or any other trade matter, we are at your disposal.

Umair Azam
613.237.1208
uazam@tradeisds.com

Daniel Hohnstein
613.237.9005
dhohnstein@tradeisds.com

Greg Tereposky
613.237.1210
gtereposky@tradeisds.com

Canada Announces New Sanctions on China

On March 22, 2021, Canada announced that in response to human rights violations in Xinjiang in China, it will join its international partners in imposing new sanctions. The announcement comes after the European Union (EU) decided to impose the first sanctions against Beijing since an EU arms embargo in 1989. The United Kingdom (UK) and the United States (US) have also declared sanctions against China.  

The U.N. and other rights experts have raised alarm at the extent of human rights abuse in China. Sources indicate that more than 1 million Muslims are being detained in concentration camps in Xinjiang with reports of political re-education, torture, forced labour, and sterilizations.

Under the new measures, Canada has sanctioned 4 officials and 1 entity under the Special Economic Measures (People’s Republic of China) Regulations (China Regulations), based on their participation in what is described as gross and systematic human rights violations in the Xinjiang Uyghur Autonomous Region. Notably, Canada did not impose these sanctions under its Sergei Magnitsky Law or the Justice for Victims of Corrupt Foreign Officials Act, which allows Canada to adopt targeted measures against foreign nationals who are, in the opinion of the Governor in Council, responsible for or complicit in gross violations of human rights.

Canada has adopted these new measures in coordination with the UK and the US. In addition to addressing human rights violations, the new sanctions aim to prevent the entry of goods that are produced from forced labour into “Canadian and the wider global supply chains and to protect Canadian businesses from becoming unknowingly complicit.” On a previous occasion, the Government of Canada laid out its seven-pronged approach to the Beijing sanctions regime:

  • The Prohibition of imports of goods produced wholly or in part by forced labour;
  • A Xinjiang Integrity Declaration for Canadian companies;
  • A Business Advisory on Xinjiang-related entities;
  • Enhanced advice to Canadian businesses;
  • Export controls;
  • Increasing awareness for Responsible Business Conduct linked to Xinjiang; and
  • A Study on forced labour and supply chain risks

The China Regulations prohibit any transaction akin to an asset freeze with listed individuals by prohibiting persons in Canada, and Canadians outside Canada, from engaging in any activity related to any property of these individuals or providing financial or related services to them. 

To avoid breaching these latest sanctions, including the ones announced by Canada on January 12, 2021, businesses with a trading relationship with China should have in place a compliance programme based around a robust policy on sanctions and adopt comprehensive systems to implement the policy effectively. Tereposky & DeRose regularly assists with such compliance programs.

Vince DeRose
613.237.8862
vderose@tradeisds.com

Jennifer Radford
613.237.9777
jradford@tradeisds.com

Umair Azam
613.237.1208
uazam@tradeisds.com

The European Union Takes a Jab at COVID-19 Vaccine Exports

On March 17, 2021, the European Union (EU) flexed its muscle by threatening to curb vaccine exports by banning them to certain countries. Canada, although not specifically targeted by the EU’s newest overture in the COVID-19 vaccine saga, could experience a spillover effect with disruptions in the vaccine supply. In the first quarter of this year, Canada relied heavily on assurances provided by the EU for securing the Covid-19 vaccine without formalizing the agreement (See A Friend in Need is A Friend Indeed – European Union Provides Verbal Assurances To Canada Against its Vaccine Export Controls).

The European Commission President, Von der Leyen, said that the COVID-19 action of export controls “is about making sure that Europe gets its fair share.” This announcement comes at a time when Canada is bolstering its efforts to secure a steady supply of COVID-19 vaccines after a slower than the anticipated start. She added that “all options are on the table” and the EU could invoke its emergency article 122 of the Treaty on the Functioning of The European Union “if severe difficulties arise in the supply of certain products” to member states allowing the EU to take exceptional measures such as seizing production of vaccines and suspending intellectual property rights.

Meanwhile, on March 16, 2021, the Canadian Minister of Public Services and Procurement, Anita Anand, stated that there will be no reduction in Canada’s supply of doses as the country is receiving over 2 million doses next week and a cumulative total of 8 million doses by the end of March. The White House confirmed on March 17, 2021, that Canada has asked the United States for help in procuring the Covid-19 vaccine. This was followed by another announcement by the Canadian Minister on March 18, 2021:

After numerous discussions with the Biden administration, Canada is in the process of finalizing an exchange agreement to receive 1.5 million doses of the AstraZeneca vaccine from the U.S. We look forward to providing an update to Canadians once the details are finalized.

On March 19, 2021, Canadian Prime Minister Justin Trudeau announced that starting March 22, 2021, Canada will receive at least a million doses of Pfizer’s vaccine each week to the end of May. Canada approved AstraZeneca’s shot and ordered 20 million doses of it directly from the company while some European countries, including Germany, France, Italy, and Spain suspended its use. The suspension was a result of reports that the AstraZeneca vaccine caused a dangerous blood clot in recipients. The EU regulator announced on March 18, 2021, that there was “no indication” the shot was responsible for the condition.

The logistical hurdles and the rising post-Brexit tension between the EU and the United Kingdom as Canada braces for a third wave of the pandemic could jeopardise plans to roll out the already delayed vaccination supply from the EU. Having secured, under a loan agreement, 1.5 million doses of the AstraZeneca vaccine from the US and two million doses from the Serum Institute in India, Canada should have a total of 9.5 million doses, up from the previously projected 8 million doses.

Tereposky & DeRose regularly provides advice on Canadian trade matters, including procurement,  safeguard actions, and export controls. Should you have any questions regarding this matter, we are at your disposal.

Vince DeRose
613.237.8862
vderose@tradeisds.com

Jennifer Radford
613.237.9777
jradford@tradeisds.com

Umair Azam
613.237.1208
uazam@tradeisds.com

Vince DeRose appointed as Managing Partner

The partners of Tereposky & DeRose are pleased to announce the appointment of Vince DeRose as the firm’s inaugural Managing Partner. Vince is a  founding partner of the firm. Over the course of his 20-year career, Vince has represented government and private sector clients in high-stakes matters concerning public procurement, trade and investor-state dispute settlement and has appeared as counsel before courts, tribunals, arbitrators and administrative agencies.  Since the firm’s inception, Vince has undertaken a leadership role in the management and direction of the firm. That role has now been formalized.

With this new appointment, Tereposky & DeRose’s team of committed professionals and staff members will further develop its leading position in international trade, investor-state dispute settlement, government procurement and related practice areas.

 

Canada launches public consultation on trade negotiations with the United Kingdom

On March 12, 2021, the Government of Canada announced that it is launching public consultations as it ramps up its efforts on new trade negotiations with the United Kingdom. Further to the United Kingdom’s withdrawal from the European Union, Canada and the United Kingdom committed to continue their trade relationship, as established under the Canada-EU Comprehensive Economic and Trade Agreement (CETA), pursuant to the Canada-United Kingdom Trade Continuity Agreement (TCA) (see “Preparing for Brexit – Canada and the United Kingdom Clinch a Transitional Trade Continuity Deal”). While steps are taken to implement the TCA, interim measures agreed under a Memorandum of Understanding (MOU) have ensured that goods traded between Canada and the UK continue to enjoy uninterrupted preferential tariff treatment. The interim measure implemented in Canada is the United Kingdom Trade Continuity Remission Order, 2021 (see “Maintaining the Status Quo – The Canada-United Kingdom Trade Continuity Remission Order, 2021”).

Key provisions in Article IV of the TCA (i) require Canada and the UK to commence negotiations on a more permanent regional trade agreement (RTA) within one year of the TCA’s entry into force, and (ii) establish the objective of concluding those negotiations within three years of the TCA’s entry into force.

In addition to concluding a bilateral trade agreement with Canada, the United Kingdom has taken steps to begin the process of negotiating its accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a plurilateral RTA to which Canada is already a party. The United Kingdom submitted a notification of intent letter to begin the CPTPP accession process on February 1, 2021..

The purpose of the Government of Canada’s consultations is to provide the Canadian public and other interested stakeholders (e.g., industry associations, enterprises, and other organizations) with an opportunity to submit information, views, requests, and questions that will help to shape Canada’s priorities in the trade negotiations with the United Kingdom.

More information on the consultation process and how to make submissions is provided on the dedicated Global Affairs Canada website. Canadians anywhere in the world can participate in the public consultations process, which will remain open until April 27, 2021.

Tereposky & DeRose regularly provides advice on the interpretation, application, and implementation of international trade agreements. Should you have any questions regarding the CUKTCA, CETA, CPTPP or any other trade matter, we are at your disposal.

Daniel Hohnstein
613.237.9005
dhohnstein@tradeisds.com

Umair Azam
613.237.1208
uazam@tradeisds.com

Greg Tereposky
613.237.1210
gtereposky@tradeisds.com

Dinner is served – Food importers in Canada must apply for Canadian food inspection agency’s licence

The Canadian Food Inspection Agency (CFIA) has announced that as of March 15, 2021, importers must possess a valid Safe Food for Canadians (SFC) licence before importing food products that are covered under the Safe Food for Canadians Regulations. The announcement explains that (i) unless importers enter a valid SFC licence into their import declaration, the CFIA will reject their imports of meat, fish, eggs, dairy products, fruits, vegetables, honey, or maple products, and (ii) importers will not be able to obtain SFC licences for their shipments at the border.

The CFIA’s announcement should be read together with the new Customs Notice 20-01, which was issued by the Canadian Border Services Agency (CBSA) on January 6, 2021 (replacing the previous Customs Notice CN 19-01 concerning SFC requirements). The new customs notice explains the importance of obtaining new SFC licences, as licences and registrations issued under previous CFIA food legislation (e.g. the Fresh Fruit and Vegetable Regulations, or the Dairy Products Regulations) are no longer valid for registered foods. Rather, SFC licences are now mandatory for commercial importers of covered foods. The new customs notice also explains that “[s]hipments without an SFC licence may experience delays or refusal of entry at the border, and importers may be subject to enforcement actions”.

Under normal circumstances, SFC licence applications normally take up to 15 business days to process. If a pre-licence inspection is required, the process can take longer. Importers requiring an SFC licence are encouraged to submit their application as soon as possible to avoid delays or rejection of shipments at the border.

The SCFR identifies general exemptions from licensing requirements for certain categories of food imports. However, even if exempted from the SFCR requirements, food imports remain subject to CFIA requirements under the Health of Animals Act, Plant Protection Act and their associated regulations, as well as all other relevant Canadian legislation and regulations.

Tereposky & DeRose LLP regularly provides advice on the interpretation, application, and implementation of customs notices and provides representation to Canadian and international businesses at the CBSA. Should you have any questions regarding the CFIA requirements for a new SFC licence, or any other trade matter, we are at your disposal.

Daniel Hohnstein
613.237.9005
dhohnstein@tradeisds.com

Umair Azam
613.237.1208
uazam@tradeisds.com