Canada announces new round of sanctions on Belarus

On 2 December 2021, Canada levied a new round of economic sanctions against Belarus. Canada and its allies have implemented several rounds of increasingly restrictive economic sanctions against Belarus since August 2020. Canada first sanctioned Belarus in August 2020 as a result of the Presidential election of that month, which was widely regarded as unfree, unfair, and illegitimate.

This contentious election resulted in the sixth presidential term of Alexander Lukashenko, the President of Belarus since 1994. Canada and its allies’ sanctions have sought to increase the cost to Belarus and President Lukashenko of continuing to flout international human rights norms, including the right to democratic participation. Tereposky & DeRose have previously written about these past sanctions.

Since Canada and its allies first sanctioned Belarus in 2020, the relationship between Belarus and the west have continued to worsen. This has culminated in the current situation where Belarus is allegedly encouraging migrants from the Middle East and Africa to travel to and migrate into Europe, using Belarus as a transit point.

These efforts by Belarus to manufacture a migrant crisis on the EU’s borders is what Canada’s most recent sanctions are a response to. Canada took this most recent measure, along with its prior measures against Belarus, in coordination with its allies including the United States, the United Kingdom, and the European Union. Together, this group of states hopes to accomplish together more than they could individually.

Canada’s specific economic measures consisted of sanctioning twenty-four (24) individuals and seven (7) entities, under the Special Economic Measures (Belarus) Regulations (“Regulations”). The Regulations prohibit persons in Canada as well as Canadians abroad from engaging in any activity relating to any property owned by the individuals or entities. Additionally, neither persons in Canada nor Canadians outside of Canada may provide financial or related services to listed persons. Finally, the individuals listed are prohibited from entering Canada pursuant to the Immigration and Refugee Protection Act.

Canada sanctioned individuals because of their responsibility for the ongoing gross and systemic human rights violations being committed in Belarus. The corporate entities sanctioned are also involved in either directly supporting the Belarussian government’s human rights abuses or are indirectly benefiting from it.

For example, Canada sanctioned Tsentrkurort, Belarus’ state-owned tourism country, which played a key role in orchestrating irregular migration from the Middle East and Africa to Europe. Canada also sanctioned the Presidential Sports Club, a state-run sports organization headed by the President’s son, Dmitry Lukashenko. The remaining five (5) corporate entities are all involved in the arms manufacturing or defence industries.

These restrictions do not mean that Canadians cannot do business in Belarus, but the ever-changing legal environment of these and other sanctions may present challenges to investment and trade opportunities.

The lawyers at Tereposky & DeRose are available to assist with any and all questions you may have regarding the sanctions and their practical effects.

Vince DeRose
613.237.8862
vderose@tradeisds.com

Jennifer Radford
613.237.9777
jradford@tradeisds.com

Peter Knowlton
613.237.4742
pknowlton@tradeisds.com

SEIZING THE MOMENT: CBSA Seizes a Shipment of Goods from China allegedly made with Forced Labour

Recently, the Canadian Border Services Agency (“CBSA”) reported that for the first time it seized goods imported on the suspicion that the goods were “mined, manufactured or produced wholly or in part by forced labour.” The suspected goods in question were women’s and children’s clothes being imported from China.

In January 2021, Canada, acting in unison with its traditional allies such as the United Kingdom, implemented economic measures against China in response to the increasing body of “evidence and reports of human rights violations in the People’s Republic of China against members of the Uyghur ethnic minority” including “repressive surveillance, mass arbitrary detention, torture and mistreatment, forced labour within the Xinjiang Uyghur Autonomous Region (Xinjiang), and mass transfers of forced labourers from Xinjiang to provinces across China.”

Specifically, Canada implemented the following seven measures:

1. The prohibition of imports of goods procured wholly or in part by forced labour

Canada’s Customs Tariff Act contains a prohibition on the importation of goods from any country that are produced in whole or in part by forced labour and this Act provides the basis for prohibiting the importation of goods produced by forced labour originating in Xinjiang.

Canada had implemented the above prohibition to give effect to the labour obligations Canada signed on to as part of the Canada – United States – Mexico Agreement (“CUSMA”).

2. A Xinjiang Integrity Declaration for Canadian companies

Canadian companies that are either (1) sourcing directly or indirectly from Xinjiang or from entities relying on Uyghur labour, (2) established in Xinjiang, or (3) seeking to engage in the Xinjiang market must sign a declaration acknowledging that the company is (A) aware of the human rights situation in Xinjiang, (B) abides by all relevant Canadian and international laws, respects human rights, and (C) seeks to meet or exceed OECD Guidelines for Multinational Enterprises and the UN Guiding Principles for Business and Human Rights.

This declaration is meant for companies to affirm they are not knowingly sourcing products or services from a supplier implicated in forced labour or other human rights violations and committing to conduct due diligence on their suppliers in China.

Canadian companies that fail to do so may lose trade advocacy support and future Export Development Canada financial support.

3. A Business Advisory on Xinjiang-related entities

Canada’s Global Affairs Canada (“GAC”) issued a business advisory with an aim to help Canadian firms and stakeholders understand the legal and reputational risks posed to companies whose supply chains engage with entities possibly implicated in forced labour.

4. Enhanced advice to Canadian businesses

The Canadian Trade Commissioner Service committed to working with public and private sector stakeholders with the aim to provide enhanced advice on due diligence and risk mitigation strategies related to supply chains and forced labour. This has consisted of, amongst other things, the trade Commissioner sharing new guidelines regarding specific risks that Canadian firms should be aware of when operating in Xinjiang.

5. Export controls

Canada committed to denying export permits if Canada determines there is a substantial risk the export would result in a serious violation of human rights or international human rights law. Canada will pay special attention to the exports of advanced Canadian technologies and services that could be misused or diverted towards government surveillance, repression, arbitrary detention or forced labour, in light of the evolving situation in Xinjiang.

6. Increasing awareness for Responsible Business Conduct linked to Xinjiang

GAC committed to convening meetings with business and non-governmental organizations with the intent to raise awareness about the risks of doing business in Xinjiang, with special focus paid to ensuring the integrity and legal compliance of the supply-chain.

7. A Study on forced labour and supply chain risks

GAC committed to seeking out a third-party analysis of areas of exposure to forced labour involving Uyghurs. This study is intended to contribute to the body of knowledge on these issues, with a view to providing Canadian companies with further advice on the risks of doing business in the region.

Conclusion

Canada’s economic measures targeting China are still in their relative infancy, and their full effects remain to be seen. However, this first seizure may imply that further seizures of goods from China allegedly made with forced labour is a real possibility. Importers in Canada should ensure they have appropriate due diligence programs in place to mitigate this risk.

Tereposky & DeRose has significant experience in the design and implementation of CBSA cross-border trade restrictions. 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.

Should you have any questions regarding these new procedures, please contact us.

Vince DeRose
613.237.8862
vderose@tradeisds.com

Jennifer Radford
613.237.9777
jradford@tradeisds.com

Peter Knowlton
613.237.4742
pknowlton@tradeisds.com