On October 13, 2026, Canada published new guidance for establishing when property owned or controlled by an entity is deemed to be owned by a listed person under the Special Economic Measures Act (the “SEMA”) and the Justice for Victims of Corrupt Foreign Officials Act (the “JVCFOA”).

The deemed ownership provisions extend the dealings prohibitions set out in the SEMA and JVCFOA and their regulations. The prohibitions prohibit any person(s) in Canada, or Canadian person(s) outside Canada, from dealing with property that is owned or controlled, directly or indirectly, by a listed person. Under the deemed ownership provisions, if a listed person controls an entity, directly or indirectly, the entity’s property is deemed to be owned by that person – and is therefore subject to the dealings prohibitions – even if the entity itself is not listed.

The new guidance outlines three control criteria for determining whether a listed person controls an entity:

a. the person holds, directly or indirectly, 50% or more of the shares or ownership interests in the entity or 50% or more of the voting rights in the entity;

Criteria (a) applies an aggregate ownership approach: if listed person(s) collectively hold 50% of more of the shares, interest or voting rights, the entity is deemed controlled by the listed person(s) and becomes subject to the dealings prohibitions, even if no listed person individually meets the threshold.

b. the person is able, directly or indirectly, to change the composition or powers of the entity’s board of directors;

Criteria (b) also considers the person’s ability to appoint or remove a majority of the members of the entity’s administrative, management or supervisory bodies and the person’s ability to control a majority of the shareholders’ or members’ voting rights.

c. it is reasonable to conclude, having regard to all the circumstances, that the person is able, directly or indirectly and through any means, to direct the entity’s activities.

Criteria (c) addresses a listed person’s ability to exercise de facto influence over an entity’s activities. Factors which may be considered under criteria (c) include the existence of a share buyback clause in favor of a listed person, the transfer of shares by a listed person before or after designation, and the use of trusts, shell companies and/or limited liability companies.

Under the new guidance, if a listed person meets one or more of criteria (a), (b), or (c), any property that is owned — or that is held or controlled, directly or indirectly — by the entity is deemed to be owned by that person and is subject to the dealings prohibitions.  

We regularly assist clients with the application for delisting process and subsequent judicial review of determinations (or lack thereof) by the Minister in response to those applications for delisting. We have significant experience in the design and implementation of sanctions-related compliance programs and internal investigations. Where breaches are identified, we work closely with clients in making voluntary disclosures and in engaging with the ensuing investigations conducted by the RCMP and Global Affairs Canada.