Canada Imposes Sanctions on Myanmar Military Officials

Canada’s Minister of Foreign Affairs, The Honourable Marc Garneau announced that  effective February 18, 2021, Canada is imposing sanctions against 9 Myanmar military officials, under the Special Economic Measures (Burma) Regulations (“Regulations”). This action is followed by the coup d’état perpetrated by the Myanmar Armed Forces. Earlier this month on February 3, 2021, the G7 Foreign Ministers made the following statement:

            We, the G7 Foreign Ministers of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States of America and the High Representative of the European Union, are united in condemning the coup in Myanmar.

While the specific prohibitions are set out in the regulations, the names of the individuals added to the schedule of these regulations are:

  • Min Aung Hlaing
  • Soe Win
  • Sein Win
  • Soe Htut
  • Ye Aung
  • Mya Tun Oo
  • Tin Aung San
  • Aung Lin Dwe
  • Ye Win Oo

The current measures under the Regulations impose on listed individuals a prohibition on dealings (effectively an asset freeze) by prohibiting persons in Canada and Canadians outside Canada from dealing in any property of these individuals or providing financial or related services to them.

The sanctions against Myanmar were enacted under the Special Economic Measures Act to respond to the ongoing human rights and humanitarian situation in Myanmar. On December 13, 2007, the Special Economic Measures (Burma) Regulations came into force.

The measures implemented by the Regulations, as amended, include:

  • a freeze on assets in Canada of any designated Myanmar nationals connected with the Myanmar State, as well as prohibitions on several categories of transactions, services and dealings involving property of designated persons, wherever situated; and
  • an arms embargo, including prohibitions on exporting and importing arms and related material to and from Myanmar, on communicating technical data related to military activities or arms and related material, and on financial services related to military activities or arms and related material.

A separate Special Economic Measures (Burma) Permit Authorization Order (SOR/2007-286), made pursuant to subsection 4(4) of the Special Economic Measures Act, authorizes the Minister of Foreign Affairs to issue to any person in Canada and any Canadian outside Canada a permit to carry out a specified activity or transaction, or any class of activity or transaction, that is restricted or prohibited pursuant to the Regulations.

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.

If you would like to discuss any aspect of the Canadian sanctions regime, contact Vince DeRose, Jennifer Radford or Umair Azam at:

 

Vince DeRose
613.237.8862
vderose@tradeisds.com

Jennifer Radford
613.237.9777
jradford@tradeisds.com

Umair Azam
613.237.1208
uazam@tradeisds.com

 

A Friend in Need is a Friend Indeed – European Union Provides Verbal Assurances to Canada Against its Vaccine Export Controls

Canada’s doses of COVID-19 vaccines from Pfizer-BioNTech and Moderna are made in and shipped from Europe. With AstraZeneca being unable to fill Europe’s contract for its vaccine in the first three months of the year, the European Union (EU) issued its temporary Transparency and Authorization Mechanism on 29 January 2021. One of the key highlights of the mechanism is the export authorization scheme that provides for authorizations of exports outside the EU of COVID-19 vaccines until the end of March 2021. As such, the vaccine exports will be subject to an early notification and authorization before they are effectively shipped outside the EU.

Recently, the President of the European Commission (EC) provided assurances to the Canadian Prime Minister that the proposed European Union vaccine export transparency mechanism is not intended to disrupt exports of vaccines to Canada. On Monday, the Canadian Minister of International Trade, Mary Ng, said she and the Prime Minister had received several verbal assurances from European officials that Canada’s vaccine orders would not be affected by the controls. While Canada is not on the list of countries exempted from the controls under the Transparency and Authorization Mechanism, the European Commission’s declaration states:

           The Commission is mindful of APAs [Advanced Purchase Agreement] contracted by third countries, and will endeavour to ensure that the expectations of these countries to obtain their deliveries will be met.

Although the measure states that the export authorization mechanism is not an export ban, concerns were raised in Canada that Canada’s Advanced Purchase Agreements may not be honoured. However, the Canadian Prime Minister assured that should the EU go forward with the controls, he had ‘strong assurances’ from EU leadership that Canada would not be impacted. A news source reported that the Assistant Deputy Minister for trade policy and negotiations at Global Affairs Canada, Steve Verheul told the House of Commons Trade Committee that Canada’s first goal is to ensure Europe lives up to its promise. Without any further elaboration he added, “We’re waiting to see if the EU process is going to pose any interruptions or not,” said Verheul. He went on to state “But we’re certainly prepared that if this process does start to create problems, we will have steps we can take in light of that.” Currently, with no domestic COVID-19 vaccine production, the Canadian government has signed a “memorandum of understanding” with Novavax to produce its COVID-19 vaccine in Canada. However, it is not expected to roll out production until fall.

The EU has invested a total of €2.7 billion to produce several vaccines against COVID-19. While the EU claims that its measures are in line with all its international obligations under WTO and G20 commitments, Canada does not have many mechanisms to challenge the new controls under the Comprehensive Economic and Trade Agreement (CETA), Canada’s free trade agreement with the European Union.

Tereposky & DeRose regularly provides advice on Canadian trade matters, including safeguard actions and export control. Should you have any questions regarding this matter, we would be pleased to speak with you.

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’s Economic Sanctions: All Bark no Bite? Charges Dropped Against Halifax Man Accused of Violating Syrian Sanctions

Under Canada’s regime of economic sanctions, Nader Kalai, a businessman from Halifax was expected to be the first person to face a trial after violating Canada’s sanctions in Syria. However, the trial ended abruptly in January 2021 as the Crown declined to offer any evidence and asked the Court for an acquittal.

On May 24, 2011, Canada announced that targeted sanctions, in response to the humanitarian crises and resulting breach of international peace and security in the region, would be imposed against members of the current Syrian regime under the Special Economic Measures Act (SEMA). The Special Economic Measures (Syria) Regulations impose sanctions against members of the current Syrian regime. In addition to the restrictions on dealings with designated persons, the Regulations prohibit any person in Canada and any Canadian outside Canada to:

  • Import, purchase, acquire, carry or ship any goods, excluding food for human consumption, from Syria;
  • Provide or acquire financial services to, from or for the for the benefit of or on the direction or order of Syria or any person in Syria;
  • Invest in Syria;
  • Export, sell, supply or ship to Syria of goods, including technical data, used for monitoring telecommunications;
  • Export, sell, supply or ship luxury goods to Syria;
  • Export, sell, supply or ship goods listed in Schedule 2 of the Regulations, including any technical data related to such goods;
  • Causing, assisting or promoting prohibited activities is likewise prohibited.

As a backgrounder to the proceeding, Kalai was accused of violating SEMA and initially, his trial was set for May 2020. The hearing was then delayed to the following month as a result of the COVID-19 pandemic. The three-day trial starting on August 18, 2020, was to be judge-alone and much of it was to be done by video-conferencing. The trial was expected to be unique as only one person has been prosecuted under SEMA since its introduction in 1992 which at the time resulted in a guilty plea and a small fine for the accused, a company.

The accusations against Kalai of violating the measures imposed on Syria included making a payment of 15 million Syrian pounds (approximately C$140,000) to a company called Syrialink, a Syrian company, on November 27, 2013. The Crown alleged that the transaction took place when Kalai was in Canada.

An earlier ruling by the Supreme Court of Nova Scotia shows that the presiding judge held that while the evidence before the Court was admissible, Crown had produced little or no evidence in support of the documents being admitted for the truth of their contents and the Crown did not meet the threshold for substantive reliability.

In June 2018, the Canada Border Services Agency (CBSA) laid the charges against Kalai for violating the Canadian sanctions regime. After a two-year-long investigation into Kalai, the CBSA claimed that he had misled Citizenship and Immigration Canada in acquisition of his status as a Canadian permanent resident. Had he been convicted, Kalai would have faced up to five years in prison.

Kalai, who has been placed under the European Union sanctions regime, was described by a European court as being a “leading businessperson operating in Syria with significant investments in the construction industry.”

The efficacy of the Canadian sanctions regime appears to be in stark contrast with respect to its American counterpart. The United States Department of Justice laid charges against three individuals, including two residents of Ontario, Canada in an indictment with conspiracy to export U.S. goods to Iran resulting in extra-territorial arrests (See, International Sanctions lead to charges being laid in Canada and Iran by US Authorities).

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.

If you would like to discuss any aspect of the Canadian sanctions regime, contact Vince DeRose, Jennifer Radford or Umair Azam at:

Vince DeRose
613.237.8862
vderose@tradeisds.com

Jennifer Radford
613.237.9777
jradford@tradeisds.com

Umair Azam
613.237.1208
uazam@tradeisds.com