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.