During the month of June, Canada has issued new sanctions targeting individuals and entities in Ukraine, Haiti, and Iran. It has also enacted new sanctions regulations to target Russian collaborators in Moldova. Further, the Senate Standing Committee on Foreign Affairs and International Trade released a report regarding its legislative review of the Justice of Victims of Corrupt Foreign Officials Act (the “Sergei Magnitsky Law”) and the Special Economic Measures Act (the “SEMA”).

Prior to Parliament adjourning for summer recess on June 21, 2023, three bills amending Canada’s sanctions laws received royal assent. Bill S-8 and Bill C-47 amend the SEMA and the Sergei Magnitsky Law to: (i) expand the scope of inadmissibility to Canada based on sanctions, (ii) broaden the scope of who can be subject to economic sanctions, and (iii) introduce a “deemed ownership” provision into the respective sanctions laws. Bill C-41, tabled on March 9, 2023, amends the Criminal Code to create a legal regime whereby the Minister of Public Safety and Emergency Preparedness may authorize certain eligible persons to carry out certain humanitarian or aid activities in geographic areas under the control of a terrorist group. 

Amendments to the Ukraine Regulations

On June 10, 2023, Canada announced new sanctions under the Special Economic Measures (Ukraine) Regulations (the “Ukraine Regulations”) – effective retroactively as of June 8, 2023 – in response to “Russia’s attempts to destroy Ukraine’s cultural sites, institutions and identity”.

These amendments to the Ukraine Regulations target 24 individuals and 17 entities who are “connected to Russia’s theft of Ukrainian cultural property”. Specifically, the amendments include individuals who are “Ukrainians who work at museums and other cultural centres who collaborate with Russia”, as well as “newly-created entities in Russian-occupied areas of Ukraine”. This is the latest round of sanctions under the Ukraine Regulations following amendments on September 29, 2022, which targeted “Russian regime collaborators complicit in sham referendums in Ukraine”.

Amendments to the Haiti Regulations

On June 13, 2023, Canada amended the Special Economic Measures (Haiti) Regulations (the “Haiti Regulations”) to add two individuals to the sanctions list who Canada believes are “a foreign public official, or an associate of such an official, [who] is responsible for or complicit in ordering, controlling or otherwise directing acts of significant corruption”.

Further amendments were made to the Haiti Regulations on June 21, 2023, targeting four additional individuals who Canada asserts have committed “gross and systemic human rights violations”.

On December 22, 2022, the former Prime Minister of Haiti, Laurent Lamothe, challenged his listing under the Haiti Regulations on the grounds that the allegations against him were baseless, that grounds supporting his listing were not provided, and that his listing was in breach of procedural fairness requirements. On January 23, 2023, the Federal Court stayed the proceedings pending the Minister of Foreign Affairs’ determination of whether Mr. Lamothe should be de-listed. Mr. Lamothe remains listed under Part 1 of the Schedule.

Amendments to the Iran Regulations

On June 19, 2023, Canada announced new sanctions under the Special Economic Measures (Iran) Regulations (the “Iran Regulations”) – effective retroactively as of June 16, 2023 – in response to “gross and systemic human rights violations in Iran’s criminal justice system”.

These amendments to the Iran Regulations target seven individuals associated with Iran’s Revolutionary Courts, which Canada states is “notorious for issuing death sentences and harsh prison terms following sham trials and based on evidence gathered under torture”. This is the twelfth package of sanctions imposed by Canada against Iran since October 2022, bringing the total number of sanctioned Iranian individuals to 163.

New Moldova Regulations

On June 1, 2023, Canada announced new Special Economic Measures (Moldova) Regulations (the “Moldova Regulations”) “in response to Russia’s ongoing war of aggression against Ukraine”. Canada has claimed that Russia has used its influence in Moldova “to restrain the national government from exercising full sovereignty” over its territory, specifically in Transnistria. Following Russia’s annexation of Crimea in 2014 and the invasion of Ukraine in February 2022, Canada has reported threats by Russian officials to draw Moldova further into the conflict. Canada’s objective in enacting the Moldova Regulations is “to undermine Russia’s ability to continue its unjustifiable invasion of Ukraine through Moldova, counter Russian destabilization efforts in the region, and support the democratically elected Government of Moldova”.

Under the Moldova Regulations, seven individuals and one entity in Moldova, believed to be Russian collaborators, were targeted. The individuals listed include “Moldovan oligarchs, business people, parliamentarians and politicians who are connected to Russia”. The entity listed is a political party closely connected with an individual listed, “which has worked to destabilize Moldova’s democratically elected government in favour of Russia”.

Prime Minister Justin Trudeau announced his intention to create the new Moldova Regulations after his meeting in Ottawa with Moldovan President Maia Sandu on May 11, 2023.

Legislative Review of the Sergei Magnitsky Law and the Special Economic Measures Act

Following its 5-year legislative review of the Sergei Magnitsky Law and the SEMA, on May 16, 2023 the Standing Senate Committee on Foreign Affairs and International Trade released its report entitled “Strengthening Canada’s Autonomous Sanctions Architecture: Five-Year Legislative Review of the Sergei Magnitsky Law and the Special Economic Measures Act” (the “Report”). The Report includes 19 recommendations intended to strengthen Canada’s autonomous sanctions regimes.

The objectives of the Report include recommendations to ensure due process and procedural fairness standards are met in the administration of sanctions, to increase transparency and communication relating to the imposition of sanctions, and to improve the government’s ability to enforce its sanctions. Some of the notable recommendations include:

• Establishing “an effective, transparent process to review applications for delisting with specific service standards”, as well as to “inform individuals and entities subject to autonomous sanctions of the action taken against them, along with an explanation as to why they have been sanctioned, and how to submit an application for delisting” (Recommendation 15).
• Making it a priority of the Government of Canada “to develop and provide the public and the private sector with specific and comprehensive written guidance on the interpretation of Canada’s autonomous sanctions laws and regulations” (Recommendation 13).
• Investing “greater financial and human resources in enforcing sanctions by providing new funding specifically for this purpose to the Royal Canadian Mounted Police and the Canada Border Services Agency” (Recommendation 9).
• Amending the SEMA and the Sergei Magnitsky Law “to require that new regulations made under either Act include a sunset clause that would prescribe a date for the termination of a sanctions regime unless renewed prior to the expiry of the term” (Recommendation 19).

Our team will continue to closely monitor new developments in Canada’s sanctions regimes, providing updates to keep clients informed. 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. We also regularly assist clients with the application for delisting process as well as applications for exemption permits.