On July 14, 2022, Canada’s latest sanctions against Russia’s industrial manufacturing industry went into effect. Canada had previously announced these sanctions were incoming on July 9, 2022. These sanctions are issued under the Special Economic Measures (Russia) Regulations (“Russia Regulations”).
Canada expanded its existing measures on Russia’s oil, gas and chemical sectors to include industrial manufacturing. Canada’s new sanctions prohibit Canadians and any person in Canada from providing services incidental to Russian manufacturing. Specifically, the sanctions apply to services relating to the manufacturing of basic materials, fabricated metal products, computer electronic and optical products, electrical equipment, machinery equipment, and motor vehicles. The sanctions also prohibit the provision of services in the land and pipeline transport industry. Previously prohibited services under Part 1 of Schedule 8 now also apply to the manufacturing and land and pipeline transport industries.
Importantly, if a Canadian or person in Canada was already providing listed services to the newly listed industries under a contract that was entered into before July 14, 2022, then a 60-day grace period applies, allowing Canadian businesses to conclude those contracts before September 12, 2022.
Our team will continue to monitor the sanctions related to Russia, providing updates about important developments affecting trade and services.
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. We also regularly assist clients with the application for delisting process as well as applications for exemption permits.