Regulations Amending the Special Economic Measures (Iran) Regulations: SOR/2023-127

Canada Gazette, Part II, Volume 157, Number 14

Registration
SOR/2023-127 June 16, 2023

SPECIAL ECONOMIC MEASURES ACT

P.C. 2023-570 June 16, 2023

Whereas the Governor in Council is of the opinion that gross and systematic human rights violations have been committed in the Islamic Republic of Iran;

Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of Foreign Affairs, makes the annexed Regulations Amending the Special Economic Measures (Iran) Regulations under subsections 4(1)footnote a, (1.1)footnote b, (2)footnote c and (3) of the Special Economic Measures Act footnote d.

Regulations Amending the Special Economic Measures (Iran) Regulations

Amendment

1 Part 2.1 of Schedule 1 to the Special Economic Measures (Iran) Regulations footnote 1 is amended by adding the following in numerical order:

Application Before Publication

2 For the purpose of paragraph 11(2)(a) of the Statutory Instruments Act, these Regulations apply according to their terms before they are published in the Canada Gazette.

Coming into Force

3 These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

Iran continues to commit gross and systematic human rights violations and to threaten international peace and security.

Background

Between 2006 and 2010, Canada implemented into domestic law several rounds of United Nations’ (UN) sanctions against Iran in response to its nuclear program. In July 2010, Canada imposed additional sanctions against Iran, in consultation with the United States (U.S.), the European Union (EU) and other like-minded partners, through the Special Economic Measures (Iran) Regulations (Iran Regulations) under the Special Economic Measures Act (SEMA). The sanctions were based on Canada’s view that Iran’s failure to meet its international obligations amounted to a grave breach of international peace and security that resulted or was likely to result in a serious international crisis.

Additional SEMA sanctions against Iran were implemented through amendments made between 2011 and 2013. On July 14, 2015, the five permanent members of the UN Security Council (China, France, Russia, the United Kingdom (U.K.) and the U.S.) plus Germany, led by the EU, concluded an agreement with Iran regarding its nuclear program called the Joint Comprehensive Plan of Action (JCPOA).

In 2015, the implementation of key milestones in the JCPOA triggered immediate changes to sanctions imposed by the UN, the U.S. and the EU against Iran, resulting in significant sanctions relief for Iran.

In 2016, Canada amended its sanctions against Iran under SEMA to recognize progress made under the JCPOA but continued to have serious concerns about Iran’s nuclear ambitions. Therefore, Canada maintained tight restrictions on sensitive goods related to nuclear proliferation and the development of Iran’s ballistic missile program, while also maintaining sanctions on individuals and entities.

On October 3, 2022, Canada expanded the scope of the Iran Regulations to include gross and systematic human rights violations, allowing Canada to target sanctions at key individuals and entities who routinely, and as a matter of state policy, violate human rights or justify the regime’s actions to a domestic and global audience.

On October 7, 2022, Canada announced its intention to take significant further action against the Iranian regime, including through sanctions. This was followed with the imposition of additional sanctions as Canada responds to Iran’s continued disregard for international human rights and its activities that threaten international and regional peace and security.

In addition to the sanctions described above, Canada designated the state of Iran as a supporter of terrorism under the State Immunity Act in 2012. In concert with the Justice for Victims of Terrorism Act, this listing allows victims to bring civil action against Iran for losses or damages from an act of terrorism linked to Iran committed anywhere in the world. Following the designation, Canada expelled Iranian diplomats from Canada and closed its embassy in Tehran.

Bilateral relations are governed by a Controlled Engagement Policy (CEP) and are limited to a small set of issues, including consular matters (this includes the downing of Flight PS752), human rights, Iran’s nuclear program and regional security.

The proposed regulatory amendments align with existing policy and objectives to maintain pressure on Iran to change its behaviour and to reinforce Canada’s steadfast commitment to holding Iran to account for its actions at home and abroad.

Objective

These sanctions are intended to increase pressure on Iran to cease its egregious behaviour with respect to human rights violations.

Description

The amendments add seven individuals to the Iran Regulations, who are subject to a broad dealings ban.

The recommended individuals are seven judges in Iran’s system of Revolutionary Courts who have overseen countless unfair trials and handed down scores of harsh sentences, including death sentences, to political prisoners, human rights activists, members of ethnic and religious minority groups and peaceful protesters. Judges in Iran’s Revolutionary Courts act as both judge and prosecutor in rushed and secretive proceedings devoid of due process; prisoners are denied access to a counsel of their choosing and face trial following prolonged periods of detention without charge, frequently enduring torture to extract forced confessions used to substantiate a judge’s charges. Iran’s Revolutionary Courts and the judges that preside over its branches are emblematic of the regime’s flagrant disregard for the rule of law and ongoing gross and systematic violations of human rights.

Any individual or entity in Canada, and Canadians and Canadian entities outside Canada are thereby prohibited from dealing in the property of, entering into transactions with, providing services to, or otherwise making goods available to listed persons and entities.

Regulatory development

Consultation

Global Affairs Canada engages regularly with relevant stakeholders including civil society organizations and cultural communities and other like-minded governments regarding Canada’s approach to sanctions implementation.

With respect to the amendments targeting individuals and entities, public consultation would not have been appropriate, given the urgency to impose these measures in response to the violations of human rights occurring in Iran and Iran’s ongoing breach of international peace and security.

Modern treaty obligations and Indigenous engagement and consultation

An initial assessment of the geographical scope of the initiative was conducted and did not identify any modern treaty obligations, as the amendments do not take effect in a modern treaty area.

Instrument choice

Regulations are the sole method to enact sanctions in Canada. No other instrument could be considered.

Regulatory analysis

Benefits and costs

Sanctions targeting specific persons have less impact on Canadian businesses than traditional broad-based economic sanctions and have limited impact on the citizens of the country of the listed persons. It is likely that the newly listed individuals have limited linkages with Canada and Canadians outside Canada, and therefore do not have business dealings that are significant to the Canadian economy.

Canadian banks and financial institutions are required to comply with sanctions. They will do so by adding the newly listed individuals to their existing monitoring systems, which may result in a minor compliance cost.

Small business lens

While possible, it is unlikely the amendments would create additional costs for small businesses seeking permits that would authorize them to carry out specified activities or transactions that are otherwise prohibited, as Canada has applied comprehensive sanctions against Iran for several years. The combination of Canadian, UN and U.S. sanctions severely limit trade and there is no active trade promotion, reducing the likelihood of costs for businesses. No significant loss of opportunities for small businesses is expected as a result of the Regulations.

One-for-one rule

The permitting process for businesses meets the definition of “administrative burden” in the Red Tape Reduction Act and would need to be calculated and offset within 24 months. However, the proposal addresses an emergency circumstance and is exempt from the requirement to offset administrative burden and regulatory titles under the one-for-one rule.

Regulatory cooperation and alignment

While the amendments are not related to a work plan or commitment under a formal regulatory cooperation forum, they align with actions taken by Canada’s allies.

Strategic environmental assessment

The amendments are unlikely to result in important environmental effects. In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.

Gender-based analysis plus (GBA+)

The subject of economic sanctions has previously been assessed for effects on gender and diversity. Although intended to facilitate a change in behaviour through economic pressure on individuals and entities in foreign states, sanctions under the SEMA can nevertheless have an unintended impact on certain vulnerable groups and individuals. Rather than affecting Iran as a whole, these targeted sanctions impact individuals and entities believed to be engaged in activities that violate human rights and present an ongoing breach of international peace and security. Therefore, these sanctions are unlikely to have a significant impact on vulnerable groups as compared to traditional broad-based economic sanctions directed toward a state and limit the collateral effects to those dependent on those targeted individuals and entities. Furthermore, these sanctions are being introduced in support of the women of Iran who are facing increasingly repressive and unacceptable levels of discrimination, harassment, and persecution by the Iranian regime.

Rationale

Iran’s disregard for its international human rights obligations has long been the subject of condemnation by Canada and the international community. As part of Canada’s leadership of the United Nations General Assembly (UNGA) Resolution on the Human Rights Situation in Iran, Canada, together with like-minded partners, documents the systemic human rights violations perpetuated by the Iranian regime, including increasing numbers of executions, including of minors, systematic violations of the rule of law and the right to due process through the use of sham trials, and the discrimination, persecution, harassment, and arbitrary detention of minority ethnic and religious communities, such as the Bahá’í, and LGBTQ persons in Iran.

Events in Iran demonstrate a gravely concerning pattern of gross and systematic human rights violations, particularly against women. The killing in September 2022 of Mahsa Amini, a young woman who was reportedly beaten and later died while in the custody of Iran’s so-called “morality police” purportedly for failing to wear her hijab “properly,” shocked the world. News of her death sparked domestic and international condemnation, and thousands of Iranian citizens took to the streets in peaceful protest against the regime. Protesters across Iran have faced a brutal crackdown by various branches of Iran’s law enforcement and security and intelligence apparatus and have experienced gross miscarriages of justice at the hands of Iran’s judicial system.

In its actions abroad, Iran is challenging the rules-based international system through deliberate policies to support extremist groups throughout the Middle East. Iran routinely targets and threatens Canada’s partners in the region, such as Israel and several Gulf States. Iran continues to develop and employ new threats to regional and international security, including malicious cyber activities and the transfer of advanced weapons-capable unmanned aerial systems.

These amendments target judicial officials for their participation in gross and systematic human rights violations in Iran via their role to oversee branches in Iran’s Revolutionary Court System.

Canada continues to advance these measures to respond to Iran’s disregard for human rights and to increase pressure on Iran to cease its egregious behaviour.

The amendments will bring Canada into closer alignment with measures imposed against Iran by like-minded countries, with whom Canada remains in lockstep.

Implementation, compliance and enforcement, and service standards

The amendments come into force on the day they are registered.

The names of the listed individuals and entities will be available online for financial institutions to review and will be added to the Consolidated Canadian Autonomous Sanctions List. This will help to facilitate compliance with the Regulations.

Canada’s sanctions regulations are enforced by the Royal Canadian Mounted Police. In accordance with section 8 of SEMA, every person who knowingly contravenes or fails to comply with the Regulations is liable, upon summary conviction, to a fine of not more than $25,000 or to imprisonment for a term of not more than one year, or to both; or, upon conviction on indictment, to imprisonment for a term of not more than five years.

The Canada Border Services Agency (CBSA) has enforcement authorities under the SEMA and the Customs Act and will play a role in the enforcement of these sanctions.

Contact

Neil Brennan
Director
Gulf States Relations Division
Global Affairs Canada
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 343‑203‑5813
Email: Neil.Brennan@international.gc.ca