Regulations Amending the Special Economic Measures (Russia) Regulations: SOR/2023-184

Canada Gazette, Part II, Volume 157, Number 18

Registration
SOR/2023-184 August 17, 2023

SPECIAL ECONOMIC MEASURES ACT

P.C. 2023-831 August 17, 2023

Whereas the Governor in Council is of the opinion that gross and systematic human rights violations have been committed in the Russian Federation;

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 (Russia) 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 (Russia) Regulations

Amendments

1 Part 1.1 of Schedule 1 to the Special Economic Measures (Russia) Regulations footnote 1 is amended by adding the following in numerical order:

2 Part 3 of Schedule 1 to the Regulations is amended by adding the following in numerical order:

Application Before Publication

3 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

4 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

The Russian Federation continues to commit human rights violations in Russia. This domestic oppression is closely linked to its aggression abroad, particularly in Ukraine. The Russian judicial system is under federal political control and does not afford fair and impartial proceedings. Therefore, the Russian government has implemented legislation aimed at stifling criticism of its war against Ukraine and is using the judicial system to sentence opposition voices.

Background

Following Russia’s illegal occupation and attempted annexation of Crimea in March 2014, the Canadian government, in tandem with partners and allies, enacted sanctions through the Special Economic Measures (Russia) Regulations (the Regulations), which were made under the Special Economic Measures Act (SEMA). These sanctions impose dealings prohibitions (an effective asset freeze) on designated individuals and entities in Russia and Ukraine supporting or enabling Russia’s violation of Ukraine’s sovereignty. Any person in Canada and Canadians 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.

On February 24, 2022, Russian President Putin announced a “special military operation” as Russian forces launched a full-scale invasion of Ukraine from Russian and Belarusian territory. The invasion has become a grinding war of attrition which sees little prospect of a quick victory for either side, and both continue to incur heavy losses. The Russian military has committed horrific atrocities against civilians, including in Izium, Bucha, Kharkiv and Mariupol. Experts, including the Organization for Security and Cooperation in Europe (OSCE) Moscow Mechanism fact-finding missions, the Independent International Commission of Inquiry on Ukraine and United Nations (UN) Office of the High Commissioner for Human Rights (OHCHR), have concluded that Russia is committing serious human rights violations, war crimes, possible crimes against humanity, and conflict-related sexual violence. These studies have linked Russian external aggression with systematic repression and human rights abuses domestically. According to Ukraine’s State Emergency Department, 30% of Ukrainian territory (approximately the size of Austria) is mined. President Putin’s military invasion has been paired with significant malicious cyber operations and disinformation campaigns that falsely portray the West as the aggressor and claim Ukraine is developing chemical, biological, radiological and/or nuclear weapons with the support of the North Atlantic Treaty Organization (NATO). The deterioration of Russia’s relations with Ukraine has paralleled the worsening of its relations with the United States (U.S.) and NATO, which has led to heightened tensions.

International response

The coalition of countries supporting Ukraine includes, but is not limited to, G7 and European countries and some of Ukraine’s neighbours. This group is working to support Ukraine across a number of areas, including energy security, nuclear safety, food security, humanitarian assistance, combatting Russian disinformation, sanctions and economic measures, asset seizure and forfeiture, military assistance, accountability, recovery and reconstruction. Canada and G7 countries are engaged in intense diplomacy with the broader international community to encourage support for Ukraine and counter false Russian narratives. Key votes in multilateral forums have effectively isolated Russia, including resolutions in the UN General Assembly condemning Russian aggression against Ukraine (March 2022), deploring the humanitarian consequences of Russian aggression against Ukraine (March 2022), suspending Russian membership in the UN Human Rights Council (April 2022) and condemning Russia’s illegal annexation of Ukrainian territories (October 2022). Many developing countries have refrained from openly criticizing Russia or imposing penalties due to geopolitical considerations, commercial incentives, or simply fear of retaliation, with some also arguing the conflict is less of a priority for their regions. Russia continues to use its position as a permanent member of the UN Security Council (UNSC) to block UNSC action on its war on Ukraine and its corrosive disinformation policies.

Canada’s response

Since February 2022, Canada has committed or delivered over Can$8 billion in assistance to Ukraine. This includes military aid, cyber defence and training to Ukrainian troops in the United Kingdom (U.K.) and Poland under the aegis of Operation UNIFIER. Economic resilience support includes new loan resources, a loan guarantee, and Ukraine Sovereignty Bonds. Canada is helping Ukraine repair its energy infrastructure and has temporarily removed trade tariffs on Ukrainian imports. Canada has also committed development and humanitarian assistance, and is countering disinformation through the G7 Rapid Response Mechanism. Canada is also providing security and stabilization programming, including support for civil rights organizations and human rights defenders. Canada announced two new immigration streams for Ukrainians coming to Canada: the temporary Canada Ukraine Authorization for Emergency Travel and a special permanent residence stream for family reunification.

Since 2014, in coordination with its allies and partners, Canada has imposed sanctions on more than 2 600 individuals and entities in Russia, Belarus, Ukraine and Moldova who are complicit in the violation of Ukraine’s and Moldova’s sovereignty and territorial integrity. In addition, Canada implemented targeted restrictions against Russia and Belarus in financial, trade (goods and services), energy and transport sectors. Canada is part of the Oil Price Cap Coalition, which limits the provision of maritime services to Russian crude oil and petroleum products above a price set by the coalition. These amendments to the Regulations build upon Canada’s existing sanctions by further impeding Russian dealings with Canada. Canada seeks to align its measures with its partners, including the U.S., the U.K., the European Union (EU), Australia, New Zealand, Japan and Ukraine.

Conditions for imposing and lifting sanctions

Pursuant to SEMA, the Governor in Council may impose economic and other sanctions against foreign states, entities and individuals when, among other circumstances, a person has participated in gross and systematic human rights violations in Russia.

The duration of sanctions by Canada and like-minded partners has been explicitly linked to the peaceful resolution of the conflict, and the respect for Ukraine’s sovereignty and territorial integrity, within its internationally recognized borders, including Crimea, as well as Ukraine’s territorial sea. The U.S., the U.K., the EU and Australia have continued to update their sanction regimes against individuals and entities in both Ukraine and Russia.

Objective

  1. Condemn the ongoing human rights abuses taking place inside of Russia.
  2. Impose further costs on Russian officials in Russia’s justice and security sector who are engaged in these human rights abuses.
  3. Target those individuals and entities who are assisting in the repression of anti-war protests and criticism and the free flow of information about the war as a means to assist Russia’s war against Ukraine.
  4. Align Canada’s measures with those taken by international partners.

Description

The amendments to the Regulations add 15 individuals and 3 entities to Schedule 1 of the Regulations, who are subject to a broad dealings ban. These individuals are members of the Russian justice and security sectors, including judiciary and investigative committee senior officials. They have been involved in human rights abuses against Russian opposition leaders, including Vladimir Kara-Murza, Alexei Navalny and other Russian citizens. The entities are two federally controlled district courts supervised by the Moscow City Court, both of which have been involved in sentencing and imprisoning multiple Russian opposition leaders and critics, including Vladimir Kara-Murza and Alexei Navalny.

Regulatory development

Consultation

Global Affairs Canada engages regularly with relevant stakeholders, including civil society organizations, cultural communities and other like-minded governments, regarding Canada’s approach to sanctions implementation. Global Affairs Canada research also draws from analysis from pro-democracy movements inside and outside of Russia.

With respect to the amendments targeting individuals and entities, public consultation would not be appropriate, given the risk of asset flight and the urgency to impose these measures in response to the ongoing breach of international peace and security in Ukraine.

Modern treaty obligations and Indigenous engagement and consultation

An initial assessment of the geographical scope of the amendments 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 individuals and entities have less impact on Canadian businesses than traditional broad-based economic sanctions, and they have limited impact on the citizens of the country of the listed individuals and entities. It is likely that the newly listed individuals and entities have limited linkages with 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 and entities to their existing monitoring systems, which may result in a minor compliance cost.

The amendments could create additional costs for businesses seeking permits that would authorize them to carry out specified activities or transactions that are otherwise prohibited.

Small business lens

Likewise, the amendments could create additional costs for small businesses seeking permits that would authorize them to carry out specified activities or transactions that are otherwise prohibited. However, costs will likely be low, as it is unlikely that Canadian small businesses have or will have dealings with the newly listed individuals and entities. No significant loss of opportunities for small businesses is expected as a result of the amendments.

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 amendments address an emergency circumstance and are therefore 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 SEMA can nevertheless have an unintended impact on certain vulnerable groups and individuals. Rather than affecting Russia as a whole, these targeted sanctions impact individuals believed to be engaged in activities that directly or indirectly support, provide funding for or contribute to a violation of the sovereignty or territorial integrity of Ukraine. 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.

Rationale

The amendments seek to impose a direct economic cost on Russia and signal Canada’s strong condemnation of Russia’s violations of its international human rights obligations. The 15 individuals are members of the Russian justice and security sectors, including judiciary and investigative committee senior officials, and the 3 entities are the federally funded Moscow City Courts and two district courts under its jurisdiction. A number of these individuals are senior officials in the Government of Russia. They are being added to the Regulations because they have been involved in human rights abuses against Russian opposition leaders, including Vladimir Kara-Murza and Alexei Navalny, and other Russian citizens. On July 31, 2023, a Russian court dismissed Vladimir Kara-Murza’s appeal against a 25-year prison sentence he received earlier this year for criticizing Russia’s illegal invasion of Ukraine. On August 4, 2023, the Moscow City Court sentenced Mr. Navalny to an additional 19 years of imprisonment on charges of extremism.

These human rights violations are part of and contribute to Russia’s invasion of Ukraine that began on February 24, 2022. The OSCE has found that by silencing domestic civic action and criticism of Russia’s war, Russian officials and elites seek to ensure they will not face domestic opposition while carrying out a foreign aggression. The OSCE reports that this repression stretches back over a decade and has intensified since 2012. One of the core pieces of Russian legislation suppressing civil society activities is the so-called “foreign agents” law, which has been criticized by all international human rights monitoring bodies. After the illegal invasion of Ukraine, the Russian government made further amendments to this law to target criticism of its war and anti-war protests. As part of this, the Russian regime has attempted to outlaw the use of the word “war” and other criticisms of its invasion as disinformation and treason.

These amendments align Canada’s efforts with those of its international partners and expose individuals and entities engaged in activities that undermine international peace and security.

Implementation, compliance and enforcement, and service standards

The amendments come into force on the day on which 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 and the Canada Border Services Agency (CBSA). 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 CBSA has enforcement authorities under SEMA and the Customs Act, and will play a role in the enforcement of these sanctions.

Contact

Andrew Turner
Director
Eastern Europe and Eurasia Relations Division
Global Affairs Canada
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 343‑203‑3603
Email: Andrew.Turner@international.gc.ca