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Registration

SOR/2013-219 November 29, 2013

SPECIAL ECONOMIC MEASURES ACT

UNITED NATIONS ACT

Regulations Amending Certain Regulations Imposing Sanctions on the Democratic People’s Republic of Korea

P.C. 2013-1295 November 28, 2013

Whereas the Security Council of the United Nations, acting under Article 41 of the Charter of the United Nations, adopted Resolution 2094 (2013) on March 7, 2013;

Whereas it appears to the Governor in Council to be necessary to make regulations for enabling the measures set out in that resolution to be effectively applied;

And whereas the Governor in Council is of the opinion that the situation in the Democratic People’s Republic of Korea constitutes a grave breach of international peace and security that has resulted or is likely to result in a serious international crisis;

Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of Foreign Affairs, makes the annexed Regulations Amending Certain Regulations Imposing Sanctions on the Democratic People’s Republic of Korea pursuant to

REGULATIONS AMENDING CERTAIN REGULATIONS IMPOSING SANCTIONS ON THE DEMOCRATIC PEOPLE’S REPUBLIC OF KOREA

SPECIAL ECONOMIC MEASURES ACT

SPECIAL ECONOMIC MEASURES (DEMOCRATIC PEOPLE’S REPUBLIC OF KOREA) REGULATIONS

1. The definition “DPRK” in the English version of section 1 of the Special Economic Measures (Democratic People’s Republic of Korea) Regulations (see footnote 1) is replaced by the following:

“DPRK” means the Democratic People’s Republic of Korea and includes

  • (a) its political subdivisions;
  • (b) its government and departments and the government and departments of its political subdivisions; and
  • (c) its agencies and those of its political subdivisions. (RPDC)

2. Section 10 of the Regulations is renumbered as subsection 10(1) and is amended by adding the following:

(2) Section 2 does not apply in respect of goods whose export is prohibited under section 3 of the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK).

(3) Section 3 does not apply in respect of goods whose import is prohibited under section 5 of the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK).

3. Section 11 of the Regulations is amended by striking out “or” at the end of paragraph (d), by adding “or” at the end of paragraph (e) and by adding the following after paragraph (e):

  • (f) financial services whose provision or acquisition is prohibited under section 6.1 of the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK).

4. Section 12 of the Regulations is renumbered as subsection 12(1) and is amended by adding the following:

(2) Section 6 does not apply in respect of technical data whose provision or transfer is prohibited under section 7 of the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK).

UNITED NATIONS ACT

REGULATIONS IMPLEMENTING THE UNITED NATIONS RESOLUTIONS ON THE DEMOCRATIC PEOPLE’S REPUBLIC OF KOREA (DPRK)

5. (1) The definitions “DPRK” and “luxury goods” in section 1 of the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK) (see footnote 2) are replaced by the following:

“DPRK” means the Democratic People’s Republic of Korea and includes

  • (a) its political subdivisions;
  • (b) its government and departments and the government and departments of its political subdivisions; and
  • (c) its agencies and those of its political subdivisions. (RPDC)

“luxury goods” includes jewelry, gems, precious and semiprecious stones, precious metals, watches, cigarettes, alcoholic beverages, perfume, designer clothing and accessories, furs, sporting goods, private aircraft, gourmet foods and ingredients, lobster, computers, televisions and other electronic devices, yachts, racing cars, automobiles and other motor vehicles, except those that are used for public transportation, that are used to transport people. (articles de luxe)

(2) Section 1 of the Regulations is amended by adding the following in alphabetical order:

“bulk cash” means an amount of currency of any country whose total value is greater than $10,000 in Canadian currency. (grande quantité d’argent en espèces)

6. Section 3 of the Regulations is amended by striking out “or” at the end of paragraph (b), by adding “or” at the end of paragraph (c) and by adding the following after paragraph (c):

  • (d) bulk cash.

7. Section 4 of the Regulations is replaced by the following:

4. No owner or master of a Canadian vessel, as defined in section 2 of the Canada Shipping Act, 2001, and no operator of an aircraft registered in Canada shall knowingly carry or cause or permit to be carried arms and related material, resources contributing to the DPRK’s weapons programme, luxury goods or bulk cash, wherever situated, destined for any person in the DPRK.

8. Section 5 of the Regulations is amended by striking out “or” at the end of paragraph (a), by adding “or” at the end of paragraph (b) and by adding the following after paragraph (b):

  • (c) bulk cash.

9. Sections 6 to 6.2 of the Regulations are replaced by the following:

6. No owner or master of a Canadian vessel, as defined in section 2 of the Canada Shipping Act, 2001, and no operator of an aircraft registered in Canada shall knowingly carry or cause or permit to be carried arms and related material, resources contributing to the DPRK’s weapons programme or bulk cash, wherever situated, destined for any person in Canada and procured from any person in the DPRK or any citizen of the DPRK.

6.1 No person in Canada and no Canadian outside Canada shall knowingly provide or acquire any financial services to, from or for the benefit of or on the direction or order of the DPRK or any person in the DPRK with respect to any of the activities prohibited by sections 3 to 6 and 6.3 to 8.

10. Section 7 of the Regulations is replaced by the following:

7. No person in Canada and no Canadian outside Canada shall knowingly provide or transfer to any person in the DPRK technical assistance or any other assistance or services, such as brokering or other intermediary services, related to the provision, manufacture, maintenance or use of arms and related material or resources contributing to the DPRK’s weapons programme.

11. Subsection 15.1(1) of the Regulations is replaced by the following:

15.1 (1) Sections 3, 4, 6.1, 6.3 and 7 do not apply in respect of small arms, light weapons and related material.

12. The French version of the Regulations is amended by replacing “République populaire démocratique de Corée” with “RPDC” in the following provisions:

  • (a) the portion of section 3 before paragraph (a) and paragraph 3(b);
  • (b) paragraph 5(b); and
  • (c) section 8.

COMING INTO FORCE

13. 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.)

Issue

On March 7, 2013, the United Nations Security Council (“Security Council”), acting under Chapter VII of the Charter of the United Nations, adopted Resolution 2094 (2013) imposing additional sanctions against the Democratic People’s Republic of Korea (DPRK). The sanctions strengthen and modify measures that had been imposed by the Security Council in Resolution 1718 (2006) and Resolution 1874 (2009). Resolution 2094 was adopted in response to a nuclear test conducted by the DPRK on February 12, 2013, which violated the two previous Resolutions.

Background

Security Council Resolution 1718 (2006) imposed an embargo on the sale or supply of arms and related material, resources contributing to the DPRK’s weapons programme or the transfer of related technical assistance, and prohibited the export of luxury goods to the DPRK, with certain exceptions. Resolution 1718 (2006) further imposed a travel ban and assets freeze against persons designated by the United Nations Sanctions Committee (“1718 Committee”), established to oversee the embargo against the DPRK. As a member of the United Nations, Canada is legally obliged, pursuant to Article 25 of the Charter of the United Nations, to apply binding decisions of the Security Council, in accordance with Article 41 of Chapter VII of the Charter of the United Nations. The United Nations Act constitutes the appropriate legislative authority to implement these decisions in Canadian law.

Canada has implemented its international obligations under Resolution 1718 (2006) by introducing, pursuant to section 2 of the United Nations Act, the Regulations Implementing the United Nations Resolution on the Democratic People’s Republic of Korea (DPRK), which came into force on November 9, 2006. The implementation of the travel ban imposed by Resolution 1718 (2006) is ensured in Canada under provisions of the Immigration and Refugee Protection Act.

Noting that the nuclear test and missile activities carried out by the DPRK have further generated increased tension in the region, the Security Council determined that the situation continues to constitute a threat to international peace and security. Accordingly, the Security Council adopted Resolution 1874 (2009) to modify and strengthen the measures imposed against the DPRK by expanding the arms embargo to include all arms and related materials, with the exception of the export, sale, supply, transfer or shipment of small arms and light weapons; expanding the prohibition on the provision, to any person in the DPRK, of technical assistance related to arms and related materials and creating a prohibition on financial transactions related to the provision, manufacture, maintenance or use of arms or related material. It also expanded the list of sanctioned items, materials, equipment, goods and technology, which could contribute to the DPRK’s nuclear-related, ballistic missile-related or other weapons of mass destruction-related programs and activities; and required States to prohibit the provision of refuelling and other services to DPRK vessels believed to contain sanctioned cargo.

On August 11, 2011, Canada imposed sanctions against North Korea under the Special Economic Measures Act. These sanctions are in addition to existing sanctions passed under the United Nations Act. The Special Economic Measures (Democratic People’s Republic of Korea) Regulations came into force to reinforce the message to the North Korean government that its aggressive actions, such as the sinking of the Cheonan, are unacceptable. The Special Economic Measures (Democratic People’s Republic of Korea) Regulations imposed a ban on all exports, all imports to Canada from North Korea, all new investment in North Korea, the provision of financial services to North Korea and to persons in North Korea, the provision of technical data to North Korea, and the docking and landing in, and transiting of, Canada by North Korean ships and aircraft.

The Special Economic Measures (Democratic People’s Republic of Korea) Regulations made some exceptions, including humanitarian efforts and goods, such as food and medical supplies or equipment; stabilization and reconstruction assistance and activities; financial or other support provided by the Government of Canada; and non-commercial remittances.

Objectives

The Regulations Amending Certain Regulations Imposing Sanctions on the Democratic People’s Republic of Korea are necessary (a) for Canada to fulfill its international legal obligation to implement the decisions of the Security Council in Resolution 2094 (2013); (b) to give effect to a recommendation of the Standing Joint Committee for the Scrutiny of Regulations; and (c) to eliminate duplication of prohibitions between the Special Economic Measures (Democratic People’s Republic of Korea) Regulations and the Regulations Implementing the United Nations Resolutions on the Democratic Republic of Korea.

Description

The Regulations Amending Certain Regulations Imposing Sanctions on the Democratic People’s Republic of Korea will amend the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of North Korea (DPRK) as follows: (a) amend the definitions of “DPRK” and “luxury goods”; (b) prohibit transfers of bulk cash (any amount of currency whose total value is greater than $10,000 in Canadian currency); (c) prohibit the provision of financial services to, from, for the benefit of, or on the direction or order of the DPRK or any person in the DPRK with respect to activities already prohibited under the Regulations; and (d) further elaborate on the prohibition on the provision of services or assistance in relation to arms and related material or resources contributing to the DPRK’s weapons program, namely, to explicitly include brokering or other intermediary services in the class of prohibited services or assistance. Moreover, the addition of section 6.3 to subsection 15.1(1) of the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK) is intended to give effect to a change of a technical nature recommended by the Standing Joint Committee for the Scrutiny of Regulations.

The Security Council resolutions relevant to the Regulations are available at www.un.org/sc/committees/1718/index.shtml. This link provides information concerning the work of the 1718 Committee, which oversees the relevant sanctions measures, including listings.

The Regulations Amending Certain Regulations Imposing Sanctions on the Democratic People’s Republic of Korea will exempt all activities already prohibited by the Regulations Implementing the United Nations Resolutions on the Democratic Republic of Korea (DPRK) from the scope of the Special Economic Measures (Democratic People’s Republic of Korea) Regulations.

“One-for-One” Rule

The “One-for-One” Rule does not apply to this proposal, as there is no change in administrative costs to business.

Small business lens

The small business lens does not apply to this proposal, as there are no costs (or insignificant costs) on small business.

Consultation

The Department of Foreign Affairs, Trade and Development drafted the Regulations Amending Certain Regulations Imposing Sanctions on the Democratic People’s Republic of Korea in consultation with the Department of Justice.

Rationale

The Regulations Amending Certain Regulations Imposing Sanctions on the Democratic People’s Republic of Korea will enable Canada to align to the sanctions adopted unanimously by the Security Council in Resolution 2094 (2013) co-sponsored by Canada. As Canada has very limited bilateral trade with North Korea and has imposed very strict sanctions since 2011, additional sanctions are expected to have minimal costs or impacts. Canada has always shown leadership in its dealings with North Korea, and amending its sanctions is consistent with Canada’s official position.

Implementation, enforcement and service standards

The provisions of Canada’s sanctions regulations are enforced by the Royal Canadian Mounted Police and the Canada Border Services Agency.

Contacts

Alain Gendron
Director
North East Asia Division
Department of Foreign Affairs, Trade and Development
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 613-944-1519
Fax: 613-944-3049
Email: alain.gendron@international.gc.ca

Keith Morrill
Director
United Nations, Human Rights and Economic Law Division
Department of Foreign Affairs, Trade and Development
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 613-992-6296
Fax: 613-992-2467
Email: keith.morrill@international.gc.ca