Vol. 148, No. 14 — July 2, 2014
SOR/2014-172 June 21, 2014
SPECIAL ECONOMIC MEASURES ACT
Regulations Amending the Special Economic Measures (Ukraine) Regulations
P.C. 2014-849 June 21, 2014
Whereas the Governor in Council is of the opinion that the situation in Ukraine 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, pursuant to subsections 4(1) to (3) of the Special Economic Measures Act (see footnote a), makes the annexed Regulations Amending the Special Economic Measures (Ukraine) Regulations.
REGULATIONS AMENDING THE SPECIAL ECONOMIC MEASURES (UKRAINE) REGULATIONS
1. Paragraph 2(a) of the Special Economic Measures (Ukraine) Regulations (see footnote 1) is replaced by the following:
- (a) a person engaged in activities that directly or indirectly facilitate, support, provide funding for or contribute to a violation or attempted violation of the sovereignty or territorial integrity of Ukraine or that obstruct the work of international organizations in Ukraine;
2. Part 1 of the Schedule to the Regulations is amended by adding the following after item 17:
- 18. Petr Grigorievich JAROSH
- 19. Oleg Grigorievich KOZYURA
- 20. Viacheslav PONOMARIOV
- 21. Igor Mykolaiovych BEZLER
- 22. Igor KAKIDZYANOV
- 23. Oleg TSARIOV
- 24. Roman LYAGIN
- 25. Aleksandr MALYKHIN
- 26. Natalia Vladimirovna POKLONSKAYA
- 27. Igor Sergeievich SHEVCHENKO
3. Part 2 of the Schedule to the Regulations is amended by adding the following after item 1:
APPLICATION PRIOR TO PUBLICATION
Statutory Instruments Act
4. For the purpose of paragraph 11(2)(a) of the Statutory Instruments Act, these Regulations apply before they are published in the Canada Gazette.
COMING INTO FORCE
5. 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.)
Pro-Russian separatists continue to destabilize Ukraine and facilitate Russian military action against the Ukrainian government.
Acting in coordination with the United States and the European Union, the Governor in Council has found that the situation in Ukraine constitutes a grave breach of international peace and security that has resulted or is likely to result in a serious international crisis. As a result, regulations were passed imposing sanctions on Ukraine and/or Russia on March 17, 2014, and amended on March 19, 2014, March 21, 2014, April 12, 2014, April 28, 2014, May 4, 2014, and May 12, 2014.
During the month of May 2014, pro-Russia separatists seized government buildings, clashed with government forces and captured a number of hostages across eastern and southern Ukraine. On May 3, 2014, violence spread to the southern Ukrainian city of Odessa as clashes resulted in approximately 50 deaths and over 200 injured. The following week, deadly violence erupted in the port city of Mariupol (Donetsk oblast) as gunmen attacked the police station. In Donetsk, gunmen also attacked the Red Cross and held several of its workers on accusations of espionage. Incidents of violence were also reported in Sloviansk, Kramatorsk, Horlivka and other key Ukrainian cities. Ukrainian forces continue their anti-terrorist operations in an attempt to recapture occupied buildings and push back the violent separatists.
On May 11, 2014, two separatist organizations (the Donetsk and Luhansk “People’s Republics”) held illegal referenda, claiming that 89% and 96% of voters respectively, voted in favour of self-rule. Fraud and harassment incidents were reported, including thousands of pre-filled ballots and instances of individuals voting several times. The separatist authorities have stated that they will prevent the presidential elections from being held in the Donetsk region as planned on May 25, 2014. Canada and the international community responded by denouncing the referenda as illegal, and will continue to apply pressure until the situation in Ukraine de-escalates.
The proposed Regulations Amending the Special Economic Measures (Ukraine) Regulations (the Regulations) amend section 2 of the existing Regulations and add 10 individuals and one entity to the Schedule.
The proposed Regulations amend section 2 of the Special Economic Measures (Ukraine) Regulations, which describes who may be listed as a designated person. This includes broadening paragraph 2(a) to include persons whose activities obstruct the work of international organisations in Ukraine. This amended category continues to capture all designations that fell within the description in paragraph 2(a) prior to these Regulations.
The Regulations also add 10 individuals and one entity to the list of designated persons under the Special Economic Measures (Ukraine) Regulations.
Any person in Canada and any Canadian outside Canada are prohibited from:
- dealing in any property, wherever situated, held by or on behalf of a designated person;
- entering into or facilitating, directly or indirectly, any transaction related to such a dealing;
- providing any financial or related service in respect of such a dealing;
- making goods, wherever situated, available to a designated person; and
- providing any financial or related service to or for the benefit of a designated person.
Exceptions to the above-noted prohibitions are available for the following:
- Payments made by or on behalf of designated persons pursuant to contracts entered into prior to the coming into force of the Regulations, provided that the payments are not made to or for the benefit of a designated person;
- Pension payments to any person in Canada or any Canadian outside Canada;
- Transactions in respect of accounts at financial institutions held by diplomatic missions, provided that the transaction is required in order for the mission to fulfill its diplomatic functions under the Vienna Convention on Diplomatic Relations, or, transactions required in order to maintain the mission premises if the diplomatic mission has been temporarily or permanently recalled;
- Transactions by international organizations with diplomatic status, agencies of the United Nations, the International Red Cross and Red Crescent Movement, or Canadian nongovernmental organizations that have entered into a grant or contribution agreement with the Department of Foreign Affairs, Trade and Development;
- Transactions necessary for a Canadian to transfer to a non-designated person any accounts funds or investments of a Canadian held by a designated person on the day on which that person became designated;
- Financial services required in order for a designated person to obtain legal services in Canada with respect to the application of any of the prohibitions in the Regulations; and
- Loan repayments made to any person in Canada or any Canadian abroad in respect of loans entered into before the coming into force of the Regulations, enforcement of security in respect of those loans, or payments by guarantors guaranteeing those loans.
The “One-for-One” Rule applies to this proposal, as there are minimal administrative costs to business, because of the reporting requirement. However, the administrative burden associated with these Regulations is carved out from the “One-for-One” Rule as they address unique and exceptional circumstances.
Small business lens
The small business lens does not apply to this proposal, as there are no costs (or insignificant costs) on small business and small businesses would not be disproportionately affected.
Foreign Affairs, Trade and Development Canada drafted the Regulations in consultation with the Department of Justice and Citizenship and Immigration Canada.
The measures contained in the Regulations demonstrate Canada’s concern about the continuing violation of Ukraine’s sovereignty and territorial integrity.
Implementation, enforcement and service standards
Canada’s sanctions regulations are enforced by the Royal Canadian Mounted Police and the Canada Border Services Agency. In accordance with section 8 of the Special Economic Measures Act, every person who wilfully contravenes these 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.
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