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SOR/2016-14 February 5, 2016

UNITED NATIONS ACT

Regulations Amending the Regulations Implementing the United Nations Resolutions on Iran

P.C. 2016-50 February 5, 2016

Whereas the Security Council of the United Nations, acting under Article 41 of the Charter of the United Nations, adopted Resolution 2231 (2015) on July 20, 2015;

And 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;

Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of Foreign Affairs, pursuant to section 2 of the United Nations Act (see footnote a), makes the annexed Regulations Amending the Regulations Implementing the United Nations Resolutions on Iran.

Regulations Amending the Regulations Implementing the United Nations Resolutions on Iran

Amendments

1 (1) The definitions Committee of the Security Council, Security Council Resolution 1747, Security Council Resolution 1803, Security Council Resolution 1929 and Security Council Resolutions in section 1 of the Regulations Implementing the United Nations Resolutions on Iran (see footnote 1) are repealed.

(2) The definitions arms and related material, Canadian, designated person, Iran, person, property and Security Council Resolution 1737 in section 1 of the Regulations are replaced by the following:

arms and related material means any type of weapon, ammunition, military vehicle, military equipment or paramilitary equipment, and their spare parts. (armes et matériel connexe)

Canadian means a citizen within the meaning of the Citizenship Act, a permanent resident as defined in subsection 2(1) of the Immigration and Refugee Protection Act or a corporation incorporated by or continued under the laws of Canada or of a province. (Canadien)

designated person means a person that is designated by the Security Council under paragraph 6(c) of Annex B to Security Council Resolution 2231 or whose name appeared, on July 20, 2015, on the list established under Security Council Resolution 1737, and whose name has since not been removed from that list by the Security Council. (personne désignée)

Iran means the Islamic Republic of Iran and includes

  • (a) any of its political subdivisions;
  • (b) its government and any of its departments or a government or department of its political subdivisions; and
  • (c) any of its agencies or any agency of its political subdivisions. (Iran)

person means an individual or an entity. (personne)

property means any real, personal, movable or immovable property. (bien)

Security Council Resolution 1737 means Resolution 1737 (2006) of December 23, 2006 adopted by the Security Council. (résolution 1737 du Conseil de sécurité)

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

entity means a corporation, a trust, a partnership, a fund, an unincorporated association or organization or a foreign state. (entité)

Focal Point for De-listing means the Focal Point for De-listing established under Resolution 1730 (2006) of December 19, 2006 adopted by the Security Council. (point focal pour les demandes de radiation)

Joint Commission means the Joint Commission established in the Joint Comprehensive Plan of Action. (Commission conjointe)

Joint Comprehensive Plan of Action means the Joint Comprehensive Plan of Action (S/2015/544) prepared jointly by China, France, Germany, the Russian Federation, the United Kingdom and the United States, with the High Representative of the European Union for Foreign Affairs and Security Policy, and Iran, on July 14, 2015 and endorsed by the Security Council in Security Council Resolution 2231. (Plan d’action global commun)

official means an individual who

  • (a) is or was employed in the service of Her Majesty in right of Canada or of a province;
  • (b) occupies or occupied a position of responsibility in the service of Her Majesty in right of Canada or of a province; or
  • (c) is or was engaged by or on behalf of Her Majesty in right of Canada or of a province. (fonctionnaire)

Security Council means the Security Council of the United Nations. (Conseil de sécurité)

Security Council Resolution 2231 means Resolution 2231 (2015) of July 20, 2015 adopted by the Security Council. (résolution 2231 du Conseil de sécurité)

2 Sections 3 to 22 of the Regulations are replaced by the following:

Prohibited dealings and activities

3 It is prohibited for any person in Canada or any Canadian outside Canada to knowingly

  • (a) deal in any property in Canada that is owned, held or controlled, directly or indirectly, by a designated person, by a person acting on behalf of or at the direction of a designated person or by a person that is owned, held or controlled by a designated person;
  • (b) enter into or facilitate any transaction related to a dealing referred to in paragraph (a);
  • (c) provide any financial or related service in respect of a dealing referred to in paragraph (a); or
  • (d) make any property or any financial or related service available, directly or indirectly, to a designated person, to a person acting on behalf of or at the direction of a designated person or to a person that is owned, held or controlled by a designated person.

Specific products

4 (1) It is prohibited for any person in Canada or any Canadian outside Canada to sell, supply or transfer, directly or indirectly, any of the following products, wherever situated, destined for Iran, for a person acting on behalf of Iran or for any person in Iran:

  • (a) those that appear in Information Circular INFCIRC/254/Rev.12/Part 1, entitled Communication Received from the Permanent Mission of the Czech Republic to the International Atomic Energy Agency regarding Certain Member States’ Guidelines for the Export of Nuclear Material, Equipment and Technology;
  • (b) those that appear in Information Circular INFCIRC/254/Rev.9/Part 2, entitled Communication Received from the Permanent Mission of the Czech Republic to the International Atomic Energy Agency regarding Certain Member States’ Guidelines for Transfers of Nuclear-related Dual-use Equipment, Materials, Software and Related Technology;
  • (c) those identified by the Security Council for the purpose of paragraph 2 of Annex B to Security Council Resolution 2231;
  • (d) those that are listed in the following provisions of the Guide:
    • (i) group 1, items 1-1.A.1. to 1-1.A.3.,
    • (ii) group 1, item 1-1.C.,
    • (iii) group 1, items 1-7.A. to 1-7.E.,
    • (iv) group 1, items 1-9.A. to 1-9.E.,
    • (v) group 2, items 2-10.c. and 2-10.d.,
    • (vi) group 2, item 2-21.b.1., and
    • (vii) group 2, items 2-21.b.3. and 2-21.b.4.;
  • (e) any battle tanks, armored combat vehicles, large-calibre artillery systems, combat aircraft, attack helicopters, warships, missiles or missile systems as defined for the purposes of the United Nations Register of Conventional Arms, or related material including their spare parts;
  • (f) those that appear in the Security Council document S/2015/546, entitled Missile Technology Control Regime: Equipment, Software and Technology, annex to the letter dated July 16, 2015 from the Permanent Representative of the United States of America to the United Nations;
  • (g) any technology in respect of any activity related to ballistic missiles capable of delivering nuclear weapons, including launches using ballistic missile technology, or related to the development of nuclear weapon delivery systems, that is inconsistent with the Joint Comprehensive Plan of Action.

Exception

(2) Subsection (1) does not apply to products that appear in section 1 of Annex B to Information Circular INFCIRC/254/Rev.12/Part 1 that are for light-water reactors, or to low-enriched uranium covered by section 1.2 of Annex A to that Information Circular, if it is incorporated into assembled nuclear fuel elements for light-water reactors.

Uranium mining and nuclear materials and technologies

(3) It is prohibited for any person in Canada or any Canadian outside Canada to

  • (a) make available any property or provide any financial or related services related to uranium mining in Canada, or to the production or the use of nuclear materials and technologies listed in Information Circular INFCIRC/254/Rev.12/Part 1, in Canada, to Iran, to any person in Iran or to any person that is owned, held or controlled, directly or indirectly, by Iran or any person in Iran, or acting on behalf of or at the direction of Iran or any person in Iran; or
  • (b) enter into or facilitate any transaction related to uranium mining in Canada, or to the production or the use of nuclear materials and technologies listed in Information Circular INFCIRC/254/Rev.12/Part 1 in Canada, with Iran, with any person in Iran or with any person that is owned, held or controlled, directly or indirectly, by Iran or any person in Iran, or acting on behalf of or at the direction of Iran or any person in Iran.

Technical assistance

(4) It is prohibited for any person in Canada or any Canadian outside Canada to provide technical assistance to Iran or to any person in Iran related to the sale, supply or transfer of any of the products referred to in subsection (1) or related to the manufacture or use of such a product in Iran or on behalf of Iran.

Property and financial services

(5) It is prohibited for any person in Canada or any Canadian outside Canada to make available any property or provide financial or related services to Iran or to any person in Iran related to the sale, supply or transfer of any of the products referred to in subsection (1) or related to the manufacture or use of such a product in Iran or on behalf of Iran.

Arms and related material

5 It is prohibited for any person in Canada or any Canadian outside Canada to knowingly import, purchase or acquire arms and related material, wherever situated, from Iran, from any person in Iran or from any other person acting on behalf of or at the direction of Iran or any person in Iran.

Canadian vessel or aircraft

6 (1) It is prohibited for any owner or master of a Canadian vessel, within the meaning of section 2 of the Canada Shipping Act, 2001, any operator of an aircraft registered in Canada, or any Canadian owner or master of a vessel or Canadian operator of an aircraft to carry, cause to be carried or permit to be carried any of the products referred to in section 4, wherever situated, destined for Iran, for any person in Iran or for any person acting on behalf of or at the direction of Iran or any person in Iran.

Carriage from Iran — products referred to in paragraph 4(1)(f)

(2) It is also prohibited for them to carry, cause to be carried or permit to be carried any of the products referred to in paragraph 4(1)(f) from Iran.

Arms and related material destined for any person in Canada

(3) It is also prohibited for them to carry, cause to be carried or permit to be carried arms and related material, wherever situated, destined for any person in Canada who acquired them from Iran, from any person in Iran or from any person acting on behalf of or at the direction of Iran or any person in Iran.

Assisting a prohibited act or thing

7 It is prohibited for any person in Canada or any Canadian outside Canada to knowingly do anything that causes, facilitates or assists in, or is intended to cause, facilitate or assist in, any act or thing prohibited by sections 3, 4, 5 and 6.

Obligations

Duty to determine

8 (1) The following entities must determine on a continuing basis whether they are in possession or control of property that is owned, held or controlled by or on behalf of a designated person:

  • (a) authorized foreign banks, as defined in section 2 of the Bank Act, in respect of their business in Canada or banks to which that Act applies;
  • (b) cooperative credit societies, savings and credit unions and caisses populaires regulated by a provincial Act and associations regulated by the Cooperative Credit Associations Act;
  • (c) foreign companies, as defined in subsection 2(1) of the Insurance Companies Act, in respect of their insurance business in Canada;
  • (d) companies, provincial companies and societies, as those terms are defined in subsection 2(1) of the Insurance Companies Act;
  • (e) fraternal benefit societies regulated by a provincial Act in respect of their insurance activities and insurance companies and other entities regulated by a provincial Act that are engaged in the business of insuring risks;
  • (f) companies to which the Trust and Loan Companies Act applies;
  • (g) trust companies regulated by a provincial Act;
  • (h) loan companies regulated by a provincial Act;
  • (i) entities that engage in any activity described in paragraph 5(h) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act if the activity involves the opening of an account for a client; and
  • (j) entities authorized under provincial legislation to engage in the business of dealing in securities or to provide portfolio management or investment counselling services.
Duty to disclose — supervising and regulating agencies

(2) Every entity referred to in subsection (1) must disclose, every month, to the principal agency or the body that supervises or regulates it under federal or provincial law, whether it is in possession or control of any property referred to in that subsection and, if so, the number of persons or contracts involved and the total value of the property.

Immunity

(3) No proceedings under the United Nations Act and no civil proceedings lie against a person for a disclosure made in good faith under subsection (2).

Duty to disclose — RCMP or CSIS

9 (1) Every person in Canada and every Canadian outside Canada must disclose without delay to the Commissioner of the Royal Canadian Mounted Police or to the Director of the Canadian Security Intelligence Service

  • (a) the existence of property in their possession or control that they have reason to believe is owned, held or controlled by or on behalf of a designated person; and
  • (b) any information about a transaction or proposed transaction in respect of property referred to in paragraph (a).
Immunity

(2) No proceedings under the United Nations Act and no civil proceedings lie against a person for a disclosure made in good faith under subsection (1).

Applications

Exemption

10 (1) A person that wishes to do an act or thing that is prohibited under these Regulations may, before doing the act or thing, apply to the Minister in writing for a certificate to exempt the act or thing from the application of the Regulations.

Certificate

(2) The Minister may issue the certificate if the Security Council did not intend that such an act or thing be prohibited or if it is established that the requirements of Security Council Resolution 2231 have been met, and, if required by that resolution, that the Security Council has approved the act or thing in advance.

Exemption for property

11 (1) A person whose property has been affected by the application of section 3 may apply to the Minister in writing for a certificate to exempt the property from the application of that section if the property

  • (a) is necessary for basic or extraordinary expenses or is subject to a lien, mortgage or security interest, to a hypothec or prior claim, to a charge or to a judicial, administrative or arbitral decision;
  • (b) is necessary for the civil nuclear cooperation projects described in Annex III to the Joint Comprehensive Plan of Action; or
  • (c) is necessary for any activity required for the implementation of the Joint Comprehensive Plan of Action.
Certificate — paragraph 1(a)

(2) If it is established in accordance with Security Council Resolution 2231 that the property is necessary for basic or extraordinary expenses or is subject to a lien, mortgage or security interest, to a hypothec or prior claim, to a charge or to a judicial, administrative or arbitral decision, the Minister must issue a certificate within the following timelines:

  • (a) within 15 working days after receiving the application, in the case of property necessary for basic expenses, if the Security Council does not oppose the application;
  • (b) within 30 working days after receiving the application, in the case of property necessary for extraordinary expenses, if the Security Council approves the application; and
  • (c) within 90 days after receiving the application, in the case of property that is subject to a lien, mortgage or security interest, to a hypothec or prior claim, to a charge or to a judicial, administrative or arbitral decision that
    • (i) was created or issued before the coming into force of these Regulations;
    • (ii) is not for the benefit of a designated person; and
    • (iii) has been brought to the attention of the Security Council by the Minister.
Certificate — paragraphs (1)(b) and (c)

(3) If it is established that the property is necessary for one of the projects or activities referred to in paragraph 1(b) or (c), the Minister must advise the Security Council of his or her intention to issue a certificate and, if the Security Council approves the project or activity, the Minister may issue the certificate.

Certificate — parties to contract

12 (1) If a party to a contract or a gratuitous transfer becomes a designated person, any party to that contract or transfer may apply to the Minister in writing for a certificate to exempt property from the application of section 3 to permit any party that is not a designated person to receive payments or a transfer or to permit the party that is a designated person to make payments or to complete the transfer.

Certificate — time period

(2) The Minister must issue a certificate within 90 days after receiving the application and at least 10 working days after advising the Security Council of his or her intention to issue the certificate, if it is established that

  • (a) the contract was entered into or the transfer occurred prior to any party becoming a designated person;
  • (b) the contract does not relate to an activity set out in any of subsections 4(1) and (3) to (5); and
  • (c) the payments or transfer are not to be received, directly or indirectly, by a designated person, by a person acting on behalf of, or at the direction of, a designated person or by a person that is owned, held or controlled by a designated person.
Mistaken identity

13 (1) A person in Canada or any Canadian outside Canada whose name is the same as or similar to the name of a designated person and that claims not to be that designated person may apply to the Minister in writing for a certificate stating that they are not that designated person.

Determination by Minister

(2) Within 45 days after receiving the application, the Minister must,

  • (a) if he or she is satisfied that the applicant is not the designated person, issue the certificate; or
  • (b) if he or she is not so satisfied, provide notice to the applicant of his or her determination.

Disclosure of Information

Disclosure by official

14 (1) An official may, for the purpose of responding to a request from the Security Council, the Joint Commission or the Focal Point for De-listing, disclose personal information to the Minister.

Disclosure by Minister

(2) The Minister may, for the purpose of administering or enforcing these Regulations or fulfilling an obligation under a resolution of the Security Council, disclose personal information to the Security Council, the Joint Commission or the Focal Point for De-listing.

Legal Proceedings

Prohibition — legal proceedings

15 No legal proceedings lie in Canada at the instance of the Government of Iran, of any person in Iran, of a designated person or of any person claiming through or acting on behalf of any such person in connection with any contract or other dealing if its performance was prevented in any way by these Regulations.

Application Prior to Publication

3 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

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

On July 20, 2015, the United Nations Security Council adopted Resolution 2231, under Chapter VII of the United Nations Charter, endorsing the agreement reached between the five permanent members of the Security Council (China, France, Russia, the United Kingdom and the United States) and Germany (P5+1) and Iran on its nuclear program. The agreement provides Iran with substantial international sanctions relief in return for Iran fulfilling its commitments to significantly roll back and constrain its nuclear program.

Background

In 2003, the International Atomic Energy Agency (IAEA) confirmed the existence of previously undeclared nuclear facilities in Iran, contrary to Iran’s Safeguards Agreement pursuant to the Treaty on the Non-Proliferation of Nuclear Weapons. Iran refused to suspend proliferation-sensitive activities and the IAEA referred the matter to the Security Council in 2006. The Security Council identified Iran’s nuclear program as a threat to international peace and security and passed six successive resolutions against Iran, four of them imposing sanctions: 1737 (2006), 1747 (2007), 1803 (2008) and 1929 (2010).

On July 14, 2015, the P5+1 reached an agreement with Iran on the Joint Comprehensive Plan of Action (JCPOA). Under the JCPOA, Iran accepted long-term restrictions on its nuclear program, combined with extensive international verification, aimed at preventing Iran from being able to produce a nuclear weapon. In return, Iran receives significant relief from sanctions imposed for its past non-compliance with international obligations in regard to its nuclear program. On July 20, 2015, the Security Council endorsed the JCPOA by adopting Resolution 2231 (2015).

The IAEA is responsible for monitoring and verifying Iran’s implementation of its JCPOA commitments. Due to Iran’s provisional implementation of the IAEA Safeguards Additional Protocol, which provides inspectors with additional verification tools and greater access to relevant Iranian facilities, the IAEA now has a significantly improved ability to monitor and verify that Iran is meeting these commitments under the JCPOA.

Pursuant to Security Council Resolution 2231 (2015), on January 16, 2016, the IAEA officially confirmed that Iran had verifiably met its commitments under the JCPOA, triggering the sanctions reduction commitments of the United Nations. The United States and the European Union also modified their nuclear-related autonomous sanctions against Iran.

Security Council Resolution 2231 (2015) requires member states to continue to prevent persons designated by the United Nations from entering or transiting through their territory, for up to five years. Member states are also required to continue to freeze all assets of designated individuals or entities for up to eight years. In addition, in accordance with decisions of the Security Council set out in the Resolution, member states take the measures necessary to

  • restrict activities pertaining to Iran’s nuclear program for up to 10 years;
  • restrict activities pertaining to Iran’s development of nuclear weapon delivery systems and ballistic missile program for up to eight years;
  • restrict activities pertaining to Iran’s acquisition and/or facilitation of the use of certain heavy arms and military equipment for up to five years; and
  • restrict the procurement of arms and related material from Iran for up to five years.

The Resolution includes a mechanism to allow for the reimposition of sanctions that were imposed under Security Council Resolutions 1737 (2006), 1747 (2007), 1803 (2008), and 1929 (2010) should Iran not fulfill its commitments under the JCPOA. If this mechanism is activated, Canada will be required to amend the Regulations to account for the reimposition of sanctions.

Objectives

The Regulations Amending the Regulations Implementing the United Nations Resolutions on Iran (the Regulations) implement in Canadian domestic law the binding international obligations of the Security Council Resolution 2231 (2015) adopted on July 20, 2015.

Resolution 2231 (2015) was adopted by the Security Council pursuant to Article 41 of Chapter VII of the Charter of the United Nations and is binding on all member states. As a member state of the United Nations and pursuant to Article 25 of the Charter of the United Nations, Canada is legally obligated to implement binding decisions of the Security Council.

Description

In accordance with Security Council Resolution 2231 (2015), the Regulations

  • restrict the provision of nuclear-related material and technology to Iran;
  • restrict the provision of goods, technology and related services in relation to Iran’s ballistic missile program and development of nuclear weapon delivery systems;
  • restrict the provision of heavy arms and related material to Iran or services related to the Iran’s use of such arms and related material; and
  • restrict the procurement of arms and related material from Iran.

The Regulations allow for the issuance of ministerial certificates to authorize activities with Iran in the above areas if it is established that the requirements under Resolution 2231 for participation in such activities are met, including the approval of the Security Council, as required.

The Regulations continue to impose asset freezes on the individuals and entities maintained on the list of designated persons per Resolution 2231, while adding an exception, via ministerial certificate, for dealings in property of a designated person if necessary for certain activities related to the implementation of the JCPOA.

In the event that the Security Council reimposes sanctions on Iran under the terms of Resolution 2231, the Regulations Implementing the United Nations Resolutions on Iran would be amended to reflect those binding decisions of the Security Council.

Finally, the Regulations update language throughout the Regulations Implementing the United Nations Resolutions on Iran to give effect to certain recommendations made by the Standing Joint Committee for the Scrutiny of Regulations, to clarify intent and to ensure consistency across Canada’s economic sanctions regulations.

In Canada, implementation of travel restrictions on designated persons mandated under Resolution 2231 (2015) is ensured under the Immigration and Refugee Protection Act and its Regulations. The United Nations Act constitutes the appropriate legislative authority to implement into Canadian law the asset freezes and additional restrictive measures mandated by the Security Council. The text of Security Council Resolution 2231 (2015) is available at http://www.un.org/fr/documents/view_doc.asp?symbol=S/RES/2231(2015)&TYPE=&referer=/fr/&Lang=E.

“One-for-One” Rule

The “One-for-One” Rule applies to this proposal, as there are minimal administrative costs to business related to the reporting requirement. However, the administrative burden associated with these Regulations is carved out from the “One-for-One” Rule, as they implement non-discretionary international obligations.

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.

Consultation

Foreign Affairs, Trade and Development Canada drafted the Regulations in consultation with the Department of Justice. The Regulations implement non-discretionary international obligations.

Rationale

The Regulations will allow Canada to fulfill its international legal obligations by implementing Security Council Resolution 2231 (2015).

Implementation, enforcement and service standards

Canada’s sanctions regulations are enforced by the Royal Canadian Mounted Police and the Canada Border Services Agency. Every person who contravenes the Regulations is liable, upon conviction, to the punishments set out in section 3 of the United Nations Act (i.e. on summary conviction, to a fine of not more than $100,000 or to imprisonment for a term of not more than one year, or to both; or, on conviction on indictment, to imprisonment for a term of not more than 10 years.)

Contact

Emmanuelle Lamoureux
Director
Gulf States Relations Division
Global Affairs Canada
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 343-203-3293
Email: Emmanuelle.Lamoureux@international.gc.ca