Regulations Amending the Special Economic Measures (Ukraine) Regulations: SOR/2020-15
Canada Gazette, Part II, Volume 154, Number 4
SOR/2020-15 January 29, 2020
SPECIAL ECONOMIC MEASURES ACT
P.C. 2020-11 January 29, 2020
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 in or is likely to result in a serious international crisis;
Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of Foreign Affairs, pursuant to subsections 4(1) footnote a, (1.1)footnote a, (2) and (3) of the Special Economic Measures Act footnote b, makes the annexed Regulations Amending the Special Economic Measures (Ukraine) Regulations.
Regulations Amending the Special Economic Measures (Ukraine) Regulations
1 Part 1 of the schedule to the Special Economic Measures (Ukraine) Regulations footnote 1 is amended by adding the following after item 196:
- 197 Yekaterina (Ekaterina) Borisovna ALTABAEVA
- 198 Vladimir Vladimirovich NEMTSEV
- 199 Mikhail Vladimirovich RAZVOZHAEV
- 200 Sergei (Sergey) Andreyevich DANILENKO
- 201 Yekaterina (Ekaterina) Eduardovna PYRKOVA
- 202 Lidia (Lydia) Aleksandrovna BASOVA
Application Prior to Publication
2 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
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.)
The Russian Federation continues to violate the sovereignty and territorial integrity of Ukraine.
In November 2013, the refusal of then Ukrainian President Viktor Yanukovych to sign a landmark association agreement with the European Union set off major protests in Kyiv, leading to the fall of his government. In March 2014, Russian forces occupied the Crimean peninsula of Ukraine. Following an unconstitutional “referendum” on March 16, 2014, Russian President Vladimir Putin signed a treaty purporting to incorporate Crimea into the Russian Federation on March 18, 2014. Canada, along with the international community, continues to condemn this illegal annexation.
In the wake of the annexation, Russian-backed militants quickly seized control of significant portions of the Donetsk and Luhansk regions of eastern Ukraine, declaring the creation of the “Donetsk People’s Republic” and the “Luhansk People’s Republic.” Fraudulent “independence referendums,” initiated by pro-Russian separatists, were held on May 11, 2014, but gained no international recognition. Peace agreements were reached at talks held in Minsk, Belarus, in September 2014 and in February 2015 (the Minsk agreements). Despite ongoing diplomatic efforts to seek a resolution to the conflict, Russia continues to sponsor violent pro-Russian separatist groups in the Donetsk and Luhansk regions of Ukraine. Russia’s direct military involvement in Ukraine and clear violation of Ukraine’s sovereignty and territorial integrity continue to be a grave concern for the international community.
Acting in coordination with the United States (U.S.) and the European Union (EU), the Governor in Council found that the illegal annexation of Crimea by the Russian Federation 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, the Special Economic Measures (Ukraine) Regulations (the Ukraine Regulations) — as well as the Special Economic Measures (Russia) Regulations (the Russia Regulations) — were approved on March 17, 2014. The Ukraine Regulations impose dealings prohibitions (an effective asset freeze) on designated individuals and entities. 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. Amendments to the Ukraine Regulations were made on March 19, April 12, May 12, June 21, July 11, July 24, August 6, and December 19, 2014; on February 17 and June 29, 2015; on March 18 and November 28, 2016; and on March 4, March 15 and June 25, 2019.
The Special Economic Measures (Ukraine) Permit Authorization Order and the Special Economic Measures (Russia) Permit Authorization Order, which came into force on March 17, 2014, authorize the Minister of Foreign Affairs to issue to any person in Canada and Canadian outside Canada a permit to carry out a specified activity or transaction, or any class of activity or transaction, that is otherwise prohibited pursuant to the Ukraine Regulations and the Russia Regulations.
Canada continues to strongly condemn Russia’s behaviour toward Ukraine. At the G7 Leaders’ Summit in Charlevoix in June 2018, Canada and fellow G7 partners reiterated their condemnation of Russia’s illegal annexation of Crimea and reaffirmed their enduring support for Ukrainian sovereignty, independence and territorial integrity within its internationally recognized borders. They also recalled that the continuation of sanctions is clearly linked to Russia’s failure to demonstrate complete implementation of its commitments in the Minsk agreements and respect for Ukraine’s sovereignty. Leaders further affirmed their readiness to take further restrictive measures in order to increase costs to Russia, should its actions so require.
Since Canada’s last substantive amendments to the Ukraine Regulations on March 15, 2019, Russia has continued to play a destabilizing role in Ukraine, while denying that it bears responsibility for the conflict. This stance has serious consequences for the implementation of a number of the Minsk agreements’ measures aimed at ensuring the security and sovereignty of Ukraine, as does Russia’s continued support of separatists operating in Ukraine’s Donetsk, Luhansk and Crimea regions and the organization and facilitation of illegitimate elections in Crimea in September 2019. These elections have not been recognized by Canada and other like-minded countries, nor are those elected individuals recognized as official representatives of the territory.
The duration of sanctions by Canada and like-minded partners has been explicitly linked to the complete implementation of the Minsk agreements by all parties. The EU and the U.S. have continued to update their sanction regimes against individuals and entities in both Ukraine and Russia.
- (1) Align Canada’s actions with those taken by international partners to underscore continued trans-Atlantic unity in responding to Russia’s actions in Ukraine; and
- (2) Demonstrate Canada’s commitment to a policy of non-recognition of Russia’s illegal annexation of Crimea.
The Regulations Amending the Special Economic Measures (Ukraine) Regulations (the Regulations) add six individuals to Part 1 of the schedule to the Ukraine Regulations.
Public consultation on the Regulations would not have been appropriate, as publicizing the names of the listed individuals targeted by sanctions could have resulted in asset flight prior to the coming into force of the amendments.
Modern treaty obligations and Indigenous engagement and consultation
An assessment has been conducted and no modern treaty obligations have been identified.
Regulations are the sole method to enact sanctions in Canada. No other instrument could be considered.
Benefits and costs
Sanctions targeting specific persons have less impact on Canadian businesses than traditional broad-based economic sanctions, and the Regulations will have limited impact on the citizens of the countries of the listed persons. It is likely that the individuals listed 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 most likely do so by adding the new names to their existing monitoring systems, which may result in a minor compliance cost.
Small business lens
The Regulations potentially create additional compliance 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 businesses have or will have dealings with the newly listed individuals. No significant loss of opportunities for small businesses is expected as a result of the Regulations.
As there are no administrative costs associated with this regulatory amendment, the one-for-one rule does not apply.
Regulatory cooperation and alignment
The Regulations are not related to a work plan or commitment under a formal regulatory cooperation forum. While the regulatory mechanisms for sanctions in Canada, the U.S. and the EU are inherently different, the Regulations align with U.S. and EU sanction measures on Ukraine.
Strategic environmental assessment
The Regulations 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 in foreign states, sanctions under the Special Economic Measures Act can nevertheless have an unintended impact on certain vulnerable groups and individuals. Rather than affecting Ukraine 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.
The individuals added to the schedule to the Ukraine Regulations are linked to Russia’s illegal annexation and ongoing occupation of Crimea, and to the continuing violation of Ukraine’s sovereignty and territorial integrity. Russia continues to consolidate its illegal control over Crimea, including through the organization and facilitation of illegitimate regional elections in the region in September 2019. These elections have not been recognized by Canada and other like-minded countries, nor are those elected individuals recognized as official representatives of the territory. These actions further contribute to the insecurity in Ukraine and the destabilization of the region by enforcing Russian laws and exercising Russian sovereignty on Ukrainian territory without the authorization of the Government of Ukraine. The listings signal Canada’s strong condemnation of this ongoing Russian behaviour.
Implementation, compliance and enforcement, and service standards
The names of the listed individuals will be available online for financial institutions to review and will also be added to the Consolidated Canadian Autonomous Sanctions List. This will help to facilitate compliance with the Regulations.
Canada’s sanction regulations are enforced by the Royal Canadian Mounted Police. In accordance with section 8 of the Special Economic Measures Act, 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.
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