Vol. 148, No. 9 — April 23, 2014

Registration

SOR/2014-93 April 12, 2014

SPECIAL ECONOMIC MEASURES ACT

Regulations Amending the Special Economic Measures (Ukraine) Regulations

P.C. 2014-463 April 12, 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

AMENDMENTS

1. (1) Paragraph 2(a) of the Special Economic Measures (Ukraine) Regulations (see footnote 1) is replaced by the following:

(2) Section 2 of the Regulations is amended by striking out “or” at the end of paragraph (c) and by replacing paragraph (d) with the following:

2. The schedule to the Regulations is amended by adding the following after the heading “PERSONS”:

PART 1

INDIVIDUALS

3. The schedule to the Regulations is amended by adding the following after item 9:

PART 2

ENTITIES

1. Chernomorneftegaz

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

Registration

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.)

Issues

Ukrainian officials, party members, and other individuals and entities, working in concert with the Russian Federation government and military forces, have illegally annexed the Crimean peninsula and seized Ukrainian government assets. They have supported, or continue to facilitate, Russian military action against the Ukrainian government and military inside Crimea, violating Ukraine’s sovereignty and territorial integrity.

Background

Beginning in November 2013, former Ukrainian President Viktor Yanukovych attempted to consolidate his waning power and suppress dissent through harsh measures, including the use of deadly force. In response to popular protests, and as widely reported in the media, the Yanukovych government escalated the use of violence and other forms of repression to include the use of live rounds against protesters and other forms of violence resulting in over 100 deaths.

In late January 2014, Yanukovych and key members of his region ultimately fled from Kyiv to Russia. A new interim government was formed which Yanukovych, stationed in Russia, refused to recognize. Yanukovych called on Russia to take steps to overthrow the new government in Kyiv. In doing so, Yanukovych and several members of his former regime incited calls from inside and outside Ukraine in favour of Russian military intervention.

In early March 2014, Russian military forces took operational control of the Crimean peninsula, including capturing government buildings and the Crimean Parliament, naval and other military installations, Simferopol airport, as well as access points to the peninsula. Russia increased its troop presence to an estimated 20 000 soldiers while at the same time denying that the forces were Russian.

On March 6, 2014, the Russian-controlled Crimean Parliament adopted a resolution declaring its unanimous decision to become part of Russia, and set a referendum on this question, which took place on March 16, 2014. The Ukrainian Ministry of Justice has underlined the illegality of the referendum, and noted that, according to the Ukrainian constitution, only national referendums are permitted.

The referendum in Crimea was held while the province was under the control of an illegal and coercive Russian military presence. The Russian-controlled legislature announced that 97% of the population voted in favour of Crimea becoming a subject of the Russian Federation. The following day, members of the legislature travelled to Moscow to begin the process of accession.

Since the referendum and subsequent illegal annexation of the Crimean peninsula, Crimean authorities have seized control of Ukrainian government assets and expropriated two major natural-resource companies. They have also passed resolutions to expropriate the property of 131 enterprises, institutions and organizations in the agro-industrial sector, as well as additional firms and entities in the forest and hunting sectors.

On March 17, 2014, acting in coordination with the United States and the European Union, the Governor in Council passed regulations imposing sanctions on Ukraine and Russia, after finding that the situation with respect to Crimea constitutes a grave breach of international peace and security that has resulted or is likely to result in a serious international crisis. The Governor in Council passed further amendments to the Regulations on March 18 and 21, 2014.

Objectives

The Regulations Amending the Special Economic Measures (Ukraine) Regulations (the Regulations) amend section 2 of the Regulations and add two individuals and one entity to the schedule.

Description

The Regulations amend section 2 of the Special Economic Measures (Ukraine) Regulations, which describes who may be listed as a designated person. This includes broadening subsection 2(a) to include persons whose activities have directly or indirectly facilitated, supported, provided funding for or contributed to a violation or attempted violation of the sovereignty or territorial integrity of Ukraine. This amended category continues to capture all designations that fell within the description in subsection 2(a) prior to these Regulations.

Section 2 is also amended to introduce a new category, namely, entities whose ownership or control was purported to be altered by a person who has violated or attempted to violate the sovereignty or territorial integrity of Ukraine. Additional amendments to section 2 will provide for the listing of senior officials of such entities.

The Regulations also add two individuals and one entity to the schedule. Any person in Canada and any Canadian outside Canada are prohibited from

Exceptions to the above-noted prohibitions are available for the following:

“One-for-One” Rule

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, 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.

Consultation

Foreign Affairs, Trade and Development Canada drafted the Regulations in consultation with the Department of Justice and Citizenship and Immigration Canada.

Rationale

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.

Contact

Jennifer May
Director
East/Southeast Europe Bilateral and Commercial Relations
Foreign Affairs, Trade and Development Canada
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 613-992-7991
Fax: 613-995-1277
Email: Jennifer.may@international.gc.ca