Regulations Amending the Special Economic Measures (Venezuela) Regulations: SOR/2018-114
Canada Gazette, Part II, Volume 152, Number 12
May 30, 2018
SPECIAL ECONOMIC MEASURES ACT
P.C. 2018-608 May 29, 2018
Whereas, the Governor in Council is of the opinion that the Association Concerning the Situation in Venezuela, of which Canada is a member, has made a decision calling on its members to take economic measures against Venezuela;
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 (Venezuela) Regulations.
Regulations Amending the Special Economic Measures (Venezuela) Regulations
1 The Schedule to the Special Economic Measures (Venezuela) Regulations footnote 1 is amended by adding the following after item 40:
- 41 Tania Valentina DÍAZ GONZÁLEZ
- 42 Fidel Ernesto VÁSQUEZ IRIARTE
- 43 Carolys Helena PÉREZ GONZÁLEZ
- 44 Cilia Adela FLORES DE MADURO
- 45 Erika del Valle FARÍAS PEÑA
- 46 Ramón Darío VIVAS VELASCO
- 47 Christian TYRONE ZERPA
- 48 Fanny Beatriz MÁRQUEZ CORDERO
- 49 Malaquías Gil RODRÍGUEZ
- 50 Indira Maira ALFONZO IZAGUIRRE
- 51 Jhannett María MADRIZ SOTILLO
- 52 Carlos Enrique QUINTERO CUEVAS
- 53 Xavier Antonio MORENO REYES
- 54 Carlos Alberto ROTONDARO COVA
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 May 20, 2018, Venezuelan presidential elections are anticipated to further solidify President Maduro’s authoritarian hold over Venezuela, while Venezuelan citizens are increasingly unable to exercise their rights, the Venezuelan economy and humanitarian crisis are continuing to deteriorate, and the prospects for restoration of democracy appear low.
The dismantling of Venezuela’s democracy hit a critical point in July 2017 when, following months of deadly protests, the ruling party of Nicolás Maduro consolidated its power with the election of a National Constituent Assembly (ANC). The election of this body took place without the constitutionally required referendum allowing the Venezuelan people to decide on whether it should be established. This new body stripped the democratically elected National Assembly of all meaningful law-making powers and began rewriting the constitution. Canada and other international partners have rejected its legitimacy and have pledged not to recognize decisions emanating from the ANC.
Since the last round of Canadian sanctions were imposed, the economic, political and humanitarian crisis in Venezuela has continued to worsen as it moves ever closer to full dictatorship. Regional elections on October 15 and municipal elections on December 10, 2017, were plagued with voting irregularities and social coercion tactics. Many opposition representatives abstained and the government claimed overwhelming victory in both elections.
Canadian bilateral relations with Venezuela
On September 22, 2017, Canada imposed sanctions under the Special Economic Measures Act (SEMA) on 40 Venezuelan officials and individuals, including President Nicolás Maduro, for their role in the deterioration of democracy in Venezuela. The Special Economic Measures (Venezuela) Regulations imposed an asset freeze and dealings prohibition on the 40 listed persons, which included high-level officials of the ANC, the National Electoral Council (CNE), and others who are involved in the erosion of democratic rights in Venezuela. The Government of Canada has now identified an additional 14 Venezuelans who have contributed to the decline of democracy in Venezuela.
In addition to sanctions imposed pursuant to SEMA, on November 3, 2017, Canada sanctioned 19 Venezuelan nationals (three of whom were also sanctioned under SEMA) under the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law), who were responsible for, or complicit in, gross violations of internationally recognized human rights, acts of significant corruption, or both.
Santo Domingo dialogue
An attempt at mediating a way forward was launched in Santo Domingo, Dominican Republic, during the week of September 11, 2017, with the aim of creating and formalizing an agreement to resolve the economic and political crisis. One of the opposition’s objectives for this process was free and fair elections. The Santo Domingo dialogue entered an “indefinite recess” on February 7, 2018, when the two sides failed to reach an agreement and the President of the government-controlled CNE announced that presidential elections would be held far ahead of the July date that had been discussed at the negotiation table.
A spring date made it impossible to allow for the institutional changes needed to ensure that the vote be free and fair. President Maduro was the ruling party’s presidential candidate while the opposition’s most popular leaders were either barred from running for office, under house arrest or had fled the country. Furthermore, the Constitutional Chamber of the Supreme Court on January 25, 2018, issued a decision excluding the coalition of opposition parties, the Democratic Unity Roundtable, from participating in the electoral process (as an entity). Multiple opposition parties were also barred from running in the elections. Candidates were given from February 24 to 26, 2018, to register to run and 16 days to campaign. Most opposition parties decided not to participate in the presidential elections on the basis that the elections would not be free and fair. Opposition candidate Henri Falcón registered, and on March 1, 2018, signed an agreement with the government that agreed to include regional and local council elections along with the presidential elections and established some electoral guarantees that were insufficient to meet international best democratic practices.
On February 26, 2018, with 19 votes in favour, the Permanent Council of the Organization of American States passed a resolution calling on the Venezuelan government to reconsider the date of the elections and to provide sufficient guarantees for free and fair elections.
The Lima Group
The Lima Group — an ad hoc grouping of more than a dozen countries in the hemisphere, including Canada, that are seeking a solution to the crisis in Venezuela — has met five times at the Foreign Minister level since August 2017. In response to the events of February 7, 2018 (i.e. the collapse of the Santo Domingo process and unilateral decision by the CNE to confirm the spring presidential elections), Peru convened an emergency meeting of the Lima Group on February 13, 2018. The resulting declaration used strong language to highlight the Lima Group’s “firmest rejection” of the election date, which “impedes the holding of democratic, transparent and credible elections.” It laid out the standards the presidential elections would have had to meet in order for them to be free and fair and stated that failure to meet these standards would lead to the results lacking any legitimacy and credibility.
Humanitarian and human rights situation
The human rights and humanitarian situation in Venezuela has deteriorated along with the political crisis. Venezuela’s population is still facing severe shortages of basic necessities, including food and medicine, and malnutrition and starvation are growing. In the past six months, the regime has persecuted, imprisoned and exiled a number of opposition leaders (including six mayors). There are currently more than 300 political prisoners in jail. This is coupled with poor prison conditions and impunity for human rights abuses.
United States sanctions
On September 5, 2017, the association formed by the Governments of the United States of America and Canada concerning the situation in Venezuela called upon its members to take economic measures against Venezuela and persons responsible for the current situation in Venezuela as well as to continue to monitor the situation and adjust measures as appropriate. The United States Government has targeted 56 persons from Venezuela for sanctions since 2014, including members of the executive, military, judiciary, National Guard, CNE and ANC. The most recent round of United States sanctions came on March 19, 2018, and targeted four high-level current or former Venezuelan government officials involved in economic mismanagement and corruption.
The objectives of the Regulations Amending the Special Economic Measures (Venezuela) Regulations (the Regulations) are to respond to recent anti-democratic actions of the Maduro regime, namely the calling of the presidential elections in unacceptable conditions. The Regulations aim at sending a message to members of the Government of Venezuela that their anti-democratic actions have consequences, demonstrate to Canadians more broadly that the government is prepared to take action when regional norms of democratic good governance are flouted, and show solidarity with the actions of the like-minded countries in the hemisphere.
The Regulations list 14 additional persons to the Schedule of listed persons in the Special Economic Measures (Venezuela) Regulations. These listed persons are in addition to the 40 persons who were sanctioned on September 22, 2017, under the Special Economic Measures (Venezuela) Regulations.
Subject to certain exceptions, the Special Economic Measures (Venezuela) Regulations prohibit any person in Canada and any Canadian outside Canada from: (a) dealing in any property, wherever situated, that is owned, held or controlled by a listed person or by a person acting on behalf of a listed person; (b) entering into or facilitating any transaction related to a dealing referred to in paragraph (a); (c) providing any financial or related services in respect of a dealing referred to in paragraph (a); (d) making any goods available, wherever situated, to a listed person or to a person acting on behalf of a listed person; or (e) providing any financial or related services to or for the benefit of a listed person.
The “One-for-One” Rule applies to this proposal as there are administrative costs to business related to a disclosure requirement of the Regulations. The Regulations require financial institutions in Canada to determine on a continuing basis whether they are in possession or control of property owned, held or controlled by a listed person. These financial institutions are required to disclose without delay the existence of such property to the Commissioner of the Royal Canadian Mounted Police (RCMP) or the Director of the Canadian Security Intelligence Service. Additionally, a separate Special Economic Measures (Venezuela) Permit Authorization Order already in effect pursuant to subsection 4(4) of the Special Economic Measures Act may also increase administrative costs to businesses seeking permits orders that would authorize them to carry out specified activities or transactions that are otherwise prohibited.
However, the administrative burden associated with these Regulations is exempted from the “One-for-One” Rule as the Regulations address unique, exceptional circumstances, namely the urgent situation in Venezuela.
Small business lens
The small business lens does not apply to this proposal, as small business would not be disproportionately affected by the Regulations.
Public consultation with regards to the Regulations establishing lists of listed persons would not be appropriate, as the prepublication of the list could result in asset flight prior to the coming into force of the Regulations.
Canada and most countries in the hemisphere have strongly condemned attempts by the Maduro government to consolidate power, to limit the democratic rights of the Venezuelan people, to restrict opposition and freedom of expression, and to violate internationally recognized human rights. The United States, the European Union, Switzerland and Panama have applied punitive measures against the Maduro regime.
While Canada has engaged strongly to hold Venezuela to account, the Maduro regime continues to strengthen its authoritarian control. The new names identified for addition to the Schedule are directly linked to the regime’s recent anti-democratic actions, particularly in relation to the presidential elections. Taking action against the persons listed in the Regulations will show members of the Government of Venezuela that their anti-democratic actions have consequences and also demonstrate more broadly that the Government of Canada is prepared to take action when regional norms of democratic good governance are flouted. These measures are in line with, and support the actions of like-minded countries in the hemisphere and globally.
Implementation, enforcement and service standards
Canada’s sanctions regulations are enforced by the RCMP and the Canada Border Services Agency. In accordance with section 8 of the SEMA, every person who willfully contravenes the Special Economic Measures (Venezuela) Regulations as amended by 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 or not more than five years.
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