Regulations Amending the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK): SOR/2020-119

Canada Gazette, Part II, Volume 154, Number 12

Registration

SOR/2020-119 June 1, 2020

UNITED NATIONS ACT

P.C. 2020-400 May 30, 2020

Whereas the Security Council of the United Nations, acting under Article 41 of the Charter of the United Nations, adopted Resolution 1718 (2006) on October 14, 2006, Resolution 1874 (2009) on June 12, 2009, Resolution 2087 (2013) on January 22, 2013, Resolution 2094 (2013) on March 7, 2013, Resolution 2270 (2016) on March 2, 2016, Resolution 2321 (2016) on November 30, 2016, Resolution 2356 (2017) on June 2, 2017, Resolution 2371 (2017) on August 5, 2017, Resolution 2375 (2017) on September 11, 2017 and Resolution 2397 (2017) on December 22, 2017;

And whereas it appears to the Governor in Council to be necessary to make regulations for enabling the measures set out in those resolutions to be effectively applied;

Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of Foreign Affairs, pursuant to section 2 of the United Nations Act ^{footnote a}, makes the annexed Regulations Amending the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK).

Regulations Amending the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK)

Amendments

1 (1) The definition Focal Point for De-listing in section 1 of the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK) ^{footnote 1} is repealed.

(2) The definitions arms and related material, Canadian, DPRK, entity and luxury goods in section 1 of the Regulations are replaced by the following:

• arms and related material means any type of weapon, ammunition, military equipment including military vehicles, or paramilitary equipment, and their spare parts. (armes et matériel connexe)
• Canadian means a citizen within the meaning of the Citizenship Act, or an entity established, incorporated or continued by or under the laws of Canada or of a province. (Canadien)
• DPRK means the Democratic People’s Republic of Korea and includes
  • (a) its political subdivisions;
  • (b) its government and departments and the government and departments of its political subdivisions; and
  • (c) its agencies or any agency of its political subdivisions. (RPDC)
• entity includes a corporation, trust, partnership, fund, unincorporated association or organization or a foreign state. (entité)
• luxury goods includes jewelry, gems, precious and semi-precious stones, precious metals, lead crystal, tableware of porcelain or bone china, watches, cigarettes, alcoholic beverages, perfume, designer clothing and accessories, furs, rugs, tapestries, sporting goods, private aircraft, gourmet foods and ingredients, lobster, computers, televisions and other electronic devices and yachts, personal watercraft, snowmobiles and automobiles and other motor vehicles that are used to transport people, except those that are used for public transportation. (articles de luxe)

2 The heading before section 2 and sections 2 to 17 of the Regulations are replaced by the following:

Prohibitions

Prohibited activities

2 (1) 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 or by a person acting on behalf of, or at the direction of, a designated person;
• (b) enter into or facilitate any transaction related to a dealing referred to in paragraph (a);
• (c) provide or acquire any financial or related services in respect of a dealing referred to in paragraph (a);
• (d) make available any property to or for the benefit of a designated person, a person acting on behalf of or at the direction of a designated person or an entity that is owned, held or controlled, directly or indirectly, by a designated person; or
• (e) provide any financial or related services to or for the benefit of any person or entity referred to in paragraph (d) or acquire any such services from or for the benefit of any such person or entity.

Cash

(2) It is prohibited for any person in Canada or any Canadian outside Canada to knowingly supply or transfer, directly or indirectly, any bulk cash that is destined for the DPRK, for any person in the DPRK or for any national or to knowingly receive any bulk cash from the DPRK, from any person in the DPRK or from any national.

Real property

3 (1) It is prohibited for any person in Canada or any Canadian outside Canada to knowingly sell or lease or otherwise make available real property to the DPRK, to a national or to any person acting on behalf or at the direction of the DPRK or a national.

Embassies and consulates

(2) Subsection (1) does not apply to real property that is located in Canada and used exclusively for diplomatic or consular activities or to activities within the meaning of the Vienna Convention on Diplomatic Relations.

Application

(3) For greater certainty, only the renewal of a lease that was entered into before the coming into force of these Regulations is subject to subsection (1) and that subsection does not apply to a lease that provided for that renewal.

Providing financial or related services

4 (1) It is prohibited for any person in Canada or any Canadian outside Canada to knowingly provide financial or related services that are intended to facilitate trade with the DPRK to the DPRK, to any person in the DPRK or to a person acting on behalf of or at the direction of the DPRK or any person in the DPRK.

Accepting financial or related services

(2) It is prohibited for any person in Canada or any Canadian outside Canada to accept any financial or related services that are intended to facilitate trade with the DPRK from the DPRK, from any person in the DPRK or from a person acting on behalf of or at the direction of the DPRK or any person in the DPRK.

Exception — diplomatic missions or humanitarian aid

5 (1) Sections 2 and 4 do not apply to an activity that is intended solely for the support of diplomatic or consular missions in the DPRK or humanitarian aid missions that is conducted by or in coordination with the United Nations, even if that activity involves the Foreign Trade Bank of the DPRK or the Korea National Insurance Corporation.

Exception — case by case

(2) Sections 2 and 4 do not apply to an activity if the Committee of the Security Council has approved the activity in advance.

Prohibited activities — entities referred to in section 19

6 It is prohibited for any entity referred to in section 19 to open a new office, branch, subsidiary or bank account in the DPRK.

Joint ventures and cooperative entities

7 (1) It is prohibited for any person in Canada or any Canadian outside Canada to form, maintain or operate a joint venture or a cooperative entity with the DPRK or with any person in the DPRK.

Maintaining operations

(2) A joint venture or cooperative entity may continue to operate, however, if the Committee of the Security Council has approved the maintenance of the operation.

Embargo — specific products

8 (1) It is prohibited for any person in Canada or any Canadian outside Canada to knowingly sell, supply or transfer, directly or indirectly, any of the following products, wherever situated, to the DPRK or to any person in the DPRK:

• (a) arms and related material;
• (b) the vehicles, aircrafts, vessels and associated transport equipment referred to in HS codes 86 to 89;
• (c) luxury goods;
• (d) aviation fuel including aviation gasoline, napthatype jet fuel, kerosene-type jet fuel and kerosene-type rocket fuel, except for aviation fuel provided to a DPRK passenger aircraft for its return flight to the DPRK;
• (e) crude oil and refined petroleum products;
• (f) condensates and natural gas liquids;
• (g) the base metals and articles of base metal referred to in HS codes 72 to 83;
• (h) the machinery, mechanical appliances and electrical equipment referred to in HS codes 84 and 85.

DPRK’s weapons programme

(2) It is prohibited for any person in Canada or any Canadian outside Canada to knowingly sell, supply or transfer, directly or indirectly, any of the following products, wherever situated, that are destined for the DPRK or for any person in the DPRK:

• (a) those that are listed 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 are listed 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 that appear on the lists set out in the Security Council documents S/2014/253, S/2016/308, S/2016/1069, S/2017/728, S/2017/760, S/ 2017/822 and S/2017/829;
• (d) those that have been identified under paragraph 8 of Security Council Resolution 1718 by the Committee of the Security Council or by the Security Council;
• (e) those that appear in Annex III of Security Council Resolution 2321.

Support of military activities

(3) It is prohibited for any person in Canada or any Canadian outside Canada to knowingly provide to the DPRK, to any person in the DPRK, or to any person acting on behalf of the DPRK, any products other than food or medicine that could be used to support military activities.

Technical assistance

(4) It is prohibited for any person in Canada or any Canadian outside Canada to knowingly provide to the DPRK, to any person in the DPRK, or to any person acting on behalf of the DPRK, technical assistance related to the sale, supply, transfer, manufacture, use or maintenance of any of the products referred to in paragraph (1)(a) or subsection (2).

Training to nationals

(5) It is prohibited for any person in Canada or any Canadian outside Canada to knowingly provide to any national teaching or training in disciplines which could contribute to the proliferation of nuclear activities or the development of nuclear weapon delivery systems in the DPRK, including in advanced studies of physics, materials science, computer simulation and related computer sciences and geospatial navigation, and in nuclear, chemical, mechanical, electrical, industrial, aerospace and aeronautical engineering and related disciplines.

Exception — exportation

9 (1) Subsections 8(1) to (3) do not apply to an activity if the Committee of the Security Council has approved the activity in advance.

Exception — technical assistance and training

(2) Subsections 8(4) and (5) do not apply to an activity if the Committee of the Security Council has approved the activity in advance.

Embargo — prohibited acquisitions

10 (1) It is prohibited for any person in Canada or any Canadian outside Canada to knowingly import, purchase or acquire any vessel or any of the products referred to in paragraph 8(1)(a) or subsections 8(2) and (3), wherever situated, from the DPRK or from any person in the DPRK.

Coal, minerals and wood

(2) It is prohibited for any person in Canada or any Canadian outside Canada to knowingly import, purchase or acquire any of the following products, wherever situated, from the DPRK or from any person in the DPRK:

• (a) any salt, sulphur, earths and stone, plastering materials, lime, cement and other materials referred to in HS code 25;
• (b) coal, iron, iron ore, gold, titanium ore, vanadium ore, rare earth minerals, copper, nickel, silver, zinc, lead and lead ore;
• (c) any wood, articles of wood and wood charcoal referred to in HS code 44.

Statues

(3) It is prohibited for any person in Canada or any Canadian outside Canada to knowingly import, purchase or acquire statues, wherever situated, from the DPRK or from any person in the DPRK.

Seafood

(4) It is prohibited for any person in Canada or any Canadian outside Canada to knowingly import, purchase or acquire seafood, including fish, crustaceans, mollusks and other aquatic invertebrates, wherever situated, or to acquire fishing rights related to such products by transfer or other means, from the DPRK or from any person in the DPRK.

Food and agricultural products

(5) It is prohibited for any person in Canada or any Canadian outside Canada to knowingly import, purchase or acquire the products referred to in HS code 7, HS code 8 and HS code 12, wherever situated, from the DPRK or from any person in the DPRK.

Textiles

(6) It is prohibited for any person in Canada or any Canadian outside Canada to knowingly import, purchase or acquire textiles, including fabrics and partially or fully assembled apparel products, wherever situated, from the DPRK or from any person in the DPRK.

Machinery, appliances and electrical equipment

(7) It is prohibited for any person in Canada or any Canadian outside Canada to knowingly import, purchase or acquire the machinery, mechanical appliances and electrical equipment referred to in HS codes 84 and 85, wherever situated, from the DPRK or from any person in the DPRK.

Technical assistance and training

(8) It is prohibited for any person in Canada or any Canadian outside Canada to knowingly receive any technical assistance or teaching or training related to the purchase, acquisition, manufacture, use or maintenance of any of the products referred to in paragraph 8(1)(a) or subsections 8(2) and (3) from the DPRK, from any person in the DPRK or from any national.

Exception — importation

11 Subsections 10(1) to (7) do not apply to an activity if the Committee of the Security Council has approved the activity in advance.

Embargo — carriage

12 (1) It is prohibited for any owner or master of a Canadian vessel, as defined in section 2 of the Canada Shipping Act, 2001, or any operator of an aircraft registered in Canada or any Canadian owner or master of a vessel or Canadian operator of an aircraft to knowingly carry, cause to be carried or permit to be carried any of the products referred to in subsections 8(1) to (3) or any bulk cash that is destined for the DPRK or for any person in the DPRK.

Carriage from DPRK — products referred to in subsections 10(1) to (7)

(2) It is also prohibited for any such owner, master or operator to knowingly carry, cause to be carried or permit to be carried, from the DPRK, any of the products referred to in any of subsections 10(1) to (7) or any bulk cash.

Exception — export

13 (1) Subsection 12(1) does not apply if the Committee of the Security Council has been given notice in advance of the transport of a product that has been the subject of an advance approval referred to in subsection 9(1).

Exception — import

(2) Subsection 12(2) does not apply if the Committee of the Security Council has been given notice in advance of the transport of a product that has been the subject of an advance approval referred to in section 11.

Maintaining vessel

14 (1) It is prohibited for any person in Canada or any Canadian outside Canada to knowingly provide products or services for the operation or maintenance of any vessel, including with respect to stevedoring and lighterage, if the vessel has been identified by the competent authorities as one that is carrying any of the products referred to in subsections 8(1) to (3) and 10(1) to (7), unless it is necessary to do so for the safeguarding of human life or for the vessel to return to its port of origin.

Crew services

(2) It is prohibited for any person in Canada or any Canadian outside Canada to knowingly provide a Canadian-flagged vessel or aircraft, or crew services for any vessel or aircraft, to the DPRK, to any person in the DPRK, to a designated person, to a person acting on behalf of or at the direction of a designated person or to an entity that is owned, held or controlled by a designated person.

Crew services from DPRK

(3) It is prohibited for any person in Canada or any Canadian outside Canada to knowingly procure vessel or aircraft crew services from the DPRK or from any person in the DPRK.

Vessels

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

• (a) register a vessel in the DPRK;
• (b) obtain authorization for a vessel to fly the DPRK flag;
• (c) own, lease or operate, directly or indirectly, any DPRK-flagged vessel;
• (d) insure or reinsure any DPRK-flagged vessel or any vessel owned, held, controlled or operated, directly or indirectly, by the DPRK or any other vessel identified by the competent authorities as one that has transported any of the products referred to in any of subsections 8(1) to (3) and 10(1) to (7); or
• (e) provide any vessel classification, certification or related service for any DPRK-flagged vessel.

Exceptions — case by case

15 Section 14 does not apply to an activity if the Committee of the Security Council has approved the activity in advance.

Assisting in prohibited activity

16 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 activity prohibited by sections 2, subsection 3(1), sections 4 and 6, subsection 7(1), sections 8, 10, 12 and 14.

Obligations

Airports

17 (1) The authority that is responsible for an airport or its operator must refuse to allow an aircraft to land if the Minister advises the Authority that the Minister has information in his or her possession allowing him or her to conclude that the aircraft is in contravention of subsection 12(1) or (2) or that it is an aircraft of the DPRK.

Ports

(2) The authority that is responsible for a port or its operator must refuse to allow a vessel to dock if the Minister advises the port or its operator that the Minister has information in his or her possession allowing him or her to conclude that the vessel is in contravention of subsection 12(1) or (2) or that it is a vessel of the DPRK.

Exceptional circumstances

(3) Subsections (1) and (2) do not apply if it is necessary for the aircraft or vessel to land or dock for the safeguarding of human life, for inspection under a federal Act or for the aircraft or vessel to return to its point of origin.

Registration of vessels

18 (1) The Chief Registrar who is responsible for maintaining the Canadian Register of Vessels under Part 2 of the Canada Shipping Act, 2001, must not register or must cancel the registration of a vessel if

• (a) the vessel is designated by the Committee of the Security Council under Security Council Resolution 1718;
• (b) the Chief Registrar has been notified that the vessel’s registration has been cancelled by a Member State of the United Nations under paragraph 24 of Security Council Resolution 2321; or
• (c) the Chief Registrar has been notified of the Minister’s decision, based on reasonable grounds, that the vessel is
  • (i) owned, held or controlled by the DPRK, or
  • (ii) used for activities prohibited by these Regulations.

Approval by Committee of Security Council

(2) Paragraphs 1(a) and (b) do not apply if the Committee of the Security Council has given approval in advance for the registration.

Duty to determine

19 The following entities must determine on a continuing basis whether they are in possession or control of property 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, and banks regulated by that Act;
• (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 activities 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 regulated by the Trust and Loan Companies Act;
• (g) trust companies regulated by a provincial Act;
• (h) loan companies regulated by a provincial Act;
• (i) entities that engage in any activity referred to 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 — RCMP or CSIS

20 (1) Every person in Canada, every Canadian outside Canada and every entity set out in section 19 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

21 (1) A person that wishes to engage in any activity that is prohibited under these Regulations must, before doing so, apply to the Minister in writing for a certificate to exempt the activity from the application of the Regulations.

Certificate

(2) The Minister must issue the certificate if the Security Council did not intend that the activity be prohibited or if the Security Council or the Committee of the Security Council has approved the activity in advance.

Basic or extraordinary expenses

22 (1) A person whose property is affected by the application of section 2 may apply to the Minister in writing for a certificate to exempt the property from the application of that section if 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.

Certificate

(2) If it is established in accordance with Security Council Resolution 1718 that the property is necessary for basic or extraordinary expenses or that it 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 time periods:

• (a) within 15 working days after receiving the application, in the case of property necessary for basic expenses, if the Committee of the Security Council did not oppose the application;
• (b) within 30 working days after receiving the application, in the case of property necessary for extraordinary expenses, if the Committee of the Security Council approved the application; and
• (c) within 90 working 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 person became a designated person,
  • (ii) is not for the benefit of a designated person, and
  • (iii) has been brought to the attention of the Committee of the Security Council by the Minister.

Mistaken identity

23 (1) A person 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 working days after receiving the application, the Minister must

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

Vessels

24 (1) A person whose vessel is subject to a measure taken under subsection 18(1) based on a decision made under paragraph 18(1)(c) may apply in writing to the Minister for a reconsideration of that decision.

Favourable decision

(2) If the Minister believes that subparagraph 18(1)(c)(i) or (ii) no longer applies to the vessel, the Minister must notify the applicant and the Chief Registrar of his or her decision and the Chief Registrar must rescind the measure taken.

Unfavourable decision

(3) If the Minister believes that subparagraph 18(1)(c)(i) or (ii) continues to apply to the vessel, the Minister must notify the applicant of the decision to confirm the measure.

New application

(4) If there has been a material change in circumstances since the last application was submitted under subsection (1), a person may submit another application to the Minister.

Personal Information

Communication by Minister

25 (1) The Minister may, for the purpose of enforcing these Regulations or fulfilling any obligation under a resolution of the Security Council with respect to the DPRK or to respond to a request from the Security Council or any of its subsidiary organs, disclose any personal information to an official or to the Security Council or any of its subsidiary organs.

Receipt of information

(2) An official may receive any personal information disclosed to them under subsection (1).

Communication by official

(3) An official may, for the purpose of administering or enforcing these Regulations or fulfilling an obligation under a resolution of the Security Council with respect to the DPRK or to respond to a request from the Security Council or any of its subsidiary organs, disclose any personal information to the Minister.

Application Before 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

As a Member State of the United Nations and pursuant to Article 25 of the Charter of the United Nations (the Charter), Canada is legally obligated to implement binding decisions of the United Nations Security Council (the Security Council) taken under Chapter VII of the Charter. On October 14, 2006, acting under Chapter VII of the Charter, the Security Council adopted Resolution 1718 (2006) imposing sanctions against the Democratic People’s Republic of Korea (DPRK) in response to a nuclear test conducted by the DPRK on October 9, 2006. Between 2006 and 2017, United Nations sanctions against the DPRK were progressively strengthened through the imposition of successive rounds of Security Council resolutions in response to its failure to comply with the previous resolutions. Canada has implemented resolutions 1718 (2006), 1874 (2009), 2087 (2013), 2094 (2013), 2270 (2016), 2356 (2017), 2371 (2017), 2375 (2017), and parts of 2321 (2016) and 2397 (2017) through the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK). The elements of Resolution 2321 (2016) and Resolution 2397 (2017) that have already been adopted include restrictions on the import of coal and certain base metals from the DPRK as well as restrictions on the export to the DPRK of crude oil, refined petroleum products, and machinery and electrical equipment.

The elements of Resolution 2321 (2016) that remain to be implemented include a prohibition on the DPRK using real property that it owns or leases for any purpose other than for diplomatic or consular activities. This was adopted to curtail the DPRK’s ability to use such property to generate income in support of its nuclear and ballistic missile programs. Further, Resolution 2321 (2016) imposed an obligation on Member States not to register or deregister vessels designated by the 1718 Committee; owned, controlled or operated by the DPRK; or any vessel that has been deregistered by another Member State. The 1718 Committee is a subsidiary body established by the Security Council to administer the DPRK sanctions regime, including identifying and designating vessels who are suspected of being involved in activities prohibited by the relevant sanctions against the DPRK. The element of Resolution 2397 (2017) that remains to be implemented is a prohibition that expanded upon Resolution 2321 (2016), imposing an obligation on Member States not to register or deregister vessels where a Member State has reasonable grounds to believe that a vessel is involved in activities prohibited by previous resolutions. These measures were adopted to curtail the DPRK’s ability to evade Security Council sanctions.

Objective

• Implement resolutions 2321 (2016) and 2397 (2017) in full and fulfill Canada’s international legal obligation to implement the binding decisions of the Security Council; and
• Address miscellaneous amendments raised by the Standing Joint Committee for the Scrutiny of Regulations (SJCSR).

Description

The Regulations Amending the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK) [the Regulations] give effect to the decisions by the Security Council to impose various measures outlined in resolutions 2321 (2016) and 2397 (2017).

The Regulations

• create a new provision prohibiting the sale, lease or rent of real property to the DPRK, except for real property used for diplomatic or consular purposes;
• create a new provision prohibiting the registration, along with an obligation to deregister, vessels owned, controlled or operated by the DPRK, designated by the 1718 Committee, deregistered by another United Nations Member State, and where the Minister of Foreign Affairs (the Minister) has reasonable grounds to believe that a vessel is involved in activities, or the transport of items, prohibited by the Regulations;
• create a new provision granting the right to owners of vessels that have been denied registration or subject to deregistration in Canada to apply to the Minister for a review of that decision;
• clarify the implementation of prohibitions set out in Security Council resolutions that are currently implemented through the Special Economic Measures (Democratic People’s Republic of Korea) Regulations, but should also appear in the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK), such clarifications include the prohibition on the supply of goods that could be used to support or enhance the operational capabilities of the armed forces of the DPRK, along with related exceptions, such as the exception applying to the delivery of food aid and humanitarian assistance, and the corresponding obligations to notify and obtain approval from the Committee of the Security Council where applicable;
• make miscellaneous amendments to address changes requested by the SJCSR, such as ensuring the English and French text are equivalent, correcting grammatical errors, and amending certain provisions to bring them in line with common language changes included in similar regulations; and
• amend the provisions allowing for the disclosure of personal information by officials and by the Minister in order to comply with requests from the Security Council to bring them in line with changes made to similar regulations.

For more information, please consult Security Council Resolution 2321 (2016) (PDF) and Resolution 2397 (2017) (PDF).

Regulatory development

Consultation

Global Affairs Canada engages regularly with relevant stakeholders including civil society organizations and cultural communities, and other like-minded governments regarding Canada’s approach to sanctions implementation. With respect to the specific Regulations, no such external outreach was conducted. Canada is obliged to implement the binding elements of the Security Council resolutions related to the Regulations as a member of the United Nations.

Modern treaty obligations and Indigenous engagement and consultation

An assessment has been conducted and no modern treaty implications have been identified.

Instrument choice

Regulations are the sole method to enact sanctions in Canada. No other instrument could be considered.

Regulatory analysis

Benefits and costs

The Regulations make Canada compliant with its obligations under the Charter of the United Nations by fully implementing Security Council resolutions 2321 (2016) and 2397 (2017).

These new prohibitions introduced in the Regulations, such as the prohibition on selling or leasing real property to the DPRK, are expected to impose minor compliance costs, given that there are no significant Canadian business interests in the DPRK and there is no known real property owned or leased by the DPRK in Canada. Additionally, because new prohibitions introduced in the Regulations only apply once the Regulations come into force, pre-existing contracts are not affected by these new prohibitions.

The new obligations introduced by the Regulations with respect to the registration and deregistration of vessels are expected to impose additional administrative burden on the Government of Canada to undertake the necessary vetting procedures, but these costs are expected to be minor as the legislative and administrative infrastructure to implement these obligations already exist within the Government of Canada. The creation of a right to owners of vessels that have been denied registration or subject to deregistration in Canada to apply to the Minister for a review of that decision may increase the administrative burden on the Government of Canada, though this is not expected to require additional resources.

Small business lens

As trade is already impacted by current economic measures against the DPRK, these Regulations are not expected to result in additional cost impacts on small business.

To facilitate compliance by small businesses, Global Affairs Canada is in the process of conducting enhanced outreach with stakeholders to better inform them of changes to the Regulations. This includes updates to the sanctions website as well as the creation of the sanctions hotline. In addition, the Trade Commissioner Service is engaged in implementing Canada’s Trade Diversification Strategy, which will support Canadian companies seeking to find alternative export markets.

One-for-one rule

The one-for-one rule does not apply to the Regulations, as they do not impose incremental administrative burden on businesses.

Regulatory cooperation and alignment

The Regulations align with Security Council resolutions 2321 (2016) and 2397 (2017) and are made to fulfill Canada’s obligation to implement all measures taken by the Security Council under Chapter VII of the Charter of the United Nations.

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

The subject of sanctions has previously been addressed for effects on gender and diversity in May 2018, in consultation with departmental gender-based analysis plus (GBA+) experts.

Although sanctions are intended to facilitate change to restore peace and security, protect and advance human rights, and combat foreign corruption through economic pressure on states and responsible individuals, they can nevertheless have an impact on vulnerable groups. In countries facing sanctions, such groups have historically been more likely to bear the political and economic instability caused by economic sanctions due to their disadvantaged position in society.

Women, in particular, are more likely to suffer due to their vulnerable socioeconomic and political status. This may particularly be the case in developing countries where broader economic sanctions are in place. This suffering has been historically measured using the following variables: women’s participation in the workplace; economic participation; political participation; and women’s economic rights. In addition, women are often primarily responsible for feeding and caring for their families in many of their countries, which is made more difficult if goods are scarce or not available in target countries, as a result of sanctions.

Current sanctions regimes are being improved from a gender and diversity responsiveness perspective. Canada is seeking to improve this responsiveness through funding research that further explores the gendered aspects of Canadian and international sanctions, as well as advancing international advocacy efforts in the multilateral settings where sanctions are designed. In addition, Canada undertakes direct, gender-responsive development programming in many countries affected by sanctions, and Canada’s contributions to international financial institutions can also go toward projects and programs in countries subject to Canadian sanctions.

Implementation, compliance and enforcement, and service standards

Canada’s sanctions regulations are enforced by the Royal Canadian Mounted Police and the Canada Border Services Agency. Anyone who contravenes the Regulations is liable, upon conviction, to the punishments set out in section 3 of the United Nations Act (namely, 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

Julanar Green
Head
North Korea Task Force
Telephone: 343‑203‑5913
Email: julanar.green@international.gc.ca