Special Economic Measures (People's Republic of China) Regulations: SOR/2021-49
Canada Gazette, Part II, Volume 155, Number 7
Registration
SOR/2021-49 March 21, 2021
SPECIAL ECONOMIC MEASURES ACT
P.C. 2021-176 March 21, 2021
Whereas the Administrator in Council is of the opinion that gross and systematic human rights violations have been committed in the People's Republic of China;
Therefore, His Excellency the Administrator of the Government of Canada in Council, on the recommendation of the Minister of Foreign Affairs, pursuant to subsections 4(1) footnote a, (1.1) footnote b, (2) and (3) of the Special Economic Measures Act footnote c, makes the annexed Special Economic Measures (People's Republic of China) Regulations.
Special Economic Measures (People's Republic of China) Regulations
Definitions
Definitions
1 The following definitions apply in these Regulations.
- People's Republic of China
- includes
- (a) any of its political subdivisions;
- (b) its government and any of its departments or any government or department of its political subdivisions; and
- (c) any of its agencies or any agency of its political subdivisions. (République populaire de Chine)
- Minister
- means the Minister of Foreign Affairs. (ministre)
List
Listed person
2 A person whose name is listed in the schedule is a person who is in the People's Republic of China, or is a national of the People's Republic of China who does not ordinarily reside in Canada, and in respect of whom the Governor in Council, on the recommendation of the Minister, is satisfied that there are reasonable grounds to believe is
- (a) a person who has participated in gross and systematic human rights violations in the People's Republic of China;
- (b) a current or former senior official of the Government of the People's Republic of China;
- (c) an associate or family member of a person referred to in paragraph (a) or (b);
- (d) an entity owned, held or controlled, directly or indirectly, by a person referred to in paragraph (a), (b) or (c) or acting on behalf of or at the direction of a person referred to in paragraph (a), (b) or (c); or
- (e) a senior official of an entity referred to in paragraph (d).
Prohibitions
Prohibited dealings and activities
3 It is prohibited for any person in Canada or any Canadian outside Canada to
- (a) deal 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) enter into or facilitate any transaction related to a dealing referred to in paragraph (a);
- (c) provide any financial or related services in respect of a dealing referred to in paragraph (a);
- (d) make available any goods, wherever situated, to a listed person or to a person acting on behalf of a listed person; or
- (e) provide any financial or related services to or for the benefit of a listed person.
Non-application
4 Section 3 does not apply in respect of
- (a) any payment made by or on behalf of a listed person that is due under a contract entered into before the person became a listed person, provided that the payment is not made to a listed person or to a person acting on behalf of a listed person;
- (b) any transactions necessary for a Canadian to transfer to a non-listed person any accounts, funds or investments of a Canadian held by a listed person on the day on which that person became a listed person;
- (c) any dealings with a listed person required with respect to loan repayments made to any person in Canada, or any Canadian outside Canada, for loans entered into with any person other than a listed person, and for enforcement and realization of security in respect of those loans, or payments by guarantors guaranteeing those loans;
- (d) any dealings with a listed person required with respect to loan repayments made to any person in Canada, or any Canadian outside Canada, for loans entered into with a listed person before that person became a listed person, and for enforcement and realization of security in respect of those loans, or payments by guarantors guaranteeing those loans;
- (e) any benefit paid under the Old Age Security Act, the Canada Pension Plan or the Act respecting the Québec Pension Plan, CQLR, c. R-9, any superannuation, pension or benefit paid under or in respect of any retirement savings plan or under any retirement plan, any amount paid under or in respect of the Garnishment, Attachment and Pension Diversion Act or the Pension Benefits Division Act and any other payment made in respect of disability to any person in Canada or any Canadian outside Canada;
- (f) financial services required in order for a listed person to obtain legal services in Canada with respect to the application of any of the prohibitions set out in these Regulations;
- (g) any transaction in respect of any account at a financial institution held by a diplomatic mission, if the transaction is required in order for the mission to fulfill its diplomatic functions as set out in Article 3 of the Vienna Convention on Diplomatic Relations or, if the diplomatic mission has been temporarily or permanently recalled, when the transaction is required in order to maintain the mission premises;
- (h) any transaction with any international organization with diplomatic status, with any United Nations agency, with the International Red Cross and Red Crescent Movement or with any entity that has entered into a grant or contribution agreement with the Department of Foreign Affairs, Trade and Development; and
- (i) a transaction by the Government of Canada that is provided for in any agreement or arrangement between Canada and the People's Republic of China.
Assisting in prohibited activity
5 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 section 3.
Duty to determine
6 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 listed 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 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 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 business described in paragraph 5(h) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act if the business 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
7 (1) Every person in Canada, every Canadian outside Canada and every entity set out in section 6 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 listed 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 Special Economic Measures Act and no civil proceedings lie against a person for a disclosure made in good faith under subsection (1).
Applications
Application — removal from list
8 (1) A listed person may apply to the Minister in writing to have their name removed from the schedule.
Reasonable grounds
(2) On receipt of an application, the Minister must decide whether there are reasonable grounds to recommend to the Governor in Council that the applicant's name be removed from the schedule.
New application
9 If there has been a material change in circumstances since the last application was submitted, a person may submit another application under section 8.
Mistaken identity
10 (1) A person whose name is the same as or similar to the name of a listed person and who claims not to be that person may apply to the Minister in writing for a certificate stating that they are not that listed person.
Determination by Minister
(2) Within 30 days after the day on which the Minister receives the application, the Minister must,
- (a) if it is established that the applicant is not the listed person, issue the certificate; or
- (b) if it is not so established, provide notice to the applicant of his or her determination.
Application Before Publication
11 For the purpose of paragraph 11(2)(a) of the Statutory Instruments Act, these Regulations apply according to their terms before they are published in the Canada Gazette.
Coming into Force
12 These Regulations come into force on the day on which they are registered.
SCHEDULE
(Sections 2 and 8)
Persons
PART 1
Individuals
- 1 ZHU Hailun
- 2 WANG Junzheng
- 3 WANG Mingshan
- 4 CHEN Mingguo
PART 2
Entities
- 1 Xinjiang Production and Construction Corps Public Security Bureau
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Issues
Since 2017, credible reports have continued to emerge of mass arbitrary detentions of Uyghurs and other Muslim ethnic minorities in the Xinjiang Uyghur Autonomous Region (XUAR) on the basis of their religion and ethnicity. Throughout the XUAR, Uyghurs and other Muslim ethnic minorities face repressive physical and digital surveillance, which includes severe restrictions on movement, the forced collection of biometric data, and coercive police surveillance. Family members of Canadian citizens have also disappeared and are incommunicado. These arbitrary detentions are directed by the central and regional governments under the pretext of countering terrorism and violent extremism. While in detention, Uyghurs and other Muslim ethnic minorities face torture or cruel, inhuman and degrading treatment or punishment, obligatory patriotic and cultural education, forced labour, and mass arbitrary forced separation of children from their parents. There are also credible reports of systematic rape and gender-based sexual violence, and witnesses and victims have reported forced medical procedures that are performed without the patient's consent, including forced sterilization, abortions, contraceptive device insertion, and organ removal. In July 2019, Chinese authorities stated that detention camps had been closed. However, there is strong evidence, including satellite imagery, leaked government documents, and witness testimony, suggesting that the detention facilities remain in operation. The Chinese government denies any such human rights abuses against Uyghur people and rejects any accountability for wrongdoing, instead seeking to discredit as well as intimidate victims and those who choose to speak out.
Background
Canada has raised the issue of human rights in Xinjiang with Chinese government officials both publicly and privately. The Government of Canada has discussed its grave concerns with like-minded partners and G7 members, and has made public statements in multilateral fora, including the United Nations General Assembly and the United Nations Human Rights Council. On January 12, 2021, in coordination with the United Kingdom, Canada announced that it was adopting a comprehensive approach to defending the rights of Uyghurs and other ethnic minorities, including by advancing measures to address the risk of having forced labour (knowingly or unknowingly) taint the supply chains of Canadian businesses.
Extreme Internet and media censorship in the People's Republic of China (PRC) and restricted access to the region have limited the ability of the international community to ascertain the exact scope and details of the human rights situation in Xinjiang. Experts estimate the number of Uyghurs and other Muslim ethnic minorities detained in the XUAR to be between 1 and 1.8 million, representing one of the largest human rights violations in the 21st century. Canada, along with others from the international community, has repeatedly called for an independent and unfettered investigation into the human rights situation in Xinjiang, conducted by a panel of international legal experts. To date, Chinese authorities have rejected all calls for such an investigation, and it is highly unlikely that an independent and unfettered panel will be permitted by PRC authorities. As a permanent member of the United Nations Security Council with strong bilateral economic relationships worldwide, the PRC and its senior leadership are effectively shielded from the jurisdiction of international courts and United Nations bodies — including the International Court of Justice and the International Criminal Court.
Objectives
- To put pressure on the Government of the People's Republic of China to change its behaviour;
- To communicate a clear message to the Government of the People's Republic of China that Canada stands with the international community in condemning the gross and systematic human rights violations at the hands of the State with impunity;
- To raise the costs to the Chinese government of continuing the policies of repression against Uyghurs and other ethnic minorities in the XUAR.
Description
The Special Economic Measures (People's Republic of China) Regulations (the Regulations) list one entity and four individuals and prohibit persons (individuals and entities) in Canada and Canadians outside Canada from conducting the following activities:
- 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;
- entering into or facilitating any transaction related to a dealing referred to in the first point;
- providing any financial or related services in respect of a dealing referred to in the first point;
- making available any goods, wherever situated, to a listed person or to a person acting on behalf of a listed person; and
- providing any financial or related services to or for the benefit of a listed person.
Consequential to being listed in the Regulations, and pursuant to the application of paragraph 35(1)(d) of the Immigration and Refugee Protection Act, the listed individuals are inadmissible to Canada.
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 this specific proposal, public consultation would not have been appropriate, as publicizing the names of the listed persons targeted by sanctions would have likely resulted in asset flight prior to the coming into force of the Regulations.
Modern treaty obligations and Indigenous engagement and consultations
An initial assessment of the geographical scope of the initiative was conducted and did not identify any modern treaty obligations, as the Regulations do not take effect in a modern treaty area.
Instrument choice
Regulations are the sole method to enact sanctions in Canada. No other instrument could be considered.
Regulatory analysis
Benefits and costs
The application of sanctions will serve to put pressure on the Government of the People's Republic of China to change its behaviour. The sanctions communicate a clear message that Canada stands with the international community and its allies in condemning the gross and systematic human rights violations that continue to take place in the XUAR at the hands of the State with impunity. As efforts to date have not convinced the Government of the People's Republic of China to accept accountability for human rights violations, sanctions send an important message from Canada and encourage a shift in policy.
Canadian banks and financial institutions are required to comply with the sanctions. They will do so by adding the new prohibitions to their existing monitoring systems, which may result in a minor compliance cost.
As it is unlikely that Canadian businesses have dealings with the newly listed individuals and entity, no significant loss of opportunities for small businesses is expected as a result of the Regulations.
Small business lens
As it is unlikely that Canadian businesses have dealings with the newly listed individuals and entity, no significant loss of opportunities for small businesses is expected as a result of the Regulations.
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 Canada's sanctions. 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.
On January 12, 2021, in coordination with the United Kingdom, Canada announced that it is adopting a comprehensive approach to defending the rights of Uyghurs and other ethnic minorities, including by advancing measures on forced labour. Announced measures included the banning of imports produced, wholly or in part, using forced labour. The sanctions will complement the measures adopted on January 12.
One-for-one rule
The one-for-one rule does not apply to the Regulations, as they do not impose an incremental administrative burden on businesses.
Regulatory cooperation and alignment
While the Regulations are not related to a work plan or commitment under a formal regulatory cooperation forum, they align with actions taken by like-minded partners.
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 new Regulations focus on an entity in charge of implementing policies related to security matters in the XUAR, including the management of detention centres. They also focus on individuals who are Government Administrators in key Party leadership roles in the Political and Legal Affairs Committee of the XUAR, and who contribute to human rights violations in the XUAR, rather than on the PRC as whole. This results in minimizing collateral effects to those dependent on those individuals.
Women are a particular target of the Strike Hard Against Violent Terrorism Campaign and broader human rights violations in Xinjiang. There are credible testimonials of mass sterilization, sexual violence, and rape in detention camps.
Exemptions are included in the Regulations, including to allow for the delivery of humanitarian assistance to provide some mitigation of the impact of sanctions on vulnerable groups. As such, these new sanctions are likely to have limited impact on the citizens of the People's Republic of China.
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. In accordance with section 8 of the Special Economic Measures Act, every person who willfully contravenes the Special Economic Measures (People's Republic of China) 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.
Contact
Shawn Steil
Executive Director
Greater China Policy and Coordination Division
Email: Shawn.Steil@international.gc.ca
Telephone: 343‑203‑4707