Regulations Amending the Special Economic Measures (Burma) Regulations: SOR/2021-237
Canada Gazette, Part II, Volume 155, Number 26
SOR/2021-237 December 9, 2021
SPECIAL ECONOMIC MEASURES ACT
P.C. 2021-1011 December 9, 2021
Whereas the Governor in Council is of the opinion that the situation in Burma constitutes a grave breach of international peace and security that has resulted 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 b, (2) and (3) of the Special Economic Measures Act footnote c, makes the annexed Regulations Amending the Special Economic Measures (Burma) Regulations.
Regulations Amending the Special Economic Measures (Burma) Regulations
1 Paragraph 18(b) of the Special Economic Measures (Burma) Regulations footnote 1 is replaced by the following:
- (b) any payment made by or on behalf of a designated person that is due under a contract that the designated person entered into before they became a designated person, provided that the payment is not made to a designated person or to a person acting on behalf of a designated person;
2 Part 1 of the schedule to the Regulations is amended by adding the following after item 54:
- 55 Myanmar War Veterans Organization
- 56 Ministry of Defence Quartermaster General Office
- 57 Myanmar Directorate of Defence Industries
- 58 Myanmar Directorate of Procurement (also known among other names as Directorate of Procurement, Directorate of Defence Procurement and Directorate of Procurement of the Commander-in-Chief of Defence Services (Army))
Application Before Publication
3 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
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.)
On February 1, 2021, under the direction of Senior General Min Aung Hlaing, Commander in Chief of the Myanmar Armed Forces (Tatmadaw), the Myanmar military initiated a military coup against the democratically elected National League for Democracy (NLD) government.
Despite condemnation by the international community, repeated calls to halt violence, and efforts led by the Association of South East Asian Nations (ASEAN) to engage the regime in inclusive dialogues toward peace, the Tatmadaw have not altered the course. Violence is in fact escalating while alleged gross human rights abuses are steadily rising. The situation constitutes an ongoing grave breach of international peace and security and worsening serious domestic, regional and international crisis. Escalating violence, severe human rights violations, humanitarian impacts on the most vulnerable, spillover into neighbouring countries hosting those fleeing violence, and the lack of tangible movement toward peace merit further coercive action.
Following the coup launched in February 2021, the Tatmadaw moved quickly to imprison the civilian political leadership from the NLD, effectively removing them from the national political scene, as well as pro-democracy activists, civil society, journalists, and human rights defenders. Popular resistance emerged almost immediately, including mass national protests and a Civil Disobedience Movement (CDM), both of which prevented the Tatmadaw from consolidating power. The Tatmadaw and other security forces ruthlessly crushed the protests using intentional and disproportionate lethal force; this is documented extensively on publicly available video, including live use of automatic weapons, sniper rifles and explosives on protesters.
While protests have waned in the months since the coup, armed opposition against the Tatmadaw has organized and proliferated throughout most of the country. Civilian militia groups, known as the People’s Defense Forces (PDFs) have been formed locally and now number in the hundreds. These groups are waging a guerilla warfare campaign, carrying out targeted assassinations and bombings of Tatmadaw-linked civilian officials and infrastructure. Ethnic Armed Organizations (EAOs) who have been battling the Tatmadaw for years continue to fight. Disparate political opposition has formed around a National Unity Government (NUG) which is seeking international recognition. The NUG political opposition is increasingly shifting toward armed opposition as they seek to form a command and control structure to coordinate the hundreds of PDFs and field their own armed forces.
Overlaying all of this, the Tatmadaw is continuing systematic violence against the civilian population, including arbitrary arrests, torture, and killing detailed vividly in the United Nations (UN) Special Rapporteur’s August 2021 report on violence in Myanmar. The outgoing UN Secretary General’s Special Envoy to Myanmar, Christine Schraner Burgener, asserted in October 2021 the situation in Myanmar had descended into a state of civil war. As of mid-November, violence associated with the coup has seen over 1 300 civilians killed by the regime, more than 9 000 civilians arbitrarily detained (7 400 of whom remain in custody without charges). More than 189 000 people have been internally displaced while another 20 000 refugees have been pushed into neighbouring countries. In sum, the situation in Myanmar constitutes an ongoing grave breach of international peace and security and a worsening serious international crisis.
Canada has supported international efforts at re-establishing peace led by ASEAN, including the ASEAN Leader’s Meeting Five-Point Consensus, a roadmap to peaceful resolution in Myanmar. Implementation has been slow, aggravated by intransigence and delay by Tatmadaw officials. The ASEAN Chair’s Special Envoy to Myanmar is tasked with leading inclusive dialogue with all parties toward peace; however, these efforts have been effectively blocked by the regime. On October 15, 2021, Canada and allies issued a public statement reaffirming support to ASEAN and the work of the Special Envoy, calling on the regime to genuinely engage and move toward peace. On the same day, ASEAN Foreign Ministers convened an emergency meeting and agreed to downgrade Myanmar’s representation in upcoming ASEAN high-level summit meetings and beyond. This was an unprecedented step by the consensus-based regional bloc and effectively censors the Tatmadaw.
Despite all efforts, the regime remains unmoved, violence continues and is escalating throughout the country. The coup is having a destabilizing effect on peace and security in the entire region. Compounded by an increase in fighting between the Tatmadaw and EAOs along Myanmar’s borders, the coup is producing a spillover effect across Myanmar’s borders, with nearly 20 000 people seeking refuge in neighbouring countries. Prospects for the voluntary, safe, dignified and sustainable return of Rohingya refugees are even more uncertain as a result given the Tatmadaw’s violent persecution of the Rohingya in 2017. The military coup also threatens regional peace and security with regard to organized crime, drug trafficking and other illicit industries. The Tatmadaw has long been complicit in Myanmar’s illegal drug, timber, gems and jade mining economies, which attract organized criminal syndicates and incentivize corruption region-wide. In the absence of any semblance of domestic oversight or accountability in Myanmar, these industries, and associated corruption they generate, are growing to new heights. The situation constitutes a clear ongoing grave breach of international peace and security and worsening serious international crisis. Escalating violence, severe human rights violations, humanitarian impacts on the most vulnerable, spillover into neighbouring countries hosting those fleeing violence, and the lack of tangible movement toward peace merit further coercive action.
Canada has taken a multipronged response to the crisis in Myanmar. Canada has refused to legitimize the regime or engage with regime government officials, except on specific topics in an ASEAN context or where it is critical to the delivery of essential services to vulnerable populations. Canada has pushed for international condemnation, action and attention, calling on the regime to halt violence, release those arbitrarily detained, engage genuinely with ASEAN, and permit full and unrestricted humanitarian access. This is supplemented by the pressure of two rounds of coordinated sanctions with our allies and parallel support to accountability efforts for past and ongoing crimes through international justice mechanisms, and humanitarian support and development programming to support vulnerable and conflict-affected populations. Canada has engaged through various bilateral and multilateral fora to develop and maintain pressure and attention on the crisis, while working to maintain development programming to provide life-saving care and treatment to vulnerable populations, including COVID-19 response. With sustained, concerted and coordinated pressure, combined with efforts to incentivize cooperation, the aim is for the regime to reverse course, engage with international peace efforts, and ultimately return to peace, democracy, prosperity and stability — ultimately addressing the grave breach of international peace the situation represents, and resulting serious international crisis. Canada is committed to coordination and solidarity with key allies to better achieve these objectives.
Canada has been strongly engaged in diplomatic efforts related to the situation in Myanmar, through bilateral and multilateral channels to coordinate actions. On February 18, 2021, Canadian sanctions against 9 individuals responsible for the coup were announced and followed by a subsequent announcement on May 17, 2021, against 16 individuals and 9 entities. Both rounds were developed and imposed in coordination with the United Kingdom and the United States.
Since 2007, Canada has maintained sanctions on Myanmar individuals and entities under the Special Economic Measures (Burma) Regulations (the Regulations).
The Regulations prohibit persons (individuals and entities) in Canada and Canadians outside Canada from conducting the following activities with listed persons:
- (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 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; and
- (e) provide any financial or related services to or for the benefit of a listed person.
- To put additional pressure on the Tatmadaw to change its behaviour, including to immediately and genuinely engage with ASEAN-led peace efforts, immediately halting violence, initiating inclusive peace dialogues, and granting unrestricted humanitarian access.
- To communicate a clear message to the Tatmadaw, and those who support the Tatmadaw regime, that Canada will not accept that actions constituting a grave breach of international peace and security, resulting in a serious international crisis, are taking place with impunity and total disregard for the will and democratic rights of the people of Myanmar.
- To align with actions taken by international partners.
The Regulations Amending the Special Economic Measures (Burma) Regulations (the amendments) add four entities linked to the regime to the Schedule of the Regulations.
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 amendments, 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 amendments.
Modern treaty obligations and Indigenous engagement and consultation
An initial assessment of the geographical scope of the initiative was conducted and did not identify any modern treaty obligations, as the amendments do not take effect in a modern treaty area.
Regulations are the sole method to enact sanctions in Canada. No other instrument could be considered.
Benefits and costs
Application of sanctions will serve to put pressure on the Tatmadaw to change its behaviour, and demonstrate Canada’s readiness to impose real costs on those working to obstruct or undermine international efforts to resolve the crisis in Myanmar. This will further demonstrate that those who support the Tatmadaw regime will face consequences. The sanctions communicate a clear message that Canada will not accept that actions constituting a grave breach of international peace and security resulting in a serious international crisis continue to take place in Myanmar at the hands of the military with impunity. As efforts to date have not convinced the Tatmadaw to accept accountability for their actions, additional sanctions send an important message from Canada and incentivize the Tatmadaw to change its behaviour.
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.
The amendments will create additional costs for 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 dealings with the newly listed persons.
Small business lens
As it is unlikely that Canadian businesses have dealings in these sectors, no significant loss of opportunities for small businesses is expected as a result of the amendments. 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, on April 9, 2021, Canada issued a business advisory in order to help ensure Canadian companies, including small businesses, are aware of heightened commercial and reputational risks of doing business in Myanmar. The advisory also outlined the Government of Canada’s expectations with respect to responsible business practices abroad, and recommended that Canadian companies undertake thoroughly responsible business conduct due diligence, including closely examining their supply chains to determine whether their activities support military-owned conglomerates or their affiliates.
The one-for-one rule does not apply to the amendments, as they do not impose an incremental administrative burden on businesses.
Regulatory cooperation and alignment
While the amendments 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 amendments 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 focus of the amendments is on specific entities with close links to the Myanmar military, rather than on Myanmar as a whole. This results in minimizing collateral effects to those dependent on those entities.
Exemptions are included in the Regulations, including, among others, to allow for the delivery of humanitarian assistance to provide some mitigation of the impact of sanctions on vulnerable groups. The Minister of Foreign Affairs can also issue permits pursuant to the Order. As such, these new sanctions are likely to have limited impact on the citizens of Myanmar.
Implementation, compliance and enforcement, and service standards
Canada’s sanction 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 (Burma) 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.
Southeast Asia, Division II,
Southeast Asia, Oceania, APEC and ASEAN Bureau Email: firstname.lastname@example.org