Special Economic Measures (Sri Lanka) Regulations: SOR/2023-2

Canada Gazette, Part II, Volume 157, Number 2

Registration
SOR/2023-2 January 6, 2023

SPECIAL ECONOMIC MEASURES ACT

P.C. 2023-3 January 5, 2023

Whereas the Governor in Council is of the opinion that gross and systematic human rights violations have been committed in Sri Lanka;

Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of Foreign Affairs, makes the annexed Special Economic Measures (Sri Lanka) Regulations under subsections 4(1)^{footnote a}, (1.1)^{footnote b}, (2)^{footnote c} and (3) of the Special Economic Measures Act ^{footnote d}.

Special Economic Measures (Sri Lanka) Regulations

Definitions

Definitions

1 The following definitions apply in these Regulations.

Minister

means the Minister of Foreign Affairs. (ministre)

Sri Lanka

means the Democratic Socialist Republic of Sri Lanka and includes

• (a) any of its political subdivisions;
• (b) its government, any of its departments and any government and department of its political subdivisions; and
• (c) any of its agencies and any agency of its political subdivisions. (Sri Lanka)

List

Listed person

2 A person whose name is listed in the schedule is a person who is in Sri Lanka, or is a national of Sri Lanka 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 Sri Lanka;
• (b) a current or former senior official of the Government of Sri Lanka;
• (c) an associate of a person referred to in paragraph (a) or (b);
• (d) a family member of a person referred to in any of paragraphs (a) to (c) and (g);
• (e) an entity owned — or held or controlled, directly or indirectly — by a person referred to in any of paragraphs (a) to (d);
• (f) an entity owned — or held or controlled, directly or indirectly — by Sri Lanka; or
• (g) a senior official of an entity referred to in paragraph (e) or (f).

Prohibitions

Prohibited dealings and activities

3 It is prohibited for any person in Canada and any Canadian outside Canada to

• (a) deal in any property, wherever situated, that is owned — or that is held or controlled, directly or indirectly — by 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 that the listed person entered into before they 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 transaction 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 that listed person before they 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 necessary 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 necessary 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 necessary 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 Sri Lanka.

Assisting in prohibited activity

5 It is prohibited for any person in Canada and 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 — or that is held or controlled, directly or indirectly — by a listed person:

• (a) banks regulated by the Bank Act and, in respect of their business in Canada, authorized foreign banks as defined in section 2 of 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

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 — or that is held or controlled, directly or indirectly — by 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

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 the removal to the Governor in Council.

New application

9 If there has been a material change in circumstances since the last application was submitted, a listed 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 the determination.

Application Before Publication

Application

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

Registration

12 These Regulations come into force on the day on which they are registered.

SCHEDULE

(Section 2 and subsection 8(1))

Persons

• 1 Sunil RATNAYAKE
• 2 Chandana Prasad HETTIARACHCHI (also known among other names as Navy Sampath)

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations or the Order.)

Issues

Since October 2019, Sri Lanka has experienced a rapid erosion of democracy, including impunity for state officials, and political obstruction of justice for human rights abuses committed during Sri Lanka’s conflict. This jeopardizes the safeguarding of fundamental human rights, progress on justice for affected populations, and prospects for peace and reconciliation. Despite continued calls from Canada and other like-minded countries to address post-conflict accountability, the Government of Sri Lanka (GoSL) has taken limited concrete action to end impunity and uphold its human rights obligations.

The GoSL has continued to obstruct ongoing investigations and criminal trials for past crimes. In January 2020, a commission was appointed to investigate allegations of “political victimization” of public officials and members of the armed forces. The commission has since intervened in police investigations and court proceedings, and undermined authorities in several high-profile cases. Due to this political interference, numerous current and former state officials credibly implicated in war crimes have had charges against them arbitrarily dropped or convictions overturned/commuted.

Background

In 1983, long-standing ethnic tensions in Sri Lanka between the Sinhalese majority and Tamil minority escalated into a brutal civil war. There were substantial governance concerns during this period, including the repression of dissent, enforced disappearances, widespread corruption, and dwindling space for civil society. The 26-year conflict between government forces and the Liberation Tigers of Tamil Eelam (LTTE), a terrorist organization listed by Canada in 2006, came to an end in 2009. The final defeat of the LTTE by the Sri Lankan Government was fraught with a number of serious alleged human rights abuses by both parties to the conflict, for which there has yet to be accountability despite repeated calls from the international community, including the United Nations Human Rights Council (UNHRC). The United Nations High Commissioner for Human Rights and the international community, including Canada, have consistently advocated for the protection of fundamental human rights and an end to impunity, but the GoSL continues to provide impunity to human rights abuses and fails to uphold the rule of law.

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 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.

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.

The Special Economic Measures (Sri Lanka) Permit Authorization Order was also made to authorize the Minister of Foreign Affairs to issue to any individual or entity in Canada and any Canadian outside Canada a permit to carry out a specified activity or transaction, or any class of activity or transaction that is otherwise restricted or prohibited pursuant to the Regulations.

Objective

• Exert pressure on the GoSL to end impunity and uphold its human rights obligations, including by undertaking a comprehensive accountability process for human rights abuses and violations.
• Communicate a clear message to Sri Lanka that Canada will not accept the continued political obstruction of justice for human rights violations in Sri Lanka.
• Raise the costs, reputational and real, to these specifically identified individuals and to the GoSL of continuing their political obstruction of justice for human rights violations in Sri Lanka.

Description

The Schedule to the Special Economic Measures (Sri Lanka) Regulations lists two individuals.

A separate Order, the Special Economic Measures (Sri Lanka) Permit Authorization Order, made pursuant to subsection 4(4) of the Special Economic Measures Act (SEMA), authorizes the Minister of Foreign Affairs to issue to any person in Canada and any Canadian outside Canada a permit to carry out a specified activity or transaction, or any class of activity or transaction, with a designated person that is otherwise restricted or prohibited pursuant to the Regulations.

Regulatory development

Consultation

Global Affairs Canada engages regularly with relevant stakeholders, including civil society organizations, cultural communities and other like-minded governments, regarding Canada’s approach to sanctions implementation.

With respect to this specific proposal, public consultation, including prepublication 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 consultation

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

Application of sanctions will send a signal to the GoSL that Canada will not accept the continued violations of human rights and impunity in Sri Lanka.

Sanctions targeting specific persons have less impact on Canadian businesses than traditional broad-based economic sanctions, and have limited impact on the citizens of the country of the listed persons. It is likely that the newly listed individuals have limited linkages with Canada, and therefore do not have business dealings that are significant to the Canadian economy.

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 Regulations could 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 listed individuals.

Small business lens

Regulations potentially create additional administrative costs for small 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 individuals. 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 conducts 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.

One-for-one rule

While there is potential for permit requests, it is unlikely that Canadian businesses have dealings with the listed individuals and, therefore, there is no expected burden under the one for one rule.

Regulatory cooperation and alignment

The Regulations are not related to a work plan or commitment under a formal regulatory cooperation forum, and Canada would be moving forward with sanctions unilaterally. However, the proposed list includes individuals that are currently ineligible for entry into the United States.

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 subject of economic sanctions has previously been assessed for effects on gender and diversity. Although intended to facilitate a change in behaviour through economic pressure on individuals in foreign states, sanctions under the Special Economic Measures Act can nevertheless have an unintended impact on certain vulnerable groups and individuals. Rather than affecting Sri Lanka as a whole, these targeted sanctions impact individuals believed to be engaged in activities that obstruct justice for human rights violations in Sri Lanka. Therefore, these sanctions are unlikely to have a significant impact on vulnerable groups as compared to traditional broad-based economic sanctions directed toward a state, and limit the collateral effects to those dependent on those targeted individuals.

The focus of the listings is on two individuals who were state officials in Sri Lanka at the time of their crimes. This results in minimizing collateral effects to those dependent on those individuals.

These new sanctions are unlikely to impact the citizens of Sri Lanka.

Rationale

The human rights situation in Sri Lanka continues to deteriorate. Despite continued calls from Canada and like-minded countries, the GoSL’s action to address post-conflict accountability and uphold its international human rights obligations has been limited.

Implementing additional escalation measures in the form of sanctions sends a clear message to the GoSL that Canada will not accept the continued violations of human rights and impunity in Sri Lanka.

Implementation, compliance and enforcement, and service standards

The Regulations and the Order come into force on the day on which they are registered.

The names of the listed individuals and entities will be available online for financial institutions to review, and will be added to the Consolidated Canadian Autonomous Sanctions List. This will help to facilitate compliance with the Regulations.

Canada’s sanctions regulations are enforced by the Royal Canadian Mounted Police and the Canada Border Services Agency (CBSA). In accordance with section 8 of the Special Economic Measures Act, every person who knowingly contravenes or fails to comply with the Special Economic Measures (Sri Lanka) 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.

The CBSA has enforcement authorities under SEMA and the Customs Act, and will play a role in the enforcement of these sanctions.

Contact

Gillian Frost
Executive Director
India, Bangladesh, Sri Lanka, Bhutan, Maldives and Nepal Division

Global Affairs Canada
Telephone: 343‑203‑3407
Email: Gillian.frost@international.gc.ca