Regulations Amending the Special Economic Measures (Belarus) Regulations: SOR/2023-71
Canada Gazette, Part II, Volume 157, Number 9
SOR/2023-71 April 5, 2023
SPECIAL ECONOMIC MEASURES ACT
P.C. 2023-326 April 5, 2023
Whereas the Governor in Council is of the opinion that the actions of the Republic of Belarus constitute 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, makes the annexed Regulations Amending the Special Economic Measures (Belarus) Regulations under subsections 4(1)footnote a, (1.1)footnote b, (2)footnote c and (3) of the Special Economic Measures Act footnote d.
Regulations Amending the Special Economic Measures (Belarus) Regulations
1 Paragraphs 3.1(a) to (c) of the Special Economic Measures (Belarus) Regulations footnote 1 are replaced by the following:
- (a) Belarus or an entity controlled by Belarus; or
- (b) a person acting on behalf of or at the direction of an entity referred to in paragraph (a).
2 Paragraphs 3.2(a) to (c) of the Regulations are replaced by the following:
- (a) Belarus or an entity controlled by Belarus; or
- (b) a person acting on behalf of or at the direction of an entity referred to in paragraph (a).
3 Part 2 of Schedule 1 to the Regulations is amended by adding the following in numerical order:
- 56 Priorbank JSC
- 57 Belvnesheconombank OJSC
- 58 BPS-Sberbank OJSC
- 59 VTB Bank (Belarus) JSC
- 60 Belorussian-Russian Belgazprombank Joint Stock Company
- 61 Statusbank JSC
- 62 Belarusbank JSC
- 63 National Bank of the Republic of Belarus
- 64 Belagroprombank JSC
Application Before Publication
4 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
5 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.)
Belarus is supporting the Russian Federation’s violation of the sovereignty and territorial integrity of Ukraine, and assisting in Russian sanctions evasion.
On August 9, 2020, the Republic of Belarus held presidential elections marred by widespread irregularities. Under the direction of incumbent President Alexander Lukashenko, the Government of Belarus led a systematic campaign of repression during the lead-up to the vote and through the conduct of the election itself, and used state-sponsored violence against the people of Belarus in an effort to suppress anti-government protests. Human Rights Watch, Amnesty International, the Office of the United Nations High Commissioner for Human Rights, Viasna Human Rights Centre, and the Organization for Security and Cooperation in Europe, all reported numerous human rights violations. Since then, numerous reputable human rights organizations, including Viasna Human Rights Centre, have been forced to close.
The Government of Belarus has continued to commit gross and systematic human rights violations since the 2020 presidential election. These include prolonged arbitrary detentions, brutality, intimidation, and the excessive use of force against peaceful protestors. Arbitrary arrests continue. In addition, there are undue restrictions on the rights to freedom of expression, peaceful assembly, and freedom of association. Human rights observers identified an escalation in the scale of repression against independent journalists in 2021, including arbitrary detention, the imposition of fines and prison sentences, loss of media credentials and police raids.
Canada has been strongly engaged in the situation in Belarus, directly with the Government of Belarus and with international partners, as well as in multilateral forums such as at the Organization for Security and Cooperation in Europe, Media Freedom Coalition, and Freedom Online Coalition and the International Accountability Platform for Belarus. The Governor in Council approved the Special Economic Measures (Belarus) Regulations (the Regulations) on September 28, 2020.
Since the middle of 2021, there has been a rapprochement between Belarus and Russia. Russia is providing diplomatic, financial, military, media and intelligence support to Belarus. On November 30, 2021, Lukashenko stated that Russia-occupied Crimea became legally a part of Russia in 2014, adding that he planned to visit the peninsula with Russian President Vladimir Putin. This marked a significant shift from earlier statements. Russia and Belarus held a joint military exercise from February 10 to 20, 2022. However, on February 20, 2022, Russia extended the joint military exercise with Belarus and announced that Russian troops would not leave Belarus. Belarus’s overall relationships with Ukraine, the United States, and the North Atlantic Treaty Organization (NATO) have also deteriorated, which has led to heightened tensions.
On February 24, 2022, President Putin announced a “special military operation” as Russian forces launched a full-scale invasion of Ukraine. The invasion began with targeted strikes on key Ukrainian military infrastructure and Russian forces advancing into Ukraine in the north from Russia and Belarus, the east from Russia and the so-called Luhansk People’s Republic (LNR) and Donetsk People’s Republic (DNR), and the south from Crimea. On February 27, 2022, the Lukashenko regime passed a fraudulent amendment to Belarus’s Constitution removing Article 18, which pledged to “make its territory a nuclear-free zone and a neutral state.” This move has paved the way for Belarus to host Russian nuclear weapons. Following the invasion, Belarusian forces were deployed to the border with Ukraine, but have yet to enter Ukraine itself.
The coalition of countries supporting Ukraine includes, but is not limited to, G7 and European countries and some of Ukraine’s neighbours. This group is working to support Ukraine across a number of areas, including energy security, nuclear safety, food security, humanitarian assistance, combatting Russian disinformation, sanctions and economic measures, asset seizure and forfeiture, military assistance, accountability, recovery, and reconstruction. Canada and G7 countries are engaged in intense diplomacy with the broader international community to encourage support for Ukraine and counter false Russian narratives. Key votes in multilateral forums have effectively isolated Russia, including resolutions in the United Nations General Assembly condemning Russian aggression against Ukraine (March 2022), deploring the humanitarian consequences of Russian aggression against Ukraine (March 2022), suspending Russian membership in the United Nations Human Rights Council (April 2022), and condemning Russia’s illegal annexation of Ukrainian territories (October 2022). Many developing countries have refrained from openly criticizing Russia or imposing penalties due to geopolitical considerations, commercial incentives, or simply fear of retaliation, with some also arguing the conflict is less of a priority for their regions. Canada is closely coordinating with allies. The United States, United Kingdom, European Union, and other allies have announced sanctions in response to the Russian military attack in Ukraine, including via Belarus.
Since February 2022, Canada has committed or delivered over $5 billion in assistance to Ukraine. This includes military aid, cyber defence and training to Ukrainian troops in the United Kingdom and Poland under the aegis of Operation UNIFIER. Economic resilience support includes new loan resources, a loan guarantee, and Ukraine Sovereignty Bonds. Canada is helping Ukraine repair its energy infrastructure and has temporarily removed trade tariffs on Ukrainian imports. Canada has also committed development and humanitarian assistance, and is countering disinformation through the G7 Rapid Response Mechanism. Canada is also providing security and stabilization programming, including support for civil rights organizations and human rights defenders. Canada announced two new immigration streams for Ukrainians coming to Canada: the temporary Canada-Ukraine Authorization for Emergency Travel and a special permanent residence stream for family reunification.
In coordination with its allies and partners, Canada has imposed sanctions on more than 1 800 individuals and entities in Russia, Belarus and Ukraine who are complicit in the violation of Ukraine’s sovereignty and territorial integrity. In addition, Canada implemented targeted restrictions against Russia and Belarus in financial, trade (goods and services), energy and transport sectors. Canada is part of the Oil Price Cap Coalition, which limits the provision of maritime services to Russian crude oil and petroleum products above a price set by the coalition. These amendments to the Regulations build upon Canada’s existing sanctions by further impeding Belarus’s dealings with Canada.
Conditions for imposing and lifting sanctions
Pursuant to the Special Economic Measures Act (SEMA), the Governor in Council may impose economic and other sanctions against foreign states, entities and individuals when, among other circumstances, a grave breach of international peace and security has occurred, resulting in a serious international crisis.
The duration of sanctions by Canada and like-minded partners has been explicitly linked to the peaceful resolution of the conflict, and the respect for Ukraine’s sovereignty and territorial integrity, within its internationally recognized borders, including Crimea, as well as Ukraine’s territorial sea. The United States, the United Kingdom, the European Union, and Australia continue to update their sanction regimes against individuals and entities in Russia, Belarus and Ukraine.
- 1. Increase macroeconomic pressure on Belarus for its support of Russia’s unprovoked and unjustifiable invasion of Ukraine.
- 2. Prevent sanctions evasion through the Belarusian banking and financial sector.
- 3. Increase the economic costs of the Belarus-Russia economic and political partnership.
- 4. Align with actions taken by international partners to underscore continued unity with Canada’s allies and partners in responding to Belarus’s support of Russia’s actions in Ukraine.
The Regulations Amending the Special Economic Measures (Belarus) Regulations (the amendments) add nine entities to Schedule 1 of the Regulations, thereby subjecting them to a broad dealings ban. These nine entities are recommended for listing under Schedule 1 in relation to the latest developments regarding Russia’s ongoing violations of Ukraine’s sovereignty and territorial integrity, in part through Belarus and with Belarusian support. The entities are all Russian and Belarusian-owned banks in Belarus not previously sanctioned by Canada.
The amendments make changes to the wording of sections 3.1 and 3.2 of the Regulations to provide greater legal clarity.
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. Global Affairs research also draws from analysis from pro-democracy movements inside and outside of Belarus.
With respect to the process of amending sanctions lists, public consultation would not be appropriate, given the risk of asset flight and the urgency to impose these measures in response to the ongoing breach of international peace and security in Ukraine.
Modern treaty obligations and Indigenous engagement and consultation
An initial assessment of the geographical scope of the amendments 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
Sanctions targeting specific entities 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 entities. It is likely that the newly listed entities 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 sanctions. They will do so by adding the newly listed entities to their existing monitoring systems, which may result in a minor compliance cost.
The amendments could create additional costs for businesses seeking permits that would authorize them to carry out specified activities or transactions that are otherwise prohibited.
Small business lens
Likewise, the amendments could create additional 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 small businesses have or will have dealings with the newly listed entities. No significant loss of opportunities for small businesses is expected as a result of the amendments.
The permitting process for businesses meets the definition of “administrative burden” in the Red Tape Reduction Act and would need to be calculated and offset within 24 months. However, the amendments address an emergency circumstance and are therefore exempt from the requirement to offset administrative burden and regulatory titles under the one-for-one rule.
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 Canada’s allies.
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 and entities in foreign states, sanctions under SEMA can nevertheless have an unintended impact on certain vulnerable groups and individuals. Rather than affecting Belarus as a whole, these targeted sanctions impact individuals and entities believed to be engaged in activities that directly or indirectly support, provide funding for or contribute to a violation of the sovereignty or territorial integrity of Ukraine. 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 and entities.
The amendments seek to impose direct economic costs on the Belarusian financial sector and signal Canada’s strong condemnation of Belarus’s involvement in Russia’s latest violations of Ukraine’s territorial integrity and sovereignty. The amendments are a direct response to the continued involvement of the Government of Belarus and its financial and banking sector in directly and indirectly contributing to the invasion of Ukraine. The amendments build on Canadian sanction actions taken in November 2022 that listed some Belarusian banks as Canada seeks to apply further macroeconomic pressure on Belarus.
Implementation, compliance and enforcement, and service standards
The amendments come into force on the day on which they are registered.
The names of the 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 SEMA, every person who knowingly contravenes or fails to comply with the 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 of 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.
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