Regulations Amending the Special Economic Measures (Russia) Regulations: SOR/2023-174
Canada Gazette, Part II, Volume 157, Number 17
Registration
SOR/2023-174 August 4, 2023
SPECIAL ECONOMIC MEASURES ACT
P.C. 2023-787 August 4, 2023
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 (Russia) 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 (Russia) Regulations
Amendment
1 Item 734 of Part 1 of Schedule 1 to the Special Economic Measures (Russia) Regulations footnote 1 is repealed.
Coming into Force
2 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
The amendments to the Special Economic Measures (Russia) Regulations (the Regulations) remove Igor Viktorovich Makarov from Schedule 1 of the Regulations, who no longer meets the nationality criteria to be listed under these Regulations.
Background
Following Russia’s illegal occupation and attempted annexation of Crimea in March 2014, the Canadian government, in tandem with partners and allies, enacted sanctions through the Regulations under the Special Economic Measures Act (SEMA). These sanctions impose dealings prohibitions (an effective asset freeze) on designated individuals and entities in Russia and Ukraine supporting or enabling Russia’s violation of Ukraine’s sovereignty. Any person in Canada and Canadians outside Canada are thereby prohibited from dealing in the property of, entering into transactions with, providing services to, or otherwise making goods available to listed persons.
On February 24, 2022, Russian President Putin announced a “special military operation” as Russian forces launched a full-scale invasion of Ukraine from Russian and Belarusian territory. The war has become a grinding war of attrition which sees little prospect of a quick victory for either side, and both continue to incur heavy losses. The Russian military has committed horrific atrocities against civilians, including in Izium, Bucha, Kharkiv and Mariupol. Experts, including the Organization for Security and Cooperation in Europe (OSCE) Moscow Mechanism fact-finding missions, the Independent International Commission of Inquiry on Ukraine and the United Nations (UN) Office of the High Commissioner for Human Rights (OHCHR), have concluded that Russia is committing serious human rights violations, war crimes, possible crimes against humanity, and conflict-related sexual violence. These studies have linked Russian external aggression with systematic repression and human rights abuses domestically. According to Ukraine’s State Emergency Department, 30% of Ukrainian territory (approximately the size of Austria) is mined. President Putin’s military invasion has been paired with significant malicious cyber operations and disinformation campaigns that falsely portray the West as the aggressor; and claim Ukraine is developing chemical, biological, radiological and/or nuclear weapons with North Atlantic Treaty Organization (NATO) support. The deterioration of Russia’s relations with Ukraine has paralleled the worsening of its relations with the United States and the NATO, which has led to heightened tensions.
International response
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, and 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 UN 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 UN Human Rights Council (April 2022) and condemning Russia’s illegal annexation of Ukrainian territories (October 2022). Russia continues to use its position as a permanent member of the UN Security Council (UNSC) to block UNSC action on its war on Ukraine and its corrosive disinformation policies.
Canada’s response
Since February 2022, Canada has committed or delivered over $8 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, since 2014 Canada has imposed sanctions on more than 2 600 individuals and entities in Russia, Belarus, Ukraine and Moldova 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 proposed amendments to the Regulations build upon Canada’s existing sanctions by further impeding Russian dealings with Canada. Canada seeks to align its measures with its partners, including the United States, the United Kingdom, the European Union, Australia, New Zealand, Japan and Ukraine.
Designated persons may apply to the Minister of Foreign Affairs to have their name removed from the Regulations. The Regulations define “designated person” as a person who is in Russia, or is a national of Russia who does not ordinarily reside in Canada.
Objective
To fairly respond to the evolving situation of designated individuals.
Description
The Regulations Amending the Special Economic Measures (Russia) Regulations (the amendments) remove one individual from Schedule 1 of the Regulations.
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 these amendments, public consultation would not have been appropriate.
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.
Instrument choice
Regulations are the sole method to remove persons subject to sanctions in Canada. No other instrument could be considered.
Regulatory analysis
Benefits and costs
The amendments are positive in nature to the individual who is no longer legally eligible to remain listed. There will be no direct costs to business or government as a result of the delisting. Any additional risks created by the delisting of the individual are outside of the scope of consideration given the legal application of the Regulations.
Small business lens
Analysis under the small business lens concluded that the amendment will impact small businesses. The delisting of the individual from Schedule 1 removes a small amount of administrative burden stemming from the authorization process to seek a permit to conduct business with the listed individual.
One-for-one rule
The one-for-one rule applies since there is an incremental decrease in administrative burden on business; however, the incremental reduction is not counted as burden since it was exempted from the requirement to be offset when the requirement was originally introduced. No regulatory titles are repealed or introduced.
Regulatory cooperation and alignment
The amendments are not related to a work plan or commitment under a formal regulatory cooperation forum.
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
Given the targeted nature of the amendments, no gender-based analysis plus (GBA+) impacts have been identified.
Rationale
Sanctions were enacted in response to the Russian invasion of Ukraine that began on February 24, 2022, which continues Russia’s blatant violation of Ukraine’s territorial integrity and sovereignty under international law. Sanctions target specific individuals and entities considered to be influential, or to have close ties to the Russian regime. In coordination with actions being taken by Canada’s allies, the sanctions seek to impose a direct economic cost on Russia and signal Canada’s strong condemnation of Russia’s latest violations of Ukraine’s territorial integrity and sovereignty, while implementing sanctions in a fair and responsive manner.
Igor Viktorovich Makarov was listed under the Regulations on April 19, 2022, based on evidence that he was a Russian national, and that he was an associate of senior officials of the Russian government. He has since provided confirmation that the renunciation of his Russian citizenship was finalized, and that he has not resided in Russia since 2013. Therefore, he no longer meets the nationality criteria for a “designated person” set out in the Regulations.
Implementation, compliance and enforcement, and service standards
The amendments come into force on the day they are registered.
The name of the individual will be removed from 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. In accordance with section 8 of 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 Canada Border Services Agency has enforcement authorities under SEMA and the Customs Act, and will play a role in the enforcement of these sanctions.
Contact
Sanctions Policy and Operations Division
Global Affairs Canada
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 343‑203‑3975 or 1‑833‑352‑0769
Email: sanctions@international.gc.ca