Regulations Amending the Regulations Implementing the United Nations Resolutions on Iran: SOR/2023-219
Canada Gazette, Part II, Volume 157, Number 23
SOR/2023-219 October 18, 2023
UNITED NATIONS ACT
P.C. 2023-1028 October 16, 2023
Whereas the Security Council of the United Nations, acting under Article 41 of the Charter of the United Nations, adopted Resolution 2231 (2015) on July 20, 2015;
And whereas it appears to the Governor in Council to be necessary to make regulations for enabling the measures set out in that resolution to be effectively applied;
Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of Foreign Affairs, makes the annexed Regulations Amending the Regulations Implementing the United Nations Resolutions on Iran under section 2 of the United Nations Act footnote a.
Regulations Amending the Regulations Implementing the United Nations Resolutions on Iran
1 Paragraphs 4(1)(d) to (g) of the Regulations Implementing the United Nations Resolutions on Iran footnote 1 are repealed.
2 Sections 5 and 6 of the Regulations are replaced by the following:
Canadian vessel or aircraft
6 It is prohibited for any owner or master of a Canadian vessel, as defined in section 2 of the Canada Shipping Act, 2001, any operator of an aircraft registered in Canada, or any Canadian owner or master of a vessel or Canadian operator of an aircraft to carry, cause to be carried or permit to be carried any of the products referred to in section 4, wherever situated, destined for Iran, for any person in Iran or for any person acting on behalf of or at the direction of Iran or any person in Iran.
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 October 18, 2023, but if they are registered after that day, they come into force on the day on which they are registered.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the regulations.)
Iran continues to threaten international peace and security through the advancement of its nuclear program.
Between 2006 and 2010, Canada implemented into domestic law several rounds of United Nations (UN) sanctions against Iran in response to its nuclear program. In July 2010, Canada imposed additional sanctions against Iran, in consultation with the United States (U.S.), the European Union (EU) and other like-minded partners, through the Special Economic Measures (Iran) Regulations (SEMA Iran Regulations) under the Special Economic Measures Act (SEMA). The sanctions were based on Canada’s view that Iran’s actions amounted to a grave breach of international peace and security that resulted or was likely to result in a serious international crisis.
Additional SEMA sanctions against Iran were implemented through amendments made between 2011 and 2013. On July 14, 2015, the five permanent members of the UN Security Council (China, France, Russia, the United Kingdom and the U.S.) plus Germany, led by the EU, concluded an agreement with Iran regarding its nuclear program called the Joint Comprehensive Plan of Action (JCPOA).
In 2015, the implementation of key milestones in the JCPOA triggered immediate changes to sanctions imposed by the UN, the U.S. and the EU against Iran, resulting in significant sanctions relief for Iran.
United Nations Security Council Resolution (UNSCR) 2231, adopted on July 20, 2015, endorses the JCPOA. Canada currently implements provisions under UNSCR 2231 through the Regulations Implementing the United Nations Resolutions on Iran (United Nations Act [UNA] Iran Regulations) and include, among other things, sanctions against specific individuals and entities related to Iran’s nuclear program and trade prohibitions on the export of items controlled under the Missile Technology Control Regime and nuclear-related products. These measures also impose a dealings prohibition on listed individuals and entities, effectively freezing their assets in Canada and rendering listed individuals inadmissible to Canada under the Immigration and Refugee Protection Act (IRPA).
In 2016, Canada amended its sanctions against Iran under SEMA to recognize progress made under the JCPOA but continued to have serious concerns about Iran’s nuclear ambitions. Consequently, Canada maintained tight restrictions on sensitive goods related to nuclear proliferation and the development of Iran’s ballistic missile program.
On October 18, 2023, some of the provisions under UNSCR 2231 are scheduled to expire. This will result in the lifting of some sanctions and prohibitions related to Iran’s nuclear program in Canada. It is necessary to maintain the sanctions and prohibitions impacted by the expiration in order to address ongoing concerns about Iran’s nuclear and ballistic missile programs. These sanctions will be maintained by transferring expired UNSCR 2231 provisions to Canada’s autonomous regulations. This will comprise two sets of regulatory amendments: (a) amendments to the UNA Iran Regulations to repeal expired UNSCR 2231 provisions; and (b) amendments to the SEMA Iran Regulations to add these same provisions. Maintaining these provisions will serve to continue to place pressure on the Iranian regime to urgently comply with legal obligations regarding its nuclear program and to halt its proliferation activities. The regulatory amendments align with existing policy and objectives and reinforce Canada’s steadfast commitment to holding Iran to account for its actions at home and abroad.
Canadian-Iranian bilateral relations are governed by a controlled engagement policy and are limited to a small set of issues, including consular matters (i.e. the downing of Flight PS752), human rights, Iran’s nuclear program and regional security.
This amendment to the SEMA Iran Regulations intends to mirror UNSCR 2231 provisions that are currently implemented in Canada under the UNA Iran Regulations, and that will expire on October 18, 2023. This will entail a repeal of sections of the UNA Iran Regulations pertaining to expired sections of United Nations Security Council Resolution 2231, which will then be directly added to the SEMA Iran Regulations. The amendments aim to contribute to international efforts by like-minded countries to limit Iran’s efforts to build its nuclear program and delivery systems.
Eighteen individuals and 56 entities will be added to the SEMA Iran Regulations, and will be subject to an asset freeze. These amendments also add the following restrictions previously found under the UNA Iran Regulations:
- prohibitions on the export to Iran of
- items, material, equipment, goods and technology related to goods listed in the Missile Technology Control Regime (2015/254);
- battle tanks, armoured combat vehicles, large calibre artillery systems, combat aircraft, attack helicopters, warships, missiles or missile systems, as defined in the United Nations Registry of Conventional Weapons;
- a prohibition on the provision to any person in Iran of technical assistance, financial or related services related to the supply, sale, transfer, manufacture or use of the products subject to the export prohibitions;
- a prohibition on making available to any person in Iran any property, financial assistance or investment, related to the supply, sale, transfer, manufacture or use of the products subject to the export prohibitions;
- a prohibition on providing any technology to Iran in respect of any activity related to ballistic missiles capable of delivering nuclear weapons; and
- a prohibition on the acquisition and import from Iran of arms and related material;
It has been confirmed that the recommended individuals and entities are still engaged in activities that directly or indirectly facilitate, support, provide funding for, contribute to, or could contribute to, Iran’s proliferation-sensitive nuclear activities, or to Iran’s activities related to the development of chemical, biological or nuclear weapons of mass destruction or delivery systems for such weapons, in addition to former or current senior officials of the Islamic Revolutionary Guard Corps and affiliated entities that have facilitated the Iranian regime’s destabilizing regional military operations.
Any individual or entity in Canada, and Canadians and Canadian entities 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 and entities.
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 the amendments, public consultation would not have been appropriate on the urgency to impose these measures in response to Iran’s ongoing breach of international peace and security and its proliferation-sensitive nuclear activities. The amendments will enter into force on October 18, 2023, in order to transfer provisions currently captured under UNSCR 2231 immediately after their expiration.
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
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 Canadians outside 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 individuals to their existing monitoring systems, which may result in a minor compliance cost.
Small business lens
While possible, it is unlikely the amendments would create additional costs for small businesses seeking permits that would authorize them to carry out specified activities or transactions that are otherwise prohibited, as Canada has applied comprehensive sanctions against Iran for several years. The combination of Canadian, UN and U.S. sanctions severely limit trade and there is no active trade promotion, reducing the likelihood of costs for businesses. No significant loss of opportunities for small businesses is expected as a result of the SEMA Iran Regulations.
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 initiative addresses an emergency circumstance and is 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 close 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 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 the SEMA can nevertheless have an unintended impact on certain vulnerable groups and individuals. Rather than affecting Iran as a whole, these targeted sanctions impact individuals and entities believed to be engaged in activities that present an ongoing breach of international peace and security and contribute to Iran’s nuclear program. 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 the specific individuals and entities.
In its actions abroad, Iran is challenging the rule-based international system through deliberate policies to support paramilitary non-state actors aligned with Iran throughout the Middle East. Iran routinely targets and threatens Canada’s partners in the region, such as Israel and several Gulf States. Iran continues to develop and employ new threats to regional and international security, including malicious cyber activities and the transfer of advanced weapon-capable unmanned aerial vehicle (UAVs) systems. Iran also engages in weapon proliferation activities in support of Russia’s illegal invasion of Ukraine, having transferred hundreds of Iranian-made combat UAVs to Russia for use in the war against Ukraine, and providing training to Russian personnel on their use.
Iran continues to disregard the conditions agreed upon in the JCPOA and is not complying with International Atomic Energy Agency’s (IAEA) verification and monitoring. Iran’s stockpile of enriched uranium remains beyond the JCPOA limits and, in recent months, its stockpile of high-enriched uranium has increased. According to the IAEA and other like-minded countries, Iran maintains a significant latent capacity to further expand its uranium enrichment capacities. In recent months, Iran has taken several measures to block IAEA monitoring and verification. This includes by de-designating experienced IAEA inspectors and blocking IAEA access to data from surveillance cameras set up at key nuclear sites. In the absence of Iranian adherence to its obligations under the JCPOA and its lack of cooperation with the IAEA, Canada must maintain sanctions on Iranian nuclear equipment and materials in order to ensure adequate safeguards to limit Iranian nuclear capabilities. Canada will continue to use all diplomatic tools at its disposal to respond to the Iranian regime’s activities that directly or indirectly contribute to or could contribute to its nuclear program, its actions that threaten international peace and stability, and Iran’s human rights violations. These amendments will bring Canada into closer alignment with measures imposed against Iran by like-minded countries, with whom Canada remains in lockstep. These measures will maintain a dealings prohibition on the listed persons, effectively freezing their assets in Canada and rendering listed individuals inadmissible to Canada under the Immigration and Refugee Protection Act (IRPA). This contributes to Canada’s objective to continue to impose costs upon Iran for its behaviour and to maintain pressure on the regime by denying it economic and diplomatic opportunities.
Implementation, compliance and enforcement, and service standards
The amendments come into force no earlier than October 18, 2023.
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 SEMA Iran Regulations.
Canada’s sanctions regulations are enforced by the Royal Canadian Mounted Police. In accordance with section 8 of SEMA, every person who knowingly contravenes or fails to comply with the SEMA Iran 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 the SEMA and the Customs Act and will play a role in the enforcement of these sanctions.
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