Regulations Amending the Special Economic Measures (Ukraine) Regulations: SOR/2024-113

Canada Gazette, Part II, Volume 158, Number 13

Registration
SOR/2024-113 May 31, 2024

SPECIAL ECONOMIC MEASURES ACT

P.C. 2024-624 May 31, 2024

Whereas the Governor in Council is of the opinion that the situation in Ukraine constitutes a grave breach of international peace and security that has resulted 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 (Ukraine) Regulations under paragraph 4(1)(a)footnote a and subsections 4(1.1)footnote b, (2)footnote c and (3) of the Special Economic Measures Act footnote d.

Regulations Amending the Special Economic Measures (Ukraine) Regulations

Amendment

1 Part 1 of the schedule to the Special Economic Measures (Ukraine) Regulations footnote 1 is amended by adding the following in numerical order:

Application Before Publication

2 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

3 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

Senior members of the regime of former Ukrainian President Viktor Yanukovych, their associates, and family members have engaged in activities that directly or indirectly facilitate, support, provide funding for, or contribute to the violation of the sovereignty and territorial integrity of Ukraine in the context of Russia’s ongoing war of aggression against Ukraine.

Background

In November 2013, due to direct pressure by Russia and its President Vladimir Putin, then Ukrainian President Viktor Yanukovych refused to sign a landmark association agreement between Ukraine and the European Union. Yanukovych’s decision set off major protests in Kyiv, known as the Euromaidan and the Revolution of Dignity. This led to the fall of the Yanukovych government.

As a pro-Russian president, Yanukovych left a legacy of shrinking democracy, deep corruption, and closer integration with Russia. After his removal, reports surfaced that Yanukovych intentionally weakened the Armed Forces of Ukraine and other security bodies while in office. Among other things, he turned a blind eye to the activity of Russian agents working in Ukraine, disarmed Ukrainian counter-intelligence capacities, and signed unprofitable defence contracts with Russia. The Yanukovych administration was warned as early as 2013 of Russian plans to invade Ukraine but no action was taken. In 2014, Russia took advantage of the corruption, turmoil and protests. Russian soldiers appeared in Ukraine, taking full control of the Crimean peninsula and encouraging separatist forces in Luhansk and Donetsk.

Both the actions and inaction of the Yanukovych administration weakened any deterrence Ukraine might have presented to Russia and paved the way for Russia’s illegal invasion in 2022 and present occupation of Ukraine. Following the events of the Euromaidan protests and the Revolution of Dignity (Maidan) and Russia’s invasion in 2014, members of former President Viktor Yanukovych’s government and their family members took refuge abroad – including in Russia – to avoid prosecution in Ukraine for undermining Ukrainian sovereignty and territorial integrity, corruption, and human rights abuses.

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, which continues in May 2024. Heavy fighting persists in eastern and southern Ukraine. As part of its military strategy, Russia continues to fire missiles and kamikaze drone attacks on essential civilian infrastructure. As of February 2024, the UN Human Rights Monitoring Mission in Ukraine has confirmed at least 10 000 civilians have been killed and 20 000 injured since February 24, 2022. Furthermore, 444 medical facilities and 1 055 educational facilities in Ukraine have been damaged or destroyed by Russia’s military since the invasion.

International response

The coalition of countries supporting Ukraine against Russia’s illegal invasion includes, but is not limited to, the G7, the European Union and several European countries neighbouring Ukraine, Australia, Japan, the Republic of Korea and New Zealand. 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 diplomatically 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 (UNGA) 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 (HRC) (April 2022), condemning Russia’s illegal annexation of Ukrainian territories (October 2022), on the Principles of the Charter of the United Nations underlying a comprehensive, just and lasting peace in Ukraine (February 2023), and the HRC resolution on the Situation of Human Rights in Ukraine stemming from the Russian aggression (April 2023). Like-minded partners have also sanctioned a number of these individuals, as well as others engaged in attempts to violate Ukraine’s sovereignty and territorial integrity.

Canada’s response

Following Russia’s illegal occupation and attempted annexation of Crimea in March 2014, the Canadian government, in tandem with partners and allies, imposed sanctions through the Special Economic Measures (Ukraine) Regulations (the Ukraine Regulations) under the Special Economic Measures Act (SEMA). These sanctions impose dealings prohibitions (an effective asset freeze) on designated individuals and entities in 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. In coordination with its international partners, Canada has imposed sanctions on more than 3 000 individuals and entities in Russia, Belarus, Ukraine and Moldova who are complicit in the violation of Ukraine’s and Moldova’s sovereignty and territorial integrity and human rights abuses. This includes former Ukrainian President Yanukovych.

In 2014, senior members of the regime of former Ukrainian President Viktor Yanukovych, their associates, and family members were listed at the request of Ukraine as politically exposed foreign persons under Canada’s Freezing Assets of Corrupt Foreign Officials (Ukraine) Regulations (SOR/2014-44) pursuant to the Freezing Assets of Corrupt Foreign Officials Act (FACFOA). This asset freeze was extended for an additional five-year period in 2019. To continue providing support to Ukraine, Canada is now listing some of these individuals under the SEMA given their contributions in relation to Russia’s violation of Ukraine’s sovereignty and territorial integrity and illegal occupation of Crimea.

Objective

  1. Provide strategic support to Ukraine and its reform efforts by targeting individuals who contributed to and benefited from the activities of the administration of Viktor Yanukovych, facilitating Russia’s invasion of Ukraine;
  2. Impose further costs on so-called authorities in areas of Ukraine illegally occupied by Russian forces or controlled by Russian-backed proxies for their support of Russia’s aggression and attack on Ukraine;
  3. Undermine Russia’s ability to conduct its military aggression against Ukraine.

Description

The amendments add 10 individuals to the Ukraine Regulations, who are subject to a broad dealings ban. These individuals are all connected directly to former Ukrainian President Viktor Yanukovych, who is already sanctioned under the Ukraine Regulations.

The listed individuals include former officials who served as ministers, heads of office, chiefs of police, and decision-makers whose collective actions led to the uprising known as Maidan, which brought down the Yanukovych regime and became a catalyst for Russia’s military interventions into Ukraine. Since then, several of them have engaged with the Russian state as collaborators, either in facilitating, supporting, funding, or contributing to Russia’s violation of Ukraine’s sovereignty, operating business entities in the temporarily occupied territories of Ukraine, or serving as officials in the occupying regimes of the temporarily occupied territories. The listed individuals also include influential family members of representatives of the former regime, who remain tied to business interests that operate in the temporarily occupied territories and undermine Ukraine’s sovereignty over those territories.

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 the amendments, public consultation would not be appropriate, given the risk of asset flight.

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 enact sanctions in Canada. No other instrument could be considered.

Regulatory analysis

Benefits and costs

The incremental cost to the Government of Canada to administer and enforce these additional prohibitions vis-à-vis the over 3 000 persons already sanctioned in relation to Russia’s invasion of Ukraine is minimal. Sanctions targeting specific individuals 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 individuals and entities. Based on initial assessment of available open-source information, it is believed 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 sanctions. They will do so by adding the newly listed individuals to their existing monitoring systems, which may result in a compliance cost.

Small business lens

With respect to the persons being listed under the Ukraine Regulations, analysis under the small business lens concluded that the regulatory amendments will not impact Canadian small businesses. The amendments prohibit Canadian businesses from dealing with, providing services to, or otherwise making goods available to listed persons, but do not create obligations related to them. While Canadian businesses may seek permits under the Ukraine Regulations, they are granted on an exceptional basis. Global Affairs Canada does not anticipate any applications resulting from listing these. Thus, there would be no incremental administrative burden arising from this requirement. Canadian small businesses are also subject to the duty to disclose under the Ukraine Regulations, which would represent a direct compliance requirement. However, as the newly listed individuals have limited known linkages with Canada, Global Affairs Canada does not anticipate any disclosures resulting from the amendments.

One-for-one rule

The one-for-one rule does not apply, as there is no incremental change in administrative burden on businesses. The permitting process for businesses meets the definition of “administrative burden” in the Red Tape Reduction Act; however, while permits may be granted under the Ukraine Regulations, on an exceptional basis, given these individuals were previously listed under the FACFOA Regulations and several are sanctioned in other jurisdictions as well, Global Affairs Canada does not anticipate any permit applications with respect to the amendments.

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 international partners. 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. G7 states, the European Union, Australia and New Zealand continue to update their sanction regimes against individuals and entities in both Ukraine and Russia and enforce far-reaching bans on trade and investment with the territories of Ukraine currently occupied by Russia.

Strategic environmental assessment

The Ukraine Regulations 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

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 Ukraine as a whole, these targeted sanctions impact individuals believed to be engaged in activities that directly or indirectly support, provide funding for or contribute to a violation of the sovereignty and 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.

Implementation, compliance and enforcement, and service standards

The amendments come into force on the day on which they are registered.

Consequential to being listed in the Ukraine Regulations, and pursuant to the application of paragraph 35.1(b) of the Immigration and Refugee Protection Act, the listed individuals would be inadmissible to Canada.

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 Ukraine Regulations.

The Department’s Trade Commissioner Service abroad and in Canada continues to assist clients in understanding Canadian sanctions regulations, and notably the impact of the Ukraine Regulations on any activities in which Canadians may be engaged. The Department is also increasing outreach efforts across Canada – including to engage with businesses, universities, and provincial/territorial governments – to enhance national awareness of and compliance with Canadian sanctions.

Under the SEMA, both the Royal Canadian Mounted Police and Canada Border Services Agency officers have the power to enforce sanctions violations through their authorities as defined under the Customs Act, the Excise Act or the Excise Act, 2001, and sections 487 to 490, 491.1 and 491.2 of the Criminal Code.

In accordance with section 8 of the SEMA, every person who knowingly contravenes or fails to comply with the Ukraine 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.

Contact

Global Affairs Canada
Sanctions Bureau (PSD)
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone (toll-free): 1‑833‑352‑0769
Telephone (local): 1‑343‑203‑3975
Fax: 1‑613‑995‑9085
Email: sanctions@international.gc.ca