Regulations Amending the Special Economic Measures (Venezuela) Regulations: SOR/2024-264

Canada Gazette, Part II, Volume 159, Number 1

Registration
SOR/2024-264 December 13, 2024

SPECIAL ECONOMIC MEASURES ACT

P.C. 2024-1318 December 13, 2024

Whereas the Governor in Council is of the opinion that gross and systematic human rights violations have been committed in the Bolivarian Republic of Venezuela;

Whereas the Governor in Council is of the opinion that the situation in the Bolivarian Republic of Venezuela constitutes a grave breach of international peace and security that has resulted or is likely to result in a serious international crisis;

And whereas the Governor in Council is of the opinion that a national of the Bolivarian Republic of Venezuela who is a foreign public official, or an associate of such an official, is responsible for or complicit in ordering, controlling or otherwise directing acts of significant corruption;

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 (Venezuela) 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 (Venezuela) Regulations

Amendments

1 (1) Paragraph 2(a) of the Special Economic Measures (Venezuela) Regulations footnote 1 is replaced by the following:

(2) Paragraphs 2(d) to (f) of the Regulations are replaced by the following:

2 Paragraph 3(a) of the Regulations is replaced by the following:

3 The portion of section 6 of the Regulations before paragraph (a) is replaced by the following:

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:

4 Paragraph 7(1)(a) of the Regulations is replaced by the following:

5 The schedule to the Regulations is amended by adding the following in numerical order:

Application Before Publication

6 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

7 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

Despite the Maduro regime agreeing in October 2023 to a more transparent and fair presidential election process, the protracted political crisis in Venezuela is deepening. The contested proclamation of Maduro as the winner of the July 28, 2024, presidential election, amid widespread allegations of electoral fraud, sparked massive protests. The Maduro regime further entrenched its power and launched a new wave of repression of dissent. International human rights bodies reported systematic human rights violations, including notably arbitrary detentions and extrajudicial executions. Venezuelan citizens, who peacefully and massively participated in the July 28 elections, are increasingly unable to exercise their rights; as a result, the Venezuelan economy and the humanitarian crisis continue to deteriorate.

Background

Situation prior to the presidential election of July 28, 2024

For years, Venezuela has been suffering a protracted political crisis, systematic human rights violations and abuses, increasing restrictions to the civic space, entrenched corruption, and economic contraction due to mismanagement and corruption, notably involving high-ranking officials of the Maduro regime. The Maduro regime controls all governing institutions, including the Superior Tribunal of Justice (TSJ) and lower bodies of the judiciary, the National Electoral Council (CNE), the National Assembly, and security and defence forces. It uses them to undermine democratic institutions and silence dissenting voices, including human rights defenders, journalists, and social and political leaders.

On October 17, 2023, representatives of the Maduro regime and the democratic Venezuelan opposition signed an agreement (“the Barbados Agreement”) to ensure that political and electoral rights are upheld in the 2024 presidential election, including allowing each party to freely choose their candidates. However, within weeks of signing the agreement, the Maduro regime reneged on its commitments. In December 2023, the regime via the TSJ upheld the (alleged) “disqualification” of opposition leader Maria Corina Machado, winner of the 2023 opposition primaries, from participating in political life for 15 years. Then in March 2024, undermining the competitiveness of the election, the regime prevented Machado and her substitute Corina Yoris from registering as a candidate. Instead, it only allowed for the registration of Edmundo Gonzalez Urrutia, a barely known retired diplomat, to run as Machado’s replacement.

In the lead up to the 2024 election, the Maduro regime engaged in efforts to undermine participation in the elections and transparent oversight of processes, including making it difficult for voters of legal age and voters living outside of Venezuela to access voter registration. The regime also reduced citizens’ ability to vote inside the country by, for example, relocating voting centres to remote areas or inside housing complexes strongly aligned with the regime and reassigning voters to different voting centres, including in different cities, which disproportionately affected areas where the opposition had performed well in previous elections. Further, in May 2024, the regime, which had invited the European Union to send an Electoral Observation Mission to the presidential election, revoked its invitation, minimizing independent oversight of the process.

Despite all these efforts, Maria Corina Machado continued campaigning for Edmundo Gonzalez Urrutia and leading massive rallies, including in cities and towns historically aligned with the regime. Thanks to Machado’s efforts, Edmundo Gonzalez Urrutia consolidated his lead in the polls by at least 20% over Maduro.

Situation on election day and after the presidential election

On July 28, Venezuelans participated massively and peacefully in the presidential elections. Experts estimate that the turnout was almost 70% of the people registered to vote who still live in Venezuela (almost doubling the turnout of the 2018 presidential elections and tripling the official turnout of the December 2023 Consultative Referendum over the Essequibo, a disputed territory with Guyana). The CNE – controlled by Maduro – subsequently proclaimed Maduro winner of the election but failed to provide any evidence to support his claimed victory. The opposition, thanks to a network of citizen witnesses, compiled over 83% of the official voting station tally sheets, which showed opposition candidate Edmundo Gonzalez Urrutia won the election with 67% of the vote against Maduro’s 30%. This result is in line with several credible exit polls and four independent quick counts.

Two of the independent international entities that observed the electoral process at the invitation of the Government also published preliminary reports questioning the integrity of the process. The Carter Center, which sent a small election observation team to Venezuela, concluded that the election did not meet international standards of electoral integrity and could not be considered democratic. The United Nations Panel of Experts that had also monitored the elections similarly concluded in a report made public on an exceptional basis by the UN Secretary General that the results management process fell short of the basic transparency and integrity measures that are essential to holding credible elections. Both entities also made favourable references about the veracity of the evidence published by the opposition.

Since the announcement of the results, dozens of countries, including Canada, and international organizations have demanded the publication of the election tally sheets and their independent verification.

Following the contested proclamation of Maduro by the CNE, numerous protests by concerned citizens, rejecting the official results, took place across the country. The regime harshly repressed these demonstrations, thereby discouraging further public protests. There have been numerous reports of regular security forces and para-police (colectivos) engaging in violent acts that have resulted in at least 28 deaths caused by gunshot wounds, and possible extrajudicial executions. There have been over 2 000 arbitrary detentions, including over 150 teenagers, and at least 43 forced disappearances.

The regime has also cracked down on the opposition and increased harassment and persecution against real or perceived dissent, particularly targeting opposition figures, social leaders, journalists and electoral volunteers. This harassment included an arrest warrant for Edmundo Gonzalez Urrutia, forcing him into exile in Spain on September 7, 2024. Various international organizations and prominent figures have spoken out and expressed their concerns about and/or condemned the violence and repression in Venezuela, including the United Nations Secretary-General, United Nations Office of the High Commissioner for Human Rights, the United Nations Fact-Finding Mission on Venezuela, the Prosecutor of the International Criminal Court, and the Inter-American Commission on Human Rights, which labelled the Venezuelan state response to the demonstration as practices of “state terrorism”.

Canada’s response

Since 2017, as part of Canada’s foreign policy response to the situation in Venezuela, Canada has implemented three rounds of targeted sanctions against Venezuela in response to the Maduro regime’s erosion of democratic institutions. Canada first imposed sanctions on September 22, 2017, when Canada listed 40 individuals linked to the government, aiming to hold accountable those responsible for undermining democracy and stability in the country. These measures were enacted under the Special Economic Measures Act (SEMA) and included asset freezes and prohibitions on dealings with the listed individuals. To date, Canada has imposed targeted sanctions on 113 Venezuelan citizens under the Special Economic Measures (Venezuela) Regulations (the “Regulations”).

Canada has also remained active on the Venezuelan crisis including through co-sponsoring resolutions and making interventions at the Organization of American States, the United Nations, the United Nations Human Rights Council, and other international forums, calling on Venezuelan authorities to respect signed agreements, human rights, democracy, and the will of the people.

Objective

Description

The amendments expand the scope of the Regulations to allow Canada to impose sanctions in response to the current and continuously deteriorating situation in Venezuela to now include activities that contribute directly or indirectly to the grave breach of international peace and security, gross and systematic human rights violations, or significant corruption. The corresponding listing criteria of the Regulations are amended to reflect these new circumstances.

In addition, the listing criterion on senior officials of an entity is expanded to include both current and former officials. Finally, the amendments include updated language for clarification and consistency with other regulations under the SEMA. These amendments include updated language to clarify that it is prohibited for any person in Canada or any Canadian outside Canada to deal with property held or controlled both directly or indirectly by a listed person, and concurrently clarifies that Canadians (including businesses, such as banks and cooperative credit associations) have a duty to determine and disclose whether they are in possession or control of such property.

The amendments add five individuals to the Schedule of listed persons under the Regulations. These individuals are current or former senior officials of the Government of Venezuela and have engaged in the undermining of democratic institutions of the country.

Any person in Canada or Canadians outside Canada are thereby prohibited from dealing in the property of, entering into transactions with, providing services to, transferring property to, or otherwise making goods available to listed persons (individuals and entities). These measures will also render listed individuals inadmissible to Canada under the Immigration and Refugee Protection Act (IRPA). Under the Regulations, listed persons may apply to the Minister of Foreign Affairs to have their name removed from the Schedule of designated persons. The Minister must determine whether there are reasonable grounds to make a recommendation to the Governor in Council for removal.

Regulatory development

Consultation

Global Affairs Canada regularly engages with relevant stakeholders in Venezuela, including civil society organizations and other like-minded governments, regarding Canada’s response to the situation in Venezuela, including sanctions implementation.

With respect to the amendments, public consultation would not have been appropriate, given that publicizing the names of the persons targeted by sanctions would have likely resulted in asset flight prior to the coming into force of the amendments.

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 proposed regime does 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 amendments enhance Canada’s capacity for deterring actors from engaging in human rights violations, and/or acts that undermine the peace, security or stability of Venezuela or the integrity of its democratic institutions, and/or significant acts of corruption committed by the de facto authorities of Venezuela. The amendments align with Canada’s existing foreign policy strategies and actions to put pressure on Venezuela to respect the will of the people as expressed in the July 28, 2024, presidential election, and to ensure respect for human rights in Venezuela.

The incremental cost to the Government of Canada to administer and enforce these additional prohibitions is minimal. The amendments target specific individuals and, therefore, they 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. 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. As such, it is anticipated that there will be no significant impacts on Canadians and Canadian businesses as a result of these amendments.

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 very minor compliance cost.

Small business lens

With respect to the persons being listed under the Regulations, an analysis under the small business lens concluded that the amendments could impact Canadian small businesses. The Regulations prohibit Canadian businesses from dealing with, providing services to, or otherwise making goods available to listed persons, but do not create any direct administrative obligations related to them. While Canadian businesses may seek permits under the Regulations, they are granted on an exceptional basis. Global Affairs Canada does not anticipate any applications resulting from listing these persons. 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 Regulations, which would represent a direct compliance requirement. However, as the newly listed persons 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 business. 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 Regulations on an exceptional basis, given that the listed individuals have limited business ties to Canadian economy Global Affairs Canada does not anticipate any permit applications with respect to the Regulations.

Regulatory cooperation and alignment

While the Regulations are not related to a work plan or commitment under a formal regulatory cooperation forum, they align with actions taken by like-minded partners. Sanctions are most effective when they are applied in a coordinated manner. Several like-minded countries are also considering sanctions in response to the corrupt actions and human rights violations that have occurred during the 2024 electoral process. On September 12, 2024, the United States issued a round of sanctions on 16 members of the de facto Venezuelan Government involved in acts obstructing a competitive and inclusive presidential election process in Venezuela and violations of human rights. On November 27, 2024, they imposed another round of sanctions on 21 members of the de facto Venezuelan Government on the same basis.

Effects on the environment

The amendments are unlikely to result in important environmental effects. In accordance with the Cabinet Directive on Strategic Environmental and Economic Assessment (SEEA Directive), a preliminary scan concluded that an SEEA 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 indirect impact on certain vulnerable groups and individuals. Rather than affecting Venezuelans as a whole, these targeted sanctions would directly impact only those listed individuals. Therefore, these sanctions are unlikely to have a significant negative indirect 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.

Implementation, compliance and enforcement, and service standards

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

Consequential to being listed in the 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 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 Venezuela Regulations.

The Trade Commissioner Service at Global Affairs Canada continues to assist clients in understanding Canadian sanctions regulations and, notably, the impact of the regulations on any activities in which Canadians may be engaged, abroad and in Canada. Global Affairs Canada is also increasing outreach efforts across Canada — including engaging with businesses, universities, and provincial and territorial governments — to enhance national awareness of and compliance with Canadian sanctions.

Under the SEMA, both 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 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
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone (toll-free): 1‑833‑352‑0769
Telephone (local): 343‑203‑3975
Fax: 613‑995‑9085
Email: sanctions@international.gc.ca