Regulations Amending the Special Economic Measures (Iran) Regulations: SOR/2025-84

Canada Gazette, Part II, Volume 159, Number 7

Registration
SOR/2025-84 March 6, 2025

SPECIAL ECONOMIC MEASURES ACT

P.C. 2025-296 March 6, 2025

Whereas the Governor in Council is of the opinion that the actions of the Islamic Republic of Iran constitute a grave breach of international peace and security that has resulted in 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 (Iran) 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 (Iran) Regulations

Amendments

1 (1) The portion of section 2 of the Special Economic Measures (Iran) Regulations footnote 1 before paragraph (a.1) is replaced by the following:

2 A person whose name is listed in Schedule 1 is a person in respect of whom the Governor in Council, on the recommendation of the Minister, is satisfied that there are reasonable grounds to believe is

(2) Section 2 of the Regulations is amended by adding the following after paragraph (a.1):

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

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

3 The portion of section 9 of the Regulations before paragraph (a) is replaced by the following:

9 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 (1) The portion of subsection 10(1) of the French version of the Regulations before paragraph (a) is replaced by the following:

10 (1) Toute personne se trouvant au Canada, tout Canadien se trouvant à l’étranger et toute entité visée à l’article 9 est tenu de communiquer, sans délai, au commissaire de la Gendarmerie royale du Canada ou au directeur du Service canadien du renseignement de sécurité :

(2) Paragraph 10(1)(a) of the Regulations is replaced by the following:

5 Part 1 of Schedule 1 to the Regulations is amended by adding the following in numerical order:

6 Part 2 of Schedule 1 to the Regulations is amended by adding the following in numerical order:

Application Before Publication

7 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

8 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 Islamic Republic of Iran (Iran) continues to threaten international peace and security through its destabilizing activities across the Middle East region and beyond. The Iranian regime poses a threat both through its armed forces and through its support to its allies and proxies. The regime has also expanded its defence and security cooperation partnerships with other states engaged in malign activities, notably Russia, to which it has transferred ballistic missiles and drones for Russia’s illegal war against Ukraine.

Background

Iran’s malign activities

Despite decades of concerted efforts by the international community, Iran remains a destabilizing force across the Middle East through malign activities by its own military as well as its support of a network of aligned, non-state militias and terrorist armed groups, collectively dubbed the “Axis of Resistance.” Iran’s support for Axis members, including Hamas, Hezbollah, the Houthis, and others — most of which Canada has designated as terrorist entities or has sanctioned — involves funding, arms provision, technology transfers, training, and ideological and political support.

The regime and its proxies have heightened the risk of uncontrollable escalation in the region through persistent attacks against Arab neighbours, Israel, and American and allied forces in the region. In 2024, Iran undertook two sets of large-scale, direct territorial attacks against Israel using ballistic missiles and unmanned aerial vehicles (UAVs)/drones, a dangerous and unprecedented step that raises the stakes in a longstanding regional confrontation. As Iran continues to build networks to acquire and share weapons technology and expertise, the regime has also increased the operational coordination of its proxies within the Axis of Resistance, with multiple aligned armed groups launching attacks in Iraq and against Israel.

Iran has also increased defence cooperation with and provided materiel support to Russia in its illegal war of aggression against Ukraine in the form of UAVs, ammunition, and ballistic missiles. Canada and G7 partners have assessed that there is evidence that Iran has continued to transfer weaponry to Russia despite repeated international calls to stop and that this represents a further escalation of Iran’s military support to Russia’s war of aggression against Ukraine. Russia has used Iranian weaponry such as UAVs to kill Ukrainian civilians and strike their critical infrastructure. Russia’s aggression constitutes a flagrant violation of international law, including the UN Charter, and a direct threat to the Ukrainian people as well as European and international security more broadly.

International response

Attacks by Iran and its proxies have been widely condemned by the international community. In April 2024, G7 leaders released a communiqué calling for an immediate de-escalation, condemning Iran’s actions against Israel, and calling for coordination in imposing sanctions against Iran. In a September 2024 statement, G7 members condemned Iran’s export and Russia’s procurement of Iranian ballistic missiles and reiterated that they stood ready to adopt further measures.

Since April 2024, the United States, the European Union, the United Kingdom, and Australia have imposed a range of sanctions on Iranian individuals and entities for aiding Russia’s military capabilities. These designations from partner countries include key actors within Iran’s UAV and missile industries and supply chains; and facilitators of Iran’s military support to Russia; as well as Iran Air and two other airlines. The United States has also announced sanctions on companies in the steel sector for enabling Iran’s UAV production and identified as blocked property a number of vessels and an aircraft that have facilitated illicit trade and the sale of UAVs in support of Iran. Within the limitations of the previous Iran Regulations, Canada was able to join these efforts by announcing a round of sanctions in August 2023 and April 2024.

Canada’s response

Together with its international partners, Canada has undertaken a range of measures designed to pressure Iran to change its behaviour.

Canada designated the Islamic Republic of Iran as a state supporter of terrorism under the State Immunity Act in 2012. In concert with the Justice for Victims of Terrorism Act, this listing allows victims to bring civil action against Iran for losses or damages from an act of terrorism linked to Iran committed anywhere in the world. Following that designation in 2012, Canada expelled Iranian diplomats from Canada and closed its embassy in Tehran.

Canada designated the Islamic Republic of Iran as a regime that has engaged in terrorism and systematic and gross human rights violations pursuant to subparagraph 35(1)(b) of the Immigration and Refugee Protection Act in 2022. In June 2024, it listed the Islamic Revolutionary Guard Corps (IRGC) as a terrorist entity under the Criminal Code in response to its terrorist acts both on its own and in knowing association with listed terrorist entities, such as Hezbollah and Hamas.

Between 2006 and 2010, Canada implemented into domestic law several rounds of sanctions imposed by the United Nations Security Council against Iran in response to its nuclear program. In July 2010, Canada established the Special Economic Measures (Iran) Regulations (“Iran Regulations”), pursuant to the Special Economic Measures Act (SEMA). The Iran Regulations were based on Canada’s position 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, in particular related to Iran’s nuclear program. In October 2022, Canada amended the Iran Regulations to also respond to gross and systematic human rights violations.

Since October 2022, Canada has imposed 18 rounds of sanctions under the Iran Regulations. A total of 203 Iranian individuals and 250 Iranian entities are currently listed under the Iran Regulations. Canada also listed two (2) Iranian individuals under the Justice for Victims of Corrupt Foreign Officials Act on December 7, 2023, in relation to the torture and killing of Iranian-Canadian photojournalist Zahra Kazemi in Iran in 2003.

Objective

These amendments aim to increase pressure on Iran and send a clear signal of

Description

The amendments expand the scope of the listing criteria under the Iran Regulations to allow Canada to impose sanctions in response to the evolving peace and security threat that Iran poses to the region and globally. In addition to nuclear activities and human rights violations, the Iran Regulations can now capture the broad scope of malign activities carried out by, or consistent with the policies of, the Islamic Republic of Iran. A new listing criterion is therefore being added to capture individuals and entities engaged in destabilizing activities in the Middle East region and globally that undermine international peace, security or stability in a manner that is consistent with the Iranian regime’s destabilizing policies.

The amendments also include a new listing criterion to designate any current or former senior government officials, beyond senior Islamic Revolutionary Guard Corps (IRGC) officials. Finally, the amendments include updated language for clarification and consistency with the SEMA. These amendments include updated language in French to correct an error, and 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 that an entity owned, held or controlled, directly or indirectly, by a listed person can also be listed.

The amendments further add three (3) individuals and four (4) entities to Schedule 1 of the Iran Regulations for their engagement in activities that undermine international peace, security or stability in a manner that is consistent with the policies of Iran, such as activities that directly or indirectly facilitate, support, or provide funding for, contribute to, or could contribute to Iran’s military support to Russia’s illegal war against Ukraine.

Any person in Canada or Canadians outside Canada is 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 Iran 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, including civil society organizations, 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 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.

Indigenous engagement, consultation and Modern Treaty obligations

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 methods to enact sanctions in Canada. No other instruments could be considered.

Regulatory analysis

Benefits and costs

The incremental cost to the Government of Canada to administer and enforce these additional sanctions measures is minimal. The amendments target specific individuals and entities, and as such 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 and entities 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 sanctions. They will do so by adding the newly listed individuals and entities to their existing monitoring systems, which may result in a minor compliance cost.

Small business lens

Analysis under the small business lens concludes that the amendments could impact Canadian small businesses. The amendments listing new individuals and entities do not impose any new compliance or administrative burden on small businesses in Canada. These 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 Iran Regulations, Global Affairs Canada does not anticipate any applications resulting from listing these persons. Canadian small businesses are also subject to the duty to disclose under the Iran 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 businesses. The permitting process for businesses meets the definitions of “administrative burden” in the Red Tape Reduction Act; however, while permits may be granted under the Iran Regulations on an exceptional basis, given that the listed individuals and entities have limited business ties to the Canadian economy, Global Affairs Canada does not anticipate any permit application with respect to the amendments.

Regulatory cooperation and alignment

The amendments align Canada’s efforts with those of its international partners and expose individuals and entities engaged in activities that undermine international peace and security. 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.

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 a SEEA 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 SEMA can nevertheless have an unintended impact on certain groups and individuals in vulnerable situations. 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. Therefore, these targeted sanctions limit the collateral effects to those dependent on listed individuals and entities and 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

Implementation 

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

Consequential to being listed in the Iran Regulations, and pursuant to the application of paragraph 35.1(b) of the Immigration and Refugee Protection Act (IRPA), the listed individuals are rendered 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 Iran Regulations.

Compliance and enforcement

The Trade Commissioner Service (TCS) at Global Affairs Canada continues to assist clients in understanding Canadian sanctions regulations and, notably, the impact of the Iran 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 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.

Contact

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