Yesterday, Canada announced new sanctions against Iran in
coordination with authorities in the United States and the United
Kingdom. These sanctions, implemented in response to the November
9, 2011 International Atomic Energy Agency's assessment of
Iran's nuclear capabilities, significantly expand on
Canada's current measures against Iran and will have specific
impact on the Canadian financial services and oil and gas sectors.
Other companies, even those that are not engaged in business with
Iran, may also be affected by these new controls.
On November 21, 2011, further restrictions were added to the
Special Economic Measures (Iran) Regulations,
a broad prohibition against providing or acquiring any
financial services to or for the benefit of, or on the direction or
order of, Iran or any person in Iran;
a broad prohibition against the supply of any goods used in the
petrochemical, oil or natural gas industry (this is expanded from
the earlier prohibition which applied only to goods used in the
refining of oil or liquefaction of natural gas);
the addition of various entities and individuals to the list of
designated persons — there is a general prohibition on
dealings with these persons; and
the addition of various items and equipment to the prohibited
The complete amendments, which include certain limited
exceptions to these prohibitions, can be found here.
Also, the Office of the Superintendant of Financial Institutions
has issued a Notice in respect of these new measures as
they apply to federally regulated financial institutions.
All Canadian companies, including those that have not engaged in
any business with Iran, should be amending their compliance
procedures and screening protocols and reviewing current
transactions and other activities to ensure compliance with these
Economic Sanctions Compliance
The increasing use of economic sanctions by Canada and its
trading partners, including the United States and the European
Union, is significantly raising exposure to financial, operational
and reputational risk. It is important for any company doing
business internationally to have in place comprehensive internal
control measures for compliance with economic sanctions, export
controls, anti-corruption laws and related requirements.
These new measures against Iran should trigger a review and
revision of those controls, including the lists (or list-service
providers) used for screening transactions involving designated
persons. Notably, the prohibitions against dealings with designated
persons apply to all companies, regardless of whether they are
engaged in business with Iran. Companies should also be reviewing
other components of their internal trade control systems, including
their compliance manual and processes, employee and executive
training programs, internal audit procedures, and their contract
review process, to ensure they are fully up to date.
At the present time, in addition to these measures against Iran,
Canada currently imposes trade controls of varying degrees on
activities involving the following countries (and in many cases,
individuals and entities associated with them): Belarus, Burma
(Myanmar), Côte d'Ivoire, the Democratic Republic of the
Congo, Cuba, Egypt, Eritrea, Guinea, Iraq, Lebanon, Liberia, Libya,
North Korea, Pakistan, Sierra Leone, Somalia, Sudan, Syria,
Tunisia, and Zimbabwe. Any involvement of these countries or any
"designated person" in proposed transactions or other
activities should raise a red flag for further investigation to
ensure compliance with economic sanctions.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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