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On March 5, 2012, Canada has taken additional steps to impose
economic sanctions against Syria by imposing a ban on financial
services and targeting transactions involving the Central Bank of
Syria as well as additional listed individuals. Companies engaged
in cross-border activities, including those that do not involve
Syria, should be reviewing these changes and revising policies and
procedures to ensure full compliance with the new measures.
Canada first imposed sanctions against Syria on May 24, 2011. On
a number of occasions since that time, sanctions have been expanded
to target the petroleum industry and prohibit other commercial
activities, including acquiring goods from Syria, investing in
Syria and supplying certain goods and technical data to Syria. See
our legal updates on these developments: Canada Imposes Economic Sanctions Against Syriaand Canada Imposes Additional Economic Sanctions Against
Syria.
The New Measures
The amendments can be found here. As a result of today's measures,
persons in Canada and Canadians outside Canada are now prohibited
from providing or acquiring financial or other related services to,
from or for the benefit of or on the direction or order of Syria or
any person in Syria.
The new measures provide specific exemptions from this financial
services ban, including for:
loan repayments to any person in Canada or any Canadians abroad
in respect of loans entered into before March 5, 2012 as well as
enforcement of security in respect of such loans or payments by
guarantors guaranteeing such loans;
financial services required to be provided or acquired further
to a contract entered into before March 5, 2012; and
financial services in respect of non-commercial remittances of
$40,000 or less sent to or from Syria, or any person in Syria, if
the person providing the financial services keeps a record of the
transaction.
Canada has now also imposed prohibitions on dealing with the
Central Bank of Syria as well as seven individuals who have been
added to the list of designated persons.
Canadian companies and individuals are prohibited from engaging
in a wide range of dealings with designated persons under
Canada's sanctions regime. Canadians are also subject to
reporting requirements in respect of property owned or controlled
by designated persons and related proposed or actual
transactions.
Financial institutions, including federally regulated banks and
provincial trust and loan companies and securities dealers, are
required to monitor and determine on a continuing basis whether
they are in possession or control of property owned or controlled
by or on behalf of a designated person.
Economic Sanctions Compliance and
Enforcement
The increasing use and enforcement 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 Syria 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 regardless of whether or not you are engaged in
business with Syria. 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 now fully up to date.
At the present time, 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, Iran, 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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