Canada: Canadian Sanctions Target Former Ukrainian Government Officials

The Office of the Superintendent of Financial Institutions (OSFI) has issued a notice dated March 5, 2014, directing banks, trust companies, insurers and other federally regulated financial institutions (FRFIs) to immediately freeze assets of the former Ukranian president, Viktor Yanukovych, and his close associates and to refrain from having any dealings with these individuals.

Although FRFIs bear the highest compliance burden, these regulations will apply to all persons within Canada, as well to Canadians located outside the country.

In imposing these targeted sanctions, Canada is acting in concert with the EU and the United States. The EU imposed measures on March 5 similar to those implemented by Canada. The Decision of the Council of the European Union provides for the freezing of funds and assets of the same individuals targeted by Canada. In the case of the United States, on March 6, 2014, President Obama signed an Executive Order permitting the blocking of property of persons who undermine both the democratic institutions and the peace and stability of Ukraine. The Executive Order gives the U.S. Secretary of the Treasury authority to penalize both Ukrainian and Russian persons. At this time a specific list has not been issued by the U.S. Treasury Department.


The Freezing Assets of Corrupt Foreign Officials Act (FACFOA) permits the Canadian government, at the written request of a foreign state, to freeze the assets of or prohibit dealings with persons who misappropriated or inappropriately acquired the property of the foreign state by virtue of their office or a personal business relationship. The Governor-in-Council may make an order or regulation under the Act if it is satisfied that the foreign country is in a state of turmoil or political uncertainty and if making an order or regulation is in the interest of international relations. This legislation was first enacted at the time of the Arab Spring to target former Egyptian and Tunisian government officials.

The Freezing Assets of Corrupt Foreign Officials (Ukraine) Regulations (Ukraine Regulations) were made effective on March 5, 2014, and were prompted by a request from the new Ukrainian government to Canada. The Ukraine Regulations target 18 Ukrainian officials and certain family members by requiring that their assets within Canada be frozen, and impose on all Canadians (not just FRFIs) searching, freezing, monitoring, disclosure and due diligence obligations.


The Ukraine Regulations freeze the assets of listed politically exposed foreign persons (PEFPs) by prohibiting the following activities by anyone in Canada or any Canadian outside Canada:

  1. Dealing, directly or indirectly, in any property, wherever situated, of a listed PEFP;
  2. Entering into or facilitating, directly or indirectly, any financial transaction related to a dealing referred to in point 1;
  3. Providing financial services or other related services in respect of any property of a listed PEFP.

Compliance Obligations on Financial Institutions

Practically speaking, banks, trust companies, insurers and other FRFIs will bear the greatest compliance burden for implementing the Ukraine Regulations because they will have to ensure that transactions with and financial services provided to listed PEFPs are blocked and reported. The financial services that are prohibited under the Ukraine Regulations encompass a wide range of services, including asset management, lending (including mortgage lending) and the provision of property insurance and other insurance policies and services.

These sanctions require financial institutions to search their customer records in order to identify financial assets to which the asset freeze applies. OSFI has advised that, at a minimum, it expects that FRFIs will be able to search their records for the listed PEFPs at least on a weekly basis and more frequently if need be. The Ukraine Regulations impose continuous searching and reporting obligations. The PEFP list is exhaustive for now, and FRFIs are not required to determine whether other persons are or were closely associated with PEFPs and therefore would be captured by the Ukraine Regulations.

OSFI states that certain financial institutions that are subject to the money laundering and anti-terrorism financing legislation (Proceeds of Crime (Money Laundering) and Terrorist Financing Act) are also required to search their corporate records to determine the ownership of their corporate and other business clients, and obtain and record prescribed information on persons that own or control – directly or indirectly – 25% or more of their clients. OSFI therefore expects that these financial institutions will need to review their records to determine if their clients are owned or controlled, directly or indirectly, by PEFPs designated under the Ukraine Regulations.

If a financial institution finds that it has property in its possession or control that it has reason to believe is owned or controlled – directly or indirectly – by PEFPs, or if it is providing prescribed financial or other services to PEFPs, it must immediately report that information to the Royal Canadian Mounted Police.

Compliance Obligations on All Canadians

Canadian companies should carefully review their business activities abroad and monitor any transactions that could implicate compliance under the Ukraine Regulations. In particular, companies should be alert to any involvement of the persons listed in the Ukraine Regulations, in addition to the companies and persons listed in the other regulations made under the United Nations Act, the Special Economic Measures Act, the Criminal Code and the FACFOA.

Canadian companies should also continue to stay up to date on regulatory developments, because the Canadian government may decide in conjunction with the United States and the EU to broaden the sanctions to deter Russia from its territorial and other ambitions in Ukraine.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.