Canada imposes unilateral economic sanctions against both Russia and Iran pursuant to the Special Economic Measures (Russia) Regulations and Special Economic Measures (Iran) Regulations, respectively. It was not long ago that Canadian export controls lawyers were saying that Canada imposed its most strict sanctions against Iran. However, on February 5, 2016, Canada lifted some of its sanctions against Iran. Canada is talking tough on Russia and Canada's unilateral economic sanctions against Russia have been evolving. The question is, which country (Russia vs Iran) faces the more strict restrictions under Canadian laws? Which country poses the greater risk for Canadian companies seeking business opportunities?
I have not asked an easy question and they are different elements to look at to answer the questions. To help with the analysis, I have prepared a chart that sets out the unilateral economic sanctions and trade restrictions imposed by Canada against both countries (as at July 19, 2016).
Chart: Unilateral economic sanctions and trade restrictions imposed by Canada: Russia vs Iran (as at July 19, 2016)
|
Type of Restriction/Obligation |
Russia |
Iran |
|
Number of Listed Entities |
55 + 6 (as at July 19, 2016) |
161 |
|
Number of Listed Financial Institutions |
6 |
Not separately listed |
|
Number of Listed Individuals |
93 |
41 |
|
Number of Listed Goods |
19 |
41 |
|
Prohibition to deal in any property, wherever situated, held by or on behalf of a listed person |
Yes |
Yes |
|
Prohibition to enter into or facilitate directly or indirectly, any transaction related to a dealing in any property, wherever situated, held by or on behalf of a listed person |
Yes |
Yes |
|
Prohibition to provide any financial or other related service in respect of to a dealing in any property, wherever situated, held by or on behalf of a listed person |
Yes |
Yes |
|
Prohibition to make any goods, wherever situated, available to a listed person |
Yes |
Yes |
|
Prohibition to provide any financial or related service to or for the benefit of a listed person |
Yes |
Yes |
|
Prohibition to provide financing for or otherwise deal in new debt of longer than 30 days' maturity, including bonds, loans, debentures, extensions of credit, loan guarantees, letters of credit, bank drafts, bankers' acceptances, discount notes, treasury bills, commercial paper and other similar instruments in relation to persons listed in Schedule 2 (financial institutions) |
Yes |
No |
|
Prohibition to provide financing for or otherwise deal in new debt of longer than 90 days' maturity, including bonds, loans, debentures, extensions of credit, loan guarantees, letters of credit, bank drafts, bankers' acceptances, discount notes, treasury bills, commercial paper and other similar instruments in relation to persons listed in Schedule 3 (entities) |
Yes |
No |
|
Prohibition to provide financing for or otherwise deal in new securities, including shares or any other ownership interest in relation to persons listed in Schedule 2 (financial institutions) |
Yes |
No |
|
Prohibition to export, sell, supply, or ship any listed good |
Yes |
Yes |
|
Prohibition to provide to any financial, technical or other services related to any listed good whose export, sale, supply or shipment is prohibited |
Yes |
Yes |
|
Exemptions |
Yes –7 (listed goods & services) |
Yes – 7 (listed goods) and 5 (technical data) |
|
Prohibition to transfer, provide or disclose to government entity or any person in the country any technical data related to listed goods |
No |
Yes |
|
Prohibition to do anything that causes, assists or promotes, or is intended to cause, assist or promote any prohibited act |
Yes |
Yes |
|
Ongoing duties to determine |
Yes |
Yes |
|
Ongoing disclosure obligations |
Yes |
No |
|
Ministerial Authorization potential |
Yes |
Yes |
|
UN Sanctions Restrictions |
No |
Yes |
Based on the chart above, Canada's economic sanctions against
both countries create risks for businesses. The Canadian sanctions
against Russia include certain goods, services and financial
services. As a result, more activities of Canadian businesses might
be caught in a somewhat wider net of unilateral sanctions against
Russia.
On the other hand, the Canadian sanctions against Iran are against more entities and more individuals and there are also multilateral UN sanctions restrictions to also consider when looking at Canada's trade restrictions against Iran. The tracing of the relationships adds a level of complexity to any analysis. In addition, because services are not the subject of a specific prohibition, it is necessary to take time to interpret the scope of the goods and data related prohibitions. The total volume of restrictions against Iran is still complex and also rather broad.
While it appears from media reports that Iran is being opened up and Russia is being constricted, Canada's economic sanctions against both countries create obstacles to Canadian business. I cannot conclude that the sanctions against Russia are more restrictive. I have to conclude that targeted sanctions are just that – targeted. What is desired to be open is open and what is desired to be closed is closed.
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.
