Canada: Canada's Standing Committee Of Foreign Affairs And International Development Makes 13 Economic Sanctions Recommendations

Last Updated: July 25 2017
Article by Cyndee Todgham Cherniak

In 2016 and early 2017, Canada's Standing Committee on Foreign Affairs and International Development (FAAE) reviewed Canada's Special Economic Measures Act ("SEMA") and the Freezing Assets of Corrupt Foreign Officials Act. The SEMA was encted to authorize the Governor in Council (Cabinet) to promulgate unilateral economic sanctions against states, as well as individuals and entities within them. Simply put, under SEMA, legal trade can become illegal. The Freezing Assets of Corrupt Foreign Officials Act was enacted in 2011 to respond to the events of the Arab Spring. Simply put, it is a mechanism to prevent the flight or liquidation of any assets of deposed foreign officials found in Canada before the new governments could seek their recovery.

On April 6, 2017, FAAE released the Seventh Report of the FAAE, based on its review, which is entitled " A COHERENT AND EFFECTIVE APPROACH TO CANADA'S SANCTIONS REGIMES: SERGEI MAGNITSKY AND BEYOND" and in which it provides an excellent summary about Canada's economic sanctions laws, the purpose of economic sanctions and makes 13 recommendations. On July 17, 2017, Canada's Minster of Foreign Affairs, Ms. Crystia Freeland provided a response to the FAAE Report.

The 13 recommendations in the FAAE Report, which were unanimously supported (on a bipartisan basis) by the members of the FAAE, are:

  1. The Government of Canada should ensure that sanctions imposed using more than one of the United Nations Act, the Special Economic Measures Act or the Export and Import Permits Act are imposed in a complementary and coherent manner, and amended concurrently when necessary;
  2. The Government of Canada should implement the decisions of the United Nations Security Council regarding its mandated sanctions regimes through the timely enactment, amendment, and repeal of regulations under the United Nations Act;
  3. The Government of Canada should properly resource and reform the structures responsible for its sanctions regimes, in order to effectively impose sanctions on targeted states and persons;
  4. The Government of Canada should provide comprehensive, publically available, written guidance to the public and private sectors regarding the interpretation of sanctions regulations in order to maximize compliance;
  5. The Government of Canada should produce and maintain a comprehensive, public and easily accessible list of all individuals and entities targeted by Canadian sanctions containing all information necessary to assist with the proper identification of those listed;
  6. The Government of Canada should transfer responsibility for the issuance of permits under the Special Economic Measures Act and the United Nations Act to the section of Global Affairs Canada that already issues similar permits under the Export and Import Permits Act;
  7. The Government of Canada should ensure that law enforcement agencies highly prioritize the enforcement of sanctions measures and are given the necessary resources to fulfil their duties;
  8. The Government of Canada should amend the Special Economic Measures Act and the Freezing Assets of Corrupt Foreign Officials Act to allow for an independent administrative process by which individuals and entities designated by these Acts can challenge that designation in a transparent and fair manner;
  9. The Government of Canada should provide a clear rationale for the listing and delisting of persons under the Special Economic Measures Act and ensure that the information is easily accessible to the public through the Global Affairs Canada sanctions website;
  10. The Government of Canada should amend the Special Economic Measures Act to require the production of an annual report by the Minister of Foreign Affairs, to be tabled in each House of Parliament within six months of the fiscal year end, which would detail the objectives of all orders and regulations made pursuant to that Act and actions taken for their implementation;
  11. The Government of Canada should amend the Special Economic Measures Act and the Freezing Assets of Corrupt Foreign Officials Act to require a mandatory legislative review of the Acts by a parliamentary committee within 5 years of the amendments becoming law;
  12. In honour of Sergei Magnitsky, the Government of Canada should amend the Special Economic Measures Act to expand the scope under which sanctions measures can be enacted, including in cases of gross human rights violation; and
  13. The Government of Canada should amend the Immigration and Refugee Protection Act to designate all individuals listed by regulations under the Special Economic Measures Act as inadmissible to Canada.

Minister Freeland's response is one of gratitude, but not one of a promise to act.

Shortly after the release of the Report, all of Canada's political parties supported Recommendation 12 and backed the implementation of a Canadian Magnitsky Act. On June 22, 2017, Canada's Standing Committee on Foreign Affairs and International Development unanimously agreed to report Bill S-226 "Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law)" back to the House of Commons with amendments that strengthen the sanctions (that is make the sanctions even more robust). Bill S-226, when passed, will have a significant impact on Canada's economic sanctions laws. Bill S-226 is not an anti-Russia law, it's coverage includes Iran, Syria, Sudan and other countries. Arguably, Canada could list members of China's government for the purposes of imposing economic sanctions or freezing assets. For more information about the amendments to Bill S-226, please see " Canada's Standing Committee On Foreign Affairs And International Development Amends Canada's Proposed Magnitsky Act".

Canadian companies who export to Iran, Syria, Russia and other countries targeted by Canada's economic sanctions should review the report because it provides a useful overview of Canadian law and thinking about sanctions. The recommendations are important because they may be implemented. It must be expected that Canada will change its export controls laws. Canada has already started the process of changing its export controls laws in Bill C-47 "An Act to amend the Export and Import Permits Act and the Criminal Code (amendments permitting the accession to the Arms Trade Treaty and other amendments)" See an article entitled " Canada's Arms Trade Treaty Legislation Will Create Arms Brokering Rules And Change The Export And Import Permits Act").

Some of the recommendations are intended to assist SMEs. For example, Recommendation 5 recommends that the Government of Canada (that is, Global Affairs Canada) produce and maintain a comprehensive, public and easily accessible list of all individuals and entities targeted by Canadian sanctions containing all information necessary to assist with the proper identification of those listed. Currently, a Canadian exporter must review all regulations under the SEMA and UN Act and other statutes to see whether a particular purchase is a designated person or whether the export or transfer of the goods is prohibited. We wrote about is problem with Canada's economic sanctions laws in an article entitled " Ten Compliance Problems Canadian Companies Face In Complying With Canada's Economic Sanctions Laws". Minister Freeland has instructed Global Affairs to implement this recommendation "in the near term" (whatever that means).

Similarly, Recommendation 4, which recommends that the Government of Canada should provide comprehensive, publically available, written guidance to the public and private sectors regarding the interpretation of sanctions regulations in order to maximize compliance, will assist Canadian businesses and provide needed clarity. Global Affairs has been instructed to consider how this recommendation can be implemented.

Many of the recommendations address a problem experienced by Canadian exporters – that Canada's laws overlap and may not be consistent. Significant differences that exist between sanctions regimes and the variety of measures imposed. The use of multiple Acts in the implementation of sanctions regimes complicates compliance and enforcement. An example taken from the report is:

"First, Canada listed North Korea under the Area Control List, using the lower threshold required by the Export and Import Permits Act, and then the government enacted stricter sanctions once it was deemed necessary through the grave breach provision of the Special Economic Measures Act. ... While this example demonstrates the complementarity and flexibility of Canada's legislative framework, the provisions of the three regulations under the three Acts also demonstrate the complexity that can result. Regulations under the United Nations Act and the Special Economic Measures Act for North Korea appear to create overlapping prohibitions or restrictions in some areas. ... For example, both sets of regulations prohibit the provision and acquisition of financial services. The North Korea regulations under the Special Economic Measures Act, however, contain exclusions to this prohibition, including in relation to the work of international organizations and for non-commercial remittances under $1,000, which are not found in the United Nations Act regulations. This would suggest that one would need a permit under the United Nations Act regulations in order to carry out transactions specifically allowed under the Special Economic Measures Act. Or, conversely, the Special Economic Measures Act regulations specifically allow for acts which are prohibited by the UN sanctions..."

Canadian exporters often make mistakes when not realizing the differences in Canadian laws or complying with a lower threshold or exemption in one piece of legislation.

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 Mondaq.com.

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

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (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 www.mondaq.com

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 Mondaq.com’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.

Disclaimer

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.

Registration

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 unsubscribe@mondaq.com 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.

Cookies

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.

Links

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.

Mail-A-Friend

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.

Security

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 webmaster@mondaq.com.

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 EditorialAdvisor@mondaq.com.

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 enquiries@mondaq.com.

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