Canada: 2023 Budget: Canada Announces Permanent Withdrawal Of Most-Favoured-Nation Status From Russia And Belarus

As part of its 2023 Budget, Canada has announced plans to permanently withdraw Most-Favoured-Nation ("MFN") status for goods imported from Russia and Belarus via amendments to the Customs Tariff, which will result in the application of a 35% tariff rate under the General Tariff to almost all imports originating in those countries. This proposed measure is in addition to the sanctions that Canada has implemented against Russia and Belarus, including the recent ban on all imports of steel and aluminum products from Russia.

The proposed amendments will dispense of the requirement for the House of Commons and Senate to approve MFN withdrawals every 180 days. The only other country subject to permanent withdrawal of MFN status by Canada is North Korea, demonstrating the exceptional nature of this measure.

Canada had first withdrawn MFN status on Russian and Belarussian imports on 2 March 2022, as part of Canada's multi-faceted approach to sanctioning these two countries following Russia's invasion of Ukraine. A second MFN exemption order was issued 7 October 2022, extending the measure for another 180 days.

Our team will continue to closely monitor the prohibitions and sanctions related to Russia and Belarus, providing updates to keep clients informed about important developments affecting trade and services. We have significant experience in the design and implementation of sanctions-related compliance programs and internal investigations. Where breaches are identified, we work closely with clients in making voluntary disclosures and in engaging with the ensuing investigations conducted by the RCMP and Global Affairs Canada. We also regularly assist clients with the application for delisting process as well as applications for exemption permits, including under the Special Economic Measures (Russia) Permit Authorization Order and the Special Economic Measures (Belarus) Permit Authorization Order.

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