On February 24, 2022, Canada imposed additional sanctions on Russia in the wake of its invasion of Ukraine. The new sanctions, the key elements of which are described below, are now effective and were imposed under the Special Economic Measures Act by way of amendment to two sets of regulations:

  • The Special Economic Measures (Russia) Regulations (the "Russia SEMA Regulations"); and
  • The Special Economic Measures (Ukraine) Regulations (the "Ukraine SEMA Regulations").

Russia SEMA Regulations

The February 24, 2022 amendments to the Russia SEMA Regulations add the following:

1. a prohibition on new debt financings of any term, with three entities designated pursuant to this prohibition:

a. Central Bank of the Russian Federation;
b. National Wealth Fund of the Russian Federation; and
c. Ministry of Finance of the Russian Federation.

2. 382 individuals to the existing list of 120 individuals that are subject to general dealing prohibitions; and

3. 28 entities to the existing list of 71 entities that are subject to a general dealing prohibition, including:

a. 16 Russian banks;
b. Gazprom, Gazpromneft, Russian Direct Investment Fund and Alrosa.

Ukraine SEMA Regulations

The reason that there are regulations specifically in respect of Ukraine is that regulations were required in respect of territory that Canada considers to be part of the Ukraine but which has been annexed by Russia or is under its control. Before the February 24 amendments, this applied only to the Crimea region of Ukraine that was previously annexed by Russia. The February 24 amendments add the regions the regulations refer to as:

  1. "DNR region of Ukraine or the so-called Donetsk People's Republic and the territory it controls in the Donetsk oblast of eastern Ukraine" (the "DNR Region"); and
  2. "LNR region of Ukraine means the so-called Luhansk People's Republic and the territory it controls in the Luhansk oblast of eastern Ukraine" (the "LNR Region").

Regulations in respect of Ukraine were also required to sanction Ukrainian nationals who were considered by the Canadian government to be persons engaged in activities that directly or indirectly facilitate, support, provide funding for or contribute to a violation or attempted violation of the sovereignty or territorial integrity of Ukraine or that obstruct the work of international organizations in Ukraine or are related in some way to such persons.

The February 24 amendments add restrictions in relation to the DNR and LNR Regions, similar to those already in force in relation to the Crimea region, including prohibitions on:

  1. the making of investments involving a dealing in property (falling within certain categories) that is located in those regions;
  2. the provision or acquisition of financial or other related services with respect to any such investment;
  3. the import, purchase or acquisition of goods, wherever situated, from those regions;
  4. the export of goods destined for those regions or the sale, supply or transfer of goods, wherever situated, to any person in those regions;
  5. the provision of technical assistance to either of those regions or any person in those regions; and
  6. the provision of financial or other services related to tourism to, or the acquisition of such services from, either of those regions or any person in either of those regions.

Also, four persons were added to the list of persons that are subject to general dealing prohibitions.

Conclusion

Canada has imposed significant new sanctions on Russia and on the DNR and LNR Regions. Many additional persons are subject to general dealing prohibitions. Canadian businesses must comply with economic sanctions laws, including these new 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.