In this post, we describe the territorial sanctions imposed by Canada in relation to Ukrainian territory that has been annexed by Russia as well as other sanctions on Russian persons and on certain Ukrainians who have supported Russia's actions in Ukraine, since our previous update on August 15, 2022.
As discussed below, the key points are that two more regions of Ukraine were comprehensively sanctioned and a number of additional Russians and Ukrainians have been designated.
More Areas Under Russian Control in Ukraine Have Been Comprehensively Sanctioned
More parts of Ukraine have been comprehensively sanctioned. Previously, three regions of Ukraine were sanctioned:
- The Crimea region of Ukraine which is defined as the Autonomous Republic of Crimea and the city of Sevastopol including their land areas and territorial sea;
- The so-called Donetsk People's Republic and the territory it controls in the Donetsk oblast of eastern Ukraine; and
- the so-called Luhansk People's Republic and the territory it controls in the Luhansk oblast of eastern Ukraine.
The two further regions of Ukraine that are sanctioned are:
- the area of the Kherson oblast of Ukraine that is illegally occupied by the Russian Federation; and
- the area of the Zaporizhzhia oblast of Ukraine that is illegally occupied by the Russian Federation.
The Crimea region of Ukraine is defined as a specific area. The other four regions are defined on the basis of territorial control by so-called republics (in the Donetsk and Luhansk oblasts) or illegally occupied by Russia in the case of the Kherson and Zaporizhzhia oblasts. As the lines of control in at least two of these oblasts are currently reportedly shifting as Ukraine forces regain territory, the precise areas subject to comprehensive sanctions are likely changing on a day-to-day basis with some areas decreasing in size. This is unlikely to have practical significance for most Canadian businesses given that commercial dealings in areas near where combat is occurring are likely at a standstill. However, any commercial dealings or other business relationships in the Donetsk, Luhansk, Kherson and Zaporizhzhia regions (or Crimea) should be carefully checked for sanctions compliance.
The prohibitions on the five sanctioned Ukraine regions are applicable to all persons in Canada and all Canadians outside of Canada and in general (there are some variations for the Crimea region of Ukraine) are as follows:
- making an investment that involves a dealing in any property located in a sanctioned region that is owned - or that is held or controlled, directly or indirectly - by a person in a sanctioned region;
- providing or acquiring financial or other related services with respect to an investment referred to in paragraph (a);
- importing, purchasing or acquiring goods, wherever situated, from a person in a sanctioned region;
- exporting goods destined for a sanctioned region or selling, supplying or transferring goods, wherever situated, to any person in a sanctioned region;
- providing technical assistance (any form of assistance, such as providing instruction, training, consulting services or technical advice or transferring know-how or technical data) to a person in a sanctioned region;
- providing financial or other services related to tourism to, or acquiring such services from, a person in a sanctioned region; and
- docking in a sanctioned region a cruise ship that is registered or licensed, or for which an identification number has been issued, under any Act of Parliament.
Canada is, clearly, a supporter of Ukraine insofar as Russia's war in Ukraine is concerned. Hence it bears some explanation as to why the above-noted comprehensive sanctions are enacted by way of regulations made under the Special Economic Measures Act ("SEMA") in respect of Ukraine, and not as part of the regulations made in respect of Russia. The reason is that SEMA authorizes the Canadian government to make regulations in respect of a foreign state. While in the case of Ukraine the foreign policy concern is Russia's activities, those activities are occurring in Ukraine. Canada likely cannot make regulations in respect of areas of Ukraine if those regulations are made in respect of Russia. Thus the Canadian government has made regulations under SEMA in respect of Russia in order to sanction Russian persons and to impose various restrictions on dealings with certain parts of the Russian economy and also made regulations under SEMA in relation to persons in Ukraine who are cooperating with Russia and with respect to geographic areas of Ukraine that, while purportedly annexed and to some extent currently controlled by Russia, Canada views as remaining part of Ukraine under international law.
Designations of Additional Russian and Ukrainian Persons
On August 19, 2022, Canada designated an additional 62 Russian individuals who, according to the Canadian government, are senior government officials, including Russian federal governors and regional heads, family members and senior defence officials of previously listed entities. On the same day Canada designated one additional Russian defence sector entity.
On September 29, 2022, Canada designated an additional 43 Russian individuals who, according to the Canadian government, are family members of already listed oligarchs, additional oligarchs or "financial elites".
Also on September 29, 2022 Canada designated an additional 35 Ukrainian individuals who, according to the Canadian government, are so-called senior officials in the Russian-occupied territories of Donetsk, Luhansk, Kherson and Zaporizhzhia in Ukraine. The individuals are so-called senior officials in the Russian-occupied territories of Donetsk, Luhansk, Kherson and Zaporizhzhia in Ukraine. On the same day the Canadian government sanctioned a Ukrainian entity that it says is a so-called government body in Kherson.
On September 30, 2022, Global Affairs Canada issued (notably, from Washington, DC) a strongly worded press releaseindicating that Canada intends to stay the course in its foreign policy towards Russian in relation to its war in Ukraine, and in relation to Ukrainians who are cooperating with Russia.
Canada's sanctions in relation to Russia's war in Ukraine are here to stay for the foreseeable future. Canadian businesses that have any relationships whatsoever with Russia, Belarus and Ukraine, or nationals of or persons in those jurisdictions, should be monitoring Canadian economic sanctions developments and ensuring compliance.
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.