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Registration

SOR/2011-268 November 21, 2011

SPECIAL ECONOMIC MEASURES ACT

Regulations Amending the Special Economic Measures (Iran) Regulations

P.C. 2011-1347 November 17, 2011

Whereas the Governor in Council is of the opinion that the situation in Iran constitutes a grave breach of international peace and security that has resulted or is likely to result in a serious international crisis;

Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of Foreign Affairs, pursuant to subsections 4(1) to (3) of the Special Economic Measures Act (see footnote a), hereby makes the annexed Regulations Amending the Special Economic Measures (Iran) Regulations.

REGULATIONS AMENDING THE SPECIAL ECONOMIC MEASURES (IRAN) REGULATIONS
AMENDMENTS

1. The portion of section 3 of the Special Economic Measures (Iran) Regulations (see footnote 1) before paragraph (a) is replaced by the following:

3. It is prohibited for any person in Canada and any Canadian outside Canada to

2. The Regulations are amended by adding the following after section 3:

3.1 Section 3 does not apply in respect of

  • (a) loan repayments to any person in Canada, or any Canadian abroad, in respect of loans entered into before July 22, 2010, enforcement of security in respect of those loans, or payments by guarantors guaranteeing those loans;
  • (b) pension payments to any person in Canada or any Canadian abroad;
  • (c) any transaction in respect of the accounts at a Canadian financial institution that are used for the regular business of the Embassy of Iran or its consular missions in Canada;
  • (d) any transaction in respect of the accounts at an Iranian financial institution that are used for the regular business of the Embassy of Canada or its consular missions in Iran;
  • (e) any transaction to international organizations with diplomatic status, United Nations agencies, the International Red Cross and Red Crescent Movement, or Canadian non-governmental organizations that have entered into a grant or contribution agreement with the Department of Foreign Affairs and International Trade and the Canadian International Development Agency, for the purpose of pursuing humanitarian relief work in Iran; and
  • (f) any transactions necessary for a Canadian to transfer any existing accounts, funds or investments of a Canadian held with a designated person to a non-designated person.

3. Subsection 4(1) of the (1) Regulations is amended by adding the following after paragraph (b):

  • (b.1) any goods used in the petrochemical, oil or natural gas industry, other than
    1. (i) goods that are required to be ) exported, sold, supplied or shipped further to a contract entered into before November 22, 2011, and
    2. (ii) goods the export, sale, supply or shipping of which is prohibited by paragraph (b);

(2) Subparagraph 4(1)(d)(ii) of the Regulations is replaced by the following:

  1. (ii) items 5400 and 5505, unless the export, sale, supply or shipment of the good is otherwise prohibited by these Regulations.

4. Section 5 of the Regulations is amended by striking out “or” at the end of paragraph (b), by adding “or” at the end of paragraph (c) and by adding the following after paragraph (c):

  • (d) provide or acquire any financial services to, from or for the benefit of, or on the direction or order of, Iran or any person in Iran, other than
    1. (i) financial services that are required to be provided or acquired further to a contract entered into before November 22, 2011,
    2. (ii) financial services the provision or acquisition of which are otherwise prohibited by these Regulations,
    3. (iii) financial services in respect of pension payments to any person in Canada or any Canadian abroad,
    4. (iv) financial services in respect of pension payments to any person in Iran,
    5. (v) financial services in respect of the accounts at a Canadian financial institution that are used for the regular business of the Embassy of Iran or its consular missions in Canada,
    6. (vi) financial services in respect of the accounts at an Iranian financial institution that are used for the regular business of the Embassy of Canada or its consular missions in Iran, or for the personal banking of their employees,
    7. (vii) financial services in respect of non-commercial remittances of $40,000 or less sent to or from Iran or any person in Iran, if the person providing the financial services keeps a record of the transaction, and
    8. (viii) financial services in respect of any transaction with international organizations with diplomatic status, United Nations agencies, the International Red Cross and Red Crescent Movement, or Canadian non-governmental organizations that have entered into a grant or contribution agreement with the Department of Foreign Affairs and International Trade and the Canadian International Development Agency, for the purpose of pursuing humanitarian relief work in Iran.

5. Section 7 of the Regulations is replaced by the following:

7. It is prohibited for any person in Canada and any Canadian outside Canada to provide a vessel that is owned or controlled by, or operating on behalf of, the Islamic Republic of Iran Shipping Lines with insurance services, or stevedoring, bunkering and lighterage and similar services, for the vessel’s operation or maintenance.

6. The Regulations are amended by adding the following after section 8:

8.1 The prohibitions in sections 4 to 8 do not apply with respect to an activity that has as its purpose the safeguarding of human life, disaster relief, or the providing of medicine or medical supplies.

7. The heading before section 13 and sections 13 and 14 of the Regulations are repealed.

8. Items 6, 8, 13, 15, 17, 29, 92, 130, 161, 174 and 183 of Part 1 of Schedule 1 to the Regulations are repealed.

9. Part 1 of Schedule 1 to the Regulations is amended by adding the following after item 279:

280. Advanced Fibres Development Company

281. Ansar Bank

282. Aras Farayande

283. Arfa Paint Company (also known as Arfeh Company)

284. Arya Niroo Nik

285. Ashtian Tablo (also known as Bals Alman)

286. Azarab Industries

287. Bank Kargoshaee (also known as Bank Melli Iran Investment Company (BMIIC) and Bank Melli Printing and Publishing Company (BMPPC))

288. Bank Refah

289. Banque Sina

290. Bonab Research Centre

291. Bonyad Taavon Sepah

292. EDBI Exchange Company, Tehran-based

293. EDBI Stock Brokerage Company

294. Electronic Components Industries (ECI)

295. EMKA Company

296. ESNICO (Equipment Supplier for Nuclear Industries Corporation)

297. Etemad Amin Invest Company Mobin

298. Fajr Aviation Composite Industries

299. Farasepehr Engineering Company

300. Fulmen (also known as Fulmen Company)

301. Hafize Darya Shipping Lines (HDSL)

302. Hirbod Co.

303. Hosseini Nejad Trading Company

304. Industrial Development & Renovation Organization (IDRO)

305. Iran Centrifuge Technology Company

306. Iran Insurance Company

307. Iran Marine Industrial Company (SADRA)

308. Iran Saffron Company

309. Iranian Aviation Industries Organization (IAIO)

310. Loghman Pharmaceutical & Hygienic Co.

311. Marou Sanat

312. MASNA (Moierat Saakht Niroogahye Atomi Iran) (also known as Managing Company for the Construction of Nuclear Power Plants)

313. Mehr Bank

314. Melli Agrochemical Company PJS

315. Moallem Insurance Company

316. Neda Industrial Group

317. Neka Novin

318. Noavaran Pooyamoj

319. Noor Afza Gostar

320. Parto Sanat Company

321. Paya Partov (also known as Paya Parto)

322. Post Bank of Iran

323. Pouya Control

324. Raka

325. Research Institute of Nuclear Science & Technology

326. Safa Nicu

327. Sakhte Turbopomp va Kompressor (SATAK)

328. Sapid Shipping Co. (also known as Safiran Payam Darya Shipping Lines (SAPID))

329. Sepanir Oil and Gas Energy Engineering Company

330. Shahid Ahmad Kazemi Industrial Group

331. Shahid Beheshti University (SBU)

332. Shakhese Behbud Sanat

333. Shetab Gaman

334. Shetab Trading

335. Shipping Computer Services Company (SCSCOL)

336. Shomal Cement Company

337. Soroush Sarzamin Asatir Ship Management Company

338. South Way Shipping Agency Company Limited

339. SUREH (Nuclear Reactors Fuel Company)

340. Taghtiran (also known as Taghtiran Kashan Company)

341. Tajhiz Sanat Shayan (TSS)

342. Technology Cooperation Office (TCO) of the Iranian President’s Office

343. Tidewater Middle East Co.

344. Y.A.S. Company Limited

345. Yasa Part

10. Items 20 and 22 of Part 2 of Schedule 1 to the Regulations are repealed.

11. Part 2 of Schedule 1 to the Regulations is amended by adding the following after item 47:

48. Javad Rahiqi

12. Items 30 and 47 of Schedule 2 to the Regulations are repealed.

13. Schedule 2 to the Regulations is amended by adding the following after item 60:


Item 

Column 1
Goods

Column 2
Description

61.

Absolute pressure transducers

Absolute pressure transducers capable of measuring absolute pressures below 100kPa, and specially designed parts and software for them.

62.

Diamond core drilling tools

Diamond core drilling tools of all specifications.

63.

Electrical resistivity tomography equipment

Specially designed equipment for electrical resistivity tomography, capable of mineral surveying.

64.

Gamma-ray spectrometers

Gamma-ray spectrometers of all types and specifications, and specially designed parts and software for them.

65.

Gravimeters and gravity gradiometers

Gravimeters and gravity gradiometers of all specifications, and specially designed parts for them.

66.

LIDAR systems

Light detection and ranging (LIDAR) systems, equipment and components, designed for geophysical surveying.

67.

GPR systems

Ground penetrating radar (GPR) systems, equipment and components, designed for geophysical surveying.

68.

Magnetometers and magnetic gradiometers

Magnetometers, magnetic gradiometers, and their compensation systems, of all specifications, and specially designed parts for them.

69.

Mass spectrometers

Mass spectrometers of all types and specifications and specially designed parts and software for them.

70.

Numerically controlled machine tools

Numerically controlled machine tools of all types, and specially designed parts and software for them.

71.

Reflection seismological equipment

Reflection seismological equipment of all specifications and specially designed parts for it.

APPLICATION PRIOR TO PUBLICATION

14. For the purpose of paragraph 11(2)(a) of the Statutory Instruments Act, these Regulations apply before they are published in the Canada Gazette.

COMING INTO FORCE

15. These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT
ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issue and objectives

On July 22, 2010, the Governor in Council passed regulations imposing unilateral sanctions on Iran, after making a finding that Iran’s nuclear proliferation activities, including its ongoing violation of multiple United Nations (UN) Security Council resolutions and its continued failure to cooperate with the International Atomic Energy Agency (IAEA), constituted a grave breach of international peace and security that had resulted or was likely to result in a serious international crisis. In the intervening months, Iran has continued to violate its non-proliferation obligations under international law.

Iran’s continued enrichment of uranium and its lack of transparency and unwillingness to cooperate with the IAEA represent a significant challenge to the international community. On November 8, 2011, the IAEA issued its latest and most critical report to date on Iranian non-compliance with its international legal obligations. The report details the IAEA’s investigation into the possible military dimensions of Iran’s nuclear program, and reveals linkages between Iran’s nuclear and missile programs. It provides compelling evidence that reinforces the views of Canada and its allies that Iran is pursuing a nuclear weapons capability.

Iran continues to represent a threat to international peace and security due to its defiance of multiple UN resolutions, its illegal enrichment of nuclear material, and its pursuit of activities that can only be understood in the context of developing a nuclear weapons capability. Iran has also adopted an aggressive stance toward certain regional neighbours, including Israel and Saudi Arabia, as well as the United States. The insecurity created by these twin currents of Iranian policy has the potential to generate a serious regional conflict, with global consequences.

The amendments to the Special Economic Measures (Iran) Regulations (the “Iran Regulations”) prohibit all financial transactions with Iran, subject to certain exceptions; expand the list of prohibited goods to include all goods related to the oil, gas and petrochemical industries in Iran; amend the list of prohibited goods to include a number of additional goods with potential applications in Iran nuclear activities; add one new individual and 66 entities to the list of designated persons found in Schedule 1 of the Iran Regulations; and remove certain entities that have been recommended for removal by the Minister of Foreign Affairs because they no longer present a proliferation concern for Canada. It should be noted that the new prohibitions on financial transactions and on the export of goods related to the oil, gas and petrochemical industries (and the provision of related services and technical data) do not apply to contracts in force prior to November 22, 2011. Existing prohibitions on goods exports and financial transactions continue to apply as before.

The amendments also represent part of a coordinated effort by like-minded governments such as the United States and United Kingdom to apply pressure on Iran.

Description and rationale

The Government of Canada has made these amendments to the Iran Regulations in order to respond to the gravity of the recent IAEA report on Iran’s nuclear proliferation activities, in accordance with the authority granted under the Special Economic Measures Act.

The objectives of the Regulations amending the Iran Regulations are to add further impediments to Iran’s nuclear proliferation activities, and to persuade Iran’s leadership to resume negotiations with the international community with respect to its nuclear activities. The measures have been drafted in consultation with like-minded countries to ensure that they are coordinated to increase their effectiveness in countering Iran’s nuclear proliferation activities.

Consultation

The Department of Foreign Affairs and International Trade drafted the Regulations amending the Iran Regulations having consulted the Department of Justice.

Implementation, enforcement and service standards

Compliance is ensured by the Royal Canadian Mounted Police and the Canada Border Services Agency. Every person who contravenes the Regulations is liable, upon conviction, to the punishments set out in section 8 of the Special Economic Measures Act.

Contacts

Uday Sequeira
Desk Officer — Iran
Middle East, Gulf and Maghreb Relations
Department of Foreign Affairs and International Trade
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 613-996-3877
Fax: 613-944-7431
Email: uday.sequeira@international.gc.ca

Roland Legault
Deputy Director
United Nations, Human Rights and Economic Law Division (JLH)
Department of Foreign Affairs and International Trade
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 613-944-1599
Fax: 613-992-2467
Email: roland.legault@international.gc.ca

Hugh Adsett
Director
United Nations, Human Rights and Economic Law Division (JLH)
Department of Foreign Affairs and International Trade
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 613-992-6296
Fax: 613-992-2467
Email: hugh.adsett@international.gc.ca

Footnote a
S.C. 1992, c. 17

Footnote 1
SOR/2010-165