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Registration

SOR/2012-85 April 24, 2012

SPECIAL ECONOMIC MEASURES ACT

Regulations Amending the Special Economic Measures (Burma) Regulations

P.C. 2012-524 April 24, 2012

Whereas the Governor in Council is of the opinion that the situation in Burma 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 (Burma) Regulations.

REGULATIONS AMENDING THE SPECIAL ECONOMIC
MEASURES (BURMA) REGULATIONS

AMENDMENTS

1. (1) The definition “controlling interest” in section 1 of the Special Economic Measures (Burma) Regulations (see footnote 1) is repealed.

(2) Section 1 of the Regulations is amended by adding the following in alphabetical order:

“arms and related material”
« armes et matériel connexe »

“arms and related material” means any type of weapon, ammunition, military vehicle or military or paramilitary equipment, and includes their spare parts.

2. Sections 3 to 12 of the Regulations are replaced by the following:

Asset freeze

3. Subject to section 18, it is prohibited for any person in Canada and any Canadian outside Canada to

  1. (a) deal in any property, wherever situated, held by or on behalf of a designated person;

  2. (b) enter into or facilitate any transaction related to a dealing referred to in paragraph (a);

  3. (c) provide any financial or related service in respect of a dealing referred to in paragraph (a);

  4. (d) make any goods, wherever situated, available to a designated person; or

  5. (e) provide any financial or related service to or for the benefit of a designated person.

Restricted or prohibited activities

4. Subject to section 19, it is prohibited for any person in Canada and any Canadian outside Canada to

  1. (a) export, sell, supply, ship, transport or otherwise deal in arms and related material, wherever situated, destined for Burma or any person in Burma;

  2. (b) import, purchase, acquire, ship, transport or otherwise deal in arms and related material, wherever situated, that are exported from Burma after December 13, 2007;

  3. (c) transfer, provide or communicate technical data related to military activities or to the provision, manufacture, maintenance or use of arms and related material to Burma or any person in Burma; or

  4. (d) provide or acquire financial or other services related to military activities or to the provision, manufacture, maintenance or use of arms and related material to, from or for the benefit of or on the direction or order of Burma or any person in Burma.

3. Section 13 of the Regulations is replaced by the following:

Prohibition

13. No person in Canada and no Canadian outside Canada shall do anything that causes, assists or promotes, or is intended to cause, assist or promote, any act or thing prohibited by section 3 or 4.

4. Section 14 of the Regulations is amended by striking out “and” at the end of paragraph (h), by adding “and” at the end of paragraph (i) and by adding the following after paragraph (i):

  1. (j) entities that engage in any activity described in paragraph 5(h) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act if the activity involves the opening of an account for a client.

5. Subsection 16(3) of the Regulations is replaced by the following:

Presumption

(3) If the Minister does not make a decision on the application within 90 days after the day on which the application is received, the Minister is deemed to have decided to recommend that the applicant remain a designated person.

6. Sections 18 and 19 of the Regulations are replaced by the following:

Exceptions to section 3

18. Section 3 does not apply in respect of

  1. (a) any activity engaged in under an agreement or arrangement between Canada and Burma;

  2. (b) any payment made by or on behalf of a designated person that is due under a contract entered into before the person became a designated person, provided that the payment is not made to or for the benefit of a designated person;

  3. (c) any goods made available, or services provided, to or by any of the following entities for the purpose of safeguarding human life, disaster relief, democratization, stabilization or providing food, medicine, medical supplies or equipment or development assistance:

    1. (i) an international organization with diplomatic status,

    2. (ii) a United Nations agency,

    3. (iii) the International Red Cross and Red Crescent Movement, or

    4. (iv) a non-governmental organization that has entered into a grant or contribution agreement with the Department of Foreign Affairs and International Trade or the Canadian International Development Agency; and
  4. (d) any transaction necessary for a Canadian to transfer any existing accounts, funds or investments of a Canadian held with a designated person to a person other than a designated person.

Exceptions to section 4

19. Section 4 does not apply in respect of

  1. (a) protective clothing and equipment, including flak jackets and military helmets, for the personal use of United Nations personnel, human rights monitors, representatives of the media and humanitarian and development workers and associated personnel;

  2. (b) non-lethal military equipment intended solely for humanitarian, human rights monitoring or protective use, and related technical assistance and training; and

  3. (c) members of the Canadian Forces who are in or travel to Burma in the performance of official duties, including providing security to Canadian diplomatic staff, providing humanitarian assistance, or engaging in other activities authorized by the Chief of the Defence Staff.

7. The schedule to the Regulations is replaced by the schedule set out in the schedule to these Regulations.

APPLICATION PRIOR TO PUBLICATION

Application

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

COMING INTO FORCE

Registration

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

SCHEDULE
(Section 7)

SCHEDULE
(Section 2)

PERSONS

PART 1

ENTITIES

1. Air Bagan (also known among other names as Air Bagan Holdings Pte. Ltd. and Air Bagan Limited)

2. Bandoola Transportation Co. Ltd.

3. Berger Paint Manufacturing Co. Ltd.

4. Dagon Brewery

5. Granite Tile Factory (Kyaikto)

6. Hantha Waddy Golf Resort and Myodaw (City) Club Ltd.

7. Htoo Furniture (also known among other names as Htoo Wood, Htoo Wood Products, Htoo Wood Products Pte. Limited and Htoo Wood-Based Industry)

8. Htoo Group of Companies (also known among other names as Htoo Trading Company Limited and Htoo Trading Group Company)

9. Innwa Bank

10. MEC Disposable Syringe Factory

11. MEC Marble Mine

12. MEC Marble Tiles Factory

13. MEC Burma Cable Wire Factory

14. MEC Oxygen and Gases Factory

15. MEC Ship Breaking Service

16. MEC Steel Mills (Hmaw Bi/Pyi/Ywama)

17. MICB (also known among other names as Myanma Investment and Commercial Bank and Burma Investment and Commercial Bank)

18. Myaing Galay (Rhino Brand) Cement Factory

19. Myanma Economic Bank (also known among other names as Burma Economic Bank)

20. Myanma Economic Corporation (MEC)

21. Myanma Foreign Trade Bank (also known among other names as Burma Foreign Trade Bank)

22. Burma Ar (Power) Construction Services

23. Burma Brewery Ltd.

24. Burma Daewoo International

25. Burma Imperial Jade Co. Ltd.

26. Burma Nouveau Steel Co. Ltd.

27. Burma Posco Steel Co. Ltd.

28. Burma Rubber Wood Co. Ltd.

29. Burma Ruby Enterprise

30. Burma Segal International Ltd.

31. Myawaddy Bank Ltd.

32. Myawaddy Trading Ltd.

33. Myawaddy Travel Services

34. National Development Corp.

35. Nawaday Hotel and Travel Services

36. Ngwe Pin Le (Silver Sea) Livestock Breeding and Fishery Co.

37. Pavo Trading Pte. Ltd.

38. Rothman of Pall Mall Burma Private Ltd.

39. Sin Min (King Elephants) Cement Factory (Kyaukse)

40. Soap Factory (Paung)

41. The First Automotive Co. Ltd.

42. Union of Burma Economic Holding Ltd.

43. Yuzana Company Limited (also known among other names as Yuzana Construction)

44. Zay Gabar Company (also known among other names as Zaykabar Company)

PART 2

INDIVIDUALS

1. Than Shwe, born February 2, 1933

2. Maung Aye, born December 25, 1937

3. Khin Lay Thet, born June 19, 1947

4. Aung Thet Mann, born June 19, 1977 (also known among other names as Shwe Mann Ko Ko)

5. Toe Naing Mann, born June 29, 1978

6. Zay Zin Latt, born March 24, 1981

7. Tin Aung Myint Oo, born May 27, 1950

8. Kyaw Win, born January 3, 1944

9. Ye Myint, born October 21, 1943

10. Tin Lin Myint, born January 25, 1947

11. Aung Htwe, born February 1, 1943

12. Maung Bo, born February 16, 1945

13. Tin Naing Thein, born 1955

14. Saw Tun, born May 8, 1935

15. Chan Nyein, born 1944 (also known among other names as Chang Nyein)

16. Zaw Min, born January 10, 1949

17. Lun Thi, born July 18, 1940

18. Hla Tun, born July 11, 1951

19. Nyan Win, born January 22, 1953

20. Kyaw Myint, born 1940

21. Maung Oo, born 1952

22. Saw Lwin, born 1939

23. Soe Tha, born 1945

24. Thaung, born July 6, 1937

25. Thein Zaw, born October 20, 1951

26. Kyaw Thu, born August 15, 1949

27. Mya Oo, born January 25, 1940

28. Myint Swe, born May 24, 1951

29. Hsan Hsint, born 1951

30. Than Sein, born February 1, 1946

31. Tay Za, born July 8, 1964

32. Thidar Zaw, born February 24, 1964

33. Pye Phyo Tay Za, born January 29, 1987

34. Thiha, born June 24, 1960

35. Khin Shwe, born January 21, 1952

36. Zay Thiha, born January 1, 1977

37. Khin Nyunt, born October 11, 1939

38. Khin Win Shwe, born October 6, 1940

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

1. Background

In 2007, the Governor in Council determined that the situation in Burma constituted “a grave breach of international peace and security that has resulted or is likely to result in a serious international crisis.” This determination was based, in particular, on the violent crackdown against monks and protesters in August and September of 2007 and the detention of hundreds of political prisoners, including Nobel laureate, honorary Canadian citizen and pro-democracy opposition leader Aung San Suu Kyi. As a result, Canada passed the Special Economic Measures (Burma) Regulations, which imposed a number of prohibitions, including

  1. (a) a ban on all goods exported from Canada to Burma, except the export of humanitarian goods;

  2. (b) a ban on all goods imported from Burma into Canada;

  3. (c) a ban on new investment in Burma by Canadian persons and companies;

  4. (d) a freeze on assets in Canada of any designated Burmese nationals;

  5. (e) a prohibition on the provision of Canadian financial services to and from Burma;

  6. (f) a prohibition on the export of any technical data to Burma; and

  7. (g) a ban on the docking or transiting of ships or aircraft in each other’s territory.

The Special Economic Measures (Burma) Regulations have not been amended or updated since they came into effect.

2. Issue

Positive developments since 2010 in Burma indicate a significant improvement in the democracy and human rights situation, in stark contrast with the situation in 2007. Hundreds of political prisoners have been released, the government has entered peace negotiations and signed ceasefire agreements with most of the ethnic armed groups in the country, Aung San Suu Kyi and other members of her opposition pro-democracy party have been elected to Parliament, and overall basic freedoms have improved. However, some significant concerns remain, particularly with regard to remaining political prisoners and the ongoing conflict in Kachin state.

Substantial changes to Canada’s sanctions, including an easing of trade, investment, and financial services provisions, are needed to reflect existing positive developments in the country and encourage new ones. Easing sanctions is also necessary to enable Canada to pursue its interests in Burma, including strengthening human rights and democracy and seeking opportunities for international development cooperation. Lifting the bans on trade, investment and financial services would also open up commercial opportunities for Canadian companies in Burma, and would make it easier for them to enter joint ventures with companies from Association of Southeast Asian Nations (ASEAN) countries which may have interests in Burma.

3. Objectives

The amendments aim to contribute to international efforts to recognize positive changes taking place in Burma, while continuing to pressure its government to make additional reforms.

4. Description

The Regulations Amending the Special Economic Measures (Burma) Regulations (the Regulations) remove a number of prohibitions currently found in the Special Economic Measures (Burma) Regulations: prohibitions on import, export, investment, the docking and landing of ships and aircraft and the provision or acquisition of financial services. They retain prohibitions on importing or exporting arms and related material and on dealing in the property of designated persons (which effectively freezes any of their assets in Canada or under the control of a Canadian outside Canada).

5. Consultation

The Department of Foreign Affairs and International Trade drafted the Regulations following consultations with the Department of Finance Canada, the Canada Border Services Agency, the Canadian International Development Agency and the Department of Justice.

6. Small business lens

The Regulations may affect Canadians or Canadian companies that wish to conduct business with Burma, if their transaction involves a designated person. This is a significant reduction in the burden caused by the existing regulations, which require a permit from the Minister of Foreign Affairs for any transaction. No other effects are expected, given that all remaining prohibitions have been in effect for five years. Nevertheless, the Minister of Foreign Affairs is authorized to issue permits to allow those affected by the Regulations to undertake activities that would otherwise be prohibited.

7. Rationale

The current Burmese government has demonstrated a willingness to implement reforms and has made improvements to the human rights and democracy situation. International support and recognition are important to ensuring that these efforts continue. On the other hand, further improvements in the human rights and democracy situation are still necessary, and the risk remains that the situation could deteriorate. Retaining some leverage over the Burmese government in the form of limited sanctions may be useful in pressuring for continued progress.

Like-minded countries and entities such as the United States, Australia and the European Union are expected to take equivalent measures at roughly the same time. The United States has already announced a review of financial and investment sanctions, and issued Office of Foreign Assets Control General License 14-C, authorizing the exportation and re-exportation of a number of financial services provided in support of certain not-for-profit activities, such as projects to meet basic human needs. Keeping Canadian sanctions in line with those of our major partners is a key element of their effectiveness.

8. Implementation, enforcement and service standards

Compliance is ensured by the Royal Canadian Mounted Police and the Canada Border Services Agency. Every person who contravenes section 3, 4 or 13 of the Regulations is liable, upon conviction, to the punishments set out in section 8 of the Special Economic Measures Act.

9. Contacts

David Kyffin
Legal Officer
United Nations, Human Rights and Economic Law Division (JLH)
Department of Foreign Affairs and International Trade
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 613-995-3589
Fax: 613-992-2467
Email: david.kyffin@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

Lisa Rice Madan
Director
Southeast Asia and Oceania Relations Division
Department of Foreign Affairs and International Trade
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 613-992-6807
Fax: 613-944-1604
Email: lisa.ricemadan@international.gc.ca

Footnote a
S.C. 1992, c. 17

Footnote 1
SOR/2007-285