Vol. 148, No. 8 — April 9, 2014
SOR/2014-63 March 19, 2014
SPECIAL ECONOMIC MEASURES ACT
Regulations Amending the Special Economic Measures (Ukraine) Regulations
P.C. 2014-291 March 19, 2014
Whereas the Governor in Council is of the opinion that the situation in Ukraine 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), makes the annexed Regulations Amending the Special Economic Measures (Ukraine) Regulations.
REGULATIONS AMENDING THE SPECIAL ECONOMIC MEASURES (UKRAINE) REGULATIONS
1. The schedule to the Special Economic Measures (Ukraine) Regulations (see footnote 1) is amended by adding the following after item 3:
4. Rustam Ilmirovich TEMIRGALIEV
5. Deniz Valentinovich BEREZOVSKIY
6. Aleksei Mikhailovich CHALIY
7. Pyotr Anatoliyovych ZIMA
8. Yuriy ZHEREBTSOV
9. Sergey Pavlovych TSEKOV
APPLICATION PRIOR TO PUBLICATION
Statutory Instruments Act
2. 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
3. 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.)
Ukrainian officials, party members, and other individuals in the province of Crimea, working in concert with the Russian Federation government and Russian military forces, have illegally seized power on the Crimean peninsula. They are now facilitating Russian military action against the Ukrainian government and military inside Crimea, as well as Russia’s violation of Ukraine’s sovereignty and territorial integrity.
Since February 27, 2014, Ukrainian provincial-level officials in Crimea, with Russian backing, have taken a series of measures that violate both the Ukrainian constitution and, because of Russian involvement, international law. Heavily armed Russian soldiers have taken control of the Ukrainian province of Crimea, surrounding or seizing direct control of Crimea’s airports, government buildings, provincial legislature and military installations. They have also severed telephone lines within Crimea, set up roadblocks on Crimean roads, and built trenches to sever the Crimean peninsula from the Ukrainian mainland.
With the Crimean provincial legislature under Russian military control, the legislature’s Speaker Volodymyr Konstantynov, announced that legislators had passed a vote of non-confidence in the provincial government of Crimea. Konstantynov also announced that legislators had voted to appoint Serhiy Aksyonov as the new prime minister of Crimea. Aksyonov had been head of the Russian Unity party in Crimea, a Russian-backed party that supported closer integration with Russia. The acting president of Ukraine, Oleksandr Turchynov, decreed that the appointment of Aksyonov as the head of the Crimean government was unconstitutional.
On March 1, 2014, Aksyonov declared himself in charge of all military, police, air forces, navy and border guards in Crimea, and urged those who disagreed with this declaration “to resign.” He also made a request to President Vladimir Putin for “assistance to preserve peace and calm.” On that same day, Aksyonov also announced that a referendum on whether Crimea should separate from Ukraine was being moved forward two months, from May 25, 2014, to March 30, 2014.
Upon an invitation from the Ukrainian government on March 4, 2014, an unarmed military observation mission composed of various Organization for Security and Cooperation in Europe (OSCE) countries (including two observers from Canada) was formed to report on military activities in the Crimean peninsula. This mission has been confronted several times by unidentified armed men who did not allow them to enter Crimea and turned them back.
At the request of the Prosecutor General’s Office of Ukraine, the Kyiv District Administrative Court found the appointment of Aksyonov as Prime Minister of Crimea, and the decision to organize a referendum, illegal. The Court also struck down the February 27, 2014, decision by the Crimean legislature to dissolve the provincial government.
On March 5, 2014, a Ukrainian court ordered the arrest of Serhiy Aksyonov and Volodymyr Konstantynov under Part 1 of Article 109 of the Criminal Code of Ukraine, relating to “actions aimed at the violent overthrow, change of constitutional order, or the seizure of state power.”
On March 6, 2014, the Crimean Parliament adopted a resolution declaring its unanimous decision to become part of Russia, and moving forward the date of the referendum by another two weeks to March 16, 2014. The Ukrainian Ministry of Justice has underlined the illegality of the referendum, and noted that, according to the Ukrainian constitution, only national referendums are permitted.
Between March 2, 2014, and March 14, 2014, Russian forces steadily took operational control of the Crimean peninsula, capturing key installations and chokepoints, and increasing their troop presence to an estimated 20 000.
With the Crimean provincial legislature under Russian military control, the legislator’s Speaker announced legislators had passed a vote of non-confidence in the provincial government of Crimea. The Speaker also announced that legislators had voted to appoint Serhiy Aksyonov as the new prime minister of Crimea. On March 6, 2014, the self-appointed Crimean Parliament adopted a resolution declaring its unanimous decision to become part of Russia, and set a referendum on this question for March 16, 2014.
On March 16, 2014, the referendum was held in Crimea while the province was under the control of an illegal and coercive Russian military presence, resulting in an announced vote of 98.77% in favour of Crimea becoming a subject of the Russian Federation. The following day, members of Crimea’s self-appointed Parliament travelled to Moscow to begin negotiations on accession.
On March 17, 2014, acting in coordination with the United States and the European Union, the Governor in Council passed regulations imposing unilateral sanctions on Ukraine and Russia, after finding that the situation with respect to Crimea constitutes a grave breach of international peace and security that has resulted or is likely to result in a serious international crisis.
The proposed Regulations Amending the Special Economic Measures (Ukraine) Regulations (the Regulations) add six individuals to the list of designated persons subject to sanctions under the Special Economic Measures (Ukraine) Regulations. These individuals are Ukrainian officials, party members, and other individuals in the province of Crimea who, working in concert with the Russian Federation government and Russian military forces, have illegally seized power on the Crimean peninsula and are facilitating Russia’s violation of Ukraine’s sovereignty and territorial integrity.
The Regulations add six individuals to the list of designated persons under the Special Economic Measures (Ukraine) Regulations. Any person in Canada and any Canadian outside Canada are prohibited from
- dealing in any property, wherever situated, held by or on behalf of a designated person;
- entering into or facilitating, directly or indirectly, any transaction related to such a dealing;
- providing any financial or related service in respect of such a dealing;
- making goods, wherever situated, available to a designated person; and
- providing any financial or related service to or for the benefit of a designated person.
Exceptions to the above-noted prohibitions are available for the following:
- Payments made by or on behalf of designated persons pursuant to contracts entered into prior to the coming into force of the Regulations, provided that the payments are not made to or for the benefit of a designated person;
- Pension payments to any person in Canada or any Canadian outside Canada;
- Transactions in respect of accounts at financial institutions held by diplomatic missions, provided that the transaction is required in order for the mission to fulfill its diplomatic functions under the Vienna Convention on Diplomatic Relations, or, transactions required in order to maintain the mission premises if the diplomatic mission has been temporarily or permanently recalled;
- Transactions by international organizations with diplomatic status, agencies of the United Nations, 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, Trade and Development;
- Transactions necessary for a Canadian to transfer to a non-designated person any accounts, funds or investments of a Canadian held by a designated person on the day on which that person became designated;
- Financial services required in order for a designated person to obtain legal services in Canada with respect to the application of any of the prohibitions in the Regulations; and
- Loan repayments made to any person in Canada or any Canadian abroad in respect of loans entered into before the coming into force of the Regulations, enforcement of security in respect of those loans, or payments by guarantors guaranteeing those loans.
The “One-for-One” Rule applies to this proposal, as there are minimal administrative costs to business, because of the reporting requirement. However, the administrative burden associated with these Regulations is carved out from the “One-for-One” Rule as they address unique, exceptional circumstances.
Small business lens
The small business lens does not apply to this proposal, as there are no costs (or insignificant costs) on small business, and small businesses would not be disproportionately affected.
Foreign Affairs, Trade and Development Canada drafted the Regulations in consultation with the Department of Justice and Citizenship and Immigration Canada.
The measures contained in the Regulations demonstrate Canada’s concern about the situation in Ukraine. The economic sanctions in the Regulations target individuals engaged in activities that directly or indirectly facilitate, support, provide funding for, or contribute to the deployment of Russian armed forces to Crimea or to the seizing of control of Ukrainian government and military entities inside Crimea.
Implementation, enforcement and service standards
Canada’s sanctions regulations are enforced by the Royal Canadian Mounted Police and the Canada Border Services Agency. In accordance with section 8 of the Special Economic Measures Act, every person who wilfully contravenes these Regulations is liable upon summary conviction to a fine of not more than $25,000 or to imprisonment for a term of not more than one year or to both, or upon conviction on indictment, to imprisonment for a term of not more than five years.
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