Vol. 149, No. 5 — March 11, 2015
SOR/2015-39 February 17, 2015
SPECIAL ECONOMIC MEASURES ACT
Regulations Amending the Special Economic Measures (Russia) Regulations
P.C. 2015-199 February 17, 2015
Whereas the Governor in Council is of the opinion that the actions of the Russian Federation constitute 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 (Russia) Regulations.
REGULATIONS AMENDING THE SPECIAL ECONOMIC MEASURES (RUSSIA) REGULATIONS
1. Part 1 of Schedule 1 to the Special Economic Measures (Russia) Regulations (see footnote 1) is amended by adding the following after item 77:
- 78. Anatoly ANTONOV
- 79. Sergey CHEMEZOV
- 80. Andrei KARTAPOLOV
- 81. Dmitry KISELYOV
- 82. Iosif KOBZON
- 83. Valery KULIKOV
- 84. Aleksey NAUMETS
- 85. Alexander NOSATOV
- 86. Valery RASHKIN
- 87. Igor TURCHENYUK
- 88. Alexander ZALDOSTANOV
2. Part 2 of Schedule 1 to the Regulations is amended by adding the following after item 34:
- 35. Public Movement “Novorossiya”
3. Schedule 3 to the Regulations is amended by adding the following after item 1:
- 2. Rosneft
APPLICATION PRIOR TO PUBLICATION
4. 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
5. 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.)
The Russian Federation continues to violate the sovereignty and territorial integrity of Ukraine.
Acting in coordination with the United States and the European Union, the Governor in Council has found that the actions of the Russian Federation constitute a grave breach of international peace and security that has resulted or is likely to result in a serious international crisis. As a result, the Special Economic Measures (Russia) Regulations were approved on March 17, 2014. Amendments to these Regulations were made on March 19, 2014, March 21, 2014, April 28, 2014, May 4, 2014, May 12, 2014, June 21, 2014, July 24, 2014, August 6, 2014, September 16, 2014, and December 19, 2014.
Russia’s direct military involvement in the conflict in Ukraine, which the Russian government continues to deny, is of increasingly grave concern for the international community. There has been a recent escalation of violence, continued attacks against Ukrainian defence forces, including a rise in civilian casualties, and ongoing violations of the ceasefire agreements made in Minsk, Belarus, on September 5 and 19, 2014. Russia is failing to implement the 12-point peace plan that was agreed upon by the Presidents of Ukraine and Russia, including commitments on the release of prisoners; permanent observation of the ceasefire by the Organization for Security and Cooperation in Europe (OSCE); the full withdrawal of Russian soldiers and weapons from the region; and self-determination by the Donetsk and Luhansk provinces on their future status. Despite key leaders calling for a diplomatic solution to the crisis, all previous attempts at an agreement or ceasefire arrangement have deteriorated amidst continued fighting in eastern Ukraine.
There have been multiple reports of large convoys crossing the border from Russia into Ukraine, the thirteenth “humanitarian” convoy is on route from Russia to Ukraine with suspected supplies for the insurgents, and the North Atlantic Treaty Organization (NATO) has assessed a significant military build-up of Russian artillery, tanks and troops along the border region. OSCE monitors on the ground have also reported these significant movements. Ukraine’s National Security and Defence Council has estimated that a total of 33 000 Russian and pro-Russian militants are operating in eastern Ukraine, including 7 500 Russian soldiers.
In a recent visit to Ukraine, United States Secretary of State John Kerry stated that the tanks crossing the border from Russia into Ukraine and the Russian fighters in unmarked uniforms crossing the border and leading separatists in battle could not be ignored. John Kerry also stated that “modern rockets” and other military hardware had crossed the border from Russia into Ukraine.
The United Nations (UN) has warned of a growing number of civilian deaths as Ukrainian forces battle pro-Russian separatists for control in the Donetsk and Luhansk regions. On February 5, 2015, United Nations Secretary-General Ban Ki-moon voiced grave concern over the continuing hostilities in eastern Ukraine. The United Nations confirms that figures for civilian casualties have spiked with 224 civilians killed and 545 wounded in the last three weeks of January. According to the Office of the UN High Commissioner for Human Rights, the overall death toll now exceeds 5 300 people, with another 12 235 wounded since mid-April last year.
The civilian death toll from the fighting has been particularly high in the residential areas of both government-controlled territory, such as the towns of Avdiivka, Debaltseve, Popasna and Shchastia and the settlement of Stanytsia Luhanska, as well as the cities of Donetsk and Horlivka controlled by the armed groups. In the single most deadly incident involving civilians on January 24, 2015, at least 31 people were killed and 112 wounded in Mariupol, following two attacks by multiple launch rocket systems.
There have also been growing fears that Russia’s aggression will lead to security concerns for other neighbouring regions. NATO is stepping up its presence close to Russia’s western border and on February 5, 2015, NATO Defense Ministers agreed to establish new NATO command and control units in Estonia, Latvia, Lithuania, Romania, Bulgaria and Poland.
Canada, along with its partners and allies, continues to collaborate in imposing additional coordinated sanctions on Russia, including sanctions targeted at key sectors of the Russian economy, and sanctions against individuals directly or indirectly responsible for the situation in Ukraine. These actions have been taken to demonstrate to the Russian leadership that it must end its support to militant separatists in eastern Ukraine and tangibly participate in creating the necessary conditions for the political process to advance peacefully.
The proposed Regulations amend the Special Economic Measures (Russia) Regulations by adding 11 individuals and one entity to Schedule 1, and one entity to Schedule 3.
The Regulations add 11 individuals and one entity to the list of designated persons in Schedule 1 of the Special Economic Measures (Russia) 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 whose name is listed in Schedule 1;
- 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 listed in Schedule 1; and
- providing any financial or related service to or for the benefit of a designated person listed in Schedule 1.
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 nongovernmental organizations that have entered into a grant or contribution agreement with Foreign Affairs, Trade and Development Canada;
- 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 Regulations also add one entity to the list of designated persons in Schedule 3 of the Special Economic Measures (Russia) Regulations. It is prohibited for any person in Canada and any Canadian outside Canada to transact in, provide financing for or otherwise deal in new debt of longer than 90 days’ maturity, including bonds, loans, debentures, extensions of credit, loan guarantees, letters of credit, bank drafts, bankers’ acceptances, discount notes, treasury bills, commercial paper and other similar instruments, in relation to
- a designated person listed in Schedule 3;
- the property of a designated person listed in Schedule 3; or
- the interests or rights in property of a designated person listed in Schedule 3.
The prohibition noted above does not apply in respect of a loan that was made or a bond or debenture that was issued before the designated person was listed in Schedule 3.
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) to 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 continuing violation of Ukraine’s sovereignty and territorial integrity.
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.
Eastern Europe and Eurasia Division
Foreign Affairs, Trade and Development Canada
125 Sussex Drive