Vol. 149, No. 5 — March 11, 2015
SOR/2015-40 February 17, 2015
SPECIAL ECONOMIC MEASURES ACT
Regulations Amending the Special Economic Measures (Ukraine) Regulations
P.C. 2015-200 February 17, 2015
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. Part 1 of the schedule to the Special Economic Measures (Ukraine) Regulations (see footnote 1) is amended by adding the following after item 63:
- 64. Larisa AIRAPETYAN
- 65. Eduard BASURIN
- 66. Olga BESEDINA
- 67. Oleg BUGROV
- 68. Vladyslav DEYNEGO
- 69. Pavel DREMOV also known as “Batya” or “Kazak”
- 70. Ekaterina FILIPPOVA
- 71. Sergey IGNATOV
- 72. Zaur ISMAILOV
- 73. Ravil KHALIKOV
- 74. Ihor KOSTENOK
- 75. Serhiy KOZYAKOV
- 76. Lesya LAPTEVA
- 77. Sergey LITVIN
- 78. Evgeny MANUILOV
- 79. Yevgeniy MIKHAYLOV
- 80. Alexey MILCHAKOV also known as “Fritz” or “Serbian”
- 81. Dmitry NEKLYUDOV
- 82. Yevgeniy ORLOV
- 83. Arseny PAVLOV also known as “Motorola”
- 84. Dmitry SEMYONOV
- 85. Aleksandr SHUBIN
- 86. Yuriy SIVOKONENKO
- 87. Aleksandr TIMOFEEV
- 88. Mikhail TOLSTYKH also known as “Givi”
- 89. Viktor YATSENKO
2. Part 2 of the schedule to the Regulations is amended by adding the following after item 20:
- 21. Cossack National Guard
- 22. Donetsk Republic
- 23. Free Donbass
- 24. Kalmius Battalion
- 25. Luhansk Economic Union
- 26. Oplot
- 27. Peace to Luhansk Region
- 28. People’s Union
- 29. Prizrak Brigade
- 30. Profaktor, TOV
- 31. Smert aka Death Battalion
- 32. Somali Battalion
- 33. Sparta Battalion
- 34. The South-East Movement
- 35. Zarya Battalion
APPLICATION PRIOR TO PUBLICATION
3. 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
4. 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.)
Pro-Russian separatists continue to destabilize eastern Ukraine and facilitate Russian military action against the Ukrainian government.
Acting in coordination with the United States and the European Union, the Governor in Council has found 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. As a result, the Special Economic Measures (Ukraine) Regulations were approved on March 17, 2014. Further amendments to these Regulations were made on March 19, 2014, April 12, 2014, May 12, 2014, June 21, 2014, July 11, 2014, July 24, 2014, August 6, 2014, and December 19, 2014.
Meeting on the margins of the United Nations (UN) General Assembly on September 25, 2014, the G7 Foreign Affairs Ministers welcomed the Minsk agreements of September 5 and 19, 2014, as an important step towards a sustainable, mutually agreed ceasefire, a secure Russian-Ukrainian border and the return of peace and stability to eastern Ukraine with the establishment of a “special status” zone. However, Russia and the militants it backs have violated previous commitments, including agreements reached in Geneva in April 2014 and in Berlin in July 2014, and there continue to be ongoing violations of the Minsk agreements.
Early 2015 has seen the worst deterioration in the security situation since the Minsk agreements of September 2014. Separatist leaders have publicly renounced the Minsk agreements, declared intentions to expand the territory under their control to the entirety of the Donetsk and Luhansk provinces, and announced a “mobilization drive” intended to recruit 100 000 militants. Meanwhile, Russia continues to provide military support to the insurgents in the form of both soldiers and weapons. According to Ukraine’s Minister of Defense, there are approximately 7 500 Russian soldiers currently active in eastern Ukraine.
An offensive launched in mid-January 2015, has seen the separatists make significant gains, beginning with the Donetsk airport, a strategically and symbolically important facility close to downtown Donetsk. The insurgents have also launched an offensive against the town of Debaltseve, a key railroad hub whose seizure would widen transport links between rebel-held areas in the Donetsk and Luhansk provinces, with heavy casualties reported on both sides. Mariupol, the last major Ukrainian-held city in either province, was intensely shelled by the rebels on January 24, 2015. This current year has seen a significant increase in indiscriminate shelling and civilian casualties in other parts of these provinces as well.
Sustained and intensive efforts by Germany’s Chancellor Merkel and French President Hollande resulted in the successful conclusion of the February 12, 2015, “Package of Measures for the Implementation of the Minsk Agreements.” However, during negotiations and in the days and hours before the ceasefire of February 15, fighting continued around Debaltseve where Russian-backed separatist militias operated beyond the line of contact agreed upon in the Minsk agreements of September 2014, causing numerous civilian casualties, and putting at risk the hard-won agreement. Since the truce came into force, the Ukrainian troops have continued to come under fire, and Debaltseve remains the scene of clashes, despite a reduction in overall violence.
According to the UN, pro-Russian insurgents have deliberately targeted public utilities such as water, electricity and sewage plants, and forced essential services, including hospitals and clinics, to shut down. The humanitarian situation is deteriorating, and civilians caught in the crossfire are being evacuated when the situation permits. It is also estimated that 5.2 million Ukrainians live in conflict-affected areas; 610 413 people are reported to be internally displaced (95% from the eastern regions of Ukraine); and 593 609 have fled to neighbouring countries. According to the UN, over 5 300 have been killed since the violence began in April 2014.
The proposed Regulations Amending the Special Economic Measures (Ukraine) Regulations (the Regulations) add 26 individuals and 15 entities to the Schedule.
The proposed Regulations add 26 individuals and 15 entities 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 nongovernmental 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 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