Vol. 148, No. 16 — July 30, 2014
SOR/2014-180 July 11, 2014
SPECIAL ECONOMIC MEASURES ACT
Regulations Amending the Special Economic Measures (Ukraine) Regulations
P.C. 2014-880 July 11, 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. Part 1 of the schedule to the Special Economic Measures (Ukraine) Regulations (see footnote 1) is amended by adding the following after item 27:
- 28. Viktor Yuriiovych ANOSOV
- 29. Viacheslav Anatoliiovych APRAKSIMOV
- 30. Fedir Dmytrovych BEREZIN
- 31. Ruslan Yunirovish ILKAEV
- 32. Valery Vladimirovich KAUROV
- 33. Oleksandr Sergiyovych KHODAKOVSKYI
- 34. Mykola Ivanovych KOZITSYN
- 35. Oleksii Borysovych MOZGOVYI
- 36. Valerii Kostiantynovych MUSIIENKO
- 37. Viacheslav Mykolaiovych PETROV
- 38. Ihor Venedyktovych PLOTNYTSKY
- 39. Yurii Oleksandrovych PROTSENKO
- 40. Oleh Anatoliiovych VASIN
- 41. Serhii Anatoliyovych ZDRILIUK
APPLICATION PRIOR TO PUBLICATION
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.)
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, and June 21, 2014.
Presidential elections were held in Ukraine on May 25, 2014, resulting in Petro Poroshenko being elected in the first round, and receiving 54.7% of the votes. Despite Russian efforts to undermine the vote’s legitimacy by destabilizing eastern Ukraine, election turnout was reported at over 60% nation wide, excluding those regions in eastern Ukraine not under government control. Most polling stations in Donetsk and Luhansk regions were closed by pro-Russian militias, and turnout there was as low as 15%. Separatists in these parts of Ukraine rejected the vote and reiterated their claim for independence.
On June 4–5, 2014, leaders of the G7 countries met in Brussels and issued a declaration condemning the Russian Federation’s continuing violation of the sovereignty and territorial integrity of Ukraine. Leaders reaffirmed Russia’s illegal annexation of Crimea, and that actions to destabilize eastern Ukraine are unacceptable and must stop. Leaders also called on the Russian Federation to meet the commitments it made in the Geneva Joint Statement of April 17, 2014, and to cooperate with the government of Ukraine as it implements its plans for promoting peace, unity and reform.
Leaders also confirmed the decision by the G7 countries to impose sanctions on individuals and entities who have actively supported or implemented the violation of Ukraine’s sovereignty and territorial integrity and who are threatening the peace, security and stability of Ukraine. Canada, along with the G7 nations, has indicated readiness to intensify targeted sanctions and to implement significant additional measures to impose further costs on Russia should events so require.
Despite Ukraine’s recent successful elections and international pressure to respect Ukraine’s sovereignty and territorial integrity, Russia continues to destabilize the region. Throughout June 2014, deadly clashes between Ukrainian security forces and pro-Russian separatists continued in eastern Ukraine. Armed militia groups and insurgents have occupied government buildings, opened fire on border guard posts, launched mortar attacks at military checkpoints, and taken hostages, including Organization for Security and Cooperation in Europe (OSCE) representatives.
On June 14, 2014, pro-Russian militia shot down a Ukrainian military transport plane, killing all 49 military personnel and crew members on board. This was the worst single loss of life among Ukrainian military personnel during months of unrest in eastern Ukraine, and came a day after reports that Russian tanks and armoured personnel carriers had entered the conflict.
On June 24, 2014, pro-Russian insurgents shot down an army helicopter near Slaviansk in eastern Ukraine. The incident resulted in the deaths of nine Ukrainian soldiers and came the day after pro-Russian rebels agreed to a ceasefire until June 27 to match a week-long truce ordered by President Poroshenko, as part of the President’s 15-point peace plan. According to United Nations figures, the past three months of deadly violence has claimed close to 500 lives.
The proposed Regulations Amending the Special Economic Measures (Ukraine) Regulations (the Regulations) add 14 individuals to the schedule.
The proposed Regulations add 14 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 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.
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