Vol. 148, No. 27 — December 31, 2014
SOR/2014-317 December 19, 2014
SPECIAL ECONOMIC MEASURES ACT
Regulations Amending the Special Economic Measures (Ukraine) Regulations
P.C. 2014-1499 December 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. Part 1 of the schedule to the Special Economic Measures (Ukraine) Regulations (see footnote 1) is amended by adding the following after item 54:
- 55. Oleh BEREZA
- 56. Oleksandr KARAMAN
- 57. Volodimir KONONOV
- 58. Georgiy L’vovich MURADOV
- 59. Andriy Yurevich PINCHUK
- 60. Miroslav Vladimirovich RUDENKO
- 61. Mikhail Sergeyevich SHEREMET
- 62. Gennadiy Nikolaiovych TSYPKALOV
- 63. Oleksandr ZAKHARCHENKO
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.)
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, and August 6, 2014.
Meeting on the margins of the United Nations (UN) General Assembly on September 25, 2014, the G7 Foreign 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 reported violations of the Minsk agreements.
Armed militia groups and insurgents currently control large parts of the Donetsk and Luhansk regions of Ukraine. On November 2, 2014, the Donetsk and Luhansk so-called “People’s Republics” held illegitimate “presidential and legislative elections,” in violation of the Minsk agreements. Canada, as well as the United States and the European Union, has condemned these “elections,” which contravened Ukraine’s constitution as well as the terms of the Minsk agreements and were conducted illegitimately in the presence of armed gunmen. Within days, the self-proclaimed leaders of the two “People’s Republics,” Aleksander Zakharchenko and Igor Plotnitsky, were “inaugurated” in Donetsk and Luhansk, wearing presidential sashes in separatist colours. In an inflammatory statement, Plotnitsky has indicated that it is just a matter of time before the “People’s Republics” will join the Russian Federation, and has listed a number of other regions of Ukraine (Vinnytsia, Zaporizhzhia, Kherson, Cherkasy, and Chernihiv) as also wanting to join the Russian Federation.
On November 12, 2014, NATO Supreme Allied Commander Philip Breedlove cited multiple reports of large convoys crossing the border into Ukraine from Russia over a period of days, and assessed that this significant military build-up included Russian artillery, tanks and troops. Monitors from the Organization for Security and Cooperation in Europe (OSCE) have also reported these significant military movements. Ukraine’s National Security and Defence Council has estimated that there are a total of 33 000 Russian and pro-Russian militants operating in eastern Ukraine, including 7 700 Russian soldiers.
According to the Ukrainian National Security and Defence Council, between April 2014 and November 11, 2014, 1 052 Ukrainian soldiers have been killed during the conflict in Ukraine’s eastern regions.
According to the United Nations, 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 UN also estimates that over 4 000 persons have been killed, over 6 000 wounded and hundreds of thousands displaced since the Russian-backed militants launched their violent campaign in April 2014. The humanitarian situation is likely to continue to deteriorate with the onset of winter. Briefing the United Nations Security Council on November 12, 2014, Assistant Secretary-General ad interim for UN Political Affairs Jens Anders Toyberg-Frandzen noted that the number of internally displaced persons is expected to increase.
The proposed Regulations Amending the Special Economic Measures (Ukraine) Regulations (the Regulations) add nine individuals to the Schedule.
The proposed Regulations add nine 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) 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