New Russia sanctions: luxury and weapons bans

Summary#

These final regulations (SOR/2022-102) change the Special Economic Measures (Russia) Regulations to add 14 people to Canada’s Russia sanctions list and to ban certain trade with Russia. The regulations were registered on May 18, 2022 and some of the new trade bans take effect 60 days after registration.

What it does#

• Adds 14 named individuals (oligarchs, family members and close associates) to Schedule 1 of the Special Economic Measures (Russia) Regulations. Those listed face the existing dealings ban in the Regulations.
• Prohibits exporting from Canada to Russia the luxury items listed in a new Schedule 6. It also prohibits importing from Russia the luxury items in Part 2 of Schedule 6.
• Prohibits exporting from Canada to Russia the goods listed in a new Schedule 7 that could be used to manufacture weapons (metals, parts, certain machinery, vehicles, unmanned aircraft, medical/analytical equipment, etc.).
• Creates or clarifies defined terms, including consumer communication device and Restricted Goods and Technologies List (the latter is maintained by Global Affairs Canada).
• Clarifies that anyone in Canada, and Canadians outside Canada, must not knowingly help, facilitate or assist activities that are prohibited by these rules.
• Notes key timing:
  • The regulations came into force on registration (May 18, 2022).
  • The new bans on luxury goods and on weapons‑related goods take effect 60 days after the regulations come into force.
• Lists several specific exceptions to the weapons‑related export ban (for example, some media equipment, items for international nuclear safeguards, certain civil aircraft items, and widely available consumer communication devices).

Who's affected#

• The 14 newly listed individuals on Schedule 1 (oligarchs and associates). Examples include Dmitry Arkadievich MAZEPIN, Nikita Dmitryevich MAZEPIN and Oleg Valentinovich BELOZYOROV (the full list is in the Regulations).
• Canadian exporters and importers of the items covered by Schedule 6 (luxury goods) and Schedule 7 (goods that could be used to make weapons). That can include food and drink traders, luxury goods retailers, manufacturers of certain metals and parts, machinery suppliers, and vehicle dealers.
• Banks and other financial institutions that must screen for and block dealings with listed persons and update monitoring systems (references to the Consolidated Canadian Autonomous Sanctions List are used for this).
• Transport, shipping and customs businesses, and travellers (there are narrow personal‑effects exceptions).
• Enforcement and administration: Royal Canadian Mounted Police and Canada Border Services Agency will enforce the rules; Global Affairs Canada manages listings and guidance.
• It is unclear how deep the trade links are for every listed good; the regulations note that many of the newly listed people likely have limited ties to Canada.

Why it matters#

• These rules increase Canada’s economic pressure on people and trade linked to Russia in response to the invasion of Ukraine. That aims to limit Russia’s ability to access luxury items and materials that could support weapons production.
• For businesses: exporters and importers that trade in the specified categories must stop shipments to or from Russia once the bans take effect unless a specific exception or permit applies.
• For listed individuals: existing dealings bans mean assets and transactions involving them in Canada are restricted.
• There are criminal penalties for knowingly breaking the rules: on summary conviction a fine up to $25,000 or imprisonment for up to one year, and on conviction on indictment imprisonment for up to five years.
• Many exceptions exist for limited humanitarian, media, inspection, or personal uses. If you trade in the affected goods and are unsure how this applies, the Regulations and guidance from Global Affairs Canada should be consulted.