Sanctions: 35 Individuals, 6 Energy Firms

Summary#

These final regulations — the Regulations Amending the Special Economic Measures (Russia) Regulations — were registered on October 28, 2022. They add 35 people and 6 companies to Canada’s Russia sanctions list, creating an asset freeze and broad ban on dealings with those listed persons and entities.

What it does#

• Adds 35 individuals (mostly senior officials tied to the energy sector) and 6 entities to Schedule 1 of the Regulations Amending the Special Economic Measures (Russia) Regulations. The added entities include Infrastructure Molzhaninovo LLC, Sibuglemet Group LLC, Transoil LLC, Lukoil PJSC, NNK JSC, and Gas Industry Insurance Company SOGAZ.
• Freezes the property of the listed people and companies for anyone in Canada and for Canadians outside Canada. That means most transactions, payments, services or transfers involving their property are prohibited.
• The rules took effect on the day the regulations were registered — October 28, 2022 — and were applied before the Canada Gazette publication.
• The names will be added to Canada’s consolidated sanctions list so banks and other organizations can update their screening systems.

Who's affected#

• Banks and other financial institutions in Canada — they must screen for and block dealings with the newly listed names.
• Canadian businesses and individuals that might have done business with the listed energy officials or the listed companies. Small businesses are unlikely to be heavily affected, but could face extra paperwork or denied permit requests if a connection exists.
• Law enforcement and border authorities — the Royal Canadian Mounted Police and the Canada Border Services Agency enforce the rules.
• Global Affairs Canada manages the list and communications about the sanctions.
• It is clear the targeted people are senior energy-sector figures; beyond that, the day-to-day impact on most Canadians is likely minimal.

Why it matters#

• Practically, these measures block money, services and trade between Canada (and Canadians) and the newly listed Russian individuals and companies. That can stop bank accounts from being used, payments from going through, or contracts from being fulfilled.
• Banks will update controls, so some transactions may be delayed or flagged while compliance checks occur.
• The measures are part of coordinated international sanctions aimed at increasing economic pressure on Russia over its actions in Ukraine.
• Penalties for knowingly breaking the rules include a summary conviction fine of up to $25,000 or imprisonment for up to one year, or, on indictment, imprisonment for up to five years.