Sanctions on Two Sri Lankan Individuals

Summary#

The Special Economic Measures (Sri Lanka) Regulations (SOR/2023-2) are Canada’s final rules that add targeted sanctions against people linked to serious human-rights abuses in Sri Lanka. They ban many kinds of financial and commercial dealings with the two named individuals and took effect on January 6, 2023 (registered that day and published in the Canada Gazette on January 18, 2023).

What it does#

• Prohibits Canadians in Canada and Canadians abroad from:
  • dealing in property owned or controlled by a listed person;
  • entering into or helping with transactions related to that property;
  • providing financial or related services connected to those dealings;
  • supplying goods to a listed person or someone acting for them;
  • knowingly facilitating or assisting any of the above.
• Lists 2 individuals by name in the schedule: Sunil RATNAYAKE and Chandana Prasad HETTIARACHCHI (also known as Navy Sampath).
• Allows the Minister of Foreign Affairs, under the Special Economic Measures (Sri Lanka) Permit Authorization Order, to issue permits that let people carry out specific transactions that the Regulations would otherwise block.
• Requires a range of financial and related institutions (banks under the Bank Act, credit unions, insurers, trust and loan companies, securities dealers, etc.) to monitor continuously for property linked to listed persons and report it.
• Includes a number of specific exceptions, for example:
  • some pre-existing contract payments and certain loan-repayment and enforcement transactions;
  • routine pension and social benefit payments (Old Age Security, Canada Pension Plan, Québec plan etc.);
  • transactions needed for diplomatic missions and certain international organizations;
  • legal services needed to challenge or understand the sanctions.
• Sets penalties for knowingly breaking the rules: upon summary conviction a fine of up to $25,000 or imprisonment for up to one year, or both; on indictment, imprisonment for up to five years.

Who's affected#

• The two named individuals: Sunil RATNAYAKE and Chandana Prasad HETTIARACHCHI (Navy Sampath).
• Any person in Canada or any Canadian outside Canada who owns, controls, or does business with property or entities connected to those listed people.
• Financial institutions and other regulated entities that must screen accounts and report suspected property (banks, credit unions, insurers, trust and loan companies, securities dealers).
• Canadian businesses that might otherwise seek a permit to do business with a listed person (permits can be requested but are discretionary).
• The listed individuals are also made inadmissible to Canada under the Immigration and Refugee Protection Act.

Why it matters#

• In plain terms, these rules freeze and ban most financial and commercial links between Canadians and the listed individuals. That limits the listed persons’ ability to use Canadian services, assets, or markets.
• Banks and other providers must update screening and reporting systems; compliance will likely cause some minor administrative costs.
• For the public, the measures signal that Canada is using targeted sanctions to pressure the Government of Sri Lanka over concerns about human-rights abuses and obstruction of justice.
• Enforcement is handled by the Royal Canadian Mounted Police and the Canada Border Services Agency (CBSA), and the names will be added to the Consolidated Canadian Autonomous Sanctions List so institutions can check them.