New Russia Sanctions: 22 People, 4 Entities

Summary#

These final regulations, titled Regulations Amending the Special Economic Measures (Russia) Regulations, add 22 people and 4 organizations to Canada’s Russia sanctions list. They were registered on May 27, 2022 and published in the Canada Gazette on June 8, 2022; they took effect on the day they were registered. The practical effect is a broad ban on Canadians dealing with the listed people and entities and an effective freeze on their property in Canada.

What it does#

• Adds 22 named individuals and 4 named entities to Schedule 1 of the Special Economic Measures (Russia) Regulations.
  • The four entities added are: Management Company of the Russian Direct Investment Fund JSC, RVC Management Company LLC, Russian Agricultural Bank JSC, and Investtradebank JSC.
• Prohibits Canadians and anyone in Canada from dealing in the property of, providing services to, or otherwise making goods available to those listed.
• Requires Canadian banks and other financial institutions to screen for and block dealings with the newly listed names.
• Names and details will be added to the public Consolidated Canadian Autonomous Sanctions List to help with compliance.
• Enforcement roles are assigned to agencies including the Royal Canadian Mounted Police and the Canada Border Services Agency.
• Penalties for knowingly breaking the rules include fines up to $25,000, or imprisonment up to 1 year on summary conviction, or up to 5 years on indictment.

Who's affected#

• The 22 individuals and the 4 entities that were added to the sanctions list.
• Canadian banks and other financial institutions that must update screening systems and block prohibited transactions.
• Businesses and exporters who might seek permits for transactions otherwise prohibited; they could face extra paperwork or denied permissions.
• Most Canadians are unlikely to notice any direct effect unless they have dealings with the listed parties. It is unclear how many of the newly listed people or entities have meaningful links with Canada.

Why it matters#

• These listings extend Canada’s economic pressure on Russia in response to the invasion of Ukraine (begun on February 24, 2022).
• For people or companies that unknowingly deal with a listed person or entity, the rules can mean frozen assets, blocked transactions, or criminal penalties.
• The change signals continued alignment with allies using targeted sanctions to try to change behaviour without imposing blanket trade bans on an entire country.
• For most Canadians the impact will be indirect: small compliance costs for banks and possible limits on business ties with the newly listed Russian financial actors.