Canada expands Russia sanctions list

Summary#

These are the final Regulations Amending the Special Economic Measures (Russia) Regulations. They add a number of named Russian individuals and companies to Canada’s sanctions list so that Canadians are banned from dealing with them. The rules took effect on February 24, 2022 and were published in the Canada Gazette on March 16, 2022.

What it does#

• Adds 31 named individuals and 19 named entities to Schedule 1 of the Special Economic Measures (Russia) Regulations.
• Moves 5 entities from Schedule 2 and 3 entities from Schedule 3 into Schedule 1, which broadens the restrictions that apply to those entities.
• As a result, Canadians and people in Canada are generally prohibited from dealing with the property of, doing transactions with, or providing services to the listed people and entities.
• The amendments were made under the Special Economic Measures Act and came into force on the day the regulations were registered (February 24, 2022).

Who's affected#

• The newly listed individuals and companies themselves (examples named in the regulation include Yevgeny Viktorovich Prigozhin and the group Wagner).
• Large Russian firms added to the list, including banks and energy companies such as Sberbank, VTB, and Gazprom (these are examples from the amendments).
• Canadian banks and other financial institutions, which must screen for and block transactions involving the listed names.
• Canadian businesses or people who dealt with those named entities or individuals, or who might seek permits from Global Affairs Canada to lawfully carry out otherwise prohibited activities.
• Enforcement and compliance bodies, including the Royal Canadian Mounted Police and the Canada Border Services Agency.

Why it matters#

• Practical effect: assets in Canada linked to the listed people and entities can be frozen, and Canadians are blocked from doing business with them.
• Banks and businesses will need to update their screening systems; this can mean small compliance costs and possible disruption if contracts or payments involve the listed parties.
• The measure is part of Canada’s coordinated response with allies to Russia’s actions in Ukraine. It is intended to put direct economic pressure on specific people and organizations.
• There are criminal penalties for knowingly breaking the rules: on summary conviction a fine of up to $25,000 or jail up to one year (or both), and on indictment jail up to five years.
• The government did not seek public consultation on these additions because naming targets in advance could have let them move assets before the measures took effect.