Expanded Russia sanctions and CNC export ban

Summary#

These are final changes to the Regulations Amending the Special Economic Measures (Russia) Regulations that were registered on June 12, 2024 and published in the Canada Gazette on July 3, 2024. They add a number of people and organizations to Canada’s Russia sanctions list and add new export controls on certain machine tools and parts that can be used in weapons production.

What it does#

• Adds 11 individuals and 16 entities to the sanctions lists in the Special Economic Measures (Russia) Regulations. The full names are published in the Canada Gazette schedules.
• Prohibits exports from Canada and by Canadians abroad of certain Computer Numerical Controlled (CNC) machine tools and related parts, by adding these Harmonized System codes to the export ban:
  • 8457.10 – Machining centres for working metal
  • 8458.11 – Numerically controlled horizontal lathes (including turning centres) for removing metal
  • 8458.91 – Numerically controlled lathes (other than horizontal lathes) for removing metal
  • 8459.61 – Numerically controlled milling machines for metals (specified types)
  • 8466.93 – Parts and accessories principally for the machine-tool headings 8456–8461
• Fixes some wording in the French version of Schedule 7 and corrects a published date of birth for Vladislav Alexandrovich TRETIAK.
• The rules took effect on the day they were registered (see June 12, 2024).

Who's affected#

• The 11 individuals newly listed (names published in Schedule 1). Examples include Vladislav Alexandrovich TRETIAK, Maksim Anatolyevich SHUGALEY, and Alexander Alexandrovich MALKEVICH. The Canada Gazette shows the full list.
• The 16 entities newly listed (names published in Schedule 2). Examples include Pobeda LLC (Pobeda Airlines), Novorossiysk Shipping Company, Russian National Reinsurance Company JSC, Rossiyskaya Gazeta, and Voice of Europe s.r.o..
• Canadian exporters and businesses that deal in CNC machine tools, milling machines, lathes, and related parts. These businesses must not export the newly listed goods to Russia or make them available to listed persons.
• Canadian banks and other financial institutions. They must screen for and block dealings with the newly listed people and entities.
• The listed individuals themselves. Being listed means asset dealings are prohibited and they become inadmissible to Canada under the Immigration and Refugee Protection Act.

Why it matters#

• The changes tighten Canada’s targeted sanctions aimed at making it harder for Russia to obtain equipment and technology used in military production. Adding CNC machines and parts targets tools that can be used to make weapons and military components.
• The additions also target people and organizations tied to Russia’s military-industrial complex, sanctions circumvention, and disinformation networks. That can cut off sources of revenue, services, and international access for those listed.
• For Canadian businesses, the practical impact is mostly compliance: exporters and banks may need to update screening and stop certain transactions. The government’s analysis says effects on Canadian trade overall should be small because exports to Russia are already low.
• There are legal penalties for violating the regulations. On summary conviction, penalties include a fine of up to $25,000 or imprisonment for up to 1 year, and on conviction on indictment, imprisonment for up to 5 years.