Sanctions: Xinjiang Officials and Entity

Summary#

The federal government registered the Special Economic Measures (People's Republic of China) Regulations on March 21, 2021 (published in the Canada Gazette on March 31, 2021). The rule lists four people and one organization tied to alleged rights abuses in Xinjiang and stops most Canadians and people in Canada from doing business with them.

What it does#

• Lists these people and the entity (named in the schedule):
  • ZHU Hailun
  • WANG Junzheng
  • WANG Mingshan
  • CHEN Mingguo
  • Xinjiang Production and Construction Corps Public Security Bureau
• Prohibits, for anyone in Canada and for Canadians abroad:
  • Dealing in any property owned or controlled by a listed person.
  • Entering into or facilitating transactions linked to those dealings.
  • Providing financial or related services for those dealings.
  • Supplying goods to a listed person or someone acting for them.
  • Providing financial services to or for the benefit of a listed person.
• Also makes it illegal to knowingly help or facilitate any of the prohibited activities.
• Includes exemptions for some routine or humanitarian matters, for example:
  • Payments required by contracts made before someone was listed.
  • Certain loan and pension payments.
  • Financial transactions needed for diplomatic missions, some international organizations, and certain government-to-government arrangements.
  • Legal services in Canada that relate to applying the sanctions.
• Requires banks and other financial service firms to keep checking whether they hold assets of listed people and to report suspected assets or transactions to the Royal Canadian Mounted Police or the Canadian Security Intelligence Service.
• Contraventions are punishable under the Special Economic Measures Act (penalties noted below). The listed individuals are also made inadmissible to Canada under immigration rules.

Who's affected#

• The four named individuals and the one named entity listed above.
• People and businesses in Canada, and Canadians working or living abroad, who might:
  • Hold or handle property tied to those listed.
  • Provide financial services, goods, or other support to them.
• Financial institutions and firms that open accounts, provide banking, insurance, trust, loan, securities or investment services — they have a legal duty to monitor and report.
• It is unclear how many Canadian businesses actually have existing dealings with the named people or the entity; the government says significant impacts on small businesses are unlikely.

Why it matters#

• The measures effectively cut the listed people and the named entity off from the Canadian financial system and from receiving goods or services from Canadians. That can freeze assets and block transactions tied to Canada.
• Canada is using these targeted sanctions to signal disapproval and to try to increase pressure over the alleged human-rights abuses in the Xinjiang region.
• Financial institutions will need to update screening and reporting systems; the government expects only minor compliance costs.
• Enforcement is by the Royal Canadian Mounted Police and the Canada Border Services Agency. Penalties for willful breaches include a fine of up to $25,000, or imprisonment for up to 1 year on summary conviction, or up to 5 years on indictment.