Further to our previous messages on this subject, you will find below a summary of the recent sanctions that Canada has imposed on Russia which may have a potential impact on member operations. As a reminder, these sanctions are being implemented through the Special Economic Measures (Russia) Regulations, which first came into effect in 2014 and have been subject to a series of amendments in response to Russia’s invasion of Ukraine. A general overview of these regulations can be found at this LINK on Global Affairs Canada’s website.
Prohibitions on Ships
On March 6, Canada added a new section (3.4) to the Russia Regulations under which certain ships are prohibited from stopping in Canadian ports or passing through Canadian waters. Ships that fall under this prohibition include ships that are registered in Russia, as well as ships that are used, leased or chartered (in whole or in part) by, on behalf of, or for the benefit of Russia, a designated person, or a person in Russia.
Based on the above wording, it is our understanding that the prohibition could potentially extend beyond the ship (and its owners, operators, charterers, etc.) to encompass the cargo on board, if it is determined that the movement of the cargo (or the transaction involving the cargo’s sale or purchase) will benefit Russia or a person in Russia.
Prohibitions on Individuals and Entities
Over the last several weeks, Canada has added several hundred names to the list of “designated persons” who are subject to an asset freeze and dealings prohibition, as set out in Schedule 1 of the Russia Regulations. As a result, Canadian companies and nationals are now prohibited from engaging in or facilitating a wide range of activities involving approximately 1,000 Russian individuals and entities. Prohibited activities include:
- Making any goods, wherever situated, available to a designated person;
- Providing any financial or related service to, or for the benefit of, a designated person;
- Dealing in property held by or on behalf of a designated person; entering into or facilitating any transaction related to such a dealing, or providing any financial or other related services in respect of such a dealing.
A consolidated reference list of currently sanctioned individuals and entities is available on the Global Affairs Canada website at this LINK. Note that there can be a 24-hour delay between the entry into force of new sanctions listings and the list being updated.
Although members should be careful to ensure that they do not engage in dealings with any of the designated persons whose names appear on this list, please bear in mind that an individual or an entity does not have to appear on this list in order to be captured by the prohibition on vessel entry – as that prohibition extends to a broader range of individuals and entities than those listed as designated persons.
On March 10, Canada imposed a prohibition on the import, purchase or acquisition of petroleum products from Russia or from any person in Russia, as set out in a new schedule 5 to the Russia Regulations. It is worth noting that the prohibition applies not only to imports into Canada, but also to the import, purchase, or acquisition of these products anywhere in the world by persons in Canada or Canadians outside Canada. The text of schedule 5 (which includes a description of the petroleum products captured by the prohibition) can be found on this WEB PAGE (please scroll to the bottom of the page).
We appreciate that Canada’s sanctions regime against Russia is evolving rapidly and that the applicability of the resulting prohibitions to specific member operations and activities is not always obvious or clear cut. We therefore continue to work with Transport Canada to better understand how these sanctions are being implemented on a practical level and to ensure that we have a concrete link with Global Affairs Canada.
We will continue to provide updates on the sanctions regime as warranted. In the meantime, members with questions on any of the above should contact the undersigned.