Canadian Sanctions - Frequently Asked Questions

Disclaimer: The Frequently Asked Questions (FAQs) on this page are intended for general informational purposes and do not constitute legal advice. These FAQs address complex topics involving sanctions policy, international relations, and domestic and international law. As each circumstance is specific and may engage sanctions in different ways, it is important to carefully review the applicable sanctions regulations before conducting any activities. We recommend that you seek legal counsel for assistance in the interpretation of Regulations. Contravening sanctions is a criminal offence.

• What are sanctions?
• What are sanctions regulations?
• When does Canada impose sanctions?
• What is the purpose of the United Nations Act?
• What is the purpose of the Special Economic Measures Act?
• What is the purpose of the Justice for Victims of Corrupt Foreign Officials Act?
• What Are “Listed”, “Named” or “Designated” Persons?
• What happens when a person is designated?
• When does a prohibition apply?
• Can I deal with the subsidiaries of a designated company?
• Can I deal with an entity that deals with a designated person?
• What sanctions does Canada currently have in place?
• Who must comply with sanctions?
• What are the consequences of not complying with sanctions?
• How do Canada’s sanctions differ from those imposed by other countries (e.g. the United States)?
• Are Canada’s sanctions the same for all countries?
• Where can I find a complete list of people and companies with whom it is prohibited to do business?
• Canada has sanctions on Country X. Does that mean I cannot do any business with that country?
• A bank has blocked my transaction. What should I do?
• What do I do if I want to pursue an activity or transaction that I believe may be prohibited under Canadian sanctions regulations?
• Are there exceptions in Canadian sanctions for humanitarian assistance and similar types of work?
• Can I report an individual or a company for breaching sanctions?

Q: What are sanctions?

A: Sanctions are a foreign policy tool used to address international peace and security concerns, gross violations of human rights, and significant foreign corruption. They form part of a comprehensive foreign policy approach involving political dialogue, engagement, and programming.

Sanctions place restrictions on the activities permissible between Canadians and foreign states, individuals, or entities. They can encompass a wide variety of measures, including, but not limited to, financial restrictions, travel restrictions, arms embargos, export/import restrictions, shipping bans, and the suspension of technical assistance and/or development aid to a country. Sanctions applied against foreign states may target specific economic sectors or may apply more broadly, depending on the foreign policy objectives the sanctions seek to achieve.

Q: What are sanctions regulations?

A: Sanctions regulations are statutory instruments made under an Act of Parliament. The contravention of these regulations can lead to penalties, fines, or imprisonment as prescribed by the legislation.

In order to implement sanctions in Canadian law, regulations are made pursuant to the authorities found in the Special Economic Measures Act, the Justice for Victims of Corrupt Foreign Officials Act, and the United Nations Act. These regulations define the scope of the measures being imposed in a certain situation, including any applicable exceptions. Regulations vary widely. For information about the sanctions Canada has imposed against a certain country or foreign national, always consult the relevant regulations.

Regulations made under the Special Economic Measures Act and the United Nations Act are accessible under the “Selected Documents” section of the country-specific sanctions pages. The most recent version of the regulations is located at the top of the list. For regulations made under the Justice for Victims of Corrupt Foreign Officials Act, consult the Justice for Victims of Corrupt Foreign Officials Regulations.

Q: When does Canada impose sanctions?

A: Canada is legally required to implement sanctions imposed by the United Nations Security Council (UNSC) under Chapter VII of the Charter of the United Nations. These sanctions are implemented in Canadian law by adopting regulations under the United Nations Act.

Canada also has the ability to impose sanctions autonomously by adopting regulations under the Special Economic Measures Act and the Justice for Victims of Corrupt Foreign Officials Act. Canada uses autonomous sanctions as a discretionary tool of foreign policy to influence behaviour, with the object of addressing international peace and security concerns, human rights violations, and corruption. Canadian sanctions aim to bring about a change in policy or behaviour by the target state, individuals, or entities. Through the use of targeted sanctions measures, Canada strives to minimize adverse consequences for civilian populations and for legitimate business, humanitarian, or other activities.

Q: What is the purpose of the United Nations Act?

A: If the United Nations Security Council (UNSC) determines that an act of aggression or a threat to or breach of the peace has occurred, it may decide what measures member states shall take to restore or maintain international peace and security. Such a decision by the UNSC imposes a legal obligation on Canada, as a member of the United Nations, to implement the required measures in Canada. The United Nations Act allows the Canadian government to make regulations that give legal effect to UNSC sanctions in Canada.

Q: What is the purpose of the Special Economic Measures Act?

A: The Special Economic Measures Act (SEMA) allows Canada to impose sanctions, either unilaterally or in concert with likeminded countries, when:

1. an international organization or association of states, to which Canada belongs, calls on its members to take economic measures against a foreign state;
2. a grave breach of international peace and security has occurred that has resulted or is likely to result in a serious international crisis;
3. gross and systematic human rights violations have been committed in a foreign state; or
4. a national of a foreign state, who is either a foreign public official or an associate of such an official, is responsible for or complicit in acts of significant corruption.

In order to maximize the effectiveness of sanctions measures, Canadian policy seeks to ensure, whenever possible, that sanctions under SEMA are applied multilaterally, in concert with other like-minded countries.

Q: What is the purpose of the Justice for Victims of Corrupt Foreign Officials Act?

A: The Justice for Victims of Corrupt Foreign Officials Act allows Canada to impose sanctions against foreign nationals who, in the opinion of the Governor in Council, are:

1. responsible for or complicit in gross violations of internationally-recognized human rights against individuals in a foreign state that are (1) seeking to expose illegal activity carried out by a foreign public official or (2) seeking to obtain, exercise, defend or promote internationally-recognized rights and freedoms; or
2. foreign public officials, or foreign nationals who are associates of such officials, and who are responsible for or complicit in acts of significant corruption in a foreign state.

Listed foreign nationals are found in the Schedule of the Justice for Victims of Corrupt Foreign Officials Regulations. Persons in Canada and Canadians outside of Canada are prohibited from dealing in the property of these individuals. These individuals are also inadmissible to Canada pursuant to the Immigration and Refugee Protection Act.

Q: What Are “Listed”, “Named” or “Designated” Persons?

A: It is common for sanctions regulations to prohibit or restrict dealings with certain persons (both individuals and entities). In such cases, the relevant sanctions regulation will refer to “listed”, “named”, or “designated” persons. These terms are often used interchangeably when discussing sanctions, although regulations are specific in their usage of the terms. For more information, please see Listed Persons.

Q: What happens when a person is designated?

A: When a person (individual or entity) is designated under Regulations pursuant to the Special Economic Measures Act or the Justice for Victims of Corrupt Foreign Officials Act, they are subject to a dealings ban and they become inadmissible to Canada.

A dealings ban consists of measures aiming to prevent an individual or entity from gaining access to property or other assets under Canadian jurisdiction, or from benefitting from transactions with Canadians and persons abroad. A dealings ban prohibits persons in Canada and any Canadian (in Canada or abroad) from conducting dealings with a designated person, including:

• dealing in their property;
• entering into or facilitating transactions related to their property; and,
• providing financial or related services.

A “dealing in property” may apply to real property (e.g., land or buildings), as well as all other forms of property, including physical goods – such as equipment, vehicles, and artwork – or intangible property – such as money, financial instruments, and intellectual property.

Dealings bans apply to both direct and indirect transactions with designated entities. Under most Regulations it is also prohibited to enter into or facilitate transactions related to dealings with designated entities by someone else.

Depending on the Regulations, some exceptions may apply, such as in the case of diplomatic activities, in respect of pre-existing contracts so long as there is no resulting benefit to a designated person, or for transactions required to move financial assets away from designated persons. Consult the relevant Regulations to determine the prohibitions and potential exceptions that may apply to your activity.

Q: When does a prohibition apply?

A: Unless otherwise specified in the relevant Regulations, sanctions prohibitions apply from the date of their entry into force.

Prohibitions do not apply retroactively.

In some cases, some prohibitions may include wind-down periods, meaning they only take effect after a specified period following the date of their entry into force. In other cases, exceptions may apply for activities for which an existing contract is in place when it does not benefit a designated person. The relevant Regulations will specify whether any exceptions apply.

For example, under the Special Economic Measures (Russia) Regulations, in the case of a contract with a designated person that was entered into before the date the person was designated, it is permissible to discharge contractual obligations, in whole or in part, provided that no payment is made to or for the benefit of a designated person.

The following scenarios may serve as illustrative examples for activities pursuant to the Special Economic Measures (Russia) Regulations:

• Scenario 1: A Canadian company (“A”) has entered into a contract with a non-designated Russian company (“B”). As per the contract, A sends funds to B in return for the delivery of non-designated goods. At a given time, company B is designated under Schedule 1 of the Special Economic Measures (Russia) Regulations and is thus subject to the dealings ban. At the time that the designation came into force, the goods provided by B had already been delivered to A and payment had already been made.

The financial transaction between company A and company B would not be considered to have contravened the dealings ban because it was completed prior to the coming into force of B’s designation. Similarly, the goods that A purchased from B were delivered prior to the coming into force of B’s designation, so A may use and dispose of the goods without engaging the dealings prohibitions.

• Scenario 2: A Canadian company (“A”) has entered into a contract with a non-designated Russian company (“B”). As per the contract, A sends funds to B in return for the delivery of non-designated goods. At a given time, company B is designated under the Special Economic Measures (Russia) Regulations and is thus subject to a dealings ban. At the time that the designation came into force, payment had been made but the goods provided by B had not yet been delivered.

The financial transaction between company A and company B is not considered to have contravened the dealings prohibitions because it was completed prior to the coming into force of B’s designation. As for the goods: given that company A has already provided payment to company B, and provided that the activity does not require in any further dealings with B or benefit it in other ways, A may receive the goods delivered by B and use them without engaging the dealings prohibitions.

• Scenario 3: A Canadian company (“A”) has entered into a contract with a non-designated Russian company (“B”). As per the contract, A sends funds to B in return for the delivery of non-designated goods. At a given time, company B is designated under the Special Economic Measures (Russia) Regulations and is thus subject to a dealings ban. At the time that the designation came into force, A had not yet fully paid but B had already delivered the goods to A.

Notwithstanding the fact that company A entered into the contract with company B before the latter was listed as a designated entity, any dealings or transactions with company B after the date that the designation came into force would be considered a contravention of the dealings ban.

Q: Can I deal with the subsidiaries of a designated company?

A: Under the Special Economic Measures Act (SEMA) and the Justice for Victims of Corrupt Foreign Officials Act (JVCFOA), property owned by an entity that is in turn owned or controlled by a designated person is subject to the dealings ban defined under the relevant Regulations.

The SEMA and the JVCFOA include three criteria by which ownership and control may be assessed:

• if the designated person holds, directly or indirectly, 50% or more of the shares or ownership interests in the entity or 50% or more of the voting rights in the entity;
• if the designated person is able, directly or indirectly, to change the composition or powers of the entity’s board of directors; or,
• if it is reasonable to conclude, that the designated person is able, directly or indirectly and through any means, to direct the entity’s activities.

Should any of these provisions apply, the non-designated entity’s property would be regarded as owned or controlled by the designated person, and it would therefore be prohibited for Canadians or persons in Canada to deal in the property of that entity even if they are not themselves designated under Canadian sanctions.

The following scenarios may serve as illustrative examples for activities pursuant to the SEMA and the JVCFOA:

• Scenario 1: A Canadian company is considering the possible sanctions implications of buying goods from a subsidiary of a listed entity. The designated parent company owns a majority of shares in the subsidiary. Given that one of the deemed ownership provisions apply, the subsidiary would be deemed to be owned or controlled by the designated parent company with respect to the dealings bans under the SEMA and the JVCFOA. Consequently, it would be prohibited for the Canadian company to purchase goods from the subsidiary.
• Scenario 2: A Canadian company is considering the possible sanctions implications of buying goods from a subsidiary of a listed entity. While the designated parent company does not meet the 50% or more ownership criteria of the subsidiary, it is known to exercise considerable influence over its strategic decision-making. Given that at least one of the deemed ownership provisions applies, the subsidiary would be deemed to be owned or controlled by the designated parent company. Consequently, it would be prohibited for the Canadian company to purchase of goods from the subsidiary.

Q: Can I deal with an entity that deals with a designated person?

A: It is important to check the relevant Regulations to determine whether a prohibition may apply.

A “dealing in property” may apply to real property (e.g., land or buildings), as well as all other forms of property, including physical goods – such as equipment, vehicles, and artwork – or intangible property – such as money, financial instruments, and intellectual property.

Under most Regulations made pursuant to the Special Economic Measures Act and the Justice for Victims of Corrupt Foreign Officials Act, it is prohibited to enter into or facilitate a transaction related to a dealing with a listed person – even indirectly, such as through a third party – including if that third party is not Canadian and/or is located outside of Canada.

For example, Section 3 paragraph (b) of the Special Economic Measures (Russia) Regulations prohibits the direct or indirect facilitation of dealings between any person and a designated person.

As such, knowingly entering into or facilitating a transaction related to a dealing between any person and a designated person would be prohibited under the Special Economic Measures (Russia) Regulations. This prohibition applies regardless of whether the third party is Canadian or situated in Canada, or whether or not any sanctions apply to this third party.

The following scenarios may serve as illustrative examples for activities pursuant to the Special Economic Measures (Russia) Regulations:

• Scenario 1: A Canadian company (“A”) is the end-user of a type of product that it purchases from a non-designated foreign supplier (“B”). Company B manufactures this product using materials that it sources directly from a company recently designated under the Special Economic Measures (Russia) Regulations (“C”).

While a foreign supplier is not subject to Canadian sanctions and it may be legal for B to deal with C in jurisdictions outside of Canada, transactions between Canadian company A and foreign supplier B involving company’s C products are nonetheless considered prohibited under the Special Economic Measures (Russia) Regulations unless an exception is applicable. It would therefore be prohibited for the Canadian end-user company, A, to continue procuring goods from B that involve dealings with C past the date on which the listing of C came into force.

Q: What sanctions does Canada currently have in place?

For information about the sanctions Canada has imposed against a certain foreign state, individual, or entity, always consult the relevant regulations. Regulations made under the Special Economic Measures Act and the United Nations Act are accessible under the “Selected Documents” section of the country-specific sanctions pages. The most recent version of the regulations is located at the top of the list. For regulations made under the Justice for Victims of Corrupt Foreign Officials Act, consult the Justice for Victims of Corrupt Foreign Officials Regulations.

Canadians must also comply with several other Canadian laws that restrict or impose limits on certain activities with foreign states or foreign nationals.

• The Criminal Code enables Canada to apply measures in relation to terrorist entities, including those not necessarily listed by the United Nations Al-Qaida and Taliban Regulations or the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism.
• Regulations enacted under the Export and Import Permits Act provide Canada with an additional mechanism for controlling trade. Notably, export or transfer of any goods or technology to countries named in the Area Control List is controlled, and must be authorized by an export permit issued by the Minister of Foreign Affairs under the authority of the Export and Import Permits Act. For more information, please see Export and Import Controls.
• The Freezing Assets of Corrupt Foreign Officials Act allows Canada to freeze the assets or restrain the property of certain politically exposed foreign persons (such as government officials or politicians), at the request of a country undergoing internal turmoil or political uncertainty.
• The Immigration and Refugee Protection Act provides the authority to deny entry into Canada to foreign nationals who are inadmissible pursuant to sanctions.

Q: Who must comply with sanctions?

A: Canadian sanctions restrictions must be respected by any persons (both individuals and entities) located in Canada, including governments. Canadian persons (both individuals and entities) must also comply with Canadian sanctions restrictions when they are located or engaged in activities abroad.

Q: What are the consequences of not complying with sanctions?

A: Contravening Canadian sanctions is a criminal offence. Offences are investigated and enforced by the Canadian Border Services Agency and the Royal Canadian Mounted Police.

Under the United Nations Act, the maximum penalty on summary conviction is a $100,000 fine or a 1-year prison term, or both. Convictions on indictment may result in a maximum 10-year prison term.

Under the Special Economic Measures Act and the Justice for Victims of Corrupt Foreign Officials Act, the maximum penalty on summary conviction is a $25,000 fine or a 1-year prison term, or both. Conviction on indictment may result in a maximum 5-year prison term.

Separate penalties are imposed for contraventions of the Criminal Code, the Freezing Assets of Corrupt Foreign Officials Act, and the Export and Import Permits Act.

Q: How do Canada’s sanctions differ from those imposed by other countries (e.g. the United States)?

A: There are often significant differences in how countries impose sanctions, due to their different legal systems. Canada’s sanctions are applied under Canadian law, which determines the legal basis upon which the sanctions are made, as well as the specific prohibitions that are imposed.

Remember that compliance with another country’s sanctions does not ensure compliance with Canadian law. Canadian sanctions restrictions must be respected by any persons (both individuals and entities) located in Canada. Canadian persons (both individuals and entities) must also comply with Canadian sanctions restrictions when they are located or engaged in activities abroad. Always consult the Canadian regulations to determine if any Canadian sanctions measures apply to your situation.

If you are located in or have dealings in a foreign jurisdiction, be sure to consult that jurisdiction’s laws and regulations to determine if any additional sanctions measures might apply to your intended activity and/or transaction.

Q: Are Canada’s sanctions the same for all countries?

A: No. Canadian sanctions usually do not apply in the same way to every country. Please check the relevant regulations and, if necessary, seek the advice of legal counsel to determine whether any Canadian sanctions measures apply to your particular situation.

Q: Where can I find a complete list of people and companies with whom it is prohibited to do business?

A: The Consolidated United Nations Security Council Sanctions List, located on the United Nations website, provides a searchable list of all individuals and entities designated by the United Nations Security Council that are referred to in regulations made under the United Nations Act. Not all prohibitions in the regulations will apply to every individual or entity on that list. The applicable sanctions regulations will specify what prohibitions apply to a particular individual or entity. With the exception of the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism (RIUNRST), regulations made under Canada's United Nations Act refer to the names of listed persons (both individuals and entities) published by the relevant Security Council Committee. The names of persons listed under RIUNRST are published in the Schedule to the regulations.

The Consolidated Canadian Autonomous Sanctions List includes the names of persons (both individuals and entities) listed in the schedules of regulations made under the Special Economic Measures Act and the Justice for Victims of Corrupt Foreign Officials Act.

The inclusion of these names on this list is for administrative purposes and ease of reference only. The consolidated list is not a regulation, and it does not have force of law. In addition, the prohibitions may not apply to each individual or entity in the same way. Each applicable sanctions regulation specifies what prohibitions apply to a particular individual or entity. For accurate information on which provisions apply, reference must be made to the relevant regulation in which the particular individual or entity is listed.

You should also consult other Canadian laws that restrict or impose limits on certain activities with foreign states or nationals, including:

• The Criminal Code, for measures applied in relation to terrorist entities; and
• The Freezing Assets of Corrupt Foreign Officials Act, for restrictions imposed in relation to politically exposed foreign persons (such as government officials or politicians) from a country in turmoil.

Q: Canada has sanctions on Country X. Does that mean I cannot do any business with that country?

A: Sanctions can impact Canadian businesses by:

• prohibiting all or specific types of trade and other economic activities with listed or designated persons in a particular country;
• prohibiting all or specific types of trade and other economic activity with a foreign market;
• restricting financial transactions and services, such as foreign investments, acquisitions, wire transfers, or letters of credit; or
• freezing or seizing property situated in Canada.

These restrictions may apply to dealings with the entire country, with non-state actors, such as terrorist organizations, or with designated persons from that country. It is important to carefully review the regulations for each country before conducting business to determine what prohibitions apply. When in doubt, seek the advice of legal counsel for assistance in the interpretation of regulations. Please note that Global Affairs Canada does not provide legal advice to the public and is unable to confirm whether or not your particular activity or transaction is permitted under Canadian sanctions.

Q: A bank has blocked my transaction. What should I do?

A: First, contact the financial institution and ask them to provide the reasons for blocking the transaction. Banks and other financial institutions may block, prohibit, or freeze transactions for any number of reasons, including (but not limited to) compliance with sanctions regulations in Canada or abroad.

If the proposed transaction is blocked for reasons of institutional policy, you may wish to follow up further with the financial institution.

If the institution advises you that an economic sanction prohibits the transaction, request that they provide the specific regulatory provision(s) blocking the transaction.

If the financial transaction has been blocked to comply with foreign laws, you may wish to seek the advice of legal counsel in the relevant foreign state regarding next steps.

If the transaction has been blocked due to a Canadian sanctions regulation, you may wish to review the relevant regulation and/or seek the advice of legal counsel to determine if an exception applies or if the transaction is indeed prohibited.

If you conclude that the intended transaction is prohibited, you may consider applying for a permit or certificate, which can allow for specific activities or transactions that would otherwise be prohibited by sanctions to be carried out on an exceptional basis.

Information on how to apply and what documents are required to complete an application is available on our Permits and Certificates page.

Q: What do I do if I want to pursue an activity or transaction that I believe may be prohibited under Canadian sanctions regulations?

A: If you conclude that the activity or transaction that you wish to carry out is prohibited under Canadian sanctions, you may consider applying for a permit or certificate. These can allow for specific activities or transactions that would otherwise be prohibited by sanctions regulations to be carried out on an exceptional basis.

Information on how to apply and what documents are required to complete an application is available on our Permits and Certificates page. Please note that Global Affairs Canada does not provide legal advice to the public and cannot confirm whether or not your particular situation requires a permit or certificate prior to receipt of a formal application. If you are unsure whether or not your proposed activity or transaction is prohibited, we suggest that you consult the relevant regulations for each country and, if necessary, seek the advice of private legal counsel before applying for a permit or certificate.

There is no guarantee that your application for a permit or certificate will be approved. Do not undertake any activities prohibited by sanctions until you have received a signed permit or certificate.

Q: Are there exceptions in Canadian sanctions for humanitarian assistance and similar types of work?

A: Canadian sanctions regulations may include exceptions for humanitarian and other types of activities. Always check the relevant regulations to determine whether any exceptions apply to your particular situation.

If you conclude that no exceptions apply to your particular situation, and that the intended activity and/or transaction you wish to carry out is prohibited under Canadians sanctions regulations, you may consider applying for a permit or certificate, which can allow for specific activities or transactions that would otherwise be prohibited by sanctions to be carried out on an exceptional basis.

Information on how to apply and what documents are required to complete an application is available on our Permits and Certificates page.

Q: Can I report an individual or a company for breaching sanctions?

A: Mandatory or voluntary disclosures of violations of sanctions can be made to the RCMP at the following address.

Federal Policing Operations - Intake Unit
RCMP
73 Leiken Drive
Ottawa, Ontario
Canada K1A 0R2

Fax: 613-825-7030
Email: Federal_Policing_Intake_Unit@rcmp-grc.gc.ca

Please note that your information is not protected via email. If necessary, you may submit an encrypted email or send a secure fax.