Canada has passed legislation to allow the United Nations Security Council to make decisions and trade policies through the United Nations Act, the Special Economic Measures Act, and the Export and Import Permits Act. This is referred to as “Economic Sanctions Legislation.” Regulations in those Acts generally provide for lists of designated individuals and entities and impose certain responsibilities on financial entities (banks, credit unions, insurance companies, trust and loan companies, and securities dealers), and all Canadians.
Financial entities are assigned one or more of these three specific requirements:
- the duty to determine
- the duty to freeze, and
- the duty to disclose.
Non-compliance with Economic Sanctions Legislation can result in significant fines and forfeitures, as well as up to 10 years imprisonment for the offending entity and its directors/officers. Contraventions of certain regulations to the United Nations Act may also represent non-compliance with Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) provisions and could attract additional fines and penalties.
United Nations Act
Canada’s United Nations Act enables the Canadian government to make decisions passed by the United Nations Security Council. Contraventions of the United Nations Act are punishable by fines of not more than $100,000 (CAD) or imprisonment for a term not more than 10 years. In addition, any property dealt with contrary to any order or regulation made under the United Nations Act may be seized and detained and is liable to forfeiture. Contraventions of certain regulations to the United Nations Act may also represent non-compliance with provisions of the PCMLTFA and may result in additional fines and penalties.
Special Economic Measures Act
The Special Economic Measures Act authorizes the orders or regulations to impose sanctions measures in relation to a foreign state in either of the two following situations:
- To implement economic measures against a foreign state pursuant to a decision, resolution or recommendation of an international organization of states or association of states, of which Canada is a member; or
- Where the government believes that a grave breach of international peace and security has occurred and has resulted in or could result in a serious international crisis.
Contraventions of regulations and orders are punishable by a fine not exceeding $25,000 (CAD) or imprisonment for a term not exceeding five years. The Minister of Foreign Affairs is responsible for the administration and enforcement of the Special Economic Measures Act.
Export and Import Permits Act
The Export and Import Permits Act is composed of trade sanctions on goods through three regulations: the Area Control List (ACL), Export Control List (ECL), and Import Control List (ICL). Permits are required for the export of any goods to countries listed in the ACL, currently Myanmar (Burma) and Belarus. Permits are required for the export of goods on the ECL and the import of goods on the ICL. The ECL list particularly seeks to control the states to which military goods and technology are exported. The ICL requires permits for items such as weapons, textiles and apparel, and certain animals and foods. For some of those items, states prescriptions are specified.
Contraventions of the Export and Import Permits Act are punishable by a fine in an amount that is in the discretion of the court and/or to imprisonment for a term up to 10 years.