Written By Jessica Horwitz and Ethan Gordon
On March 24, 2021, Canada imposed new economic sanctions against nine Russian government officials ("listed person(s)") implicated in what the Government of Canada believes were "gross and systematic" violations of human rights. These sanctions reflect concern by the Government of Canada in respect of actions Canada believes were taken by Russian government officials in connection with the poisoning of Russian opposition leader and anti-corruption activist Alexey Navalny, his subsequent detention and prosecution, and measures taken against Russian citizens who protested his treatment. In a press release, Canada described the actions of these individuals as a "continuing pattern that targets opposition voices and those it deems threatening."
Several days later on March 29, 2021, Canada announced additional sanctions listings in connection with the dispute over sovereignty of the Crimea region of Ukraine. These latest designations, which include two individuals and two entities under the Russia sanctions and two entities under the Ukraine sanctions, target individuals and entities involved in the construction of a railway over the Kerch bridge between Russia and Crimea.
The Special Economic Measures Act, the Special Economic Measures (Russia) Regulations and the Special Economic Measures (Ukraine) Regulations impose targeted prohibitions on specific individuals, entities and business sectors in Russia and Ukraine. Schedule 1 of both the Russia and Ukraine regulations contain the list of individuals and entities subject to the broadest level of restrictions. The measures prohibit any person in Canada, including individuals and corporate entities, and any Canadian outside of Canada, including Canadian citizens and Canadian corporations or businesses with activities abroad, to directly or indirectly participate, cause, facilitate, or assist in the following activities:
- dealing in property, wherever situated, that is held by or on behalf of listed persons or a person acting on behalf of a listed person;
- entering into or facilitating any transaction related to a prohibited dealing;
- providing any financial or related services in respect of a prohibited dealing;
- making available any goods, wherever situated, to a listed person or a person acting on behalf of a listed person; and
- providing any financial or other related services to or for the benefit of a listed person.
A number of exceptions to the above prohibitions are listed in section 4 of both the Russia and Ukraine regulations.
The nine Russian individuals sanctioned on March 24, 2021, are:
- Aleksandr Vasilyevich BORTINKOV, Director of the Federal Security Service of Russia (FSB)
- Aleksandr Petrovich KALASHNIKOV, Director of the Federal Penitentiary Service (FSIN)
- Sergey Vladilenovich, KIRIYENKO, Deputy Chief of Staff of the Presidential Administration of Russia
- Igor Viktorovich KRASNOV, Prosecutor General of the Russian Federation
- Aleksey Yurievich KRIVORUCHKO, Deputy Minister of Defence of the Russian Federation
- Sergey Ivanovich MENYAILO, Plenipotentiary Representative of the President of the Russian Federation in the Siberian Federal District
- Pavel Anatolievich POPOV, Deputy Minister of Defence of the Russian Federation
- Andrey Veniaminovich YARIN, Chief of the Presidential Domestic Policy Directorate
- Viktor Vasilyevich ZOLOTOV, Director of the National Guard of Russia
The two Russian individuals, two Russian entities, and two Ukrainian entities sanctioned on March 29, 2021, are:
- Aleksandr Nikolaevich GANOV, General director of the JSC TC Grand Service Express
- Leonid Kronidovich RYZHENKIN, Deputy general director for infrastructure projects at Stroigazmontazh (SGM)
- JSC Lenpromtransproyekt
- JSC "The Berkakit-Tommot-Yakutsk Railway Line's Construction Directorate"
- Federal State Unitary Enterprise "Crimea Railway"
- First Crimean Insurance Company
Canada is acting in concert with other like-minded countries in its response to this issue. On March 2, 2021, the United States announced additional sanctions against the Russian government in respect of the poisoning of Navalny and his subsequent imprisonment. These sanctions covered seven of the nine individuals named by Canada on March 24. The two other individuals named by Canada had already been sanctioned by the United States for their involvement in the 2014 invasion of Ukraine and the alleged interference in the 2016 U.S. presidential election. The U.S. measures were announced at the same time as the European Union approved sanctions on four Russian officials relating to the prosecution and imprisonment of Navalny, three of whom appear on Canada's list. The European Union had previously imposed sanctions on the six other Russian nationals named by Canada on March 24 in October 2020, specifically in response to Navalny's poisoning.
The European Union previously imposed sanctions in October 2020 on all six of the individuals and entities sanctioned by Canada on March 29, 2021. The United States currently has one of the individuals and one of the entities on its sanctions lists, making this an example of an instance where Canadian designations are broader than those of the United States.
Economic sanctions change frequently and without notice. It is a best practice for companies that do business internationally to maintain a risk-appropriate system of restricted party screening on counterparties. It is important to ensure that any changes to the sanctions status of both new and existing business partners are promptly identified to enable the company to take corrective action. If you have any questions about counterparty risk assessment in international business transactions, please contact a member of the Bennett Jones International Trade & Investment group.