Canada Targets 54 Entities and Individuals under its Latest Russia and Ukraine Economic Sanctions

On February 17, 2015, Prime Minister Stephen Harper announced new Canadian sanctions against 37 Russian and Ukrainian individuals, and 17 Russian and Ukrainian entities. These new sanctions were introduced in response to escalating violence, including the attacks on the Ukrainian city of Mariupol on January 24. Canada’s new sanctions align in part with the European Union’s sanctions against 19 individuals and 9 entities announced earlier this week.  

These latest amendments bring Canada’s total number of sanctioned parties under its Russia and Ukraine sanctions to 273. Canadian companies doing business abroad should be reviewing their screening protocols to ensure that they remain in compliance with these measures.  

Today, the amendments to the Special Economic Measures (Russia) Regulations (the “Russia Regulations”) and Special Economic Measures (Ukraine) Regulations (the “Ukraine Regulations”) were released. These amendments come on the heels of Canada’s energy sector restrictions imposed against Russia on December 19, 2014. For more information on those measures, please see New Canadian Sanctions Target Russian Oil Exploration and Production Activity.  

All of the newly listed entities and individuals, with the exception of Rosneft (discussed further below), are subject to broad sanctions measures. Persons in Canada and Canadians outside of Canada are prohibited from engaging in any dealings involving these parties, including facilitating transactions involving their property, providing financial or related services to them or for their benefit, or making goods available to them.

Targeted Entities

Of the 17 newly listed entities, two are Russian and 15 are Ukrainian. The majority of these listings target armed non-state actors operating in eastern Ukraine, such as the Kalmius Battalion or the so-called “Death Battalion.” The Russian public movement Novorossiya, or “New Russia,” headed by a Russian intelligence officer that ostensibly provides humanitarian aid in eastern Ukraine, is also subject to the new sanctions.

Two companies have also been listed:

  • Profaktor TOV, an accounting, auditing and bookkeeping firm in Ukraine, had been previously listed by the United States due to dealings of its CEO Petr Savchenko in Donetsk. Profaktor is now listed under the Russia Regulations, but Savchenko is not.
  • Rosneft, Russia’s largest state-owned oil company, is now listed on Schedule 3 of the Russia Regulations. Although it is not subject to the broad restrictions described above, there is now a prohibition against dealing in any new debt of longer than 90 days’ maturity in relation to Rosneft, its property, or any interests or rights in its property.

Targeted Individuals

Of the 37 newly listed individuals, 11 are Russian and 26 are Ukrainian. The Ukrainian individuals are largely political and military leadership within the separatist republics of Donetsk and Luhansk.

The Russian individuals are primarily members of the political and military elite and include:

  • Anatoly Ivanovich Antonov, and Arkadii Viktorovich Bahkin, both Deputy Ministers of Defence;
  • Iosif (Joseph) Davydovich Kobzon, a popular singer and a member of the State Duma,
  • Dmitry Konstantinovich Kiselyov, the head of the Russian Federal State news agency;
  • Lt. Gen. Igor Nikolaevich Turchenyuk, the commander of Russian ground forces in the Crimea;
  • Rear Admirals Valery Vladimirovich Kulikov and Alexander Mihailovich Nosatov, both listed as the Deputy Commanders of the Black Sea Fleet; and
  • Aleksandr Zaldastanov, the leader of the politically influential Night Wolves Motorcycle Club.

Only one Russian businessperson of note is listed in these latest amendments: Sergey Chemezov, a known associate of President Putin’s, and CEO of Rostec, a state-owned conglomerate. Rostec itself has not been listed under Canada’s sanctions measures.

Trade Control Compliance

Today’s listings by Canada, along with recently intensified enforcement efforts by the Canada Border Services Agency, the Royal Canadian Mounted Police and authorities in other jurisdictions, highlight the need for careful due diligence in conducting business activities abroad.

At the present time, Canada imposes trade controls of varying degrees on activities involving the following countries (and over 2,000 listed entities and individuals associated with them): Belarus, Burma (Myanmar), the Central African Republic, Côte d'Ivoire, Cuba, the Democratic Republic of the Congo, Egypt, Eritrea, Guinea, Iran, Iraq, Lebanon, Liberia, Libya, North Korea, Pakistan, Russia, Somalia, South Sudan, Sudan, Syria, Tunisia, Ukraine, Yemen and Zimbabwe. Any involvement of these countries or any "designated person" in proposed transactions or other activities should raise a red flag for further investigation to ensure compliance with export and technology transfer controls and economic sanctions.