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100 days into the Russia-Ukraine conflict: Canada implements new services ban for oil, gas, mining and chemical industries

Today, Canada announced its most recent round of amendments to the Special Economic Measures (Russia) Regulations. These amendments introduce a ban on the provision of 28 prescribed services in a handful of industries, which, for the time being, include the oil, gas, mining and chemical industries. In Global Affairs Canada’s (“GAC”) announcement of these changes, Mélanie Joly, Minister of Foreign Affairs, noted that “[t]he Russian invasion of Ukraine has now lasted over 100 days” and emphasized Canada’s commitment to do “everything in its power to prevent Putin’s ability to fuel and finance his war machine”.

These amendments follow the May 8, 2022 G7 Leaders’ Statement, which was posted on Prime Minister Justin Trudeau’s website, of the collective intention to “take measures to prohibit or otherwise prevent the provision of key services on which Russia depends”, in order to “reinforce Russia’s isolation across all sectors of its economy”. The United States, United Kingdom and European Union acted swiftly in respect of this commitment, announcing services bans in early May. In contrast to Canada’s services ban, which covers a broad array of services specific to the oil, gas, mining and chemical industries, the services bans introduced by Canada’s international counterparts are more narrow in terms of the specific services captured (as they focus on professional services such as accounting and management consulting services), but broader in terms of the industries captured (as they capture all industries).

For more details regarding Canada’s sanctions response to the Russian invasion of Ukraine, please refer to our client alerts from February 28, 2022, March 2, 2022, March 14, 2022, March 29, 2022, April 7, 2022, May 2, 2022, and June 3, 2022.

Canada’s new services ban covers a broad array of services, but is restricted to the oil, gas, mining and chemical industries

According to GAC’s press release, the services ban affects the provision of 28 services vital for the operation of the oil, gas and chemical industries, including technical, management, accounting, computer and advertising services. This ban “targets an industry that accounts for about 50% of Russia’s federal budget revenues”.

More specifically, as set out in the amendments, new section 3.10 prohibits “any person in Canada and any Canadian outside Canada to provide to Russia or to any person in Russia any service referred to in Part 1 of Schedule 8 in relation to any industry referred to in Part 2 of that Schedule”.

The services referred to in Part 1 of Schedule 8 include those crucial to most business functions, such as management consulting services, accounting, auditing and bookkeeping services, R&D services, advertising, construction work, engineering services, and computer and related services. As specific to the oil and gas sector, prescribed services also include the bulk storage of liquids and gases, the transportation of petroleum and natural gas, retail sales of fuel oil, bottled gas, coal and wood, and the wholesale trade services of solid, liquid an gaseous fuels and related products. “Services incidental to mining” and “services incidental to energy distribution” are also captured within the scope of prohibited activities.

The affected industries referred to in Part 2 of Schedule 8 include:




Mining of coal and lignite


Extraction of crude petroleum and natural gas


Mining of metal ores


Other mining and quarrying


Mining support service activities


Manufacture of coke and refined petroleum products


Manufacture of chemicals and chemical products

A few important points to keep in mind

Some important points to keep in mind regarding these new services prohibitions:

  • There are no grandfathering, winding down or other exceptions and no general permits have yet been issued in connection with these prohibitions;
  • Even though they were announced today (June 8), they came into effect yesterday (June 7) – there is no grace period for their application;
  • They are very broadly worded to apply to services “in relation” to the industries listed above;
  • They are not limited to services provided from Canada – they will also apply to Canadian companies and individuals providing services to Russia or persons in Russia from anywhere in the world; and
  • No guidance has been issued by the Canadian government regarding the interpretation of these prohibitions.

G7 counterparts have likewise implemented services bans, with a focus on professional services across all industries

One month ago, on May 8, 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control issued a determination pursuant to Executive Order 14071 prohibiting the exportation, re-exportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of accounting, trust and corporate formation, and management consulting services to any person located in the Russian Federation. This prohibition took effect on June 7, 2022, targeting services that are “key to Russian companies and elites building wealth, thereby generating revenue for Putin’s war machine, and to trying to hide that wealth and evade sanctions”.

A few days earlier, on May 4, 2022, the United Kingdom and European Union announced their own bans on services exports, including management consulting, accounting and public relations services, to Russia. The European Union’s ban now also includes oil transport services, prohibiting EU operators from insuring and financing the transport of oil to third countries, as well as broadcasting services provided by Russian state-owned broadcasters on EU airwaves. The broadcasting suspension addresses the concern that certain TV channels were acting as “mouthpieces that amplify Putin's lies and propaganda aggressively”.

The distinctions in approach demonstrate the continued divergences between international sanctions regimes despite the emphasis on coordination. 

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With no end in sight to the conflict between Russia and Ukraine, we anticipate the continued expansion of Canada’s Russian sanctions program. In particular, we would not be surprised to see additional services and industries added to the list as the situation evolves and as Canada observes and assesses the responses of its international counterparts. We will continue to monitor and report on any relevant developments. 



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