Canada and its allies implement multiple rounds of sanctions against Iran in the wake of Mahsa Amini’s death
Canada is quickly ratcheting up economic sanctions measures against Iran, with the latest measures announced on October 13, 2022. These latest rounds are the first significant changes to Canada’s controls over trade and investment with Iran since sanctions had been significantly relaxed back in 2016.
On October 3, 2022, Canada imposed sanctions on 25 Iranian individuals and nine Iranian entities under the Special Economic Measures (Iran) Regulations (the “Iran Regulations”). The new sanctions come in response to human rights violations in Iran and the apparent killing of Mahsa Amini by the country’s so-called “morality police”. These are the first substantive changes to Canada’s sanctions against Iran since they were significantly relaxed in February of 2016 following the negotiation of the Joint Comprehensive Plan of Action (“JCPOA”) between Iran and the five permanent members of the UN Security Council plus Germany.
On October 7, 2022, Prime Minister Trudeau announced that his government would implement additional sanctions against over 10,000 high-ranking Iranian officials, making Canada’s sanctions against Iran some of the most aggressive in the world. The subsequent enactment on October 13, 2022 of sanctions against 20 individuals and entities will likely be followed by further measures in the coming days and weeks.
Companies doing business in or with Iran or that region of the world should be reviewing their compliance policies and screening protocols to ensure they are fully up to date with these latest amendments to the Iran Regulations and should be monitoring developments carefully as the situation in Iran is fluid and the potential exists for a further expansion of sanctions measures by Canada and its allies.
A History of Canadian Sanctions Against Iran: 2007-2022
Although Canada had implemented UN Security Council resolutions imposing certain limited sanctions measures against Iran starting in 2007, it was not until 2010 that Canada began to apply more aggressive “Made-in-Canada” or autonomous sanctions measures in response to the expansion of Iran’s nuclear program and the country’s failure to meet requirements set out by the International Atomic Energy Agency.
Sanctions were then progressively tightened with a prohibition on providing financial services to or for the benefit of persons in Iran in 2011, and by 2013, eventually resulting in an almost full trade embargo that imposed broad prohibitions on exports and imports to and from Iran and a ban on communicating a wide range of technical data to the country. In addition, most dealings involving hundreds of Iranian entities and individuals that had been designated under the Iran Regulations were prohibited.
Canada loosened its sanctions against Iran on February 5, 2016 after Iran committed to roll back its nuclear program under the JCPOA. The import and technical data prohibitions were largely removed, while more limited export prohibitions remain in place vis-à-vis certain sensitive goods and technologies listed in Schedule 2 of the Iran Regulations.
The prohibition on dealing in property owned by listed persons also remains in place, although the number of listed individuals and entities has been drastically reduced. Section 3 of the Iran Regulations prohibits any Canadian or person in Canada from:
(a) dealing in any property, wherever situated, that is owned, held or controlled by a listed person or by a person acting on behalf of a listed person;
(b) entering into or facilitating any transaction related to a dealing referred to in paragraph (a);
(c) providing any financial or related service in respect of a dealing referred to in paragraph (a);
(d) making any goods, wherever situated, available to a listed person or to a person acting on behalf of a listed person; or
(e) providing any financial or related service to a listed person or to a person acting for the benefit of a listed person.
Through its Regulations Implementing the United Nations Resolutions on Iran, Canada also continues to apply certain limited sanctions measures against Iran that are imposed by the UN Security Council. In addition, the Government of Canada also maintains a policy of denial for permit applications relating to exports or transfers of certain goods and technologies identified on the Export Control List.
Iran’s Morality Police
After the Islamic Revolution of 1979, Iran’s leadership imposed strict rules on women’s clothing, emphasizing modesty and the need for women to cover their hair with the hijab. In the early days of the Islamic Republic, female dress requirements were enforced by de facto religious police, which eventually transformed into the Gasht-e Ershad (Guidance Patrols) or “morality police” who currently enforce the government-mandated dress code.
The morality police, infamous among Iranian women, patrol the streets and may arrest women who are dressed in a manner that is not compliant with government rules. Women who are arrested are generally taken to detention centers, known as “re-education centers”, where they are given classes about Islam and the importance of the headscarf, and are required to sign a pledge promising to dress according to government requirements moving forward. There are also reports of beatings at these detention centers.
The Death of Mahsa Amini
On September 13, 2022, a 22-year-old Kurdish-Iranian woman named Mahsa Amini was arrested in Tehran by Iran’s morality police for failing to wear her hijab in accordance with government rules. After being taken into police custody, she was hospitalized later that day and died of internal injuries on September 16, 2022. Witnesses claim that Mahsa was beaten in the police vehicle with a baton, and her head was banged against the interior of the vehicle, all of which the Iranian government has denied.
The Government of Canada has described Mahsa Amini’s death as “a direct result of the systemic harassment and repression that women face in Iran.” Her death has sparked massive protests across Iran and around the world.
The October 3rd Sanctions
On October 3, 2022, Foreign Affairs Minister Mélanie Joly announced that Canada would amend the Regulations to impose new sanctions on Iran in response to “gross human rights violations,” including Mahsa Amini’s killing and the subsequent violent crackdown on anti-government protestors in Iran. Minister Joly described Iran as engaging in “grave and ongoing breaches of international law” and having a “blatant disregard for human life.”
These new sanctions measures included the addition of 25 individuals, as well as nine entities, to Schedule 1 of the Iran Regulations. Canadians and persons in Canada are thus prohibited from dealing in property that is owned, held or controlled by any of the newly-added entities and individuals, as well as from engaging in any of the other activities enumerated in section 3 (above) in relation to those persons.
These amendments also involved a reorganization of Schedule 1 of the Iran Regulations. Specifically, Schedule 1 will now be subdivided into four categories of individuals and entities: Entities listed for a grave breach of international peace and security (Part 1); Entities listed for gross human rights violations (Part 1.1); Individuals listed for a grave breach of international peace and security (Part 2); and Individuals listed for gross human rights violations (Part 2.1). There is a corresponding additional provision allowing the Governor in Council to add a person to Schedule 1 where there is reason to believe that that person has participated in gross systemic human rights violations in Iran. Under paragraph 35(1)(d) of the Immigration and Refugee Protection Act (“IRPA”), a foreign national will also be inadmissible into Canada on grounds of violating human rights if they are subject to a regulation of the Governor in Council, including the Iran Regulations, on account of gross or systematic human rights violations committed in a foreign state.
The Government of Canada also announced incoming amendments, including under Bill S-8 (discussed below), that would broaden inadmissibility under the IRPA to include any foreign national subject to Canadian sanctions, regardless of whether or not they are listed for human rights violation-related reasons. In practice, this means that the Canada Border Services Agency would be permitted to deny entry to, as well as remove, any listed person from Canada.
Targeted Individuals and Entities
Minister Joly described the new sanctions as targeting “senior Iranian officials and prominent entities that directly implement repressive measures, violate human rights and spread the Iranian regime’s propaganda and misinformation.” Newly-listed individuals include, among others:
- Mohammed-Hossein Bagheri, Chief of Staff of Iran’s Armed Forces (for grave breach of international peace and security)
- Major General Hossein Salami, the Commander-in-Chief of the Islamic Revolutionary Guard Corps (for grave breach of international peace and security)
- Ali Shamkhani, Head of the Supreme National Security Council (for grave breach of international peace and security)
- Esmail Qaani, Commander of the Quds Force of the IRGC (for grave breach of international peace and security)
- Seyyed Mohammed Saleh Hashemi Golpayegani, Secretary of Iran’s Headquarters for the Office of Enjoining Right and Forbidding Evil (for gross human rights violations)
- Mohammad Rostami Cheshmeh Gachi, Head of the Morality Police (for gross human rights violations)
- Esmail Khatib, Minister of Intelligence and Security and the Ministry of Intelligence and Security (MOIS) (for gross human rights violations)
Newly-listed entities include, among others:
- Evin Prison, which houses political prisoners (for gross human rights violations)
- Office of the Enjoining Right and Forbidding Evil (for gross human rights violations)
- The Morality Police (for gross human rights violations)
Moreover, although the Islamic Revolutionary Guard Corp (“IRGC”) has already been listed for many years in previous iterations of the Iran Regulations, the IRGC Cyber Defense Command is now listed under the new sanctions for gross human rights violations.
The increased focus on the state of human rights in Iran has renewed calls in Canadian politics to list the IRGC as a terrorist entity under the Canadian Criminal Code. In particular, Opposition Leader Pierre Poilievre has in recent days called on Prime Minster Trudeau’s government to immediately list the IRGC as a terrorist organization. The Opposition’s calls have emphasized both Mahsa Amini’s killing and the tragic downing of Flight 752 on January 8, 2020, when a Ukranian International Airlines flight carrying 85 Canadians and permanent residents was shot down by the IRGC shortly after taking off in Tehran. On October 4, 2022, Prime Minister Trudeau made an announcement commemorating the 1000th day since the downing of Flight 752 in which he condemned Iran’s human rights violations but stopped short of responding to Poillievre’s demands to name the IRGC as a terrorist entity under the Criminal Code. Doing so would impose severe penalties for people or organizations that participate in or deal with the IRGC’s property or finances.
Sanctions Intensify: The October 7th Announcement & October 13th Measures
On October 7, 2022, Prime Minister Trudeau announced that further sanctions would soon be implemented against Iran. In particular, Trudeau promised to list over 10,000 senior IRGC members and officials as inadmissible to Canada on account of their engagement in terrorism and systemic and gross human rights violations. Trudeau emphasized that these would be “some of the toughest measures on Iran of any country in the world.”
On October 13, 2022, Foreign Affairs Minister Joly announced that 20 new individuals and entities would be added to the Iran Regulations. These individuals include:
- Saeed Mortazavi, the Iran Revolutionary Court prosecutor who ordered the torture of Canadian-Iranian journalist Zahra Kazemi (for gross human rights violations)
- Abdolreza Rahmani Fazli, the former Minister of Interior of Iran (for gross human rights violations)
- Amir Hatami, the Brigadier General in the Iranian regular army (for grave breach of international peace and security)
- Hossein Shariatmadari, the editor-in-chief of a conservative state-controlled newspaper (for grave breach of international peace and security)
The individuals listed for gross human rights violations will be inadmissible to Canada under paragraph 35(1)(d) of the IRPA, and all listed persons’ assets will be effectively frozen in Canada. The newly listed entities are Kayhan, Tasnim News Agency and Nour News Agency.
In a press conference on the afternoon of October 13th, the Minister of Public Safety announced that the Government will subject the additional over 10,000 senior IRGC officials referenced in Trudeau’s October 7th announcement to an IRPA designation. This is a severe measure, typically reserved for the most egregious human rights violators, that will bar the designated individuals from entering Canada. However, unless and until these designated individuals are also listed under Canadian sanctions regulations, they will avoid the application of financial services prohibitions.
Trudeau’s October 7th announcement also included a promise to invest $76 million to strengthen Canada’s capacity to implement sanctions, as well as the RCMP’s capacity to enforce sanctions. These resources will be largely allocated towards hiring new RCMP officers, intelligence analysts and tech specialists who can track and seize the assets of sanctioned individuals, as well as to reinforcing the RCMP’s ability to track assets overseas. The funds will also help Canada to enforce new authorities that allow for seizure, forfeiture, disposal and redistribution of assets from sanctioned individuals and entities.
As a separate matter, Bill S-8, which was passed by the Senate in June, 2022, is currently awaiting a second reading in the House of Commons. If passed, Bill S-8 will create a distinct ground of inadmissibility based on the individual being listed under Canada’s sanctions, and will expand the scope of IRPA inadmissibility to include all Special Economic Measures Act regulations, including the Iran Regulations, regardless of whether or not the listing was based on human rights violations.
Canada’s Allies Are Also Imposing New Sanctions Measures Against Iran
In the United States, the Biden administration has included the IRGC on its own Foreign Terrorist Organizations list since 2019. Like Canada, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has also sanctioned Iran’s morality police, Mohammed Rostami Cheshmeh Gachi, Esmail Khatib and others.
In France, the Ministry of Foreign Affairs has condemned Mahsa Amini’s killing and called for a transparent investigation into the circumstances of her death. German Chancellor Olaf Scholz has also called for a transparent investigation, and the German Foreign Ministry has called for the European Union to ban entry and freeze assets of individuals responsible for repression in Iran. On October 12th, the European Commission announced that it is putting forward a package of sanctions against at least 15 Iranian individuals and entities linked to the death of Mahsa Amini.
In the United Kingdom, the government has imposed sanctions on leading Iranian political and security officials including Gholamreza Soleimani and Hassan Karami, thereby freezing their assets and rendering these individuals unable to enter the UK.
Next Steps for Canadian Companies
With newly-imposed sanctions, further caution should be exercised when engaging in activities involving Iran or the surrounding region as well as transactions anywhere in the world involving entities or individuals based in or having other connections to Iran . Among other things, companies should review and continue to monitor their supply chain to ensure that they are not directly or indirectly dealing with listed individuals or entities, or the entities those listed persons own or control. All companies doing business abroad should be implementing Know Your Customer (or more broadly, Know Your Counterparty) procedures to ensure that they have the fullest possible picture of entities and individuals with whom they transact. Internal compliance policies and procedures, including screening protocols, should also be updated by adding the names of the newly-sanctioned individuals and entities.
As the situation in Iran remains fluid, firms should be monitoring developments closely as there is a likelihood of additional sanctions measures being imposed by Canadian authorities and their counterparts in the United States, the United Kingdom and the European Union in response to further reports of human rights violations in Iran. We will continue to provide regular updates regarding the newly implemented sanctions as well as any further steps taken by the Canadian Government to implement the proposed measures announced on October 7th and their implications for Canadians doing business abroad.
 “Who are Islamic ‘morality police’?” (April 22, 2016), online: BBC.com www.bbc.com/news/world-middle-east-36101150; “Iran protests: Mahsa Amini’s death puts morality police under spotlight” (September 21, 2022), online: BBC.com www.bbc.com/news/world-middle-east-62984076.
 “Iran protests: Mahsa Amini’s death puts morality police under spotlight” (September 21, 2022), online: BBC.com www.bbc.com/news/world-middle-east-62984076.
 Nadeen Ebrahim, “Iran’s morality police have terrorized women for decades. Who are they?” (September 21, 2022), online: CNN.com < www.cnn.com/2022/09/21/middleeast/iran-morality-police-mime-intl/index.html>.
 New York Times, “An Iranian Uprising Led by Women” (September 28, 2022), online (podcast): Spotify.com https://open.spotify.com/show/3IM0lmZxpFAY7CwMuv9H4g.
 Ibid; Saba Aziz, “Canada slaps new sanctions on Iran over death of Mahsa Amini” (October 3, 2022), online: GlobalNews.ca <globalnews.ca/news/9171749/canada-iran-sanctions-mahsa-amini-death-2/>.
 Government of Canada, “Canadian Sanctions Related to Iran”, online: Canada.ca www.international.gc.ca/world-monde/international_relations-relations_internationales/sanctions/iran.aspx?lang=eng .
 Foreign Affairs Minister Mélanie Joly, online: Twitter.com < https://twitter.com/melaniejoly/status/1576926015993294849/photo/1>.
 Prime Minister of Canada Justin Trudeau, “Canada to implement new measure against the Iranian regime” (October 7, 2022), online: PM.GC.ca <pm.gc.ca/en/news/news-releases/2022/10/07/canada-implement-new-measures-against-iranian-regime>.
 Tona MacCharles, “”Justin Trudeau unveils more Iranian sanctions, strops short of terrorist designation” (October 7, 2022), online: TheStar.ca www.thestar.com/politics/federal/2022/10/07/justin-trudeau-unveils-more-iranian-sanctions-stops-short-of-terrorist-designation.html.