Canada Announces "Biggest-Ever" Trade and Vessel-Related Sanctions Against Russia

In what has been touted as “one of the most important sanctions announcement since Russia began its full-scale invasion of Ukraine in February 2022”, the Canadian government has just issued “its biggest-ever package of vessel- and trade-related sanctions”. On June 17, 2025, the Honourable Anita Anand, Minister of Foreign Affairs, announced amendments to the Special Economic Measures (Russia) Regulations (the “Russia Regulations”) implementing a new package of wide-ranging sanctions. These measures include asset freezes and related measures against 39 entities and 77 individuals, trade restrictions on nearly 1,000 newly targeted goods and technologies, and various prohibitions against an additional 201 vessels “to further constrain the activities of vessels that are part of Russia’s shadow fleet”.

Notably, although these measures were publicly announced on June 17, 2025, they in fact came into force on June 13, 2025. Companies should be reviewing their sanctions compliance policies and screening protocols to ensure they reflect these latest changes, particularly as these newest measures target a number of new entities, including certain financial institutions.

These new measures demonstrate a committed effort by the Canadian government to target Russia’s military, energy, and financial sectors.

Overview of the New Sanctions Measures

Supply and Sourcing Restrictions

The new measures prohibit the supply, shipment, sale or export, from anywhere in the world, of nearly 1,000 newly listed items to Russia or to any person in Russia, including a broad range of industrial goods and advanced sensitive technologies with potential dual-use applications, jet fuel and its additives, as well as certain items that could be used in chemical and biological weapons, . The list of prohibited exports also extends to items that could be used for military purposes, such as video game consoles and controllers.

In addition, there are new prohibitions on sourcing, i.e., acquiring, importing, or purchasing, from Russia or from persons in Russia a variety of high-revenue goods through which Russia gains financial benefit from overseas exports. The newly imposed sourcing restrictions apply to coal and coal products, and metals, including steel, lead, nickel, zinc, cobalt, tin, and aluminum, as well as other revenue-generating goods.

These prohibitions include winding down provisions that allow for the continued supply or sourcing of the newly listed items provided that (i) they are supplied or sourced under a contract entered into 60 days before the coming into force of these measures (i.e., April 14, 2025) and (ii) they are supplied or sourced within 120 days of the coming into force (i.e., before October 11, 2025).

Vessel Sanctions

To further bolster the effectiveness of Canada’s sanctions against Russia, the new measures target Russia’s so-called shadow fleet. This refers to vessels that Canada has determined are involved in transporting oil, liquefied natural gas, arms and other goods for Russia’s benefit. These include listing an additional 201 vessels, as well as a new prohibition against the provision of any services to these and all previously listed vessels which now total over 300.

Sanctions on Entities and Individuals

In addition to these trade and vessel-related sanctions, an additional 116 entities and individuals have been listed under the Russia Regulations. These include three financial entities (two of which are non-Russian foreign financial institutions), entities and individuals operating in Russia’s quantum sector, entities and individuals who have “benefited from the war, including some of the wealthiest Russian industrialists,” and Surgutneftegas, the major Russian oil and company that up until now had only been subject to certain debt restrictions.

The Russia Regulations impose an outright ban on dealing in property that is owned, held, or controlled by a designated person and prohibit directly or indirectly facilitating transactions relating to such dealings as well as providing financial services or making available goods to such persons. These prohibitions extend to any property of a non-designated entity that Canada deems to be controlled directly or indirectly by a designated person. For a more detailed discussion on the application of this broad ownership and deemed ownership rule, please see our client alert: “Deemed Ownership” Rule Now in Force: Addressing Heightened Canadian Sanctions Risk.”

Military Assistance

Prime Minister Carney has pledged to provide $4.3 billion in support for Ukraine, including $2 billion in military assistance (funding helicopters, drones, armoured vehicles, and ammunition), a $2.3 billion loan to assist in rebuilding infrastructure and public systems, as well as $57.4 million in security-related assistance. The loan will be repaid by interest from frozen Russian assets through the G7 Extraordinary Revenue Acceleration Loans mechanism.

Conclusion

This latest round of sanctions marks a significant escalation in Canada’s response to Russia’s ongoing aggression in Ukraine. By targeting a broad spectrum of goods and technologies, imposing stringent vessel-related prohibitions, and expanding asset freezes to encompass a wider array of entities and individuals, Canada is sending a clear message of its commitment to upholding international law and supporting Ukraine. These measures not only aim to disrupt Russia’s ability to finance and sustain its war efforts but also reinforce Canada’s alignment with its allies in applying coordinated economic pressure. Although these new sanctions coincided with the expansion of Russia sanctions by many of Canada’s allies, including the United Kingdom, the European Union, and Australia, the United States has held off further measures in the hopes of a “potential deal” to end the war in Ukraine.

Businesses involved in sourcing or supplying the items covered by these new prohibitions should implement robust measures to minimize the risk of these goods or technologies being supplied to or sourced from Russia or Russian parties (including via third countries). As part of their risk mitigation strategies, companies should also consider incorporating clear standard terms and conditions in their contracts that explicitly address the re-export to or direct or indirect sourcing from Russia.

McCarthy Tétrault’s International Trade and Investment Law Group has significant experience with sanctions matters and will continue to monitor these developments and shifting sanctions landscape related to the conflict in Ukraine and beyond. For assistance with sanctions and assistance navigating them, please contact our team.