FEDERAL REG

SOR/2016-278: Regulations Amending the Regulations Implementing the United Nations Resolutions on the Democratic People's Republic of Korea (DPRK)

REGISTRATION OF FEDERAL REGULATION - VIA OIC DATABASE, PRIOR TO PART II OF THE GAZETTE

Registered
October 21, 2016


REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the Regulations.) Issues On March 2, 2016, the United Nations Security Council (UNSC), acting under Chapter VII of the Charter of the United Nations (UN Charter), adopted Resolution 2270 (2016) imposing additional sanctions against the Democratic People’s Republic of Korea (DPRK) as a result of the systematic, ongoing and severe ... (Click for more)


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Published on October 21, 2016

Bill Summary

SOR/2016-278: Regulations Amending the Regulations Implementing the United Nations Resolutions on the Democratic People's Republic of Korea (DPRK)

REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the Regulations.) Issues On March 2, 2016, the United Nations Security Council (UNSC), acting under Chapter VII of the Charter of the United Nations (UN Charter), adopted Resolution 2270 (2016) imposing additional sanctions against the Democratic People’s Republic of Korea (DPRK) as a result of the systematic, ongoing and severe violations of past UNSC resolutions by the DPRK. The sanctions strengthen and modify measures that had been imposed by the UNSC in Resolution 1718 (2006), Resolution 1874 (2009), Resolution 2087 (2013) and Resolution 2094 (2013). Resolution 2270 was adopted in response to the fourth nuclear test conducted by the DPRK on January 6, 2016, which violated the previous resolutions. The implementation of UNSC Resolution 2270 (2016) in Canadian law requires amendments to the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK). Background Security Council Resolution 1718 (2006) imposed an embargo on the sale or supply of arms and related material, resources contributing to the DPRK’s weapons program and the transfer of related technical assistance, and the export of luxury goods to the DPRK. Resolution 1718 (2006) further imposed a travel ban and assets freeze against persons designated by the United Nations Sanctions Committee (1718 Committee) established to oversee the sanctions against the DPRK. As a member of the United Nations, Canada is legally obliged, pursuant to Article 25 of the UN Charter, to apply binding decisions of the Security Council, in accordance with Article 41 of Chapter VII of the Charter of the United Nations. The United Nations Act provides the appropriate legislative authority to implement these decisions in Canadian law. Canada implemented its international obligations under Resolution 1718 (2006) by introducing, pursuant to section 2 of the United Nations Act, the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK), which came into force on November 9, 2006. The implementation of the travel ban imposed by Resolution 1718 (2006) is ensured in Canada under provisions of the Immigration and Refugee Protection Act. In 2009, noting the DPRK’s second nuclear test and missile activities, which generated increased tension in the region, the UNSC determined that the situation continued to constitute a threat to international peace and security. Accordingly, the UNSC adopted Resolution 1874 (2009) to modify and strengthen the measures imposed against the DPRK by expanding the arms embargo to include all arms and related materials, with the exception of the export, sale, supply, transfer or shipment of small arms and light weapons; expanding the prohibition on the provision, to any person in the DPRK, of technical assistance concerning arms and related materials; and creating a prohibition on financial transactions related to the provision, manufacture, maintenance or use of arms or related material. It also expanded the list of sanctioned items, materials, equipment, goods and technology which could contribute to the DPRK’s nuclear-related, ballistic missile-related or other weapons of mass destruction-related programs and activities; and required States to prohibit the provision of refuelling and other services to DPRK vessels believed to contain sanctioned cargo. Canada implemented its international obligations under Resolution 1874 (2009) by introducing, pursuant to section 2 of the United Nations Act, the Regulations Amending the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK), which came into force on July 30, 2009. On March 7, 2013, the UNSC adopted Resolution 2094 (2013) imposing additional sanctions against the DPRK in response to a third nuclear test conducted by the DPRK on February 12, 2013, which violated the two previous resolutions. The sanctions strengthened and modified measures that had been imposed by the UNSC in Resolution 1718 (2006) and Resolution 1874 (2009) and included (a) amendments to the definitions of “DPRK” and “luxury goods;” (b) prohibitions on transfers of bulk cash; (c) prohibitions on the provision of financial services to, from, for the benefit of, or on the direction or order of the DPRK or any person in the DPRK with respect to activities already prohibited under the Regulations; and (d) further elaboration of the prohibition on the provision of services or assistance in relation to arms and related material or resources contributing to the DPRK’s weapons program, namely, to explicitly include brokering or other intermediary services in the class of prohibited services or assistance. Canada implemented its international obligations under Resolution 2094 (2013) by introducing the Regulations Amending Certain Regulations Imposing Sanctions on the Democratic People’s Republic of Korea, which came into force on November 29, 2013. These Regulations amended the Special Economic Measures (Democratic People’s Republic of Korea) Regulations and the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK). Objectives Resolution 2270 (2016) was adopted by the UNSC pursuant to Article 41 of Chapter VII of the UN Charter and is binding on all member states. As a member state of the United Nations and pursuant to Article 25 of the UN Charter, Canada is legally obligated to implement binding decisions of the UNSC. The implementation of the resolution in Canadian law requires amendments to the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK). These amendments will also give effect to recommendations of the Standing Joint Committee for the Scrutiny of Regulations. Description These Regulations implement the decisions of Security Council Resolution 2270 not already incorporated in Canadian domestic legislation. In accordance with Security Council Resolution 2270 (2016), the Regulations expand the arms embargo to prohibit the transfer of small arms and light weapons to the DPRK; prohibit teaching or training of DPRK nationals in fields such as advanced physics, aerospace engineering, and advanced computer simulation that could contribute to the DPRK’s proliferation-sensitive nuclear activities; prohibit DPRK leasing or chartering of Canadian-flagged vessels or aircraft and the provision of crew services to the DPRK; prohibit Canadians from owning, leasing, operating or insuring DPRK vessels, from providing any vessel classification, certification or related service to any DPRK vessel, and from obtaining authorization for a vessel to use the DPRK flag; prohibit the procurement of coal, iron or iron ore from the DPRK; prohibit the procurement of gold, titanium ore, vanadium ore and rare earth minerals from the DPRK; prohibit the transfer of aviation fuel, including rocket fuel, to the DPRK with the exception of aviation fuel used to fuel civilian passenger aircraft outside the DPRK exclusively for consumption during a return flight to the DPRK; prohibit Canadian financial institutions from opening branches in the DPRK; and update the list of specific luxury goods that are banned for transfer to the DPRK. The Regulations continue to impose asset freezes on the individuals and entities maintained on the list of designated persons per Resolution 1718, including those listed in Annex I and II of Resolution 2270. In Canada, implementation of travel restrictions is ensured under the Immigration and Refugee Protection Act and its Regulations. The Regulations allow for the issuance of ministerial certificates to authorize certain prohibited activities if it is established that the requirements for participation in such activities are met, including, when required, the approval of the Committee of the Security Council established per Resolution 1718. Finally, the Regulations update language throughout the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK) to give effect to certain recommendations made by the Standing Joint Committee for the Scrutiny of Regulations, to clarify intent and to ensure consistency across Canada’s economic sanctions regulations. The United Nations Act constitutes the appropriate legislative authority to implement into Canadian law the asset freeze and additional restrictive measures mandated by the Security Council. The UNSC resolutions relevant to the Regulations, and information concerning the work of the Security Council Committee established pursuant to Resolution 1718 (2006) to oversee the relevant sanctions measures, including listings, are available at https://www.un.org/sc/suborg/en/sanctions/1718. Resolution 2270 (2016) is available at http://www.securitycouncilreport.org/atf/cf/%7B65BFCF9B-6D27-4E9C-8CD3-CF6E4FF96FF9%7D/s_res_2270.pdf. “One-for-One” Rule These Regulations are carved out from the “One-for-One” Rule, as they implement non-discretionary international obligations. Small business lens The small business lens does not apply to this proposal, as there are no costs (or insignificant costs) on small business, and small businesses would not be disproportionately affected. Consultation Global Affairs Canada drafted the Regulations in consultation with the Department of Justice, the Department of Finance, Transport Canada, Immigration, Refugees and Citizenship Canada and the Canada Border Services Agency. Rationale The Regulations amending the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK) enable Canada to align with the sanctions adopted unanimously by the UNSC in Resolution 2270 (2016), co-sponsored by Canada. As Canada has very limited bilateral trade with North Korea and has imposed very strict sanctions since 2011, additional sanctions are expected to have minimal costs or impacts. Canada has always shown leadership in its dealing with North Korea and its sanctions are consistent with Canada’s official position. Implementation, enforcement and service standards Canada’s sanctions regulations are enforced by the Royal Canadian Mounted Police and the Canada Border Services Agency. Every person who contravenes the Regulations is liable, upon conviction, to the punishments set out in section 3 of the United Nations Act (i.e. on summary conviction, to a fine of not more than $100,000 or to imprisonment for a term of not more than one year, or to both; or, on conviction on indictment, to imprisonment for a term of not more than 10 years). Contact Christopher Burton Director Northeast Asia Division Foreign Affairs, Trade and Development Canada 125 Sussex Drive Ottawa, Ontario K1A 0G2 Telephone: 343-203-3366 Email: [email protected] Footnote a R.S., c. U-2 Footnote 1 SOR/2006-287; SOR/2009-232, s. 1

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