FEDERAL REG

SOR/2016-51: Regulations Amending the Special Economic Measures (Ukraine) Regulations

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

Registered
March 18, 2016


REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the Regulations.) Issues Pro-Russian forces continue to destabilize eastern Ukraine and facilitate Russian military action against the Ukrainian government. Background Acting in coordination with the United States (U.S.) and the European Union (EU), the Governor in Council has found that the situation in Ukraine constitutes a gra... (Click for more)


Published on March 18, 2016

Bill Summary

SOR/2016-51: Regulations Amending the Special Economic Measures (Ukraine) Regulations

REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the Regulations.) Issues Pro-Russian forces continue to destabilize eastern Ukraine and facilitate Russian military action against the Ukrainian government. Background Acting in coordination with the United States (U.S.) and the European Union (EU), the Governor in Council has found that the situation in Ukraine constitutes a grave breach of international peace and security that has resulted or is likely to result in a serious international crisis. As a result, the Special Economic Measures (Ukraine) Regulations (the Ukraine Regulations) were approved on March 17, 2014. Amendments to the Ukraine Regulations were made on March 19, 2014, April 12, 2014, May 12, 2014, June 21, 2014, July 11, 2014, July 24, 2014, August 6, 2014, December 19, 2014, February 17, 2015, and June 29, 2015. Since the last round of amendments on June 29, 2015, the situation in eastern Ukraine has remained tense and volatile. Reporting from the United Nations (UN) and the Special Monitoring Mission (SMM) of the Organization for Security and Cooperation in Europe (OSCE) indicates that a reduction in hostilities, in September and October 2015, has been followed by increased skirmishes and military presence along the line of contact, including the use of artillery systems. Reports of a gradual re-escalation in hostilities around flashpoints such as the Donetsk airport have stoked fears of a resumption of indiscriminate shelling of populated areas. Throughout December 2015, the SMM has reported an increase in ceasefire violations, which occur on a near daily basis in the Donetsk and Luhansk regions. The SMM has also noted concerns over live-fire exercises, shelling in separatist-controlled areas by multiple launch rocket systems, as well as a mounting number of tragic incidents involving mines and unexploded ordnance along the line of contact. Russian-backed separatist insurgents frequently deny OSCE SMM observers access to areas under their control, and continue to receive Russian support, including the suspected provision of supplies delivered by large convoys which cross the border from Russia into Ukraine. The work within the “Normandy Four” format (France, Germany, Russia and Ukraine) and the Trilateral Contact Group (the OSCE, Russia and Ukraine) continues. On December 30, 2015, Normandy format leaders reaffirmed their commitment to a ceasefire in eastern Ukraine, among other Minsk measures. However, much remains to be done toward achieving concrete results. The durations of sanctions by Canada and our like-minded partners has been explicitly linked to the complete implementation of the Minsk agreements by all parties. With the expectation that the Minsk agreements would not be fully implemented by the December 31, 2015, deadline, the European Council has recently prolonged EU economic sanctions against Russia until July 31, 2016. Recent actions were also taken by the United States in their December 22, 2015, announcement of a package of measures designed to maintain the efficacy of existing sanctions. The U.S. actions reflect a continued effort to counter attempts to circumvent sanctions and to align measures with international allies. The cost of the conflict in human terms is high. The UN has recorded at least 29 830 casualties (Ukrainian armed forces, civilians and members of the armed groups) in the armed conflict area of eastern Ukraine from mid-April 2014 to mid-November 2015, including at least 9 098 killed and 20 732 injured. As of November 15, 2015, the Ministry of Social Policy of Ukraine had registered 1 578 925 internally displaced persons throughout Ukraine. Actual numbers are widely judged to be much higher. The UN has also received numerous reports of serious human rights abuses against individuals residing in the areas of the Donbas region controlled by the self-proclaimed “Donetsk People’s Republic” and the self-proclaimed “Luhansk People’s Republic”, including allegations of killings, ill-treatment and torture, illegal detention and forced labour, as well as restrictions on assembly, expression and movement. The onset of winter and lack of humanitarian access to the region under separatists’ control are expected to worsen the already difficult situation of the 2.9 million people in the conflict area. Objectives The Regulations Amending the Special Economic Measures (Ukraine) Regulations (the Regulations) add three individuals and four entities to the Schedule. These measures are being taken to align with recent actions taken by international partners, to underscore continued trans-Atlantic unity in responding to Russia’s actions in Ukraine, to maintain pressure on Russia to fully implement its Minsk commitments, and to demonstrate our commitment to a policy of non-recognition of Russia’s illegal annexation of Crimea. Description The Regulations add three individuals and four entities to the list of designated persons under the Special Economic Measures (Ukraine) Regulations. Any person in Canada and any Canadian outside Canada is prohibited from dealing in any property, wherever situated, held by or on behalf of a designated person; entering into or facilitating, directly or indirectly, any transaction related to such a dealing; providing any financial or related service in respect of such a dealing; making goods, wherever situated, available to a designated person; and providing any financial or related service to or for the benefit of a designated person. Exceptions to the above-noted prohibitions are available for the following: payments made by or on behalf of designated persons pursuant to contracts entered into prior to the coming into force of the Regulations, provided that the payments are not made to or for the benefit of a designated person; pension payments to any person in Canada or any Canadian outside Canada; transactions in respect of accounts at financial institutions held by diplomatic missions, provided that the transaction is required in order for the mission to fulfill its diplomatic functions under the Vienna Convention on Diplomatic Relations, or transactions required in order to maintain the mission premises if the diplomatic mission has been temporarily or permanently recalled; transactions by international organizations with diplomatic status, agencies of the United Nations, the International Red Cross and Red Crescent Movement, or Canadian non-governmental organizations that have entered into a grant or contribution agreement with Global Affairs Canada; transactions necessary for a Canadian to transfer to a non-designated person any accounts, funds or investments of a Canadian held by a designated person on the day on which that person became designated; financial services required in order for a designated person to obtain legal services in Canada with respect to the application of any of the prohibitions in the Regulations; and loan repayments made to any person in Canada or any Canadian abroad in respect of loans entered into before the coming into force of the Regulations, enforcement of security in respect of those loans, or payments by guarantors guaranteeing those loans. “One-for-One” Rule The “One-for-One” Rule applies to these Regulations, as there are minimal administrative costs to business, because of the reporting requirement. However, the administrative burden associated with these Regulations is carved out from the “One-for-One” Rule, as they address unique, exceptional circumstances. Small business lens The small business lens does not apply to these Regulations, as there are no costs (or insignificant costs) imposed 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 and Immigration, Refugees and Citizenship Canada. Rationale The measures contained in the Regulations demonstrate Canada’s concern about the continuing violation of Ukraine’s sovereignty and territorial integrity. Implementation, enforcement and service standards Canada’s sanctions regulations are enforced by the Royal Canadian Mounted Police and the Canada Border Services Agency. In accordance with section 8 of the Special Economic Measures Act (SEMA), every person who wilfully contravenes the Special Economic Measures (Ukraine) Regulations under the SEMA is liable upon summary conviction to a fine of not more than $25,000 or to imprisonment for a term of not more than one year or to both, or upon conviction on indictment, to imprisonment for a term of not more than five years. Contact Kevin Hamilton Director Eastern Europe and Eurasia Division Global Affairs Canada 125 Sussex Drive Ottawa, Ontario K1A 0G2 Telephone: 343-203-3603 Fax: 613-995-1277 Email: [email protected] Footnote a S.C. 1992, c. 17 Footnote 1 SOR/2014-60

This Bill does not amend any statutes.

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