CANADA’S SANCTIONS REGIME
Do sanctions programs have
& YOUR LEGAL OBLIGATIONS
anything to do with your firm?
You don’t open accounts for terrorists
or money launders so why worry
about Canada’s sanctions regime?
;e short answers are yes, the sanctions
regulation do apply and failure to pay
attention can lead to legal and reputational
What are Canada’s Sanction Programs?
Economic sanctions are a standard tool of
international diplomacy. ;ey can be used to
force compliance with international norms;
to punish speci;c countries, companies or
individuals for bad behavior or to interdict
the ;ow of goods or services intended to be
used for purposes such as terrorism or the
development of nuclear weapons.
Many sanctions programs are coordinated
through the UN Security Council including
those against Iran, North Korea and several
war-torn African countries. Others, such as
those against Russia are common to Western
countries but cannot be organized through
the UN because of Russia’s veto power.
Confusingly Canada has 27 sanctions
programs under ;ve federal statutes includ-
ing the Criminal Code. 25 of these
include sanctions against named persons
and entities. In some cases, there are
sanctions against a country under more
than one statute; in some cases the same
companies or individuals appear on more
than one list.
All these programs place similar obligations on ;nancial institutions including,
as expressed in the section 83.111 of the
Criminal Code: “entities authorized under
provincial legislation to engage in the
business of dealing in securities, or to
provide portfolio management or investment counselling services.” Does this
sound like your ;rm?
;e common provisions are:
Prohibition from providing ;nancial
services to or holding the assets of speci;ed individuals or companies;
Determining on a continuing basis
whether you are in possession or control of
property owned or controlled by or on
behalf of a listed individual or entity
Freezing the assets of any speci;ed
individuals or companies;
Reporting to speci;ed authorities if you
determine you are in possession or control
of the property of any listed individual or
Many programs have additional features
that are unrelated to ;nancial services,
such as arms embargos and import/export
It’s not easy to be a Compliance O;cer
Unfortunately, the Federal Government
has done little to make compliance with
sanction requirements easy:
1. No Single Sanctions List.
;e lists of sanctioned individuals and
companies are all over the place:
a. Many dealers think (wrongly!) that the
only sanctions programs are those for
which the O;ce of the Superintendent of
Financial Institutions lists on its web site.
Not even those lists are consolidated: there
are separate lists for each of individuals
and entities under multiple anti-terrorist
regulations and for the Iran and North
Korea programs under the United Nations
b. ;e lists under the Special Economic
Measures Act (SEMA), the Freezing Assets
of Corrupt Foreign O;cials Act and the
Justice for Victims of Corrupt Foreign
VP OF IDA
Do sanctions programs have anything to do with your firm?