CSA Alerts Market Participants to Economic Sanctions Imposed Under Amended Special Economic Measures (Russia) Regulations

The Canadian Securities Administrators have issued a statement alerting market participants to economic sanctions recently imposed by the Government of Canada under amendments to the Special Economic Measures (Russia) Regulations (the “Regulations”).

Market participants who transact or deal with “designated persons”, and their assets or property, may be impacted by the new restrictions.

Background

The Regulations came into force on March 17, 2014 in response to Russia’s violation of the sovereignty and integrity of Ukraine, as well as human rights violations committed in Russia. The Regulations have since been amended on several occasions.

Russia’s continued and accelerated violent actions prompted these more recent amendments in late February and early March 2022.

The Amended Regulations

With limited exception, the amended Regulations impose an asset freeze on “designated persons” (listed in Schedule 1 of the Regulations) and prohibit any person in Canada and any Canadian outside Canada from:

• dealing in any property, wherever situated, held by or on behalf of a designated person listed in Schedule 1;
• entering into or facilitating, directly or indirectly, any transaction related to such a dealing;
• providing any financial or other related services in respect of such a dealing;
• making any goods, wherever situated, available to a designated person listed in Schedule 1; and
• providing any financial or related service to, or for the benefit of, a designated person listed in Schedule 1.

Certain entities (listed in section 6 of the Regulations) are also required to determine on a continuing basis whether they possess or control property owned by, or on behalf of, a designated person listed in Schedule 1. These entities must report any such situation, or any proposed transaction involving such property, to the Commissioner of the RCMP.

With limited exception, the amended Regulations also include restrictions:

• in connection with the provision of, or the dealing in, new debt or equity financing to designated persons listed in Schedules 2 and 3, as applicable; and
• regarding the sale, export or supply of certain goods related to oil exploration or production and the provision of services related to such goods.

Notably, causing, facilitating or assisting any of the foregoing activities are likewise prohibited.

For further information about the amended Regulations, please contact any member of our Financial Services Regulatory Group.