Things to know
- Canada has a broad range of economic sanctions laws that apply to all individuals and businesses in Canada and to all Canadian citizens and Canadian businesses doing business outside Canada. These laws are included in a number of different statutes and regulations including the Criminal Code, United Nations Act, Special Economic Measures Act, Freezing Assets of Corrupt Foreign Officials Act and Justice for Victims of Corrupt Foreign Officials Act.
- Given that many Canadian businesses have dealings with other businesses outside Canada (e.g., as customers or suppliers), it is important to understand, and comply with, the applicable sanctions laws that may apply to your business.
- Broadly speaking, the Canadian sanction laws: (i) prohibit all individuals and businesses from dealing with designated persons (e.g., listed on government lists, U.N. lists, etc.), jurisdictions (e.g., North Korea) or within specific sectors (e.g., arms; nuclear materials; certain chemicals), and (ii) impose screening, reporting and asset-freeze obligations on regulated financial institutions as well as other prescribed businesses.
- Canadian sanctions laws provide exemptions for the provision of goods and services for certain purposes (humanitarian relief etc.).
- Canada’s export laws should also be reviewed to confirm relevant prohibitions and exemptions.
Things to do
Confirm Application of Rules
- Review your business activities and confirm the scope of restrictions and obligations that apply to you. For example, if you are a prescribed business under the Canadian sanctions laws (predominantly businesses involved in finance and insurance), you would be subject to a broad range of obligations, including those relating to continuous screening, reporting and asset-freeze obligations.
- Monitor regulatory developments. The Canadian laws are in flux and are expected to change in scope frequently based on international developments. In addition, the Canadian government is under pressure to keep its sanctions laws up to date with international standards and we expect more strict requirements and enforcement to apply in the coming years.
Compliance Program
- To mitigate the risk of corporate criminal liability, damage to reputation and fines, you need to have a robust compliance program that meets the regulatory requirements and expectations.
- If you have a compliance program in place already, you should carefully review your program to confirm that it meets the regulatory requirements and expectations.
- You should carefully review your business activities and arrangements with third parties to mitigate the risk of non-compliance.