On December 19, 2014 the Canadian Government imposed additional economic sanctions against Russia which expressly target oil exploration and production.
All persons in Canada and any Canadian outside Canada are now prohibited from exporting, selling, supplying or shipping certain goods to Russia or to any person in Russia for use in:
- offshore oil exploration or production at a depth greater than 500 m;
- oil exploration or production in the Arctic; or
- shale oil exploration or production.
The prohibited goods are listed in "Schedule 4" to the Sanctions.
Moreover, the new sanctions also prohibit the provision of any financial, technical or other services related to "Schedule 4 goods".
Prior to last week, Canada's economic sanctions were entirely focussed on prohibited persons and entities, as well as certain types of debt and equity financing. The introduction of sectoral prohibitions focussed on oil exploration and production marks a change that potentially impacts a wide array of Canadian companies.
In addition to targeting Russian oil exploration and production, the Canadian Government increased the list of "Schedule 1" prohibited persons from 66 to 77.
In addition to expanding the economic sanctions against Russia, Canada also expanded its economic sanctions against Ukraine by increasing the list of prohibited persons from 54 to 63.
Those conducting business in Russia or Ukraine, particularly those involved directly or indirectly with oil production, should take steps to ensure compliance with these new Canadian laws. The economic sanctions imposed on Russia and Ukraine have rapidly evolved and ongoing vigilance with respect to developments is the prudent course.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
