Worldwide: Sanctions Round-Up: Nicaragua, Venezuela, Ukraine And Yemen; White Supremacist Groups Added To Anti-Terrorism List

Last Updated: August 6 2019
Article by Jessica B. Horwitz and Sabrina Bandali

The Government of Canada made a number of changes last month to its economic sanctions and anti-terrorism regimes. This blog summarizes the recent amendments, which illustrate:

  • the frequency with which the scope of sanctions and designated persons listings can change;
  • the need to ensure your compliance screening stays up to date with current lists (and to automate such processes where possible);
  • the importance of understanding the screening technology you are relying on; and
  • the potential impact of sanctions and listing mechanisms on parties doing business within Canada, as well as abroad.

Special Economic Measures (Nicaragua) Regulations

Canada introduced a new set of economic sanctions against Nicaragua under the Special Economic Measures Act on June 21. The regulations target nine individuals in the government of President Daniel Ortega and were issued in concert with U.S. measures against certain of these individuals.

The sanctions relate to a recent state-sponsored crack-down on anti-government protestors and related human rights violations, including allegations of unjust detentions, torture, extrajudicial killings and other mistreatment. Some 62,000 Nicaraguans have been forced to flee the country as refugees during the recent unrest. This forced migration is contributing to the ongoing border crisis between Mexico and the United States as the refugees attempt to make their way north.

The new regulations, subject to certain routine exceptions, prohibit any Canadian citizen or entity, or any individual or entity in Canada, from dealing in any property owned, held or controlled by a listed person or anyone acting on behalf of a listed person. The regulations also prohibit facilitating such a transaction, providing any financial or related service to a listed person or anyone acting on behalf of a listed person, making any goods available to a listed person, or knowingly doing anything that causes, facilitates or assists in any prohibited activity. There is a further duty to report to the RCMP or CSIS any property in one's possession or control that is or may be owned, held or controlled by or on behalf of a listed person, or any information about a transaction or proposed transaction involving this property.

Removal of Individual from Venezuela Sanctions

Canada amended the Schedule to the Special Economic Measures (Venezuela) Regulations to remove Manuel Ricardo Cristopher Figuera as a listed person under Canada's Venezuela sanctions. Mr. Figuera, who was formerly the director of Venezuela's National Intelligence Service, recently defected from the regime of President Nicolas Maduro to support Juan Guaidó's opposition forces in an attempted uprising against Maduro in spring of 2019.

Canada's stated reason for the removal was to: "demonstrate that Canada's sanctions are not intended to be permanent; send a clear message to members of the Maduro regime that Canada is willing to review the list of Venezuelan officials sanctioned as long as they support the return to democracy in Venezuela; and show solidarity with the actions of the United States."

Correction of Typo in Ukraine Sanctions

Canada corrected a typographical error in the listing of an individual from the Special Economic Measures (Ukraine) Regulations Schedule: Aleksey Vladimirovich Shatokhin's first name was corrected, which was previously listed as "Andrey (Andrei, Andrii)". Shatokhin is a Russian official in charge of the Kerch Control Point in the Sea of Azov who was implicated in the "Kerch Strait" incident of 2018 (which we discussed in a previous blog post). Shatokhin is on the sanctions list of the European Union in addition to Canada, but he is not currently sanctioned by the United States.

This amendment is a good reminder that sanctions regulations are subject to revision at any time and are often amended quickly, and that they occasionally contain typographical errors or other minor errors that are later corrected. For this reason, it is important that corporate screening procedures reference original source materials (e.g., the Global Affairs or Justice Canada websites or the Canada Gazette) and ensure that the most-up to date versions of the lists are used.

If your company uses a third-party aggregator service for its sanctions screening, it is important to be aware of the system's parameters, such as whether the service is dynamic rather than static and if it uses "fuzzy" search logic to return results that vary slightly in spelling from your original query, and to understand the frequency and manner of updates to the source data. For example, you should understand whether the service draws from online government sources that update automatically or if the dataset needs to be updated manually by staff when amendments occur. In the latter case, there may be a greater risk that the information could become out-of-date.

Two Neo-Nazi Groups Present in Canada Added to List of Terrorist Entities

Canada updated the Criminal Code list of terrorist entities to add, among other entities, two white supremacist extremist groups with a presence in Canada: "Blood & Honour", and "Combat 18". A copy of the updated list also is available on the Public Safety website.

The List of Entities is a regulation under Part II.1 of the Criminal Code, which was introduced through amendments promulgated in the Anti-Terrorism Act in 2001. Part II.1 makes it an offense in Canada to provide support for identified terrorist groups. This includes knowingly collecting or making available any "property or financial or other related services" to be used, directly or indirectly or in whole or in part, in a terrorist activity or to benefit a terrorist group. As with all criminal offences under Canadian law that require a mental or knowledge-based element, if circumstances exist such that the person who performed the action ought to have known, or failed to make adequate inquiry to confirm, that the action was prohibited, the required knowledge will be imputed.

Although not technically economic sanctions, the inclusion of a person on the List of Entities has a similar effect as a standard sanction in that it prohibits most dealings with the person. The addition of these two groups to the terrorism list is a reminder that domestic persons as well as foreign individuals and entities can be subject to restrictions on business dealings under Canadian law. It is important that companies consider all applicable restrictions when conducting routine due diligence on domestic business transactions, not only those imposed by way of the Special Economic Measures Act.

Amendments to Yemen Regulations under the United Nations Act

Canada amended its Regulations Implementing the United Nations Resolution on Yemen on June 25. The amendments included both stylistic and substantive changes. The substantive changes were added to implement United Nations Security Council Resolution 2216 (2015), which was issued in connection with further military escalation by the Houthi insurgency group. The amendments impose an embargo against providing arms, military assistance or mercenary personnel to designated individuals and entities in Yemen, or facilitating same. The resolution also added two Houthi leaders, Abulmalik al-Houthi and Ahmed Ali Abdullah Saleh, to the list of designated individuals.

Note that the Yemen regulations, like most regulations under Canada's United Nations Act, do not reproduce a list of designated persons in the body of the regulations, as do those under the Special Economic Measures Act. Rather, United Nations Act regulations incorporate by reference applicable United Nations Security Council resolutions, which in turn contain the individual and entity names. Because of this, it is important to remember that a keyword search of Canadian regulations alone is never sufficient for purposes of restricted party screening. A comprehensive review of Canadian restricted parties lists must cover the United Nations Security Council Consolidated List in addition to Canadian legal instruments.

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.

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