Canada imposes additional sanctions on Iran essentially prohibiting all transactions

By Christine Duhaime | May 29th, 2013

New Sanctions Against Iran

The government of Canada today announced the imposition of new sanctions against Iran as a result of the lack of progress with the reduction of Iran’s nuclear program.

Effective today, Canada banned all exports from and imports to Iran, and added more entities and individuals to the list of designated persons with whom transactions are prohibited.

The sanctions are imposed under the authority of the Special Economic Measures ActS.C. 1992, c. 17 (the “Act“). It authorizes the Governor-in-Council to make orders and regulations to implement decisions, recommendations or resolutions of an international organization of a state or states when there are, or may be, grave breaches of international peace or security.

Under the authority of the Act, the Special Economic Measures (Iran) RegulationsSOR/2010-165, were amended to prohibit wholesale, any person in Canada from exporting, selling, supplying, shipping goods to a person or entity in Iran or to any person or entity for the purposes of a business in or operated from Iran. A person or entity is also now prohibited from importing, buying, acquiring, shipping or transporting any goods that are exported, supplied or shipped from Iran.

Previous to the amendments announced today, the sanctions in respect of trade were more limited and covered certain prescribed goods and services. The amendments today operate as a global restriction against economic engagements with Iran.

Continuation of Financial Prohibitions Involving Iran

The prohibitions in respect of financial services involving Iran, and Iranians, remain in place and they generally prohibit Canadians from having any financial dealings whatsoever with Iran.

Under the Regulations, banks, credit unions, insurance and trust companies, securities brokers, investment advisors and money services businesses must continue to determine whether they have in their possession, money or other property of a designated person or entity from Iran and must report such property to the RCMP immediately in addition to taking certain steps to freeze the assets.

FATF Rceommendation on the Proliferation of Weapons of Mass Destruction

The Financial Action Task Force (“FATF“) Recommendation 7 requires that Canada, and reporting entities under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, S.C. 2000, c. 17 to the extent enacted,  freeze, without delay, the funds and assets of designated persons and entities listed under the Act and therefore, compliance officers should ensure that the new designated lists are included in their compliance procedures.

The FATF Recommendation 7 is targeted at the prevention and disruption of the financing of the proliferation of weapons of mass destruction.

UN Act Continues to Apply in Respect of Sanctions

The requirements under the Regulations are in addition to the economic sanctions required by Canada’s implementation of the UN Security Council Resolutions on Iran pursuant to the United Nations ActR.S.C., 1985, c. U-2 and the Regulations Implementing the United Nations Resolutions on IranSOR/2007-44.

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