Vol. 149, No. 14 — July 15, 2015

Registration

SOR/2015-179 June 29, 2015

SPECIAL ECONOMIC MEASURES ACT

Regulations Amending the Special Economic Measures (Ukraine) Regulations

P.C. 2015-1041 June 29, 2015

Whereas the Governor in Council is of the opinion that the situation in Ukraine constitutes a grave breach of international peace and security that has resulted or is likely to result in a serious international crisis;

Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of Foreign Affairs, pursuant to subsections 4(1) to (3) of the Special Economic Measures Act (see footnote a), makes the annexed Regulations Amending the Special Economic Measures (Ukraine) Regulations.

REGULATIONS AMENDING THE SPECIAL ECONOMIC MEASURES (UKRAINE) REGULATIONS

AMENDMENTS

1. Section 1 of the Special Economic Measures (Ukraine) Regulations (see footnote 1) is amended by adding the following in alphabetical order:

2. The marginal note to section 3 of the Regulations is replaced by “Prohibited transactions and activities — designated persons”.

3. The Regulations are amended by adding the following after section 4:

Prohibited transactions and activities — Crimea region of Ukraine

4.1 It is prohibited for any person in Canada and any Canadian outside Canada to

Non-application

4.2 Section 4.1 does not apply in respect of

4. Section 5 of the Regulations is replaced by the following:

Prohibited act

5. It is prohibited for any person in Canada and any Canadian outside Canada to do anything that causes, assists or promotes, or is intended to cause, assist or promote, any act or thing prohibited under section 3 or 4.1.

APPLICATION PRIOR TO PUBLICATION

Statutory Instruments Act

5. For the purpose of paragraph 11(2)(a) of the Statutory Instruments Act, these Regulations apply before they are published in the Canada Gazette.

COMING INTO FORCE

Registration

6. These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

Pro-Russian forces continue to destabilize eastern Ukraine and facilitate Russian military action against the Ukrainian government.

Background

Acting in coordination with the United States and the European Union, the Governor in Council has found that the situation in Ukraine constitutes a grave breach of international peace and security that has resulted or is likely to result in a serious international crisis. As a result, the Special Economic Measures (Ukraine) Regulations were approved on March 17, 2014. Further amendments to these Regulations were made on March 19, 2014, April 12, 2014, May 12, 2014, June 21, 2014, July 11, 2014, July 24, 2014, August 6, 2014, December 19, 2014, and February 17, 2015.

There has been a significant escalation in the number and intensity of attacks in eastern Ukraine in recent weeks, resulting in the highest level of violence since the February 12, 2015, “Package of Measures for the Implementation of the Minsk Agreements.” Flare-ups have occurred not only around Donetsk City airport (a regular hotspot), but also increasingly in nearby cities such as Mariinka, 30 km west of Donetsk. On June 3, 2015, Russian-backed forces mounted a major but unsuccessful assault on Mariinka. In the south, the Mariupol area remains a concern. Mariupol’s suburb of Shyrokyne has been a particular hotspot with the Organization for Security and Co-operation in Europe (OSCE) Special Monitoring Mission (SMM) unable to visit the city between May 14 and June 9, 2015, due to escalating violence.

Initial implementation of the withdrawal of heavy weapons, which was to be completed within 15 days of the February ceasefire, has stalled. The OSCE SMM has recorded the presence of banned heavy weapons in violation of the ceasefire agreement, particularly in areas controlled by Russian-backed forces. In addition, although some prisoner exchanges have taken place, hundreds of individuals remain detained in violation of the Minsk commitments, which call for the release and exchange of all hostages and unlawfully detained persons. Denials and restriction of access to the OSCE SMM monitors in the course of their observation duties have taken place overwhelmingly on the part of the Russian-backed forces.

A meeting among Foreign Affairs ministers of “Normandy format” countries (Ukraine, Russia, Germany, France) in Berlin on April 13, 2015, yielded little progress on the implementation of the Minsk commitments, beyond an agreement to establish working groups on humanitarian assistance, security issues, the political process and economic reconstruction in eastern Ukraine. The four working groups created under the “Trilateral Contact Group” of Russia, Ukraine and the OSCE have met three times in Minsk since mid-May 2015, but have not yielded tangible results. There are also reports of non-attendance and disruptive behaviour of Russian delegates in the Trilateral Contact Group and its working groups.

According to the United Nations, over 6 400 people have been killed in eastern Ukraine since violence began in April 2014. It is estimated that 5.2 million Ukrainians live in conflict-affected areas; 1.3 million people are reported to be internally displaced (97% from the eastern regions of Ukraine); and 640 000 have fled to neighbouring countries.

Canada believes that a firm and united response to Russian aggression in Ukraine continues to be essential. Canada continues to maintain pressure on Russia to adhere to the Minsk Agreements and respect Ukraine’s sovereignty and territorial integrity.

Objectives

The Regulations Amending the Special Economic Measures (Ukraine) Regulations, (the Regulations) amend the Special Economic Measures (Ukraine) Regulations by adding prohibitions on imports from, exports to, and investments in the Crimea region of Ukraine, as well as prohibitions on the provision or acquisition of financial or other related services and on the transfer, provision or communication of technical data in the Crimea region of Ukraine, and finally, prohibitions on the provision or acquisition of financial and other services related to tourism and on the docking of cruise ships. The Regulations also add a definition of the “Crimea region of Ukraine.”

Description

The Regulations add a definition of the Crimea region of Ukraine to the Special Economic Measures (Ukraine) Regulations. The “Crimea region of Ukraine” means the Autonomous Republic of Crimea and of the city of Sevastopol, and includes their land areas and territorial sea. The Regulations also add prohibitions related to the Crimea region of Ukraine to the Special Economic Measures (Ukraine) Regulations. It is prohibited for any person in Canada and any Canadian outside Canada to

Exceptions to the above-noted prohibitions are available for the following:

“One-for-One” Rule

The “One-for-One” Rule applies to this proposal, as there are minimal administrative costs to business, because of the reporting requirement. However, the administrative burden associated with the Regulations is carved out from the “One-for-One” Rule as they address unique, exceptional circumstances.

Small business lens

The small business lens does not apply to this proposal, as there are no costs (or insignificant costs) to small business, and small businesses would not be disproportionately affected.

Consultation

Foreign Affairs, Trade and Development Canada drafted the Regulations in consultation with the Department of Justice and Citizenship and Immigration Canada.

Rationale

The measures contained in the Regulations demonstrate Canada’s concern about the continuing violation of Ukraine’s sovereignty and territorial integrity.

Implementation, enforcement and service standards

Canada’s sanctions regulations are enforced by the Royal Canadian Mounted Police and the Canada Border Services Agency. In accordance with section 8 of the Special Economic Measures Act (SEMA), every person who wilfully contravenes the Regulations under the SEMA is liable upon summary conviction to a fine of not more than $25,000 or to imprisonment for a term of not more than one year or to both, or upon conviction on indictment, to imprisonment for a term of not more than five years.

Contact

Kevin Hamilton
Director
Eastern Europe and Eurasia Division
Foreign Affairs, Trade and Development Canada
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 343-203-3603
Fax: 613-995-1277
Email: Kevin.Hamilton@international.gc.ca