Duhaime's Financial Crime & Anti-Money Laundering Law in Canada

Sanctions likely to seriously impede Canadian-Russian financial transactions and therefore significant trade

By Christine Duhaime, B.A., J.D., Financial Crime and Certified Anti-Money Laundering Specialist

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The Canadian government has announced the imposition of sanctions against the Bank of Moscow, the Russian National Commercial Bank and other Russian and Ukrainian-controlled businesses and financial institutions, as well as a travel ban against a collection of politically exposed persons in both countries, notably the CEO of the Bank of Russia. Canada also imposed sanctions against a distillery in the Crimea and other alcohol-producing entities.

The sanctions are in response to growing violence in the Eastern Ukraine and the build up of the Russian military along the border. The sanctions are targeted at curbing the raising of funds to support the war but the effect will be essentially a freeze on Canada-Russia financial transactions because of the inclusion of Russia’s key bank and payment processor. No doubt trade will be significantly impaired if not entirely halted.

“The Putin regime’s continued illegal occupation of Ukraine’s Crimean peninsula and its provocative military activity in eastern Ukraine remains a grave concern to Canada and the international community,” Prime Minister Stephen Harper said in a statement today.

The sanctions are imposed pursuant to the Special Economic Measures Act (“SEMA“) and its Regulations promulgated thereunder in respect of the Ukraine, and the Freezing Assets of Corrupt Foreign Officials Act and its Regulations promulgated thereunder.

SEMA prohibits all Canadian corporate entities of any type (not just banks, funds and other financial institutions) and all persons in Canada and Canadians outside of Canada from dealing in property of, or providing financial or related services to, any of the sanctioned persons or entities, or for their benefit. Moreover, assets or property of such the sanctioned persons must be immediately frozen and any transactions cannot be completed absent written authorization from the federal government.

The list of sanctioned persons and entities is as follows:

Expanded sanctions list:

Individuals (Russian)

• Sergei Orestovoch Beseda, Commander of the Fifth Service of the Russian Federal Security Service and Commander of the Service for Operational Information and International Communications of the Russian Federal Security Service.
• Aleksandr Vasilievich Bortnikov, permanent member of the Russian Federation’s Security Council and Director of the Russian Federal Security Service.
• Mikhail Vladimirovich Degtyarev, member of the State Duma.
• Mikhail Efimovich Fradkov, permanent member of the Russian Federation’s Security Council and Director of the Foreign Intelligence Service.
• Boris Vyacheslavovich Gryzlov, permanent member of the Russian Federation’s Security Council.
• Ramzan Akhmadovich Kadyrov, President of the Republic of Chechnya.
• Vladimir Georgyevich Kulishov, First Deputy Director of the Russian Federal Security Service, Chief of the Border Guards.
• Konstantin Valerevich Malofeev, Russian business figure and financier of secessionist groups in Ukraine.
• Rashid Gumarovich Nurgaliev, permanent member and Deputy Secretary of the Russian Federation’s Security Council.
• Nikolai Platonovich Patrushev, permanent member and Secretary of the Russian Federation’s Security Council.
• Nikolay Terentievich Shamalov, CEO and majority shareholder of Bank Rossiya.
• Igor Shchegolev, aide to the President of the Russian Federation and the former Minister of Communications and Mass Media.
• Alexander Nikolayevich Tkachyov, Governor of Krasnodar Krai.
• Valerii Yuriovych Travkin, officer in the Main Intelligence Directorate of the General Staff of the Armed Forces of the Russian Federation.

Individuals (Ukrainian)

• Sergey Abisov, Minister of Interior of the Republic of Crimea.
• Pavel Yurevich Gubarev, one of the self-described leaders of the Donetsk People’s Republic.
• Ekaterina Yurevna Gubareva, so called Minister of Foreign Affairs of the Donetsk People’s Republic.
• Boris Litvinov, Chairman of the Supreme Council of the Donetsk People’s Republic.
• Oksana Tchigrina, spokesperson of the Luhansk People’s Republic.

Entities (Russian)

• Bank of Moscow
• Dobrolet (Dobrolyot) Airlines
• Russian Agricultural Bank (Rosselkhozbank)
• Russian National Commercial Bank
• United Shipbuilding Corporation
• VTB Bank OAO (former Vneshtorgbank)

Entities (Ukrainian)

• “Army of the Southeast”
• “Crimean enterprise ‘Azov distillery plant’”
• “Donbass People’s Militia”
• “Federal State of Novorossiya”
• “International Union of Public Associations ‘Great Don Army’”
• “Luhansk Guard”
• “Resort ‘Nizhnyaya Oreanda’”
• “Sobol
• “State concern ‘National Association of producers Massandra’
• “State enterprise ‘Factory of sparkling wine Novy Svet’”
• “State enterprise ‘Kerch commercial seaport’”
• “State enterprise ‘Magarach of the national institute of wine’
• “State enterprise ‘Sevastopol commercial seaport’”
• “State enterprise ‘Universal-Avia’”
• “State ferry enterprise ‘Kerch Ferry’”
• “Vostok battalion”