ANNOUNCEMENT 22 Feb 2022

In February 2022, the government of Canada announced sanctions against two Russian banks in response to Russian recognition of the independence of the Donetsk and Luhansk regions of Ukraine. 

NUMBER OF INTERVENTIONS

3

  • 3 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

Government of Canada. Regulations Amending the Special Economic Measures (Russia) Regulations (SOR/2022-027). 24/02/2022. Available at: https://www.international.gc.ca/world-monde/international_relations-relations_internationales/sanctions/russia_regulations-reglement_russie2.aspx?lang=eng

Prime Minister of Canada. "Canada announces support to address the situation in Ukraine". 22/02/2022. Available at: https://pm.gc.ca/en/news/news-releases/2022/02/22/canada-announces-support-address-situation-ukraine

Inception date: 24 Feb 2022 | Removal date: open ended

Controls on commercial transactions and investment instruments

On 24 February 2022, the government of Canada amended the Special Economic Measures (Russia) Regulations (SOR/2022-027), imposing sanctions on two Russian banks in response to Russia's recognition of the independence of the Donetsk and Luhansk regions of Ukraine. The two banks falling under Canadian sanctions are Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank (VEB) and Promsvyazbank Public Joint Stock Company (Promsvyazbank PJSC). Inclusion of these financial institutions in the sanctions list entails a prohibition on any Canadian entity dealing in property with the said banks or indirectly engaging in this activity, provide any goods to them, or providing any financial service to or for the benefit of these entities. Canada's economic measures also include the two banks' asset freeze. According to Prime Minister Trudeau's statement, VEB and Promsvyazbank PJSC are "significant Russian financial institutions" contributing to the funding of Russia's campaign in Ukraine. 

The action was taken as a part of a sanctions package announced by Prime Minister Justin Trudeau on 22 February 2022.  That package also includes restrictions on the members of the Russian parliament who support the recognition of Donetsk and Luhansk, prohibition for individuals to deal with VEB and Promsvyazbank PJSC (see related intervention), a dealing ban on the Russia-controlled parts of Donetsk and Luhansk (see related state act), and restrictions on transactions related to Russian sovereign debt (see related intervention). 

In this context, Justin Trudeau, Canada's Prime Minister, said: “Russia’s recent actions are a blatant attack on Ukrainian sovereignty, as well as a serious threat to the security and stability of the region and the international rules-based order. The sanctions and the additional military support we are announcing today is the first step Canada will take to stop Russia’s unwarranted aggression. There will be serious consequences for Russia’s actions, and together with our allies and partners, we will continue to take decisive action to support the sovereignty, territorial integrity, and independence of Ukraine.”

AFFECTED SECTORS

 
N/A

AFFECTED PRODUCTS

 
N/A
Inception date: 24 Feb 2022 | Removal date: open ended

Control on personal transactions

On 24 February 2022, the government of Canada announced a set of economic measures against two Russian banks in response to the Russian recognition of the independence of the Donetsk and Lugansk regions of Ukraine. In particular, Canadian individuals are prohibited from engaging in any deals with Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank (VEB) and Promsvyazbank Public Joint Stock Company (Promsvyazbank PJSC). The measure took effect pursuant to the amendment of the Special Economic Measures (Russia) Regulations (SOR/2022-027).

The measure is part of a new sanctions round that also targets members of the Russian State Duma, prohibition for commercial entities to deal with the two banks in question (see related intervention), a dealings ban on the Russia-controlled parts of Donetsk and Luhansk (see related state act), and restrictions on transactions related to Russian sovereign debt (see related intervention). The intention to announce the measure was declared by Prime Minister Justin Trudeau on 22 February 2022, who stated that sanctions on VEB and Promsvyazbank PJSC are necessary to prevent "significant Russian financial institutions" from funding aggressive actions. 

Explaining the rationale behind the sanctions, Canada's Prime Minister said: “Russia’s recent actions are a blatant attack on Ukrainian sovereignty, as well as a serious threat to the security and stability of the region and the international rules-based order. The sanctions and the additional military support we are announcing today is the first step Canada will take to stop Russia’s unwarranted aggression. There will be serious consequences for Russia’s actions, and together with our allies and partners, we will continue to take decisive action to support the sovereignty, territorial integrity, and independence of Ukraine.” 

 
N/A
 
N/A
Inception date: 24 Feb 2022 | Removal date: open ended

Controls on commercial transactions and investment instruments

On 24 February 2022, the Canadian government announced the prohibition to purchase Russian sovereign debt instruments as a part of sanctions in response to Russian recognition of the "independence" and "sovereignty" of the Donetsk and Luhansk regions in Ukraine. The action entered into force immediately through the amendment of the Special Economic Measures (Russia) Regulations (SOR/2022-027). 

The prohibition is imposed by including the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation into Schedule 3.1 of Special Economic Measures (Russia) Regulations. This inclusion effectively prohibits any Canadian entity or individuals to "transact in, provide financing for or otherwise deal in new debt" issued by the Russian government financial institutions in question. 

The intention to undertake the sovereign debt restriction was announced by Justin Trudeau, Canada's Prime Minister, on 22 February 2022. The prohibition is part of a set of economic measures undertaken by Canada in response to Russian actions vis-a-vis the Donetsk and Luhansk regions. Among other actions are sanctions against the Russian parliament members, restrictions on VEB and Promsvyazbank PJSC (see related interventions), and a dealings ban on the Russia-controlled parts of Donetsk and Luhansk (see related state act).

Announcing Canada's response to Russian actions, Justin Trudeau, Canada's Prime Minister, stated: “Russia’s recent actions are a blatant attack on Ukrainian sovereignty, as well as a serious threat to the security and stability of the region and the international rules-based order. The sanctions and the additional military support we are announcing today is the first step Canada will take to stop Russia’s unwarranted aggression. There will be serious consequences for Russia’s actions, and together with our allies and partners, we will continue to take decisive action to support the sovereignty, territorial integrity, and independence of Ukraine.” 

 
N/A
 
N/A