Canada Steps Up Sanctions on Russia and Belarus: Extractive Sector Services, Advanced Technology and Certain Media Entities Facing New Restrictions | Stikeman Elliott LLP


In this post, we describe the many sanctions imposed by Canada on Russia and Belarus, and on certain Ukrainians who have supported them, since our previous update on June 22, 2022.

As discussed below, the key points are:

  • Additional goods and technology restrictions have been imposed on Russia while also being extended to Belarus;
  • The Canadian government has taken the remarkable step of placing broad sanctions on Russian media;
  • Sanctions have been imposed in relation to the Bucha Massacre;
  • The services ban for Russia has been expanded and now also applies to Belarus; and
  • More Ukrainians who have assisted in the occupation of parts of Ukraine have been designated.

New Restrictions on Advanced Technologies and Russian Defense Officials and Entities

On June 27, 2022, Canada imposed new sanctions on Russia to:

  • Prohibit the export of certain advanced technologies and goods that could be used in the production and manufacturing of weapons by Russia, including specified goods or technologies falling within the following categories:
    • Quantum computing materials;
    • cryogenic refrigeration systems;
    • Ultra-high vacuum equipment;
    • High quantum efficiency photodetectors;
    • Additive manufacturing equipment for certain uses or processes;
    • Metal powders for additive manufacturing;
    • Certain microscopes and detectors;
    • Decapsulation equipment for semiconductor devices;
    • Software related to the above items or for digital twins or the determination of the reliability of additive manufactured products; and
    • Technology related to the above items; and
  • Designate 6 individuals who are senior Russian defense officials and 46 Russian defense entities.

Designations of Russian Media

On July 7, 2022, Canada took the remarkable step of designating 29 individuals who are, according to Canada, Russian disinformation and propaganda figures and 15 entities that Canada refers to as involved in disinformation activities. The Russian government likely considers these persons to be media figures, albeit state-friendly or controlled. Also designated is a media regulator. Illustrative of the news-media nature of these persons are the names of the entities:

  • Channel One Russia JSC;
  • Television Station Russia-1;
  • NTV Broadcasting Company JSC;
  • Russotrudnichestvo (the Federal Agency for the Commonwealth of Independent States Affairs, Compatriots Living Abroad, and International Humanitarian Cooperation);
  • TASS;
  • The All-Russia State Television and Radio Broadcasting Company (VGTRK);
  • Gazprom Media;
  • National Media Group;
  • Rossiya-24 TV Channel;
  • Smotrim;
  • Ru;
  • RT;
  • Sputnik;
  • REGNUM News Agency; and
  • Roskomnadzor (The Federal Service for Supervision of Communications, Information Technology and Mass Media).

It may be worth noting that the Deputy Prime Minister, who is widely considered to have the policy lead on Canada’s sanctions on Russia, was formerly a well-known member of the press who once served as the Moscow bureau chief for an international business news organization.

Gold Import Ban

On July 7, 2022, Canada prohibited the import of certain gold products from Russia, including unwrought gold, semi-manufactured gold, gold powder, monetary gold and jewelry made of gold.

Services Ban: More Services and Industries Added

On July 14, 2022:

  • Canada added 2 more manufacturing services to the list of banned services that cannot be provided to banned industries:
    • Services incidental to manufacturing, except to the manufacture of metal products, machinery and equipment
    • Services incidental to the manufacture of metal products, machinery and equipment
  • Canada added 8 new industries to the list of banned industries to which banned services cannot be provided:
    • manufacture of basic metals
    • Manufacture of fabricated metal products
    • Manufacture of computer, electronic and optical products
    • Manufacture of electrical equipment
    • Manufacture of machinery and equipment
    • Manufacture of motor vehicles, trailers and semi-trailers
    • Manufacture of other transport equipment
    • Land transport and transport via pipelines

For further discussion of the ban on the provision of certain services to certain industries please see our post of June 22, 2022.

Bush Massacre and Other Defense Sector Designations

On July 29, 2022, Canada designated an additional 43 individuals and 17 entities. These persons include military officials allegedly involved in the Bucha Massacre and entities in the defense sector that, according to the Government of Canada, directly or indirectly support the Russian military.

Sanctions on Belarus are Expanded

On June 27, 2022, similar to previously or contemporaneously imposed sanctions on Russia, Canada imposed new sanctions on the Republic of Belarus to:

  • prohibit the export to Belarus of:
    • certain goods and technologies,
    • luxury goods
    • goods for the manufacture of weapons,
  • prohibit the import of certain luxury goods from Belarus.

On the same day, Canada designated 13 senior officials of the Ministry of Defense of the Government of Belarus and 2 Belarusian military entities.

Designations of Certain Ukrainian Nationals

On June 27, 2022, Canada designated 15 former senior officials of the so-called Luhansk People’s Republic (LNR) and the so-called Donetsk People’s Republic (DNR), and their family members, as well as purported leaders in areas of Ukraine illegally occupied by Russian forces or controlled by Russian-backed proxies.

The Gazprom Turbine

Even though the Gazprom pipeline turbine controversy is beyond the scope of this post, we would remiss not to mention it for the benefit of our international readers who may not be aware of it or the court application challenging the Canadian government’s permit decision allowing for a turbine bound for a Gazprom pipeline to be exported from Canada. Those interested in this issue can find extensive media coverage online.

Potential Implications for Canadian Businesses

Canada continues to add to the thicket of sanctions on Russia and Belarus, including sanctions on persons and a variety of other restrictions. This poses an ever-increasing burden on Canadian businesses that must comply with these sanctions. It is important to take care to ensure compliance. We that anticipation enforcement may be more top-of-mind than it has perhaps been in recent years.

Conclusion

The pace of new Canadian sanctions has not yet slackened. Although there is likely a bottomless well of persons and entities who could potentially be for involvement in or support of the war in Ukraine, logically there should be an end point designated for other sanctions, given the extensive sanctions that have already been imposed and the diminishing returns of identifying any remaining areas of commercial relations between Canada and Russia (or Belarus). However, we have not seen that yet and the Canadian government remains creative in finding new sanctions and, we understand, wishes to maintain a leadership role to the extent possible. Stay tuned for more developments.

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