CBA Demarch on Proposed Sanctions Legislation Underscores Trade Bar’s Frustration With Canada’s Overall Management of Its Russia Sanctions Program
On May 12, 2023, in response to the Government of Canada’s proposed amendments to the Special Economic Measures Act (SEMA) and the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law) (Magnitsky Act) in Bill C-47, the Budget Implementation Act 2023, No. 1 (Bill C-47), the International Law Section of the Canadian Bar Association (CBA Section) has filed a submission with the Parliamentary Standing Committee on Finance. Bill C-47 is intended to make consequential amendments with respect to commitments made by the Government in its 2023 Budget. The same text was filed with the Senate’s Standing Committee on Foreign Affairs and International Trade.
The CBA Section submission was put together by a number of experienced international trade lawyers – Canadian practitioners who have become increasingly frustrated with the management of Canada’s Russia Sanctions program. In a nutshell, the concerns are about a lack of clarity and guidance along with a failure to provide an effective permit application process. The Canadian Bar Association has played an important role in co-ordinating the work on this important submission and also organized meetings with Global Affairs Canada officials over the last year.
The author is an active member and has participated in the CBA Section with other trade lawyers. The CBA’s facilitated work has included collaboration on preparation of the brief, along with earlier meetings conducted with officials from Global Affairs Canada. In its brief, the CBA pointed out that the proposed amendments include phrasing that is “highly subjective and may lead to inconsistent outcomes.” Canada’s trade law bar is looking for increased predictability and certainty but takes the view that that Canada’s sanction regime is actually causing increasing confusion and compliance challenges. As per the brief:
“To date, no guidance has been issued by Global Affairs Canada despite repeated and long-standing requests from the [association], trade lawyers and the business community.”
As it was tabled on March 28, 2023, Bill C-47 includes amendments to certain Canadian economic sanctions legislation, including the introduction of new legal tests. While these tests may have the objective of clarifying Canada’s “ownership and control”, the CBA Section took the view that Canada’s government continues to be plagued by a lack of clarity and interpretive guidance. This makes it difficult for Canadians to remain compliant, a submission set out by the CBA about the specific problem in some detail.
In a related development, the Senate’s Standing Committee on Foreign Affairs and International Trade released a report that was critical of Canada’s current sanction regime. To make it “fit for purpose”, the Report – Strengthening Canada’s Autonomous Sanctions Architecture: Five-Year Legislative Review of the Sergei Magnitsky Law and the Special Economic Measures Act (the Report) – sets out 19 recommendations with respect to the need for improved transparency and guidance. In particular, the report notes the significant delay that most applicants for Ministerial Permits face and the need for improved due process. Noting that, “Individuals and companies should be made aware if they face sanctions and the reason.”
The Senate’s Report underscores the many problems Canada’s trade bar and their clients face in navigating through Canada’s current sanctions regime. We will review the Report and some recent examples in greater detail in an upcoming Slaw column.
– Michael Woods
 Government Bill (House of Commons) C-47 (44-1) – First Reading – Budget Implementation Act, 2023, No. 1 – Parliament of Canada; see also Bill C-47: An Act to implement certain provisions of the budget tabled in Parliament on March 28, 2023 (justice.gc.ca) and C-47 (44-1) – LEGISinfo – Parliament of Canada