![Page 1: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/1.jpg)
Sanctions Risk ManagementSymposium
September 18-19, 2017 | The Princeton Club | New York, NY
incooperation with
September18,20174:00PM– 4:45PMNavigatingtheSanctionsandExportControls
RequirementsofMultipleJurisdictions
1
JohnBoscariolHeadofInternational
Trade&InvestmentLawGroup
McCarthyTétrault
DavidMcLeanDeputyHeadofOFSIandHeadofEnforcement&
Engagement
HeraUy SmithGlobalSanctionsCompliance
OfficerAssociatedForeignExchange(AFEX)
SaskiaRietbroekPrincipal
www.SanctionsAlert.com(Moderator)
![Page 2: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/2.jpg)
Navigating the Turbulent Currents of International Sanctions and Export Controls | September 18-19, 2017 | The Princeton Club | New York, NY
Sanctions Risk Management Symposiumincooperation with
2
DavidMcLeanDeputyHeadandHeadofEnforcement&EngagementOfficeofFinancialSanctionsImplementation(OFSI
WhatistheOFSIandhowUKsanctionslawcouldaffectyouextraterritorially
![Page 3: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/3.jpg)
Navigating the Turbulent Currents of International Sanctions and Export Controls | September 18-19, 2017 | The Princeton Club | New York, NY
Sanctions Risk Management Symposiumincooperation with
OfficeofFinancialSanctionsImplementation(OFSI)– WhoWeAre
§ PartofHMTreasury
§ UKCompetentAuthorityforfinancialsanctions
§ PartofthewiderUKGovernmentsanctionsapproachledbyUK’sForeignOffice
§ OperationalfromApril2016– partofincreasedUKGovernmentfocusonfinancialsanctions
3
![Page 4: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/4.jpg)
Navigating the Turbulent Currents of International Sanctions and Export Controls | September 18-19, 2017 | The Princeton Club | New York, NY
Sanctions Risk Management Symposiumincooperation with
WhatWeDo
§ ImplementationofUN&EUfinancialsanctionsinUK§ Terroristassetfreezing§ Outreachandguidance§ Licencing§ Compliance&Enforcement– civilenforcementdirectly,criminalenforcementviasupporttoUK’sNationalCrimeAgency
§ Nottradesanctions– implementedbyUK’sDepartmentofInternationalTrade,enforcedbyRevenue&Customs
4
![Page 5: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/5.jpg)
Navigating the Turbulent Currents of International Sanctions and Export Controls | September 18-19, 2017 | The Princeton Club | New York, NY
Sanctions Risk Management Symposiumincooperation with
WhyDoWeDoIt?
“OFSIwillbeacentreofexcellenceforfinancialsanctions,raisingawarenessandprovidingclearguidancetopromotecompliancewithfinancialsanctions,providingaprofessionalservicetothepublicandindustry,andworkingcloselywithotherpartsofgovernmenttoensurethatsanctionsbreachesarerapidlydetectedandeffectivelyaddressed.”(former)ChancelloroftheExchequer,31March2016
§ FromApril2017breachingfinancialsanctionsisaseriouscrime intheUK– upto7yearsinprison
§ Civilpenalties– thegreaterof£1mor50%ofthevalueofthebreach
5
![Page 6: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/6.jpg)
Navigating the Turbulent Currents of International Sanctions and Export Controls | September 18-19, 2017 | The Princeton Club | New York, NY
Sanctions Risk Management Symposiumincooperation with
Whydoesthismattertoyou?Financialsanctionsapplymorebroadlythansimplytothepersonssubjecttothem.
§ EUfinancialsanctions(incl.wheretheyimplementUNsanctions)applywithinterritoryofEUandtoallEUpersons,wherevertheyareintheworld.
§ UKfinancialsanctionsapplywithinterritoryofUKandtoallUKpersons,wherevertheyareintheworld.
§ AllindividualsandlegalentitieswhoarewithinorundertakeactivitieswithinUK’sterritorymustcomplywithEUandUKfinancialsanctionsthatareinforce.
§ AllUKnationalsandUKlegalentitiesestablishedunderUKlaw,includingtheirbranches,mustalsocomplywithUKfinancialsanctionsthatareinforce,irrespectiveofwheretheiractivitiestakeplace.
§ AllEUnationalsandlegalentitiesestablishedunderEUlawmustcomplywithEUfinancialsanctionsthatareinforce,irrespectiveofwheretheiractivitiestakeplace. 6
![Page 7: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/7.jpg)
Whatshouldyoudo?
Navigating the Turbulent Currents of International Sanctions and Export Controls | September 18-19, 2017 | The Princeton Club | New York, NY
Sanctions Risk Management Symposiumincooperation with
§ Don’tbreaksanctions!§ Thinkextraterritorially§ Knowyourrisk– sensibleandeffectiveriskmanagement§ Knowyourstructures– howexposedareyourbusinessestosanctions
regimes§ Knowyourjurisdictions– whatapplies,howandwhy§ Knowyouragencies– haveyougotallnecessarylicences?Financial
sanctionsvsexportcontrols§ Getprofessionaladvice§ Talktoregulators/competentauthorities§ Dobusiness(whichdoesn’tbreaksanctions)
7
![Page 8: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/8.jpg)
Navigating the Turbulent Currents of International Sanctions and Export Controls | September 18-19, 2017 | The Princeton Club | New York, NY
Sanctions Risk Management Symposiumincooperation with
8
JohnBoscariolHeadofInternationalTrade&InvestmentLawGroupMcCarthyTétrault
![Page 9: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/9.jpg)
Navigating the Turbulent Currents of International Sanctions and Export Controls | September 18-19, 2017 | The Princeton Club | New York, NY
Sanctions Risk Management Symposiumincooperation with
9
§ Exportandtechnologytransfercontrols§ ExportControlList§ AreaControlList
§ Economicsanctions§ SpecialEconomicMeasuresAct§ UnitedNationsAct§ FreezingAssetsofCorruptForeignOfficialsAct
§ CriminalCode(“terroristgroups”)§ Domesticindustrialsecurity
§ DefenceProductionAct,Controlled
GoodsProgram§ Otherlegislationofpotentialconcern
§ blockingorders(Cuba)§ anti-boycottpolicyanddiscriminatorybusinesspracticeslaws
§ anti-briberylaw(CorruptionofForeignPublicOfficialsActandCriminalCode)
§ “Complianceconvergence”
Canada’sExportControlsandEconomicSanctions
![Page 10: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/10.jpg)
Navigating the Turbulent Currents of International Sanctions and Export Controls | September 18-19, 2017 | The Princeton Club | New York, NY
Sanctions Risk Management Symposiumincooperation with
10
CanadianmeasuresmaybebroaderthanthoseoftheU.S.,othercountries§ Russia/Ukraine– over300designatedpersons§ Belarus,Burma,Libya,NorthKorea§ Iran– evenpost-JCPOA
CanadiansanctionsmeasuresdivergingfromthoseoftheU.S.andEurope
Importanceof“homegrown”strategiesforenforcement,disclosuresandcompliance
ChallengesinInteractionWithOtherRegimes
![Page 11: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/11.jpg)
Navigating the Turbulent Currents of International Sanctions and Export Controls | September 18-19, 2017 | The Princeton Club | New York, NY
Sanctions Risk Management Symposiumincooperation with
11
CanadianmeasurescanbeindirectconflictwiththoseoftheUnitedStates§ ForeignExtraterritorialMeasuresAct“blocking”orderinrespectofUStradeembargoofCuba
§ prohibitionagainstcompliancewithUStradeembargoofCuba§ obligationtonotifyCanadianAttorneyGeneralofcertaincommunications§ criminalpenaltyexposure:upto$1.5millionand/or5yearsimprisonment
Provincialbusinessdiscriminatorypracticeslegislation
ChallengesinInteractionWithOtherRegimes(Cont.)
![Page 12: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/12.jpg)
Navigating the Turbulent Currents of International Sanctions and Export Controls | September 18-19, 2017 | The Princeton Club | New York, NY
Sanctions Risk Management Symposiumincooperation with
12
CanadianmeasurescanbeindirectconflictwiththoseoftheU.S.Canadianhumanrights/employmentlawsandpotentialconflictwith
§ U.S.prohibitionsondoingbusinesswithnationalsofsanctionedcountries(Cuba)
§ U.S.exportcontrolsunderInternationalTrafficinArmsRegulations– DepartmentofDefenseTradeControls(USState)
§ U.S.exportcontrolsunderExportAdministrationRegulations(CCL)- DepartmentofCommerce
ChallengesinInteractionWithOtherRegimes(Cont.)
![Page 13: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/13.jpg)
Navigating the Turbulent Currents of International Sanctions and Export Controls | September 18-19, 2017 | The Princeton Club | New York, NY
Sanctions Risk Management Symposiumincooperation with
13
Significantdifferences(vsUSandothercountries)inadministrationandguidanceoneconomicsanctions
§ fewcourtcasesandno FAQs,guidelines,rulings,opinions
§ noconsolidatedlists
§ noestablishedvoluntarydisclosureprocess
§ nodeferredornon-prosecutionagreements
ChallengesinInteractionWithOtherRegimes(Cont.)
![Page 14: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/14.jpg)
Navigating the Turbulent Currents of International Sanctions and Export Controls | September 18-19, 2017 | The Princeton Club | New York, NY
Sanctions Risk Management Symposiumincooperation with
14
JohnW.BoscariolMcCarthyTétrault LLPInternationalTradeandInvestmentLawwww.mccarthy.caDirectLine: 416-601-7835
E-mail: [email protected]: www.linkedin.com/in/johnboscarioltradelawTwitter: www.twitter.com/tradelawyer
![Page 15: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/15.jpg)
Navigating the Turbulent Currents of International Sanctions and Export Controls | September 18-19, 2017 | The Princeton Club | New York, NY
Sanctions Risk Management Symposiumincooperation with
15
HeraUy SmithGlobalSanctionsComplianceOfficerAssociatedForeignExchange(AFEX)
![Page 16: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/16.jpg)
Navigating the Turbulent Currents of International Sanctions and Export Controls | September 18-19, 2017 | The Princeton Club | New York, NY
Sanctions Risk Management Symposiumincooperation with
ExtraterritorialApplicationofU.S.Sanctions“U.S.nexus”
U.S.citizens,residents,companiesOwnedandcontrolledsubsidiariesofU.S.entitiesUSD,accesstotheU.S.financialsystem
SecondarySanctionsIran,Cuba,andNorthKorea
ConflictofLawIssuesCanadianLawUKLaw
16
![Page 17: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/17.jpg)
Navigating the Turbulent Currents of International Sanctions and Export Controls | September 18-19, 2017 | The Princeton Club | New York, NY
Sanctions Risk Management Symposiumincooperation with
ExtraterritorialApplicationofU.S.Sanctions
17
![Page 18: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/18.jpg)
Navigating the Turbulent Currents of International Sanctions and Export Controls | September 18-19, 2017 | The Princeton Club | New York, NY
Sanctions Risk Management Symposiumincooperation with
GlobalInternalPolicy§ Risk-basedApproach§ Consider:
§ Sanctionsregulations§ Businessrevenue§ ReputationalRisk§ Partnerbankpolicies
§ Trend:§ BordercitiesandportsbetweenChinaandNorthKorea;Crimeanregion;Iran
18
![Page 19: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/19.jpg)
Sanctions Risk ManagementSymposium
September 18-19, 2017 | The Princeton Club | New York, NY
incooperation with
Questions?
19
![Page 20: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/20.jpg)
Navigating the Turbulent Currents of International Sanctions and Export Controls | September 18-19, 2017 | The Princeton Club | New York, NY
Sanctions Risk Management Symposiumincooperation with
BonusSlidesProvidedby
20
![Page 21: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/21.jpg)
Navigating the Turbulent Currents of International Sanctions and Export Controls | September 18-19, 2017 | The Princeton Club | New York, NY
Sanctions Risk Management Symposiumincooperation with
JointComprehensivePlanofAction(JCPOA)
21
§ July2015§ PhasedsanctionsreliefforIran§ P5+1(China,France,Germany,Russia,UKandUS),EUandIran§ January2016:“ImplementationDay”§ U.S.sanctionsreliefundertheJCPOAcanbe“snappedback”ifIranfailstocomplywiththeJCPOA.
§ http://www.state.gov/e/eb/tfs/spi/iran/jcpoa/index.htm
![Page 22: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/22.jpg)
Navigating the Turbulent Currents of International Sanctions and Export Controls | September 18-19, 2017 | The Princeton Club | New York, NY
Sanctions Risk Management Symposiumincooperation with
U.K.OfficeofFinancialSanctionsImplementation(OFSI)
22
§ FallsunderHerMajesty’sTreasury;§ Helpstoensurethatfinancialsanctionsareproperlyunderstood,implementedandenforcedintheUK;
§ Canimposepenaltiesforseriousfinancialsanctions breaches;
§ www.gov.uk/government/organisations/office-of-financial-sanctions-implementation
![Page 23: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/23.jpg)
Navigating the Turbulent Currents of International Sanctions and Export Controls | September 18-19, 2017 | The Princeton Club | New York, NY
Sanctions Risk Management Symposiumincooperation with
‘Brexit’
23
§ U.K.’swithdrawalfromtheEuropeanUnion§ DecidedbyreferendumvoteonJune23,2016.
§ U.K.issettoleavetheE.U.byMarch2019§ Legalandcomplianceeffectsarestilltakingshape.
![Page 24: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/24.jpg)
Navigating the Turbulent Currents of International Sanctions and Export Controls | September 18-19, 2017 | The Princeton Club | New York, NY
Sanctions Risk Management Symposiumincooperation with
RelevantCanadianGovernmentAgencies
24
§ FinancialTransactionsandReportsAnalysisCentreofCanada(FINTRAC)
§ GlobalAffairsCanada(GAC)– EconomicLawSectionandExportControlsDivision
§ OfficeoftheSuperintendentofFinancialInstitutions(OSFI)§ PublicProsecutionServiceofCanada(PPSC)§ RoyalCanadianMountedPolice(RCMP)§ CanadaBorderServicesAgency(CBSA)§ CanadianSecurityIntelligenceService(CSIS)
![Page 25: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/25.jpg)
GrowingImpactofCanadianTradeControls• what’sdrivingthis?
• since9/11,newemphasisofCanadianauthoritiesonsecurity(vs.governmentrevenues)• morerecently,increasedpenalties,enforcementbyU.S.authorities• pressurefromU.S.affiliates,suppliersandcustomers(andU.S.government)• penaltyexposure• operationalexposure• reputationalexposure
• companiesarenowmoreconcernedthaneverbeforeaboutwhomtheydealwith,wheretheirproductsandtechnologyendup,andwhousestheirservices
• financings,bankingrelationships,mergersandacquisitions
Slide 25
![Page 26: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/26.jpg)
WhatAreCanada’sTradeControls?• exportandtechnologytransfercontrols
• ImportControlList• ExportControlList,AreaControlList
• economicsanctions• SpecialEconomicMeasuresAct• UnitedNationsAct• FreezingAssetsofCorruptForeignOfficialsAct• CriminalCode(“terroristgroups”)
• domesticindustrialsecurity• DefenceProductionAct,ControlledGoodsProgram
• otherlegislationofpotentialconcern• blockingorders(Cuba)• anti-boycottpolicyanddiscriminatorybusinesspracticeslaws• anti-briberylaw(CorruptionofForeignPublicOfficialsActandUSFCPA)
• “complianceconvergence”
Slide 26
![Page 27: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/27.jpg)
ChallengeswithCanada’sTradeControls¬measurestakeeffectimmediately– noconsultations
¬measureschangeoften,inresponsetodevelopinginternationalevents
¬measuresare“layered”¬multipleCanadianregulatoryregimes¬measuresinthecountryinwhichyou’redoingbusiness¬USextraterritorialmeasures
![Page 28: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/28.jpg)
HotCanadianEconomicSanctionsIssues
• driveintonewmarkets
• Burma
• Cuba
• Iran
• businessinvolvingRussiaorUkraine
• technologytransfers– cloudcomputing
• conflictingUSandCanadiantradeandinvestmentcontrolsonCuba
Slide 28
![Page 29: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/29.jpg)
KeyIssuesinInteractionWithUSandOtherRegimes• screenagainstCanadianlists
• listsofover2,000designatedpersons– individuals,companies,organizations• SpecialEconomicMeasuresActregulations• UnitedNationsActregulations• FreezingAssetsofCorruptForeignOfficialsAct regulations• CriminalCode anti-terrorismprovisions
• anyinvolvementinthetransaction– purchaser,ultimateuser,vendor,creditor,broker,serviceprovider• appliesregardlessofwhereCanadiancompanyisdoingbusiness• appliestonon-CanadiansinCanada
Slide 29
![Page 30: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/30.jpg)
KeyIssuesinInteractionWithUSandOtherRegimes• CanadianmeasuresmaybebroaderthanthoseoftheUnitedStatesandothercountries
• Russia/Ukraine– over300designatedpersons• Belarus,Burma,Libya,NorthKorea• Iran– evenpost-JCPOA
• CanadiansanctionsmeasuresdivergingfromthoseoftheUnitedStatesandEurope
• importanceof“homegrown”compliancepolicies
Slide 30
![Page 31: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/31.jpg)
KeyIssuesinInteractionWithUSandOtherRegimes• CanadianmeasurescanbeindirectconflictwiththoseoftheUnitedStates
• ForeignExtraterritorialMeasuresAct“blocking”orderinrespectofUStradeembargoofCuba• obligationtonotifyCanadianAttorneyGeneralofcertaincommunications• criminalpenaltyexposure:upto$1.5millionand/or5yearsimprisonment
• provincialbusinessdiscriminatorypracticeslegislation
Slide 31
![Page 32: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/32.jpg)
KeyIssuesinInteractionWithUSandOtherRegimes
• CanadianmeasurescanbeindirectconflictwiththoseoftheUnitedStates• Canadianhumanrights/employmentlawsandpotentialconflictwith
• UScontrolsunderInternationalTrafficinArmsRegulations– DepartmentofDefenseTradeControls(USState)
• USExportAdministrationRegulations(CCL)- DepartmentofCommerce
Slide 32
![Page 33: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/33.jpg)
KeyIssuesinInteractionWithUSandOtherRegimes
• significantdifferencesinadministrationandguidanceoneconomicsanctions• noFAQs,guidelines,rulings,opinions• noconsolidatedlists• novoluntarydisclosureprocess• nodeferredornon-prosecutionagreements
• reportingtoRCMP/CSIS• mandatoryforpropertyofdesignatedpersons• whenGACbecomesawareofpotentialviolation,immediatenotificationtoRCMP
Slide 33
![Page 34: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/34.jpg)
KeyIssuesinInteractionWithUSandOtherRegimes
• keyrecommendationsofCanada’sHouseofCommonsForeignAffairsCommittee
• properlyresourceandreformthestructuresforsanctionsregimes• comprehensive,publicallyavailable,writtenguidanceforpublicandprivatesectorsregardinginterpretationofsanctionsregulations
• produceandmaintainacomprehensive,publicandeasilyaccessiblelistofallindividualsandentitiestargetedbyCanadiansanctionscontainingallinformationnecessarytoassistwithproperidentification
• independentadministrativeprocessbywhichdesignatedindividualsandentitiescanchallengeinatransparentandfairmanner
• clearrationaleforthelistinganddelistingofpersons
Slide 34
![Page 35: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/35.jpg)
ImplicationsforEconomicSanctionsComplianceandEnforcement
• internalcomplianceprogramsmustbe“homegrown”
• trainingandinternalcommunications
• screeningprocessandproviders
• coordinationofinternalinvestigationsanddisclosuresinvolvingmultiplejurisdictions
Slide 35
![Page 36: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/36.jpg)
Canada’sEconomicSanctionsLegislation• SpecialEconomicMeasuresActandUnitedNationsActcaninclude:
• banonprovidinggoods,services,technology• assetsfreezes– cannotdealwithlistedindividuals,companies,organizations• banonfacilitation• monitoringandreportingobligations
• FreezingAssetsofCorruptForeignOfficialsAct• Ukraine,Tunisia,Egypt(untilMarch2016)
• applicationtopersonsinCanadaandCanadiansoutsideCanada
• permitprocessandenforcement(GAC,CBSAandRCMP)
• also,CriminalCode– terroristgroups
Slide 36
![Page 37: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/37.jpg)
UnitedNationsActRegulations• countries,groupsandindividualssubjecttosanctionsunderUnitedNationsAct:
Slide 37
Al-Qaida and Taliban
Democratic Republic of the Congo
Iran
Sudan
Lebanon
Libya
Yemen
Iraq
Somalia
Eritrea
terrorists and terrorist organizations
North Korea
Central African Republic
South Sudan
![Page 38: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/38.jpg)
SpecialEconomicMeasuresActRegulations• authorityforCanadatoimposeeconomicsanctionsabsentorinadditiontoaUNSecurityCouncilresolution
• currentlyinforce• Iran• Syria• Burma• Zimbabwe• NorthKorea• Russia• Ukraine(includingCrimearegion)• SouthSudan
Slide 38
![Page 39: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/39.jpg)
Canada’sAutonomousSanctions:Iran
• effectiveFebruary5,2016,broadtradeembargomeasureshavebeenremoved,leavingonly:
• SEMAprohibitionsonactivitiesinvolving202listedpersons• SEMAprohibitionsonsupplyinganySchedule2itemsandrelatedtechnicaldata
• UnitedNationsrestrictions• exportandtechnologytransfercontrols
Slide 39
![Page 40: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/40.jpg)
Canada’sUNSanctions:Iran• Canada’sUnitedNationsActIranregulationsamendedinaccordancewithUNSecurityCouncilResolution2231
• listofdesignatedpersons(andregularreportingforFSfirms)• verylonglistofprohibitedgoodsandtechnology• prohibitionsonprovisionofpropertyandfinancialservicesinconnectionwithprohibiteditems
• uraniumminingrestrictions• shippingandaircraftrestrictions• sourcingbanonarmsandrelatedmaterials• prohibitionsagainstfacilitation
Slide 40
![Page 41: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/41.jpg)
ExportControls:Iran• exportandtechnologytransfercontrolsunderExportandImportPermitsAct
• NoticetoExportersNo.196(Feb5,2016):policyofdenialfortransferofcertainExportControlListitems:
• certainGroup1dual-use(cybersecurity,sensors,specialmaterials,aerospaceandpropulsion,etc.)
• allGroup2(munitions),Groups3and4(nuclear)• certainGroup5(strategicitems)• allGroup6(missiletechnology,GPS)• certainGroup7(chemicalweaponsmaterials,containmentfacilities,humantoxins)
• exceptionsforitemsforcivilaircraftSlide 41
![Page 42: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/42.jpg)
CanadavsUnitedStates
• new“disconnect”betweenUSandCanadiansanctionsagainstIran
• re-exports/re-transfersofUS-originitemstoIran• UStakesjurisdictionwithaslittleas10%US-origin– differsfromECL5400testappliedbyCanadianauthorities
• Iranianvisitors/temporaryresidentemployeesaccesstoUStechnology
• areyouUS-ownedorcontrolled?• OFACGeneralLicenseHauthorizescertaintransactionsforUS-ownedforeignentities
• involvementofUSpersons– useofrecusals• otherUStouchpoints
Slide 42
![Page 43: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/43.jpg)
Prosecutions:R.v.Yadegari• July6,2010,firstsuccessfulprosecutionundertheIransanctionsregulationsunderUnitedNationsAct
• attemptedshipmenttoIranthroughDubaidual-usepressuretransducers
• couldbeusedinheatingandcoolingapplicationsaswellasincentrifugesforenrichinguranium
• OntarioprovincialcourtjudgefoundthatYadegari “kneworwaswilfullyblindthatthetransducershadthecharacteristicsthatmadethemembargoed”
• alsoviolationsofCustomsAct,ExportandImportPermitsAct,NuclearSafetyandControlAct,andCriminalCode
• sentencedto51monthsimprisonment(slightreductiononappeal)Slide 43
![Page 44: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/44.jpg)
Prosecutions:R.v.LeeSpecialtiesLtd.
• firstprosecutionunderSpecialEconomicMeasuresAct• attemptedshipmentof50VitonO-ringstoIran($15totalvalue)
• althoughdual-use,thesewereprohibitedgoodslistedonSchedule2totheIranSEMAregulations
• multiplechangesinaccountandshippingaddresses
• detainedbyCBSA• April14,2014guiltypleaand$90,000penalty
Slide 44
![Page 45: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/45.jpg)
Russia/UkraineEconomicSanctionsMeasures• designatedpersonrestrictionsonrangeofactivitiesinvolvingover300listedentitiesandindividuals
• broadprohibitions– assetfreeze• debtfinancingprohibition(30or90daysmaturity)• equityfinancingprohibition
• prohibitionsagainstsupplyoflistedgoodsorrelatedfinancial,technicalorotherservicesforusein
• offshoreoilexplorationorproductionatadepthgreaterthan500meters;• oilexplorationorproductionintheArctic;or• shaleoilexplorationorproduction
Slide 45
![Page 46: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/46.jpg)
Russia/UkraineEconomicSanctionsMeasures
• prohibitionsondealingwithCrimearegionofUkraine,including:
• investmentandrelatedservices• importing,purchasing,acquiring,shippingorotherwisedealingingoodsexportedfromtheregion
• exporting,selling,supplying,shippingorotherwisedealingingoodsdestinedfortheregion;
• transferring,providingorcommunicatingtechnicaldataorservices;
• providingoracquiringfinancialorotherservicesrelatedtotourism
Slide 46
![Page 47: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/47.jpg)
Russia/UkraineEconomicSanctionsMeasures• exportcontrolpolicy(GACExportControlsDivision)
• nopermitifmaterialbenefittoRussianmilitary
• March25,2015unanimousParliamentarymotiononMagnitskysanctions:
• governmentto“exploresanctionsasappropriateagainstanyforeignnationalsresponsibleforviolationsofinternationallyrecognizedhumanrightsinaforeigncountry,whenauthoritiesinthatcountryareunableorunwillingtoconductathorough,independentandobjectiveinvestigationoftheviolations”
• GovernmentresponsetoHoC ForeignAffairsCommitteerecommendations
Slide 47
![Page 48: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/48.jpg)
TheCubanConundrum
• problem,whetherornotyoutradewithCuba• Canada’sexpandingeconomicrelationshipwithCuba
• CanadaisoneofCuba’slargesttradingpartners• CanadianexportstoCuba- machinery,agrifood products,sulphur,electricalmachinery,newsprint
• CanadianimportsfromCuba- ores,fishandseafood,tobacco,copperandaluminumscrapandrum
• CanadaisoneofCuba’slargestsourceofforeigndirectinvestment
• CanadianFDI- nickelandcobaltmining,oilandgas,powerplants,foodprocessing
Slide 48
![Page 49: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/49.jpg)
TheCubanConundrum(cont’d)• expandingextraterritorialreachofU.Stradeembargo
• 1962– impositionoffulltradeembargounderTradingWiththeEnemyAct
• 1975– eliminationofgenerallicenseallowingtradebyforeignnon-bankingentities
• hadtoapplyforspecificlicenseanddemonstrateindependentoperationredecision-making,risk-taking,negotiationandfinancing
• 1990– MackAmendmentproposedoutrightprohibitiononissuanceoflicensestoforeignaffiliatesofU.S.firms
• 1992– CubanDemocracyAct• 1996– Helms-BurtonActextendsaspectsofCubanembargo
toCanadiancompaniesthathavenoconnectionwithU.S.entities
Slide 49
![Page 50: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/50.jpg)
CurrentU.S.Measuresvs.Cuba
• CubanAssetsControlRegulations• administeredbyU.S.Treasury’OfficeofForeignAssetsControl• prohibitiononforeignentitiesownedorcontrolledbyU.S.personsfromdoingbusiness
withCuba
• ExportAdministrationRegulations• administeredbytheU.S.DepartmentofCommerce’sBureauofIndustryandSecurity• requiresthatare-exportlicensebeappliedforwhereU.S.contentis10%ormore
• Helms-BurtonAct• TitleIII– privaterightofactionvs.“traffickers”in“confiscatedproperty”(right
suspended)
• TitleIV– baronentryintheUnitedStatesfortraffickers,theirspousesandminorchildren
Slide 50
![Page 51: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/51.jpg)
TheForeignExtraterritorialMeasuresAct
• 1996“blocking”order• obligationtonotifyCanadianAttorneyGeneralofcertaincommunications• prohibitionagainstcomplyingwithcertainU.S.tradeembargomeasures
• penaltyexposure:upto$1.5millionand/or5yearsimprisonment
Slide 51
![Page 52: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/52.jpg)
FEMAEnforcementExperience• therehasneverbeenanattemptedprosecutionoftheCanadianblockingorder
• nocaselaworadministrative/prosecutorialguidelines
• noguidancefromtheCanadiangovernment
• numerousinvestigations- AmericanExpress,Eli-Lilly,Heinz,RedLobster,Wal-Martandothers
• Wal-Mart’sCubanpyjamas• nationalisticsensitivities
Slide 52
![Page 53: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/53.jpg)
CriticalFEMAConflictPoints
• trainingprograms• compliancemanuals• communicationsandinstructions• serveraccessibility• meetingsandtelephoneconversations• M&Aduediligence• contracts– e.g.,supplyagreementswithU.S.companies,intercompanyagreements,purchaseorders,etc.
• end-usecertificates
Slide 53
![Page 54: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/54.jpg)
BestPractice#1– ScreeningforDesignatedPersons
• listsofdesignatedpersons– individuals,companies,organizations
• SpecialEconomicMeasuresActregulations• UnitedNationsActregulations• FreezingAssetsofCorruptForeignOfficialsActregulations• CriminalCodeanti-terrorismprovisions
• anyinvolvementintheactivity– researchpartner,collaborator,purchaser,borrower,ultimateuser,vendor,creditor,broker,serviceprovider
Slide 54
![Page 55: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/55.jpg)
BestPractice#2– ContractClausesandCertifications
• tradecontrolclausesforagreementswithborrowers,vendors,customers,researchpartners,etc.
• designatedperson• compliancewithtradecontrolsandcertifications• productinformation,includingECL/ECCNclassification• end-usecertification• indemnification• notificationofinvestigationsorinquiries,cooperation
Slide 55
![Page 56: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/56.jpg)
BestPractice#3– UsingVoluntaryDisclosureMechanisms
• incertaincircumstances,canbeaneffectivetool• coordinatewithseveralgovernmentdepts
• ExportControlsDivision• EconomicLawDivision• CBSA• RCMP• PWGSCControlledGoodsDirectorate(mandatoryreporting)• other(e.g.,CanadianNuclearSafetyCommission)
Slide 56
![Page 57: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/57.jpg)
BestPractice#4– ControllingTechnologyTransfers
• higherriskvsexportshipments• processgoverning
• email• virtualmeetings– tele/videoconference• plans/drawings– marking• serveraccess– upload/download• cloudcomputing
Slide 57
![Page 58: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/58.jpg)
BestPractice#5– “HomeGrown”CompliancePolicies
• tradecontrolcomplianceintheshadowoftheUnitedStates
• CanadiancontrolscanbemoreonerousthanUScontrols–e.g.,encryption,Russia,Belarus,Burma,NorthKorea
• CanadiancontrolsoverUS-origingoodsandtechnology• conflicts
• Cuba• ITAR
Slide 58
![Page 59: 6 Multiple Jurisdictions Consolidated V4 - Sanctions Alert · support to UK’s National Crime Agency §Not trade sanctions –implemented by UK’s Department of International Trade,](https://reader034.vdocument.in/reader034/viewer/2022042415/5f30bcf729f0847944033316/html5/thumbnails/59.jpg)
JohnW.BoscariolMcCarthyTétrault LLP
InternationalTradeandInvestmentLawwww.mccarthy.ca
DirectLine: 416-601-7835
E-mail: [email protected]: www.linkedin.com/in/johnboscarioltradelaw
Twitter: www.twitter.com/tradelawyer
John W. Boscariol, International Trade and Investment Law Group, McCarthy Tétrault LLP / mccarthy.ca