Canada-U.S. Blog Trade Lawyers Cyndee Todgham Cherniak and Susan K. Ross

Canada’s Cabinet Can Impose Unilateral Economic Sanctions Against Venezuela Without Parliament Vote

Posted in Export Controls & Economic Sanctions, Exports

On July 26, 2017, Canada’s Minister of Foreign Affairs issued a Statement “Canada Calls on Venezuela to cancel Constituent Authority“.  The Statement contains two interesting sentences:

“Furthermore, Canada welcomes and supports the important actions taken today by the United States to target leaders of the regime. Individuals who are undermining democracy and human rights in Venezuela should be held accountable for their actions.”

On June 26, 2017, the United States imposed economic sanctions against 13 current and former members of Maduro’s administration, freezing their U.S. assets and barring Americans from doing business with them.  Does Minister Freeland’s Statement foretell of Canadian economic sanctions against Venezuelan officials?

It is possible.  Canada has enacted the Special Economic Measures Act, pursuant to which Canada imposes unilateral economic sanctions (multilateral economic sanctions implementing United Nations Security Council Resolutions are imposed pursuant to the United Nations Act).  Currently, Canada imposes multi-lateral sanctions pursuant to the United Nations Act against 12 countries (Central African Republic of Congo, Eritrea, Iran, Iraq, Lebanon, Libya, North Korea, Somalia, South Sudan, Yemen) and Al Qaida/Taliban/Terrorist entities.  Canada imposes unilateral sanctions (somewhat coordinated with major trading partners) pursuant to the Special Economic Measures Act against 9 countries (Burma/Myanmar, North Korea, Iran, Libya, Russia, South Sudan, Syria, Ukraine and Zimbabwe).  Venezuela is not on either sanctions list.

The country specific sanctions are contained in regulations promulgated by the Governor in Council (meaning the Cabinet).  Regulations are not passed by the Canadian Parliament like a statute.  Regulations are published in the Canada Gazette after being prepared by the Governor in Council.  Usually, a date is provided in the regulation stating when the regulation will come into effect. Through the issuance of regulations, the Government of Canada may impose restrictive measures and prohibitions on what are otherwise legitimate activities. Bank accounts can be frozen, financial dealings blocked and goods for export seized. Economic sanctions are imposed in the pursuit of foreign policy objectives related to international peace and security.

Given the regulatory structure, the Governor-in Council could promulgate the Special Economic Measures (Venezuela) Regulations at any time.  Canada imposes targeted unilateral sanctions that take many forms:

  • country-based or territory sanctions;
  • targeting individual or entity sanctions;
  • targeting a sector of government (e.g., nuclear or military) sanctions;
  • targeting sectors of the economy, including private business (e.g., financial sector, petroleum exploration and production, etc.); and
  • comprehensive embargoes.

That being said, there was a report in the Globe & Mail newspaper in an article written by Michelle Zillio entitled “Canada reviewing U.S. sanctions on 13 Venezuelan government officials” that Prime Minister Trudeau might be tapped as a mediator to their current crisis.  If that is a possibility, Canadian sanctions would be unlikely, because sanctions are a form of punishment for bad behaviour.  But, if a resolution does not seem possible and the Venezuelan people need a form of intervention to persuade the government to act better, then unilateral sanctions could apply pressure.

For more information about Canada’s economic sanctions laws, please contact Cyndee Todgham Cherniak at 416-307-4168 or at Cyndee@LexSage.com.  There are additional articles about Canada’s economic sanctions laws on the LexSage website.