Canada’s Senate is currently considering Bill S-219 “An Act to deter Iran-sponsored terrorism, incitement to hatred, and human rights violations” (to be called “Non-Nuclear Sanctions Against Iran Act“) which has received little attention. Bill S-219 will, if passed into law, ensure that Canada has the most restrictive economic sanctions regime against Iran of all countries in the World.
Canada’s unilateral economic sanctions regime is based on targeted sanctions. Bill S-219 also pursues targeted sanctions – but the new sanctions targets are wide in potential scope. Bill S-219 would, if passed, change Canada’s economic sanctions regime, as it applies to Iran, in four fundamental ways:
- The Minister of Foreign Affairs and International Trade will be required to table an Annual Report focused on Iran-sponsored terrorism, incitement to hatred, and human rights violations;
- Canada would be prohibited from easing economic sanctions under the Special Economic Measures Act unless two consecutive annual reports conclude that there is no credible evidence of terrorist activity or incitement to hatred emanating from Iran and that there has been significant progress in Iran in respect of human rights;
- Incorporating into Canada’s economic sanctions system a human rights imperative (Iran only); and
- Establishing another list of sanctioned Iranian persons (which can be modified from time to time) the following persons:
- the Execution of Imam Khomenei’s Order (EIKO);
- other entities named in the annual report, including those that the Minister believes have been owned or controlled by EIKO or the Islamic Revolutionary Guard Corps (IRGC) or the officers of which have been acting on behalf of EIKO or the IRGC during the five preceding years; and
- Iranian officials named in the annual report as being persons the Minister believes to be responsible for terrorist activity, support of terrorism, incitement to hatred, or serious human rights violations.
These changes will be significant, if passed into law. Currently, Bill S-219 has receive Second Reading in the Senate. Bill S-219 is currently being reviewed by the Senate Standing Committee on Foreign Affairs and International Trade. There has already been much testimony on Bill S-219 (Bill Bowder testified on December 8, 2016 and his testimony is a very interesting read) and more testimony will be had. Bill S-219 is on the Agenda of the Senate Standing Committee on Foreign Affairs and International Trade’s March 29, 2017 meeting. There is no guarantee that Bill S-219 will be passed into law in Canada.
If Bill S-219 is passed into law in Canada, it will limit the ability of the Minister of Global Affairs to ease Canada’s economic sanctions against Iran even if other countries ease their sanctions against Iran. This would limit the ability of Canadian companies and Canadians outside Canada from pursuing the opportunities that are available to other companies (e.g., U.S. companies or EU companies where the economic sanctions regimes have been eased). If Bill S-219 is passed into law, Canada would essentially take the hardest stance against Iran of any country. For this reason, Canadian companies should be watching this Bill very closely and revisit any business in or with Iran. Any Canadian business or Canadian doing business in Iran should ensure that their compliance program process for reviewing designated persons lists is updated and able to respond quickly to the addition of new names of designated persons/entites (targets).
For more information about Canada’s economic sanctions against Iran, please contact Cyndee Todgham Cherniak at 416-307-4168 or at cyndee@Lexsage.com. More information about Canada’s economic sanctions regime is posted on the LexSage web-site.