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

Canada’s Indirect Economic Sanctions: Where Export Development Canada is not pursuing business at this time

Posted in Canada's Federal Government, Export Controls & Economic Sanctions, Exports

Canada effectively imposes economic sanctions against certain countries via the Export Development Canada (“EDC”) positions on where they will and will not or business.  EDC is Canada’s export credit agency.  The EDC extends credit to Canadian businesses (big and small) to facilitate export sales. EDC financial products and services include trade credit insurance, export financing for Canadian companies and for their foreign customers, bonding products, and advice on doing business outside Canada.  If the EDC will not provide trade insurance, export financing or bonding products for exports to certain countries, many Canadian businesses are not able to pursue opportunities in those markets (unless the business is able to self-fund or obtain banks financing and insurance).  Canadian companies have been forced to retreat from the Russian market due to this hidden economic sanction.

Most companies understand that Canada imposes economic sanctions under the United Nations Act (“UN Act”) and/or the Special Economic Measures Act (“SEMA”) against 19 countries.  The list of UN Act and SEMA sanctioned countries as at December 31, 2017 are:

Country Sanctions Regimes
Burma/Myanmar SEMA
Central African Republic UN Act
Democratic Republic of Congo UN Act
Eritrea UN Act
Iran SEMA/UN Act
Iraq UN Act
Lebanon UN Act
Libya SEMA/UN Act
North Korea SEMA/UN Act/Area Control List
Russia SEMA/Magnitsky
Sierra Leone UN Act
Somalia UN Act
South Sudan SEMA/UN Act/Magnitsky
Sudan UN Act
Syria SEMA
Ukraine SEMA
Venezuela SEMA/Magnitsky
Yemen UN Act
Zimbabwe SEMA

 Let’s look at these countries from a different lens – the EDC lens.  Of these countries, the EDC states that it is not currently pursuing business in connection with the following countries:

The EDC takes a reactive, restrictive or responsive approach to doing business in the following countries:

Ukraine is a target market for the EDC.

The one country that stands out in the above lists is Russia.  Russia was put on the naughty list in 2014 under the Harper Government and the EDC will not pursue business relating to Russia.  This means that Canadian companies cannot get EDC financing or insurance to do business in Russia.  Some Canadian companies have raised the issue with Canada’s Minister of International Trade and are urging Canada to change the EDC policy on Russia.  But, there has been no change yet.

What this shows is that EDC business is also a foreign policy tool.

If you would like to know more about Canada’s economic sanctions laws, please contact Cyndee Todgham Cherniak at 416-307-4168 or at