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

What Are Canada’s Economic Sanctions Against Venezuela?

Posted in Canada's Federal Government, Corporate Counsel, Cross-border trade, Export Controls & Economic Sanctions, Politics

Canada imposes two types of unilateral economic sanctions against Venezuela.  Canada imposes unilateral economic sanctions under the Special Economic Measures Act (and Special Economic Measures (Venezuela) Regulations).  Canada also imposes unilateral economic sanctions and trade restrictions pursuant to the Justice for Victims of Corrupt Foreign Officials (Sergei Magnitsky Law) Act and Justice for Victims of Corrupt Foreign Officials Regulations. Both sets of economic sanctions are intended to put financial pressure on President Maduro and his inner circle.

On September 5, 2017, Canada imposed the SEMA sanctions in order to implement the decision of the association formed between Canada and the United States.  On November 3, 2017, Canada imposed its first round of Magnitsky sanctions shortly after the passage of the Justice for Victims of Corrupt Foreign Officials (Sergei Magnitsky Law) Act. Global Affairs’ statement concerning the Magnitsky sanctions against Venezuela reiterated Canada’s concern about the political and economic crisis in Venezuela.  On May 30, 2018, Canada announced in a news release “Canada imposes further sanctions on the Maduro Regime in Venezuela” that it was adding 14 more names to the SEMA Designated Persons List in response to May 20, 2018 Venezuela Election.  This May 30, 2018 announcment occurred one day after the release of the report by the Panel of Independent International Experts on possible crimes against humanity in Venezuela and one day before Minister Freedland was to attend a meeting on the Assembly of American States’ General Assembly. The May 30, 2018 additions to the SEMA Designated Persons List includes Maduro’s wife and family members of the late President Hugo Chavez.

Who in Canada Needs to Be Aware of Canada’s Sanctions Against Venezuela?

Any Canadian or business in Canada that does business with Venezuela or Venezuelans should carefully review the two sets of economic sanctions.  In addition to financial institutions (e.g., banks, financial advisors, insurance companies), real estate companies and condominium sales entities, businesses in the oil and gas section, engineering companies, service providers, exporters of goods, etc. there are many others who need to be aware of the sanctions.

When I was younger, many children at Canadian camps were from Venezuela.  Venezuelan officials may also send their children to Canadian private schools and universities.  It is important to obtain information about relatives of Venezuelan citizens who are in Canada benefiting from our health care and education systems.

SEMA Asset Freeze and Prohibitions

Canada’s SEMA sanctions against Venezuela are a combination of an asset freeze and prohibitions.  The SEMA sanctions against Venezuela include:

  1. Persons in Canada and any Canadian outside Canada shall not deal in any property, wherever situated, that is owned, held or controlled by person on the SEMA Designated Persons List or by a person acting on behalf of a person on the SEMA Designated Persons List.
  2. Persons in Canada and any Canadian outside Canada shall not enter into or facilitate any transaction related to a dealing in any property, wherever situated, that is owned, held or controlled by person on the SEMA Designated Persons List or by a person acting on behalf of a person on the SEMA Designated Persons List.
  3. Persons in Canada and any Canadian outside Canada shall not provide any financial or related services in respect of a dealing in any property, wherever situated, that is owned, held or controlled by person on the SEMA Designated Persons List or by a person acting on behalf of a person on the SEMA Designated Persons List.
  4. Persons in Canada and any Canadian outside Canada shall not make available any goods, wherever situated, to a person on the SEMA Designated Persons List or by a person acting on behalf of a person on the SEMA Designated Persons List.
  5. Persons in Canada and any Canadian outside Canada shall not provide any financial or related services to or for the benefit of a person on the SEMA Designated Persons List.
  6. Persons in Canada and any Canadian outside Canada shall not knowingly do anything that causes, facilitates or assists in, or is intended to cause, facilitate or assist in, any probitied act in 1-5 above.

There are a number of exceptions to the above listed prohibitions.

Magnitsky Asset Freezes and Prohibitions

Canada’s Magnitsky sanctions against Venezuela are a combination of an asset freeze and prohibitions.  The Magnitsky sanctions against Venezuela duplicate some the SEMA sanctions and, in some cases, differ from the SEMA sanctions.  The Magnitsky sanctions are more expansive in their scope to cover property, services and financial services:

The prohibitions under Canada’s Magnitsky Law include:

  1. Persons in Canada and any Canadian outside Canada shall not deal in any property, wherever situated, that is owned, held or controlled by person on the Magnitsky Designated Persons List or by a person acting on behalf of a person on the Magntisky Designated Persons List.
  2. Persons in Canada and any Canadian outside Canada shall not enter into or facilitate any financial transaction related to a dealing in any property, wherever situated, that is owned, held or controlled by person on the Magnitsky Designated Persons List or by a person acting on behalf of a person on the Magnitsky Designated Persons List.
  3. Persons in Canada and any Canadian outside Canada shall not provide any financial services or any other services to a person on the Magnitsky Designated Persons List or on behalf of a person on the Magnitsky Designated Persons List or on the direction or order of a person on the Magnitsky Designated Persons List.
  4. Persons in Canada and any Canadian outside Canada shall not acquire financial services or any service for the benefit of  or on the direction of a person on the Magnitsky Designated Persons List.
  5. Persons in Canada and any Canadian outside Canada shall not make available any property, wherever situated, to a person on the Magnitsky Designated Persons List or by a person acting on behalf of a person on the Magnitsky Designated Persons List.
  6. Persons in Canada and any Canadian outside Canada shall not knowingly do anything that causes, facilitates or assists in, or is intended to cause, facilitate or assist in, any probitied act in 1-5 above.

There are a number of exceptions to the above listed prohibitions.

Designated Persons Lists

Canada has creates two lists of designated persons.  There are 54 individuals (all associated with the Maduro Regime, including Nicolas Maduro Moros) named in the Special Economic Measures (Venezuela) Regulations a (“SEMA Designated Persons List”) and 19 individuals named in the Justice for Victims of Corrupt Foreign Officials Regulations (“Magnitsky Designated Persons List”).

The following individuals are named in both the SEMA Designated Persons List and the Magnitsky Designated Persons List as at June 1, 2018:

  • Nicolás MADURO MOROS
  • Tareck Zaidan EL AISSAMI MADDAH
  • Gustavo Enrique GONZÁLEZ LÓPEZ

The following individuals are named only and the Magnitsky Sanctions List as at June 1, 2018:

  • Adán Coromoto CHÁVEZ FRÍAS
  • Luis Ramón REYES REYES
  • Rocco ALBISINNI SERRANO
  • Alejandro Antonio FLEMING CABRERA
  • Rafael Darío RAMÍREZ CARREÑO
  • Carlos Alberto OSORIO ZAMBRANO
  • Luis Alfredo MOTTA DOMÍNGUEZ
  • José Vicente RANGEL ÁVALOS
  • Eulogio Antonio DEL PINO DÍAZ
  • Nelson José MERENTES DÍAZ
  • José David CABELLO RONDÓN
  • Rodolfo Clemente MARCO TORRES
  • José Gregorio VIELMA MORA
  • Francisco José RANGEL GÓMEZ
  • Ricardo Antonio MOLINA PEÑALOZA
  • Argenis de Jesús CHÁVEZ FRÍ

The following individuals are named only to SEMA Sanctions List as at June 1, 2018:

  • Elías José JAUA MILANO
  • Tarek Willians SAAB HALABI
  • Néstor Luis REVEROL TORRES
  • Roy Antonio María CHADERTON MATOS
  • María Iris VARELA RANGEL
  • Pedro Miguel CARREÑO ESCOBAR
  • Diosdado CABELLO RONDÓN
  • Susana Virginia BARREIROS RODRÍGUEZ
  • Freddy Alirio BERNAL ROSALES
  • Delcy Eloína RODRÍGUEZ GÓMEZ
  • Tania D’AMELIO CARDIET
  • Aristóbulo ISTÚRIZ ALMEIDA
  • Jorge Jesús RODRÍGUEZ GÓMEZ
  • Francisco José AMELIACH ORTA
  • Carlos Alfredo PÉREZ AMPUEDA
  • Sergio José RIVERO MARCANO
  • Jesús Rafael SUÁREZ CHOURIO
  • Carmen Teresa MELÉNDEZ RIVAS
  • Bladimir Humberto LUGO ARMAS
  • Gustavo Enrique GONZÁLEZ LÓPEZ
  • Elvis Eduardo HIDROBO AMOROSO
  • Remigio CEBALLOS ICHASO
  • Antonio José BENAVIDES TORRES
  • Hermann Eduardo ESCARRÁ MALAVÉ
  • Sandra OBLITAS RUZZA
  • Socorro Elizabeth HERNÁNDEZ HERNÁNDEZ
  • Maikel José MORENO PÉREZ
  • Gladys María GUTIÉRREZ ALVARADO
  • Juan José MENDOZA JOVER
  • Luis Fernando DAMIANI BUSTILLOS
  • Lourdes Benicia SUÁREZ ANDERSON
  • Carmen Auxiliadora ZULETA DE MERCHÁN
  • Arcadio de Jesús DELGADO ROSALES
  • Calixto Antonio ORTEGA RÍOS
  • Andrés Eloy MÉNDEZ GONZÁLEZ
  • Manuel Enrique GALINDO BALLESTEROS
  • Vladimir PADRINO LÓPEZ
  • Iania Valentina DÍAZ GONZÁLEZ
  • Fidel Ernesto VÁSQUEZ IRIARTE
  • Carolys Helena PÉREZ GONZÁLEZ
  • Cilia Adela FLORES DE MADURO (Maduro’s wife)
  • Erika del Valle FARÍAS PEÑA
  • Ramón Darío VIVAS VELASCO
  • Christian TYRONE ZERPA
  • Fanny Beatriz MÁRQUEZ CORDERO
  • Malaquías Gil RODRÍGUEZ
  • Indira Maira ALFONZO IZAGUIRRE
  • Jhannett María MADRIZ SOTILLO
  • Carlos Enrique QUINTERO CUEVAS
  • Xavier Antonio MORENO REYES
  • Carlos Alberto ROTONDARO COVA

It is important to realize that the above names are only a starting point.  The prohibitions and asset freezes extend to other persons where the activity benefits a designated person or is on the direction of order of a designated person.  This means that family members could be covered (such as children).  It also means that companies associated with the designated persons are covered (e.g., the designated person or a company owned by a designated person is a shareholder of the company).  Further, representatives and agents may be covered (e.g., a Venezuelan lawyer or holding company hired by a designated person who is soliciting goods, property or services, including financial services) may be covered.

It is also important to know that Canada’s SEMA Designated Persons List and Magnitsky Designated Persons List may change at any time.  Both lists should be reviewed carefully.

For more information about complaince with CAnada’s economic sanctions against Venezuela, please contact Cyndee Todgham Cherniak at 416-307-4168 or cyndee@lexsage.com.