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July 27, 2010

New commercial sanctions against Iran

The Government of Canada announced the implementation of new sanctions against the Islamic Republic of Iran (Iran) using the Special Economic Measures Act (SEMA).

The Special Economic Measures (Iran) Regulations have been drafted to implement many of the measures that the United Nations called upon but did not obligate member states to implement under Resolution 1929.

The regulations prohibit the following:

• dealings with designated individuals and entities, such as dealings in any property, or making any goods or financial or related services available to a designated individual or entity;
• exporting or otherwise providing to Iran arms and related materials not already banned, items that could contribute to Iran's proliferation activities, and items used in refining oil and gas;
• providing technical data related to these goods;
• making any new investment in the Iranian oil and gas sector, or providing or acquiring financial services for this purpose; providing or acquiring financial services to allow an Iranian financial institution (or a branch, subsidiary or office) to be established in Canada, or vice versa;
• establishing correspondent banking relationships with Iranian financial institutions, or purchasing any debt from the government of Iran;
• and providing services for the operation or maintenance of a vessel owned or controlled by, or operating on behalf of the Islamic Republic of Iran's Shipping Lines.

The list of prohibited goods includes all arms and related material not already banned by previous UN Security Council resolutions. It also includes almost all of the items in Canada's Export Control Guide, items used in refining oil and gas and a list of goods that could contribute to Iran's proliferation activities.

With the understanding that humanitarian and diplomatic channels must remain open, exemptions are provided for activities that safeguard human life, provide disaster relief, food or medicine, except where designated individuals and entities are involved.

The restriction on dealings with designated individuals and entities does not apply to:

• the shipment of bulk agricultural commodities by the Islamic Republic of Iran Shipping Lines;
• loan repayments;
• pension payments;
• transactions with the Iranian and Canadian embassies;
• transactions with certain organizations, such as the Red Cross or Red Crescent and non-governmental organizations; and
• transactions necessary to transfer an account held with a designated individual or entity.

Further details are available from the Department of Foreign Affairs and International Trade.

The United States and the European Union have announced similar measures this week.