This article discusses the significant legal developments involving export controls and economic sanctions that occurred in 2022.
After four years in the works, ITAR was significantly revised in September 2022 by consolidating the regulatory definitions, processes, and policies within Part 120. That Part now has three parts: first, providing background information on the statutory and regulatory scheme and related laws; second, providing information on ITAR’s policies and procedures; third, providing a listing of defined regulatory terms that globally apply throughout ITAR. The intent of these revisions is that ITAR will have a more logical flow, such as related definitions being next to one another. Additionally, ITAR was amended to make the so-called “see-through” rule explicit within the regulations, which generally maintains controls over an ITAR-controlled item, even when incorporated into a non-ITAR-controlled item. Elsewhere, two key terms that were previously defined locally, “development” and “production,” are now defined globally.
The Directorate of Defense Trade Controls (DDTC) in 2022 launched a new pilot program to test a new concept involving open general licenses. The current pilot program has two open general licenses (one for re-exports and one for re-transfers) that are valid through July 31, 2023. These programs have a number of limitations and restrictions, and they are available only to the Australian, Canadian, and United Kingdom governments and to certain persons within those countries.
On November 22, 2022, DDTC extended its current licensing policy towards Cyprus through September 30, 2023, which suspends its status as a proscribed country and the resulting policy of denial.
The U.S. Department of Commerce’s Bureau of Industry (BIS) has been extremely busy responding to Russia’s invasion of Ukraine, which began in February 2022. With almost every escalation of the war, BIS has escalated export controls on exports to Russia (and Belarus).
On February 24, 2022, BIS released a draft Federal Register Notice of a final rule effective on that same date increasing export controls on exports to Russia, which was ultimately published on March 3, 2022. This first round of export controls introduced a license requirement for all exports, re-exports, transfers, or releases of any commodities, software, or technology (Items) classified on the Commerce Control List (CCL) under Categories 3 through 9. Additionally, BIS expanded its Military End User (MEU) and Military End Use rule found at 15 C.F.R. § 744.21 to impose a license requirement of exporting any Item subject to EAR (that is, even EAR99 items) to military end users or for military end uses, except for EAR99 food and medicine or certain mass market encryption commodities and software, when destined for Russian government end users or State-Owned Enterprises (SOEs). BIS narrowed the applicability of License Exception ENC in accordance with its expanded MEU rule.
Importantly, this first round of increased export controls introduced two new Foreign Direct Product Rules (FDP Rules) specific to Russia—one for end users in Russia and one specific to military end users or for military end uses. BIS first expanded the FDP Rule for specific end users in 2020 when it created a new FDP rule specifically directed at Huawei and many of its affiliates and subsidiaries included on the Entity List. Many export practitioners opined at the time that this end-user-specific FDP Rule heralded a new era in export controls and was proven right with this first round of Russian export controls.
In March 2022, BIS imposed the Russian licensing requirements of February 24, 2022, onto exports, re-exports, transfers, and releases to Belarus. BIS also expanded the list of EAR99 items that require a license for export, re-export, release, or transfer to Russia or Belarus based on use in the oil industry and use as luxury items. BIS introduced a list of countries to which the new FDP Rules did not apply, assuming that the excluded countries were implementing export restrictions similar to those of the United States.
In April 2022, BIS expanded the list of countries excluded from the application of the new FDP Rules. BIS also expanded the license requirements for exports, re-exports, transfers, or releases to Russia or Belarus. Specifically, all items with an ECCN require a license for export, re-export, transfer, or release to Russia or Belarus. This extension of license requirements also extended the new FDP Rules to Belarus. BIS narrowed the applicability of License Exception Aircraft, Vessels, and Spacecraft (AVS) for exports, re-exports, transfers, or releases to Russia or Belarus or Russian or Belarusian nationals.
On May 11, 2022, BIS further expanded the list of EAR99 items, identified by a Schedule B or Harmonized Tariff Schedule of the United States (HTSUS) number. In June, BIS also revoked the license exception for EAR99 food and medicine when destined for MEUs or military end uses. Finally, BIS clarified its license review policy.
In September 2022, BIS added additional EAR99 items, identified by a Schedule B or HTSUS number, to its list of items requiring a license for export, re-export, transfer, or release to Russia and amended monetary thresholds for luxury items on the list. BIS expanded these EAR99 controls to Belarus. BIS further expanded the MEU and military intelligence end user rules to additional countries.
During all these expansions and revisions to the EAR, BIS continued to add Russian, Belarusian, and other entities to its Entity List. It also issued expansive orders denying export privileges to several Russian airlines and aircraft.
On September 15, 2022, President Biden issued a first-of-its-kind CFIUS-related order captioned Ensuring Robust Consideration of Evolving National Security Risks by the Committee on Foreign Investment in the United States. The order requires CFIUS, “as appropriate,” to weigh the effect of covered transactions on the United States: (1) commercial and defense supply chain resilience; (2) technological leadership in areas affecting national security; (3) cybersecurity; and (4) sensitive personal data. The order specifically named the following supply chains as “fundamental to national security”: advanced clean energy, agriculture (for food security), artificial intelligence, biomanufacturing and biotechnology, climate adaptation technologies, critical materials, microelectronics, and quantum computing.
On October 20, 2022, CFIUS released its first-ever public Enforcement and Penalty Guidelines. The Guidelines focus on failures to timely file mandatory declarations, material misstatements, omissions, false certifications, and non-compliance with a CFIUS mitigation agreement, condition, or order. The Guidelines provided a non-exhaustive list of aggravating and mitigating factors and the Committee’s first-ever public description of a voluntary self-disclosure (VSD) process.
CFIUS’s review and suspension of the proposed acquisition of Magnachip by Chinese investors in 2021 surprised many, given the company’s sparse involvement in the U.S. economy, limited to incorporation in Delaware and being listed on the New York Stock Exchange. In December 2021, after CFIUS allowed the parties to withdraw and re-file, the parties terminated the deal. The Magnachip transaction demonstrates that CFIUS will zealously assert jurisdiction when it believes there is a national security risk.
In 2022, Congress passed the CHIPS Act, which, among other initiatives, commits approximately $52,000,000,000 in awards to semiconductor-related companies for manufacturing and research. To protect these funds from aiding a recipient’s ability to expand manufacturing operations in China or other “foreign countries of concern,” Congress will lead a first-of-its-kind outbound investment review process. No implementing regulations have been published through the end of November 2022.
As the Biden Administration matured, there were significant shifts in U.S. sanctions regulations and policy. These shifts included noteworthy developments in Russia-related sanctions.
Before the Russian Federation’s 2022 invasion of Ukraine, formally recognized to have started on February 24, 2022, most U.S. sanctions on Russia were prompted by Russia’s 2014 invasion and annexation of Ukraine’s Crimea region and Russia’s support for the conflict in eastern Ukraine. Executive Orders (EOs) 13660, 13661, 13662, and 13685, which were codified by the Countering America’s Adversaries Through Sanctions Act, were the basis for these 2014 sanctions.
Since March 6, 2014, when President Obama signed EO 13660, the United States has had an ongoing national emergency formally declared to deal with Ukraine-related threats, and President Biden continued the national emergency under Section 202(d) of the National Emergencies Act (50 U.S.C. § 1622(d)), on February 21, 2022, with EO 14065.
Throughout 2022, President Biden issued four Ukraine-related EOs expanding on the aforementioned EOs targeting Russia, among others, starting with EO 14065 to address Russia’s characterization of purported independence and sovereignty of the so-called Donetsk People’s Republic (DNR) and the Luhansk People’s Republic (LNR) regions of Ukraine on February 21, 2022. Starting March 8, 2022, three additional EOs were issued to address Russia’s February 24, 2022 invasion of Ukraine.
The EOs cite the International Emergency Economic Powers Act (50 U.S.C. § 1701 et seq.), the National Emergencies Act (50 U.S.C. § 1601 et seq.), Section 212(f) of the Immigration and Nationality Act of 1952 (8 U.S.C. § 1182(f)), Section 301 of Title 3, the United States Code, and the Constitution for authority.
Through the Ukraine-/Russia-Related Sanctions Regulations (URSR), codified at 31 C.F.R. Part 589, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and U.S. Department of State’s Office of Economic Sanctions Policy and Implementation (TFS/SPI) issued regulations to implement the EOs and to exercise the President-delegated authority of the Departments of the Treasury and State to augment the sanctions. The individuals and entities determined by the Departments of the Treasury and State to be subject to sanctions are included on OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN List) and other sanctions lists (such as OFAC’s Non-SDN Menu-Based List) administered by the two Departments.
EO 14065, signed February 21, 2022, expanded the scope of the national emergency declared in the aforementioned 2014 EOs and EO 13849 from 2018 and prohibited new investments by U.S. persons in the DNR, the LNR, and other regions of Ukraine (collectively, the Covered Regions). It also prohibited U.S.-destined imports from, as well as exports, re-exports, sales, and supplies to, the Covered Regions, with U.S. persons or others located in the U.S. further prohibited from supporting such transactions with the Covered Region, as may be determined by the Departments of the Treasury and State. EO 14065 also blocked all property and interests of property with a certain nexus to the United States that the Departments of the Treasury and State determine to have a prohibited nexus to the Covered Regions.
On February 22, 2022, two days before the invasion, OFAC started imposing new Russia-targeted sanctions. By February 25, 2022, Russia became the world’s most sanctioned nation, overtaking the Islamic Republic of Iran.
On February 26, 2022, President Biden, along with the leaders of Canada, the United Kingdom, the European Commission, Germany, Italy, and France, committed to removing select Russian banks from the SWIFT messaging system to “ensure that these banks are disconnected from the international financial system and harm their ability to operate globally.”
EO 14066, signed March 8, 2022, principally prohibited certain Russian-origin fossil fuels and related products from being imported into the United States and U.S. persons from making new investments in Russia’s energy sector, and the EO prohibited U.S. persons from supporting such imports or investments.
EO 14068, signed March 11, 2022, principally prohibited the import from, and export, re-export, and supply to, Russia of additional goods (such as the import of seafood, alcoholic beverages, and non-industrial diamonds; the export of luxury goods; and U.S. dollar-denominated banknotes.) The EO granted the Departments of the Treasury, State, and Commerce the authority to augment the list of in-scope goods.
EO 14071, signed April 6, 2022, principally prohibited U.S. persons from making new investments in Russia. It also prohibited the provision of certain services determined by the Departments of the Treasury and State to any person located in Russia.
On April 8, 2022, President Biden signed into law the bipartisan Suspending Normal Trade Relations with Russia and Belarus Act (SNTRRBA), which subjected Russian and Belarusian products to column two of the HTSUS starting April 9, 2022, after the SNTRRBA unanimously passed the Senate and nearly unanimously passed the House of Representatives. The SNTRRBA also modified and reauthorized sanctions under the Global Magnitsky Human Rights Accountability Act.
As a consequence of Russia’s invasion of Ukraine and Belarus’s material support thereof, the Departments of the Treasury and State, in lockstep with a coalition of thirty-seven countries, added hundreds of now-sanctioned parties to the SDN list and other sanctions lists.
In February 2022, OFAC issued new Frequently Asked Questions (FAQs) and Afghanistan-related General License (GL) 20, which expanded authorizations for commercial and financial transactions in Afghanistan.
On February 8, 2022, OFAC issued the Ethiopia Sanctions Regulations to implement EO 14046 of September 17, 2021, captioned Imposing Sanctions on Certain Persons with Respect to the Humanitarian and Human Rights Crisis in Ethiopia.
On May 12, 2022, OFAC issued Syria GL 22, authorizing specified economic activities in certain regions of Syria not controlled by the Assad regime. GL 22 supports the Biden Administration’s strategy to defeat ISIS by promoting economic stabilization in areas liberated from the terrorist group’s control.
On June 9, 2022, OFAC issued a final rule to increase support for the Cuban people. Specifically, the rule authorized group people-to-people educational travel to Cuba and removed certain restrictions on authorized academic educational activities, permitted travel to attend or organize professional meetings or conferences in Cuba, removed the $1,000 quarterly limit on family remittances, and authorized donative remittances to Cuba.
On September 23, 2022, OFAC issued Iran GL D-2. GL D-2 authorized a more expansive set of activities related to internet communication, including cloud-based software and services, to increase support for internet freedom in Iran by bringing U.S. sanctions guidance in line with the changes in modern technology since the issuance of Iran GL D-1.
On November 26, 2022, OFAC issued Venezuela GL 41, authorizing Chevron Corporation to resume limited natural resource extraction operations in Venezuela. OFAC also issued Venezuela GL 40A, authorizing certain transactions involving the exportation or re-exportation of liquefied petroleum gas to Venezuela; GL 8K, and transactions involving Petróleos de Venezuela, S.A. necessary for the limited maintenance of essential operations in Venezuela or the wind-down of operations in Venezuela for certain entities.
On September 6, 2022, OFAC amended and reissued in their entirety the Cyber-Related Sanctions Regulations, which had initially been published in abbreviated form on December 31, 2015.
On September 30, 2022, OFAC published its Sanctions Compliance Guidance for Instant Payment Systems.
On January 21, 2022, DDTC concluded an administrative settlement with Torrey Pines Logic, Inc. (TPL) and Dr. Leonid B. Volfson. In the proposed charging letter, DDTC alleged that TPL and Dr. Volfson attempted to export ITAR-controlled thermal imaging systems without authorization to various countries, including China and Lebanon, and to restricted-destination Russia. DDTC further alleged that they engaged repeatedly in ITAR-controlled activities while ineligible and not registered, including some transactions involving Significant Military Equipment, and that they exported defense articles without authorization while a Commodity Jurisdiction request was pending. Under a consent agreement, TPL and Dr. Volfson agreed to a civil penalty of $840,000, half of which was suspended on the condition that TPL and Dr. Volfson apply this amount to remedial compliance costs and refrain from participating in export-related activities for three years.
On August 5, 2022, DDTC concluded administrative proceedings against Ryan Adams, Marc Baier, and Dan Gericke. DDTC alleged that they had violated ITAR § 127.1(a)(1) by providing ITAR-controlled electronic defense services and software to the United Arab Emirates (UAE) without proper authorization. Each individual, under his separate consent agreement, was debarred for a period of three years. The U.S. Department of Justice (DOJ) also agreed with each individual to a deferred prosecution agreement (DPA) in a related enforcement action. In the DPA, Ryan Adams, Marc Baier, and Dan Gericke acknowledged criminal violations of the AECA and ITAR and agreed to cut all ties with the UAE, cooperate with the DOJ, and pay fines of $600,000, $750,000, and $335,000, respectively.
Since Russia’s invasion of Ukraine in February 2022, the United States has increasingly used export controls on aircraft to apply pressure on Russian companies and individuals by prohibiting the export of aircraft to Russia or Belarus without U.S. export authorization. BIS has used General Prohibition 10 in 15 C.F.R. § 736.2(b)(10) to sanction aircraft and their owners or operators who violate these U.S. export controls by prohibiting them from receiving any form of service both in the United States and abroad, which effectively grounds the aircraft. The U.S. Department of the Treasury Financial Crimes Enforcement Network (FinCEN) has also issued a joint alert with BIS to financial institutions urging them to be vigilant against efforts to evade export controls implemented in connection with Russia’s invasion of Ukraine.
By May 20, 2022, BIS had identified two aircraft owned by the Russian oligarch Roman Abramovich as likely in violation of U.S. export controls. On June 6, 2022, in the first action of its kind, BIS issued a Charging Letter against Abramovich for allegedly violating U.S. export controls involving flights of two of his private jets, which are of U.S. origin, to Russia without export licensing. Under the Charging Letter, Abramovich “reexported” the aircraft to Russia without the required BIS export license on three flights from the UAE and Turkey. Abramovich faces potential penalties, including jail time, fines, and loss of export privileges. The DOJ has also obtained warrants to seize the aircrafts at issue, which have a combined value of over $400,000,000 and are subject to forfeiture. BIS has taken similar action against PJSC LUKOIL (Lukoil), charging Lukoil with the unlicensed re-export of an aircraft from the UAE to Russia. Lukoil also faces fines, loss of export privileges, and exclusion from practice before BIS.
On June 7, 2022, BIS imposed a Temporary Denial Order (TDO) on three apparently related U.S. companies—Quicksilver Manufacturing, Inc., Rapid Cut LLC, and U.S. Prototype, Inc.—while it investigates potential export control violations. According to the TDO, Quicksilver and Rapid Cut, both 3D printing manufacturers, exported drawings from their customers to China for printing without an export license. The drawings related to controlled satellite and rocket technology, which were subject to a presumption of denial for export authorization for China, and technical data for military submersible vessels. The TDO suspended the companies’ ability to participate in any export transactions—including receiving exports or benefiting from export transactions—for a renewable period of 180 days, currently set to expire on December 4, 2022. BIS urges customers of the companies to review whether they had provided any controlled technology or technical data to the companies.
On January 11, 2022, Sojitz (Hong Kong) Limited (Sojitz HK), a trading and financing company based in Hong Kong, entered into a settlement agreement with OFAC, agreeing to a civil penalty of $5,228,298 for apparent Iran sanctions violations. OFAC alleges that, from August 2016 through May 2018, despite repeated and explicit instructions prohibiting U.S. dollar payments in connection with Iran-related business transactions, certain Sojitz HK employees violated company policy by purchasing approximately 64,000 tons of high density polyethylene resin (HDPE) of Iranian origin from a supplier in Thailand for resale to buyers in China and took steps to conceal the HDPE’s Iranian origin. As a result, Sojitz HK made sixty U.S. dollar payments, totaling $75,603,411, through multiple U.S. financial institutions in connection with the HDPE of Iranian origin. OFAC provided mitigating credit for voluntary disclosure of the apparent violations, a thorough investigation by the company, termination of the rogue employees, and enhanced sanctions compliance procedures.
On April 25, 2022, OFAC announced a $6,131,855 settlement with Toll Holdings Limited (Toll), an Australian international freight company, for nearly three thousand apparent violations of multiple OFAC sanctions programs. OFAC alleged that, between approximately January 2013 and February 2019, Toll paid or received 2,958 payments in connection with shipments involving North Korea, Iran, and Syria, as well as property of entities on the SDN list. The payments were processed through U.S. banks, one of which repeatedly raised concerns about payments involving sanctioned parties and required Toll to provide documentation and confirm that its payments did not violate sanctions regulations. Eventually, in February 2017, Toll introduced “hard controls” that disabled the location codes for sanctioned countries, preventing shipments to or from sanctioned countries, but not before 2,853 illicit payments were made. OFAC alleged that these violations were, in part, due to Toll’s rapid growth without corresponding growth in its compliance resources.
On May 27, 2022, OFAC announced a settlement with Banco Popular de Puerto Rico (BPPR) for $255,937.86 for apparent Venezuela sanctions violations. Despite the issuance of EO 13884 on August 5, 2019, blocking interests in the property of the Government of Venezuela, BPPR failed to identify and block the accounts of Venezuelan government officials until over a year later. BPPR’s delay in identifying these customers for fourteen months following the issuance of EO 13884 resulted in 337 apparent sanctions violations; however, due to BPPR’s self-disclosure, internal review, and improvements to its compliance program, the apparent violations were non-egregious.
On September 30, 2022, Tango Card, Inc. (Tango Card), a digital “reward” supplier based in Seattle, Washington, entered into a settlement agreement with OFAC for apparent violations of multiple sanctions programs. After being alerted by a client in February 2021 that several reward recipient email addresses were associated with sanctioned jurisdictions, Tango Card conducted an investigation and discovered that, between September 2016 and September 2021, it had transmitted 27,720 gift and debit cards, totaling $386,828.65, to individuals with domains associated with Cuba, Iran, Syria, North Korea, and the Crimea region of Ukraine. While Tango Card used geolocation and screening mechanisms for senders of rewards, that is, its direct customers, it did not use those controls for recipients of rewards. Following the discovery of the apparent violations, Tango Card implemented a number of remedial measures, including blocking domains associated with sanctioned jurisdictions, hiring additional compliance staff and conducting additional training, acquiring additional screening tools, and implementing regular “lookback” reports to identify recipients located in sanctioned jurisdictions. The statutory maximum civil monetary penalty for these apparent violations was over $9,000,000,000, but OFAC determined that, due to Tango Card’s additional compliance steps and Tango Card’s voluntary self-disclosure, the apparent violations were non-egregious, and they settled on a $116,048.60 penalty.
On October 11, 2022, OFAC announced a settlement with Bittrex, an online virtual currency exchange company based in Washington. Gaps in Bittrex’s sanctions compliance procedures allowed persons located in the Crimea region of Ukraine, Cuba, Iran, Sudan, and Syria to use Bittrex’s platform to perform $263,451,600.13 worth of virtual currency transactions. Bittrex had no internal controls in place to screen customer IP addresses for terms associated with sanctioned jurisdictions; in February 2016, Bittrex retained a third-party vendor for sanctions screening purposes, but the screening was incomplete and did not scrutinize whether customers were in a sanctioned jurisdiction. The statutory maximum civil monetary penalty was over $35,000,000,000, but, because Bittrex was a small and new company at the time and took steps to remedy its compliance program promptly after learning about the incomplete screening, OFAC accepted a $24,280,829.20 settlement.
In 2022, Canadian economic sanctions efforts were centered primarily around Russia’s illegal invasion of Ukraine. Canada implemented more than thirty amendments to the Special Economic Measures (Russia) Regulations (SEMA Russia Regulations), which have become the most impactful sanctions program in modern Canadian history.
For many years, companies have struggled with the issue of whether Canadian economic sanctions prohibit them from engaging in dealings involving entities that are owned or controlled by persons designated or listed by the Canadian government. On October 25, 2022, the Court of King’s Bench of Alberta issued a decision in Angophora Holdings Limited v. Ovsyankin, which attempts to tackle this “control question.” The Court adopted a facts-based analysis to determine functional control, but it considered formal control structures, including the extent to which the entity is held (in terms of percentage ownership interest) by the listed person, as a factor to be considered in that assessment. The Court concluded that a listed person’s fifty percent indirect ownership and involvement in management and operations of the controlled entity disclosed a “strong prima facie case” that the entity was controlled by or acting on behalf of the listed person, and, therefore, dealings with such an entity would risk violating sanctions.
Canada imposed its initial round of 2022 sanctions against Russia on February 24, 2022, immediately after Russia signed a decree recognizing the independence and sovereignty of the Donetsk and Luhansk regions. The initial sanctions package imposed a broad dealings prohibition on 351 members of the Russian Duma, major Russian banks, state-owned companies, political and financial elites and their families, and President Vladimir Putin. Multiple rounds of additional measures were implemented in the weeks and months that followed, creating one of Canada’s most aggressive sanctions programs.
The SEMA Russia Regulations encompass a very broad set of measures. There is a broad asset freeze and dealings prohibition with respect to more than 1,100 individuals and 260 entities listed under Schedule 1. The list encompasses members of Putin’s family, key government officials, including ministers and members of the Russian Federal Assembly, oligarchs, and their close associates and family members, energy sector executives, misinformation agents, and various state bodies. In a number of cases, Canada has listed entities and individuals that have not been listed, including those under the sanctions regimes of the United States, the United Kingdom, or the European Union. Further, the Canadian measures do not yet include any general licenses or permits or broad exemptions that are often available in these other jurisdictions.
Canada has imposed bans on supplying a broad range of goods to Russia or persons in Russia (some of these bans include prohibitions on any related financial, technical, or other services), including certain luxury items, certain goods and technologies (including software) that could be used in the manufacturing of weapons, and goods and technologies as set out in the Restricted Goods and Technologies List prepared by Global Affairs Canada. This List includes a broad range of items in the areas of electronics, computers, telecommunications, sensors and lasers, navigation and avionics, marine, aerospace, and transportation.
In addition, persons in Canada and Canadians outside Canada are prohibited from providing to Russia or any person in Russia a wide range of services in relation to certain listed industries. The affected industries include oil, gas, mining, the manufacturing of chemicals and chemical products, transport and transport via pipelines, the manufacturing of basic metals, fabricated metal products, machinery and equipment, computers, electronic and optical products, electrical equipment, motor vehicles, and transport equipment. Prohibited services include, among others, accounting, management consulting, engineering, scientific and technical consulting, services incidental to the manufacturing of metal products and machinery and equipment, and advertising. Notably, the scope of prohibited services is much broader than that of the U.S., UK, and EU sanctions regimes.
There are restrictions in place relating to the provision of insurance and reinsurance to or for the benefit of Russia or any person in Russia in relation to aircraft, aviation, and aerospace products and related technology. Transport Canada implemented a no-fly zone for Russian aircraft in Canadian airspace. Russian ships or ships related to listed persons are prohibited from docking in Canada or passing through Canada.
To respond to the Russian invasion of Ukraine and the violations of Ukraine’s sovereignty and territorial integrity, Canada expanded the list of Ukrainian territories that are subject to broad sourcing and supply prohibitions in 2022. The initial prohibitions imposed on the Crimea region of Ukraine in 2014 were supplemented in 2022 with prohibitions on dealings with four other regions: the DNR and LNR and the areas of the Kherson and Zaporizhzhia oblasts of Ukraine that are illegally occupied by Russia.
During 2022, Canada targeted Belarus with sanctions, mainly in connection with its involvement in the Russian invasion of Ukraine, targeting Belarusian government and financial elites, their family members and associates, defense officials, and entities involved in Belarus’ financial, potash, energy, tobacco, and defense sectors. Canada has also prohibited the provision of all insurance, reinsurance, and underwriting services for aircraft, aviation, and aerospace products owned, controlled, or operated by Belarusians; the export to Belarus of all items on the Restricted Goods and Technologies List; the export of certain advanced technologies that could be used in the manufacturing of weapons; and the export and import of certain luxury goods to or from Belarus or any person in Belarus.
Canada implemented five rounds of sanctions on Iran throughout October and November 2022, specifically listing the Morality Police, senior Iranian officials, and prominent entities that directly implement repressive measures, violate human rights, and spread the Iranian regime’s propaganda and misinformation. These latest rounds are the first significant changes to Canada’s controls over trade and investment with Iran since sanctions had been significantly relaxed in 2016.
On November 14, 2022, Canada announced that it designated Iran as a regime that has engaged in terrorism and systematic and gross human rights violations. This means that tens of thousands of senior members of the Iranian regime, including many members of the Islamic Revolutionary Guard Corps, are now inadmissible to Canada under the Immigration and Refugee Protection Act.
In February and May 2021, Canada had listed several Myanmar individuals and entities under the Special Economic Measures Act (SEMA). These sanctions were expanded in 2022 by adding further key senior military and military-appointed officials and their family members, as well as military, defense, and affiliated commercial entities to the sanctions list.
In November 2022, Canada imposed sanctions on Haiti under SEMA and the United Nations Act. The sanctions measures impose dealings prohibitions, asset freezes, travel bans on listed persons, and an arms embargo.
