Canada – Amendments to the Special Economic Measures (Russia) Regs.

On October 8, 2014, the Canada Gazette published Regulations Amending the Special Economic Measures (Russia) Regulations (SOR/2014, Sept. 16, 2014). The Regulations add four entities and five individuals to the list of designated persons under Schedule 1 of the Russia Regulations. Any person in Canada and any Canadian outside Can¬ada are prohibited from

• dealing in any property, wherever situated, held by or on behalf of a designated person whose name is listed in Schedule 1;
• entering into or facilitating, directly or indirectly, any trans¬action related to such a dealing;
• providing any financial or related service in respect of such a dealing;
• making goods, wherever situated, available to a designated per¬son listed in Schedule 1; and
• providing any financial or related service to or for the benefit of a designated person listed in Schedule 1.

Exceptions to the above-noted prohibitions are available for certain types of payments or transactions designated in the Russia Regulations.

The Regulations also add one entity to the list of designated persons in Schedule 2 and amend subsection 3.1(1) to reflect a shorter period of maturity for loans, bonds or debentures for Schedule 2 designated persons. It is now prohibited for any person in Canada and any Canadian outside Canada to transact in, provide or otherwise deal in a loan, bond or debenture of longer than 30 days’ maturity in relation to

• a designated person listed in Schedule 2;
• the property of a designated person listed in Schedule 2; or
• the interests or rights in property of a designated person listed in Schedule 2.

The prohibition noted above does not apply in respect of a loan that was made or a bond or debenture that was issued before the designated person was listed in Schedule 2.

It is also prohibited for any person in Canada and any Canadian outside Canada to transact in, provide or otherwise deal in capital funding through the transaction of shares in exchange for an ownership interest in relation to

• a designated person listed in Schedule 2;
• the property of a designated person listed in Schedule 2; or
• the interests or rights in property of a designated person listed in Schedule 2.

The prohibition noted above does not apply to capital funding that occurred before the designated person was listed in Schedule 2.

Finally, the Regulations also remove two entities from the list of designated persons in Schedule 1 of the Regulations