Office of the Superintendent of Financial Institutions
This Notice is directed to the attention of all banks, authorized foreign banks, trust companies, loan companies, cooperative credit societies, cooperative retail associations, life insurance companies, property and casualty insurance companies and fraternal benefit societies (FRFIs).
On March 17, 2014 the Governor in Council enacted the Special Economic Measures (Russia) Regulations and the Special Economic Measures (Ukraine) Regulations under the Special Economic Measures Act (SEMA). Both these Regulations were amended on March 19, 2014.
On March 21, 2014 the Governor in Council enacted an amendment to the Special Economic Measures (Russia) Regulations which amended the list of names subject to the sanctions contained in the Regulations. The list includes a financial institution, Bank Rossiya.
The following is a link to information provided by the Department of Foreign Affairs, Trade and Development (DFATD).
The Regulations will be published in the Canada Gazette on a later date, but came into effect on the dates they were registered.
Orders were also issued authorizing Ministerial approval of activity or transactions otherwise prohibited by the SEMA Russia Regulations and the SEMA Ukraine Regulations.
In this Notice, "Regulations" refers to the SEMA Russia Regulations and the SEMA Ukraine Regulations.
The SEMA Ukraine Regulations include lists of names of persons for which the Governor in Council considers there are reasonable grounds to believe are engaged in activities that directly or indirectly facilitate, support, provide funding for, or contribute to the deployment of Russian armed forces to Ukraine or to the seizing of control of Ukrainian government and military entities inside Ukraine.
The SEMA Russia Regulations include a list of names of persons for which the Governor in Council considers there are reasonable grounds to believe are connected with the Government of Russia, or are individuals or entities engaged in activities that directly or indirectly facilitate, support, provide funding for, or contribute to the deployment of Russian armed forces to Ukraine.
The Regulations provide a review mechanism to remove names from the schedules upon receipt of an application from a designated person.
FRFIs should note that these sanctions are in addition to the Freezing Assets of Corrupt Foreign Officials (Ukraine) Regulations, which took effect on March 5, 2014 and which froze the assets of 18 designated persons (see previous OSFI Notice).
OSFI expects that FRFIs will implement the necessary measures to search for the names of designated persons and freeze assets subject to the Regulations. As with other searching and reporting requirements, the obligation to search for designated names is a continuing one. For example, at a minimum, it is our expectation that federally regulated deposit-taking institutions be able to search their records for designated names at least on a weekly basis, and more frequently if need be. New clients' names should be checked against the names of designated persons as part of, or as soon as reasonably possible after, the process of account opening or otherwise entering into a business relationship.
FRFIs that are subject to the PCMLTFA are required to obtain and record prescribed information on the persons who own or control, directly or indirectly, 25% or more of clients that are corporations and other entities. It is OSFI's expectation that FRFIs will search these records to determine if they are dealing with a corporation or an entity that may be owned or controlled, directly or indirectly, by a designated person under the Regulations.
If Canadian financial institutions have property in their possession or control that they have reason to believe is owned or controlled by designated persons, or they have information about a transaction or proposed transaction in respect of property covered by the Regulations, they are required to report such information to the Royal Canadian Mounted Police immediately. Information may be provided as follows:
Federal Policing Criminal Operations
National Operations Centre (NOC) Ottawa, ON
Fax : 613-993-0260
Please note that the SEMA does not require financial institutions to report to their financial regulators each month on the results of the continuous searching and reporting obligations.
If any clarification is needed on the changes made by the Regulations, please contact:
Department of Foreign Affairs, Trade and Development
United Nations, Human Rights and Economic Law Division
125 Sussex Drive,
Telephone: (613) 995-1108
Fax: (613) 992-2467
This Notice is also being sent to the following for their information: