- What are the laws governing the Sanctions against Iran?
- What are the restrictions against Iran under the Iran UN Regulation?
- What are the restrictions against Iran under the SEMA Regulations?
- Other restrictions
- Are there any exceptions to these sanctions?
- Why and when did the sanctions against Iran start?
- What has happened recently?
The death of Mahsa Amini saw the execution of sanctions from many countries against Iran, including Canada. What exactly happened? Why were countries forced to cut diplomatic ties with Iran? – Let’s find out.
What are the laws governing the Sanctions against Iran?
The sanctions against the second largest country in the Middle East and the Islamic Republic of Iran date back years, considering that the sanctions have had a long history not just in Canada but also through the United Nations and the United States.
Originally, sanctions against the country were enacted under the United Nations Act and the Special Economic Measures Act (SEMA). The reason provided for the imposition of these sanctions was the nuclear weapons of mass destruction (WMD) programs that Iran started. This was followed by the reasoning of continuous gross human rights violations prevalent in the country.
The ‘Regulations Implementing the United Nations Resolution on Iran (“Iran UN Regulation”) came into force on 22nd February 2007. The Iran UN Regulations were modified on 5th February 2016 to implement further the UN changes to the sanctions policy against Iran, as decided by the Security Council of the United Nations in Security Council (UNSC) Resolution 2231 in 2015. Simultaneously, the ‘Special Economic Measures (Iran) Regulation’, came into force on 22nd July 2010.
What are the restrictions against Iran under the Iran UN Regulation?
Restrictions against Iran under the Iran UN Regulations include:
- Ban on the export of the following Iran items:
- Materials, items, technology, equipment and goods related to Uranium enrichment, heavy-water-related activities, or activities related to the development of nuclear weapon delivery systems. (These are mainly the products that have been listed in the International Atomic Energy Agency’s Information Circulars, the UN Security Council documents, and the Guide to Canada’s Export Controls – Group 1 and Group 2)
- Materials, items, technology, equipment and goods listed in the Missile Technology Control Regime (2015/254).
- Military equipment, as defined within the United Nations Registry of Conventional Weapons.
- Ban on making any property, financial assistance, sale, investment, or transfer available.
- Ban on making any property or financial services available to Iran for further investments in nuclear-related activities in Canada.
- Ban on providing technology for any activity related to ballistic missiles capable of delivering nuclear weapons.
- Ban on importing and acquiring arms or any related materials from Iran.
- Ban on entertaining any claims by Iran or any designated person related to the sanctions imposed on Iran.
What are the restrictions against Iran under the SEMA Regulations?
Under the SEMA Regulations, restrictions against the Islamic Republic of Iran impose an effective asset freeze and a dealing prohibition on any designated listed person in Schedule 1. This means that there is a prohibition on Canada or any Canadian outside Canada to:
- Deal in property with any designated listed person in Schedule 1.
- Facilitate or enter into any transaction that has been prohibited by the regulations.
- Provide any financial assistance for dealing in transactions prohibited by the regulations.
- Making goods available to any designated listed person in Schedule 1.
- Export, sell, supply, or ship any goods listed in Schedule 2 or the regulations to Iran for any business in Iran or for any individual in Iran.
SEMA Regulations consist of a broad anti-circumvention clause according to which any person in Canada, or any person of Canadian nationality outside Canada, is prohibited from engaging in any activity which “causes, assists or promotes, or is intended to cause, assist or promote, any act or thing prohibited by” the Regulations.
Further, the individuals included within Part 2.1 of the SEMA Regulations are also barred from entering Canada under the Immigration and Refugee Protection Act. Therefore, it becomes imperative to undertake detailed due diligence while entering into transactions or while dealing with an entity that could potentially be a listed person within Schedule 1 of the SEMA Regulations.
In addition to the sanctions mentioned above, the export of a wide range of sensitive products – which are listed on the Export Control List – has also been restricted by Canada. This move has been made under the Export and Import Permits Act (EIPA).
To know more about how the EU sanctions have had an alarming impact on Iran, refer to the following article: Alarming Impact of EU Sanctions on Iran.
Are there any exceptions to these sanctions?
There are exceptions to these sanctions in the form of permits and certificates under the Iran UN Regulations. It is possible for the Minister of Foreign Affairs to issue a certificate and authorize any activity that the regulations have restricted. However, this is only done on a case-to-case basis and only allowed once the requirements under Resolution 2231 have been strictly adhered to. One of the requirements under the resolution is to obtain prior consent from the UN Security Council.
Any person in Canada, or any Canadian nationality outside Canada, may also be allowed to pursue and undertake specific transactions and activities with Iran or an Iranian national. This may be done through a Special Economic Measures (Iran) Permit Authorization Order, which is given under section 4(4) of the Special Economic Measures Act.
Why and when did the sanctions against Iran start?
In response to Iran’s nuclear program, the UNSC imposed four rounds of sanctions against Iran between 2006 and 2010. Through the power provided to the UN Security Council under Chapter VII of the Charter of the United Nations, several resolutions (1737, 1747, 1803, and 1929) were passed against Iran, keeping in mind the proliferation risks presented by Iran’s nuclear program. The risks existed because Iran refused to meet the requirements under the International Atomic Energy Agency (IAEA), along with refusing to comply with some of the previous UN Security Council resolutions.
The foreign and diplomatic relations between Canada and Iran began through the founding of the Iranian Mission in Ottawa in 1956 and the Canadian Mission in Tehran in 1959.
However, Canadian domestic law implements the decisions of the UN Security Council through ‘The Regulations Implementing the United Nations Resolution Against Iran’. The travel restrictions envisaged by the UN Resolution have their equivalent domestic law in the Immigration and Refugee Protection Act.
Canada imposed additional sanctions against Iran in July 2010 under the SEMA Regulations, considering that the Governor of the Council found that Iran’s failure to meet international obligations was capable of initiating an international crisis due to the allegations of a grave breach of international peace and security. Eventually, the SEMA Regulations were further tightened over the years through various amendments made in October 2011, November 2011, January 2012, December 2012 and May 2013.
The Joint Comprehensive Plan of Action (JCPOA)
On 14th July 2015, the five permanent members of the UNSC – China, Russia, the UK, France, and the United States – and Germany concluded the JCPOA with Iran. The countries were led by the European Union, and it was endorsed by the UNSC Resolution 2231. On 16th January 2016, also known as the ‘Implementation Day’, IAEA confirmed that Iran had fulfilled its commitments under JCPOA. This meant that Iran rolled back its nuclear program and was also successfully subjected to extensive international verification.
On the same day, immediate changes were made against the Iran sanction policy, which had been imposed by the United Nations, European Union, and the United States (through the U.S. Department of the Treasury Office in Washington Dc) against Iran. This resulted in a considerable decrease in the economic sanctions imposed against Iran.
The Canadian Government made the required changes to its ‘Regulations Implementing the United Nations Resolutions in Iran’ on 5th February 2016. Further amendments were also made to the ‘Special Economic Measures (Iran) Regulations’ to identify the implementations and progressions made under the JCPOA and reduce the economic sanctions.
Therefore, while prohibition against certain items was continued, the blanket ban on imports from Iran and exports to Iran was removed, along with certain other prohibitions. Further, listed persons and entities mentioned within Schedule 1 were also subjected to changes.
What has happened recently?
On 16th September 2022, the Islamic Revolutionary Guard Corps, also known as Gasht-e-Ershad or Iran’s Morality Police, came into the limelight. The Morality Police date back to before the Islamic Revolution of Iran in 1979. Public morals were originally overseen by market inspectors called ‘muhtasib’. By the 20th century, muhtasibs transitioned to vice squads. It was first in Saudi Arabia, where the influence of Wahhabism gained prominence, and eventually, from Saudi Arabia, the same spread to Iran.
On 16th September 2022, a young Kurdish-Iranian woman Mahsa Amini, was allegedly killed in police custody. The death of Mahsa Amini was related to the systemic harassment, and repression women face in the country, especially due to the dress code that women are expected to follow. This resulted in a worldwide outcry wherein many condemned the actions of Iran’s Morality Police.
The Canadian Government, too, expressed strong condemnation of the act on 23rd September 2022. The condemnation was not just limited to Mahsa’s death but also the subsequent actions taken by Iran in the form of violent crackdowns against civilian protestors and the use of force in the Iran protests.
Eventually, Canada’s recent sanctions against Iran aroused seeing a protest. On 29th September 2022, Canada’s Prime Minister Justin Trudeau and Foreign Minister announced the imposition of Canadian sanctions against Iranian individuals and entities, including Iran’s Morality Police and its leadership. This was followed by the amendment of the Special Economic Measures (Iran) Regulation on 3rd October 2022, through which new sanctions were implemented, and an additional 25 individuals (including senior Iranian officials) and nine entities were accused of gross human rights violations and breach of international peace and security.
Subsequently, as highlighted by Canada’s foreign minister Melanie Joly, further amendments were made to the Regulation (on 11th October, 19th October, 28th October, 10th November, 29th November, 7th December, and 6th January) to include further new sanctions, due to which more Iranian individuals and entities were included within the Regulation, and to impose bans against them.
Until now, the Canadian Government has imposed sanctions against several Iranian individuals and entities, and it is less likely for the sanctions to be removed soon, considering the continued unrest and gross human rights violations in the Iranian regime.
Canada has imposed sanctions on several other countries, including North Korea, China, Belarus, Iraq, the Republic of Congo, and many others.
Canada’s recent sanctions against Iran for continued human rights violations
In May 2023, Canada’s Ministry of Foreign Affairs announced that Canada shall impose additional sanctions against Iran under the Special Economic Measures (Iran) Regulations. This would be the 11th package of sanctions against Iran since October 2022. This decision comes in alignment with other jurisdictions, such as the European Union, the United States, and the United Kingdom.
The recent list is inclusive of one entity and nine individuals, considering their gross and systematic human rights violations in Iran and abroad. This list aims to exemplify the regime’s brutality and disregard for human rights as it is the site of a record number of state executions.
The list is inclusive of the Morality Police of Iran and a deputy commander of the Islamic Revolutionary Guard Corps (IRGC) forces in Sistan and Baluchistan Province. Some other people sanctioned under this regime are:
- Abualfazl Nazeri, Vice Chairman, Board of Directors, Paravar Pars
- Mohsen Asadi, member, Board of Directors, Paravar Pars
- Mohammad Sadegh Heidari Mousa, member, Board of Directors, Paravar Pars
- Mohammad Reza Mohammadi, member Board of Directors, Paravar Pars
- Enayatollah Rafiei, a member of the squad that arrested Mahsa Amini
- Fatemeh Ghorban-Hosseini, a member of the squad that arrested Mahsa Amini
- Parastou Safari, a member of the squad that arrested Mahsa Amini
- Ali Khoshnamvand, a member of the squad that arrested Mahsa Amini
- Parviz Absalan, Deputy Head, IRGC, in Sistan and Baluchestan Province
- Rajaei Shahr Prison, site of state execution
It cannot be denied that Canada’s sanctions have played a successful role in the past, considering that the Iranian regime eventually agreed to follow international commitments through JCPOA. However, situations differ since the situation in 2010 was based on an international level; however, the situation now is at a domestic level, even though it has brought worldwide condemnation for the country.
The Iranian regime is expected to experience increased challenges, considering that they need to deal with issues both at the domestic, as well as international levels. It is yet to be seen whether the increasing Canadas sanctions can bring a positive change in the country of Iran. However, a difficult period is bound to arise for Iranian Canadian relations due to the Iran sanctions.
If you, as an Iranian individual or your business, have been facing issues with the sanctions imposed by Canada on Iran, LegaMart’s team of experienced lawyers is here to help you with all your queries and to ensure legal compliance. You can learn about LegaMart services on our homepage.
Frequently Asked Questions
What is Canada’s Bill C-47?
The Canadian Federal Government introduced Bill C-47 and tabled it in Parliament on March 28, 2023. This bill aims to bring significant amendments to the Special Economic Measures Act (SEMA) and the Justice for Victims of Corrupt Foreign Officials Act (Magnitsky Act). One of the key amendments is to introduce new legal tests for clarifying Canada’s “ownership and control” rules in sanctions. The new definition of “ownership and control” introduces a formal “50% rule”, similar to the United States. The proposed amendment in Bill C-47 will provide long-desired certainty that if an entity is owned 50 per cent or more by a listed person, directly or indirectly, then the restrictions in Canadian sanctions laws will extend to the owned entity’s property.
This rule shall clarify for businesses to evaluate the results of the due diligence screenings and enable those performing sanctions risk assessments to reach a clear “no go” decision faster when an entity is known to have 50 per cent or more ownership by a listed person.
What other amendments come under Bill C-47?
In addition to the ownership and control provisions, some other amendments that the bill brings in are:
- Amendment of various SEMA provisions to empower the Canadian government to implement sanctions restrictions on any person “outside Canada who is not Canadian”, expanding the scope of the SEMA’s sanctions authority which is currently limited to only target individuals or entities located in or nationals of the country named in the regulation.
- A new paragraph (e.1) is added under subsection 4(2) of the SEMA to allow Canada to prohibit “the transfer or provision by any person in Canada or Canadian outside Canada of property other than goods to that foreign state, any person in that foreign state, a national of that foreign state who does not ordinarily reside in Canada or a person outside Canada who is not Canadian”. This would align the SEMA with the Magnitsky Law, which allows for the prohibition on supplying any “property” broadly speaking to a listed person, including both tangible property (goods) and intangible property (such as money, funds, currency, digital assets, virtual currency); the current SEMA only contemplates a prohibition on the supply of “goods”.
- Amendments to the sanctions statutes and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to harmonize and coordinate sanctioned asset reporting obligations under the various statutes and expand the list of other Canadian government departments with whom Global Affairs Canada can coordinate and share information on sanctions matters.