Canada bans service exports to Russia relating to mining, chemical and petroleum industries

On June 7, 2022, the Government of Canada introduced additional sanctions against Russia, targeting a broad list of 28 service sectors which are now prohibited from being exported to Russia, or any person in Russia, to the extent they relate to the mining, chemical, and petroleum industries.

The amendments

After section 3.9, the following section was added:

            “Services

3.10 It is prohibited for any person in Canada and any Canadian outside Canada to provide to Russia or to any person in Russia any service referred to in Part 1 of Schedule 8 in relation to any industry referred to in Part 2 of that Schedule.”

Further, section 5 of the Regulations was replaced as follows:

            “Assisting in prohibited activities

5 It is prohibited for any person in Canada and any Canadian outside Canada to knowingly do anything that causes, facilitates or assists in, or is intended to cause, facilitate or assist in, any activity prohibited by sections 3 to 3.10.”

The services and industries are set out in what is now a new Schedule 8 to the Special Economic Measures (Russia) Regulations. Schedule 8 includes the following:

Part 1

Part 2

Implementation

As previously mentioned, we have seen that, with the ongoing conflict between Russia and Ukraine, the Government of Canada can enact regulations quickly and without notice which may quickly affect current ongoing contracts and relationships of the impacted industries/services.

For the prohibitions to be applicable, a person in Canada or Canadian abroad must be engaged in one of the above-noted services in Part 1 of Schedule 8, and that service must “relate to” one of the industries noted in Part 2. The new prohibitions also prohibit persons in Canada and Canadians abroad from doing anything that causes, facilitates, assists, or that is intended to cause, facilitate or assist in a prohibited activity – in this case, the provision of services.

Allied countries have implemented similar bans, although the specifics of the differing sanctions do vary.

Dentons’ International Trade team keeps abreast of leading global developments. If you have any questions, please feel free to reach out to Paul Lalonde, Anthony Cole, Sean Stephenson or Daniela Acevedo.

[1] CPC category means the category established in the Provisional Central Product Classification, published by the United Nations in 1991.

[2] ISIC division means the division established in the International Standard Industrial Classification of All Economic Activities, Revision 4, published by the United Nations in 2008.