ARCHIVED — Vol. 147, No. 13 — June 19, 2013

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SOR/2013-108 May 29, 2013

SPECIAL ECONOMIC MEASURES ACT

Regulations Amending the Special Economic Measures (Iran) Regulations

P.C. 2013-599 May 28, 2013

Whereas the Governor in Council is of the opinion that the situation in Iran constitutes a grave breach of international peace and security that has resulted or is likely to result in a serious international crisis;

Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of Foreign Affairs, pursuant to subsections 4(1) to (3) of the Special Economic Measures Act (see footnote a), makes the annexed Regulations Amending the Special Economic Measures (Iran) Regulations.

REGULATIONS AMENDING THE SPECIAL ECONOMIC MEASURES (IRAN) REGULATIONS

AMENDMENTS

1. Section 3.1 of the Special Economic Measures (Iran) Regulations (see footnote 1) is amended by striking out “and” at the end of paragraph (e) and by replacing paragraph (f) with the following:

  • (f) any transactions necessary for a Canadian to transfer to a non-designated person any accounts, funds or investments of a Canadian held by a designated person on the day on which that person became a designated person; and
  • (g) financial services required in order for a designated person to obtain legal services in Canada with respect to the application of any of the prohibitions set out in these Regulations.

2. Sections 4 and 4.1 of the Regulations are replaced by the following:

4. (1) It is prohibited for any person in Canada and any Canadian outside Canada to export, sell, supply or ship goods, wherever situated, to Iran, to a person in Iran, or to a person for the purposes of a business carried on in or operated from Iran.

(2) Subsection (1) does not apply to

  • (a) products referred to in section 3 of the Regulations Implementing the United Nations Resolutions on Iran;
  • (b) goods used in the petrochemical, oil or natural gas industry, other than goods used in the refining of oil or the liquefaction of natural gas, that are required to be exported, sold, supplied or shipped under a contract entered into before November 22, 2011;
  • (c) any of the following goods that are required to be exported, sold, supplied or shipped under a contract entered into before December 12, 2012:
    • (i) equipment or machinery designed for the building, maintenance or refitting of vessels,
    • (ii) vessels designed for the transportation or storage of crude oil, or petroleum or petrochemical products, or
    • (iii) goods designed for drilling, mineral surveying and exploration, including specialized equipment used in the mining industry; and
  • (d) goods that are required to be exported, sold, supplied or shipped under a contract entered into before May 29, 2013, provided that
    • (i) they are not goods referred to in paragraph (b) or (c) that are required to be exported, sold, supplied or shipped under a contract entered into after the applicable date referred to in those paragraphs,
    • (ii) they are not goods listed in Schedule 2,
    • (iii) the consideration received or to be received complies with these Regulations and the Regulations Implementing the United Nations Resolutions on Iran;
  • (e) personal or settlers’ effects that are taken or shipped by an individual leaving Canada and that are solely for the use of the individual or the individual’s immediate family;
  • (f) informational materials, including books and other publications;
  • (g) any correspondence, including letters, printed papers and postcards; and
  • (h) any package sent by mail for non-commercial reasons, provided that it does not contain goods listed in Schedule 2.

(3) It is prohibited for any person in Canada and any Canadian outside Canada to transfer, provide or communicate to Iran or any person in Iran the following technical data:

  • (a) technical data required for
    • (i) the manufacture, use or maintenance of arms and related material,
    • (ii) the refining of oil or the liquefaction of natural gas,
    • (iii) the production of petrochemicals,
    • (iv) the building, maintenance or refitting of ships,
    • (v) the transportation or storage of crude oil, or petroleum or petrochemical products,
    • (vi) drilling and mineral surveying and exploration, or
    • (vii) the processing, storing or handling of liquid natural gas; and
  • (b) technical data related to the goods listed in Schedule 2.

(4) Subsection (3) does not apply to technical data the provision of which is prohibited under section 5 of the Regulations Implementing the United Nations Resolutions on Iran.

4.1. (1) It is prohibited for any person in Canada and any Canadian outside Canada to import, purchase, acquire, ship or tranship any goods that are exported, supplied or shipped from Iran after May 29, 2013, whether the goods originated in Iran or elsewhere.

(2) Subsection (1) does not apply to

  • (a) any items and arms or related material that are referred to in section 7 of the Regulations Implementing the United Nations Resolutions on Iran;
  • (b) goods that are required to be imported, purchased, acquired, shipped or transhipped under a contract entered into before May 29, 2013 provided that
    • (i) the goods are not natural gas, crude oil, or petroleum or petrochemical products, and
    • (ii) the consideration received or to be received complies with these Regulations and the Regulations Implementing the United Nations Resolutions on Iran;
  • (c) personal or settlers’ effects that are taken or shipped by an individual leaving Iran and that are solely for the use of the individual or the individual’s immediate family;
  • (d) informational materials, including books and other publications;
  • (e) correspondence, including letters, printed papers and postcards; and
  • (f) any package sent by mail for non-commercial reasons.

(3) It is prohibited for any person in Canada and any Canadian outside Canada to provide or acquire marketing services or any financial or other services to, from or for the benefit of, or on the direction or order of, Iran or any person in Iran in respect of the import, purchase, acquisition or shipment of natural gas, crude oil, or any petroleum or petrochemical products, from Iran.

3. (1) Subparagraph 5(d)(ii) of the Regulations is replaced by the following:

  • (ii) financial services the provision or acquisition of which is prohibited under the Regulations Implementing the United Nations Resolutions on Iran,

(2) Subparagraph 5(d)(x) of the Regulations is replaced by the following:

  • (x) financial services required in order for a person in Iran to obtain legal services in Canada; or

4. Section 6 of the Regulations is replaced by the following:

6. It is prohibited for any person in Canada and any Canadian outside Canada to make an investment in an entity in Iran.

5. Section 8.1 of the Regulations is replaced by the following:

8.1 Sections 4 to 8 do not apply to

  • (a) equipment, services and software that facilitate secure and widespread communications via information technologies, or the provision or acquisition of financial services in relation to such equipment, services and software, provided that an export permit has been issued in respect of any goods listed in the Guide;
  • (b) goods used to purify water for civilian and public health purposes, or the provision or acquisition of financial services in relation to such goods; and
  • (c) any activity, or the provision or acquisition of financial services in relation to an activity, that has as its purpose
    • (i) the safeguarding of human life,
    • (ii) disaster relief, or
    • (iii) the provision of food, medicine and medical supplies as listed in Schedule 3.

6. (1) Items 60, 113, 152, 171, 173, 179 and 347 of Part 1 of Schedule 1 to the Regulations are repealed.

(2) Item 86 of Part 1 of Schedule 1 to the Regulations is replaced by the following:

86. Iran Mineral Production and Supply Co. (also known as IMPASCO and Iran Mineral Products Company)

(3) Part 1 of Schedule 1 to the Regulations is amended by adding the following after item 448:

  • 449. Alaleh Kabud Kavir Company

  • 450. AlBorz Investment Company

  • 451. Amad Bahineh Saz Engineering Company

  • 452. Andishe va Omran Mohit Company

  • 453. Atomic Fuel Development Engineering Company (MATSA)

  • 454. Azadegan Economic and Self-Reliance Company (also known as Minoo Industrial Group)

  • 455. Baghyatollah Medical Sciences University (BMSU) (also known as Bagiatollah Medical Sciences University, Baghiatollah Medical Sciences University, Baqyatollah Medical Sciences University, Baqiyatallah Medical Sciences University, Baqiyatallah University of Medical Sciences, Baqiatollah Medical Sciences University)

  • 456. Baharestan Kish Company

  • 457. Bahman Group

  • 458. Bank Day

  • 459. Bank Ghavamin

  • 460. Bank Hekmat Iranian

  • 461. Bank Sarmayeh

  • 462. Behsaz Faraz Iranian Group

  • 463. Bonyad Mostazafan Enghelab Eslami

  • 464. Daniyan Pars Company

  • 465. Esfahan Oil Refining

  • 466. Esfahan Zinc Smelting Company

  • 467. Explosion and Impact Technology Research Centre

  • 468. Falazat Rangin Hirbed Company

  • 469. Fanavaran Petrochemical

  • 470. Fava Naft Saba Kish (also known as Fava Naft)

  • 471. Hafiz Samaneh Company

  • 472. Iran Air

  • 473. Iran Atlas Kish Commercial and Industrial Company

  • 474. Iran Atlas Kish Investment Company

  • 475. Iran Industrial Development Investment Company

  • 476. Iran Khodro Diesel

  • 477. Iran Zinc Mines Development Company

  • 478. Iranian Aluminum Company

  • 479. Iranian Offshore Engineering and Construction Company

  • 480. Iranian Venezuelan Bi-National Bank (IVBB)

  • 481. Jey Oil Refining Company

  • 482. Kermanshah Petrochemical Industries

  • 483. Khargh Petrochemical

  • 484. Kian Aliaj Company Kashan (also known as Kashan Alloy Company)

  • 485. Kowsaran Institute

  • 486. Mabna Niroo Moharake Company

  • 487. Mahan Air

  • 488. Misagh Basirat Institute

  • 489. Mobarakeh Esfahan Steel Company

  • 490. Mowj Nasr Gostar Communications and Electronics Company

  • 491. Naftiran Intertrade Company Ltd.

  • 492. Nikaroo Engineering Company

  • 493. Ofogh Toseeh Saberin Engineering Company

  • 494. Oil Exploration Operations Company

  • 495. Oil Pension Fund Investment Company

  • 496. Pardis Sabz Mellal Company

  • 497. Pars Amayesh Sanaat Kish (also known as PASK, Vacuumkaran, Vacuum Karan and Vacuum Karan Co.)

  • 498. Parsian Bank

  • 499. Payuran Energy Development Institution

  • 500. Pazuhan Pishroo Industrial Tehran

  • 501. Pelasko Kar Saipa

  • 502. Pishkasutan Saba Commercial Company (SPC)

  • 503. Pishro Systems Research Company (also known as Pishro Company, Advanced Systems Research Company, ASRC, Center for Advanced Systems Research and CRAS)

  • 504. Rayan Saipa

  • 505. Saba Naft Engineering and Construction Group

  • 506. Saba Naft Support Services Company

  • 507. Saba Steel

  • 508. Sadid Industrial Group

  • 509. Sahand Naftiran Commercial Services Company

  • 510. Saipa

  • 511. Saipa Azin

  • 512. Saipa Diesel

  • 513. Samen AlAiemeh Credit Cooperative (also known as Samen Credit Cooperative)

  • 514. Samen AlHujaj Credit Cooperative

  • 515. Sepahan Oil Company

  • 516. Sepehr Andishan Payab Company

  • 517. Setad-e Ejraye Farman-e Emam

  • 518. Shahab Sang Mineral Industries Company

  • 519. Shahed Company

  • 520. Shahid Mahallati Maritime Industries Institute

  • 521. Shahriyar Mahestan Company

  • 522. Tadbir Energy Group

  • 523. Tadbir Investment Company

  • 524. Talaeeyeh Commercial Company

  • 525. Tehran Gostaresh Company (also known as Tehran Gostaresh Co. PJS)

  • 526. Tek Yab Asia Company

  • 527. Toos Gostar Urban Development Investment Company

  • 528. Toseeh Etemad Investment Company

  • 529. Zagros Steel Company

  • 530. Zamyad

7. (1) Items 47 and 48 of Part 2 of Schedule 1 to the Regulations are repealed.

(2) Part 2 of Schedule 1 to the Regulations is amended by adding the following after item 52:

  • 53. Abbas Askarzadeh

  • 54. Abdulnasser Hemati

  • 55. AhmadReza Khatibi

  • 56. Ali Bakhshayesh

  • 57. Ali Divandari

  • 58. Ali Fadavi

  • 59. Ali Hosynitash

  • 60. Ali Soleimani Shayesteh

  • 61. Ayatollah Ibrahimi

  • 62. Babak Morteza Zanjani

  • 63. Behzad Soltani

  • 64. Ebrahim Mahmoudzadeh

  • 65. Farshad Heydari

  • 66. Ghorban Daniyali

  • 67. Hossein Faghihian

  • 68. Hossein Salami

  • 69. Jaafar Jamali

  • 70. Mashallah Azimi

  • 71. Massoud AkhavanFard

  • 72. Mohammad Ahmadian

  • 73. Mohammad Farouzandeh

  • 74. Mohammad Hassan Mohebbian Araghi

  • 75. Mohammad Reza Pishroo

  • 76. Mohammed Jaafar Mokhber Dezfooli

  • 77. Mojtaba Haeri

  • 78. Nasser Rastkhan

  • 79. Parviz Fatah

  • 80. Parviz Khaki

  • 81. Ramin PahsayeeFam

  • 82. Reza Karbashchi Khayabani

  • 83. Seyed Zia Imani

8. Schedule 3 to the Regulations is amended by adding the following after category code 30:

Column 1

Category Code

Column 2


Category Description

Column 3


Applicable Subcategories

90

Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus, parts and accessories thereof

9001.30, 9001.40, 9001.50, 9011.10, 9011.20, 9011.80, 9011.90, 9012.10, 9012.90, 9018.11, 9018.12, 9018.13, 9018.14, 9018.19, 9018.20, 9018.31, 9018.32, 9018.39, 9018.41, 9018.49, 9018.50, 9018.90, 9019.10, 9019.20, 9020.00, 9021.10, 9021.21, 9021.29, 9021.31, 9021.39, 9021.40, 9021.50, 9021.90, 9022.12, 9022.13, 9022.14, 9022.19, 9022.21, 9022.29, 9022.30, 9022.90

APPLICATION BEFORE PUBLICATION

9. For the purposes of paragraph 11(2)(a) of the Statutory Instruments Act, these Regulations apply before they are published in the Canada Gazette.

COMING INTO FORCE

10. These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

1. Background

On July 26, 2010, sanctions against Iran were enacted under the Special Economic Measures Act in response to Iran’s nuclear proliferation activities, its violation of multiple United Nations Security Council (UNSC) resolutions and its failure to cooperate with the International Atomic Energy Agency (IAEA). The Special Economic Measures (Iran) Regulations (the Iran Regulations) prohibited dealings with a list of designated persons; banned the export of goods used in the liquefaction of gas or the refining of oil as well as the export of arms and related material not already prohibited under existing United Nations sanctions; prohibited the provision of certain financial services to persons in Iran; and prohibited the export of a long list of goods and related technology that could be used in Iran’s nuclear and missile programs.

The Regulations Amending the Special Economic Measures (Iran) Regulations of October 18, 2011, added five individuals that are senior officials of the Iranian Revolutionary Guards Corps Quds Force, or are associated with such senior officials, to the list of designated persons. These individuals were implicated in the plot to kill the Saudi ambassador in the United States.

The Regulations Amending the Special Economic Measures (Iran) Regulations of November 21, 2011, further amended the Iran Regulations in response to the IAEA’s November 9, 2011, assessment of Iran’s nuclear program. The new sanctions prohibited all financial transactions with Iran, subject to certain exceptions; expanded the list of prohibited goods to include all goods used in the petrochemical, oil and gas industry in Iran; added prohibited goods to include items that could be used in Iran’s nuclear program; added new individuals and entities to the list of designated persons found in Schedule 1 of the Iran Regulations; and removed certain entities that no longer presented a proliferation concern for Canada.

The Regulations Amending the Special Economic Measures (Iran) Regulations of January 31, 2012, added three individuals and five entities to the list of designated persons. These individuals were listed in order to maintain unity with measures adopted by the European Union. The Regulations Amending the Special Economic Measures (Iran) Regulations of December 12, 2012, sought to further align Canadian sanctions with measures adopted by like-minded countries as a result of Iran’s continued refusal to engage meaningfully with the international community by adding export restrictions on vessels designed to transport or store crude oil, petroleum and petrochemical products, goods used to build or maintain ships, goods used in the mining industry, and shipments of hard currency valued at greater than $40,000. Additional entities and individuals were also listed as designated persons.

Iran’s failure to respond in April 2013 to the international community’s offer of confidence-building measures proposed by the P5+1 group (the five permanent members of the UNSC plus Germany) in the Almaty, Kazakhstan, talks, and the resulting absence of progress with both the P5+1 and the IAEA led Canada to take further action by expanding the Iran Regulations.

The latest amendments introduce the following:

  • a complete ban on imports from Iran and exports to Iran;
  • the addition of 82 new entities and 30 new individuals to the list of designated persons who have engaged in activities that directly or indirectly facilitate, support, provide funding for, or contribute to, or could contribute to, Iran’s proliferationsensitive nuclear activities, or to Iran’s activities related to the development of chemical, biological or nuclear weapons of mass destruction or delivery systems for such weapons, and who are subject to a dealings prohibition;
  • an exemption aimed at increasing the availability of consumer communication technologies that contribute to Internet freedom; and
  • an exemption for goods used to purify water for civilian and public health purposes.

In order to ensure consistency with Canada’s like-minded allies, existing humanitarian exemptions have been maintained.

The Iran Regulations also remove names of entities that are considered designated persons under the Regulations Implementing the United Nations Resolutions on Iran.

2. Issue

The latest Regulations Amending the Special Economic Measures (Iran) Regulations respond to continued concerns regarding Iran’s nuclear program and its nuclear enrichment activities, as they are reported by successive reports from the IAEA. Iran is required by binding resolutions of the Board of Governors of the IAEA and the UNSC to take steps towards the full implementation of its Safeguards Agreement (refers to the Application of safeguards in connection with the Treaty on Non-Proliferation of Nuclear Weapons [NTP] which was signed by the IAEA and Iran in 1974) and other related obligations, including implementation of an Additional Protocol (AP) [the AP is meant to grant IAEA inspectors greater authority in verifying the country’s nuclear programme. Though it was signed by Iran in December 2003, Iran has failed to implement it]. The IAEA, and the P5+1, as the political negotiating body, pursue their efforts to obtain Iran’s cooperation in achieving a comprehensive, long-standing and peaceful settlement regarding Iran’s nuclear program, with proper safeguard measures and transparency.

Despite positive confidence-building proposals presented to Iran by the P5+1 group in the course of the Almaty, Kazakhstan, talks of April 5–6, 2013, Iran has failed to respond with any concrete actions.

Canada therefore believes that further economic sanctions are required to pressure Iran into urgent compliance, consistent with the dual-track approach of engagement supported by economic pressure.

3. Objectives

These new amendments to the Iran Regulations aim at further constraining Iran’s determination to pursue a nuclear program with possible military dimensions by demonstrating the resolve of Canada, in support of like-minded countries, in pursuing a shared approach of engagement and economic pressure. At the same time, consistent with measures adopted by like-minded countries, the amendments introduce exemptions aimed at relieving the pressure on average Iranians.

The most recent amendments seek to

  • further constrain Iran’s ability to pursue nuclear activities and access sensitive technologies;
  • increase Iran’s economic isolation by banning most trade with Iran;
  • maintain exemptions aimed at lessening the pressure on average Iranians;
  • introduce an exemption for consumer communications technologies to ensure greater access to information for Iranian citizens with a view to countering the regime’s misleading nuclear narrative;
  • add 30 individuals and 82 entities to the list of designated persons engaged in activities that directly or indirectly facilitate, support, provide funding for, contribute to, or could contribute to, Iran’s proliferation-sensitive nuclear activities, or to Iran’s activities related to the development of chemical, biological or nuclear weapons of mass destruction or delivery systems for such weapons, including when the person is an entity, or an individual linked to an entity; and
  • amend the list of designated persons to remove those persons that are already designated persons under the Regulations Implementing the United Nations Resolutions on Iran.

4. Description

The latest Regulations Amending the Special Economic Measures (Iran) Regulations prohibit imports from Iran and exports to Iran, and add 30 individuals and 82 entities to the list of designated persons subject to a prohibition on dealings under the Iran Regulations. Activities that have as their purpose the safeguarding of human life, disaster relief, or the providing of medicine or medical supplies, are exempted from most sanctions, as are certain communications technologies that support Internet freedom, and goods used to purify water for civilian and public health purposes.The Minister of Foreign Affairs is authorized to issue permits to allow those affected by the Iran Regulations to undertake activities that would otherwise be prohibited.

5. Consultation

The Department of Foreign Affairs and International Trade drafted the amendments to the Regulations following consultations with the Department of Justice, theCanada Border Services Agency, the Department of Finance Canada, the Office of the Superintendent of Financial Institutions, the Department of Citizenship and Immigration, the Department of Public Safety and Emergency Preparedness, the Canadian Security Intelligence Service, the Treasury Board Secretariat, the Department of Agriculture and Agri-Food and the Privy Council Office. All departments and agencies consented to this action.

6. Small business lens

The new measures are expected to have an impact on Canadian companies doing trade with Iran, with the exception of those active in exempted sectors. Those include activities that have as their purpose the safeguarding of human life, disaster relief, or the providing of medicine or medical supplies, which are exempted from most of the sanctions, as are the supply of goods and technology that support Internet freedom, and goods used to purify water for civilian and public health purposes. The impacts are expected to be limited, however, as trade activities with Iran have decreased significantly in recent years. The Minister of Foreign Affairs is authorized to issue permits to allow those affected by the Iran Regulations to undertake activities that would otherwise be prohibited.

7. Rationale

The provisions of the Iran Regulations were implemented to put pressure on the Government of Iran to urgently comply with UNSC resolutions and other legal obligations regarding its nuclear program and to halt its proliferation activities. The measures contained in the amendments to the Iran Regulations are the best available options to limit Iran’s access to sensitive goods and resources that may support Iran’s non-compliant nuclear activities. The international community seeks to achieve a comprehensive, longstanding and peaceful settlement with Iran, with proper safeguard measures and transparency, in a way that would restore confidence in the exclusively peaceful nature of Iran’s nuclear program. Canada supports efforts to seek a diplomatic settlement to the Iranian crisis.

8. Implementation, enforcement and service standards

Provisions of Canada’s sanctions are enforced by the Royal Canadian Mounted Police and the Canada Border Services Agency.

9. Contacts

  • Cheryl Cruz
    Deputy Director
    United Nations, Human Rights and Economic Law Division (JLH)
    Department of Foreign Affairs and International Trade
    125 Sussex Drive
    Ottawa, Ontario
    K1A 0G2
    Telephone: 613-944-1599
    Fax: 613-992-2467
    Email: cheryl.cruz@international.gc.ca

  • Daniel Maksymiuk
    Deputy Director (Iran, Iraq)
    Gulf Countries and Regional Trade Division
    Department of Foreign Affairs and International Trade
    125 Sussex Drive
    Ottawa, Ontario
    K1A 0G2
    Telephone: 613-944-3022
    Fax: 613-944-7975
    Email: daniel.maksymiuk@international.gc.ca