Canada Amends its Sanctions Against Iran
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Canada Amends its Sanctions Against Iran


February 5, 2016 - Ottawa, Ontario - Global Affairs Canada

The Honourable Stéphane Dion, Minister of Foreign Affairs, and the Honourable Chrystia Freeland, Minister of International Trade, announced today changes to Canada’s economic sanctions against Iran under the Special Economic Measures Act and the United Nations Act and signalled Canada’s willingness to resume dialogue with Iran.

Canada welcomed the January 16, 2016, confirmation by the International Atomic Energy Agency that Iran had fulfilled all necessary commitments under the Joint Comprehensive Plan of Action (JCPOA). Canada has therefore amended its broad-reaching autonomous sanctions against Iran to allow for a controlled economic re-engagement, including lifting the broad ban on financial services, imports and exports. Canada has also updated its regulations under the United Nations Act in order to conform with the changes to the United Nations sanctions regime mandated by the UN Security Council.

Canadian companies will now be better positioned to compete with other companies globally.

Canada continues to have serious concerns regarding Iran’s nuclear ambitions and will continue to maintain tight restrictions on exports to Iran of goods, services and technologies considered sensitive from a security perspective (including nuclear goods and technologies, as well as those that could assist in the development of Iran’s ballistic-missile program). A Notice to Exporters has been issued indicating that while all applications for export permits will be considered on a case-by-case basis, permit applications to export the most sensitive items on the Export Control List will normally be denied. Canada will also maintain a revised list of individuals and entities of most concern in relation to the risk of proliferation and to Iran’s ballistic missile activities and with whom any transactions would continue to be prohibited. Canada has added six individuals and one entity in response to Iran’s ballistic missile program.

Canada has had no real engagement with Iran since September 2012, when the embassy of Canada in Tehran was closed and Iranian diplomats were expelled from Canada. While Iran remains a country of concern, Canada prefers dialogue over withdrawal.

Canada is willing to have discussions with Iranian officials, including talks on the possibility of restoring diplomatic contacts. We will maintain our firm commitment to the human rights of Iranians. Canada will steadfastly continue to oppose Iran’s support for terrorist organizations, its threats toward Israel, and its ballistic missile program, while also monitoring Iran’s compliance with its obligations under the JCPOA.

Quotes

“Canada’s approach to re-engagement with Iran, as with any country of concern, will be based on efforts to foster dialogue, rather than on withdrawal and isolation.

“Canada will not lower the standard to which we hold Iran accountable, particularly on its human rights record and its aggressiveness toward the state of Israel. We will any renewed engagement with Iran as a tool to support efforts to advance human rights and regional security.

“Broad sanctions brought Iran to the negotiation table, resulting in an agreement which has rolled back Iran’s nuclear program—an agreement with which Iran is complying. We need to recognize this progress and continue to encourage Iran to fully comply with the Joint Comprehensive Plan of Action.”

- Stéphane Dion, Minister of Foreign Affairs

“With these amendments to Canadian sanctions against Iran, Canadian companies will now be able to position themselves for new trade opportunities, but we will also maintain rigorous controls on any exports that raise serious proliferation concerns.”

- Chrystia Freeland, Minister of International Trade

Quick facts

  • Canada has maintained an embassy in Tehran since 1961, with the exception of 1980-88 (after the U.S. hostage rescue) and the period since September 7, 2012.
  • All G-20 countries, apart from the United States, Saudi Arabia and Canada, currently operate embassies in Tehran. The United Kingdom reopened its embassy in 2015 after a four-year closure.
  • Canada’s exports to Iran peaked at $772 million in 1997. With the imposition of sanctions, this number declined to $67 million in 2014 (comprising mostly food products exempt from sanctions).
  • The amendments to Canada’s sanctions under the Special Economic Measures Act will remove impediments on financial transactions, including transfers of personal funds.
  • Canada’s measures under the State Immunity Act and the Justice for Victims of Terrorism Act, and the listing of Iran’s Islamic Revolutionary Guards Corps’ Qods Force as a terrorist entity under the Criminal Code, have not changed.
  • Since 2003, Canada has led the annual United Nations resolution on the situation of human rights in Iran. In 2015, the resolution was successfully adopted and received the support of a cross-regional group of countries, underscoring the fact that the international community remains deeply concerned by human rights violations in Iran.

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Backgrounder - Sanctions against Iran

United Nations sanctions against Iran

Between 2006 and 2010, the UN Security Council imposed four rounds of sanctions in response to Iran’s nuclear program. The UN sanctions regime, supplemented by autonomous sanctions applied by a number of countries, including Canada, played a key role in getting Iran to the table on nuclear negotiations. On July 14, 2015, the P5+1 (the five members of the UN Security Council, the United States, the United Kingdom, France, China, Russia, plus Germany), led by the European Union, concluded the Joint Comprehensive Plan of Action (JCPOA) with Iran. This was endorsed by UN Security Council Resolution 2231. Canada will be watching the IAEA monitoring process closely.

Implementation Day for the JCPOA took place on January 16, 2016, following confirmation by the International Atomic Energy Agency (IAEA) that Iran had implemented the prescribed commitments under the agreement. This triggered immediate changes to UN, U.S. and EU sanctions against Iran, resulting in significant nuclear-sanctions relief for Iran.

All UN member states are obliged to implement the terms of UN Security Council Resolution 2231; Canada is amending its Iran UN Regulations under the United Nations Act. The UN has maintained restrictions on the export of certain arms to Iran for five years, on ballistic-missile technologies for eight years, and on nuclear and dual-use items for 10 years. UN Security Council Resolution 2231 also includes a snapback provision whereby sanctions could be reapplied if Iran fails to fulfill its commitments under the agreement.

Canada’s autonomous sanctions against Iran

Canada also imposed sanctions against Iran beyond those required by the UN. These autonomous sanctions, under Canada’s Special Economic Measures Act (SEMA), were based on a finding that Iran’s nuclear program constituted a “grave breach of international peace and security.” The SEMA sanctions were progressively expanded to cover trade, investment and the provision of financial and other services, as well as to freeze the assets of designated Iranian entities and individuals.

Taking account of the JCPOA’s progress in effectively constraining Iran’s nuclear program, as well as of sanctions adjustments by like-minded partners, Canada is amending its autonomous sanctions to replace the broad bans with a set of controls and prohibitions specifically targeting trade with Iran in sensitive products with security implications. Under SEMA (Iran), Canada will continue to maintain a revised list of designated individuals and entities subject to asset freezes and with whom all transactions involving property are prohibited, including six additional individuals related to Iran’s ballistic-missile activities and two additional entities.

Under the Export Control List of the Export and Import Permits Act (EIPA), Canada will continue to restrict the export to Iran of a wide range of sensitive products. Applications for export permits will be considered on a case-by-case basis. A Notice to Exporters identifies a range of the most sensitive items for which export permits normally will be denied (for example, military, nuclear and missile-technology items).

SEMA (Iran) also contains a list of goods, the export of which will be prohibited. These amendments to Canada’s autonomous sanctions regime will enable Canadian companies to compete with their global counterparts in the Iranian market, while ensuring that Iran cannot source from Canada items which may contribute to its military or pose a risk of proliferation.

There are also provisions in the Criminal Code that prohibit certain dealings with listed entities. Canadian companies will need to look closely at their legal obligations and do careful due diligence about prospective partners, customers or suppliers in Iran to ensure that they are not dealing with the Islamic Revolutionary Guards Corps’ Qods Force, which is a listed entity. Canadian companies will need to approach the Iranian market cautiously and guided by the advice of their legal counsel.

The decision today will enable Export Development Canada to resume suspended operations in the market that meet its normal due diligence criteria.