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As an importer, you may be familiar with the idea of sanctions, and even how certain sanctions related to your particular offering function. Regardless of your degree of knowledge about sanctions, staying informed, up-to-date, and refreshed on sanctions and how they impact your work is integral. Remaining compliant to sanction legislation is central to maintaining your business reputation and managing legal and financial risks.
As such, we will be covering a few basics surrounding sanctions legislation. Canada is considered to be a trading nation. As a result (or as a function of this), Canadian businesses tend to have ties to other nations across the globe. Of course, sanction laws have a huge implication for Canadian business.
For the most part, there is a general alignment between Canada’s sanction legislation and many international trading partners – like the US and the EU.
So, who needs to comply with Canada’s sanction laws?
No surprises here (hopefully!): Canada’s sanctions legislation applies to all Canadian citizens and Canadian businesses – including those that operate outside of Canada, too.
What do sanction laws do, exactly?
This legislation prohibits any kind of dealings with certain parties that reside in particular sectors of foreign jurisdictions. These laws also lay out processes for screening, reporting, and asset-freezing on regulated institutions. In fact, Canadian sanction laws include the resolutions that are in effect by the UN (plus other measures specific to Canada).
These sanctions imposed on foreign parties are a critical measure to maintain the peace and security of the international community. The sanctions legislation includes 5 major “acts” that cover various elements to comply with, such as:
- The United Nations Act
- Special Economic Measures Act
- Justice for Victims of Corrupt Foreign Officials Act
- Freezing Assets of Corrupt Foreign Officials Act
- Criminal Code
Please consult the Government of Canada’s web page where they go into further detail about these acts and the specifications within them: Canadian sanctions legislation
Export and Import Permits Act
As defined by the Government of Canada “An Act respecting the export, transfer and brokering of goods and technology and the import of goods,” this act imposes export and import controls on goods and certain regions / jurisdictions, having a major effect on international shipments and transactions.
A key tool for implementation in this Act are the following 3 controls lists (we will pool the interpretations as defined by the federal government):
Area Control List (ACL): Area Control List means a list of countries established under section 4; (liste des pays visés)
Export Control List (ECL): Export Control List means a list of goods and technology established under section 3; (liste des marchandises d’exportation contrôlée)
Import Control List (ICL): Import Control List means a list of goods established under section 5; (liste des marchandises d’importation contrôlée)
Beyond this, the Export and Import Permits Act prohibits aiding and abetting people or organizations that are not complying with the legislation. As such, it’s important that import businesses make sure they’re not directly or indirectly engaged with those in non-compliance.
Navigating this legislation might be tricky, but working with a customs expert and customs broker can ensure that you’re partnering up with someone who makes it their job to stay informed and help you stay in compliance upon import. To start the conversation, click here.