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Canada joins international counterparts in responding to Russia’s “fundamental challenge to the world order” with economic sanctions

02 Mar 2022 9:48 AM | Vera Dedyulya (Administrator)

Canada has imposed new economic sanctions against Russia in response to its unprovoked and illegal invasion of Ukraine. The Canadian government has described the invasion as an “egregious step” and “a blatant violation of international law and the rules-based international order”. It noted the invasion is “a continuation and acceleration of the violent steps taken by Russia since early 2014 to undermine Ukrainian security and sovereignty, and have rendered the Minsk Agreements moot”.[1] In the words of Canada’s Minister of Foreign Affairs, Mélanie Joly, Russia’s invasion of Ukraine is a “fundamental challenge to the world order that has kept us safe since the Second World War”.[2]

On February 22, 2022, Prime Minister Justin Trudeau announced a “first round” of sanctions, after Russia signed a decree recognizing the independence and sovereignty of the non-government controlled areas of Donetsk and Luhansk. These measures came into effect on February 24, 2022 and listed 351 persons, the members of the Russian Duma (lower parliamentary house), as well as two Russian banks. The Prime Minister described this “first round” as follows:

We will ban Canadians from all financial dealings with the so-called independent states of Luhansk and Donetsk. We will sanction members of the Russian parliament who voted for the illegal decision to recognize these so-called republics. We will ban Canadians from engaging in purchases of Russian sovereign debt, and we will apply additional sanctions on two State-backed Russian banks and prevent any financial dealings with them.[3]

On February 24, 2022, Canada announced a second round of sanctions in response to Russia’s invasion, including restrictions on 58 additional Russian individuals and entities, including banks, financial elites and their families, sanctioning members of the Russian Security Council, imposing restrictions on four Ukrainian individuals for their collaboration with Russia to destabilize Ukraine, and restricting exports of dual-use and other controlled items to Russia by halting the issuance of any new export or brokering permits and cancelling existing permits, with a limited number of exceptions for critical medical supply chains.[4] Canadian export controls appear notably more narrow in scope than those imposed by the U.S., as discussed below.

On February 25, 2022, Canada announced its third round of sanctions, indicating that it would be placing sanctions on Russian President Vladimir Putin, his former chief of staff Sergei Ivanov, and Russian Foreign Minister Sergei Lavrov. Canada further announced that additional sanctions would be applied to Belarus, targeting 57 individuals, for aiding Russia’s invasion of Ukraine.[5] Canada had already suspended the issuance of new export and brokering permits for controlled items to Belarus effective November 2020.[6] On February 27, 2022, Canada closed its airspace to Russian aircraft.[7] 

In imposing these sanctions, Canada has acted in coordination with a number of international allies, including the United States, United Kingdom, and Germany, although there can be significant differences in the substance and application of these measures, including the targeted parties, among the allies’ sanctions programs.

Given the significant participation of Russian businesses, and in particular Russian banks, in the global economy, these sanctions measures are anticipated to have a greater impact than any sanctions program in recent history. Although Russia is not one of Canada’s leading trade and investment partners, annual goods and services flows between the two countries exceed CAD$1.8 billion,[8] Russian foreign direct investment in Canada exceeds CAD$1.7 billion,[9] and Canadian direct investment in Russia totals approximately CAD$3.5 billion.[10] This far exceeds trade and investment with any other country subject to Canadian economic sanctions.

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