Operational Bulletin 378-A – April 24, 2015
The Sanctions Against Iran
Issue
The authorities had imposed amended sanctions against Iran. These amended sanctions are in accordance with the Special Economic Measures Act (SEMA).
As a result of this imposition, the authorities have placed certain prohibitions on:
- People in Canada and,
- Canadians residing outside Canada
The authorities have prohibited these individuals from providing or acquiring any financial services:
- To, from or for the benefit of Iran or any person in Iran or,
- On the direction or order of Iran or any person in Iran
In addition, Iranian nationals could face restrictions in transferring funds to Canadian banks as a result of this imposition.
However, the authorities have provided one exemption to this imposition. The amended sanctions provide an exemption for:
- Financial services in respect of non-commercial remittances of $40,000 or less or,
- Financial services required with regards to a contract that existed prior to November 22, 2011
Background
The International Atomic Energy Agency (IAEA) assessed Iran’s nuclear program on November 09, 2011. In response to the results of this assessment, Canada imposed further sanctions on Iran. These amended sanctions were in accordance with the Special Economic Measures (Iran) Regulations (SEMA). Since then, the authorities have amended these regulations on several occasions. The latest amendment took place on May 29, 2013.
The sanctions against Iran typically include broad prohibitions on:
- Imports from Iran
- Exports to Iran and,
- Dealing with designated persons as specified in Schedule 1 of the Special Economic Measures (Iran) Regulations (SEMA)
In addition, the Special Economic Measures (Iran) Regulations (SEMA) contain a blanket prohibition on the provision or acquisition of financial services between persons in Iran and persons in Canada. This prohibition also applies to various Canadian financial institutions. However, the authorities have provided certain exceptions. They have detailed these exceptions in paragraph 5 (d) of the Special Economic Measures (Iran) Regulations (SEMA).
As mentioned earlier, the imposition of these amended sanctions will have an impact on:
- People holding Iranian citizenship or,
- People residing in Iran
These individuals might face restrictions in transferring funds to Canadian financial institutions. This is especially so if their activities do not fit within the exemptions to the sanctions.
In addition, the restrictions also impose other measures on these individuals. For example, they serve to prohibit people in Iran from opening a bank account in Canada. This is especially so if they are opening this account prior to their immigration to Canada and for the express purpose of transferring funds. This prohibition applies even if the authorities would allow the funds themselves under the exemptions specified.
The Minister of Foreign Affairs has the authority to issue permits. These permits would typically enable individuals to conduct certain activities that the authorities would otherwise regard as prohibited. Therefore, a person in Iran would need to apply for such a permit. This permit would authorise a Canadian financial institution to undertake a financial transaction or financial service with the person in Iran. This is in accordance with the provisions specified under the Special Economic Measures (Iran) Permit Authorization Order.
The Instructions
The offices of Citizenship and Immigration Canada (CIC) will continue to process applications for permanent and temporary residence for:
- People holding Iranian citizenship or,
- People residing in Iran
All offices of the Citizenship and Immigration Canada (CIC) – whether in Canada or overseas – would need to process these applications to visa issuance. They will also process these applications as per normal office procedures.
In certain situations, applicants might need to demonstrate that they:
- Can transfer funds to Canada or,
- Have transferred funds to Canada
This scenario could typically arise in the case of federal investor class applicants. Federal investor class applicants need to make their investment of $400,000 or $800,000. In this scenario, officers would need to:
- Notify these applicants that they might face restrictions in transferring funds to a Canadian financial institution and,
- Refer these applicants to the text concerning the sanctions specified in the Special Economic Measures (Iran) Regulations
Similarly, the officers would need to provide the same information to all other applicants too. However, in the case of other applicants, they would receive this information at the time of visa issuance.
People affected by the sanctions on financial transactions would need to apply for permits. They would need to obtain permits from the Department of Foreign Affairs, Trade and Development (DFATD). This is applicable for people who are:
- Applicants for a visa or,
- Already in Canada
The permits issued by the Department of Foreign Affairs, Trade and Development (DFATD) authorise specific activities or transactions. They authorise these activities or transactions despite the prohibitions currently specified under the sanctions. Therefore, these permits would typically enable individuals to conduct certain activities that the authorities would otherwise regard as prohibited.
Officers would need to consider this permit process, when they assign a deadline for submitting evidence that:
- Applicants can transfer funds to Canada or,
- Applicants can make investments in Canada
Only after considering this would officers be able to refuse an application for failure to transfer the required funds or investments from:
- People holding Iranian citizenship or,
- People residing in Iran
The authorities have drafted specific text for communicating with clients affected by the sanctions. All offices of the Citizenship and Immigration Canada (CIC in Canada and overseas missions would need to use the following text when communicating with the clients affected by these sanctions:
“As a result of economic sanctions against Iran, Iranian nationals and persons residing in Iran are likely to face restrictions in transferring funds to, or opening bank accounts with Canadian financial institutions. The text of the Special Economic Measures (Iran) Regulations can be found at the following address: http://laws-lois.justice.gc.ca/eng/regulations/SOR-2010-165/index.html. Persons affected by the prohibitions on financial transactions may apply for a permit from the Minister of Foreign Affairs that authorizes specific activities or transactions otherwise prohibited under the sanctions. The granting of a permit is an exceptional action and applicants should not rely on receipt of a permit.
For more information about the sanctions and applications for permits, applicants should consult the website of the Department of Foreign Affairs, Trade and Development (DFATD). Applicants may also contact Department of Foreign Affairs, Trade and Development (DFATD):
Department of Foreign Affairs, Trade and Development
Economic Law Section (JLHB)
125 Sussex Drive
Ottawa, Ontario
Canada K1A 0G2
Fax: 613-992-2467
e-mail: [email protected]”
Source: Citizenship and Immigration Canada (CIC)