Operational Bulletin 378 – January 20, 2012

The Sanctions Against Iran

Issue

This Operational Bulletin (OB) specifies the definition of Iranian nationals. For the purpose of this OB, Iranian nationals comprise:

• People holding Iranian citizenship or,
• People residing in Iran

The authorities had imposed amended sanctions against Iran. These amended sanctions are in accordance with the Special Economic Measures Act (SEMA). The amended sanctions came into effect on November 21, 2011.

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:

• Non-commercial remittances of $40,000 or less or,
• Payments required under a contract that existed prior to November 22, 2011

Background

The International Atomic Energy Agency (IAEA) assess 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 Act (SEMA).

The authorities introduced new regulations that amended the Special Economic Measures (Iran) Regulations. These amendments came into force on November 21, 2011. Some of the provisions contained in the Special Economic Measures (Iran) Regulations include:

• Prohibiting financial transactions with Iran
• Expanding the list of prohibited goods to include all goods used in the:
• Petrochemical industry in Iran
• Oil industry in Iran and,
• Gas industry in Iran
• Amending the list of prohibited goods to include additional items that people could use in Iran’s nuclear program and,
• Adding new individuals and entities to the list of designated persons found in Schedule 1 of the Special Economic Measures Act (SEMA) regulations

In addition, the amended sanctions also remove certain entities as well. This is because the authorities have deemed these entities as things that do not pose a proliferation concern any longer.

Readers might wish to go through the complete text of the November 21, 2011 regulations. Therefore, they would need to visit the website of the Canada Gazette. They would be able to locate the complete text of the regulations amending the Special Economic Measures (Iran) Regulations.

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 they do not fit within the exemptions to the sanctions. The authorities have specified these exemptions in Section 5 (d) of the amended Special Economic Measures (Iran) Regulations.

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. That too, for the express purpose of transferring funds. This prohibition applies even if the authorities would allow the funds themselves under the exemptions specified.

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 CIC – whether in Canada or overseas – will 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 and International Trade (DFAIT). This is applicable for people who are:

• Applicants for a visa or,
• Already in Canada

The permits issued by the Department of Foreign Affairs and International Trade (DFAIT) authorise specific activities of transactions. They authorise these activities or transactions despite the prohibitions specified under the sanctions.

Therefore, 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. The In-Canada CIC offices and overseas missions would need to use the following text when communicating with these affected clients:

“Effective November 21, 2011, Iranian nationals and persons residing in Iran may face restrictions in transferring funds to, or opening bank accounts with Canadian financial institutions. The text of Regulations amending the Special Economic Measures (Iran) Regulations, can be found at Regulations Amending the Special Economic Measures (Iran) Regulations. Persons affected by the sanctions on financial transactions, whether they are applicants for a visa or already in Canada, may apply for permits from the Department of Foreign Affairs and International Trade (DFAIT) that authorize specified activities or transactions that are otherwise prohibited under the sanctions. Exemptions to the sanctions can be found in section 5(d) of the amended Regulations.

For more information, applicants should contact:

Department of Foreign Affairs and International Trade

Economic Law Section (JLHB)

125 Sussex Drive

Ottawa, Ontario

Canada K1A 0G2

Tel: 613-995-1108

Fax: 613-992-2467

e-mail: [email protected]”

The authorities also wish to obtain a better understanding of the effects of the sanctions on the applicants. Therefore, they have instructed the overseas missions to report the number and nature of complaints presented to them at: [email protected].

Similarly, the authorities have asked In-Canada offices to report the number and nature of complaints presented to them to the Permanent Residence Program Division within the Operational Management and Coordination Branch (OMC). In-Canada offices would need to report the number and nature of complaints presented to them at: [email protected]. They would also need to specify the words “IRAN SANCTIONS” in the Subject line.

Readers might want to obtain further information the changes outlined in this OB. To this end, they could contact the Operational Management and Coordination Branch (OMC) at: [email protected].

Source: Citizenship and Immigration Canada (CIC)