Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



Canada Imposes New Economic Sanctions Against Libya And This Affects Business

On February 27, 2011, Canada's Prime Minister Harper announced that new regulations have been promulgated to establish new economic sanctions against the Libyan regime. However, when one says "Libyan regime", one has to include "government of Libya and its institutions".

Here is the unofficial link to the new Canadian regulations against Libya - http://www.international.gc.ca/sanctions/libya-libye_regs.aspx

The new regulations cover:

1. An arms embargo:

This requires all Member states to:

  • prevent the supply, sale or transfer of arms into Libya;
  • prevent the export of arms from Libya;
  • seize and dispose of arms that meet the criteria in the Resolution; and,
  • authorise inspection of cargo going into Libya.

2. A travel ban::

This requires all Members states to:

  • prevent the entry into or transit through their territories of Muammar Qadhafi and 15 individuals closely associated with him – his sons, daughter and other loyalists.

3. An asset freeze::

This requires all Members states to:

  • freeze without delay all funds, other financial assets and economic resources which are on their territories, which are owned or controlled by Muammar Qadhafi and his sons and daughter; and,
    ensure that any funds, financial assets or economic resources are prevented from being made available by their nationals, or by any individuals or entities within their territories to Muammar Qadhafi and his sons and daughter.

The United Nations Security Council also expressed its intention to ensure that the assets frozen be made available to and for the benefit of the people of Libya.

4. The establishment of a new Sanctions Committee of the Security Council :

The Committee will, among other things:

  • monitor implementation of Resolution measures;
  • if warranted, designate additional individuals under the travel ban and asset freeze; and,
  • report within 30 days to the Security Council on its work for the First Report and thereafter, report as deemed necessary by the Committee.

5. An extended Asset Freeze:

  • An asset freeze on, and a prohibition of financial transactions with the Government of Libya, its institutions and agencies, including the Libyan Central Bank.
  • Article 5 of Reg -  No person in Canada and no Canadian outside Canada shall knowingly provide or transfer, to any person in Libya, technical assistance, financial assistance or other assistance related to military activities, including the recruitment or provision of armed mercenary personnel, or the provision, manufacture, maintenance or use of arms and related material.

For more information, please use this link to read Prime Minister Harper's statement - http://www.pm.gc.ca/eng/media.asp?category=3&id=3997&featureId=6&pageId=26

Also see http://www.pm.gc.ca/eng/media.asp?id=3998

Canada's new economic sanctions extend further than what is contained in the United Nations Security Council Resolution 1970. Canada's sanctions are intended to restrict the movement of, and access to money and weapons for those responsible for violence against the Libyan people. This makes sense given the senseless violence by the Libyan regime against the innocents of Libya.

While the human element is so very important, there is also a business element that must be discussed (which cannot and does not override the humanitarian crisis and there can never be a justification for crimes against humanity). Canada's asset freeze and limitations on activities with the Government of Libya and its institutions and agencies (including the Libyan Central Bank) will impact Canadian businesses with activities in Libya. Some of that business is with the Government of Libya and institutions of the Libyan regime (given the nature of the Libyan regime).  Most repatriation of funds from Libya to Canada for business transactions may involve Libyan institutions that are covered by the prohibitions.

In addition to a number of prohibitions on doing business with the Libyan regime and institutions, Canadian businesses (and have knowledge concerning transactions regarding designated persons) have a reporting requirements so that the Government of Canada can receive relevant information (about funds of the regime and business activities).

For more information, please contact Cyndee Todgham Cherniak at 416-307-4168. We can help Canadian businesses resolve the legal problems they may face.  Working with a Canadian lawyer allows communications to be subject to solicitor-client privilege.

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