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Canada Imposes Extensive New Sanctions and Other Economic Measures Against Russia

February 28, 2022

On February 24, 2022, and February 28, 2022, the Government of Canada announced wide-ranging new economic sanctions and other measures targeting Russia in connection with the escalating conflict in Ukraine. These announcements follow similar measures imposed by the governments of other G7 countries.

The new sanctions measures are introduced through amendments to the Special Economic Measures (Russia) Regulations (Russia Regulations) and the Special Economic Measures (Ukraine) Regulations (Ukraine Regulations). Many of these measures are in effect as of February 24, 2022, and additional measures were added and are in effect as of February 28, 2022.

Canada has also cancelled existing export permits to transfer controlled goods to Russia, and will refuse to issue new permits, subject to narrow humanitarian exceptions.

These measures have potentially significant impacts on Canadian businesses which export to or do business with Russia or Russian-based businesses.

Canada has indicated that more measures targeting Russia are to come. We will update this bulletin as changes occur.


In a significant development, the Government of Canada designated most financial institutions in Russia under Schedule 1 of the Russia Regulations. Institutions and persons listed in Schedule 1 are subject to a comprehensive ban under the Russia Regulations that prohibits the provision of any financial or related services to, and most dealings in the property of, these designated entities. The Russian financial institutions that were added to Schedule 1 include five of the six major banks in Russia that were previously designated under Schedule 2 of the Russia Regulation and were subject to sectoral sanctions prohibiting dealings in specified debt and equity securities only. Under the new sanctions program, almost all transactions with these financial institutions will be prohibited, including correspondent banking services, lending and investments. Canadian businesses will also need to reassess their existing or anticipated transactions with counterparties that rely on financing from these designated financial institutions.

Similarly, many of the Russian energy companies listed in Schedule 3 of the Russia Regulations were moved to Schedule 1, bringing them into the comprehensive prohibition framework.

On February 28, 2022, Canada also amended the Russia Regulations to designate the Russian central bank, sovereign wealth fund and ministry of finance under Schedule 1. In an earlier version of the amended Russia Regulations, issued on February 24, these entities were listed under a separate schedule and subject to a prohibition that was limited to dealings in new debt issued by these entities. However, with their new listing under Schedule 1, almost all dealings with the Russian central bank, sovereign wealth fund and ministry of finance are now prohibited. This measure is intended to prevent Russia from deploying its international currency reserves. In this respect, we also note that the Bank of Canada was added to the list of financial institutions that are required to screen and report on the property of designated persons under the Russia Regulation.

Overall, more than 400 new individuals and entities have been added to the list of designated persons in Schedule 1, including other major Russian companies, members of the Russian parliament and other government officials, their relatives and businesses. Following initial amendments on February 24, Canada published new regulations on February 28, 2022 to add Russian president Vladimir Putin and other top government officials to Schedule 1.

The prohibitions in respect of Schedule 1 designated persons do not expressly extend to their subsidiaries but Canadian businesses engaging in transactions with entities that have a connection to a designated person will need to assess carefully the impact of the connection on compliance with the prohibitions.

Canada and the other G7 countries also announced that several Russian banks will be expelled from the SWIFT payment messaging system.

Canada has also announced, but not yet published, amended regulations targeting individuals in Belarus. This bulletin will be updated with details on these additional sanctions once regulations are published.


Amendments to the Ukraine Regulations prohibit activities in connection with specified regions in eastern Ukraine, referred to in the regulations as “the so-called Donetsk People’s Republic and the territory it controls in the Donetsk oblast of eastern Ukraine” and “the so-called Luhansk People’s Republic and the territory it controls in the Luhansk oblast of eastern Ukraine” (DNR and LNR).

These restrictions largely mirror the prohibitions currently in place in respect of Crimea and prohibit Canadians and persons in Canada from engaging in the following activities:

  • Making an investment that involves dealing in property located in DNR or LNR that is owned, held or controlled by such a region or a person there
  • Providing or acquiring financial services or related services with respect to an investment in DNR or LNR
  • Importing, purchasing, exporting or selling goods to or from DNR, LNR or any person there
  • Providing technical assistance to DNR, LNR or any person there
  • Providing or acquiring financial or other services related to tourism to DNR, LNR or any person there.


Like all Canadian sanctions regulations, the new prohibitions under the Russia Regulations and Ukraine Regulations apply to all Canadian-incorporated entities and Canadian citizens, whether they are domiciled in Canada or elsewhere, and to all entities and individuals in Canada. The sanctions apply immediately.

Financial institutions, securities dealers, portfolio managers, fund managers, custodians and other participants in the capital markets and financial services industry, as well as all Canadian businesses dealing with businesses based in Russia or owned or controlled by Russians, should ensure that their sanctions screening and compliance programs take into account the expanded lists of designated persons, new prohibitions with respect to debt and the newly targeted regions.


Canada has also cancelled all existing export permits issued prior to February 24, 2022, under the Export and Import Permits Act for exporting or brokering items to Russia, and halted issuance of all future export permits. This means that any item on Canada’s Export Control List requiring an export permit cannot be exported to Russia as of February 24, 2022. There is no exception that would permit the exportation of items under pre-existing contractual agreements or previously issued export permits. Only export permit applications related to narrow end-uses such as medical supply and humanitarian needs will be considered on a case-by-case basis going forward.

In addition, pre-existing prohibitions under the Russia Regulations on the exportation, sale, supply or shipment of goods for offshore, Arctic, or shale oil exportation or production continue in effect.


Given that Canada is in many ways a trading nation, the newly announced measures will require Canadian businesses to carefully assess their business relationships and transactions to ensure compliance with the broad new scope of the Russia prohibitions.

For more information, please contact:

Vladimir Shatiryan      416-863-4154
Roy Millen                    604-631-4220
Ora Morison                416-863-2712
Brady Gordon              604-631-5255

or any other member of our International Trade or Financial Services Regulatory groups.