ARCHIVED — Special Economic Measures (Democratic People’s Republic of Korea) Regulations

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Vol. 145, No. 18 — August 31, 2011

Registration

SOR/2011-167 August 11, 2011

SPECIAL ECONOMIC MEASURES ACT

P.C. 2011-893 August 11, 2011

Whereas the Governor in Council is of the opinion that the situation in the Democratic People’s Republic of Korea constitutes a grave breach of international peace and security that has resulted or is likely to result in a serious international crisis;

Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of Foreign Affairs, pursuant to subsections 4(1) to (3) of the Special Economic Measures Act (see footnote a), hereby makes the annexed Special Economic Measures (Democratic People’s Republic of Korea) Regulations.

SPECIAL ECONOMIC MEASURES
(DEMOCRATIC PEOPLE’S REPUBLIC
OF KOREA) REGULATIONS

INTERPRETATION

1. The following definitions apply in these Regulations.

“DPRK” means the Democratic People’s Republic of Korea and includes

  1. (a) any of its political subdivisions;
  2. (b) its government and any of its departments, or any government or departments of its political subdivisions; and
  3. (c) any of its agencies or those of its political subdivisions. (RPDC)

pension” means a benefit paid under the Old Age Security Act, the Canada Pension Plan or an Act respecting the Québec Pension Plan, R.S.Q. c. R-9, any superannuation, pension or benefit paid under or in respect of any retirement savings plan or under any retirement plan, any amount paid under or in respect of the Garnishment, Attachment and Pension Diversion Act or the Pension Benefits Division Act, and any other payment made in respect of disability. (pension)

PROHIBITIONS

2. Subject to section 10, it is prohibited for any person in Canada and any Canadian outside Canada to export, sell, supply or ship any goods, wherever situated, to the DPRK or any person in the DPRK or to deal in any goods destined for the DPRK or any person in the DPRK.

3. Subject to section 10, it is prohibited for any person in Canada and any Canadian outside Canada to import, purchase, acquire or ship any goods that are exported, supplied or shipped from the DPRK after the day on which these Regulations come into force, whether the goods originated in the DPRK or elsewhere.

4. It is prohibited for any person in Canada and any Canadian outside Canada to make an investment in any entity in the DPRK that involves a dealing in any property, wherever situated, held by or on behalf of the DPRK, any person in the DPRK, or a national of the DPRK who does not ordinarily reside in Canada.

5. Subject to section 11, it is prohibited for any person in Canada and any Canadian outside Canada to provide or acquire financial services — including those that are intended to facilitate an investment in any entity — to, from or for the benefit of or on the direction or order of the DPRK or any person in the DPRK.

6. Subject to section 12, it is prohibited for any person in Canada and any Canadian outside Canada to transfer, provide or communicate, directly or indirectly, technical data to the DPRK or any person in the DPRK.

7. It is prohibited for any person to dock in Canada or pass through Canada any ship that is registered in the DPRK unless such docking or passage is necessary to safeguard human life.

8. It is prohibited for any person to land in or fly over Canada an aircraft that is registered in the DPRK, unless such landing or flying is necessary to safeguard human life.

9. It is prohibited for any person in Canada and any Canadian outside Canada to do anything that causes, assists or promotes or is intended to cause, assist or promote any act or thing prohibited by sections 2 to 8.

EXCLUSIONS

10. Sections 2 and 3 do not apply in respect of

  1. (a) goods consigned to the Canadian Embassies in Beijing or Seoul or their consular missions;
  2. (b) goods whose provision is set out in accordance with any agreement or arrangement between Canada and the DPRK and for which an export permit, if required, has been issued under the Export and Import Permits Act;
  3. (c) goods consigned to one of the following organizations for the purpose of safeguarding human life, disaster relief, stabilization or the providing of food, medicine, medical supplies or equipment, and for which an export permit, if required, has been issued under the Export and Import Permits Act:
    1. (i) international organizations with diplomatic status,
    2. (ii) United Nations agencies,
    3. (iii) the International Red Cross and Red Crescent Movement, or
    4. (iv) non-governmental organizations;
  4. (d) personal or settlers’ effects that are taken or shipped by an individual and that are solely for the use of the individual or the individual’s immediate family; or
  5. (e) personal correspondence, including lettermail, printed papers and postcards, of a weight not exceeding 250 g per item of correspondence.

11. Section 5 does not apply in respect of

  1. (a) any transaction in respect of the accounts at a financial institution that are used for the regular business of the Embassies of Canada in Beijing or Seoul or their consular missions;
  2. (b) a transaction by the Government of Canada that is provided for in any agreement or arrangement between Canada and the DPRK;
  3. (c) non-commercial remittances of less than $1,000 sent to or from the DPRK or any person in the DPRK, if the person providing the financial services keeps a record of the transaction;
  4. (d) any services provided by or to one of the following organizations for the purpose of safeguarding of human life, disaster relief, stabilization or the providing of food, medicine, medical supplies or equipment:
    1. (i) international organizations with diplomatic status,
    2. (ii) United Nations agencies,
    3. (iii) the International Red Cross and Red Crescent Movement, or
    4. (iv) a non-governmental organization that has entered into a grant or contribution agreement with the Department of Foreign Affairs and International Trade or the Canadian International Development Agency; or
  5. (e) any pension payable to a person in the DPRK.

12. Section 6 does not apply in respect of technical data transferred, provided or communicated

  1. (a) by or to the Canadian Embassies in Beijing or Seoul or their consular missions;
  2. (b) pursuant to any agreement or arrangement between Canada and the DPRK and for which an export permit, if required, has been issued under the Export and Import Permits Act; or
  3. (c) to one of the organizations referred to in any of subparagraphs 10(c)(i) to (iv), for the purpose of safeguarding human life, disaster relief, stabilization or the providing of food, medicine, medical supplies or equipment, and for which an export permit, if required, has been issued under the Export and Import Permits Act.

APPLICATION BEFORE PUBLICATION

13. For the purpose of paragraph 11(2)(a) of the Statutory Instruments Act, these Regulations apply according to their terms before they are published in the Canada Gazette.

COMING INTO FORCE

14. These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations or the Order.)

Issue and objectives

On March 26, 2010, following an explosion in the Yellow Sea, a South Korean naval ship, the Cheonan, sank, causing the deaths of 46 crew members. On May 20, 2010, the Republic of Korea (South Korea) released the results of a multinational investigation, which concluded that a North Korean torpedo sank the Cheonan.

Three Canadian naval experts participated in the Civilian-Military Joint Investigation Group and endorsed its results. The report concluded that, “based on all such relevant facts and classified analysis, we have reached the clear conclusion that [the Cheonan] was sunk as the result of an external underwater explosion caused by a torpedo made in North Korea. The evidence points overwhelmingly to the conclusion that the torpedo was fired by a North Korean submarine. There is no other plausible explanation.” Following the release of the Cheonan investigation results, the Government of Canada strongly condemned North Korea’s violent act of aggression.

The Democratic People’s Republic of Korea (or North Korea or the DPRK) has a history of provocative actions and ongoing aggressive public rhetoric and behaviour, including nuclear tests and ballistic missile launches. The United Nations Security Council (UNSC) has previously imposed economic sanctions against the DPRK. In accordance with article 25 of the Charter of the United Nations, Canada has implemented the decisions of the UNSC through the enactment of regulations made under the United Nations Act. These measures target the North Korean regime and its capacity to develop military, nuclear and missile technology capacity. These UN Security Council decisions are found in Resolution 1718 (2006), adopted in response to North Korea’s October 9, 2006, nuclear test; and Resolution 1874 (2009), adopted in response to North Korea’s May 25, 2009, nuclear test.

Following the Cheonan sinking, the United States, Japan and the Republic of Korea also imposed additional economic measures against the DPRK.

The Special Economic Measures Act (SEMA) sanctions will reinforce the message to the DPRK government that its aggressive actions, such as the sinking of the Cheonan, are unacceptable, while also signalling our solidarity and support for the Republic of Korea. Canada continues to support international efforts to achieve peace and stability on the Korean Peninsula.

Description and rationale

The UN Security Council did not impose additional sanctions against the DPRK in response to the Cheonan sinking. The sanctions implemented in the Special Economic Measures (Democratic People’s Republic of Korea) Regulations are comprehensive in nature and go beyond the existing UN Security Council sanctions that were last modified in 2009.

The imposition of sanctions can only be accomplished by legislation. The Special Economic Measures Act is the appropriate legislative authority for the implementation of sanctions where the Governor in Council has determined that there has been a grave breach of international peace and security which has resulted in, or is likely to result in, an international crisis. The Special Economic Measures (Democratic People’s Republic of Korea) Regulations consist of measures imposed pursuant to section 4 of the Special Economic Measures Act.

The Regulations include:

  • A ban on all exports to the DPRK;
  • A ban on all imports to Canada from the DPRK;
  • A ban on all new investments in the DPRK;
  • A ban on the provision of financial services to the DPRK and to persons in the DPRK;
  • A ban on the provision of technical data (i.e. technical “know-how”) to the DPRK; and
  • A ban on the docking and landing in, and transiting of, Canada by DPRK ships and aircraft.

However, the Regulations make several exemptions to these measures to avoid harming North Korea’s population and to maintain Canada’s policy options to respond rapidly to changes in the situation. One such exception is that exports to the DPRK are permitted provided that, where necessary, an export permit has been granted for the goods, the goods are consigned to a designated body, and the goods are for the purpose of safeguarding human life, disaster relief, stabilization, or the providing of food, medicine, medical supplies or medical equipment. Similarly, there is an exception for the provision of financial services for the benefit of persons in the DPRK if those services are provided by or to a designated body and are for the purpose of safeguarding human life, disaster relief, stabilization, or the providing of food, medicine, medical supplies or medical equipment. There are also other exceptions which include a provision to allow for small, non-commercial remittances.

Due to the limited bilateral trade between Canada and the DPRK, the impact of these Regulations on Canadian businesses should be negligible. In 2009, Canada’s exports to the DPRK totalled $26 million (all figures in Canadian dollars), including inorganic chemicals, organic or inorganic compounds ($8.8 million); base metals ($5.9 million); and machinery ($3.1 million). Imports to Canada from the DPRK totalled $106,000, including machinery ($43,000); electrical machinery, equipment and parts ($13,000); and printed books and newspapers ($9,000). (Source: World Trade Atlas)

A separate Order made pursuant to subsection 4(4) of the Special Economic Measures Act authorizes the Minister of Foreign Affairs to issue to any person in Canada and any Canadian outside Canada a permit to carry out a specified activity or transaction, or any class of activity or transaction, that is restricted or prohibited pursuant to the Regulations.

Consultation

The Department of Foreign Affairs and International Trade drafted the Regulations having consulted the Department of Justice, the Canada Border Services Agency, the Department of Finance, the Office of the Superintendent of Financial Institutions Canada, Citizenship and Immigration Canada, Export Development Canada, the Treasury Board of Canada, Public Safety Canada, the Canadian International Development Agency, the Department of National Defence, the Royal Canadian Mounted Police, the Canadian Security Intelligence Service, Fisheries and Oceans Canada, Transport Canada and the Financial Transactions Reports Analysis Centre of Canada. All departments and agencies consented to this action. International consultation was not undertaken.

Implementation, enforcement and service standards

Compliance is ensured by the Royal Canadian Mounted Police and the Canada Border Services Agency. Every person who contravenes provisions of the Regulations is liable, upon conviction, to the punishments set out in section 8 of the Special Economic Measures Act.

Contacts

Stephen Green
Political Officer
Korean Peninsula
Northeast Asia Division (GPA)
Department of Foreign Affairs and International Trade
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 613-996-1077
Fax: 613-944-3049
Email: stephen.green@international.gc.ca

Brent Clute
Legal Officer
United Nations, Human Rights and Economic Law Division (JLH)
Department of Foreign Affairs and International Trade
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 613-996-3864
Fax: 613-992-2467
Email: brent.clute@international.gc.ca

Sabine Nölke
Director
United Nations, Human Rights and Economic Law Division (JLH)
Department of Foreign Affairs and International Trade
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 613-992-6296
Fax: 613-992-2467
Email: sabine.nolke@international.gc.ca

Footnote a
S.C. 1992, c. 17