ARCHIVED — Vol. 148, No. 7 — March 26, 2014

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Registration

SOR/2014-44 March 5, 2014

FREEZING ASSETS OF CORRUPT FOREIGN OFFICIALS ACT

Freezing Assets of Corrupt Foreign Officials (Ukraine) Regulations

P.C. 2014-198 March 5, 2014

Whereas Ukraine has asserted to the Government of Canada, in writing, that each of the persons listed in the annexed Freezing Assets of Corrupt Foreign Officials (Ukraine) Regulations has misappropriated property of Ukraine or has acquired property inappropriately by virtue of their office or a personal or business relationship and Ukraine has asked the Government of Canada to freeze the property of those persons;

Whereas the Governor in Council is satisfied that each of those persons is a politically exposed foreign person in relation to Ukraine;

Whereas the Governor in Council is satisfied that there is internal turmoil or an uncertain political situation in Ukraine;

And whereas the Governor in Council is satisfied that the making of the annexed Freezing Assets of Corrupt Foreign Officials (Ukraine) Regulations is in the interest of international relations;

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 Freezing Assets of Corrupt Foreign Officials Act (see footnote a), makes the annexed Freezing Assets of Corrupt Foreign Officials (Ukraine) Regulations.

FREEZING ASSETS OF CORRUPT FOREIGN OFFICIALS (UKRAINE) REGULATIONS

APPLICATION

Application

1. Section 2 applies in respect of the property of the politically exposed foreign persons listed in the schedule.

PROHIBITIONS

Asset freeze

2. A person in Canada or a Canadian outside Canada must not

  • (a) deal, directly or indirectly, in any property, wherever situated, of any politically exposed foreign person;
  • (b) enter into or facilitate, directly or indirectly, any financial transaction related to a dealing referred to in paragraph (a); or
  • (c) provide financial services or other related services in respect of any property of any politically exposed foreign person.

APPLICATION BEFORE PUBLICATION

Application before publication

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

COMING INTO FORCE

Registration

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

SCHEDULE
(Section 1)

POLITICALLY EXPOSED FOREIGN PERSONS (UKRAINE)

1. Mykola Yanovych AZAROV, born on December 17, 1947, former Prime Minister of Ukraine

2. Oleksii Mykolayovych AZAROV, born on July 13, 1971, son of former Prime Minister of Ukraine Mykola Yanovych AZAROV

3. Raisa Vasylivna BOHATYRIOVA, born on January 6, 1953, former Minister of Health of Ukraine

4. Ihor Oleksandrovych KALININ, born on December 28, 1959, former Adviser to the former President of Ukraine Viktor Fedorovych YANUKOVYCH

5. Andrii Petrovych KLIUIEV, born on August 12, 1964, former Head of Administration of the former President of Ukraine Viktor Fedorovych YANUKOVYCH

6. Serhii Petrovych KLIUIEV, born on August 12, 1969, businessman, brother of Andrii Petrovych KLIUIEV

7. Serhiy Vitaliyovych KURCHENKO, born on September 21, 1985, businessman and close associate of former President of Ukraine Viktor Fedorovych YANUKOVYCH

8. Olena Leonidivna LUKASH, born on November 12, 1976, former Minister of Justice of Ukraine

9. Andriy Volodymyrovych PORTNOV, born on October 27, 1973, former Adviser to the former President of Ukraine Viktor Fedorovych YANUKOVYCH

10. Artem Viktorovych PSHONKA, born on March 19, 1976, son of former Prosecutor General Viktor Pavlovych PSHONKA, Deputy Head of the faction of Party of Regions in the Verkhovna Rada of Ukraine

11. Viktor Pavlovych PSHONKA, born on February 6, 1954, former Prosecutor General of Ukraine

12. Viktor Ivanovych RATUSHNIAK, born on October 16, 1959, former Deputy Minister of Internal Affairs of Ukraine

13. Dmytro Volodymyrovych TABACHNYK, born on November 28, 1963, former Minister of Education and Science of U kraine

14. Oleksandr Hryhorovych YAKYMENKO, born on December 22, 1964, former Head of the Security Service of Ukraine (SBU)

15. Viktor Fedorovych YANUKOVYCH, born on July 9, 1950, former President of Ukraine

16. Viktor Viktorovych YANUKOVYCH, born on July 16, 1981, son of former President of Ukraine Viktor Fedorovych YANUKOVYCH, Member of the Verkhovna Rada of Ukraine

17. Oleksandr Viktorovych YANUKOVYCH, born on July 1, 1973, son of former President of Ukraine Viktor Fedorovych YANUKOVYCH

18. Vitalii Yuriyovych ZAKHARCHENKO, born on January 20, 1963, former Minister of Internal Affairs of Ukraine

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

1. Background

The former government of President Viktor Yanukovych, elected in 2010, used a range of repressive tools — including violence, kidnappings, beatings, and intimidation by the security services — in an attempt to suppress peaceful protests in Ukraine. The President concentrated power in his own hands, at the expense of the prime minister and Parliament, while the president’s allies passed draconian laws that aimed to limit democratic expression and freedom of assembly. Rampant corruption and other abuses by senior government officials meanwhile weakened the Ukrainian economy and depleted government coffers. Open-source reports suggest that billions of dollars may have been stolen or diverted. By late February 2014, following escalating violence and protests, the Yanukovych government collapsed and the President fled to Russia.

2. Issues

The Government of Ukraine has asserted in writing to the Government of Canada that former Ukrainian President Viktor Fedorovych Yanukovych, his senior officials, close associates and family members have misappropriated state funds, or obtained property inappropriately as a result of their office or family, business or personal connections, and has asked the Government of Canada to freeze their property. Measures may be taken under the Freezing Assets of Corrupt Foreign Officials Act (FACFOA) to freeze the property of these persons through the passage of an order or regulations designating the persons in question as politically exposed foreign persons.

3. Objectives

The regulatory action aims to

  • ensure that misappropriated assets held by officials of the former government are frozen so that politically exposed foreign persons may be held accountable;
  • signal Canada’s support for accountability, rule of law and democracy in Ukraine.

4. Description

The Regulations would establish a list of designated persons, called “politically exposed foreign persons.” They would prohibit any person in Canada and any Canadians outside Canada from engaging in any of the following activities:

  • Dealing in the property of politically exposed foreign persons, whether directly or indirectly;
  • Entering into or facilitating, whether directly or indirectly, a financial transaction relating to a dealing in the property of such a person;
  • Providing any person in Canada or any Canadian outside Canada financial or related services in respect of such property.

Under the Freezing Assets of Corrupt Foreign Officials Act, the Minister of Foreign Affairs is authorized to issue permits to carry out any activity or transaction that would otherwise be prohibited by the Regulations. The Minister is also required under the Act to issue certificates exempting property of the politically exposed foreign person from the Regulations, if it is necessary to meet the reasonable expenses of the person and their dependents.

5. “One-for-One” Rule

The “One-for-One” Rule applies to these Regulations as they would require that the assets of the designated persons be frozen, if they are located in Canada or are under the control of a Canadian outside Canada. However, the minimal administrative burden associated with these Regulations is carved out from the “One-for-One” Rule as they address exceptional circumstances.

6. Consultation

The Department of Foreign Affairs, Trade and Development drafted the Regulations, following consultations with the Department of Justice, the Office of the Superintendent of Financial Institutions and the Royal Canadian Mounted Police.

7. Small business lens

The Regulations may affect Canadians or Canadian companies that conduct business with designated individuals. However, the Minister of Foreign Affairs is authorized to issue permits to allow those affected by the Regulations to undertake activities that would otherwise be prohibited.

8. Rationale

Ukraine remains in the midst of a complex political transition characterized by political uncertainty and serious economic concerns. An interim government under Prime Minister Arseniy Yatsenyuk has been appointed. However, its efforts to consolidate control have been undermined by profound economic weaknesses inherited from the Yanukovych government, and unilateral military intervention by Russian forces in the Ukrainian province of Crimea.

Considering Canada’s continued support for accountability, the rule of law and democratic rule in the Ukraine, freezing the assets of former President Yanukovych, his senior officials, associates and family is in accordance with the written request from Ukraine in the interest of international relations and consistent with Canadian law under the FACFOA.

9. Implementation, enforcement and service standards

Compliance is ensured by the Royal Canadian Mounted Police. Every person who contravenes the provisions of the Regulations is liable, upon conviction, to the punishments set out in section 10 of the Freezing Assets of Corrupt Foreign Officials Act.

10. Contacts

Mr. Masud Husain
Director
Criminal, Security and Diplomatic Law Division
Department of Foreign Affairs, Trade and Development
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 613-995-8508

Mr. Marcus Davies
Legal Officer
Criminal, Security and Diplomatic Law Division
Department of Foreign Affairs, Trade and Development
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 343-203-2542