Regulations Amending the Special Economic Measures (Burma) Regulations: SOR/2024-213

Canada Gazette, Part II, Volume 158, Number 23

Registration
SOR/2024-213 October 25, 2024

SPECIAL ECONOMIC MEASURES ACT

P.C. 2024-1139 October 25, 2024

Whereas the Governor in Council is of the opinion that the situation in Burma constitutes a grave breach of international peace and security that has resulted in or is likely to result in a serious international crisis;

Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of Foreign Affairs, makes the annexed Regulations Amending the Special Economic Measures (Burma) Regulations under paragraph 4(1)(a)footnote a and subsections 4(1.1)footnote b, (2)footnote c and (3) of the Special Economic Measures Act footnote d.

Regulations Amending the Special Economic Measures (Burma) Regulations

Amendments

1 Item 84 in Part 1 of the Special Economic Measures (Burma) Regulations footnote 1 is replaced by the following:

2 Part 1 of the schedule to the Regulations is amended by adding the following after item 85:

3 Part 2 of the schedule to the Regulations is amended by adding the following after item 134:

Application Before Publication

4 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

5 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.)

Issues

Despite condemnation by the international community, repeated calls to halt violence and efforts led by the Association of Southeast Asian Nations (ASEAN) to engage the regime in inclusive dialogues toward peace, the Myanmar military regime has not altered course since its military coup against the democratically elected National League for Democracy government in 2021. Attacks targeting civilians, gross human rights, humanitarian and international law violations are increasing in number and severity, with serious deleterious humanitarian, economic, political and security implications within Myanmar and for the broader region.

With the lack of tangible movement toward peace, there is escalating violence and armed conflict in Myanmar and neighbouring countries, as well as continued attacks on civilians, propelled by the supply of arms and military equipment to Myanmar. This merits further coercive action against individuals and entities performing key functions on behalf of the military regime.

Background

On February 1, 2021, the Myanmar military deposed the civilian government, forming the State Administration Council and arrested the democratically elected civilian leadership, protesters, journalists, and pro-democracy activists.

Gross and systematic human rights violations against the people of Myanmar have continued with unchecked impunity as the regime escalates violence to eliminate resistance and assert its authority. The military has continued its attacks on civilians and civilian infrastructure from the air and ground, causing mass displacement and a deepening humanitarian crisis. The situation, including escalating armed conflict and severe human rights violations, constitutes an ongoing grave breach of international peace and security and a worsening international crisis. It has spilled over into neighbouring countries, including those hosting the forcibly displaced.

On July 31, 2024, the Myanmar military regime extended its state of emergency for the sixth time until January 31, 2025. This extension grants regime leader Min Aung Hlaing and the State Administration Council the legal basis to continue to exercise full legislative, executive and judicial control over Myanmar, and further delays the possibility of a peaceful, democratic resolution to the crisis.

Canada has taken a multipronged response to the crisis in Myanmar and continues to be strongly engaged in diplomatic efforts to resolve the situation in Myanmar through bilateral and multilateral channels. Peace efforts have been led by ASEAN with international backing, including from Canada, following ASEAN’s April 2021 Five-Point Consensus, which established a roadmap to peace in Myanmar. Implementation of the Five-Point Consensus has stalled in the face of regime intransigence.

Building on Resolution 75/287 adopted by the United Nations General Assembly (UNGA) in June 2021, the amendments to the Special Economic Measures (Burma) Regulations (the Myanmar Regulations) reinforce repeated bilateral and multilateral calls by Canada and others, including the United Nations (UN) Special Rapporteur, to take measures to halt the flow of arms into Myanmar. Recent months have seen the proliferation of credible documentation regarding arms and resource flows to Myanmar for use by the military regime against the civilian population. Considerable mapping of the networks of known brokers, companies, directors and shareholders has taken place, resulting in calls from the international community to enact holistic sanctions on these arms dealing networks.

Further, the proposed amendments align with the content of the United Nations Security Council (UNSC) Resolution 2669, passed in December 2022, which demanded an end to the violence in Myanmar, including the release of political prisoners. By limiting regime access to arms and revenue, the amendments strengthen Canada’s commitments to see an end to conflict in Myanmar, as called for in the UNSC Resolution, and strongly encourage concerted international action from UN member states.

Attacks on civilians

The Myanmar military regime has a decades-long and well-documented history of targeting civilians. Indiscriminate bombing has destroyed homes, religious buildings, schools and medical facilities, among other civilian infrastructure. In the first four months of 2024, regime air strikes killed over 359 civilians, including 61 children, and injured 756 civilians. This represents a consistent escalation in deaths, given that there were 63 civilian deaths in 2021, 260 in 2022, and 613 in 2023. In his statement to the UN Human Rights Council on June 18, 2024, the UN High Commissioner for Human Rights decried the “disintegration of human rights” in Myanmar, pointing to the regime’s targeting civilians via air strikes, killings, burning of villages, human shields, dismembering, beheadings, sexual and gender-based violence, torture and executions. The UN High Commissioner for Human Rights and the UN Special Rapporteur for Myanmar continue to call for continued efforts to halt the flow of arms, aviation fuel and foreign currency to address the crisis.

On October 27, 2023, the Three Brotherhood Alliance, an alliance of three Ethnic Armed Organizations (EAOs) formed in 2019, launched coordinated attacks on military positions in northern Shan State in Myanmar, resulting in unprecedented military losses and prompting other EAOs and resistance forces across the country to also mobilize against the military regime. This simultaneous opening of multiple fronts stretched the military beyond its defensive capabilities. In response, the military has increasingly relied on air strikes and heavy weapons, launching indiscriminate attacks and targeting civilians and civilian objects in numerous instances causing hundreds of deaths and destroying critical infrastructure, such as roads, bridges and communication lines, resulting in mass displacement.

In Rakhine State, the home state to the majority of Rohingya people in Myanmar, the conflict between the military regime and the Arakan Army, an EAO, has escalated considerably since early 2024, resulting in over 176 civilians killed and 150 000 displaced. In response to EAO gains, the Myanmar military has barraged and destroyed towns, villages, key transport routes, roads and essential civilian infrastructure, which has an increasingly detrimental impact on Rohingya.

Integral to the perpetration of these atrocities are the arms and materiel the regime uses to commit them. Weapons and fuel supplied to the regime enable its acts of violence and atrocities throughout Myanmar. As documented by the UN Special Rapporteur, the Myanmar military has imported at least US$1 billion in arms, dual-use goods, equipment and raw materials since the military coup. The regime remains heavily reliant on arms and aircraft manufactured abroad.

Objective

Description

The amendments to the Myanmar Regulations add three individuals and four entities that perform key functions on behalf of the military to the schedule of the Regulations. The three individuals include one senior official within the military regime and two senior officials within entities that procure arms or key resources used by the regime to fuel its violence. Additionally, the four entities perform key functions on behalf of the military regime, such as being a conduit for revenue, arms, or aviation fuel.

Any person in Canada or Canadian outside Canada is thereby prohibited from dealing in the property of, entering into transactions with, providing services to, transferring property to, or otherwise making goods available to listed persons. These measures will also render listed individuals inadmissible to Canada under the Immigration and Refugee Protection Act. Under the Myanmar Regulations, listed persons may apply to the Minister of Foreign Affairs to have their name removed from the schedule of designated persons. The Minister must determine whether there are reasonable grounds to make a recommendation to the Governor in Council for removal.

Regulatory development

Consultation

Global Affairs Canada regularly engages with relevant stakeholders, including civil society organizations, cultural communities, and other like-minded governments regarding Canada’s approach to sanctions implementation.

With respect to the amendments, public consultation would not have been appropriate, as publicizing the names of the persons targeted by sanctions would have potentially resulted in asset flight prior to the coming into force of the amendments.

Modern treaty obligations and Indigenous engagement and consultation

An initial assessment of the geographical scope of the initiative was conducted and did not identify any modern treaty obligations, as the amendments do not take effect in a modern treaty area.

Instrument choice

Regulations are the sole method to enact sanctions in Canada. No other instrument could be considered.

Regulatory analysis

Benefits and costs

The application of additional sanctions will serve to put further pressure on the military regime to change its behaviour and demonstrate Canada’s readiness to impose real costs on those working to obstruct or undermine international efforts to resolve the crisis in Myanmar. This will further demonstrate that those who support the regime will face consequences. The sanctions communicate a clear message that Canada will not accept that actions constituting a grave breach of international peace and security, resulting in a serious international crisis, continue to take place in Myanmar at the hands of the military with impunity.

The incremental cost to the Government of Canada to administer and enforce these additional prohibitions is minimal. Sanctions targeting specific individuals and entities also have less impact on Canadian businesses than traditional broad-based economic sanctions and have limited impact on the citizens of the country of the listed individuals and entities. The impact of these new measures on Canadian businesses is expected to be negligible, as Canadian exports in services to Myanmar do not reach the minimum threshold required to be tracked by the Government of Canada.

Canadian banks and financial institutions are required to comply with the sanctions. They will do so by adding the new prohibitions to their existing monitoring systems, which may result in a minor compliance cost.

Small business lens

Analysis under the small business lens concluded that the amendments could impact Canadian small businesses. The Myanmar Regulations prohibit Canadian businesses from dealing with, providing services to, or otherwise making goods available to listed persons, but do not create any direct administrative obligations related to them. While Canadian businesses may seek permits under the Myanmar Regulations, they are granted on an exceptional basis, and Global Affairs Canada does not anticipate any applications resulting from listing these persons; thus, there would be no incremental administrative burden arising from this requirement. Canadian small businesses are also subject to the duty to disclose under the regulations, which would represent a direct compliance requirement. However, as the newly listed persons have limited known linkages with Canada, Global Affairs Canada does not anticipate any disclosures resulting from the amendments.

On April 9, 2021, Canada issued a business advisory in order to help ensure Canadian companies, including small businesses, are aware of heightened commercial and reputational risks of doing business in Myanmar. The advisory also outlined the Government of Canada’s expectations with respect to responsible business practices abroad and recommended that Canadian companies undertake thoroughly responsible business conduct due diligence, including closely examining their supply chains to determine whether their activities support military-owned conglomerates or their affiliates. The business advisory is recirculated regularly, as needed, as conditions change in-country, or substantial changes are made to the regulations. Global Affairs Canada continues to engage with Canadian companies active in Myanmar to ensure they understand the situation on the ground, their obligations under Canadian law, the Government of Canada’s expectations with respect to responsible business practices abroad, and the potential legal and reputational risk of doing business in Myanmar.

One-for-one rule

The one-for-one rule does not apply, as there is no incremental change in administrative burden on business. The permitting process for businesses meets the definition of “administrative burden” in the Red Tape Reduction Act; however, while permits may be granted under the Myanmar Regulations on an exceptional basis, given the minimal level of trade with Myanmar, Global Affairs Canada does not anticipate any permit applications with respect to the amendments.

Regulatory cooperation and alignment

While the amendments are not related to a work plan or commitment under a formal regulatory cooperation forum, they align with actions taken by Canada’s international partners. Sanctions are most effective when they are applied in a coordinated manner.

Canada’s sanctions against the Myanmar military regime come in support of concerted efforts with like-minded government to increase pressure on the regime to change course. Since the military coup, Canada and its allies, including the United Kingdom and the United States, have used diplomatic pressure and sanctions designating senior military officials, regime cronies, weapons dealers, and state-owned enterprises for their support to the regime to address the toll borne by civilians and encourage other countries to impose similar measures.

Effects on the environment

The amendments are unlikely to result in important environmental effects. In accordance with the Cabinet Directive on Strategic Environmental and Economic Assessment, a preliminary scan concluded that a strategic environmental assessment is not required.

Gender-based analysis plus

The subject of economic sanctions has previously been assessed for effects on gender and diversity. Although intended to facilitate a change in behaviour through economic pressure on individuals and entities in foreign states, sanctions under the Special Economic Measures Act (SEMA) can nevertheless have an unintended impact on certain vulnerable groups and individuals. Rather than affecting the whole region, these targeted sanctions impact individuals believed to be engaged in activities that contribute to a grave breach of international peace and security. Therefore, the amendments are unlikely to have a significant impact on vulnerable groups, as compared to traditional broad-based economic sanctions directed toward a state. The focus of the amendments is on specific individuals and entities that are members of the Myanmar military and persons engaged in activities that have contributed to the grave breach of international peace and security that has occurred in Myanmar.

Exemptions are included in the regulations, including, among others, to allow for the delivery of humanitarian assistance to provide some mitigation of the impact of sanctions on vulnerable groups. Therefore, these new sanctions are likely to have limited impact on the citizens of Myanmar.

Implementation, compliance and enforcement, and service standards

The amendments come into force on the day on which they are registered. The amendments follow the increase in the use of air strikes against the civilian population throughout 2024, 7th anniversary of the Rohingya crisis, and the extension of the state of emergency in Myanmar by the military regime.

Consequential to being listed in the Myanmar Regulations, and pursuant to the application of paragraph 35.1(b) of the Immigration and Refugee Protection Act, the listed individuals would be inadmissible to Canada.

The names of the listed individuals and entities will be available online for financial institutions to review and will be added to the Consolidated Canadian Autonomous Sanctions List. This will help to facilitate compliance with the Myanmar Regulations.

The Department’s Trade Commissioner Service abroad and in Canada continues to assist clients in understanding Canadian sanctions regulations, and notably the impact of the Myanmar Regulations on any activities in which Canadians may be engaged. The Department is also increasing outreach efforts across Canada — including to engage with businesses, universities and provincial/territorial governments — to enhance national awareness of and compliance with Canadian sanctions.

Under the SEMA, both Royal Canadian Mounted Police and Canada Border Services Agency officers have the power to enforce sanctions violations through their authorities as defined under the Customs Act, the Excise Act or the Excise Act, 2001, and sections 487 to 490, 491.1 and 491.2 of the Criminal Code.

In accordance with section 8 of the SEMA, every person who knowingly contravenes or fails to comply with the Myanmar Regulations is liable, upon summary conviction, to a fine of not more than $25,000 or to imprisonment for a term of not more than one year, or to both; or, upon conviction on indictment, to imprisonment for a term of not more than five years.

Contact

Global Affairs Canada
Sanctions Bureau
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone (toll-free): 1‑833‑352‑0769
Telephone (local): 343‑203‑3975
Fax: 613‑995‑9085
Email: sanctions@international.gc.ca