LexSage

Canada Did Not Impose New Economic

Sanctions Against North Korea in 2017

Written By: Cyndee Todgham Cherniak

Date: January 6, 2018

In 2017, the United Nations Security Council imposes 3 new rounds of economic sanctions against North Korea (Resolution 2397 (2017) on December 22, 2017, Resolution 2375 (2017) on September 11, 2017, and Resolution 2371 (2017) on August 5, 2017).  However, Canada has not amended existing regulations under the United Nations Act against North Korea to implement the new sanctions in Canadian law.  Canada's international obligations do not become law of Canada without a statute or a regualtion being passed by the House of Commons and the Senate.  Canada implements United Nations Security Council Resolutions imposing economic sanctions against North Korea in Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK).  This regulation has not been amended since October 2016.

That being said, Canada has very strict sanctions against North Korea.  See Canada Imposes Very Strict/Limiting Export Controls And Economic Sanctions Against North Korea

Canada has put North Korea on Canada’s Area Control List, which prohibits (without an export permit) almost all dealings in goods and technology and technical data (all goods, not just goods on the Export Control List) with North Korea.  As a general rule, Global Affairs Canada does not issue export permits for exports of goods and technology to North Korea.  As a result, any new economic sanctions restricting exports/imports/dealings in goods or technology is already covered by Canada’s Area Control List restrictions.  In other words, there is no need to impose new sanctinos to give effect to new restrictions on imports/exports/dealings in goods and technology.

The Governor in Council (the body that implements sanctions in Canada) may believe that changes to the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of North Korea are not necessary to implement Resolutions 2397(2017), 2375(2017) and 2371(2017) into Canadian law. However, the optics are that Canada has not implemented the resolutions – and that is a problem.  The new United Nations Security Council Resolutions respond to grave threats related North Korea’s intercontinental ballistic missile and nuclear missile testing.  Canada should take action in addition to issuing press releases condemning the missile launches.  It needs to be made clear that the Governmetn of Canada is supporting the sanctions and telling Canadians that they cannot engage in any of the newly sanctioned activities.

For example, United Nations Security Council Resolution 2371(2017) bans countries from accepting new North Korean labourers.  It is not clear that the ban on accepting new North Korean labourers has been implemented in Canadian law.  Further, United Nations Security Council Resolution sanctions tighten North Korea’s access to the international financial system by expanding prior financial sanctions to include a foreign asset freeze of North Korea’s Foreign Trade Bank.  It is not clear that the asset freeze relating to North Korea’s Foreign Trade Bank is fully implemented into Canadian law since financial dealings are not covered by the Area Control List restrictions. Canada imposes earlier financial restrictions in the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of North Korea.

Furthermore, United Nations Security Council Resolution 2375(2017) restricts certain forms of business transaction - joint ventures with North Korean persons and specifically states:

“…States shall prohibit, by their nationals or in their territories, the opening, maintenance, and operation of all joint ventures or cooperative entities, new and existing, with DPRK entities or individuals, whether or not acting for or on behalf of the government of the DPRK, unless such joint ventures or cooperative entities, in particular those that are non-commercial, public utility infrastructure projects not generating profit, have been approved by the Committee in advance on a case-by-case basis, further decides that States shall close any such existing joint venture or cooperative entity within 120 days of the adoption of this resolution if such joint venture or cooperative entity has not been approved by the Committee on a case-by-case basis, and States shall close any such existing joint venture or cooperative entity within 120 days after the Committee has denied a request for approval, and decides that this provision shall not apply with respect to existing China-DPRK hydroelectric power infrastructure projects and the Russia -DPRK Rajin-Khasan port and rail project solely to export Russia-origin coal as permitted by paragraph 8 of resolution 2371 (2017).”

This specific sanctioned activity does not clearly appear in Canadian law.  Canadian businesses have not been told that they cannot enter into joint ventures to provide services, which are not covered by the Area Control List restrictions.

All this being said, it is important to note that the Office of the Superintendent of Financial Institutions issued a press release on January 3, 2018 indicating that the OSFI list has been updated due to United Nations Security Council Resolution 2397(2017)’s addition of 16 sanctioned individuals and one entity.

United Nations Security Council Resolutions 2375(2017) and 2397(2017) calls for the interception and inspection of North Korean ships.  This may be done by the Government of Canada without amending Canada’s economic sanctions.

For more information about Canada’s economic sanctions, please contact Cyndee Todgham Cherniak at 416-306-4168 or at cyndee@lexsage.com.

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