Advising clients on the operations of international trade sanctions is an important part of a trade lawyer’s practice. Governments use economic sanctions as instruments of foreign and trade policy, imposing them in response to threats to international security, concerns with humanitarian violations, or in pursuit of trade related goals. These restrictions are often applied to dealings with entire countries, non-state actors, such as terrorist organizations, or designated persons from a target country. These restrictions can have a significant impact on their businesses as they can:
- prohibit trade and other economic activity with a foreign market;
- block financial transactions and affect foreign investments or acquisitions; or
- lead to the seizure of property, fines, and imprisonment.
There is an on-going debate about the effectiveness of sanctions and the way that innocent people can be sideswiped by the measures. We will explore this topic further in our following articles on sanctions and export controls. Here however, we want to focus on the way that Canada’s economic sanctions regime can and does affect would-be business immigrants. In the Canadian context, the Department of Foreign Affairs, Trade and Development (DFATD) is responsible for the administration of sanctions which are implemented under the authority of the Special Economic Measures Act (SEMA), the United Nations Act (UN Act) or the Freezing Assets of Corrupt Foreign Officials Act (FACFOA). Some of the sanctions that are currently in place have a particular effect on investor-class immigrants from Syria and Iran and their applications to move to Canada, as sanctions have frozen all financial transactions with these countries in an attempt to put pressure on theses regimes.
Syrian and Iranian nationals applying to immigrate to Canada under the federal investor class process must pledge to invest $800,000 in the Canadian economy to qualify. In addition, the provinces have business immigration programs that require selected applicants to make investments ranging from $200,000 to $800,000 as a pre-condition to their successful immigration. It is interesting to note that Iranian investor-class applicants are estimated to have contributed $350 million to the Canadian economy in the past five years. In the context of Syria, effective March 5, 2012, Syrian nationals are unable to complete financial transactions involving Canada with the exception of (1) non-commercial remittances of $40,000 or less; or (2) payments required under a contract that existed prior to March 05, 2012. The Government of Canada indicated that these measures were taken by Canada “in response to the Assad regime which has inflicted appalling levels of violence on the people of Syria.” However this means that Syrian nationals and persons residing in Syria face can neither transfer the required funds nor open bank accounts with Canadian financial institutions pursuant to regulations amending the Special Economic Measures (Syria) Regulations. These regulations prohibit Canadians (regardless of place of residence) or any person residing in Canada from providing or acquiring “any financial services or other related services… to, from or for the benefit of or on the direction or order of Syria or any person in Syria.
Similarly, prospective business immigrants from Iran are also affected by similar measures which were announced in 2010, with assurances that they were “… in no way intended to punish the Iranian people.” Nevertheless, there has been collateral damage, as otherwise innocent individual families are facing important barriers to their individual immigration process and significant delays in issuing permits to would-be business investor immigrants. This has added complication and stress in the context of a deeply troubled region of the world from which many are trying to escape.
While due to the sanctions, these business immigration applicants are blocked from transferring the required funds to successfully complete their immigration application, there is a mechanism in place to address this situation. Persons affected by the sanctions on financial transactions, whether they are applicants for a visa or already in Canada, may apply for a Ministerial Permit from the Minister of Foreign Affairs that will authorize specified activities or transactions otherwise prohibited under the sanctions. Also, in the case of both Syria and Iran, the regulations include certain exemptions to the sanctions for transactions that took place prior to the coming into force of the regulations or those involving government to government agreements or humanitarian related work. In most cases, the prospective business-immigrant must make a special application to the Minister for a permit addressed to the Canadian financial institutions, government entities, immigration authorities, and other relevant service providers that allows them to provide or acquire the funds required in the context of the immigration applications. An application for a permit is made to the Minister via the Economic Law Section at the Department of Foreign Affairs, International Trade and Development (DFATD).
It is important to note that the Ministerial Permit application process does not affect the non-financial aspects of the immigration application (visas, security checks, medical/health issues, etc.) for which Citizenship and Immigration Canada (CIC) remains responsible. Applicants should also be aware that the process of obtaining a Ministerial Permit is generally very time consuming, with some applications taking two years or longer. In recent months, a number of applicants under provincial programs have come together to raise concerns about these delays which cause stress and uncertainty for families looking to re-start their lives in Canada. It is important to factor in the possibility for delay and to be prepared to back up a strong application with persistent and effective lobbying to move the process forward.
At Woods, LaFortune LLP, we have experience assisting clients with these type of sanction related applications and our work in this area has shown us that these application should be detailed in the context of the transactions to be covered by the permit along with a compelling narrative for the Minister and DFATD officials. This narrative should provide reasonably detailed background on the individual looking to immigrate together with reasons why the granting of the permit would not conflict with the overall rationale of the relevant sanctions.
