Changes to Canadian Sanctions Laws Take Effect

Significant changes to Canadian sanctions laws took effect last month, including a new deemed ownership provision that could force companies to update their sanctions due diligence procedures, Bennett Jones said in a June client alert. Companies should “evaluate their current procedures in light of these new amendments, and think about how due diligence on prospective new transactions or business relationships may need to be updated,” Bennett Jones said of the changes, which took effect June 22.

Law firms earlier this year warned that the changes could make diligence “practically impossible,” including one revision that says a sanctioned person is deemed to control a business -- therefore subjecting that business to sanctions -- if it’s “reasonable to conclude that the person is able to direct the entity’s activities” (see 2304280013). Another change mimics the U.S. Treasury Department’s 50% rule, which prohibits transactions with any company owned 50% or more by a sanctioned person or entity.