Canadian sanctions against Iran

Statement by Prime Minister Stephen Harper

Iran continues to ignore successive UN Security Council resolutions which call for it to cooperate fully with the International Atomic Energy Agency and suspend its enrichment activities. Therefore, building upon last month’s UN Security Council Resolution 1929, the Government of Canada is implementing new regulations aimed at restricting Iran’s nuclear program and preventing the proliferation of weapons of mass destruction (WMDs).

These sanctions are in no way intended to punish the Iranian people. These targeted measures are designed to hamper attempts by Iran to develop nuclear, chemical, biological and missile programs as well as to persuade it to agree to constructive discussions with China, France, Germany, Russia, the United Kingdom and the United States. These sanctions also send a message to all states — particularly those with nuclear aspirations — that international standards cannot be flouted without consequence.

The sanctions bar dealings with designated individuals and entities involved in nuclear or WMD proliferation, including key members of the Islamic Revolutionary Guard Corps. They ban new investments in Iran’s oil and gas sector and the export of goods to Iran that could contribute to nuclear proliferation. They also prohibit Iranian financial institutions from establishing a presence in Canada and vice versa.

Canada strongly urges Iran to address the serious concerns raised by the military dimensions of its nuclear program and meet its international nuclear obligations.

Backgrounder: Sanctions against Iran Special Economic Measures Act (SEMA)

In consultation with like-minded countries, Canada is implementing new sanctions against the Islamic Republic of Iran (Iran) using the Special Economic Measures Act (SEMA). These measures entered into force on July 22, 2010.

Rationale for Sanctions

The Iranian nuclear program has been a matter of grave concern to the international community for several years. Iran signed the Nuclear Non-Proliferation Treaty in 1968 and has claimed consistently that its nuclear activities are peaceful in nature. Between 2003 and 2005, following revelations about secret nuclear sites, the International Atomic Energy Agency (IAEA) conducted intensive inspections which uncovered that for almost 20 years Iran had engaged in a range of undeclared nuclear activities including the enrichment of uranium and separation of plutonium.

In September 2005, the IAEA Board of Governors found Iran to be in non-compliance with its Safeguards Agreement with the IAEA and in February 2006 it reported Iran’s case to the UN Security Council (UNSC), leading to Resolution 1696 demanding that Iran cease its enrichment and reprocessing efforts. The Security Council has passed four more resolutions imposing sanctions (UNSCR 1737, 1747, 1803, 1929) and one that does not impose sanctions (UNSCR 1835), for Iran’s failure to comply with Resolution 1696.

Iran has continued to ignore its international legal obligations. On September 21, 2009, in a letter to IAEA Director General Mohamed ElBaradei, Iran revealed the existence of a new, previously undeclared facility to enrich uranium. The plant is not yet complete, nor has any significant amount of nuclear material been introduced to the facility. Iran was legally obliged to declare the existence of the facility before beginning construction, but failed to do so.

The latest IAEA report on Iran, dated May 31, 2010, notes that Iran has accumulated 2,550 kg of low-enriched uranium hexafluoride (UF6) since its Fuel Enrichment Plant began operation in 2007. Production levels are at the point where Iran has sufficient nuclear material to develop two nuclear weapons, if further enriched; however, the production itself is under IAEA safeguards. Under the pretext of providing fuel for the Tehran Research Reactor, Iran has already begun to upgrade its low-enriched UF6 from 3.5 per cent to 19.8 per cent, just under the legal threshold for “high-enriched nuclear material.”

Consequently, on June 9, 2010, the UN Security Council, acting under Chapter VII of the Charter of the United Nations, adopted Resolution 1929, noting that Iran has not established full suspension of all enrichment-related and reprocessing activities and heavy water-related projects as set out in resolutions 1696, 1737, 1747 and 1803 nor resumed its cooperation with the IAEA. The Security Council also noted that Iran has constructed an enrichment facility near Qom in breach of its obligations to suspend all enrichment-related activities, and that Iran has enriched uranium to near 20 per cent without notifying the IAEA with sufficient time for it to adjust the existing safeguards procedures.

Resolution 1929 imposes sanctions against Iran and individuals and entities designated by a committee of the UNSC. These sanctions are binding upon all states pursuant to Article 25 of the Charter of the United Nations and therefore Canada was required to implement them domestically. On June 22, 2010, Prime Minister Harper announced that Canada fulfilled its obligations by establishing the necessary regulations to implement the decisions in UNSC Resolution 1929 and amended its existing regulations to include these latest sanctions.

Objectives of Canadian Sanctions

These sanctions are in no way intended to punish the Iranian people. They are targeted to hamper attempts by Iran to develop its nuclear, chemical, biological and missile programs, as well as to persuade it to return to negotiations with the five permanent members of the UN Security Council plus Germany and meet its international nuclear obligations. These sanctions also send a message to all states — particularly those with nuclear aspirations — that international standards cannot be flouted without consequences.

Description of Canadian Sanctions

The Special Economic Measures (Iran) Regulations have been drafted to implement many of the measures that the UNSC called upon but did not obligate member states to implement under Resolution 1929.

The regulations prohibit the following:

 dealings with designated individuals and entities, such as dealings in any property, or making any goods or financial or related services available to a designated individual or entity;
 exporting or otherwise providing to Iran arms and related materials not already banned, items that could contribute to Iran’s proliferation activities, and items used in refining oil and gas;
 providing technical data related to these goods;
 making any new investment in the Iranian oil and gas sector, or providing or acquiring financial services for this purpose; providing or acquiring financial services to allow an Iranian financial institution (or a branch, subsidiary or office) to be established in Canada, or vice versa;
 establishing correspondent banking relationships with Iranian financial institutions, or purchasing any debt from the government of Iran;
 and providing services for the operation or maintenance of a vessel owned or controlled by, or operating on behalf of the Islamic Republic of Iran’s Shipping Lines.

The list of prohibited goods includes all arms and related material not already banned by previous UN Security Council resolutions. It also includes almost all of the items in Canada’s Export Control Guide, items used in refining oil and gas and a list of goods that could contribute to Iran’s proliferation activities.

With the understanding that humanitarian and diplomatic channels must remain open, exemptions are provided for activities that safeguard human life, provide disaster relief, food or medicine, except where designated individuals and entities are involved.

The restriction on dealings with designated individuals and entities does not apply to:

 the shipment of bulk agricultural commodities by the Islamic Republic of Iran Shipping Lines;
 loan repayments;
 pension payments;
 transactions with the Iranian and Canadian embassies;
 transactions with certain organizations, such as the Red Cross or Red Crescent and non-governmental organizations; and
 transactions necessary to transfer an account held with a designated individual or entity.