Canada Clarifies Application Of Sanctions Laws

Global Affairs Canada (GAC) has published guidance on the deemed ownership provisions of Canada’s economic sanctions legislation. The guidance provides important details on when an entity which is not itself on Canadian sanctions lists may nevertheless be subject to sanctions prohibitions.

The guidance confirms that the sanctions analysis extends well beyond formal majority ownership of an entity. It introduces an aggregate approach to the traditional 50% ownership threshold and provides guidance on when board rights, contractual arrangements, minority shareholdings, and other indicia of de facto influence may establish “control” of the entity, triggering sanctions restrictions. The result is that sanctions-screening exercises require an examination of both formal ownership and the practical realities of control.