Canada Unveils Sweeping New Russia Sanctions Targeting Trade, Sanctions Evasion and Key Industries

Written By Jessica Horwitz, Sabrina A. Bandali, George Reid, Alison Fitzgerald and Quentin Vander Schueren

On June 13, 2025, the Government of Canada registered three significant packages of amendments to the Special Economic Measures (Russia) Regulations (the Regulations) under SOR/2025-141, SOR/2025-142 and SOR/2025-143. Officially announced by the Minister of Foreign Affairs on June 17, 2025, following the G7 Leaders’ Summit in Kananaskis, Alberta, these measures represent a major escalation in Canada's economic pressure campaign against the Russian Federation.

These amendments are Canada's most substantial sanctions package since the start of Russia's full-scale invasion of Ukraine. The amendments include:

• New export and import prohibitions: The amendments imposed new export bans on a broad range of items, including industrial goods, goods related to chemical and biological weapons, and advanced materials. New import bans were also introduced for items such as coal, metals and other revenue-generating goods from Russia.
• Expanded vessel sanctions: An additional 201 vessels were listed, bringing the total number of Russia-linked vessels sanctioned by Canada to over 300. Furthermore, Canada's vessel sanctions were expanded to prohibit all services related to listed vessels.
• New designations of individuals and entities: 116 new individuals and entities have been designated. According to the Government of Canada, these designations target 45 Kremlin enablers and oligarchs, 17 individuals and entities involved in sensitive dual-use quantum technology development, 35 beneficiaries of the war, an upgraded listing for a major Russian oil company, 15 Shadow Fleet enablers and three banks (including two foreign financial institutions).

Canadian businesses with any dealings related to Russia should immediately review these amendments to ensure compliance, as the new rules have significant implications for a broad spectrum of industries, including the energy, maritime shipping, financial, technology and manufacturing sectors.

Expanded Prohibitions on Goods

Import Prohibitions

The amendments significantly expand the prohibitions on any person in Canada or any Canadian outside Canada importing, purchasing, or acquiring certain Russian-origin goods. These are detailed in new schedules to the Regulations and include the following:

• Coal and related products (Schedule 5.01): This new schedule imposes a complete import and acquisition ban on Russian coal, lignite, peat, coke and related coal tar products, targeting a key Russian commodity sector.
• Expanded metals ban (Schedule 11): The amendments significantly expand the existing import and acquisition ban on Russian metals. While the previous sanctions already restricted acquisitions of Russian steel and aluminum products, the amended Schedule 11 now also prohibits the import of Russian-origin iron, steel, aluminum, copper, nickel, lead, zinc, tin and a host of other base and industrial metals and articles thereof.
• Broad "revenue-generating goods" ban (Schedule 13): The amendments introduce a sweeping import and acquisition ban on goods from which Russia generates significant export revenue. The list in a new Schedule 13 covers key sectors such as seafood (crustaceans), alcohol (spirits), chemicals, plastics, wood and paper products, rubber, textiles, footwear, glass and various manufactured goods, including machinery and vehicles.

Export Prohibitions

The amendments introduce new prohibitions on exporting, selling, supplying or shipping certain goods to Russia or any person in Russia, expanding the already broad restrictions that existed previously:

• Jet Fuel and additives (Schedule 5.02): This new schedule specifically targets Russia's aviation sector by banning the supply of jet fuel and key additives.
• Renamed "industrial goods" ban (Schedule 7): The existing Schedule 7 has been replaced with a new schedule and the correlative prohibition in the Regulations has been renamed to expressly target, through the new Schedule 7, "industrial goods" as opposed to goods used in the manufacture of weapons. The list now covers many more products, 678 items in total as of the date of registration, including chemicals, polymers, minerals, textiles, base metals, machinery and machine tools, construction materials, electronics and vehicle parts, among others.
• Chemical and biological weapons-related (CBW) goods (Schedule 10.1): This new schedule imposes an export ban on a detailed list of specific precursor chemicals, laboratory equipment (such as fermenters, centrifuges and DNA/RNA sequencers), and related consumables.

Delayed Implementation and Wind-Down Provisions

Most of these new trade prohibitions have not yet taken effect. The prohibitions related to Schedule 10.1 (CBW-related goods) come into force 30 days after registration (July 13, 2025), while the import and export prohibitions related to Schedules 5.01, 5.02, 7, 11 and 13 come into force 60 days after registration (i.e., August 12, 2025).

The Regulations include "prior contract" exceptions. Generally, a transaction involving newly prohibited goods may be permitted if it is conducted pursuant to a contract entered into at least 60 days before the coming-into-force date of the relevant prohibition, and the transaction is completed within 120 days of that date. In respect of certain of the new prohibitions, this means as of the date on which the Regulations were registered, i.e. June 13, 2025.

Traders that are looking to rely on these exceptions should carefully review the specific criteria and deadlines prescribed in the Regulations, as they are strict and narrowly defined.

Targeting Sanctions Evasion and the "Shadow Fleet"

The amendments in SOR/2025-142 are a direct and targeted response to Russia's use of its "Shadow Fleet" of aging tankers to circumvent the G7 oil price cap and other maritime sanctions.

• Vessel designation: The Regulations replace the entirety of Schedule 1.1, which now lists over 300 vessels, including 201 newly added ships identified as being part of Russia's sanctions evasion network.
• Services prohibition: Furthermore, a new prohibition in Section 3.04(2) of the Regulations prohibits any person in Canada and any Canadian outside Canada from providing any services related to a vessel listed in Schedule 1.1, expanding the existing prohibition on docking services. For example, the expanded ban would cover marine services such as insurance and re-insurance, financial services, bunkering, port services, repairs and maintenance, etc.

New Designations

Across the three regulatory packages, Canada has added 116 individuals and entities to Schedule 1 of the Regulations, subjecting them to a full asset freeze and dealings ban. The newly listed individuals and entities include, among others:

• Quantum technology sector: Three individuals and 14 entities involved in the development of sensitive dual-use quantum technology. Key entities in this sector, including the Moscow State University Quantum Technology Centre and the National Quantum Laboratory, have been added to Schedule 1.
• Kremlin enablers and oligarchs: 45 individuals identified as "enablers" of the Kremlin and oligarchs. The new listings target high-profile individuals who are believed to provide political, cultural or economic support to the Kremlin.
• Beneficiaries of the war: 35 individuals identified as beneficiaries of the war in Ukraine, including some of the wealthiest Russian industrialists, senior government officials and individuals involved in the confiscation and redistribution of foreign company assets in Russia.
• Designation of key sanctions evasion networks: 15 individuals and entities that play a key role in the continued operation of Russia's "Shadow Fleet".
• Financial sector: Three additional banks, including two foreign financial institutions and several insurance companies such as Ingosstrakh Insurance Company and VSK Insurance House.

Implications for Canadian Businesses

These far-reaching amendments to the Regulations raise the compliance baseline for all Canadian businesses with direct or indirect ties to Russia. Businesses should take immediate steps to review and update their sanctions compliance programs:

• Counterparty screening: Businesses should update their screening processes to check against the newly added individuals and entities, as well as considering if the new designations affect dealings with non-listed entities that are owned or controlled by any of the newly designated persons. Dealings with such non-listed entities may be prohibited under Canada's deemed ownership rule.
• Supply chain and trade compliance: Businesses involved in the import or export of goods should review the newly expanded lists of prohibited items. The broad scope of the new prohibitions on industrial goods, advanced materials and revenue-generating products impacts many sectors. Careful attention should also be paid to the stated origin of goods sourced from third party suppliers and credibility of same, with enhanced due diligence for goods procured from higher risk regions with known commercial ties to Russia, to ensure that persons subject to Canadian sanctions regulations are not inadvertently purchasing goods of Russian origin, including as a result of misleading or deceptive practices by suppliers or other intermediaries.
• Contractual protections: Businesses should review and strengthen sanctions clauses in all commercial agreements. These clauses should provide clear and robust "exit ramps" in the event a counterparty, a key supplier, a vessel used for transport or a critical component in the supply chain becomes subject to sanctions.
• Avoiding facilitation: The prohibition on persons in Canada or Canadians causing, facilitating or assisting in prohibited activities (or doing anything intended to do so) operates to potentially create legal risk for persons who may play an indirect or secondary role in any conduct that is now prohibited by any part of the Regulations. Compliance programs should therefore factor in the expanded scope of the Regulations into their risk assessments and guard against facilitation-related risk exposure.

Next Steps

The Canadian government has indicated its readiness to further expand sanctions in coordination with its allies. The situation remains fluid, and businesses should monitor developments closely to maintain compliance and mitigate risk.

The Bennett Jones International Trade & Investment group is available to assist companies in evaluating their risk exposure, developing robust compliance programs, and navigating the impact of these evolving sanctions on their operations.

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