Russian President Vladimir Putin. Since Russia's 2022 invasion of Ukraine, the number of individuals and entities sanctioned by Canada has more than tripled.MAXIM SHIPENKOV/AFP/Getty Images
Warren Ferguson is an associate in the competition and foreign investment group at Stikeman Elliott LLP.
Canada’s sanctions regime is – at least on paper – among the most aggressive and ambitious in the world, with the country purportedly leading the way in attempting to seize Russian assets for the benefit of Ukraine. However, this narrative conceals the fact that actual enforcement of Canada’s sanctions laws is almost non-existent.
The main problem is the fundamental design of Canada’s sanctions regime, in which criminal prosecution is generally the only route for enforcement. If economic sanctions are to remain a tool for achieving Canada’s foreign policy objectives, this must change. Creating a dedicated civil enforcement regime is a practical and efficient solution.
Since Russia’s invasion of Ukraine in 2022, the number of individuals and entities sanctioned by Canada under the Special Economic Measures Act, or SEMA, has more than tripled and now includes over 5,000 persons. Despite this dramatic expansion, the RCMP has only charged a single individual under SEMA in over six years: A Toronto man who allegedly exported restricted good to Russia.
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It took the RCMP three years from the date of the alleged offence – and more than two years after a Global Affairs Canada witness appeared before a House of Commons standing committee where she discussed concerns about the accused’s activities – to lay the charges. The government was aware of the alleged sanctions violations, but enforcement action was long delayed.
Optimistically, this dearth of enforcement could be the result of everyone in Canada being atypically law abiding. But it is more likely these enforcement trends, or lack thereof, point to issues with the RCMP’s prosecutorial function or alternatively, to deeper issues in the structure of Canada’s sanctions regime itself.
While the former is something the Auditor-General of Canada may consider reviewing, the latter point is a major obstacle to effective enforcement of Canadian sanctions.
Violations of Canada’s sanctions laws are generally only prosecuted criminally. While this carries higher potential penalties, it also requires the Crown to meet a higher burden of proof to secure convictions.
In contrast, Canada’s closest allies, including Britain and the United States, maintain both criminal and civil enforcement regimes. Under a civil regime, government regulators can act more efficiently and with greater flexibility to investigate and impose penalties.
In 2025, this has resulted in nine reported civil enforcement decisions in the U.S., and six in Britain, standing in stark contrast to Canada’s single set of charges brought under SEMA against an individual in six years.
A recent report from Global Affairs Canada on the efficacy of Canada’s sanctions regime between 2018 and 2024 highlighted these enforcement challenges while underscoring the unintentional impact on Canadians. The most risk-averse Canadian businesses pay a price to “over-comply” with sanctions to ensure they never break the law. Yet intentional sanctions evaders face little risk of punishment.
The Canadian government recently incorporated sanctions concerns into legal frameworks with existing civil enforcement mechanisms. Most notably, changes to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, Canada’s seminal anti-money-laundering legislation, introduced a new “sanctions evasion offence” for “reporting entities.”
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The anti-money-laundering act’s reporting and monitoring obligations, with respect to sanctions evasion, only apply to “reporting entities,” a small subset of Canadian businesses. While violators are subject to administrative monetary penalties, these changes will likely have little actual effect on overall sanctions enforcement.
The limited scope of the act, even with the newly added sanctions evasion offence, underscores the ineffectiveness of co-opting enforcement mechanisms of existing legal frameworks to target alleged sanctions violations
Canada should adopt a dedicated civil enforcement regime for sanctions with a single regulatory authority. Such a scheme would bolster the implementation of Canadian sanctions and improve their effectiveness. It would also give law-abiding businesses greater legal certainty by permitting direct outreach between businesses and the regulator, something that is common in other regulatory contexts. Critically, this could partially address “over-compliance” which unfairly impacts law-abiding Canadian businesses.
With other proposed amendments to expand the scope of Canada’s sanctions regime currently before Parliament – none of which seriously contemplate improving enforcement mechanisms – the case for a civil enforcement regime is paramount.
Without a change that dramatically improves enforcement, civil or otherwise, the paper tiger that is Canada’s sanctions regime will only grow larger, but its well-intentioned policy objectives will remain effectively toothless.