Federal financial regulators have issued a notice alerting firms to the imposition of sanctions against former Ukrainian officials, including its ousted president, Viktor Yanukovych.
In a notice to banks, insurers and other federally regulated firms, the Office of the Superintendent of Financial Institutions (OSFI) reports that regulations have been adopted freezing the assets of various former Ukrainian officials. The regulations establish a list of 18 people whose assets are subject to freezing, including Ukraine’s former president Yanukovych, members of his family, and his administration.
The sanctions follow accusations from Ukraine’s new government that the people on the list have misappropriated assets from the country. “These regulations give effect to written requests from Ukraine, which has recently experienced political upheaval, to freeze assets of their former leaders and senior officials or their associates and family members suspected of having misappropriated state funds, or obtained property inappropriately as a result of their office or family, business or personal connections,” says a notice from the Foreign Affairs department.
The rules impose searching, freezing, monitoring, disclosure and due diligence obligations on financial institutions, requiring firms to search their records in order to identify financial assets to which the asset freeze applies, to identify prohibited financial transactions, and to ensure that transactions with people on the list are blocked and reported.
The prohibition on providing financial services to those on the list applies to services such as asset management, lending (including mortgage lending), the provision of insurance, and other financial services.
In its notice, OSFI says that it expects that financial firms will implement the necessary measures to search for Ukrainian officials named in the regulations; and, that these searches must be ongoing, and carried out at least weekly. Additionally, it says that firms should examine their records to determine if they are dealing with a corporation or an entity that may be owned or controlled, directly or indirectly, by a designated person.
If Canadian financial institutions have property in their possession or control that they believe is owned or controlled by designated officials, they are required to report it to the RCMP.