In June 2025, Canadian authorities laid the first criminal charges under the Special Economic Measures Act (SEMA) for alleged violations of Russia-related sanctions. This landmark case signalled a new era in Canada’s sanctions enforcement, one in which regulatory expectations are higher, penalties are more severe, and the margin for compliance error has narrowed considerably. For lawyers, this development underscored a fundamental shift: sanctions compliance is no longer a peripheral concern managed by risk officers or trade specialists but a core legal issue demanding sustained attention across multiple practice areas.
As the Government of Canada continues to broaden both the scope and volume of its sanctions, legal practitioners are increasingly on the front lines of helping clients navigate these evolving rules. Sanctions now extend well beyond traditional responses to armed conflict or threats to international peace. They are being deployed to address a widening spectrum of conduct, including human rights abuses, significant acts of corruption, cyberattacks, and the destabilization of democratic institutions. This diversification of policy objectives has transformed sanctions law into one of the most dynamic and fast-changing areas of regulatory practice.
For lawyers advising clients in trade, finance, corporate transactions, or compliance, this shift has created both new challenges and opportunities. Clients now expect their counsel to not only interpret complex legislative frameworks but also anticipate enforcement trends, identify hidden exposure risks, and design governance mechanisms that integrate sanctions compliance into broader corporate strategy. Whether conducting due diligence for a cross-border merger, reviewing financing arrangements, or advising on supply chain restructuring, lawyers must assess how sanctions may intersect with every stage of commercial activity.
Understanding an Expanding Framework
Canadian sanctions originate from multiple legal sources, including United Nations Security Council resolutions, regional measures, and autonomous domestic legislation such as the Special Economic Measures Act and the Justice for Victims of Corrupt Foreign Officials Act (Magnitsky Law). Each regime carries its own compliance obligations, enforcement mechanisms, and potential penalties.
For lawyers advising clients that operate internationally, the interaction between Canadian measures and those of other jurisdictions such as the United States, the United Kingdom, and the European Union adds further complexity. Aligning compliance strategies across multiple frameworks requires careful interpretation and continuous monitoring of new developments.
The Business and Legal Implications
The reach of sanctions extends far beyond those directly listed on official schedules. A single transaction involving a sanctioned person or jurisdiction can result in frozen assets, cancelled contracts, or reputational harm. Even indirect exposure through suppliers, subsidiaries, or financial intermediaries can lead to significant compliance risks.
Lawyers advising clients on transactions, mergers, or financing arrangements must integrate sanctions risk assessments into their due diligence and contractual review processes. They must also be prepared to address the downstream effects of sanctions measures, including payment delays, insurance restrictions, and supply chain disruptions.
Questions Lawyers Should Consider in Advising Clients
To provide effective guidance, lawyers should reflect on key questions that help identify potential sanctions risks and keep clients compliant:
- Are there indirect connections between the client and sanctioned individuals or entities, such as through subsidiaries, parent companies, family members, or intermediary banks?
- Does the proposed activity involve importing or exporting goods that may be prohibited under Canadian or allied sanctions regimes?
- Does the client intend to provide services, technical assistance, or transfer technical data that could fall within sanctions restrictions, even indirectly?
- Could any action by the client inadvertently facilitate a contravention of sanctions laws?
These questions help lawyers proactively manage risk, advise on governance and contractual safeguards, and implement compliance measures that protect clients from legal, financial, and reputational consequences.
Lawyers at the Centre of Compliance
As enforcement efforts intensify, the role of lawyers in sanctions compliance has never been more important. Practitioners are responsible for helping clients interpret new measures, assess exposure, and design controls that keep their operations compliant with the law. This includes:
- Conducting thorough due diligence and screening of counterparties and beneficial owners
- Drafting and reviewing contractual provisions that allocate sanctions-related risks
- Advising on disclosure obligations and self-reporting procedures
- Seeking regulatory guidance or exemptions where needed
- Supporting clients in building a strong culture of compliance
Lawyers who understand the evolving nature of Canada’s sanctions regime are better positioned to provide timely, strategic, and preventative legal advice.
Why Staying Ahead Matters
Sanctions law now intersects with multiple practice areas including corporate, financial, and trade law.
Whether advising a Canadian business expanding abroad or a foreign company operating in Canada, lawyers must stay ahead of new restrictions and enforcement trends to protect clients and maintain professional competence.
To help practitioners stay up to date, the OBA International Law Section presented on November 27, 2025:
Staying Ahead of Canada’s Sanctions Landscape: Essential Updates and Enforcement Trends
Access the program on demand here: https://www.cbapd.org/details_en.aspx?id=on_on25int04v
Tune in as an expert panel offers a practical discussion of Canada’s expanding sanctions regime, recent enforcement actions, and key compliance considerations for lawyers and their clients. Whether you are newer to this field or already advise clients on sanctions-related matters, this program offers valuable insight into the latest developments and a chance to have your questions answered.
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