On January 10, 2023, Canada enacted the Special Economic Measures (Sri Lanka) Regulations (the “Regulations”) in response to former state officials responsible for committing “gross and systemic violations of human rights”. The regulations entered into force on January 6, 2023 and list four individuals on Schedule 1, including former Presidents Gotabaya Pajapaksa and Mahinda Rajapaksa.

Generally speaking, listing under Schedule 1 of the Regulations imposes a dealings prohibition, effectively an asset freeze, against the listed person. The legislative drafting of the dealings prohibition reflects the updated language first observed in Canada’s Special Economic Measures (Haiti) Regulations: the dealing prohibition applies to property “owned, held, or controlled directly or indirectly” by a designated person and not property “owned, held, or controlled by or on behalf of” a designated person.

Pursuant to the Regulations, any person in Canada or any Canadian outside Canada cannot:

  • deal in any property, wherever situated, that is owned, held or controlled directly or indirectly by a person whose name is listed in Schedule 1;
  • enter into or facilitate, directly or indirectly, any transaction related to such a dealing;
  • provide any financial or other related services in respect of such a dealing;
  • make available any goods, wherever situated, to a person listed in Schedule 1 or to a person acting on their behalf; or
  • provide any financial or related service to, or for the benefit of, a person listed in Schedule 1.

Businesses should continually assess their sanctions compliance in this shifting legal landscape. Regulations enacted under the Special Economic Measures Act (“SEMA”) obligate persons in Canada and Canadian citizens to disclose certain property held by Schedule 1 entities and any related transactional information to the RCMP. Additionally, certain entities have a continuing duty to determine and disclose certain property held by Schedule 1 entities.

An unofficial copy of the Regulations that came into effect on January 6, 2023 are available here and the first amendment to the Regulations, designating former Presidents Gotabaya Pajapaksa and Mahinda Rajapaksa, are available here.

Notably, the Government of Canada’s News Release cites human rights violations that occurred during Sri Lanka’s civil conflict from 1983 to 2009 as the grounds to enact the Regulations. Pursuant to the SEMA, the Government has authority to enact regulations when enumerated circumstances occur, including when gross and systematic human rights violations have been committed in a foreign state. There is no legislative temporal restriction as to when the Government of Canada may enact regulations against nationals of a foreign state.

The enactment of these Regulations is a departure from the Government of Canada’s approach to sanctions designations, whereby regulations are enacted during, or shortly after an enumerated circumstance occurs, and also illustrates the legislative flexibility of the SEMA to sanction a government’s current response to past acts.

For example, the News Release identifies the current Government of Sri Lanka’s “limited meaningful and concrete action to uphold its human rights obligations” as the target of the Regulations and further states that the “sanctions send a clear message that Canada will not accept continued impunity for those that have committed gross human rights violations in Sri Lanka”.  Global Affairs Canada’s background also links the enactment of the Regulations to the current Government of Sri Lanka taking “limited concrete action to address post-conflict accountability and reconciliation” and identifies “political interference” causing “numerous current and former state officials credibly implicated in war crimes [having] charges against them arbitrarily dropped or convictions overturned.”


Julia Webster is a disputes and international trade lawyer. She advises companies on trade remedies, free trade agreements, blocking measures, customs compliance, anti-corruption laws, economic sanctions, AML compliance, supply chain ethics, and cross-border M&A.