Sanctions compliance means making sure that people and businesses follow these rules. This includes checking who they work with, tracking transactions, and reporting any violations.
Canada is facing serious difficulties in enforcing sanctions against countries like Russia, North Korea, and Iran. An internal report from Canada’s Foreign Ministry, highlighted by a recent news report, reveals that the government is poorly prepared to monitor compliance with these measures. The main problems are a shortage of staff and a lack of an established regulatory culture, which makes it difficult to oversee the increasingly strict sanctions.
Since the start of Russia’s full-scale invasion of Ukraine, Canada has introduced many new sanctions. These include restrictions on trade, asset freezes, and prohibitions on financial and other services. While the country has often led the way in announcing sanctions, it has struggled to keep up with enforcing them. The rapid increase in measures has created significant challenges for the Foreign Ministry, which does not have enough personnel or expertise to ensure compliance effectively.
Canada lowers Russian oil price cap to $47.6 per barrel in coordinated sanctions
The report points out that Canada lags behind other similar countries when it comes to handling regulatory procedures, allocating sufficient resources, publishing clear guidelines, and managing exemptions. These shortcomings make it hard to prevent unintended consequences for Canadians and for businesses operating under these rules.
Impact on Canadian Businesses
Canada’s difficulties in enforcing sanctions have had a direct impact on businesses. Companies in industries such as retail, aviation, financial services, and natural resources have reported challenges in navigating the complex rules. Many businesses rely on government guidance to comply with sanctions, and the lack of clear instructions has created confusion.
The report suggests that the problems have been worsened by frequent announcements of new sanctions without corresponding resources to enforce them. This approach has sometimes led to friction between the government and private companies. Businesses have expressed frustration over unclear rules, slow updates, and the complexity of managing compliance in fast-changing international environments.
Because of this, some companies risk unintentional violations, which could lead to penalties or reputational damage. The absence of a strong regulatory framework has made it harder for businesses to plan and operate confidently while adhering to Canada’s sanctions policies.
Canada eases trade stance with U.S. as Carney confirms removal of several tariffs
Global Context and Regulatory Challenges
Canada’s enforcement challenges also have an international dimension. While the country often takes the lead in introducing sanctions, its internal weaknesses reduce the effectiveness of these measures on a global scale. Other countries, including members of the Group of Seven (G7), face similar issues, but Canada’s report highlights that its own approach is lagging behind in terms of coordination, regulation, and oversight.
The report emphasizes that the exponential expansion of sanctions since the war in Ukraine began has created unprecedented challenges. Managing compliance now requires not only legal and technical knowledge but also sufficient personnel to track transactions, monitor companies, and issue clarifications. Without these tools, Canada struggles to ensure that its sanctions achieve the intended impact on target countries.
The internal findings also note that previous governments’ strategies of frequently announcing new sanctions, sometimes for political reasons, have worsened the enforcement problem. While Canada remains active on the sanctions front, the lack of resources and expertise has made implementation difficult, leaving both businesses and the government scrambling to catch up.