Canada Prohibits Canadian Financial Institutions From Transactions with Russian Central Bank

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Prime Minister Justin Trudeau
Prime Minister Justin Trudeau

OTTAWA – NEWS – Prime Minister Trudeau says, “Effective immediately, all Canadian financial institutions are prohibited from engaging in transactions with the Russian Central Bank – eliminating its ability to deploy Russia’s international currency reserves and further restricting Putin’s ability to finance his war of choice.”

Today, Chrystia Freeland, Deputy Prime Minister and Minister of Finance, announced that, effective immediately, all Canadian financial institutions are prohibited from engaging in any transaction with the Russian Central Bank.  In addition, Canada is imposing an asset freeze and a dealings prohibition on Russian sovereign wealth funds. This follows the Prime Minister’s February 26, 2022 joint statement with the European Commission, France, Germany, Italy, the United Kingdom, and the United States to implement further restrictive economic measures on Russia.

Banks in countries implementing this sanction are barred from transacting with the Russian Central Bank in any manner, which will prevent Russia from deploying its international currency reserves. By eliminating the Russian Central Bank’s ability to convert foreign denominated reserves, Russia’s use of these assets to manage its economy, buffer its financial system, and finance its invasion of Ukraine will become severely restricted.

“Canada and its allies continue to take concerted action to ensure that Russia’s invasion of Ukraine will be a strategic failure. This has never been done before at this scale – today we are taking a historic step by directly censuring Russia’s central bank. Canada is firmly on the side of the heroic resistance of the people of Ukraine and we will continue to take further action to ensure President Putin does not succeed,” stated the Deputy Prime Minister and Minister of Finance.

Quick Facts

  • The sanctioning of the Russian Central Bank is a significant and unprecedented step that marks the first time a central bank of a G20 country has been sanctioned in this way.
  • This measure has been taken under the Special Economic Measures (Russia) Regulations.
  • This measure is in addition to blocking select Russian banks from the SWIFT messaging system, which is a cornerstone of the global interbank payments system.
  • On February 22, 2022, in response to Russia’s decision to recognize the independence of the Donetsk and Luhansk regions of Ukraine, Canada announced it will:
    • Impose new sanctions against Russia, including new prohibitions on direct and indirect dealings in Russian sovereign debt;
    • Send additional military contributions to support the North Atlantic Treaty Organization (NATO) through Operation REASSURANCE, including up to an additional 460 personnel to the approximately 800 currently deployed in Europe in support of NATO; and
    • Authorize approximately 3,400 Canadian Armed Forces personnel across all branches of the service to deploy to the NATO Response Force should they be required by NATO.
  • On February 24, 2022, Canada imposed sanctions against Russia under the Special Economic Measures (Russia) Regulations and the Special Economic Measures (Ukraine) Regulations, including:
    • Imposing restrictions on 58 additional Russian individuals and entities, including banks, financial elites and their families;
    • Sanctioning members of the Russian Security Council, including the Defence Minister, the Finance Minister, and the Justice Minister;
    • Imposing restrictions on four Ukrainian individuals for their collaboration with Russia to destabilize Ukraine; and
    • Restricting exports to Russia by halting new export permit applications and cancelling valid export permits, with a limited number of exceptions for critical medical supply chains.
  • Since Russia’s attempted annexation and illegal occupation of Crimea in 2014, Canada has sanctioned over 850 individuals and entities, with many of these sanctions undertaken in coordination with our allies and partners. Canada’s sanctions will impose asset freezes and dealings prohibitions on listed persons.
  • In response to Russia’s threats and military build-up in and around Ukraine in recent weeks, the Government of Canada invested in additional support for Ukraine. This includes through the extension and expansion of Operation UNIFIER, the Canadian Armed Forces’ military training and capacity-building mission in Ukraine, up to $620 million in loans, and the provision of nearly $10 million in lethal and non-lethal equipment and ammunition.