Canada’s Russia sanctions are hitting people with no connection to Putin’s war

Canada’s economic measures against Russia — intended to target the assets of oligarchs and wealthy government officials — have hit the personal finances of people with no ties to the Putin regime, CBC News has learned.

Some Canadians who have no ties to the Russian government and do not support President Vladimir Putin’s war in Ukraine say their personal savings have been frozen because of how Global Affairs Canada imposed the sanctions.

Acting in concert with other Western allies, Canada has blocked all financial transactions and frozen accounts held by Canadians linked to a list of approved individuals and business entities – a list that now numbers more than 2,100 names.

CBC News has spoken to four people who have not been named on this list and have not been accused of supporting the Putin regime. He said he was unable to access tens of thousands of dollars in personal savings because the major banks he worked with and his family in Russia and Kazakhstan were caught up in Canadian sanctions.

“I support Ukraine in this. A lot,” said Natasha, who is originally from Belarus but moved to Saint Petersburg for university. She said she and her husband were offered jobs in Canada’s technology sector and left Russia in 2020, seeking “a better and safer life.”

CBC News has agreed not to use her last name or show her face because she is concerned about her job security.

Natasha and her husband have applied, but have not yet received permanent residency in Canada. Because of the strong emotions the war in Ukraine evokes, she said, she also fears online harassment.

In the weeks before Russia invaded Ukraine, Natasha worried about losing the savings she and her husband had left at Alfa-Bank, Russia’s largest private bank — between $80,000 and $133,000 Cdn, she said.

“Because of the history I come from, I just think it’s very dangerous to have something there,” he said.

He started the process of transferring the money to his Canadian account. But the transfer was not completed by February 24 – when Ottawa sanctions prohibited Canadians from doing business with Alfa-Bank. Their money is blocked and frozen.

Applications for exemptions are now part of a growing backlog at Global Affairs, as people without sanctions seek ministerial permission to release their personal savings.

“Maybe [Canadian government officials] don’t have enough time to dig into this and to really see that ordinary people who are here, who pay taxes and work hard and are part of this community here, are also affected. And it’s not fair,” said Natasha.

It’s also unclear whether the impact of Canadian sanctions on non-oligarchs like Natasha actually accomplishes anything.

‘It’s not fair’

“When we look at the purpose of the economic sanctions … they were imposed to change the behavior, and in this case to change the behavior of the Putin regime regarding the invasion and the continued war in Ukraine,” said John Boscariol, a trade lawyer. representing businesses and individuals affected by sanctions regulations. (He was not retained by the person interviewed for this story.)

“Freezing this private post… [for example] that happened to be sent by the grandfather to the grandson, does not change and will not change the behavior of the Putin regime,” he said.

Last month, the RCMP reported that more than $122 million Cdn in Canadian assets had been frozen since the Russian attack.

But the RCMP tracking does not distinguish between the wealth of the oligarchs and the more modest savings Natasha and her husband hope to use to pay down the front.

He is not the only small fish caught in Ottawa’s sanctions net.

Svetlana’s employer moved her from Moscow to Toronto in 2021. She recently became a permanent resident of Canada. Out of fear for her employer and her personal safety, she also asked that her name and picture not appear in this article.

“When I opened my first bank account, which is obviously one of those things you do when you arrive in a new country, I was told that there was something wrong with my work permit, so my account would be suspended,” he said. said.

That’s why he left about $39,000 Cdn in personal savings in Russia – a nest egg he reported to Canadian officials during the immigration process to prove he had the means to support himself.

‘night full of tears’

“I have signs of severe depression. Life again in Russia is not easy,” said Svetlana. “After I moved to Canada, I had hope that I could build a better life here. Less stressful, at least.”

Doctors advise not to follow the news too closely to help deal with stress. The night Russia invaded Ukraine, he went out to dinner with a Ukrainian friend.

“I came home and he texted me: ‘Don’t read anything. Don’t open the newsfeed. Like, don’t do it.’ And of course I immediately did it after getting the message,” he said.

After a “night full of tears,” he said, he contacted the Alfa-Bank branch back in Russia at 3 a.m. Toronto time to withdraw the money. Just a few hours later, Prime Minister Justin Trudeau and his ministers stepped in front of the microphone to announce Canada’s new sanctions.

Svetlana’s money never came. Like Natasha, she was blocked in transit and never reached her Canadian account – but Alfa-Bank says it no longer exists. He struggled to understand what was happening.

Alfa-Bank suggested a few weeks later that the transfer was “likely” to be frozen by the Canadian government. It directs them to a website where they can request an exemption.

Global Affairs Canada confirmed they received her application but never explained why her savings were frozen. Svetlana said the only feedback she received from the department was an automated reply e-mail thanking her for her patience as the department faced requests.

“What frustrates me the most is that I don’t see action. They don’t communicate, they don’t give an estimate of time, so we don’t know what to expect,” he said.

“I’m not guilty.”

Russian citizens are not the only ones withheld from their savings by Canadian sanctions.

Darya – who also spoke to CBC News on condition of anonymity – works and raises two children, ages five and eight, with her husband in Winnipeg. The immigration was approved in the provincial nomination program before the pandemic, but cannot move to Canada from Kazakhstan until the end of 2021.

Darya said that she also does not support Vladimir Putin. His mother is of Ukrainian descent.

When they sold property in Kazakhstan, they took some of the proceeds with them and left the rest with Darya’s brother, to be transferred later.

When he needed more money, his sister discovered that only one local bank could send Swift transfers abroad: Sberbank Kazakhstan, a subsidiary of a Russian state-owned bank that had been blacklisted by Canada.

Although formerly part of the Soviet Union, Kazakhstan is now an independent country with its own financial system. The bank told his brother that the Canadian sanctions would not affect the transfer. But the funds never made it to Darya’s account in Canada.

He applied to Global Affairs for an exemption to release the money – tens of thousands of dollars – at the end of March. The department informed him that his application would be considered. Since then, silence.

“It’s been ten months now and I don’t have anything,” said Darya. “For us, this is a lot of money, and we earned this money in Kazakhstan.”

She said she and her husband were turned down for a Canadian mortgage because they didn’t have enough to pay the bills.

“My current immigration … is not fun,” he said.

‘We are slowly losing hope’

Madina Muslimova is another permanent resident of Canada who moved to Toronto from Kazakhstan in 2018.

She is currently working while raising a small child on her own. He hopes to return to school to earn a master’s degree. Her parents, now in their 70s, recently sold some of their assets to help her financially.

His mother had a visitor visa and came to help, but he needed medical care that the family had to pay for while he was in Canada. That’s why the family tried to transfer the six-figure sum to Madina’s Canadian account.

Like Darya, she learned the hard way that Sberbank Kazakhstan is not exempt from Canadian regulations.

“My parents chose that bank,” said Madina. “It was just across the street … they thought it was stable.”

The Kazakh subsidiary is sold and rebranded last summer to escape the Russian sanctions, but the move came too late for the Madina family – funds that seem to be frozen.

“I still haven’t got any clarification on where my funds are,” Madina said. “We’re counting on that money … I think we’re slowly losing hope, to be honest.”

CBC News asked Foreign Minister Mélanie Joly what her department is doing to manage sanctions waiver requests.

“Our goal is to target Putin and his supporters. This is a strategy for Canada [and] for all our allies as well,” the minister said.

“When it comes to individual cases, we’re going to do what we’re going to do on a case-by-case basis. You want to make sure that the core of our approach is respected. And we want to make sure that we have a humane approach.”

In a written statement sent to CBC News in December, Global Affairs said it could not speak to individual applications, but “does not seek to confiscate assets owned by unregistered individuals or entities.”

But how long will the department open due to diligence and release the savings that Natasha, Svetlana, Darya and Madina have?

“They’re really considered collateral damage,” Boscariol said.

He said he believes Global Affairs currently has a backlog of more than 500 applications, with limited resources to deal with them.

Last November, Boscariol appeared before a Senate committee as an expert witness on sanctions measures. He gave the department a class failed for its administrationsaid Canada is missing an opportunity to implement more effective compliance measures.

“There are some good lessons we can learn from our allies in this regard in the United States and the United Kingdom,” he told CBC News.

The European Union, for example, has banned private transfers for people who do not have approved companies and are not government officials.

Boscariol said he also believes Canada could issue general licenses to reduce the backlog more quickly.

“Our quarrel is not with the Russians,” Prime Minister Trudeau said when the sanctions were announced. “With President Putin and Russian leaders who have enabled and supported further invasions of Ukraine.”

“I’m a Canadian citizen and the sanctions have really affected me,” Natasha told CBC News. “So I don’t know how to react to that.”