Canada publishes guidance on the meaning of deemed ownership in sanctions legislation

14 October 2026

Canada has published new guidance setting out the thresholds for establishing “deemed ownership” under the Special Economic Measures Act (SEMA) and the Justice for Victims of Corrupt Foreign Officials Act (JVCFOA). See our Canada pages for more information on this sanctions legislation and Canada sanctions lists.

The deemed ownership provisions were added to this legislation in June 2023 and, alongside the legislation’s dealings prohibitions, prohibit people and entities subject to Canadian jurisdiction from dealing with property owned, held or controlled (directly or indirectly) by any entity controlled by a Canada-sanctioned person/entity.

The guidance says that a person/entity controls an entity, directly or indirectly, if any of these criteria are met:

a. The person holds, directly or indirectly, 50% or more of the shares or ownership interests or 50% or more of the voting rights in the entity. This is assessed in the aggregate: if two or more designated people/entities together meet the 50% threshold, the entity is deemed to be controlled by them even if they do not meet it individually;

b. The person is able, directly or indirectly, to change the composition or powers of the entity’s board of directors; or

c. It is reasonable to conclude, having regard to all the circumstances, that the person is able, directly or indirectly and through any means, to direct the entity’s activities in practice.

Canada advises people and entities to implement a sanctions compliance program consulting the Global Affairs Canada sanctions website to avoid breaching sanctions indirectly.