Canada-U.S. Blog

Trade Lawyers Cyndee Todgham Cherniak and Susan K. Ross

Canada’s Level Of Activity In The Area Of Export Controls and Economic Sanctions May Surprise You

Posted in Border Security, Canada's Federal Government, Export Controls & Economic Sanctions, Exports

Businessman with World Map Globe.

Looking back over the last 12 months, the level of activity in the area of export controls, economic sanctions and trade restrictions in Canada is somewhat surprising.  Canada is usually rather quiet and there is not a lot to report.  The last 12 months are different and we are seeing activity at Global Affairs, Export Controls Division, Global Affairs, Export Controls, the Canada Border Services Agency (“CBSA”), the Royal Canadian Mounted Police (Canada’s federal police force) (“RCMP”), the Federal Court of Canada, the Minister of Foreign Affairs and the Minister of International Trade.

More activity is expected in the Fall of 2016.  We expect to see new legislation to implement requirements in the UN Arms Trade Treaty into Canadian domestic laws.  We will be watching what else is on the horizon.

For more information about Canada’s export controls and economic sanctions laws, please call Cyndee Todgham Cherniak at 416-307-4168 or email cyndee@lexsage.com.  Also go to www.lexsage.com.

Hanjin Sinks

Posted in Corporate Counsel, Cross-border deals, Cross-border trade, Transportation

Originally published in the Journal of Commerce – September 2016

For the last two weeks, the focus has been dealing with the fallout of the Hanjin bankruptcy filing. As we go to publication, the courts in the U.S. are overseeing efforts aimed at getting the vessels stuck at anchor into port and unloaded. The Federal Maritime Commission  (FMC) quickly established a protocol for shippers to report issues they encounter with Hanjin cargo. Specifically, the FMC proposes shippers send an email to complaints@fmc.gov and state “URGENT—HANJIN SHIPPING” in the subject line.  The FMC asked that any complaint also include the following details:  (1) Name; (2) Company name; (3) Contact details; (4) Identity of and contact information for the person or company associated with the problem; (5)  A full description of the matter (including attempts at resolution); and (6) The desired outcome.  The complaint should also include copies of the relevant documentation, a description of the cargo, the port or ports of origin and destination, including any terminal and railroads involved, and the date of shipment or sailing. Beyond referring the complaint for internal review, it is not all clear what the FMC intends to do with the information it receives, but this is truly an opportunity for the FMC to shine.

To its credit, the FMC quickly spoke out cautioning against price gouging. Perhaps it was asking too much given the circumstances, but what the FMC could have also done was have its Commissioners spread out to the major seaports throughout the country, bring together stakeholders, and start a timely discussion about options available to deal with the resulting headaches, including the  return of empties. Admittedly, much of what will happen is driven by what the bankruptcy court permits, but that should not have been an impediment to greater use of its bully pulpit by the FMC.

The Commission is  a relatively small organization with limited resources, and so it is reasonable to worry that it may become inundated with complaints. If not, kudos to the FMC, but if so, then how will shippers view the FMC? We should also keep in mind the FMC does not routinely deal with bankruptcy issues. Nonetheless, it could reach out for assistance on that score from both within and outside the federal government.

Even in the face of anecdotal stories about current and on-going price gouging, such as $600 for an appointment, the FMC still has time to bring together key stakeholders to walk through what is going on, assert its leadership role and seek to keep the playing field level. Should the FMC decide it is too late to do that, or conclude it is hamstrung by its legal mandate, there are still areas where the Commission could act now that would offer relief to many.

Let’s start with the empties. Yes, it is true that by now the leasing companies have started to formulate a process where their leased empties can be returned to them. What is unclear at this point is how the bankruptcy court will view them taking back “their” property without court approval. Equally vexing is what happens with the Hanjin-owned containers?  At the very least, the FMC could jawbone with the ports, considering the bankruptcy implications,  so that the ports take back the empties and not put everyone else at risk for significant per diem and other charges months from now that likely will be claimed by the bankruptcy trustee.

Additionally, given that most, if not all, states have a provision in their laws, and there is typically a term in the relevant bill of lading and/or tariff, that allows the service provider (terminal, trucker, etc.) to hold cargo until the amount due on the given shipment is paid, there will be many shipments where payments will be made twice for the simple reason the beneficial cargo owner needs that cargo. The first payment was to Hanjin and the second will be for the same handling or transportation charge to the third party possessing the shipment. Alternatively, the shipment will have moved freight collect. The typical carrier bill of lading contains a clause stating even if the carrier declared force majeure, the carrier is entitled to collect all the freight charges due. You can quickly imagine the messiness paying third parties rather than Hanjin directly is going to cause should the bankruptcy trustee come to collect.

For the nvocc community this is particularly challenging as they have tariffs or service contracts on file and the Commission’s laws and regulations mandate if they incur specified charges, they must recover them from their customer or face a potential enforcement action based on failing to charge in accord with their tariff or service contract. The reality of business is there will be customers that are so valuable, the nvocc would prefer to absorb those additional charges simply to keep their customers happy.  The FMC should step out in front of this issue and state that as a matter of policy, so long as the nvocc is able to articulate an objective reason for not passing the charge along to the customer, there will be no enforcement action taken.  In deciding what constitutes objective reasons, the Commission should seek input from the trade associations which represent these interests – shippers and nvoccs – and identify that list. This is not something to be done in a vacuum.

At the same time, the Hanjin bankruptcy is a reminder for shippers to be sure to properly and regularly vet their business partners, and be mindful of changing circumstances. The general press has covered this story from the perspective of the vessels shut out of port. For those of us in the business, we know the story goes much deeper and the goods in transit will provide the greatest challenge. Interestingly, those general press stories include comments from shippers pointing out that Hanjin was in a downward financial spiral for some time.  In such circumstances, shippers are routinely caught between wanting to move enough goods to not fall seriously below their service contract volumes, but at the same time, protect themselves from disruption by changing carriers. Those which had no service contracts or were not convinced to use Hanjin for nationalistic reasons have by and large moved to other carriers, but some still got stuck in the mess, at least as to vessels which were held out of port that carried cargo belonging to Hanjin and other consortium partners.  The Hanjin situation is a reminder about the delicate balance of sticking with business partners that were reliable in the past versus protecting your own needs. Whichever side of that pendulum  you come down on, it should not be a surprise if one of your business partners files bankruptcy or otherwise suffers significant service failures. If it is, the best recourse is to quickly review and upgrade your vetting process!

Hanjin Bankruptcy Could Sink Shippers, Too

Posted in Border Security, Corporate Counsel, Cross-border deals, Cross-border trade, Transportation

As the situation starts to stabilize, at least to the point where Hanjin vessels are now able to berth and unload cargo, there are so many other issues up in the air. As companies go about trying to get their hands on their cargo, it is important to keep in mind the major and costly headaches paying the wrong party could cause to individual shippers.

The job of the bankruptcy trustee is to maximize the bankrupt estate for the benefit of the creditors. As such, beside what could happen with service contract shortfalls and just how much of those dollars might be recoverable, there are other factors that could cause the burning of big holes in shippers’ wallets.

1)   The Hanjin bill of lading terms and conditions undoubtedly include a provision stating that all the charges associated with a given shipment are due as soon as the shipment is tendered to Hanjin. So, if the shipper ends up paying money to a third party to get his goods, such as a port, railroad or warehouse, the amount diverted to pay the third party could still be claimed by the bankruptcy trustee as owed to Hanjin.

2)   With the containers, there are two possibilities. The first is the leasing companies have language in their agreements which provides them with a lien and so the right to, in effect, repossess the containers for charges unpaid by Hanjin. However, if there is no such clause in their agreements, then the leasing companies could end on the wrong end of a claim in the bankruptcy case of taking Hanjin assets improperly. Either way, the leasing companies could find themselves answering to the bankruptcy court because they are taking action without bankruptcy court approval. There is an automatic stay in place meaning creditors are not supposed to take any sort of collection or enforcement action until the bankruptcy court rules on their claims and repossession assets is not likely to be something the bankruptcy court will be happy about.

3)   Another major area where this could be dicey is for nvoccs. If the goods were shipped freight collect and the nvocc does not pay the collect amount directly to Hanjin, they, too, could find themselves having to reimburse the bankrupt estate the amounts paid to third parties. Additionally, if money is paid twice for the same service, (such as on a freight prepaid shipment which included the rail movement, and the nvocc pays the railroad directly) it is possible the FMC would take the position that unless the nvocc bills and collects from its customers the amounts paid the third parties, there could be fines imposed by the FMC for failing to charge in accord with the nvoccs’ tariff.

By no means a detailed list, these are just some of the non-admiralty issues to keep in mind as you go about getting your cargo, whether newly being unloaded or stuck in transit.

What Can I Do If My NEXUS Card Is Confiscated By The CBSA?

Posted in Border Security, Customs Law, Immigration law, NEXUS

 

Help Question Answer Dice Showing Knowledge And Learning

The Canada Border Services Agency (“CBSA”) may confiscate, revoke or cancel a NEXUS Membership for a number of reasons, such as (1) a breach of a customs law (e.g., undervaluation or not declaring goods purchased or acquired outside Canada), (2) a breach of an immigration law (e.g., working in Canada without a proper visa), (3) a breach of a NEXUS Program rule (e.g., using the NEXUS lane with a person in the vehicle without NEXUS approval, having commercial goods in a vehicle when you used the NEXUS lane, failure to update information of your NEXUS file after a new passport is issued or you have moved, etc.), (4) a determination of ineligibility (e.g., criminal charges are laid), or (5) a determination that the information of a NEXUS application or renewal is false (e.g., no mention of a past customs violation).

Usually, the CBSA will confiscate a NEXUS Card during a secondary inspection or will send a letter indicating that your NEXUS membership has been cancelled.  You have 90 days to take action and ask the CBSA to review the decision to cancel your NEXUS membership.  The 90 day period starts on the date that you receive the cancellation letter from the CBSA. That being said, the Presentation of Persons (2003) Regulations currently sets the limitation period at 30 days and the CBSA has announced the deadline will change to 90 days.  The 90 day limitation period matches the 90 day limitation period in the Customs Act for appeals of penalties.

CBSA Confiscated NEXUS Card Due to Customs Violation

If the CBSA confiscated your NEXUS Card due to a customs violation, it is important to file 2 appeals. One appeal is filed with the NEXUS program and is in respect of the cancellation of the NEXUS privileges (this is the one that is usually most important to the traveller). The second appeal is the appeal of the CBSA’s determination that there was a customs infraction and is filed with the Recourse Directorate (this is often the appeal with less importance to the traveller, but more importance to the CBSA).  This second appeal of the customs infraction is a necessary step that must be successful before the NEXUS appeal will be considered by the CBSA NEXUS Program.  The Recourse Directorate will review the customs infraction appeal and, if successful, will send a letter to the NEXUS Program to support your NEXUS appeal.  If the Recourse Directorate finds that a customs contravention did occur, you will not be successful in the NEXUS appeal.  It is important to note that the NEXUS appeal must be filed within the 90 day limitation period and the customs infraction appeal will not be concluded within the first 90 days. This means you must file the NEXUS appeal and not wait until you hear back from the Recourse Directorate.

The strategy of the appeal of the customs infraction will depend on the actual infraction.  The most common infractions we see are failure to declare goods (e.g., you forgot about a good you purchased or acquired outside Canada or did not tell the Primary CBSA officer about the good) or undervaluation of goods (e.g., a person says they purchased  or acquired outside Canada $400 worth of goods and you actually have more than $400 worth of goods).  It is also common to see the CBSA confiscate a NEXUS Card for failure to check the box for agricultural goods (or food) or failure to declare more than $CDN 10,000.  The CBSA has also confiscated NEXUS Cards of:

(a) travellers who did not have a CITES permit when importing certain goods;

(b) travellers who did not provide truthful answers about importing alcohol and/or tobacco; and

(c) travellers who did not answer all questions truthfully (which sometimes is really that the CBSA did not like you or you did not behave nicely with the CBSA officer).

There are a variety of other reasons that the CBSA may determine that a customs infraction has occurred.

The customs infraction appeal must set out the facts, details concerning the dispute and the reasons for the appeal. The appeal should include any and all relevant documents concerning the “disagreement” with the CBSA.  Most importantly, it is very important to not admit a mistake as the CBSA officer often asks you to do when discussing appeal rights.  How you present your case is very important.

After the appeals are filed, the CBSA, Recourse Directorate will send a copy of the CBSA Officer’s notes on the day in question relating to the “disagreement”.  The CBSA, Recourse Directorate will give you 30 days to file additional information after receiving the notes. If your letter of appeal is very divergent from the CBSA Officer’s version of the events, you will have a problem in explaining those differences.

For more information, please review Canada’s NEXUS Program 101 and What Canadian Corporate Counsel Should Know About The NEXUS Program.

CBSA Cancelled Your NEXUS Membership Due to a Breach of a NEXUS Program Rules

If the CBSA cancelled your NEXUS Membership or confiscated your NEXUS Card due to a breach of the NEXUS Program, you file one appeal with the NEXUS Redress Committee.  If the NEXUS Redress Committee Level 1 does not allow the appeal, you may file a further appeal to the Recourse Directorate.

This appeal must explain what happened.  However, if you ignored the rules of the NEXUS Program or forgot the rules of the NEXUS Program, you are unlikely to be successful in your Nexus appeal.  That being said, honest mistakes are sometimes forgiven and second chances are sometimes given.  It will all depend on the facts and the CBSA Officer’s notes about the incident in question.  There are many things you can include in your NEXUS appeal to improve your chances of success. How you communicate the details will also affect your chances of success.

That being said, recent changes to the enforcement of the NEXUS Program rules by the CBSA decrease chances of success in NEXUS appeals. See our recent post When Are You Not Allowed To Use The NEXUS Lane.  Also look at Know the Rules: Canada Border Services Agency NEXUS Membership Program Guidelines.

CBSA Confiscated NEXUS Card Due to Immigration Law Violation

If the CBSA confiscated your NEXUS Card due to a customs law violation, it is important to file 2 appeals. One appeal is filed with the NEXUS program and is in respect of the cancellation of the NEXUS privileges. The second appeal is the appeal of the CBSA’s or Immigration Canada’s determination that there was a immigration law infraction.  What steps need to be taken to appeal the alleged immigration violation depends on the type of violation.  Each case must be reviewed for specific facts and a specialized strategy for the appeal will be necessary.

CBSA Cancelled NEXUS Card Due to Ineligibility

If the CBSA cancelled your NEXUS Membership due to a determination of ineligibility, it is most commonly the result the CBSA reviewing information concerning an arrest or a criminal conviction.  You will have to file one appeal with the NEXUS Redress Committee and provide evidence that the charges were dropped or dismissed by a court of law. If you have been given a pardon, you would need to provide evidence of the pardon.

For example, an individual’s NEXUS membership was cancelled after a CBSA officer determined, based on incomplete information in the National Crime Information Center, that the individual had been convicted of an offence.  However, in fact, the charges had been dismissed.  We were able to locate the necessary documents to provide the needed evidence to persuade the CBSA to overturn the cancellation.

We have seen cases where the CBSA cancelled a NEXUS Membership for perceived breaches of criminal laws. For example, a Canadian had his NEXUS Membership cancelled because his name was located in the phone of a person of interest.  We helped this person organize documents to demonstrate he had “good character” and the CBSA had made a rush to judgement when finding his name in someone else’s phone.

We have also seen cases where the CBSA cancelled a NEXUS Membership because of activities considered to demonstrate “poor character”, such as a determination after the issuance of a NEXUS Card that the person committed a customs infraction prior to applying for a NEXUS Card.  In this case, we needed to file two appeals and follow a process similar to the process described above.

When we are preparing for appeals of this category of NEXUS appeal, we sometimes need to file an ATIP (access to information) request.  Having the CBSA’s file can help in responding to the perceived ineligibility.  For more information, please review “How To Find Out What Is In The CBSA Files About You“.

It is not a simple and quick process to appeal a confiscation of a NEXUS pass (any of the categories discussed above). The process is not written anywhere and may take over a year. If you require assistance from a lawyer because the NEXUS privileges are important to you, please contact Cyndee Todgham Cherniak at 416-307-4168 or email at cyndee@lexsage.com.  You may find additional articles on the LexSage website.

What Should I Do If The CBSA Seizes My Currency or Monetary Instruments?

Posted in Border Security, Canada's Federal Government, Currency Reporting, Customs Law, Exports, Imports Restrictions

Canadian currencyOn September 9, 2016, the Globe and Mail published an article entitled “Seizures of undeclared cash spike at Vancouver International Airport“, which reports that the CBSA “confiscated more than $13-million in hidden currency from 792 Chinese people passing through Vancouver International Airport”.  The CBSA seizes undeclared currency and monetary instruments at all of Canada’s airports (from outgoing and incoming passengers).  The Globe and Mail article focuses on Chinese travelers to Canada.

When travellers travel to Canada by air, they are given an E311 Declaration Card during the flight to complete.  One of the mandatory questions asks whether the person has “currency and/or monetary instruments totaling CAN$10,000 or more”.  If a person answers “yes”, they are referred to the Secondary Inspection Area (mandatory) to complete an E667 “Cross-Border Currency or Monetary Instruments Report – General”. If the person answers “no” and the CBSA finds currency and/or monetary instruments exceeding $CDN 10,000, the currency/monetary instruments will be seized.

If the traveller is entering Canada at a border crossing, the Primary CBSA Officer will ask as a mandatory question whether the vehicle (that is all the persons in the vehicle combined) has more than $CDN 10,000. If the answer is “yes”, the Primary CBSA officer will refer the vehicle for a mandatory examination and to complete an E667 Form.  If the person answers “no” and the CBSA finds currency and/or monetary instruments exceeding $CDN 10,000, the currency/monetary instruments will be seized.

The CBSA will complete a Statement of Goods Seized when the currency and/or monetary instruments are seized.  Usually, the CBSA conducts examinations and interrogations during the secondary inspection.  The CBSA Officers involved in the seizure will usually complete Narrative Reports about their dealings with the traveller.  The CBSA will also complete an E667 form and will send that form to FINTRAC.

The CBSA will not release the currency and/or monetary instruments if they believe the currency and/or monetary instruments is “proceeds of crime”.  The seizure takes place pursuant to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

If the CBSA accepts that the currency and/or monetary instruments is not proceeds of crime, they will seize the currency and/or monetary instruments and return the currency and/or monetary instruments after the payment of a penalty ($250 for the first offence, $2500 for a second failure to report or if false information was provided during the Secondary Inspection, $5000 for a third failure to report).  If the person has failed to report currency and/or monetary instruments more than 3 times, the CBSA may not release the currency and/or monetary instruments.

If the traveller cannot demonstrate to the CBSA that the currency and/or monetary instruments is from legal sources, the CBSA will not release the currency and/or monetary instruments.  With respect to some cultures, proving currency and/or monetary instruments is not “proceeds of crime” is not an easy task.

What should a person do if their currency is seized by the CBSA?

If the CBSA has seized currency and/or monetary instruments, you may file a request for a review to the Recourse Directorate. The Request for a Minister’s Decision must be filed pursuant to section 25 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act within 90 days of the date of the seizure.  If you file the Request for a Minister’s Decision late, it will not be considered by the Recourse Directorate (because there is a statutory deadline).  We recommend that you get assistance from a lawyer because you will have to organize evidence.  It is difficult to know what evidence to provide.

We have been involved in many currency and/or monetary instruments seizures by the CBSA. Based on our experience, it is always necessary to provide additional documentation to prove that the currency and/or monetary instruments are from legal sources. A letter or written statement is never enough in the eyes of the CBSA because people will say anything to get money back.  The CBSA wants to see a paper trail to the source of the funds.  The CBSA is asking whether the large sum of cash is being laundered.  The CBSA is asking if the funds come from illegal activities.  The CBSA is asking whether the money is to be used to fund terrorist activities. The CBSA is asking whether the traveller is committing some other form of illegal activity.  These questions can be successfully answered with evidence that can be corroborated. More evidence is better than less evidence.  The CBSA believes that if the currency or monetary instrument is legal, there should be an abundance of proof.

For example, a client was able to successfully show that currency was not proceeds of crime by providing proof of legal employment, direct deposit of pay from the legal employment into a bank account and a recent withdrawal from the bank account for the amount in the person’s possession.

A client was able to successfully argue that an unendorsed cheque written by the person to himself as the payee was not a “monetary instrument” because it had to be endorsed before a bank would release the funds.

A client was able to successfully show that currency was a bequest and was received from the executor of his grandfather’s estate two days prior to travel to Canada.  The executor provided a copy of the will, evidence of the reading of the will and proof of payment.

Many other travellers to Canada have not been so lucky in demonstrating to the CBSA the legitimacy of the source of the cash.  There are many cases.  In one case, the person could prove that he received the cash from family members. However, he could not prove that the family members received the cash from legal sources.  It was necessary to get very private financial information from the family members about legal employment, bank accounts, etc.

In another case, the traveller was a waitress and did not put all her tips in a bank account. She could not prove to the satisfaction of the CBSA that the money was not proceeds of crime because the CBSA believed the money should have gone into a bank account.  The question was raised whether the traveller committed tax evasion (because if the cash tips were not reported as income, they would have been proceeds of crime).

There is some discussion as to whether persons with offshore bank accounts in certain countries are importing proceeds of crime if they bring cash or bank drafts to Canada and do not report the currency and/or monetary instruments.  The Canada Revenue Agency has taken the position that Canadians have offshore accounts in order to commit tax evasion.

For more information, please contact Cyndee Todgham Cherniak at 416-307-4168 or by email at cyndee@lexsage.com.

Global Affairs Canada Posted Secret Memorandum On Saudi Vehicles Sale

Posted in Export Controls & Economic Sanctions, Exports

I have recently come across the March 21, 2016 “Secret” Memorandum for Action to the Minister of Foreign Affairs regarding the sale of light armoured vehicles to Saudi Arabia.  It was posted on the Global Affairs Canada web-site along with an April 11, 2016 Notice.  Historically, it is unusual for such documents to be made public.  This one is marked “Secret” and it is interesting that this document has been released.

Importers Can Play The Game Too – Preparing Call Reports To Record Communications

Posted in Antidumping, Trade Remedies

3d human with a red question mark

In antidumping injury cases in Canada, the domestic industry often include confidential call reports in their submissions to the Canadian International Trade Tribunal. The call reports document conversations and meetings with importers/distributors and customers in which the customer or distributor asks for a price reduction or says the price offered is too high.  The domestic industry uses the call report as evidence of lost sales or price suppression/price depression/price undercutting.

Usually the customer/distributor does not keep his/her own notes about the telephone conversation or meeting.  They are put in the position of defending their actions and comments that they never made.  For this reason, we have prepared a Call Report precedent for importers/distributors/customers to use when dealing with Canadian manufacturers who might bring an antidumping case.

I have often thought it would be brilliant if the importers/distributors/customers filed their call reports with the Canadian International Trade Tribunal documenting the telephone calls and meetings from the buyers perspective. It would be nice to see the call reports in which the domestic industry says that they do not have production capacity to manufacture the goods.  It would be nice to see the call reports when the domestic industry communicates that they are having delivery problems or supply problems.  It would be nice to show that the information written by the domestic industry is not correct (e.g., that the price requested is not the same price recorded by the domestic industry).  It would be nice to see the call reports where the customer says they already have a full inventory from the domestic producer and cannot finance further inventory.

For more information, please contact Cyndee Todgham Cherniak at 416-307-4168 or cyndee@lexsage.com. Please look for more helpful information at http://www.lexsage.com/free-information.

Do Not Enter! Canada Is Rejecting Potential Immigrants Who Have Broken Foreign Export Controls Laws

Posted in Border Security, Export Controls & Economic Sanctions, Exports, Immigration law

Gavel and Scales of JusticeOn August 30, 2016, the Federal Court of Canada issued its judicial review decision in Mahmood Sajid v. The Minister of Citizenship and Immigration, 2016 FC 981.  The Federal Court dismissed a judicial review application filed by Mr. Sajid to review a decision by Canada’s Refugee Protection Division (RPD) to vacate Mr. Sajid’s refugee protection.  The RPD vacated Mr. Sajid’s refugee protection due to omissions or withholdings of information. In particular, Mr. Sajid was alleged to have committed serious non-political crimes relating to the illegal export of firearms from the United States.

Mr. Sajid, a citizen of Pakistan, said he left Pakistan in 2000 due to persecution based on his sexual orientation.  He had moved to the United States and lived there without status until he crossed the border into Canada on May 15, 2014.  On June 13, 2014, he claimed refugee protection in Canada, which was granted on September 12, 2014.

However, after the initial approval of refugee protection, it was discovered that Mr. Sajid had been indicted by a Grand Jury in the United States for conspiring to export high caliber firearms and related accessories to Pakistan.  Canada’s Minister of Citizenship and Immigration informed the Court that the activities undertaken by Mr. Sajid in the United States would be violations of Canada’s export controls laws if committed in Canada.  In particular, these U.S. offences would equate under Canadian law to:

  1. Conspiracy of Exporting knowing it is unauthorized of a firearm, as described in paragraphs 465, 103(1)(a) of the Canadian Criminal Code, punishable by a maximum term of 10 years imprisonment;
  2. Export or attempt to export, as described at paragraphs 13 and 19 of the Export and Import Permits Act, punishable by a maximum term of 10 years imprisonment;
  3. False or misleading information, and misrepresentation, as described at paragraphs 17 and 19 of the Export and Import Permits Act, punishable by a maximum term of 10 years imprisonment.

Mr. Sajid had stated on his refugee protection application that he had not been convicted of and was not currently charged with, or on trial for, or party to a crime or offence, or subject to any criminal proceedings in another country.  So, this was false information provided in the the application form – a big no-no.

Upon further information gathering, the RPD learned that:

  1. Mr. Sajid withheld that he used an alias while living in the United States. The Applicant is referred to in the Indictment as SAJID MAHMOOD, a/k/a Shawn Chudhary”.
  2. Mr. Sajid withheld that he had been asked to voluntarily leave the United States. The Applicant’s answer in the refugee claim form to which he wrote “No” to the question “Have you [ever] been refused admission to, or ordered to leave, Canada or any other country?”. The RPD relied on a Report from US Homeland Security, dated October 7, 2014, which states that “a Warrant of Removal/Deportation was issued for MAHMOOD”.
  3. There was an inconsistency as to when Mr. Sajid stopped work at the pizza restaurant where the two other alleged co-conspirators worked.
  4. Mr. Sajid was aware of the investigation into the alleged criminal activities in which he and the co-conspirators were implicated (however, he said he was not aware).

The facts were getting worse for Mr. Sajid.

As a result of the misrepresentations and omissions, the Minister of Citizenship and Immigration applied to vacate Mr. Sajid’s refugee protection status and the RPD vacated Mr. Sajid’s refugee protection status. Mr. Sajid filed the judicial review of the decision of the RPD to vacate his refugee protection.  The Federal Court of Canada dismissed the application for judicial review.

The issues before the Federal Court were:

  1. Did the RPD err in finding that the Applicant obtained refugee protection by misrepresenting or withholding material facts?
  2. Did the RPD err in finding that there are serious reasons for considering that the Applicant committed the offence stated in the Indictment?
  3. Did the RPD err by failing to conduct an analysis under subsection 109(2) of the Immigration and Refugee Protection Act?

The Federal Court answered these questions as follows:

  1. The RFD did not err.  The role of a review court is not to reweigh the evidence considered by the tribunal.
  2. The RFD reasonably held that there are serious reasons for considering Mr. Sajid committed non-political crimes in the United States prior to his admission to Canada as a refugee.
  3. The RFD’s equivalency findings (that the U.S. offences had Canadian equivalent offences with the same essential element) were reasonable.
  4. Mr. Sajid had illegally shipped to Pakistan (or conspired with others) large quantities of high caliber firearms, firearm parts and accessories – these are serious non-political crimes
  5. The RFD did not apply the 10-year rule in mechanic or unjust manner.

However, what is lacking in the Federal Court decision is any review of the Canadian jurisprudence under the Export and Import Permits Act.  This is because there is little jurisprudence.  I do not know of any cases where an individual was sentenced to 10 years imprisonment for exporting a firearm.  There are few cases relating to prosecution for export offenses.  I cannot say with any degree of certainty that Mr. Sajid would have been convicted in Canada for conspiracy to export firearms to Pakistan.  Would the prosecutor have accept a plea bargain for testimony against the co-conspirators?

This case is is important because Canada is taking a hard stance against violators of export controls laws – even persons who have allegedly breached export controls laws of another country. There are a few recent immigration cases.  I expect there will be more cases in the future.

For more information about Canada’s export controls and economic sanctions laws, please contact cyndee@lexsage.com or call 416-307-4168.  For more Free Information go to http://www.lexsage.com/free-information.

 

Questions Are Being Asked About The Application of Canada’s Trade Restrictions to Sales By Streit Group

Posted in Export Controls & Economic Sanctions, Exports

smiley-vector-illustration-puzzled_X1AqT-_LIs there a Canadian-owned company with manufacturing operations in the United Arab Emirates that is selling to sanctioned destinations goods that would be on Canada’s Export Control List if they were manufactured in Canada? It appears that the answer is “Yes”.  Does the Canadian Government believe that the sales are legal under Canada’s current economic sanctions laws?  Apparently, the answer may be “Yes”. Is this catching the attention of reporters and interest groups?  The answer is “Yes”.

On September 6, 2016, the Globe and Mail published an article entitled “Canadian-owned firm sold armoured vehicles to Sudan despite export ban“.  On August 10, 2016, the CBC published an article entitled “Armoured car sale to South Sudan should be investigated, rights group says“.  Both of these articles refer to a UN panel report, which is the “Letter dated 22 January 2016 from the Panel of Experts on South Sudan established pursuant to Security Council resolution 2206 (2015) addressed to the President of the Security Council“.

There is another UN panel report entitled “Letter dated 4 March 2016 from the Panel of Experts on Libya
established pursuant to resolution 1973 (2011) addressed to the President of the Security Council”, which contains information about the Streit Group’s sales to Libya. On August 15, 2016, the CBC published an article entitled “Feds want RCMP to look into Canadian firm’s armoured car shipments to war-torn Libya“. On August 13, 2016, the CBC published an article entitled “Liberals put on the spot by Streit sales in South Sudan and Libya“.

What Geoffrey York (Globe and Mail) has reported is that the Streit Group sold from its factory in the UAE 173 armoured vehicles to South Sudan.

Murray Brewster (CBC) has reported that:

“In its initial response to the UN’s report, Global Affairs Canada said Streit didn’t break Canadian law because the armoured vehicles were manufactured and shipped by the company’s branch in the United Arab Emirates, and therefore the sale is outside of the federal government’s arms export regulatory regime.

It took the department almost a week to respond to CBC’s questions.

“We take this issue very seriously,” said spokesman Francois Lasalle, who went on to note the government’s recent decision to ratify the Arms Trade Treaty means there will be “more rigour and transparency for Canada’s export controls system,” and that legislation will be coming this fall.

The department didn’t say what Canada knew about the Streit deal and when, nor did officials respond to the allegation that the deal may have violated sanctions.”

Despite all that has been written by two reporters, this news has not caught the attention of many.  Maybe this is because many Canadians take vacation in August.  Maybe this is because most Canadians are not thinking about sales of military vehicles from half way around the world to a place on the other side of the world.

However, it is likely that changes to Canada’s export controls and trade restrictions legislation coming this Fall will raise the thermostat on these types of transactions.  Canada is getting some unfavourable press and this may cause a few perceived loopholes to be closed or restricted.  What has happened in the recent past may have a rippled effect into the future – time will tell.

For more information about Canada’s economic sanctions and export controls laws, please go to Free Information at www.LexSage.com.  If you have questions about Canada’s economic sanctions laws, please call Cyndee Todgham Cherniak at 416-307-4168 or email at cyndee@lexsage.com.

 

Canada Border Services Agency Issues Preliminary Determination of Dumping Against Gypsum Board From USA

Posted in Antidumping, Trade Remedies

Many-QuestionsTo the People of Western Canada: On September 6, 2016, the Canada Border Services Agency (“CBSA”) released a preliminary determination of dumping on gypsum board from the United States.  Starting on September 7, 2016 until some unknown date in the future, antidumping duties will be collected on drywall imported from the United States – and the rates of duties are HIGH!

The preliminary rates of duties until the final determination of dumping will be:

Exporter Estimated Margin of Dumping / Provisional Duty Payable
CertainTeed Gypsum and Ceiling Manufacturing Inc. 125.0%
Georgia-Pacific Gypsum LLC 105.2%
United States Gypsum Company 143.6%
All Other Exporters 276.5%

What this means is that if you import into British Columbia or Alberta, or Saskatchewan, or Manitoba or Yukon Territories or Northwest Territories, CertainTeed drywall from the United States, the CBSA will take the purchase receipt and add duties of 125% (the price more than doubles).  The provisional duties on other brands of drywall are either higher or lower – but all are over 105%.  There will be a border shock if any Canadian homeowner or contractor goes to a U.S. store for drywall/gypsum board.

Don’t be angry with the Canada Border Services Agency officer who gives you the bad news – CertainTeed filed the complaint that started the antidumping legal proceeding.  CertainTeed has 3 plants located in Western Canada and plants located in the United States. It is very interesting that CertainTeed’s provisional antidumping duty rate is 125%.  This may be important in the Canadian International Trade Tribunal injury inquiry.  It is unusual for the Complainant to be dumping the subject goods into Canada.  Arguably, CertainTeed’s own imports did not cause injury to CertainTeed’s plants.

Associations of contractors and builders in the Western Canadian provinces should participate in the Canadian International Trade Tribunal injury inquiry.  Anyone who is caught in this trade war should write a letter to the Canadian International Trade Tribunal.

If you require more information, please call Cyndee Todgham Cherniak at 416-307-4168 or email at cyndee@lexsage.com.