Most SMEs (and many larger companies also) have little familiarity with Canada’s export controls and economics laws. Many business persons ship first and ask questions later as they do not realize that Canada does not allow anything to go to anywhere. I have prepared an alphabetical guide to some of the relevant Canadian export controls and economic sanctions issues to highlight Canada has many restrictions on exports. Since this is merely an ABC list in a blog article, there are more issues than what is covered below.
A = Area Control List – Canada’s Area Control List (ACL) is a list of countries in respect of which Canada requires export permits to be obtained for all goods (even for pencils). Currently, North Korea is on the Area Control List.
B = Belarus – Technically, Belarus is still on Canada’s Area Control List. However, on May 7, 2016, Global Affairs Canada made an announcement that Canada plans to legally remove Belarus from the Area Control List. Belarus has been on the Area Control List since December 14, 2006. See the post entitled “Canada Announces Plans To End Strict Export Controls Against Belarus“.
C = Canada Border Services Agency – The CBSA is one of many governmental authorities with a statutory mandate to enforce Canada’s export controls laws. The CBSA may detain exported goods and seek information about export permits before permitting the export to proceed. Usually, the CBSA will contact the exporter of record for the export documentation.
D = Dual-Use Goods – Many dual-use goods that may be used for military purposes and civilian purposes may require an export permit in order to be exported. Dual-use goods include products and technologies associated with a variety of advanced materials, electronics, computers, telecommunications, sensors, lasers, navigation, avionics, marine equipment and technology and propulsion.
E = Export Control List – Canada sets out the restricted goods in the Export Control List. The Export Control List is a regulation that is passed by the Governor-in-Council. This means that the Export Control List can be changed without tabling a bill in Canada’s Parliament.
F = Firearms, Munitions, Missiles and Military Goods – Most forms of weapons cannot be exported without an export permit.
G = Guide to Canada’s Export Controls – This is an important government publication setting out Canada’s export controls rules and the goods on Canada’s Export Control List.
H = Hazardous Goods and Waste Materials – Canada restricts the export of hazardous goods and waste materials and puts conditions on the export to ensure safe transportation and arrival. Since 1992, Canada has been a party to the international Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal. The exporter primarily deals with Environment Canada.
I = Iran – Canada imposes multi-lateral and unilateral economic sanctions against Iran. Canada imposes multi-lateral sanctions pursuant to the United Nations Act and Regulations Implementing the United Nations Resolutions on Iran. Canada imposes unilateral sanctions against Russia pursuant to the Special Economic Measures Act and the Special Economic Measures (Iran) Regulations. On February 5, 2016, Canada amended its sanctions against Iran to offer some relief – but did not end all sanctions. Canadian companies must still be cautious and ask questions on proposed activities in and with Iran.
J = Judge – If you do not comply with Canada’s export control and economic sanctions laws, a Canadian judge may impose significant fines and/or prison terms. Directors and officers of a corporation may also be subject to penalties. The CBSA may impose AMPS penalties without having to ask a judge.
K = Keep Records – Keep records of your due diligence efforts to determine that you are not selling to a designated person in a country against which Canada imposes economic sanctions. Keep records of rulings obtained concerning whether goods are on Canada’s Export Control List. Keep records of the end use certificates that you have obtained. If you are registered with the Controlled Goods Program, keep all the required records.
L = Legislation – Canada’s export controls and economic sanctions laws are imposed pursuant to many statutes and regulations. Some of the laws are: Export and Import Permits Act, Special Economic Measures Act, United Nations Act, Criminal Code, Defence Production Act, Freezing of Assets of Corrupt Foreign Public Officials Act, etc.
M = Minister Approvals = Canada’s Minister of International Trade and/or the Minister of Foreign Affairs may issue a Ministerial Authorization to permit certain transactions with designated persons (or persons who are not designated persons) in sanctioned countries even if the transaction would otherwise be prohibited. A Ministerial Approval must be obtained prior to the export and should not be sought in order to correct an infraction.
N = Nuclear Non-Proliferation – Canada imposes export controls and economic sanctions in order to contain and prevent the proliferation of nuclear weapons.
O = Origin – The origin of goods to be exported from Canada may be relevant. Certain goods of U.S. origin require an export permit prior to export from Canada. Canada has a bilateral arrangement with the United States that requires Canada to ensure that U.S. controlled goods are not shipped from Canada in order to circumvent U.S. export controls and economic sanctions rules. Some goods require a specific export permit and other goods may be exported pursuant to General Export Permit No. 12.
P = Permits – An exporter of restricted goods must obtain an export permit from Global Affairs Canada (or a Ministerial approval from the Minister) prior to exporting the restricted goods.
Q = Quotas – Certain goods, such as softwood lumber are subject to export quotas.
S = Sanctions – Canada imposes multi-lateral and unilateral economic sanctions against a number of countries. Canada imposes multi-lateral economic sanctions pursuant to the United Nations Act and regulations thereto. Canada imposes unilateral sanctions pursuant to the Special Economic Measures Act and regulations thereto.
T = Trade Controls Bureau – The Trade Controls Bureau (TID) of Global Affairs Canada administers Canada’s export controls and economic sanctions laws.
U = Unilateral Sanctions – Canada may choose to impose unilateral sanctions against a country in order to send a message that Canada does not agree with that country’s activities. Unilateral sanctions may be imposed in addition to or to supplement sanctions imposed by the United Nations Security Council.
V = Vigilance = Exporters must exercise vigilance to ensure that they are in compliance with Canada’s export controls laws (and the laws of other countries and some laws have extra-territorial application). The first step is to establish internal policies and controls.
W = Wassenaar Convention – Canada is a signatory to the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies (the Wassenaar Arrangement). The Wassenaar Arrangement is a voluntary multilateral export control regime established by 41 countries with a view to regional and international security and stability, transparency and greater responsibility in transfers of conventional arms and dual-use goods and technologies. The List of Dual Use Goods and Technologies is updated from time to time (usually based on Plenary Meetings).
X = X-Ray – The Canada Border Services Agency will X-Ray your luggage before you leave Canada and X-Rays packages couriered/mailed/shipped from Canada. If a CBSA officer sees or has reason to believe controlled or restricted or prohibited goods are to be exported, he/she will detain the goods for further review.
Y = Yellow – Anyone engaged in export activities or dual-use goods or U.S. Origin goods must exercise caution.
Z = Zimbabwe – Zimbabwe and many other countries are the subject of regulations pursuant to the Special Economic Measures Act and the United Nations Act.