On June 20, 2017, Hon. Diane Lebouthiller (Minister of National Revenue) tabled (see page 13032 of Hansard) the 2016 Annual Report to Parliament on the Administration of the Export and Import Permits Act (the “2016 Annual Export Controls Report”) The Report is required under Standing Order 32(2) and section 27 of the Export and Import Permits Act, which provides that:
“As soon as practicable after December 31 of each year, the Minister shall prepare and lay before Parliament a report of the operations under this Act for that year.”
The 2016 Annual Export Controls Report is full of interesting information for export controls compliance managers and in-house counsel. Some of the more interesting facts and figures and statistics are:
- In 2016, Global Affairs Canada issued 48,100 import permits relating to controlled goods;
- In 2016, Global Affairs Canada rejected 5,051 import permits;
- In 2016, Global Affairs Canada cancelled 3,025 import permits (however, most of the cancellations related to amendments to permit details rather than non-compliance with the terms of the permits);
- In 2016, Global Affairs Canada issued 1,910 international import certificate letters and 399 delivery verification letters;
- In 2016, Global Affairs Canada issued 275,568 export permits relating to non-strategic exports (softwood lumber, logs, clothing and textiles, and agricultural products);
- In 2016, Global Affairs Canada rejected 4,226 export permits relating to non-strategic exports;
- In 2016, Global Affairs Canada cancelled 11,192 export permits relating to non-strategic exports;
- In 2016, Global Affairs Canada issued 5,978 export permits relating to military, dual-use and strategic goods (with 348 returned without action, 522 withdrawn and 7 denied);
- In 2016, the majority of strategic export permits were issued for munitions (3,203) and dual-use goods (1,824), goods and technology (222) and other (277);
- The top 12 destinations for strategic goods are the United Kingdom (11.4%), Germany (7.3%), France (5.9%), China (4.6%), South Africa (4.5%), Israel (4.5%), Australia (4.0%), the United States (3.5%), Japan (3.3%), South Korea (3.1%), India (2.4%) and Netherlands (2.2%);
- In 2016, 127 permits were issued for shipments of goods to Belarus and 5 permits were issued for shipments of goods to North Korea;
- In 2016, the Export Controls Division responded to 20 formal requests for investigation support relating to export control enforcement actions;
- In 2016, the Canada Border Services Agency (“CBSA”) referred 232 detentions to Global Affairs Canada;
- In 2016, the Export Controls Division received 32 voluntary disclosures of possible export controls violations from Canadian exporters; and
- In 2016, approximately 100-140 verification exercises were undertaken.
This information is important because it informs of the activities of Global Affairs. The Export Controls Division is very secretive as is the CBSA. The fact that there were 32 voluntary disclosures means that voluntary reporting of violations does occur in Canada (many think that there is no process – when there is). The number of referrals means that the CBSA is active in monitoring exports and will detain goods when there is no export permit and the CBSA thinks the goods might be controlled or subject to Canadian sanctions. Compliance managers should report the annual statistics to management in support of a robust export controls compliance program and annual internal compliance checks.
For more information about Canada’s export controls laws, please contact Cyndee Todgham Cherniak at 416-307-4168 or at email@example.com. More information about Canada’s export controls laws may be found on the LexSage website.