Canada recently committed to heightened enforcement of its export controls legislation on the heels of announcing amendments to A Guide to Canada’s Export Control List and the Export Permits Regulations.
Export Controls Enforcement Cooperation
Canada agreed to formally cooperate on enforcing its export controls measures with the Five Eyes, the United States, Australia, New Zealand, and the United Kingdom, this week. This follows the Canada Border Services Agency’s (“CBSA“) acknowledgment earlier this year that employees of the United States Bureau of Industry and Security (“BIS“) have been integrated into the CBSA’s anti-proliferation unit since at least March 2023.
This formal announcement increases the risk that Canadian exports may be subject to CBSA verification of control status. A CBSA officer may exercise its discretion under the Customs Act to detain goods and request further information from an exporter to verify the information submitted in an export declarations on New EXCOL, including the control status of goods/technology.
To mitigate this risk, Canadian exporters should ensure that their export control classifications are aligned with Canadian law, and should ensure that their export declarations are accurate, complete and contain the requisite level detail. Incorrect declarations or inconsistencies among declarations may trigger a verification of control status by the CBSA, which may result in delayed shipments and strain to supply chains.
Amendments to A Guide to Canada’s Export Control List
On June 1, 2023, Global Affairs Canada released a new version of A Guide to Canada’s Export Control List (January 2023) (the “Guide”), which goes into effect on July 1, 2023. The current version of A Guide to Canada’s Export Control List (December 2021), will remain in effect until June 30, 2023. The Guide encompasses the list of items enumerated on Canada’s Export Control List (“ECL“) that are controlled for export in accordance with Section 3 of the Export and Import Permits Act.
The Guide includes the detailed list of military and strategic goods and technology that are subject to export controls, including dual-use, munitions, nuclear non-proliferation, nuclear-related dual-use, miscellaneous goods and technology, missile technology control regime, and chemical and biological weapons non-proliferation lists.
The revisions to the Guide brings into force Canada’s commitments under its multilateral export control and non-proliferation regimes up to January 1, 2023 and includes amendments to controls in Groups 1, 2, 4, 6, and 7. Canadian exporters should review the revisions to the Guide to determine whether their goods and technology are affected by the revisions and require permits under the Export and Import Permits Act.
Exporters can review the specific changes to the Guide by contacting the Export Controls Policy Division of Global Affairs Canada at expctrlpol@international.gc.ca and requesting a track changes PDF.
A summary of key revisions made to the Guide can be found here. Some of these revisions include, but are not limited to the following:
Group 1
- 1-1.C.2 – Technical notes regarding ‘stress rupture life’ and ‘low cycle fatigue life’ moved to specify 1-1.C.2.b.
- 1-4.E.1. – Amendment to existing control regarding the definition of “Technology” with respect to the development, products or “digital computers” having an “Adjustment Peak Performance”, amended from 15 to 24 Weight TeraFLOPS (WT).
- 1-6.A.5.b. – Amendment to existing control regarding non-“tunable” “pulsed lasers” having specific components, including an output wavelength exceeding 510nm but not exceeding 540nm and any of the following, amended from “average output power” exceeding 50W to 80W.
- 1-6.A.5.d – Amendment to semiconductor “lasers” with respect to individual single-transverse mode semiconductor “lasers” with wavelength equal to or less than 1,510 amended to 1570nm and average of CW output power, exceeding 1.5, amended to 2.0 W; or Wavelength greater than 1,510 amended to 1,570 nm and average of CW output power, exceeding 500m W.
- 1-6.B.7. – Amendment to GRAVIMETERS – Equipment to produce, align and calibrate land-based gravity meters with a static “accuracy” amended to state less (better) than 0.1 mGal.
- 1-7.A.3 – Amendment to notes to move the former Note 1 regarding ‘Inertial measurement equipment or systems’ to the Technical Notes. The former Note 2 is now the only Note with respect to this Item.
- 1-7.D.4. – Amendment to add double quotes to computer “program”.
- 1-8.A.1.c.1.c. – Amendment to unmanned submersible vehicles to specify wireless optical data or command link exceeding 1,000m.
- 1-8.A.2.o.2.b. – Amendment to refer to motors instead of engines.
- 1-8.A.2.o.2.c. – Amendment to “Superconductive” propulsion to replace engines or permanent magnet electric propulsion engines with motors with a power exceeding 0.1 MW.
- 1-8.A.2.o.4 – New controls added for rim-drive propulsion systems: Permanent magnet electric propulsion motors specially designed for submersible vehicles, having a power output exceeding 0.1 MW. Also includes new Note.
- 1-9.A.1.b. – Amendment to delete “designed to power an “aircraft” designed to cruise at Mach 1 or higher, for more than 30 minutes”.
- 1-9.A.3. – Amendment to also reference 1-9.e.3.i. and 1-9.E.3.k.
- 1-9.E.1. – Deletes references to certain Items.
- 1-9.E.2. – Deletes references to certain Items.
- 1-9.E.3.k – New controls were added for certain technology for gas turbine engines designed for supersonic aircraft.
Group 2
- 2-4.a. – Amendment to also refer to submunitions and addition of new N.B.
- 2-4.b.a. – Amendment to Note 1 to delete “capable of producing 1,000 kg or more per day of gas in liquid form”.
- 2-10. – Amendment to include addition of Note 2 regarding exceptions to 2-10.f.
- 2-11.a. – Amendment to refer to cryptographic functionality replacing ciphering processes.
- 2-11.b. – Amendment to delete use of “Satellite navigation system” with jamming equipment and related definition.
- 2-13.d. – Amendment to include Note 5 regarding carve out for protective eyewear.
Group 4
- 4-1.B.1. – Amendment to flow-forming machines, spin-formation machines capable of flow-forming functions, and mandrels to refer to rotor-forming mandrels designed to form cylindrical rotors or inside diameter from between 75 and 400nm amended to 650nm.
Group 6
- 6-4.B. – Amendment to include Notes and an N.B., excluding control batch mixers, continuous mixers, and fluid energy mills.
- 6-12.A.1. – Amendment to include Note specifying that apparatus and devices specified include those installed on a manned aircraft or an unmanned aerial vehicle.
Group 7
- Group 7 Notes – Amendment to refer to isotopically-labelled forms or all possible stereoisomers as being controlled regardless of name or CAS number.
- 7.12. – Amendment to Technical Note to re-define ‘Disinfected’
- 7-13.1.d.12. – Amendment to delete controls on cholera toxin.
- 7-13.1.d.19 to 7-13.1.d.22 – New controls were added for certain human and animal pathogens and toxins, including new Technical Notes.
- 7-13.1.f.a – Amendment to Genetic Elements and Genetically-modified Organisms to include genetically-modified organisms that code for translated product or translated products.
Amendments to Export Permits Regulations
The government also recently announced amendments to the Export Permits Regulations to align them with existing permit application processes, which will increase regulatory clarity and certainty.[1] The amendments were published in Part II of the Canada Gazette on June 21, 2023.
The amendments do not change the permitting application process for Strategic and Military Goods and Technology or for Forest Products; however, some updates were made in NEXCOL to provide clarity on information requirements.
The amendments include the following:
- Establishing an exhaustive list of information elements that permit applicants must furnish.
- Section 3 includes the information elements for “Strategic and Military Goods and Technology”.
- Section 4 include the information elements for “Certain Forest Products”.
- Global Affairs Canada may request specific, additional documents to assist with the assessment of an export permit application for Strategic and Military Goods and Technology (e.g. a commercial invoice, purchase order, letter of credit, bank transfers and authorizations).
- Modernization of the regulations to reflect current NEXCOL processes.
- Applicants must provide their email address and the consignee(s) address and to provide a fax number (if available). Note that these requirements are already included on information fields in NEXCOL.
- Regulations updated to reflect the current process, e.g. exporters are requires to submit permits with other required documentation at a CBSA Office.
[1] These regulations relate to ECL Groups 1-4, 6, 7, 9 and Items 5101 to 5103, 5400, 5401 and 5501-5505.
