Order Amending the Export Control List: SOR/2021-121
Canada Gazette, Part II, Volume 155, Number 13
SOR/2021-121 June 4, 2021
EXPORT AND IMPORT PERMITS ACT
P.C. 2021-504 June 3, 2021
Whereas the Administrator in Council deems it necessary to control the export or transfer of goods and technology to ensure that arms, ammunition, implements or munitions of war, naval, army or air stores or any articles deemed capable of being converted into those things or made useful in the production of those things or otherwise having a strategic nature or value will not be made available to any destination where their use might be detrimental to the security of Canada and to implement an intergovernmental arrangement or commitment;
Therefore, His Excellency the Administrator of the Government of Canada in Council, on the recommendation of the Minister of Foreign Affairs, pursuant to paragraphs 3(1)(a) and (d), subsection 3(2) footnote a and section 6 footnote b of the Export and Import Permits Act footnote c, makes the annexed Order Amending the Export Control List.
Order Amending the Export Control List
1 The definitions Guide and Wassenaar Arrangement in section 1 of the Export Control List footnote 1 are replaced by the following:
- means A Guide to Canada's Export Control List, published by the Department of Foreign Affairs, Trade and Development, as amended from time to time. (Guide)
- Wassenaar Arrangement
- means the List of Dual-Use Goods and Technologies and Munitions List that was adopted at the Plenary Meeting of the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies in Vienna, Austria, held on July 11 and 12, 1996, as amended from time to time. (Accord de Wassenaar)
2 Paragraphs (a) and (b) of Group 2 of the schedule to the List are replaced by the following:
- (a) goods and technology, as described in Group 2 of the Guide, the export of which Canada has agreed to control in accordance with the Wassenaar Arrangement, other than antique firearms as defined in subsection 84(1) of the Criminal Code;
- (b) firearms, as defined in section 2 of the Criminal Code, other than antique firearms as defined in subsection 84(1) of the Criminal Code, that are:
- (i) set out in item 1 of Part 1 of the Schedule to the Regulations Prescribing Certain Firearms and other Weapons, Components and Parts of Weapons, Accessories, Cartridge Magazines, Ammunition and Projectiles as Prohibited or Restricted, or
- (ii) designed to discharge a projectile at a muzzle velocity exceeding 152.4 m/s or at a muzzle energy exceeding 5.7 joules; and
- (c) smooth-bore weapons, firearms, automatic weapons, weapons or armaments and projectors, as described in items 2-1 and 2-2.a of the Guide, the export of which Canada has agreed to control in accordance with the Inter-American Convention Against the Illicit Manufacturing of and Trafficking in Firearms, Ammunition, Explosives and other Related Materials, that
- (i) are used for hunting or sporting purposes,
- (ii) are manufactured earlier than 1938 and are not antique firearms as defined in subsection 84(1) of the Criminal Code, or
- (iii) use non-centre fire cased ammunition.
3 Group 3 of the schedule to the List is replaced by the following:
3-01 (1) Goods and technology, as described in Group 3 of the Guide, the export of which Canada has agreed to control
- (a) under the Treaty on the Non-Proliferation of Nuclear Weapons that was signed by Canada at London and Washington on July 23, 1968 and at Moscow on July 29, 1968 and that came into force for Canada on March 5, 1970; and
- (b) in accordance with the procedures referred to in the Guidelines for Nuclear Transfers (INFCIRC/254/Rev.14/Part 1), issued by the Nuclear Suppliers Group, as amended from time to time.
(2) Subsection (1) does not include goods and technology described in Group 3 of the Guide that contain
- (a) four grams or less of natural uranium or depleted uranium when contained in a sensing component in instruments;
- (b) alloys containing less than 5% thorium;
- (c) ceramic products containing thorium, which have been manufactured for non-nuclear use;
- (d) medicinal substances containing source material;
- (e) trace amounts of source material or special fissionable material found on contaminated items such as clothing, shielding or packaging;
- (f) source material which the Minister has determined will be used only in civil non-nuclear applications, such as shielding, packaging, ballasts, counter-weights or the production of alloys and ceramics;
- (g) four effective grams or less of special fissionable material when contained in a sensing component in instruments; or
- (h) plutonium 238 that is contained in heart pacemakers.
(3) For the purpose of paragraph (2)(g), weight in effective grams is equal to
- (a) in the case of plutonium isotopes and uranium-233, the isotope weight in grams;
- (b) in the case of uranium enriched to 1% or greater in the isotope uranium-235, the element weight in grams multiplied by the square of its enrichment expressed as a decimal weight fraction; and
- (c) in the case of uranium enriched to below 1% in the isotope uranium-235, the element weight in grams multiplied by 0.0001.
(4) For the purposes of paragraphs (2)(d) to (g), source material and special fissionable material have the same meanings as in the Guidelines for Nuclear Transfers referred to in paragraph (1)(b).
3-02 Deuterium, heavy water (deuterium oxide) and any other deuterium compound in which the ratio of deuterium to hydrogen atoms exceeds 1:5,000 if the Minister has determined that it is destined for use in a nuclear reactor that is capable of operating so as to maintain a controlled self-sustaining fission chain reaction.
4 Paragraph (b) of Group 4 of the schedule to the List is replaced by the following:
- (b) in accordance with the procedures referred to in the Guidelines for Transfers of Nuclear-Related Dual-Use Equipment, Materials, Software, and Related Technology (INFCIRC/254/Rev.11/Part 2), issued by the Nuclear Suppliers Group, as amended from time to time.
5 Group 6 of the schedule to the List is replaced by the following:
Missile Technology Control Regime
Goods and technology, as described in Group 6 of the Guide, the export of which Canada has agreed to control under bilateral arrangements concluded on April 7, 1987, in accordance with the Guidelines for Sensitive Missile-Relevant Transfers, issued by the Missile Technology Control Regime to control the export of missile equipment and technology referred to in the MTCR/TEM/2019/Annex of October 11, 2019, as amended from time to time.
6 Paragraphs (a) and (b) of Group 7 of the schedule to the List are replaced by the following:
- (a) in accordance with the Guidelines for Transfers of Sensitive Chemical or Biological Items and the Common Control Lists, as amended from time to time, that are issued by the Australia Group to control the export of chemical and biological weapons; and
- (b) under the Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on Their Destruction, signed at Paris, France, on January 13, 1993, as amended from time to time.
Coming into Force
7 This Order comes into force on the 30th day after the day on which it is published in the Canada Gazette, Part II.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Order.)
The Export Control List (ECL) is a regulation made pursuant to the Export and Import Permits Act (the Act) that identifies the goods and technology that are controlled for export from Canada. Exports of items controlled in the ECL may only be made under the authority of a permit issued by the Minister of Foreign Affairs (the Minister). Canada's export controls program dates back to the adoption of the Act in 1947, and established exporters of controlled items are familiar with the permit requirements.
The goods and technology controlled for export are mainly determined through commitments made with international partners in the various multilateral export control and non-proliferation regimes. The four main regimes are the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies, the Nuclear Suppliers Group, the Missile Technology Control Regime and the Australia Group. The objectives of these regimes are similar, in that countries agree on common lists of goods and technology that, if misused, could pose a threat to international security, and commit to implement controls on the export of these items. The regimes update their common control lists on an annual basis to add items that have become sensitive from an international security perspective, to remove items that have become less sensitive, and to clarify the control criteria for other items. Participation in these regimes promotes policy coordination, transparency, and information sharing on threats to international security, and maintains a level playing field for exporters in the participant countries.
The ECL itself does not contain the lists of items controlled further to Canada's participation in the regimes. Rather, these are described in a document titled “A Guide to Canada's Export Control List” (the Guide). The Guide, which contains the technical specifications of the controlled items, is published by Global Affairs Canada and is incorporated by reference in the ECL. The ECL also incorporates by reference the specific common control lists agreed upon by the main regimes.
Every year the Government negotiates changes to the control lists within the regimes and then updates the Guide in both official languages to reflect these new commitments. The ECL is then amended to incorporate both the updated common control lists and the latest version of the Guide.
This process has resulted in a delay between the negotiation of the multilateral controls and their implementation in Canada. Regulatory amendments to the ECL are frequently held up due to the limited availability of resources across Government, the compressed Parliamentary calendar, particularly during election years, and competing government priorities. However, it is critical that Canada's controls are as up to date as possible to ensure multilateral adherence in preventing the proliferation of sensitive goods and technology and to avoid having Canadian exporters placed at a competitive disadvantage internationally.
To increase the efficiency through which updates to the common control list are implemented in Canada, this Order amends the ECL to include the phrase “as amended from time to time” in reference to both the Guide and the common control lists. This would bring the ECL up to date with regime commitments made up until the end of 2020, and any subsequent annual updates to the common control lists will be incorporated in the ECL without the need for a regulatory amendment. The updated controls will instead come into force 30 days after the Department publishes the latest version of the Guide online. This Order will not change the process for elaborating or negotiating Canadian positions within the regime list-updating process.
Further to paragraph 18.1(2)(b) of the Statutory Instruments Act, the Guide may be incorporated into the ECL as “amended from time to time” only if it is reproduced from documents that are not created by the Minister. This is the case for the vast majority of the Guide. The over 350-page Guide reproduces the regime lists with some minor formatting changes that are permitted under the Statutory Instruments Act, as they facilitate the incorporation of the lists into the structure of the ECL.
There are only two discrete areas where Canada's controls differ slightly from those of the regimes and, as a result of this amendment, these will now be set out in the schedule to the ECL. The first area relates to firearms where, in addition to the controls specified in the Wassenaar Arrangement, Canada controls the export of all firearms defined as such under Canadian law and further to the Inter-American Convention Against the Illicit Manufacturing of and Trafficking in Firearms, Ammunition, Explosives and other Related Materials (CIFTA). The second area relates to certain nuclear items controlled by the Nuclear Suppliers Group (NSG). Under the NSG, the control status of certain items is dependent on the timing, destination, and amount of previous exports. As there is no mechanism to apply this approach domestically, Canada has historically controlled all exports of the listed materials, regardless of the amount previously exported within the year. There are no changes to the scope of Canada's current export controls over firearms or nuclear materials resulting from this Order.
- Reduce national security and reputational risks through the timelier implementation of Canada's international commitments to control exports of certain sensitive items;
- Maintain a level playing field for Canadian exporters of controlled goods and technology through the prompt removal of items decontrolled by the regimes from the ECL;
- Preserve the process through which exporters are currently consulted with respect to potential changes to the controls within the regimes, and continue to provide exporters with a 30-day pre-notification of the coming into force of any changes to Canada's export controls;
- Allow for the more efficient use of limited government resources.
The definition of “Guide” in section 1 of the ECL is amended to include the words “as amended from time to time.” Likewise, the lists published by the multilateral export control and non-proliferation regimes that are incorporated both in the definition of “Wassenaar Arrangement” in section 1 and in the various groups of the schedule, are amended by adding the words “as amended from time to time.” This allows updates to both the Guide and the various regime lists to come into force after the publication of the Guide by Global Affairs Canada and without the need for an amendment to the ECL.
To reduce the legal risk of this approach, further to paragraph 18.1(2)(b) of the Statutory Instruments Act, the few areas where there are substantive differences between the text of the regime lists and that of the Guide are explicitly set out in groups 2 and 3 of the schedule to the ECL.
In Group 2, the areas where Canada's controls over firearms differ from and are broader than those of the Wassenaar Arrangement's Munitions List are specified in the schedule. These include the controls that are set out in item 2-1.e of the Guide that apply to prohibited firearms, including the firearm of the design commonly known as the Taser Public Defender and any variant or modified version of it as set out in Part I of the schedule to the Regulations Prescribing Certain Firearms and Other Weapons, Components and Parts of Weapons, Accessories, Cartridge Magazines, Ammunition and Projectiles as Prohibited or Restricted, and all other firearms that are designed to discharge a projectile at a muzzle velocity exceeding 152.4 m/s or at a muzzle energy exceeding 5.7 joules. Furthermore, neither Canada nor the Wassenaar Arrangement control the export of antique firearms, and as the definition of “antique firearm” in the Criminal Code is unique to Canada, it is explicitly set out in paragraphs (a) and (b). Finally, the long-standing adaptations made to the Munitions List's controls in the Guide, further to Canada's desire to control the export of firearms as defined in CIFTA, are expressed in paragraph (c).
In Group 3 of the schedule, the technical control parameters that either diverge from or are not specifically mentioned in the control list of the NSG (INFCIRC/254/Rev.14/Part 1) are now explicitly set out in the schedule to the ECL. These include the decisions made by the International Atomic Energy Agency's (IAEA) Board of Governors with regards to the control parameters over “source material” and “special fissionable material” and the Canadian approach to applying the controls over these two categories of items, along with “deuterium” and “heavy water.” The text that has been added to Group 3 of the schedule is based on the controls in items 3-1.1, 3-1.2 and 3-2.2.1 of the Guide.
Within Group 7 of the schedule, the reference to a “bilateral arrangement concluded on December 24, 1992, between Canada and the United States” has been removed, as this arrangement is no longer taken into consideration in determining how to apply the controls over the items specified in Group 7 of the Guide.
Global Affairs Canada has consulted with industry stakeholders on these amendments. Industry stakeholders understand the benefits of implementing expedited measures to remove controls over items that are no longer controlled internationally. They also appreciate that the Order does not allow Canada to implement unilateral controls without a regulatory amendment and the corresponding public consultation period. A lack of knowledge regarding the process through which Canada's export controls are amended could result in unfounded concerns that these amendments may allow Canada to unilaterally control the export of additional items without consulting industry.
It should be noted that when negotiating new controls within the regimes, Global Affairs Canada consults with industry stakeholders who could be affected by the implementation of controls over their exports, and this consultation process will not change moving forward. In recent years, over 300 companies and associations have been individually consulted on specific proposals reviewed by the regimes.
The exemption from prepublication for this Order is consistent with past practice and has consistently been granted for regulatory amendments to the ECL. Stakeholder feedback is incorporated during the development of Canadian negotiating positions in the regimes, and there is no scope to amend the multilateral controls through the regulatory process once Canada has agreed to implement these controls in the regimes.
Benefits and costs
As there are no changes to the export permitting process itself, the Order is not anticipated to impose additional regulatory burden or costs, or have other potentially adverse impacts on the Government, industry, or individual Canadians.
For the current set of commitments, no proposals have been accepted in areas where Canada has raised concerns based on industry feedback. While it is possible that future regime commitments will add costs to Canadian industry by requiring certain companies to submit an application for a permit prior to exporting their items, as 25 years of membership in these regimes has demonstrated, these additional costs would be offset by a decrease in costs for companies whose exports have been decontrolled by the regimes.
This Order reduces costs for Government, as it eliminates the requirement to update the ECL through an annual regulatory amendment and frees up scarce resources across Government engaged in the regulatory process. The Order is not expected to result in any change in the volume of export permit applications processed.
Small business lens
According to 2018 Statistics Canada data, 485 companies, or 76% of all companies in the defence industry, employed less than 100 people. These small and medium sized enterprises (SMEs) accounted for 15% of all industry jobs, 12% of total industry sales and less than 8% of exports by value. No SMEs have been identified that currently export the items that have become controlled as a result of the most recent regime commitments. Once it is possible to do so, the Export Controls Policy Division within Global Affairs Canada will undertake outreach to industry representatives across the country, with a particular focus on SMEs, to raise awareness of Canada's export controls and provide guidance to those that export controlled items.
The Order will both add and remove items from control but does not affect the export permit process itself. The administrative burden placed on businesses will shift to the newly controlled items, while the administrative burden on decontrolled items will be lifted. On balance there is no expected increase in administrative burden as a result of this regulatory amendment and, as a result, the one-for-one rule is not triggered.
Regulatory cooperation and alignment
The objective of the Order is to ensure that the ECL reflects in a timely manner the latest commitments that Canada has agreed to within the various multilateral export controls and non-proliferation regimes. Canada's like-minded allies, such as the EU and Five Eye partners, are also members of the regimes and have thus committed to implementing export controls over the same items. Many of Canada's allies have also put in place expedited measures through which they adopt the regime controls within their domestic legal framework.
For instance, New Zealand does not update its control list through a regulatory process. Under New Zealand's Customs Act, the simple online publication of the updated national control list (the New Zealand Strategic Goods List) is sufficient to allow the new controls to come into effect. In Australia, regime commitments are reflected in the Defence and Strategic Goods List which is a “legislative instrument” that is easier to update than a regulation, as amendments come into force once signed by the Australian Minister of Defence and officially registered.
Strategic environmental assessment
In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.
Gender-based analysis plus
No substantial gender-based analysis plus (GBA+) impacts have been identified for this Order.
Canada assesses all export permit applications against the potential risk that the export could pose to vulnerable groups. Canada has also acceded to the Arms Trade Treaty (ATT), which is the first international treaty that specifically mentions gender-based violence as an outcome to prevent when determining whether to allow the export of conventional arms. In deciding whether to issue a permit under the Act “in respect of arms, ammunition, implements or munitions of war,” the Minister must consider whether the goods or technology specified in the export permit application could be used to commit or facilitate serious acts of gender-based violence or serious acts of violence against women and children. Should the Minister determine, after considering available mitigating measures, that there is a substantial risk that the proposed export would result in a serious act of gender-based violence or violence against women and children, then the Minister must deny the export permit.
The Order allows for timelier implementation of the most recent controls agreed to by the multilateral export control and non-proliferation regimes. Currently it can take a number of years to implement the regime commitments through a regulatory amendment to the ECL, which in turn presents significant national security risks and economic costs for Canada.
The Government of Canada cannot legally prevent shipments of sensitive items that the regimes have agreed to control unless those items are controlled under the ECL. Until the latest controls come into force in Canada, there is nothing preventing a Canadian company from exporting sensitive or emerging technology to a destination of concern.
In addition, Canadian exporters are required to apply for a permit before exporting items that are not controlled internationally but still controlled in Canada. This can be both costly and time consuming for companies, particularly given the ongoing delays in processing export permit applications.
Implementation, compliance and enforcement, and service standards
This Order comes into force 30 days after the day on which it is published in Part II of the Canada Gazette.
A detailed document highlighting the changes to the Guide resulting from this Order is available on Global Affairs Canada's export controls website. This document allows exporters to easily identify changes made by the Order that may impact their businesses.
This summary document will continue to be produced for all future annual updates to the Guide, and exporters will continue to have 30 days to familiarize themselves with future changes before they come into force.
Compliance and enforcement
All exports or transfers of items that are controlled under the ECL must be authorized by an export permit. The Canada Border Services Agency and the Royal Canadian Mounted Police are responsible for the enforcement of export controls. Exporting, transferring, or attempting to export or transfer goods and technology controlled under the ECL without a permit as required by the Act is prohibited and may lead to prosecution.
For information on the processing times for permit applications to export controlled items, please consult the latest version of the Export and brokering controls handbook, which can be found on the website of the Export Controls Policy Division.
Export Controls Policy Division
Global Affairs Canada
125 Sussex Drive