Order Amending the Automatic Firearms Country Control List: SOR/2022-187
Canada Gazette, Part II, Volume 156, Number 18
SOR/2022-187 August 19, 2022
EXPORT AND IMPORT PERMITS ACT
P.C. 2022-926 August 19, 2022
And whereas the Governor in Council considers it appropriate to permit the export of any thing that is specified in any of paragraphs 4.1(a) to (c)footnote a of that Act and that is included in an Export Control List, or any component or part of any such thing, to the country listed in the annexed Order;
Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of Foreign Affairs, under sections 4.1footnote a and 6footnote c of the Export and Import Permits Act footnote b, makes the annexed Order Amending the Automatic Firearms Country Control List.
Order Amending the Automatic Firearms Country Control List
1 The Automatic Firearms Country Control List footnote 1 is amended by adding the following in alphabetical order:
- North Macedonia
Coming into Force
2 This Order comes into force on the day on which it is registered.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Order.)
Canada maintains a list of countries to which it may allow the export of certain prohibited items. The purpose of this list, known as the Automatic Firearms Country Control List (AFCCL), is to serve as an additional vetting and control mechanism for exports of prohibited firearms, weapons and devices (or components or parts thereof). Based on a detailed analysis, Global Affairs Canada has assessed that North Macedonia is a country that meets the criteria for addition to the AFCCL, which creates potential opportunities for Canadian defence exporters and also allows for enhanced government-to-government defence cooperation.
As Canada is the only country in the world to maintain such a list, some Canadian defence manufacturers that export prohibited items have expressed the view that the AFCCL places them at a competitive disadvantage as compared to their international competitors. The addition of appropriate destinations to the AFCCL lessens this competitive disadvantage.
The AFCCL, which has existed since 1991, is a positive list of countries to which Canadians may apply to export certain prohibited items as defined in subsection 84(1) of the Criminal Code. In accordance with section 4.1 and subsection 7(2) of the Export and Import Permits Act (EIPA), prohibited firearms, weapons and devices (or components or parts thereof), that are also included on the Export Control List, may only be exported to countries listed on the AFCCL and only to governments of those countries or to end-users authorized by those governments. Prohibited firearms, weapons and devices (or components or parts thereof), referred to here as AFCCL items, can be used independently or can be integrated into other military and related platforms. Any permit application to export controlled items to AFCCL countries is assessed on a case-by-case basis against considerations laid out in legislation (including the Arms Trade Treaty [ATT] assessment criteria and the substantial risk test) and in policy. The ATT criteria include considerations as to whether the proposed export could be used to commit or facilitate a serious violation of international human rights or humanitarian law, an act of terrorism or transnational organized crime, or a serious act of gender-based violence or violence against women and children. If, after considering any available mitigating measures, the Minister of Foreign Affairs determines that there is a substantial risk that a Group 2 military export would result in any of these negative consequences, then the Minister is legally obligated to deny a permit for that export.
The AFCCL currently comprises 44 countries: Albania, Australia, Austria, Belgium, Botswana, Bulgaria, Chile, Colombia, Croatia, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, the Republic of Korea (South Korea), Kuwait, Latvia, Lithuania, Luxembourg, the Netherlands, New Zealand, Norway, Peru, Poland, Portugal, Romania, Saudi Arabia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine, the United Kingdom, and the United States.
The Minister of Foreign Affairs is required by the EIPA to consult the Minister of National Defence before recommending to the Governor in Council that amendments be made to the AFCCL.
The purpose of the Order Amending the Automatic Firearms Country Control List (the Order) is to
- add a destination considered appropriate to the AFCCL with a view to building on positive defence and security relationships with Canada and to expanding defence cooperation and trade ties; and
- create opportunities for Canadian companies to apply for a permit to export AFCCL items to a market where their export was previously prohibited.
North Macedonia is added to the AFCCL through this Order.
From March 2 to March 31, 2022, the Government of Canada consulted Canadians on the proposal to add North Macedonia and Qatar to the AFCCL on the “Consulting with Canadians” web platform, a dedicated consultation platform that facilitates more efficient consultations. Five comments were received from various participants, including four industry representatives and a civil society organization. Respondents were supportive, indicated no concerns, or were neutral concerning the addition of North Macedonia and Qatar to the AFCCL.
Industry representatives were either supportive or neutral with regard to the amendment. In addition, industry representatives noted that a system of checks and balances exists whereby permits could be suspended if there are concerns with specific transactions. Industry representatives also noted that the Government of Canada contributes to a more predictable, transparent and timely export process when it communicates to industry, through regulations such as the AFCCL, the countries to which it is comfortable permitting certain defence exports when all criteria are met.
The only response received from a civil society organization voiced no concerns with the addition of North Macedonia and Qatar to the AFCCL, and requested clarification as to how export permit applications for prohibited items are assessed against the risk assessment criteria outlined in the ATT. Global Affairs Canada does not distinguish between how exports of AFCCL items are assessed compared with all other exports of military and strategic items listed on the Export Control List. All military and strategic items, including AFCCL items, are assessed on an individual basis against the criteria listed in the ATT and the EIPA.
As required by section 4.1 of the EIPA, the Minister of Foreign Affairs has consulted the Minister of National Defence on the addition of North Macedonia and Qatar to the AFCCL.
At this time, Global Affairs Canada has decided to move forward with the addition of North Macedonia.
Modern treaty obligations and Indigenous engagement and consultation
Global Affairs Canada officials are not aware of the existence of any First Nations−led businesses that export AFCCL items.
The AFCCL is established in legislation; therefore, amendments to the AFCCL can only be carried out through regulations made under the EIPA.
Benefits and costs
The Order may result in commercial opportunities for a narrow segment of Canadian industry. Adding North Macedonia to the AFCCL will help create additional opportunities for Canadian companies seeking to export AFCCL items to markets where their export was previously prohibited, and thereby contribute to future economic growth within Canada. It is impossible to monetize with any degree of precision and in quantitative terms the economic impact that could result from adding this country to the AFCCL.
The small number of Canadian companies that export these items are well established, they regularly apply for permits and understand the export permit application process. Apart from the minimal cost in time and labour to apply for a permit to export AFCCL items to the newly listed destination, there are no foreseeable costs to industry as a result of the Order. There is no fee to apply for a permit to export AFCCL items.
In terms of cost to Government, the Order is not expected to result in a significant increase in export permit applications processed over the long term. In 2021, the last year for which public data is available, Global Affairs Canada issued zero export permits to North Macedonia for all controlled items (out of a total of 5 667 export permit applications processed to all destinations).
Small business lens
According to data from a 2018 Statistics Canada survey on the Canadian defence, aerospace, marine and cybersecurity industries, 485 companies, or 76% of all companies in the defence industry employed fewer than 100 people. These small and medium-sized enterprises (SMEs) only accounted for 15% of all industry jobs, 12% of total industry sales and less than 8% of exports by value. These figures are down from 2016 when SMEs accounted for 32% of defence industry employment, 24% of industry sales and 17% of all exports.
The Order does not impose new administrative or compliance costs on small businesses. However, it may increase opportunities for defence sector SMEs to grow their business in this market.
The one-for-one rule does not apply, as there is no incremental change in the administrative burden on business.
Regulatory cooperation and alignment
The AFCCL is a provision that is unique to Canada. The Order aligns Canada more closely with other like-minded countries by adding a destination to which it is possible to export prohibited firearms, weapons, and devices, subject to the issuance of a valid export permit.
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 in relation to this Order.
Canada assesses all export permit applications against the potential risk of gender-based violence or violence against vulnerable groups. Canada has also acceded to the 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 arms. Former Bill C-47, An Act to amend the Export and Import Permits Act and the Criminal Code (amendments permitting the accession to the Arms Trade Treaty and other amendments), formalized the ATT criteria in Canadian law. The fact that the Minister of Foreign Affairs must deny an export permit for AFCCL items if the proposed export would result in a substantial risk to vulnerable groups mitigates the potential negative consequences of the Order.
The addition of a new country to the AFCCL could result in new commercial opportunities for Canadian businesses in the security and defence industries. If this were to occur, such economic benefits may not be shared evenly between the sexes, as those identifying as women comprise only 25% of the workforce in the defence industry. The disparity in employment between men and women is most acute in the occupations related to science, technology, engineering, and mathematics (STEM occupations), where those identifying as women account for only 15% of all employees. However, the economic benefits could be distributed throughout the country (i.e. Western Canada, including the territories, Ontario, Quebec, and the Atlantic Provinces), as Canada’s defence and security industry operates in all those regions.
Implementation, compliance and enforcement, and service standards
The Order comes into force on the day it is registered. On that day, the Export Controls Operations Division of Global Affairs Canada, which is responsible for issuing export permits, will begin to assess export permit applications for AFCCL items to the newly listed destination, on a case-by-case basis and in accordance with assessment considerations laid out in legislation and policy.
Compliance and enforcement
All exports or transfers of prohibited firearms, weapons, and devices (or components and parts thereof) that are listed on the Export Control List 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 identified on the Export Control List without a permit as required by the EIPA is prohibited and may lead to prosecution.
For information on the processing times for permit applications to export AFCCL 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
Telephone: 343‑203‑4332 or 613‑291‑0347
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