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Executive Summaries Jan 29, 2019

Export: New Controls Planned Between Now and July

Canada is preparing to strengthen its export controls, with further measures expected by July.

These new measures will include:

  • the introduction of new brokerage controls applicable to Canadians who "make arrangements" for the movement of military goods or those related to the production of weapons of mass destruction, from one foreign country to another;
  • increasing penalties from $25,000 to $250,000 for violations of the Export and Import Permits Act;
  • the modification of the evaluation criteria for granting export licences. The criteria should be assessed by taking into consideration "serious risks" that could lead to any negative consequence mentioned in the evaluation criteria for the Arms Trade Treaty, to which Canada should adhere by the next election. Export companies will, therefore, have to adjust their licence applications accordingly. End-user certificates will, therefore, continue to be strongly encouraged.

The amendments may also include new licensing requirements for arms exports to the United States. At this time, Global Affairs Canada is considering applying these requirements to entire platforms (helicopters, ships, aircraft, vehicles), and not their component parts. However, the exact scope of the requirements should be closely monitored.

Delays are expected for processing licence applications and companies will have to take this into account when planning their transactions. 

Global Affairs Canada is currently in consultation with the community to shape policies, procedures and regulations. Exporting companies are strongly encouraged to participate in this process by submitting their responses, comments and suggestions before 31 January 2019 at this address. These comments could, for example, relate to the content of the brokering control list, activities to be excluded from the concept of brokering, criteria to be considered when establishing a "serious risk", as well as the extent of controls pertaining to exports to the United States. 

If you have any questions about the proposed changes and their impact on your operations, please do not hesitate to contact our specialised international trade team. 

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