When trying to help people in some of the poorest and most needy countries, there are a few important Canadian laws applicable to charitable organizations involved in international efforts. In particular, these are Canada’s export control laws, and Canada’s long-reaching anti-corruption law. This short article will focus on the export control laws. A subsequent article will address the anti-corruption laws.
Export Control Laws
Canada has a number of restrictions on the export of goods and capital outside Canada. Under the Export and Import Permits Act, an export permit is necessary for exports of certain types of goods and technologies that are defined on the "Export Control List" (ECL), to certain "unfriendly" nations listed on the "Area Control List" (ACL), and for goods found on the "Automatic Firearms Country Control List."
Fortunately for charities, the ECL controls are based on national security considerations as determined pursuant to Canada’s international obligations. The purpose of the ECL is
to ensure that arms, ammunition, implements or munitions of war, naval, army or air stores or any articles deemed capable of being converted thereinto or made useful in the production thereof 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.
All goods contained in the ECL require permits for export, unless the final destination is the U.S., in which case a permit will not generally be required. As a result of the nature of the ECL, it will be rare for charitable goods to be found on the ECL.
However, even if goods are not listed in the ECL, export permits are required for any export to a country or destination specified on Canada’s Area Control List (ACL). Only Belarus and Myanmar (Burma) are currently listed on the ACL. However, the ACL does change, and should be consulted prior to any export. It can be found online through the Canadian government website, http://www.international.gc.ca. Generally, exports of humanitarian aid are permitted to countries on the ACL, but nevertheless such exports will require an export permit.
If the country of import is subject to a United Nations Security Council embargo, additional approvals will be required. Canada complies with these embargoes in accordance with the United Nations Act. This statute authorizes the federal Cabinet to impose export and import controls to implement a UN Security Council resolution imposing economic sanctions on a foreign state. Regulations made under the statute currently affect trade with Burma/Myanmar, Belarus, Cote d’Ivoire, Democratic People's Republic of Korea (North Korea), Democratic Republic of the Congo, Iran, Iraq, Lebanon, Liberia, Sierra Leone, Somalia, Sudan, Zimbabwe, and various listed terrorists. While many of these regulations primarily relate to the export of arms, they should be examined carefully. If they apply, an exemption certificate under the United Nations Act regulations will be required.
Generally, between 6 to 8 weeks are required for clearances necessary to obtain an export permit, although the time for processing is reduced in some circumstances. A non-binding "approval in principle" may be obtained in advance from the Department of Foreign Affairs and International Trade Canada as to whether an export permit will likely be granted. When applying for a permit, specific information will be required as to the nature of the transfer of goods or funds, sufficient to satisfy concerns as to compliance with the spirit of the regulations.
Great caution must be taken in determining the requirement for an export permit. Many Canadians have unwittingly found themselves charged with a serious criminal offence by neglecting this permit which can result in a fine up to $25,000 and imprisonment for 5 years, and can impose personal liability on directors and officers.
In addition to the Export and Import Permits Act, there are many other Canadian export controls. These include:
U.S. Origin Goods
The export of all goods and technology of U.S. origin, regardless of their nature and destination, require permits if not controlled elsewhere on the ECL. This is in recognition of the favourable permit/licence treatment accorded bilaterally with the U.S. on most controlled items. There is an exception for goods that have resulted in a substantial change in value, form or use, but this should not be relied upon. Where the U.S. content of the goods is over a modest threshold, a U.S. permit will also be required. However, if the goods are destined to a country that is subject to U.S. sanctions administered by the Office of Foreign Assets Control of the Department of Treasury (“OFAC”) (for example, Iran and Cuba), the threshold is significantly reduced, and the goods may nevertheless be subject to a complete prohibition for re-export.
There is a plethora of other Canadian regulations controlling exports which include a catch-all control for weapons of mass destruction, automatic firearms, nuclear goods, drugs, cultural property and defence goods. In addition, it is possible that export authorizations may be required for other goods from other government departments. These include, but are not limited to: Health Canada, Agriculture Canada, Fisheries and Oceans, Natural Resources Canada, Canadian Wheat Board, and Environment Canada.