Vol. 147, No. 45 — November 9, 2013

General Export Permit No. 41 — Dual-use Goods and Technology to Certain Destinations

Statutory authority

Export and Import Permits Act

Sponsoring department

Department of Foreign Affairs, Trade and Development

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Permit.)

Issue

As a result of Canada’s status as a participating state in the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies (the “Wassenaar Arrangement”) and of a bilateral arrangement with the United States, certain dual-use and strategic goods and technology are subject to export permit requirements implemented under the Export and Import Permits Act (EIPA).

In representations made to the Department of Foreign Affairs, Trade and Development (the Department), industry stakeholders have indicated that Canada’s major trading partners have implemented procedures to administratively streamline processes for the export/transfer of certain controlled goods and technology. These stakeholders have further indicated that in order to maintain a level playing field with its competitors, Canada should introduce similar administratively streamlined processes. After reviewing the export control regimes of certain major trading partners and ensuring concordance with Canadian foreign and defence policies, the Department believes that the implementation of certain streamlined export/transfer processes would be appropriate.

Background

The EIPA authorizes the Governor in Council to establish a list of goods and technologies, called the Export Control List (ECL), which identifies goods and technology that are controlled for export or transfer from Canada to other countries. Most items on the ECL derive from Canada’s commitments to like-minded countries that participate in multilateral export control regimes or from Canada’s obligations as a signatory to multilateral or bilateral international agreements.

The principal objective of Canada’s export control regime is to ensure that exports of goods and technology included on the ECL are done in accordance with Canada’s foreign and defence policies. Unless otherwise stated, exports or transfers of goods and technology included on the ECL require a permit issued under the authority of the Minister of Foreign Affairs in order to be lawfully conducted.

Subsection 7(1.1) of the EIPA authorizes the Minister of Foreign Affairs to issue to all residents of Canada a general permit to export or transfer goods or technology included in the ECL, subject to such terms and conditions as described in the permit. These general export permits (GEPs) allow the export or transfer of certain specified items from Canada to certain eligible destinations by means of a simplified administrative procedure rather than by the standard process of having to obtain an individual export permit.

Objectives

The objective of General Export Permit No. 41 — Dual-use Goods and Technology to Certain Destinations (GEP 41) is to provide a streamlined process for the export and transfer of certain controlled goods and technology.

Description

GEPs are used to facilitate trade in defined circumstances, with such permits not requiring an individual application to be made to the Department prior to export/transfer. The relevant GEP must, however, be cited on the Export Declaration form that is provided to the Canada Border Services Agency at the time of export.

GEP 41 authorizes, subject to certain terms and conditions, the export or transfer of most goods and technology listed in Group 1 and item 5504 of the ECL to consignees when the goods and technology are destined for use in an eligible destination. Eligible destinations include those countries that, like Canada, are members of all four multilateral export control regimes. The selection of eligible goods and technology and destinations, along with the terms and conditions imposed on the use of the GEP, ensures that this streamlined process does not represent a strategic risk to Canada’s security or that of our allies. Goods and technology controlled within Group 1 and ECL item 5504 requiring export authorization from the United States as described in section (3)(c)(i) to (iii) of the Export Permit Regulations are not eligible for export or transfer under GEP 41.

“One-for-One” Rule

The “One-for-One” Rule does not apply to this proposed permit, as there is no change in administrative costs to business.

Small business lens

The small business lens does not apply to this proposal, as there are no costs to small business.

Consultation

The Department consulted with various industry stakeholders regarding the proposed introduction of this GEP, who have indicated that they are supportive of any measures to administratively streamline the export/transfer process for lower-risk transactions.

The prepublication of this GEP in the Canada Gazette, Part Ⅰ, will be the first opportunity that the exporting community has to provide specific comments on the proposed permit. All comments received during the comment period will be taken into account by the Department.

As is customary when dealing with potential regulatory changes, consultations have been held with the various Government of Canada organizations that are partners in the administration and enforcement of Canada’s export controls regime. Recommendations made by these organizations have been taken into consideration in the drafting of this GEP.

Rationale

The administration of Canada’s export control regime aims to balance national and international security concerns associated with the export/transfer of strategic and military goods and technology with Canada’s interests as a trading nation. The introduction of this streamlined export/transfer process for lower-risk transactions allows the Government of Canada to provide residents of Canada with a mechanism to compete more efficiently in the global marketplace while maintaining a robust system of export controls.

The issuance of GEP 41 will simplify the process for authorizing exports/transfers of eligible goods and technology to eligible destinations as identified in the permit and will reduce the overall regulatory burden associated with export controls for Canadian industry.

Implementation, enforcement and service standards

The export or transfer of goods and technology listed in the ECL must be authorized by permits to all destinations except where otherwise stated in the ECL item. There are certain conditions associated with GEP 41, and exporters must comply with those conditions in order to lawfully export/transfer under the GEP. It is a condition of GEP 41 that it be cited by exporters on the Export Declaration form, or other export reporting documentation that is required to be submitted to the Canada Border Services Agency, with every export shipment. Non-compliance with conditions of the GEP can lead to prosecution under the relevant provisions of the EIPA.

The Canada Border Services Agency and the Royal Canadian Mounted Police are responsible for the enforcement of export controls.

Contact

Blair Hynes
Policy Analyst
Export Controls Division
Trade Controls Bureau
Foreign Affairs, Trade and Development Canada
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 613-944-0558
Fax: 613-996-9933
Email: Blair.Hynes@international.gc.ca

PROPOSED REGULATORY TEXT

Notice is given that the Minister of Foreign Affairs, pursuant to subsections 7(1.1) (see footnote a) and 10(1) (see footnote b) of the Export and Import Permits Act (see footnote c), proposes to issue the annexed General Export Permit No. 41 — Dual-use Goods and Technology to Certain Destinations.

Interested persons may make representations concerning the proposed Permit within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part Ⅰ, and the date of publication of this notice, and be addressed to Blair Hynes, Policy Analyst, Export Controls Division, Trade Controls and Technical Barriers Bureau, Department of Foreign Affairs, Trade and Development, 125 Sussex Drive, Ottawa, Ontario K1A 0G2 (tel.: 613-944-0558; fax: 613-996-9933; email: Blair.Hynes@international.gc.ca).

Ottawa, October 24, 2013

JOHN BAIRD
Minister of Foreign Affairs

GENERAL EXPORT PERMIT NO. 41 — DUAL-USE GOODS
AND TECHNOLOGY TO CERTAIN DESTINATIONS

INTERPRETATION

Definitions

1. (1) The following definitions apply in this Permit.

“eligible destination”
« destination admissible »

“eligible destination” means Argentina, Australia, Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Poland, Portugal, the Republic of Korea, Spain, Sweden, Switzerland, Turkey, Ukraine, the United Kingdom or the United States.

“Export Controls Division”
« Direction des contrôles à l’exportation »

“Export Controls Division” means the Export Controls Division of the Department of Foreign Affairs, Trade and Development.

“Guide”
« Guide »

“Guide” has the same meaning as in section 1 of the Export Control List.

Interpretation

(2) In this Permit, “composite”, “development”, “matrix”, “production”, “software” and “user-accessible programmability” have the same meaning as in the Guide under the heading “Definitions of Terms Used in Groups 1 and 2”.

GENERAL

Authorization

2. Subject to sections 3 to 5, any resident of Canada may, under this Permit, export or transfer from Canada any good or technology referred to in

  • (a) any item in Group 1 of the Guide; or
  • (b) items 5504.2.a. to 5504.2.g. of the Guide.

Unauthorized destinations

3. (1) This Permit does not authorize the export or transfer of goods or technology to a country

  • (a) that is not an eligible destination;
  • (b) that is listed in the Area Control List; or
  • (c) in respect of which an order or regulation has been made under section 4 of the Special Economic Measures Act or section 2 of the United Nations Act.

Unauthorized goods or technology

(2) This Permit does not authorize the export or transfer of goods or technology that

  • (a) are intended to be used in a country that is not an eligible destination;
  • (b) are referred to in the schedule to this Permit;
  • (c) are referred to in any item of the Guide other than those referred to in section 2, unless the export or transfer is also authorized by another permit issued under subsection 7(1.1) of the Export and Import Permits Act; or
  • (d) are referred to in any of subparagraphs 3(2)(c)(i) to (iii) of the Export Permits Regulations.

Other unauthorized goods or technology

(3) This Permit does not authorize the export or transfer of

  • (a) software that is specially designed or modified for the development or use of the goods or technology referred to in item 5504.2.h. or 5504.2.i. of the Guide; or
  • (b) technology that is specially designed or modified for the development or production of the goods or technology referred to in item 5504.2.h. or 5504.2.i. of the Guide.

Information

4. A resident of Canada who exports or transfers goods or technology under this Permit must

  • (a) provide in writing to the Export Controls Division, before making their first export or transfer under this Permit in a calendar year, the following information:
    • (i) their name, address, telephone number and, if any, their facsimile number and electronic mail address, and
    • (ii) if the resident of Canada is a corporation, the business number assigned to the corporation by the Minister of National Revenue, the name of a contact person, the contact person’s address, telephone number and, if any, facsimile number and electronic mail address;
  • (b) provide to the Export Controls Division, within 30 days after each six-month period ending on January 31 or July 31, a report containing the following information in respect of any export or transfer made under this Permit during that period:
    • (i) the name, address and telephone number of each consignee and, if any, the consignee’s facsimile number and electronic mail address,
    • (ii) if the consignee is a corporation, the name and title of a contact person who has knowledge of the export or transfer, and the contact person’s telephone number and, if any, facsimile number and electronic mail address,
    • (iii) a description of each good or technology exported or transferred and the item number of the Guide in which it is referred to, and
    • (iv) the quantity and value of each good or technology exported or transferred by country of destination;
  • (c) within 15 days after receipt of a request from the Export Controls Division, provide to the Export Controls Division the records referred to in section 5 in respect of any export or transfer made during the period specified in the request;
  • (d) insert the term “GEP-41” or “LGE-41” in the appropriate field of the form prescribed under the Customs Act if the good exported is required to be reported under that Act; and
  • (e) obtain, before the export or transfer, a written statement from each consignee that
    • (i) identifies the country of end use of the good or technology, and
    • (ii) indicates whether the consignee is an end-user or a distributor or, if the consignee is neither, describes the consignee’s role in relation to the export or transfer.

Records

5. A resident of Canada who exports or transfers a good or technology under this Permit must retain, for a period of six years after the year in which the export or transfer is made, the following records in respect of that export or transfer:

  • (a) the date of the export or transfer;
  • (b) the name and address of each consignee;
  • (c) the quantity and value of the export or transfer;
  • (d) the name and any part number or unique identifier of the good or technology, as well as a description of the good or technology and its technical specifications;
  • (e) the item number of the Guide in which the good or technology is referred to, and a comparison of the technical specifications set out in the item with the technical specifications of the good or technology;
  • (f) the written statement obtained from each consignee under paragraph 4(e); and
  • (g) a copy, if available, of any contract between the resident of Canada and each consignee and any invoice or export or shipping document relating to the export or transfer.

CANCELLATION

6. General Export Permit No. Ex. 30 — Certain Industrial Goods to Eligible Countries and Territories (see footnote 1) is cancelled.

7. General Export Permit No. Ex. 29 — Eligible Industrial Goods (see footnote 2) is cancelled.

COMING INTO FORCE

Registration

8. This Permit comes into force on the day on which it is registered.

SCHEDULE
(Paragraph 3(2)(b))

EXCLUDED GOODS AND TECHNOLOGY

Item

Goods or technology

1.

those referred to in item 1-1.A.2.a. of the Guide that are composite structures or laminates consisting of an organic matrix and materials specified by item 1-1.C.10.c. or 1-1.C.10.d. of the Guide

2.

those referred to in item 1-1.C.1. of the Guide

3.

those referred to in item 1-1.C.12. of the Guide

4.

those referred to in item 1-1.E.1. of the Guide that are for the development or production of composite structures or laminates consisting of an organic matrix and materials specified by items 1-1.C.10.c. or 1-1.C.10.d. of the Guide or materials specified by item 1-1.C.1. or 1-1.C.12. of the Guide

5.

those referred to in item 1-5.A.1.b.5. of the Guide

6.

those referred to in item 1 -5.A.1.h. of the Guide

7.

those referred to in item 1-5.D.1.a. of the Guide that are software specially designed for the development or production of equipment, functions or features specified by item 1-5.A.1.b.5., 1-5.A.1.h. or 1-5.E.1.a. of the Guide

8.

those referred to in item 1-5.E.1.a. of the Guide that are for the development or production of equipment, functions, features or software specified by item 1-5.A.1.b.5. or 1-5.D.1.a. of the Guide

9.

those referred to in item 1-5.A.2. of the Guide

10.

those referred to in item 1-5.B.2. of the Guide

11.

those referred to in item 1-5.D.2. of the Guide

12.

those referred to in item 1-5.E.2. of the Guide

13.

those referred to in item 1-6.A.1.a.1.b.1. of the Guide that are object detection or location systems and have a sound pressure level exceeding 210 dB (reference 1 μPa at 1 m) and an operating frequency in the band from 30 Hz to 2 kHz;

14.

those referred to in item 1-6.A.1.a.2.a.1. of the Guide

15.

those referred to in item 1-6.A.1.a.2.a.2. of the Guide

16.

those referred to in item 1-6.A.1.a.2.a.3. of the Guide

17.

those referred to in item 1-6.A.1.a.2.a.5. of the Guide

18.

those referred to in item 1-6.A.1.a.2.a.6. of the Guide

19.

those referred to in item 1-6.A.1.a.2.b. of the Guide

20.

those referred to in item 1-6.A.1.a.2.c. of the Guide that are processing equipment that are specially designed for real time application with towed acoustic hydrophone arrays and have user-accessible programmability and time or frequency domain processing and correlation, including spectral analysis, digital filtering and beamforming that uses Fast Fourier or other transforms or processes

21.

those referred to in item 1-6.A.1.a.2.e. of the Guide

22.

those referred to in item 1-6.A.1.a.2.f. of the Guide that are processing equipment, specially designed for real time application with bottom or bay cable systems, having user accessible programmability and time or frequency domain processing and correlation, including spectral analysis, digital filtering and beamforming using Fast Fourier or other transforms or processes

23.

those referred to in item 1-6.A.1.a.1.c. of the Guide

24.

those referred to in item 1-6.B.8. of the Guide

25.

those referred to in item 1-6.D.1. of the Guide that are software specially designed for the development or production of equipment specified by item 1-6.B.8. of the Guide

26.

those referred to in item 1-6.D.3.a. of the Guide

27.

those referred to in item 1-6.E.1. of the Guide that are for the development of equipment or software specified by any item in this schedule that is also specified by item 1-6.A., 1-6.B. or 1-6.D. of the Guide

28.

those referred to in item 1-6.E.2. of the Guide that are for the production of equipment specified by any item in this schedule that is also specified by item 1-6.A. or 1-6.B. of the Guide

29.

those referred to in item 1-7.D.3.a. of the Guide

30.

those referred to in item 1-7.D.3.b. of the Guide

31.

those referred to in item 1-8.A.1.b. of the Guide

32.

those referred to in item 1-8.A.1.d. of the Guide

33.

those referred to in item 1-8.A.2.o.3.b. of the Guide

34.

those referred to in item 1-8.D.1. of the Guide that are software specially designed for the development or production of equipment specified by item 1-8.A.1.b., 1-8.A.1.d., or 1-8.A.2.o.3.b. of the Guide

35.

those referred to in item 1-8.E.1. of the Guide that are for the development or production of equipment specified by item 1-8.A.1.b., 1-8.A.1.d. or 1-8.A.2.o.3.b. of the Guide

36.

those referred to in item 1-9.A.11. of the Guide

37.

those referred to in item 1-9.D.1. of the Guide that are software specially designed or modified for the development of equipment or technology specified by item 1-9.A.11., 1-9.E.3.a.1. or 1-9.E.3.a.3.a. of the Guide

38.

those referred to in item 1-9.D.2. of the Guide that are software specially designed or modified for the production of equipment specified by item 1-9.A.11. of the Guide

39.

those referred to in item 1-9.E.1. of the Guide that are for the development of equipment or software specified by any item in this schedule that is also specified in item 1-9.A.11., 1-9.D.1. or 1-9.D.2. of the Guide

40.

those referred to in item 1-9.E.2. of the Guide that are for the production of equipment specified by item 1-9.A.11. of the Guide

41.

those referred to in item 1-9.E.3.a.1. of the Guide

42.

those referred to in item 1-9.E.3.a.3.a. of the Guide

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