Written By Jessica Horwitz and Kathleen Wang
The updated version of A Guide to Canada's Export Control List (the Guide) will come into force on July 23, 2021, replacing the previous December 2018 version of the Guide. Amendments to the Export Control List (ECL) published in the June 23, 2021 edition of the Canada Gazette Part II incorporate the updated version of the Guide by reference.
Canada updates the ECL and Guide periodically to reflect updates to Canada's multilateral export control commitments. This latest round of changes incorporates changes through December 31, 2020. A tracked change version of the Guide is available here in English and French.
Canadian exporters of goods and technology subject to export controls, or of any goods or technology with potential military or strategic applications (i.e., dual-use items) including notably computers, electronics and telecommunications technology and software, should review the updates to determine whether they affect the control status of their products. Companies that violate export control requirements can face significant legal, financial, commercial and reputational risks.
Background
The Guide is Canada's detailed list of items subject to export restrictions under Canada's Export and Import Permits Act. It contains the detailed technical specifications and interpretive notes necessary to determine whether goods and technology are subject to export controls.
While some of the control categories in the ECL are unilateral Canadian controls, most categories accord with international control regimes. Canada is party to the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies, the Nuclear Suppliers Group, the Missile Technology Control Regime, the Australia Group (for non-proliferation of chemical and biological weapons) and the Arms Trade Treaty. Participating states typically meet on an annual basis to negotiate and discuss proposed changes to lists of goods and technology for export control.
Canada updates the Guide to reflect changes to negotiated international control schedules under the multilateral export control and non-proliferation regimes to which Canada is a party. Most of the updates to the Guide clarify the scope of existing controls through grammatical edits and technical notes, but some expand the scope of controls on certain categories of items. A synopsis of the updates is included below.
New Export Controls Online System (EXCOL)
Global Affairs Canada (GAC) also recently launched a new EXCOL portal for export permit applications. Exporters can submit export permit and certification applications or request amendments. Existing users of the previous system should have been automatically enrolled as a user of the new EXCOL portal. Registered users have access to features such as the ability to check the status of an application, to submit quarterly utilization reports and to print selected documents. Exporters can also submit one-off applications through EXCOL as a guest user without creating an account, but this option has limited features.
Process Streamlining—Changes to the Guide Will Enter Into Force 30-days After Publication
A notable procedural change is that along with these amendments, the Government of Canada has streamlined its process to amend the Guide. GAC will now update the Guide on a rolling basis to align it with the multilateral export control regimes, rather than once per year to two years as was past practice. Changes will enter into force 30 days after they are published without the need to amend the Export Control List. Companies that are registered users of EXCOL will be notified of updates via email. Exporters will have a 30-day notice period to familiarize themselves with the updates.
GAC will continue to consult exporters who may be affected by changes before any regime negotiations. Exporters can contact GAC's Export Controls Policy Division to provide any suggestions or feedback on specific proposals.
Summary of Key Changes in the December 2020 Guide
Group 1 (Dual-Use Items)
The amendments made to Group 1 align with the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies, as amended by WA-LIST (19) 1 at the Plenary Meeting in Vienna, Austria held on December 4 and 5, 2019. Due to COVID-19, the Wassenaar Arrangement (WA) Plenary did not have an opportunity to conduct an in-depth technical review in 2020. The WA Control Lists (WA-LIST (19) 1) adopted by the December 2019 Plenary therefore remain in force in 2021.
Export controls now apply to the following technologies:
- technology required for slicing, grinding and polishing silicon wafers to achieve a site front least-squares range (item 1-3.E.4);
- software designed for the lawful interception of communications sold to law enforcement agencies (item 1-5.D.1.e) (provisional control effective for three years and renewable upon unanimous consent by Wassenaar members);
- tools that allow users to extract raw data from a network device (item 1-5.A.4.b) (provisional control effective for three years and renewable upon unanimous consent by Wassenaar members); and
- sub-orbital vehicles (item 1-9.a.4.h).
The Guide clarifies controls on:
- body armour;
- equipment for the disposal of Improvised Explosive Devices (IEDs);
- equipment designed to produce metal alloy powder or particulate materials;
- materials designed for absorbing electromagnetic radiation or intrinsically conductive polymers;
- metal alloys, metal alloy powder and alloyed materials;
- fluids and lubricating materials;
- inorganic fibrous or filamentary materials;
- anti-friction bearings, bearing systems and components;
- machine tools for removing (or cutting) metals, ceramics, or composites that can be equipped with electronic devices for numerical control;
- multi-layer masks with a phase shift layer;
- computational lithography;
- computer technology;
- telecommunications technology;
- telecommunications systems, equipment, components and accessories;
- cryptographic information security systems, equipment and components;
- information security software and technology;
- space-qualified components for optical systems;
- non-tunable continuous wave lasers;
- radar systems;
- ramjet, scramjet, combined cycle engines; and
- fan blades.
Technical and decontrol note(s) regarding:
- computational lithography, replacing a previous note under item 1-3.D.3;
- definitions of floating point and fixed point added to item 1-3.E.2;
- a former decontrol note decontrolling balls with tolerances in accordance with ISO 3290:2001 as grade G5 or worse under item 1-2.A.1 was removed; and
- mechanically chopped, milled, or cut carbon “fibrous or filamentary materials” or 25mm or less in length was decontrolled under item 1-1.A.2.b.1.
Group 2 (Munitions List)
The Guide now applies export controls to:
- military offensive cyber operations software (item 2-21.5).
The Guide clarifies controls on:
- smooth-bore weapons;
- ground vehicles and components;
- nuclear power generating or propulsion equipment;
- body armour or protective garments; and
- production equipment, environmental test facilities and components.
The Guide modified and/or added defined terms used in Group 1 and 2. These terms include:
- cyber incident response;
- equivalent standards;
- hard selectors;
- personal area network;
- sub-orbital craft;
- superalloy;
- vulnerability disclosure;
- instrumented range (changed to local definition); and
- resolution (removed).
Group 3 (Nuclear Non-Proliferation List)
No items were added to or removed from Group 3. The Guide clarifies the controls on the following:
- source materials (item 3-1.1);
- deuterium and heavy water (item 3-2.2.1); and
- dissolvers (item 3-2.3.2).
Group 5 (Miscellaneous Goods and Technology) – Canadian unilateral controls
Canada uses Group 5 to administer commitments under various free trade agreements and to further strategic and national security interests. The Guide now reflects export controls introduced last year on skim milk powders, milk protein concentrates and infant formulas (Item 5200). The Guide also clarifies controls on sugar-containing products such as sugars, syrups and molasses.
Group 6 (Missile Technology Control Regime List)
The updates clarify the export controls on:
- guidance sets (item 6-2.A.1.d);
- thrust vector control subsystems (item 6-2.A.1.e); and
- turbojet and turbofan engines (item 6-3.A.1).
Technical notes for turbojet and turbofan engines; and integrated navigation systems were added.
Group 7 (Chemical and Biological Weapons Non-Proliferation List)
New export controls apply to:
- toxic chemicals identified on Schedule 1 of the Chemical Weapons Convention (item 7-3.1); and
- Middle East respiratory syndrome-related coronavirus (MERS-CoV) (item 7-13.1.a.30).
The Guide clarifies the following:
- valves (item 7-2.1.f);
- fermenters (item 7-12.2);
- viruses (human and animal pathogens and toxins) (item 7-13.1.a); and
- genetic elements and genetically-modified organisms (items 7-13.1.f and 7-13.3.f).
The amendments to Group 7 mostly align with the Schedule 1 of the Chemical Weapons Convention and the Australia Group’s Common Control Lists (February 2020).
Group 9 (Arms Trade Treaty)
No updates were made to the export controls listed under Group 9.
For more information on how Canadian export controls affect your business, please contact the authors or any member of the Bennett Jones International Trade and Investment group.
Bennett Jones