Canada Issues New Guidance on Encryption Controls

(e-Alert – John Boscariol, McCarthy Tétrault)

On October 19, 2010, the Export Controls Division of Foreign Affairs and International Trade Canada (ECD) released new information on its policies regarding the application for and granting of permits for the export or transfer of information security goods, software and technology. Canada imposes controls on transfers of these items to all countries other than the United States.

In response to significant concerns expressed in the Canadian business community regarding the impact of these controls on their competitive position in the international marketplace, ECD has been considering means of facilitating the permit process while still complying with Canada's international commitments in this area. These consultations are further described in our earlier legal alerts: Canadian Government Launches Consultations on Encryption Controls and Canadian Government Undertaking Industry Consultations on Cryptography Export Permit Process.

This week, ECD clarified and announced changes to its policy regarding the issuance of permits for cryptographic goods, software and technology. These new guidelines can be found at Export Permits for Cryptographic Items. Among other things, they specify that exporters must now have a comprehensive compliance plan in place regarding the export and transfer of controlled goods and technology.

Read the summary and link to earlier legal alerts here.

DFAIT – Order Amending the Automatic Firearms Country Control List

(CIFFA eBulletin)

This amendment seeks to expand the Automatic Firearms Country Control List (AFCCL) to include Albania and Croatia, the only North Atlantic Treaty Organization (NATO) member countries not currently listed. Currently there are 31 countries listed on the AFCCL. Full details published in the Canada Gazette are available here.  

Export Regulations Amended on De Minimis Content, Delivery Notification, Other Issues

(World Trade Interactive)

The Bureau of Industry and Security has issued a final rule that, effective June 4, makes a number of revisions to the Export Administration Regulations detailed here.

9 Steps to Perfecting the Global Trade Balance

(Logistics Today – Carmen Yunker, J.P.Morgan)

U.S. export compliance enforcement continues to escalate. The recent $9.4 million export compliance and economic sanction penalty violation levied against DHL is a good indication that the U.S. government has no problem issuing costly penalties, even in these difficult times. Inexplicably, with an increasingly active compliance enforcement environment, some companies continue to scale back financial and workforce resources related to export compliance. That isn’t consistent with basic corporate risk mitigation policies.

Corporate executives are best served by balancing the risk of violating basic trade regulations with the need to keep an effective export compliance program. Having a compliance program on “paper” is not enough to prevent a company from being subject to penalties and operational risk. The challenge is creating the right compliance environment for each business.

An effective compliance program can be maintained on a reduced budget if the essential core practices are clearly defined and followed. Read more here.

NAM Supports Modernized Export Controls

(Industry Week – Adrienne Selko)

New rule allows U.S. manufacturers to transfer technology, items and personnel license-free within their own corporate families

The National Association of Manufacturers (NAM) last week showed its support for a new export control procedure for Intra-Company Transfers or “ICT” – exports from one part of a company to another part of the same company located abroad.

“The Intra-Company Transfer exception has been the NAM’s number one dual-use export controls modernization priority,” said NAM President John Engler. “We have led the effort and have worked tirelessly with the Department of Commerce to facilitate the creation of the new exception in a way that improves national security while simultaneously spurring technological innovation, especially in the high tech sector.

“This new exception will allow U.S. manufacturers to transfer technology, items and personnel license-free within their own corporate families, eliminating the need for thousands of individual export licenses,” said Engler. “Trade from one part of a corporate family to another part is very secure, and needs to be treated differently from transactions involving overseas purchasers. Read more here.

Export Rules Eased on Foreign-Made Goods with U.S.-Origin Components

(World Trade Interactive)

The Bureau of Industry and Security has revised its regulations on export controls for foreign-made items that incorporate controlled U.S.-origin goods (the de minimis rules). According to the BIS, this rule changes the de minimis calculation for foreign-produced hardware that is bundled with U.S.-origin software, clarifies the definition of “incorporate” as it is applied to the de minimis rules and the medical statement of understanding, removes the requirement to submit a one-time report for foreign-made software that incorporates U.S.-origin software, and revises the “Steps for Using the EAR” and General Prohibition Two with regard to the de minimis rules. This interim final rule is effective as of Oct. 1 and comments on it are due by Dec. 1. Read the complete article.

EICS / EXCOL Bulletin – Canada Day Holiday 2008

(Export & Import Controls Bureau)

Tuesday 01 July is a statutory holiday, and the Bureau's offices will be closed (no officers or Help Desk staff will be available). The EICS system will be available during normal hours.

Please note that the Help Desk email ONLY will be monitored on Tuesday the 1st between 08:00 - 16:00 (EST) for urgent messages.

Questions or problems can be directed to the following EICS email address: eics.scei@dfait-maeci.gc.ca