Alert: Exports Subject to Increasing Trade Control Scrutiny

by John Boscariol

Canada’s customs authority, the Canada Border Services Agency (CBSA), continues to exercise its broad authority under the Customs Act and the Export and Import Permits Act to engage in numerous searches, detentions, seizures, ascertained forfeitures, investigations and other enforcement activities to ensure that exports from Canada are in full compliance with Canadian legislation. Exporters must comply with significant, and at times complex, regulatory requirements, including controls over the transfer of goods and technology identified on the Export Control List (ECL), economic sanctions measures imposed under the Special Economic Measures Act (SEMA) and the United Nations Act (UNA), and CBSA export reporting obligations.

Continued reports of US authorities’ dissatisfaction with Canadian enforcement of export controls appear to be at least part of the reason for increasingly aggressive CBSA enforcement in this area. Historically, Canada does not have an as extensive enforcement record as that of the United States regarding export controls and economic sanctions. However, Canadian officials point to a “continuum of successes” recently, in addition to prosecutions and convictions, in addressing export violations – these include detentions and seizures which delay and disrupt shipments and can result in lost contracts.

Critical Areas for Exporters

Areas in which Canadian exporters are facing significant compliance and enforcement challenges include the following:

(i) dealings with “designated persons” – regardless of the destination country, exporters should be routinely screening all involved parties against the lists of companies, organizations and individuals established under the numerous SEMA and UNA sanctions regulations, the Freezing Assets of Corrupt Foreign Officials Act , as well as the Criminal Code provisions regarding dealings with terrorist entities; Canadian exporters are prohibited from engaging in dealings with these listed parties;

(ii) information security items – Canada’s export controls over goods, software and technology designed or modified to perform encryption or to work with such items (as identified on the Export Control List (ECL)) are more cumbersome than their US counterparts; often, exporters first discover that their products are subject to control when they are detained or seized by CBSA and the delays in responding to the enforcement action and obtaining a permit result in costly commercial disruption and lost sales ;

(iii) “catch-all” controls – pursuant to a “catch-all” provision in the ECL, exports of all goods and technology are prohibited without a permit if “their properties and any information made known to the exporter … would lead a reasonable person to suspect that they will be used” in connection with chemical, biological or nuclear weapons and their delivery systems or missiles (WMDs) or used in any WMD facility ; accordingly, exporters must exercise due diligence to ensure that their uncontrolled goods and technology are not destined for a WMD facility;

(iv) Iran – the supply of any goods and related technology to Iran for use in the petrochemical, oil or natural gas industry or for nuclear-related purposes is prohibited under SEMA and UNA regulations which also contain an extensive list of other prohibited items ; Canada’s recent imposition of a financial services ban can also significantly complicate matters for exporters to Iran ; further, no US-origin goods or technology can be transferred to Iran without an export permit which can only be obtained in limited circumstances ; exporters should be aware that CBSA is also closely scrutinizing exports to locations that are commonly used for transhipment to Iran, including the United Arab Emirates, Malaysia and Hong Kong;

(v) Syria – there is a ban on the export to Syria of any goods or technology identified on the ECL as well as any goods or technical data for use in the monitoring of telecommunications ; as is the case with transfers to Iran, all US-origin goods and technology is prohibited from being transferred to Syria without a permit which can only be obtained in very limited circumstances;

(vi) Cuba – Canada does not restrict exports or transfers to Cuba unless the goods or technology are of US-origin or otherwise controlled on the ECL in which case a permit must first be obtained; however, pursuant to an Order issued under the Foreign Extraterritorial Measures Act , companies and individuals are prohibited from complying with the extraterritorial US trade embargo of Cuba and are required to advise the Canadian Attorney General forthwith of any communications related to the US trade embargo received from a person in a position to influence their policies in Canada; failure to comply with the Order is punishable with criminal penalties; and

(vii) Belarus and Burma – Canada’s sanctions against Belarus and Burma are more aggressive than those imposed by other countries.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© John Boscariol, McCarthy Tetrault LLP | Attorney Advertising

Written by:

John Boscariol

McCarthy Tetrault LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.