Dentons

Introduction

Canadian production companies that sell films and/or television productions to US-based companies (including US studios, independents and streaming services) can face difficulties when sending their key personnel to the United States. The issue frequently arises when some or all of the Canadian production is scheduled to take place on location in the US. 

Canadian production companies often focus on traditional US work permit categories that were created with the film and television industry in mind, such as the O-1B for aliens of extraordinary achievement in the motion picture or television industry, or the O-2 for related essential support personnel. However, these categories are relatively difficult to use and many foreign nationals will be unable to satisfy the onerous eligibility requirements.

Fortunately, the E-1 (treaty trader) category is a viable alternative to the O-1B and O-2 categories. Despite this fact, Canadian production companies tend to overlook the E-1 category, because it was initially intended for entrepreneurs rather than the film and television industry. A brief overview of E-1 eligibility requirements appears below.

Eligible nationality

The one significant limitation of the E-1 category is that it is not available to all nationalities. In order to qualify for E-1 status, an eligible treaty must exist between the United States and the relevant foreign country. A list of eligible treaties in effect between the United States and other foreign countries appears in the Foreign Affairs Manual (FAM), the manual used by US consular officers.1 Fortunately, Canadian citizens are eligible for E-1 status, as a result of the North American Free Trade Agreement

To qualify for E-1 status, a proposed treaty trader must possess the nationality of an eligible treaty country. Although an individual Canadian citizen owner may seek status as an E-1 treaty trader, it is also possible for a corporate entity to qualify. However, in the case of a corporate entity, it must be at least 50 percent owned and controlled by Canadian citizens.2

Once an individual or corporate owner of a Canadian production company has been recognized as a principal treaty trader, the company’s employees may also seek E-1 status, as long as they possess the same nationality as the principal treaty trader. 

Existence of trade

To qualify for E1 treaty trader status, there must be an actual exchange, in a meaningful sense, of qualifying commodities, such as goods, moneys or services, to create transactions that are considered trade.3 The term “trade” is defined as the existing international exchange of items of trade for consideration between the United States and the treaty country.4

As mentioned above, trade must already be in existence at the time that E-1 status is requested. However, existing trade includes successfully negotiated contracts, binding upon the parties, which call for the immediate exchange of items of trade. In other words, even if a Canadian production company has not previously engaged in trade with a United States entity, it could potentially seek E-1 status as soon as it has signed a binding distribution contract with a US company. 

The Department of State (DOS) regulations designate “items of trade” to include: (a) goods, (b) services, (c) technology, (d) monies, (e) international banking, (f) insurance, (g) transportation, (h) tourism, (i) communications, and (j) some news-gathering activities.5 However, this is not intended to be an exhaustive list. For example, although intellectual property is not specifically mentioned, trade in intellectual property can be used to support an E-1 application.

International trade

The above definition of “trade” requires an international exchange of items of trade between the United States and the treaty country. In other words, development of the domestic US market without an international exchange would not qualify.6 

Therefore, a Canadian production company that sells films or television shows produced exclusively in the United States to a US customer might not be able to establish the existence of Canada-US trade. However, if it sells films or television shows primarily produced in Canada to US customers, the production company should have no problem establishing Canada-US trade, even if some portions are filmed on location in the United States. 

Substantial trade

To qualify for E-1 status, the international trade must be considered substantial. The term “substantial trade” means the quantum of trade sufficient to ensure a continuous flow of trade items between the United States and the treaty country.7 This continuous flow contemplates numerous exchanges over time rather than a single transaction, regardless of the monetary value.8 Clearly, there is no minimum dollar amount required to qualify for E-1 status.  

Large production companies engaged in international trades of high monetary value would have no problem establishing that their trade is substantial, as long as they are engaged in more than a single transaction. Even in the case of a small, family-owned production company, its trade may be considered substantial if the income derived from the international trade is sufficient to support the owner, and his or her family.9

Principal trade

To qualify for E-1 status, the Canadian production company must be engaged in international trade that is principally (more than 50 percent) between the United States and Canada.10 The remainder of the trade in which the treaty trader is engaged may be international trade with other countries or domestic trade.11

For example, a Canadian production company that sells its films and television shows only to Canadian-owned and US-owned movie studios or television networks would be engaged in 100 percent international trade between the United States and Canada for the following reasons:

  1. Its domestic Canadian trade is not counted as international trade; and
  2. The company’s only international trade is with US-owned companies.

On the other hand, if 60 percent of a Canadian production company’s international trade is between Canada and Germany, and 40 percent of its international trade is between Canada and the United States, it would not be eligible for E-1 status. However, since trade is specific to each corporate entity, a Canadian production company that cannot demonstrate principal trade between the United States and Canada could still qualify, if it is able to transfer its non-qualifying trade to a separate corporate entity.  

E-1 status for employees

If an individual or corporate owner of a Canadian production company can qualify as an E-1 principal treaty trader, it may seek E-1 status on behalf of its executive, supervisory and essential skills employees. Each of these employee types is described in detail below.

Executive and supervisor employees

Executive and/or supervisory duties grant the employee ultimate control and responsibility for the enterprise’s overall operation or a major component of the organization:

  1. An executive position provides the employee great authority to determine the policy of and direction for the enterprise.  
  2. A position primarily of supervisory character grants the employee supervisory responsibility for a significant proportion of an enterprise’s operations, and does not generally involve the direct supervision of low-level employees.

The executive or supervisory element of the employee’s position must be a principal function of the position, and not an incidental or collateral function. 

Most of the production company’s executives and senior managers should be able to qualify for E-1 status as executive and/or supervisory employees. In addition, its directors, producers and other senior employees might potentially qualify as supervisory employees, if they otherwise satisfy the above requirements. Otherwise, they should be able to qualify as essential skills workers. 

Essential skills employees

To qualify as an essential skills worker, an employee must possess special skills that are essential to the successful or efficient operation of the business.12 However, there is no formal requirement that the essential skills worker have any previous work experience with the company.13

The essential nature of an applicant’s skills is determined by assessing the following criteria:

  1. His or her degree of proven expertise in the area of operations involved;
  2. The uniqueness of the specific skill or aptitude;
  3. The length of experience and/or training with the company;
  4. The period of training or other experience necessary to perform the duties effectively; and
  5. The salary that the special qualifications command.14 

Performing artists/entertainers (i.e., talent), directors, cinematographers, writers, producers, and other technical/creative personnel, can all potentially qualify as essential skills workers, if they can demonstrate the essentiality of their skills. 

All essential skills workers must also establish the duration of their essentiality. There are two distinct types of essential skills workers: (a) short-term workers, and (b) long-term workers. However, for the purposes of this article, we will focus on long-term workers, since many Canadian production company employees will seek E-1 status in this capacity. 

Long-term essentiality may be established in connection with continuous activities in areas such as product improvement, quality control, or the provision of a service not generally available in the United States.15 It should be possible to demonstrate that performing artists / entertainers employed in the production will remain essential on a long-term basis, since their participation is critical to the show’s production. It should also be possible to demonstrate that other creative/technical personnel will remain essential on a long-term basis, based on the need for continuity of production (i.e., quality control). 

Intention to depart

E-1 applicants must also establish that they intend to depart from the United States upon termination of their status.16 However, the applicant’s expression of an unequivocal intention to return when his or her E-1 status ends is normally sufficient; this can customarily be expressed by way of a written statement. 

Of course, in cases where the applicant has previously violated US immigration laws (i.e., worked without lawful authorization, overstayed their status, etc.), it may be difficult to satisfy a consular officer that his or her actual intention is to depart from the United States. Therefore, a review of each applicant’s prior US immigration history is critical to any E-1 visa application.

Conclusion

In conclusion, the E-1 treaty trader category can often be a more straightforward option for many Canadian production companies, and their executive, supervisory and essential skills employees. For this reason, it should always be considered before other, more complex work permit categories (such as the O-1B and O-2). 


  1. 9 FAM 402.9-10.
  2. 9 FAM 402.9-4(B)(c).
  3. 9 FAM 402.9-5(B)(b).
  4. 22 CFR §41.51(a)(7).
  5. 22 CFR §41.51(a)(8).
  6. 9 FAM 402.9-5(B)(c).
  7. 22 CFR §41.51(a)(9).
  8. Id.
  9. Id.
  10. 22 CFR §41.51(a)(10); 9 FAM 402.9-5(D)(a).
  11. Id.
  12. 22 CFR §41.51(a)(12).
  13. 9 FAM 402.9-7(C)(3).
  14. 22 CFR §41.51(a)(12).
  15. Id.
  16. 22 CFR §41.51(a)(1).
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