Vol. 142, No. 16 — April 19, 2008

Order Amending the Automatic Firearms Country Control List

Statutory authority

Export and Import Permits Act

Sponsoring department

Department of Foreign Affairs and International Trade

Executive summary

Issue

The Export and Import Permits Act (EIPA) places very strict controls on the export of prohibited firearms, prohibited weapons and prohibited devices (as defined in the Criminal Code of Canada). Export permit applications for these items are only considered to countries on the Automatic Firearms Country Control List (AFCCL).

The proposed amendment seeks to expand the AFCCL to include the following list of North Atlantic Treaty Organization (NATO) member countries not currently listed on Canada’s AFCCL: Bulgaria, Czech Republic, Estonia, Hungary, Iceland, Lithuania, Luxembourg, Romania, Slovakia, Slovenia and Turkey.

The inclusion of these 11 countries on the AFCCL would allow Canada to further support all NATO allies and collective NATO security efforts, as well as improve access to potential market opportunities for Canadian firms in the defence sector.

Objectives

The inclusion of the remaining 11 NATO allies on the AFCCL will demonstrate Canada’s continued support to all of its individual NATO allies and to collective NATO security efforts by facilitating the transfer of prohibited firearms, prohibited weapons and prohibited devices, while maintaining strict export controls when evaluating export permit applications.

The proposed amendment also seeks to improve access for Canadian firms in the defence sector to NATO ally markets, thus providing firms with additional opportunities to compete fairly for potential contracts alongside foreign competitors.

Description

Section 4.1 of the EIPA sets out that only those countries which have concluded an intergovernmental defence, research, development and production (IDRDP) arrangement with Canada are eligible to be included on the AFCCL. The AFCCL is an export control mechanism unique to Canada and is part of Canada’s effort to encourage greater transparency in the transfer of prohibited firearms, prohibited weapons and prohibited devices. Such controls are in keeping with Canada’s long-standing policy of closely controlling the export of military goods and technologies. They are fully consistent with Canada’s policy of preventing destabilizing concentrations of conventional weapons and promoting greater transparency in their international trade. Currently, there are 20 countries listed on the AFCCL.

Given Canada’s long-standing participation in NATO and our commitment to security and stability in the Euro-Atlantic region, it is proposed that NATO member countries not already listed on Canada’s AFCCL be added in recognition of their participation with Canada in the North Atlantic Treaty and the Charter of NATO Research and Technology Organization (RTO) of January 1, 1998.

All NATO member countries are, by further NATO agreement, parties to the NATO RTO Charter. The NATO RTO has as its mission the development and effective use of national defence, research and technology to meet the military needs of the NATO Alliance. The NATO RTO Charter constitutes an arrangement between Canada and other NATO member countries. The Charter addresses and satisfies all of the IDRDP elements required under section 4.1 of the EIPA prior to the addition of a country to the AFCCL.

The NATO RTO is a subsidiary body created within the NATO framework. Upon joining the NATO Alliance, any new member state is bound by the terms of the North Atlantic Treaty and the underpinning principles of collective security as part of the terms of the NATO RTO Charter and is further part of the wider set of intra-NATO member IDRDP arrangements with Canada.

Furthermore, the North Atlantic Treaty, taken in conjunction with the authorities and arrangements of the NATO RTO Charter and the Conference of National Armaments Directors (CNAD), constitutes an exhaustive set of intergovernmental commitments in defence, research, development and production.

The proposed amendment is consistent with Canada’s foreign policy obligations, including commitments made by Canada in multilateral trade forums and defence arrangements to contribute to regional and international security.

Regulatory and non-regulatory options considered

The AFCCL mechanism available under the EIPA and its Regulations is the only domestic vehicle available to establish the basis for authorizing the export of prohibited firearms, prohibited weapons and prohibited devices, and then only under strictly controlled conditions. Countries can only be added to the AFCCL by decision of the Governor in Council.

Benefits and costs

This amendment will allow Canada to continue to support our NATO allies and confirm Canada’s commitment to the principles of collective security and, therefore, contribute to regional and international security and stability.

The costs associated with this amendment for the Government are limited to the administrative cost of making the amendment and subsequent circulation of the new Regulations.

The proposed amendment is consistent with Canada’s commitments in multilateral export control regimes and international agreements that seek to control and monitor the movement of sensitive goods and technology, such as those items controlled under the AFCCL.

The addition of the remaining 11 NATO allies to the AFCCL will enable Canadian manufacturers of prohibited firearms, prohibited weapons, and prohibited devices to apply for permits to export their products to additional NATO member countries; the measure can thereby potentially encourage several years of increased production for Canadian firms in the defence sector.

Since export of prohibited firearms, prohibited weapons and prohibited devices is lawful only under authority of permits, the measure will not place any additional burden on Canadian companies.

Rationale

The proposed amendment recognizes the valuable contributions that Canada’s defence industry makes to the nation’s prosperity. It develops high-technology products and is closely integrated with counterparts in allied countries. Canada’s defence industry provides the Canadian Forces, as well as the armed forces of our NATO allies and like-minded countries, with the equipment, munitions and spare parts necessary to meet operational needs, including requirements for combat and peacekeeping missions.

Canada’s NATO allies contribute to their collective security. All member countries are fully and permanently committed to collective defence, democratic governments and free markets. The addition of the remaining 11 NATO member countries to the AFCCL recognizes these commitments and contributions of all NATO members.

All items controlled under Canada’s Export Control List, including prohibited firearms, prohibited weapons, and prohibited devices, require a permit to be exported. All permits are evaluated on a case-by-case basis, taking into consideration a range of factors. Thus, the proposed amendment would not remove the requirement to obtain permits to authorize the export of prohibited firearms, prohibited weapons and prohibited devices to any country that is included on the AFCCL. The Minister maintains the authority to exercise discretion on a case-by-case basis over permit applications, which are approved only when the Minister of Foreign Affairs is satisfied that such exports would be consistent with Canada’s foreign policy.

Consultation

As is customary when dealing with potential changes to Canada’s export control regime, the Department consulted with relevant divisions within the Department of Foreign Affairs and International Trade as well as the Department of National Defence, which support the proposed amendment.

The proposed amendment is released for the first time for public consultation.

Implementation, enforcement and service standards

Exports of prohibited firearms, prohibited weapons and prohibited devices can be authorized only to countries listed on the AFCCL and, even then, such exports require permits. Through permit application, review and issuance, the Government can ensure that legitimate exports take place while maintaining strict controls.

Once an application to export goods such as those items controlled under the AFCCL has been received from an exporter, wide-ranging consultations are held among human rights, international security and defence industry experts at DFAIT, the Department of National Defence and, as necessary, other government departments and agencies. Through such consultations, each export permit application is assessed for its consistency with Canada’s foreign, security and defence policies. Careful attention is paid to mandatory end-use documentation in an effort to ensure that the export is intended for a legitimate end-user and will not be diverted to illegitimate ends that could threaten the peace, security or stability of Canada, its allies, or other countries or people.

The proposed amendment will likely result in additional export permit applications submitted to the Department. However, as there is a limited number of companies involved in the direct export of the items in question, it is anticipated that the number of additional applications will be relatively low. The Department will continue to ensure that export permit applications are evaluated on a timely basis.

While the AFCCL is being amended to include all current NATO member countries, an addition of a new NATO member in the future does not guarantee automatic inclusion on the AFCCL. Rather, a regulatory amendment to the AFCCL would be required to add an additional country.

The Canada Border Services Agency is responsible for the enforcement of export controls, including exports of prohibited firearms, prohibited weapons and prohibited devices. Failure to possess the required export permit can result in prosecution and conviction under the EIPA.

Performance measurement and evaluation

The inclusion of a country on the AFCCL does not guarantee the approval of exports of items controlled on the AFCCL to that country. The Department maintains rigorous export controls, as each export permit application will be actively assessed on a case-by-case basis to consider a range of factors such as regional peace, security and stability, including civil conflict and human rights, and consistency with Canada’s foreign policy and commitments made under multilateral export control regimes. If concerns or issues arise regarding a country on the AFCCL, the Minister maintains the authority to exercise the discretion to deny an export destined to that country.

Ms. Judy Korecky
Deputy Director
Export Controls Division
Export and Import Controls Bureau
Department of Foreign Affairs and International Trade
111 Sussex Drive
Ottawa, Ontario
K1N 1J1
Telephone: 613-944-2505
Fax: 613-996-9933