GHY Tradelines

(U.S. State Dept.)

As the pace of technological advance accelerates, and as technological capability spreads around the world, the need to update our Export Controls is increasingly urgent. We are no longer in an era in which a handful of countries hold the keys to the most sensitive technologies, as was the case during the Cold War. Today, a whole range of nations have advanced technological capability.

At the same time, because of the diffusion of technology, many U.S. companies must collaborate with foreign partners to develop, produce and sustain leading-edge military hardware and technology. Their survival depends on it.

But because our current export controls are confusing, time-consuming, and – many would say – overreaching, our allies increasingly seek to ‘design out’ US parts and services, thus avoiding our export controls and the end-use monitoring that comes with them in favor of indigenous design. This threatens the viability of our defense industrial base, especially in these austere times.

Click here to read the complete testimony of Tom Kelly, Acting Assistant Secretary, Bureau of Political-Military Affairs made before the House Foreign Affairs Committee Hearing on Export Control Reform.

Related: Officials Detail Export Control List Reforms, Offer No Timeframe on Additional Changes (STR Trade Report)

(IndustryWeek – AFP)

In an effort to reduce regulations that are thought to be putting American firms at a disadvantage, the United States on Tuesday eased rules on the export of select items in the aerospace industry.

The State Department said it was moving a series of “less sensitive items” from the U.S. Munitions List, which regulates exports, to a separate list maintained by the Commerce Department and seen by industry as less strenuous. […]

The items include parts and components related to aircraft and gas turbine engines, areas that the State Department said accounted for more than $20 billion in annual exports. Read more here.
 

(CBC News)

The UN General Assembly today overwhelmingly approved the first UN treaty regulating the multibillion-dollar international arms trade, a goal sought for over a decade to try to keep illicit weapons out of the hands of terrorists, insurgent fighters and organized crime.

The resolution adopting the landmark treaty was approved 154-3, with 23 abstentions. As the numbers appeared on the electronic board, loud cheers filled the assembly chamber.

A group of treaty supporters sought a vote in the 193-member world body after Iran, North Korea and Syria blocked its adoption by consensus at a negotiating conference last Thursday. The three countries voted “no” on Tuesday’s resolution.

Many countries, including the United States, control arms exports. But there has never been an international treaty regulating the estimated $60-billion global arms trade. Read more here.
 

(STR Trade Report)

The Bureau of Industry and Security has issued an advisory opinion on licensing requirements in the Export Administration Regulations for deemed reexports to third-country national and certain dual national (Canadian citizens with second citizenships acquired later in time) regular employees residing in Canada with a Canadian employment history that includes a positive security assessment under the Canadian government’s Controlled Goods Program’s Enhanced Security Strategy. Based on the facts presented, BIS has deemed such individuals to be Canadian nationals for purposes of Section 734.2(b)(5) of the EAR. As a result, technology or source code subject to the EAR may be released to these foreign nationals.

Under Section 126.18 of the International Traffic in Arms Regulations, a foreign employer who is itself an authorized consignee or end-user may allow a dual or third-country national who is a bona fide regular employee to have access to unclassified defense articles (including technical data) without prior written approval if the employer (a) has in place a process to screen its employees for substantive contacts with restricted or prohibited countries and to have its employees execute a non-disclosure agreement providing assurances that they will not transfer any defense articles to persons or entities unless specifically authorized by the employer, and (b) determines through that process that the employee does not have substantive contacts with a restricted or prohibited country. The petitioner noted that, based on public statements by U.S . and Canadian government officials, a Canadian company registered under the CGP can meet this screening requirement if a regular employee residing in Canada receives a positive security assessment evaluation through the ESS.
 

(DFAIT)

On January 30, 2013, the Government of Canada finalized the regulatory process to amend the Export Control List.  This amendment serves to control, clarify controls and remove control over specific items as agreed upon in the various multilateral export control regimes and in accordance with Canadian domestic policy.

This Order and the April 2011 version of “A Guide to Canada’s Export Controls” (Guide) will formally come into effect on March 15, 2013. Until that time, the June 2010 version of the Guide remains in effect.  Electronic and printed copies of the new April 2011 Guide will be available as of March 15, 2013.

The new version of the Guide will incorporate Canadian commitments and obligations to the various multilateral export control regimes up to April 2011. A brief overview of key changes are provided on the Export Controls Division website. The regulation and the Regulatory Impact Analysis Statement was published on the Canada Gazette website on February 13, 2013. Please contact the Export Controls Division for more details.

Contact Information:  

Marie-Soleil Fecteau
Policy Advisor, Export Controls Division (TIE)
Trade Controls and Technical Barriers Bureau
Foreign Affairs and International Trade Canada
125 Sussex Drive | Ottawa, Ontario | K1A 0G2
Tel: (613) 944-1862
tie.reception@international.gc.ca
 

(DFAIT)

The January 30, 2013 edition of the Canada Gazette, Part II, published the General Export Permit No. 46 – Cryptography for Use by Certain Consignees order and accompanying Regulatory Impact Analysis Statement.

With the introduction of GEP 46, the process to export or transfer certain cryptographic goods and technology for use by certain consignees has been streamlined. Under GEP 46, residents of Canada will be able to export or transfer most goods and technology identified in item number 1-5.A.2, 1-5.B.2, 1-5.D.2 and 1-5.E.2 of A Guide to Canada Export Controls, excluding those ineligible items identified in section 2 of the regulation, to many destinations.

Further information concerning the regulation can be found in Notice to Exporters No. 186.
 

(STR Trade Report)

The Treasury Department has published its semiannual list of countries that require or may require participation in, or cooperation with, an international boycott. Treasury is adding Iraq to this list, which also includes Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, the United Arab Emirates and Yemen.
 

(The Washington Post)

The West has launched an “all-out … war” against Iran by imposing oil and banking sanctions on his country, Iran’s president charged Tuesday.

In July, the European Union banned oil imports from Iran, just after the U.S. enacted tough measures against Iran’s central bank. The sanctions, aimed at curbing Iran’s nuclear development program, have severely harmed Iran’s economy.

Speaking on a live TV talk show, President Mahmoud Ahmadinejad said, “It is an all-out, hidden, heavy war.” Ahmadinejad admitted that the West’s sanctions have created problems in oil exports and banking. “There are barriers in transferring money, there are barriers in selling oil,” said Ahmadinejad. Read more here.
 

(Lee Berthiaume – Postmedia News)

Despite repeated Harper-government boasting about imposing some of the toughest sanctions against Iran, newly released documents show that Canadian customs agents are stretched thin — and have been missing some shipments intended for Iran’s surreptitious nuclear program.

The documents raise questions about the effectiveness of Canadian sanctions — and whether efforts to prevent Iran from acquiring Canadian technology for its nuclear program are mere rhetoric given a lack of resources and personnel. Read more here.
 

(Murray Brewster – The Canadian Press)

Two high-profile American senators are urging the U.S. to take tougher action against a Canadian aerospace company that has admitted to exporting military software to China in violation of U.S. law.

Pratt and Whitney Canada, which is owned by American defence giant United Technologies Corporation, acknowledged in a settlement a few weeks ago with the U.S. Justice Department that it and another UTC subsidiary, Hamilton Sundstrand, sold the computer programs that could allow China to complete the development of its first attack helicopter.

Senators John McCain and Carl Levin, who sit on the Senate Committee on Armed Services, have called on the Obama administration to further punish Pratt and Whitney beyond the US $75 million fine already assessed the two companies. Read more here. 
 

(Government of Canada)

On July 31, 2012, the Government of Canada concluded the regulatory process issuing General Export Permit No. 45 – Cryptography for the Development or Production of a Product (GEP 45).

As a result of the introduction of GEP 45, the process to export or transfer certain cryptographic goods and technology for the purpose of the development or production of a product has been streamlined. Under GEP 45, residents of Canada will be able to export or transfer most goods and technology identified in item number 1-5.A.2, 1-5.B.2, 1-5.D.2 and 1-5.E.2 of A Guide to Canada Export Controls, excluding those ineligible items identified in section 2 of the regulation, to many destinations.

Further information concerning the regulation can be found in Notice to Exporters No. 182.

The order and accompanying Regulatory Impact Analysis Statement will be published in the August 15, 2012 edition of the Canada Gazette, Part II.
 

(DFAIT)

On May 3, 2012, the Government of Canada concluded the regulatory process issuing General Export Permit No. 43 – Nuclear Goods and Technology to Certain Destinations (GEP 43) and General Export Permit No. 44 – Nuclear-related Dual-use Goods and Technology to Certain Destinations (GEP 44) and cancelling General Export Permit No. 27 – Nuclear-Related Dual-Use Goods.

As a result of the introduction of these new regulations, exporters will no longer be required to obtain an individual export permit from Foreign Affairs and International Trade Canada, when exporting eligible goods and technology to eligible destinations, as identified in GEP 43 and GEP 44, when accompanied by a valid export licence from the Canadian Nuclear Safety Commission.

The order will be published in the May 23, 2012 edition of the Canada Gazette, Part II. Please see the Notice to Exporters No. 181 here.
 

American Shipper magazine and its co-sponsor Amber Road (formerly Management Dynamics Inc.) are inviting participation in their upcoming Webinar, Export Reform Update – Focusing on the Four Singles, broadcasting live on Wednesday, March 28 at 2PM ET.

Background:

The Obama administration’s initiative to reform export regulations is taking shape. The effort is now centered on four key areas of reform – known as the “four singles.”   This event will provide exporters with an update on the state of export reform and help them prepare for the changes now and in the future.

• What impacts will these changes have on exports today and in the future?

• What should exporters be doing now in preparation?

• How can exporters provide input to the government?

• What role will GTM technology play?

Key topics will include:

• A review of the “four singles”: Controlled items list; Licensing agency; Modern IT system; Enforcement agency.

Expert panelists include:

Beth Peterson, President of BPE Global
Eric Hirschhorn, Under-Secretary of the U.S. Commerce Department’s Bureau of Industry and Security
Lindsay Meyer, Co-Managing Partner, Venable LLP
J. Anthony Hardenburgh, Vice President, Global Trade Content, Amber Road

Click here to register for this free webinar.

For additional information or assistance at any time, you can contact American Shipper’s Help Desk: HelpDesk@Shippers.com.
 

(CSCB)

The Export Controls Division of Foreign Affairs and International Trade Canada is organizing an Export Controls Seminar in Montréal March 6, 2012.

This seminar will review the responsibilities of Canadian industry with regards to export controls of military, strategic, and sensitive commercial goods and technology.

Details are available on the DFAIT website here.
 

(STR Trade Report)

The Treasury Department has published a current list of countries that may require participation in, or cooperation with, an international boycott. The list includes Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, United Arab Emirates and Yemen. Treasury notes that Iraq is not included on this list but that its status with respect to future lists remains under review.

Click here for Treasury notice.
 

(World Trade Interactive)

The Bureau of Industry and Security has issued a final rule that, effective Jan. 9, imposes a license requirement on exports and reexports to all destinations other than Canada of two types of microwave and millimeter wave electronic components that have uses in military radar systems as well as in civilian radar and telecommunications systems. Read more here.
 

(World Trade Interactive)

The State Department’s Directorate of Defense Trade Controls has posted to its Web site a report outlining the fiscal year 2010 performance of its “Blue Lantern” end-use monitoring program for defense exports. The report reveals that in FY 2010 about 21% of all Blue Lantern end-use checks were unfavorable (compared to 15% in FY 2009), indicating that the exported items are being used for unauthorized purposes.

The Blue Lantern program monitors the end-use of commercially exported defense articles and defense services subject to licensing or other authorizations under section 38 of the Arms Export Control Act and the International Traffic in Arms Regulations. Blue Lantern end-use monitoring entails pre-license, post-license or post-shipment checks undertaken to verify the bona fides of proposed foreign consignees and end-users, to confirm the legitimacy of proposed transactions and to provide reasonable assurance that (a) the recipient is complying with U.S. government requirements with respect to use, transfers and security of defense articles and defense services and (b) such articles and services are being used for the purposes for which they are provided. Read more here.
 

The Export Controls Division of Foreign Affairs and International Trade Canada has updated the Export Control List (ECL) and accompanying “A Guide to Canada’s Export Controls”.  These changes came into effect on December 16th, 2011. The amendments serve to control, clarify controls over or to remove from control specific items and to ensure currency of Canada’s export controls of strategic items pursuant to multilateral obligations.

Click here for a list of changes and corrections to the list. The updated Export Control List Regulation will be printed in the Canada Gazette Part II later this month. “A Guide to Canada’s Export Controls – June 2010” is now available from the Export Controls Division by emailing TIE.reception@international.gc.ca.
 

(World Trade Interactive)

According to the State Department, the Obama administration has postponed part of its effort to overhaul existing export control lists. This delay is meant to avoid undue hardship for exporters, but the administration intends to revisit the issue at a later time.

In December 2010 the administration announced its intention make the U.S. Munitions List and the Commerce Control List more positive, tiered and aligned so that eventually they can be combined into a single control list. The administration also called for the establishment of a “bright line” between the USML and the CCL to clarify whether particular items are subject to the jurisdiction of the International Traffic in Arms Regulations or the Export Administration Regulations. Read more here.
 

(Reuters – David Ljunggren)

Canada will immediately ban the export to Iran of all goods used in the petrochemical, oil and gas industry, as part of an international sanctions package, the government said on Monday.  Canada, the United States and Britain are limiting contacts with Tehran over concerns about Iran’s nuclear program.

The ban on exports of goods to the energy sector will not apply to contracts entered into before November 22 this year, Foreign Minister John Baird said in a statement. Read more here.