ARCHIVED — Vol. 147, No. 3 — January 30, 2013
SOR/2013-1 January 14, 2013
EXPORT AND IMPORT PERMITS ACT
General Export Permit No. 46 — Cryptography for Use by Certain Consignees
The Minister of Foreign Affairs, pursuant to subsection 7(1.1) (see footnote a) of the Export and Import Permits Act (see footnote b), issues the annexed General Export Permit No. 46 — Cryptography for Use by Certain Consignees.
Ottawa, January 9, 2013
Minister of Foreign Affairs
GENERAL EXPORT PERMIT NO. 46 — CRYPTOGRAPHY FOR USE BY CERTAIN CONSIGNEES
1. (1) The following definitions apply in this Permit.
« contrôlé »
“controlled” means controlled in any manner that results in control in fact, whether directly through the ownership of securities or indirectly through a trust, an agreement or an arrangement, the ownership of any corporation or otherwise.
« pays désigné »
“designated country” means Argentina, Australia, Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Poland, Portugal, Republic of Korea, Spain, Sweden, Switzerland, Turkey, Ukraine, the United Kingdom or the United States.
« entité »
“entity” means a body corporate, trust, partnership, fund, an unincorporated association or organization.
“Export Controls Division”
« Direction des contrôles à l’exportation »
“Export Controls Division” means the Export Controls Division of the Department of Foreign Affairs and International Trade.
“government of a foreign country”
« gouvernement étranger »
“government of a foreign country” includes
- (a) the government of any political subdivision of a foreign country
- (b) any agent or agency of a government of a foreign country or its political subdivisions; and
- (c) any entity controlled by a government of a foreign country or its political subdivisions.
« Guide »
“Guide” has the same meaning as in section 1 of the Export Control List.
« destination inadmissible »
“ineligible destination” means Afghanistan, Belarus, Burma (Myanmar), Côte d’Ivoire, Cuba, Democratic People’s Republic of Korea, Eritrea, Guinea, Iran, Iraq, Lebanon, Liberia, Libya, Pakistan, Sierra Leone, Sudan, Syria and Zimbabwe.
(2) In this Permit, “development”, “information security”, “production”, “software” and “use” have the same meaning as in the Guide under the heading “Definitions of Terms Used in Groups 1 and 2”.
2. (1) Subject to sections 3 and 4, any resident of Canada may, under this Permit, export or transfer from Canada any good or technology described in subsection (2) if the export or transfer is made to a consignee that
- (a) is controlled by a resident of Canada; or
- (b) is controlled by an entity that
- (i) has its head office in a designated country, and
- (ii) controls the resident of Canada who exports or transfers.
Goods and technologies
(2) The goods and technologies referred to in subsection (1) are the following:
- (a) any good referred to in item 1-5.A.2. of the Guide, other than a good referred to in item
- (i) 1-5.A.2.a.2.,
- (ii) 1-5.A.2.a.4., or
- (iii) 1-5.A.2.a.9.;
- (b) any good referred to in item 1-5.B.2. of the Guide, other than a good
- (i) used in the development or production of any good referred to in any of subparagraphs (a)(i) to (iii) or (b)(ii), or
- (ii) specially designed to evaluate and validate the information security functions of a good referred to in any of subparagraphs (a)(i) to (iii) or (c)(i) to (iii);
- (c) any good referred to in item 1-5.D.2. of the Guide, other than software
- (i) used in the development, production or use of any good referred to in any of subparagraphs (a)(i) to (iii) or (c)(ii) or (iii),
- (ii) that has the characteristics of a good referred to in any of subparagraphs (a)(i) to (iii) or that performs or simulates the functions of any of those goods,
- (iii) that certifies software referred to in subparagraph (ii),
- (iv) specially designed or modified to support technology used in the development, production or use of a good referred to in any of subparagraphs (a)(i) to (iii), (b)(i) or (ii) or (c)(i) to (iii); or
- (d) any technology referred to in item 1-5.E.2. of the Guide, other than a technology used in the development, production or use of a good referred to in any of subparagraphs (a)(i) to (iii), (b)(i) or (ii) or (c)(i) to (iii).
Countries and governments to which export or transfer is not authorized
3. (1) This Permit does not authorize the export or transfer of a good or technology to
- (a) an ineligible destination;
- (b) a country that is listed in the Area Control List;
- (c) a country in respect of which there is an order or regulation made under section 4 of the Special Economic Measures Act or section 2 of the United Nations Act; or
- (d) the government of a foreign country.
- Goods or technologies the export or transfer of which is not authorized
(2) This Permit does not authorize the export or transfer of a good or technology that
- (a) is intended to be used by anyone other than the consignee;
- (b) is intended to be incorporated into a product to be used by anyone other than the consignee;
- (c) was developed or produced under contract with the Government of Canada or developed or produced for the exclusive use of the Government of Canada;
- (d) has been used in the development or production of a product for the exclusive use of the Government of Canada or under contract with the Government of Canada; or
- (e) is referred to in any item of the Guide other than those referred to in section 2, unless the export or transfer of the goods or technology is also authorized by another export permit issued under subsection 7(1.1) of the Export and Import Permits Act.
4. A person who exports or transfers a good or technology under this Permit must
- (a) provide the following information in writing to the Export Controls Division before making their first export or transfer in a calendar year:
- (i) their name, address, telephone number and, if any, their facsimile number and electronic mail address, and
- (ii) if the person is a corporation, the business number assigned to the corporation by the Minister of National Revenue and the name of a contact person and their address, telephone number and, if any, their facsimile number and electronic mail address;
- (b) insert the term “GEP-46” or “LGE-46” in the appropriate field of the form prescribed under the Customs Act if the good exported is required to be reported under that Act;
- (c) provide to the Export Controls Division, within 15 days after receipt of its request, the records referred to in paragraph (e) in respect of any export or transfer made during the period specified in the request;
- (d) provide to the Export Controls Division, before January 31, the records referred to in subparagraph (e)(ii) in respect of any export or transfer made during the previous calendar year; and
- (e) retain the following records for a period of six years after the year in which any export or transfer is made:
- (i) the item number of the Guide which describes the good or technology,
- (ii) the name and any version number used to identify the good or technology,
- (iii) the estimated value of the good or technology exported or transfered and, in the case of a good or technology that can be quantified, the quantity of the export or transfer,
- (iv) the following information in respect of the good or technology:
- (A) their cryptographic algorithms and the key sizes employed,
- (B) the function performed by the cryptographic algorithms, and
- (C) a description of how the keys are generated and managed, if known to the person who exports or transfers,
- (v) the date of the export or transfer, and
- (vi) the consignee’s name, address, telephone number and, if any, their facsimile number and electronic mail address.
COMING INTO FORCE
5. This Permit comes into force on the day on which it is registered.
(This statement is not part of the Order.)
Subsection 7(1.1) of the Export and Import Permits Act (EIPA) authorizes the Minister of Foreign Affairs to issue generally to all residents of Canada a general permit to export or transfer goods or technology subject to such terms and conditions as described in the permit.
As a result of Canada’s status of a participating state in the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies (the “Wassenaar Arrangement”), certain cryptographic goods and technology are subject to export permit requirements implemented under the EIPA.
In representations made to Foreign Affairs and International Trade Canada (the “Department”), cryptographic industry stakeholders have indicated that Canada’s major trading partners, which are also participating states in the Wassenaar Arrangement, have administratively streamlined processes for the export/transfer of certain controlled cryptographic goods and technology. These stakeholders have further indicated that in order to maintain a level playing field compared to their competitors, the Government of Canada should introduce similar administratively streamlined processes.
The objective of General Export Permit No. 46 — Cryptography for Use by Certain Consignees (GEP 46) is to provide a streamlined process for the export and transfer of certain controlled goods and technology.
General export permits (GEPs) are used to facilitate trade in defined circumstances. Such permits do not require an individual application to be made to the Department. The relevant GEP must, however, be cited on the Export Declaration form that is provided to the Canada Border Services Agency at the time of export.
General Export Permit No. 46 authorizes, subject to certain terms and conditions, the export or transfer of most goods and technology listed in Export Control List (ECL) items 1-5.A.2, 1-5.B.2, 1-5.D.2 and 1-5.E.2 to certain consignees when destined for use solely by the consignee. These consignees include consignees located in any country (other than in ineligible destinations that are controlled by a resident of Canada) and consignees that are controlled by an entity that has its head office in a designated country and who also controls the Canadian exporter or transferor of the goods or technology. The selection of eligible goods and technology, destinations and consignees, along with the terms and conditions imposed on the use of the GEP, ensures that this streamlined process does not represent a strategic risk.
The Department consulted with various stakeholders within Canada’s cryptographic exporting industry during the drafting of this GEP. All comments received were taken into consideration, and generally focused on two specific areas: (i) clarification and addition of certain definitions, and (ii) modification of the notification and reporting requirements.
In response, the Department has added and amended certain definitions, where appropriate. However, the Department did not remove the notification requirement, nor did it extend its duration, nor did it modify the information required regarding records retention. These requirements are necessary in order for the Department to ensure that it continues to meet its interdepartmental commitments to the export control community.
Consultations have been held with the various Government of Canada organizations associated with the export or transfer of cryptographic goods and technology from Canada, all of which support the GEP implementation.
6. Small business lens
The promulgation of GEP 46 is not expected to result in any increase in the administrative burden for small businesses within Canada.
The administration of Canada’s export control regime aims to balance national and international security concerns associated with the export/transfer of strategic and military goods and technology while maintaining Canada’s interests as a trading nation. The introduction of this streamlined export/transfer process for lower-risk transactions allows the Government of Canada to provide residents of Canada with a mechanism to compete more efficiently in the global marketplace while maintaining a robust system of export controls.
The promulgation of GEP 46 will simplify the process for authorizing exports/transfers of eligible goods and technology to eligible consignees and destinations as identified in the permit. The introduction of this GEP will reduce the overall regulatory burden associated with export controls for the Canadian cryptographic industry.
8. Implementation, enforcement and service standards
Export of goods and technology listed in the ECL must be authorized by export permits to all destinations except where otherwise stated in each ECL item. There are certain conditions associated with GEP 46, and exporters must comply with those conditions in order to use the GEP. It is a condition of GEP 46 that it be cited by exporters on the Export Declaration form, or other export reporting documentation that is required to be submitted to the Canada Border Services Agency, with every export shipment. Non-compliance with conditions of the GEP can lead to prosecution under the relevant provisions of the EIPA.
The Canada Border Services Agency and the Royal Canadian Mounted Police are responsible for the enforcement of export controls.
Acting Deputy Director
Export Controls Division
Trade Controls and Technical Barriers Bureau
Foreign Affairs and International Trade Canada
125 Sussex Drive