Customs Law, Trade Law Bahriye Ceyhan Cavdar Customs Law, Trade Law Bahriye Ceyhan Cavdar

Exporting from Canada: Compliance Considerations for International Trade

Canadian businesses looking to export abroad must comply with additional trade compliance responsibilities. To ensure that exporting activities comply with various Canadian laws and regulations, Canadian exporters should be aware of the following. 

1. EXPORT DECLARATION REQUIREMENTS

To export from Canada, exporters are required to report exports of certain goods according to Canadian laws. If reporting of goods is required, exporters in Canada must submit export declarations to the Canada Border Services Agency (“CBSA”) on the Canadian Export Reporting System (“CERS”) or on the G7 Electronic Data Interchange Export Reporting (“G7 EDI”). 

To determine whether or not exporters should report the goods, exporters must consider the following factors:

  • Whether or not the goods fall under the definition of “Restricted Goods”;

  • Whether or not the goods fall under the definition of “Special Goods”;

  • Whether or not the goods fall under an exception found in the “exceptions to reporting by the exporter” section; and

  • Whether or not the goods are can be considered “Regular Goods”.

While exporters may delegate the reporting of goods to a third party, such as a customs service provider, the ultimate responsibility falls on the exporter to ensure that true, accurate and complete information is provided in accordance with Canadian laws and regulations. 

Failure to properly meet export reporting requirements may result in enforcement actions by the CBSA. Enforcement actions may be in the form of detention of exports, seizures and ascertained forfeitures of exports, or monetary penalties.

Takeaway 

Given the above, we advise exporters in Canada to seek legal assistance to understand export declaration requirements in Canada.

2. EXPORT CONTROLS

In Canada, export control laws require a permit or a license for certain goods to be exported. This is to ensure that exports of certain controlled goods are conducted lawfully and in a manner consistent with Canada’s national interests and international obligations. 

Export and Import Permits Act

Under the Export and Import Permits Act, the Minister of Foreign Affairs issues to any resident of Canada a permit to export items included on the Export Control List or to a country included on the Area Control List.  

Exporters should ensure that any exported goods are compliant with the requirement of Canadian laws regulating exports. Failure to comply with export control requirements as outlined in Canadian laws and regulations may lead to fines of up to $250,000 and/or imprisonment for up to 10 years. 

To understand export permit requirements for the goods, Canadian exporters must consider factors such as the nature, characteristics, origin, or destination of the goods being exported. Exporters may obtain certainty as to the control status of their goods by applying for an advisory opinion (“AO”) or by applying for an export permit. 

Products subject to export controls include:

  • Military and strategic goods and technology;

  • Softwood lumber;

  • Firearms;

  • Sugar and sugar containing products;

  • Peanut butter;

  • Logs; and

  • U.S.-origin goods and technology.

Controlled Goods Program

Under the Defence Production Act, controlled goods are goods that have military or national security significance. In Canada, individuals and organizations must register in the Controlled Goods Program to examine, possess or transfer such controlled goods. 

Upon registering in the Controlled Goods Program, registrants must comply with additional requirements of the Defence Production Act. This includes conducting and submitting reports on security assessments of personnel, preparing for inspections, developing security plans, and reporting security breaches. 

Takeaway

It is important for individuals and organizations to have a clear understanding about the application of export controls. We recommend consulting with our team to learn more about the legal obligations. 

3. SANCTIONS AND RESTRICTED MARKETS

Canada has trade and economic sanctions imposed on specific countries, organizations, and individuals. Sanctions restrict or prohibit certain activities with targeted countries, organizations, and individuals. As such, exporters are responsible for being aware of any applicable sanctions if they are exporting to or otherwise doing business in or with any of the named countries. 

Canada imposes sanctions under the following regimes: 

  • The United Nations Act;

  • The Special Economic Measures Act; and 

  • The Justice for Victims of Corrupt Foreign Officials Act.

There are also regulations under the above regimes which must be reviewed to understand whether or not an activity or transaction is permitted under Canadian sanctions. 

Currently, Canada imposed sanctions in relation to the following countries:

  • Belarus;

  • Central African Republic;

  • China;

  • Democratic People’s Republic of Korea (North Korea);

  • Democratic Republic of the Congo;

  • Guatemala;

  • Haiti;

  • Iran;

  • Iraq; 

  • Lebanon; 

  • Libya;

  • Moldova;

  • Myanmar;

  • Nicaragua;

  • Russia;

  • Somalia;

  • South Sudan; 

  • Sri Lanka;

  • Sudan;

  • Syria;

  • Ukraine;

  • Venezuela;

  • Yemen; and 

  • Zimbabwe.

We advise Canadian individuals and entities to conduct due diligence before engaging in activity abroad or engaging in transactions involving individuals or entities from foreign countries. Violating Canadian sanctions can result in the following:

  • Under the United Nations Act, maximum penalty on summary conviction of $100,000 fine and/or a 1-year prison term with convictions on indictment that may result in a maximum 10-year prison term;

  • Under the Special Economic Measures Act and the Justice for Victims of Corrupt Foreign Officials Act, maximum penalty on summary conviction of $25,000 fine and/or a 10year prison term with convictions on indictment that may result in a maximum 5-year prison term. 

Takeaway

Given the above, we advise seeking legal advice for assistance in the interpretation of the Canadian sanctions regime to assess their full impact


Please contact us at bahriye.ceyhancavdar@ceyhankim.com or bomin.kim@ceyhankim.com for specific questions related to your business.

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