Prior to the year 1999, Canada did not have to comply with the Unites States’ International Traffic in Arm Regulations (ITAR), which made possible the import of certain controlled goods without a license. Out of concerns regarding the fact that the merchandise might be obtained by terrorists and criminals, the United States’ Department removed Canada’s exempt status. So which was Canada’s response? With regards to what the United States had done, Canada created the Controlled Goods Program (CGP), which is responsible with regulating access to controlled goods and technologies. The outcome of implementing the Controlled Goods Program, Canada is again able to rely on an exception to the International Traffic in Arms Regulations.
A “controlled good” literally means an item that belongs one of the following groups: Group 2 (automatic weapons, components, ammunition, projectors, bombs, tanks, planes, missiles, chemicals, explosive and related equipment and accessories), Group 5 ( global navigation satellites, nuclear weapon design, ground control systems, testing equipment, etc.), and Group 6 (missile technology). The aforementioned possessions may be controlled even if they are not use for military purposes and sharing information. Before importing merchandise into Canada, it is essential to make sure whether the articles of trade are subject to domestic controls and require registration with the CGP. The fact is that anyone conducts business in Canada and possesses, examines or transfers controlled goods, must be registered.
Applicants for registration have to complete and submit an Application for Registration and Security Assessment Applications for Designated Officials, Authorized Individuals and Owners. The registration process implies justifying the need for registration by providing evidence that you will examine, possess or transfer articles of trade. It is necessary to provide the following information: a description of the organization’s business activities, a description of the controlled goods, a description of contractual information for the supply of services and details of the organization’s personnel.
Once registration is finalized, the applicant is required to follow new procedures regarding the articles of trade. It is the trade compliance manager who is responsible to make sure that the compliance measures are respected. What changes are involved? The organization will have to include mandatory security assessment of users of articles of trade and security measures surrounding the purchase, use and storage and disposal of controlled goods. Each employee and director that has direct access to the items will have to consent a security assessment. If the employee or the director has no access whatsoever, then the security assessment is not mandatory.
A security assessment implies providing information regarding personal references, places of residence, criminal history and so on. It is important to note that the security assessment takes place right after the date of the consent. If the employee or the director does not comply, they will not be granted access to the controlled goods or technology. This will surely interfere with the course of action and the legislation governing the CGP provides for severe penalties. Equally important is that the failure to register under the CGP may very well lead to criminal persecution.