Notice to Exporters

Export Controls over Goods and Technology for Certain Uses

Serial No. 176
Date: March 2011

Table of Contents

1.0 Purpose

1.1 Item 5505 (Goods and Technology for Certain Uses) of Canada's Export Control List (ECL) has been amended. This Notice provides information about the objectives and application of Item 5505, and about exporters' due diligence and compliance obligations. This Notice cancels and replaces the previously issued Notice to Exporters Serial No. 135.

2.0 General

2.1 The ECL is a Regulation made pursuant to the Export and Import Permits Act (EIPA) that lists goods and technology that may only be exported from Canada under the authority of an export permit. Export controls are administered by Foreign Affairs and International Trade Canada (DFAIT).

2.2 Canada's ECL includes a range of sensitive goods and technology. However, other goods and technology may be useful in applications related to weapons of mass destruction (WMD) – chemical, biological or nuclear weapons, including nuclear explosive or radiological disperal devices, or related missile delivery systems. Item 5505 provides the Minister of Foreign Affairs with the authority to control and prevent the export of any goods or technology when the exporter knows or reasonably suspects that they are intended for a WMD purpose, or if the Minister of Foreign Affairs has determined that they are intended for a WMD purpose.

2.3 Item 5505 is intended to be used to control exports that pose a significant risk of WMD proliferation, and not to unnecessarily hinder legitimate exports. It is assumed that exporters will conduct appropriate due diligence and that they will not do business with foreign entities that are involved with WMDs. Item 5505 is therefore intended to be applied infrequently. Other countries that maintain export controls, including many of Canada's major trading partners and allies, also have measures similar to Item 5505 in place, commonly referred to as "catch-all" controls

2.4 Item 5505 may apply to any goods or technology that are exported from Canada, regardless of whether or not they are included in the ECL. Goods or technology may be subject to concurrent control under Item 5505 and under one or more other Items of the ECL. Goods or technology that are controlled under Item 5505 may not be lawfully exported under the authority of a General Export Permit

3.0 Due Diligence and Procedures

3.1 Section (1) of Item 5505 requires an exporter to apply for an export permit if they have any knowledge suggesting that the goods or technology intended for export may in part or in their entirety be intended for WMD purposes. This knowledge may be a result of the properties of goods or technology that are proposed for export, and any information made known to the exporter by any intermediary or final consignee or from any other source, such that it would lead a reasonable person to suspect that they will be used for a WMD purpose. However, Item 5505(1) does not apply to exports to countries included in section (3), as long as the goods or technology are intended for end-use in those countries and all consignees are located in those countries. Furthermore, if there is no stated reason to believe that the items are destined to one of the identified programs, they will generally not be considered for control under Item 5505(1).

3.2 The following circumstances may indicate to an exporter a heightened risk that an export of goods or technology is intended for a WMD purpose. If one or more of these circumstances exist, an exporter should seek further information from their consignees, clients, or other involved parties. Exporters may also obtain end-use statements from their consignees as a further due diligence tool, as described in the Export Controls Handbook published by Foreign Affairs and International Trade Canada. Regarding the properties of the goods or technology, indicators that an exporter should seek further information include:

  • A party to the transaction is seeking goods or technology similar to those mentioned in the ECL – in particular under Groups 3, 4, 6, 7 or Item 5504.2.h – but in a form or having characteristics or capabilities that differ slightly from those stated in the ECL and which therefore place them outside the relevant export control threshold;
  • A party to the transaction has requested modifications to standard products that would lead to performance capabilities that are not required for the stated end-use but that would be useful for WMD purposes.

Regarding other information made known to the exporter, indicators that an exporter should seek further information include:

  • The consignee is unwilling to provide information about the end-use or end-user of the goods or technology, if the end-use information provided by the consignee is inconsistent with the normal use of the goods or technology, or if a consignee or client's business does not correspond with the normal end-use of the goods or technology;
  • Unusual conditions of sale are proposed, such as payment in excess of the normal market value, payment in cash, or if normal service, training, or installation services are declined, or if circuitous, economically inefficient shipment routes are specified;
  • The goods or technology are destined for a country subject to international sanctions in response to its WMD-related activities; or
  • Any of the foreign parties to the proposed transaction are entities designated by the United Nations, the Government of Canada or by another government as a result of their association with WMD proliferation.

3.3 Section (2) of Item 5505 requires an exporter to apply for an export permit if the Minister has determined, on the basis of the properties of the goods or technology and any additional information relating to their intended end-use or the identity or conduct of their intermediary or final consignees, or any other relevant information, that they are likely to be used for WMD purposes. This section applies to all destination countries. Exporters will be informed if the Minister has determined that Item 5505(2) applies to an export. This would generally occur following the detention or investigation of an export shipment by a competent enforcement agency, the Canada Border Services Agency or the Royal Canadian Mounted Police.

3.4 Exporters wishing to continue with the export of an item to which either Item 5505(1) or Item 5505(2) applies will have to apply to DFAIT for an export permit. Applicants should follow the instructions provided in the Export Controls Handbook published by DFAIT. In addition to the information requirements outlined in section 3 of the Export Permits Regulations (SOR/97-204), if an applicant has any information that leads them to suspect that the goods or technology proposed for export will be used for WMD purposes, this information should be described in a cover letter and included with the application. DFAIT will consider for control under Item 5505(1) only those applications which include such a cover letter and relevant supporting documents; applications made under Item 5505(1) may be returned without action if such a cover letter and supporting documents are not provided.

4.0 Additional Information

4.1 For more information on Canada's export controls, you may contact:

The Export Controls Division
Department of Foreign Affairs and International Trade
125 Sussex Drive
Ottawa, Ontario, K1A 0G2
Telephone: 613-996-2387
Facsimile: 613-996-9933
Website: Export and Import Controls
E-mail:tie.reception@international.gc.ca

Annex A

Goods and Technology for Certain Uses

5505. (1) Goods and technology whether or not included elsewhere on the List if their properties and any information made known to the exporter by any intermediary or final consignee or from any other source would lead a reasonable person to suspect that they will be used

  • in the development, production, handling, operation, maintenance, storage, detection, identification or dissemination of
    • chemical or biological weapons,
    • nuclear explosive or radiological dispersal devices, or
    • materials or equipment that could be used in such weapons or devices;
  • in the development, production, handling, operation, maintenance or storage of
    • missiles or other systems capable of delivering chemical or biological weapons or nuclear explosive or radiological dispersal devices, or
    • materials or equipment that could be used in such missiles or systems; or
  • in any facility used for any of the activities described in paragraphs (a) and (b).

(2) Goods and technology whether or not included elsewhere on the List if the Minister has determined, on the basis of their properties and any additional information relating to such matters as their intended end-use or the identity or conduct of their intermediary or final consignees, that they are likely to be used in the activities or facilities referred to in subitem (1).

(3) Subitem (1) applies to goods and technology intended for export to all destinations unless

  • they are intended for end-use in Argentina, Australia, Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Poland, Portugal, the Republic of Korea, Spain, Sweden, Switzerland, Turkey, Ukraine, the United Kingdom or the United States;
  • their intermediary consignees, if any, are located in those countries; and
  • their final consignee is located in one of those countries.

(4) Subitem (2) applies to goods and technology intended for export to all destinations