The CGD is a domestic industrial security program. It came
into effect on April 30, 2001 to address a security issue in regard to the
safeguarding of controlled goods within Canada's borders. See Appendix
1 for background on the origin of the CGD.
Controlled goods, as listed in the schedule to the DPA, are those military, strategic and military-related goods and technology, as well as dual-use goods and technology as identified in Group 2 (not all items), item 5504 and Group 6 (all items), of the Export Control List (ECL) made under authority of the Export and Import Permits Act (EIPA). Items such as military vehicles, certain firearms and related ammunition, military aircraft, military electronics, missiles, satellites and most related components are generally considered to be controlled goods.
Persons possessing, examining or transferring controlled goods within Canada or seeking to export controlled goods under the EIPA (administered by Foreign Affairs and International Trade Canada), must be registered under the CGD. 'Persons' for the purpose of registration are businesses or companies, as defined under the Controlled Goods Regulations (CGR).
The CGD is defined by Parts 2 (Regulation of Access to Controlled Goods) and 3 (Offence and Punishment) of the DPA and the CGR. An overview of the Act and Regulations is provided at Appendix 2.
In summary, the legislation does the following:
The objective of the CGD is to safeguard controlled goods within Canada and prevent controlled goods from being accessed by unauthorized persons.
Although PWGSC is responsible for the administration of the program, its administrative success is dependent on a collaborative approach and working relationships with other key government departments and agencies and industry.
As administrator of the CGD, PWGSC establishes and maintains
collaborative efforts with other government departments having either responsibility
for the determination of controlled goods, such as Foreign Affairs and International Trade Canada, or having considerable access and handling of controlled goods, such
as the Department of National Defence (DND). Industry Canada (IC) is the government
voice responsible for ensuring that the economic well-being of the industry
is protected while maintaining a balance with other interests and the overall
interests of Canada.
PWGSC recognizes the valuable contribution the aerospace, defence and satellite industries make to Canada's economy. It also relies on the co-operation of these industries in collaborating with government in safeguarding controlled goods. PWGSC establishes and maintains collaborative efforts with the registered companies that are required to safeguard controlled goods, as there are self-administrating aspects for registrants under the CGD.
Many companies that access controlled goods are represented by the Canadian Association of Defence and Security Industries (CADSI) and/or the Aerospace Industries Association of Canada (AIAC). These two associations are PWGSC's main points of contact for consulting with industry on the administration of the CGD.
As a domestic security program, the CGD establishes working
relationships with government departments and agencies responsible for policing
and security, such as the Royal Canadian Mounted Police (RCMP), the Canadian
Security and Intelligence Service (CSIS), the Canada Border Services Agency
(CBSA), the Communications Security Establishment (CSE), Citizenship and Immigration
Canada (CIC) and the Department of Fisheries and Oceans (DFO) and provincial
and municipal police forces.
The roles of PWGSC and key partners are outlined in Appendix 3.
PWGSC's primary obligation is to administer the CGD as a domestic industrial security program while ensuring a balance between the need to allow economic activity and the need for security that will not be unduly burdensome so as to become a restraint to trade and investment.
There are five aspects of the program that help to achieve this balance: industry administration; outreach activities; prevention/detection/deterrence; penalties; and enforcement.
The legislation governing the CGD has participative elements and as such its effective and efficient administration depends on the cooperation of industry. Canadian companies are responsible for registering and fulfilling conditions of registration to ensure the security of controlled goods.
Companies possessing controlled goods have an obligation to register and be prepared to meet certain conditions of registration, i.e. they must undergo a security evaluation and name a designated official (DO). They must be in a position once registered to demonstrate that they are in compliance with the conditions under section 10 of the CGR (e.g. record keeping of controlled goods and security assessments, putting in place a security plan and providing briefings and training programs on the handling of controlled goods). The DO conducts security assessments of company employees, directors and officers who access controlled goods and conducts preliminary security evaluations of foreign temporary workers, as well as completing exemption applications for foreign visitors.
PWGSC is committed to assisting applicants in successfully registering under the CGD and to provide registrants and their DOs with manageable policies and guidelines in regard to such conditions as conducting security assessments, security evaluations and implementing security plans.
Companies in the business of accessing controlled goods need to know about the importance of registration. PWGSC needs to bring that information to 'persons' (companies) who do not have an awareness of the legislation, to ensure that they do register if they access controlled goods. In this regard, PWGSC is committed to establishing a field presence for outreach activities such as education and company visits.
The nature of the program, in terms of its compliance aspects, requires that it be based in part on the three pillars of Prevention, Detection and Deterrence:
The DPA carries heavy penalties for making false or misleading statements, destroying records, making false record entries, interfering with the detainment action of an inspector and failing to comply with any reasonable request of an inspector or obstructing the performance of an inspector's functions. The DPA carries even heavier penalties for persons with access to controlled goods who knowingly refuse to register or to apply for exemption from registration or who are registered and/or exempt from registration but knowingly allow an unauthorized person to examine a controlled good or transfer a controlled good to an unauthorized person.
These penalty provisions by themselves provide a significant degree of deterrence.
PWGSC is required to conduct inspections under the DPA. PWGSC sees its primary objective when applying its inspection role, as assisting registrants in meeting their registration conditions.
The secondary inspection objective is to target those who willfully avoid registration and those who willfully fail to comply with the conditions of registration. If non-compliance is willful, then corrective measures are available such as suspension and revocation of registration and in exceptional instances, prosecution.
The CGD is a domestic industrial security program intended
to safeguard the handling of controlled goods and/or controlled technology
within Canada's borders. PWGSC is responsible for informing potential registrants
by way of outreach and education activities of the requirements of the program,
for registering companies and for ensuring compliance with the DPA and the
CGR.
