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Export and Import Controls
REPORT OF THE MINISTER
OF INTERNATIONAL TRADE
respecting operations under the
EXPORT AND IMPORT PERMITS ACT
for the year 2004
Export and Import Controls Bureau
Table of Contents
Introduction
Report:
- Import Control
- Textiles and Clothing
-
World Trade Organization and Agreement on Textiles and Clothing
- Bilateral Agreements
- Trade with NAFTA Countries
- Issuance
of Certificates and Permits
- Agricultural Products
- Poultry and Eggs
- Dairy Products
- Margarine
- Beef and Veal
- Wheat, Barley
and Their Product
- Steel Products
- Weapons and Munitions
- Export Control
- Offences
This
Report is submitted pursuant to section 27 of the Export
and Import Permits Act (hereinafter referred to as the Act),
Chapter E-19 of the 1985 Revised Statutes of Canada, as amended,
which provides:
"As soon as practicable after the 31st
day of December of each year the Minister shall prepare and lay
before Parliament a report of the operations under this Act for
that year."
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The authority to control the import and export of commodities and technologies
is derived from the Act. The Act finds its origin in the War Measures
Act and was passed as a Statutory Act of Parliament in 1947 and subsequently
amended on a number of occasions.
The Act provides that the Governor in Council may establish lists known
as the Import
Control List (ICL), the Export
Control List (ECL) and the Area
Control List (ACL). For each one of these lists, the Act
sets out criteria that govern the inclusion of goods or countries on the
respective lists and provides that the Governor in Council may revoke,
amend, vary or re-establish any of the lists. Control over the flow of
goods contained on these lists or to specific destinations is effected
through the issuance of import or export permits.
The Act delegates to the Minister of International Trade the authority
to grant or deny applications for these permits and thus confers on him
broad powers to control the flow of the goods contained in these lists.
The operations carried out under the Act can be grouped under the following
headings:
1. IMPORT CONTROL:
- Textiles and Clothing
- Agricultural Products
- Steel Products
- Weapons and Munitions
2. EXPORT CONTROL:
-
Strategic, military and atomic energy goods, materials and technology
as well as items controlled for non-proliferation purposes.
-
Miscellaneous goods including logs, softwood lumber, cedar bolts
and blocks, roe herring, peanut butter, sugar, sugar-containing products
and products of U.S. origin.
-
Any goods to countries listed on the Area
Control List (ACL), which in 2004 was Myanmar (Burma).
3. OFFENCES:
The Act contains provisions pertaining to offences and penalties therefor.
Every person (including a corporation, any of its directors or officers)
found contravening any provision of the Act is liable to be prosecuted.
A prosecution may be instituted at any time within but not later than
three years after the time when the subject matter of the complaint arose.
1. IMPORT CONTROL
Section 5 of the Act provides that the Governor in Council may establish
a list of goods, called an Import
Control List (ICL), whose importation the Governor in Council
deems it necessary to control for any of the following purposes:
-
to ensure, in accordance with the needs of Canada, the best possible
supply and distribution of an article that is scarce in world markets
or is subject to governmental controls in the countries of origin
or to allocation by intergovernmental arrangement;
-
to restrict, for the purpose of supporting any action taken under
the Farm Products Marketing Agencies Act, the importation
in any form of a like article to one produced or marketed in Canada
the quantities of which are fixed or determined under that Act;
-
to control the importation into Canada of arms, ammunition, implements
or munitions of war, army, naval or air stores, or any articles deemed
capable of being converted thereinto or made useful in the production
thereof;
-
to implement any action taken under the Farm Income Protection
Act, the Fisheries Prices Support Act, the Agricultural
Products Cooperative Marketing Act, the Agricultural Products
Board Act or the Canadian Dairy Commission Act, with
the object or effect of supporting the price of the article;
-
to implement an inter-governmental arrangement or commitment;
-
to limit, pursuant to an enquiry by the Canadian International Trade
Tribunal, the importation of goods causing or threatening to cause
serious injury to domestic producers;
-
to place certain steel products on the Import Control List for the
purpose of collecting information on imports of such products; and;
-
to facilitate implementation of action taken under the Customs Tariff
to enforce Canada's rights under a trade agreement or respond to acts
of another country that would adversely affect trade in Canadian goods
or services.
(a) Textiles and Clothing
(i)
World Trade Organization and Agreement on Textiles
and Clothing:
The Agreement on Textiles and Clothing (ATC) of the World
Trade Organization is an interim arrangement that took
effect on January 1, 1995 and expires on December 31, 2004. Its purpose
is to establish a framework for the phased elimination of quotas on
textiles and clothing. Quotas are being eliminated in four discreet
stages over the ten-year implementation period. Trade in products on
which quotas have been eliminated are thereafter governed by normal
WTO rules - i.e., they are “integrated’ into the provisions
of the General Agreement on Tariff and Trade (GATT) under the WTO.
(ii) Quotas
and Bilateral agreements
During 2004, Canada applied quotas to 40 countries, 31 of which were
WTO members. Of the remaining nine countries, Canada had bilateral arrangements
with seven countries, and two countries were subject to unilateral measures.
Canada introduced no new import quotas in 2004. All of Canada’s
quota agreements with non-WTO member countries concluded on December
31, 2004, to coincide with the conclusion of the ATC.
(iii) Trade with
NAFTA countries:
Products must originate in North American Free Trade Agreement (NAFTA)
countries in order to qualify for NAFTA rates of duties. This is determined
through the use of NAFTA rules of origin for yarn, fabric and clothing.
For apparel and textiles that do not meet these rules of origin, NAFTA
provides preferential access to the Canadian, U.S. and Mexican markets
through the use of Tariff Preference Levels (TPLs). The four broad categories
of TPL and their corresponding volumes for access to the U.S. market,
which have been fixed since 1999, are as follows:
-
Wool Apparel - 5,325,413 square metre equivalents (SMEs)
-
Cotton or Man-made Fibre Apparel - 88,326,463 SMEs
-
Cotton or Man-made Fibre Fabrics and Made-up Goods - 71,765,252
SMEs
-
Cotton or Man-made Fibre Spun Yarns - 11,813,664 kilograms.
(A) TPL allocation
Subject to the EIPA, the EIPA regulations and applicable policies,
Canadian companies with apparel TPL allocations may export to customers
in the North American free trade area products manufactured in Canada
from fabrics and yarns imported from outside this area up to the limit
of their allocations.
Because of the extensive use of TPLs for wool and non-wool apparel,
an allocation policy based primarily on historical TPL usage by exporters
was developed for these categories of products in 1998. In 2004, a similar
allocation policy was implemented for woven fabrics.
The TPLs for knit and other fabrics are allocated on a historical-use
basis to the extent of utilization by exporters, and on a first-come,
first-served basis for those amounts not allocated directly to exporters.
The TPL for yarn is allocated to exporters on a first-come, first-served
basis.
(B) TPL utilization in 2004
The 2004 TPL utilization rates for the four categories of Canadian
TPL exports were as follows:
-
wool apparel and made-up goods - 100% for the United States and
5% for Mexico;
-
cotton or man-made fibre apparel and made-up goods - 79% for the
United States and 16% for Mexico;
-
cotton or man-made fibre fabrics and made-up goods - 58% for the
United States and 10% for Mexico;
-
cotton or man-made fibre spun yarns - 26% for the United States
and 0% for Mexico.
(TPL historical utilization statistics.)
As provided for in the NAFTA, the annual growth rates for the TPL volumes
for Canadian goods entering the United States were eliminated at the
end of 1999. No growth rates were provided for trade with Mexico.
(C) TPL transfer mechanism
In 1998, a mechanism was established to allow companies to transfer
a portion of their TPL allocations to other companies. The mechanism
was implemented in two stages, with an implementation date of October
1, 1998 for wool apparel and January 1, 1999 for non-wool apparel. On
December 21, 2004 a similar transfer mechanism was implemented for woven
fabrics.
(D) TPL for “new entrants”
The method of allocating TPL is based primarily on historic utilization.
However, small TPL pools have been created for woven fabric, wool
and non-wool apparel to accommodate new exporters.
(iv) Issuance
of certificates and permits
(A) TPL
For the purposes of administering NAFTA TPL provisions, DFAIT issues
import and export certificates of eligibility pursuant to section 9.1
of the Act. The following summary outlines the number of applications
for certificates of eligibility processed in 2004:
(a) Exports (certificates of eligibility)
certificates issued .................. 50,324
certificates denied ................... 1,574
certificates cancelled ............... 2,079
(b) Imports (certificates of eligibility)
certificates issued .......... 10,283
certificates denied .............. 108
certificates cancelled .......... 376
(B) Non-TPL import permits
For the purposes of administering Canada’s import quotas, both
under the provisions of the ATC and pursuant to bilateral and unilateral
restraint arrangements with non-members of the WTO, and for monitoring
imports under the NAFTA, import permits were required for the importation
of virtually all textile and apparel products into Canada in 2004. The
following summary outlines the number of permit applications processed
in this connection in 2004:
(a) Import permits (apparel)
permits issued ............... 504,737
permits denied .................. 6,981
permits cancelled ............ 13,095
(b) Import permits (fabrics)
permits issued .............. 168,055
permits denied .................... 700
permits cancelled .............. 3,611
(b) Agricultural Products
Canada is a signatory to the WTO Agreement on Agriculture concluded
in December 1993. This Agreement obliged Canada to convert its existing
quantitative agricultural import controls to a system of tariff rate
quotas (TRQs), which came into effect in 1995.
Under these TRQs, imports are subject to low "within access commitment"
rates of duty up to a predetermined limit (i.e. until the import access
quantity has been reached), while imports over this limit are subject
to higher "over access commitment" rates of duty. For most
products, the privilege of importing at the within-access commitment
rates of duty is allocated to firms through the issuance of import allocations
(or "quota-shares"). Those with quota-shares will, upon application,
receive specific import permits giving access to the within-access commitment
rates of duty as long as they meet the terms and conditions of permit
issuance. These conditions are normally described in the Allocation
Method Orders. Imports in excess of access levels are permitted underGeneral
Import Permit No. 100 - Eligible Agricultural Goods,
which allows unrestricted imports at the higher rate of duty. Canada
continues to respect its access level commitments under the North American
Free Trade Agreement (NAFTA), and where a NAFTA commitment exists, Canada
applies either the NAFTA or WTO commitment level for each commodity
- whichever is higher.
All tariff rate quotas (TRQs) are based on Customs Tariff item numbers.
Therefore, when the TRQs came into effect in 1995, the Import
Control List (ICL) was amended to replace references to
named products (e.g. "turkey and turkey products") with tariff
item numbers. However, for ease of understanding, the older product
description will continue to be used.
1) Poultry and eggs
Effective January 1, 1995, Canada's chicken, turkey, broiler hatching
egg and chick, shell egg and egg product quantitative restrictions
were converted to TRQs.
Four product groups were maintained on the ICL in order to support
supply management of poultry under the Farm Products Marketing Act
and to support action taken under the World Trade Organization Act.
These four product groups were:
-
chicken and chicken products;
-
turkey and turkey products;
-
broiler hatching eggs and chicks;
and
-
Chicken and Chicken Products
Chicken was placed on the ICL on October 22, 1979. Pursuant to the
NAFTA, the import access level for 2004 was 69,697,500 kg, expressed
in eviscerated equivalent weight. Within access commitment permits
were issued for 69,697,500 kg.
While the import access level is set at 7.5% of the previous year's
chicken production level, provision is made to issue import permits
supplementary to the import access level, inter alia, if needed to
meet overall Canadian market needs. During 2004, supplementary import
permits were issued for 376,874 kg (eviscerated equivalent) of chicken
for market shortages; for 31,972,614 kg of chicken for re-export;
and for 2,030,815 kg of chicken to help Canadian processors compete
with foreign processors who export chicken-containing products that
are not on the ICL. Of this latter amount, permits for 673,850 kg
were issued in connection with the annual TRQ allocation and for 1,356,965
kg were issued throughout the year. In 2004, a temporary “fast
track supplementary policy” was implemented for the purpose
of accommodating supply shortages faced by B.C. chicken processors
due to the cull of chickens resulting from the avian influenza outbreak
in B.C. The EICB issued supplementary permits totaling 16,096,668
kg for this purpose.
Turkey and Turkey Products
Turkey was placed on the ICL on May 8, 1974. Pursuant to the NAFTA,
the access level is set annually at 3.5% of the domestic production
quota for that year or the WTO level of 5,588,000 kg, whichever is
higher. In 2004, the WTO level was the higher of the two, and thus
prevailed. In 2004, within access commitment permits were issued for
5,582,443 kg in eviscerated weight. Provision is made for import permits
supplementary to the import access level, inter alia, if needed to
meet overall Canadian market needs. During 2004, supplementary import
permits were issued for 1,729,841 for market shortages; for 1,458,547
kg for turkey for re-export; and for 66,821 kg of turkey to help Canadian
processors compete with foreign processors who export turkey-containing
products that are not on the ICL.
Broiler Hatching Eggs and Chicks
Broiler hatching eggs and chicks for chicken production were placed
on the ICL on May 8, 1989. Pursuant to the NAFTA, the combined import
access level for broiler hatching eggs and chicks is 21.1% of the
estimated domestic production of broiler hatching eggs for the calendar
year to which the TRQ applies. The combined annual import access level
is divided into separate levels, of 17.4% for broiler hatching eggs
and 3.7% for egg-equivalent chicks.
In 2004, the combined import access level was set at 141,397,808
eggs. Within access commitment permits were issued for 114,078,369
hatching eggs and 15,742,724 egg-equivalent chicks, for a combined
total of 129,821,093. Provision is made to issue import permits supplementary
to the import access level, inter alia, if needed to meet overall
Canadian market needs. During 2004, no supplementary import permits
were issued for market shortages. Supplementary permits were issued
for 2,847,600 eggs for the subsequent re-export of chicks. In 2004,
a temporary “fast track supplementary policy” was implemented
for the purpose of accommodating supply shortages faced by B.C. hatcheries
due to the cull of chickens resulting from the avian influenza outbreak
in B.C. The EICB issued supplementary permits totaling 9,022,752 eggs
for this purpose.
Eggs and Egg Products
Eggs and egg products were placed on the ICL on May 9, 1974. Pursuant
to the NAFTA, the import access level for shell eggs is calculated
at 1.647% of the previous year's domestic production. For 2004, this
converted to 8,547,008 dozen eggs. Within access commitment import
permits were issued for 8,538,407 dozen eggs.
Pursuant to the NAFTA, the import access levels for egg powder and
liquid, frozen or further-processed egg products is calculated at
0.627% and 0.714% of the previous year's domestic production, respectively.
For 2004 this amounted to 491,321 kg and 2,130,525 kg, respectively.
Within access commitment permit issuance totaled 386,522 kg for egg
powder and 2,102,134 kg for liquid, frozen or further processed eggs.
In 1996 an allocation for eggs for breaking purposes only was introduced.
This resulted from a WTO commitment to increase the import access
quantity to a level greater than the then-NAFTA access level. The
WTO level, 21,370,000 dozen eggs in 2004, continues to be higher than
Canada's NAFTA access level. The “eggs for breaking purposes”
allocation is equal to the difference between the WTO and NAFTA commitment
levels. The 2004 import access level for eggs for breaking purposes
only was 5,863,953 dozen eggs. During 2004, within access commitment
permits were issued for this category of eggs for 5,799,135 dozen
eggs.
While the basic access levels are fixed each year, provision is made
to issue import permits for eggs or egg products supplementary to
the import access level, inter alia, if needed to meet overall Canadian
market needs.
With regard to shell eggs, supplementary permits were issued to import
1,508,055 dozen to accommodate market shortages.
For powdered eggs, no supplementary import permits were issued for
market shortages.
In 2004, supplementary permits for 1,986,104 kg of liquid, frozen
and further processed egg products were issued for market shortages.
For eggs for breaking purposes, supplementary permits for market
shortages were issued to import 6,794,901 dozen eggs.
For powdered eggs, 4,127 kg in supplementary import permits were
issued for re-export.
For liquid, frozen and further processed egg products, import permits
for 1,049,522 kg were issued for re-export.
For eggs for breaking purposes, no supplemantary import permits were
issued for re-export.
In 2004, a temporary “fast track supplementary policy”
was implemented for the purpose of accommodating supply shortages
faced by B.C. egg graders due to the cull of chickens resulting from
the avian influenza outbreak in B.C. The EICB issued supplementary
permits totaling 2,846,726 dozen eggs or liquid equivalent for breaking
purposes and 17,800,340 dozen eggs for the table egg market for this
purpose.
Import permits are required for importing inedible egg products into
Canada, although for monitoring purposes only. Permits were issued
for 328,550 kg for this type of product in 2004.
2) Dairy products
Quantitative restrictions in 11 categories of dairy products were
converted to TRQs in support of supply management under the Canadian
Dairy Commission Act and action taken under the World Trade Organization
Agreement Implementation Act. These products are:
- butter (implemented on August 1, 1995);
- cheese of all types other than imitation cheese (implemented
on January 1, 1995);
- buttermilk in dry, liquid or other form (implemented on January
1, 1995);
- fluid milk (implemented on January 1, 1995);
- dry whey (implemented on August 1, 1995);
- evaporated and condensed milks (implemented on January 1, 1995);
- heavy cream (implemented on August 1, 1995);
- products consisting of natural milk constituents (implemented
on January 1, 1995);
- food preparations (implemented on January 1, 1995 under 1901.90.33);
- ice cream and ice cream novelties in retail packaging (implemented
on January 1, 1995); and
- yoghurt (implemented on January 1, 1995).
Butter
The access level for butter was 3,274,000 kg for the quota year
from August 1, 2003 to July 31, 2004, of which 2,000,000 kg was reserved
for imports from New Zealand. The entire TRQ was allocated to the
Canadian
Dairy Commission and the total access level was utilized.
Supplementary import permits for butter and butteroil for re-export
were issued for 24,691,540 kg.
Cheese
The access level for cheese has been fixed since 1979 at 20,411,866
kg. Under the provisions of a December 1995 Agreement between Canada
and the European Union, 66% of the TRQ is allocated to cheese imports
from the European Union and 34% to imports from non-EU sources. Within
access commitment import permits were issued for 20,411,866 kg of
cheese, and permits for re-export were issued for 3,028,455 kg. Supplementary
import permits for other purposes totaled 1,038,579 kg.
Buttermilk
The 2004 access level for buttermilk was 908,000 kg. The TRQ, all
of which was used in 2004, is reserved exclusively for imports from
New Zealand. Supplementary import permits for re-export were issued
for 82,547 kg of buttermilk product. Supplementary import permits
for other purposes totaled 1,495 kg.
Fluid Milk
The fluid milk access level in 2004 was 64,500 tonnes, which represents
estimated annual cross-border purchases by Canadian consumers. The
goods are imported under General
Import Permit No. 1 - Dairy Products for Personal Use.
On January 26, 2000 General Import Permit No. 1 was amended.
The $20 limit in value for each importation of fluid milk imports
for personal use was removed. Supplementary import permits for re-export
totaled 8,751,019 kg.
Dry Whey
The access level for dry whey in 2004 was 3,198,000 kg. Within access
commitment import permits were issued for the full TRQ amount. Supplementary
import permits for 12,840,659 kg of dry whey were issued for the manufacture
of animal feed. In addition, supplementary imports for re-export totaled
811,940 kg.
Evaporated and Condensed Milk
The access level for evaporated and condensed
milk in 2004 was 11,700 kg. The TRQ is reserved exclusively for imports
from Australia. Within access commitment import permits were issued
for 4,881 kg. Supplementary import permits for re-export were issued
for 205,953 kg.
Heavy Cream
The heavy cream access level in the quota year from August 1, 2003
to July 31, 2004 was 394,000 kg for sterilized cream having a minimum
of 23% butterfat and sold in cans having a volume not exceeding 200
ml. Within access commitment import permits were issued for 362,165
kg. Supplementary import permits were issued for re-export for 1,822,840
kg.
Products Consisting of Natural Milk Constituents
The access level for these products in 2004 was 4,345,000 kg, and
within access commitment import permits were issued for 4,090,436
kg. Supplementary import permits for re-export were issued for 2,317,353
kg.
Food Preparations
The access level in 2004 for food preparations classified under 1901.90.33
was 70,000 kg, allocated on a first-come, first-served basis. The
TRQ covers ingredients for the manufacture of confectionery and other
food products, and for soft-serve ice cream. Within access permit
issuance totaled 20,120 kg.
Ice Cream and Yoghurt
The access levels in 2004 were 484,000 kg for ice cream and 332,000
kg for yoghurt. Within access commitment import permit issuance in
2004 totaled 484,000 kg for ice cream and 332,000 kg for yoghurt.
In 2004, supplementary permits were issued for 6,577 kg of yoghurt
for re-export. Supplementary import permits for other purposes were
issued for 2,975 kg for ice cream and for 97,605 kg for yogurt.
Skimmed and Whole Milk Powder and Animal Feed
The access level for these products is zero, and there is no associated
TRQ. However, supplementary import permits for re-export were issued
for 2,367,675 kg of skimmed milk powder, and for 23,874,810 kg of
whole milk powder. Supplementary permits for other purposes were issued
for 88,366 kg of skimmed milk powder and for 10,499 kg of whole milk
powder.
3) Margarine
The TRQ for margarine was introduced on January 1, 1995. The import
access level for 2004 was 7,558,000 kg. Within access commitment permit
issuance totaled 3,593,967 kg.
4) Beef and veal
The restrictions on imports of non-NAFTA beef and veal established
under the Meat Import Act were converted to a TRQ on January 1, 1995.
The TRQ applies to all imports of fresh, chilled and frozen beef and
veal imported from non-NAFTA countries (excluding Chile) and in 2004
was 76,409 tonnes. Of this total, 35,000 tonnes were reserved for
imports from Australia and 29,600 tonnes were reserved for imports
from New Zealand. The balance of the TRQ (11,809 tonnes) was reserved
for imports from all countries, including Australia and New Zealand,
once their country-specific reserves were fully used.
Since May 20, 2003, the government has made changes to the supplementary
import policy on three occasions in order to support domestic beef
and veal producers in facing the challenges and uncertainty brought
on by BSE. The changes have provided domestic producers with greater
opportunities to supply the Canadian market while the government works
to fully restore access to export markets, and were developed in close
consultation with industry stakeholders. The policy was modified once
in 2004, on April 27. Since that time, supplemental imports have been
limited to those situations where neither the specific product nor
reasonable substitutes are available in Canada at competitive prices.
One supplementary import permit was issued in 2004, for 457 kg of
beef.
5) Wheat, barley
and their products
The restrictions imposed on imports of wheat, barley and their products
under the Canadian Wheat Board Act were converted to TRQs on August
1, 1995. These TRQs are administered by Canada Border Services Agency
on a first-come-first-served basis using an August-July year. Importers
may cite General
Import Permit No. 20 - Wheat and Wheat Products, Barley and Barley
Products to import goods at the lower rate of duty.
Once the access levels are filled, importers must cite General
Import Permit No. 100 - Eligible Agricultural Goods
on Customs entry documents to import goods at the higher rate of duty.
The following annual (August 1 to July 31) TRQ levels for wheat, barley,
wheat products and barley products apply:
Wheat: .........................226,883 tonnes
Wheat products: ...........123,557 tonnes
Barley: ..........................399,000 tonnes
Barley products:.............. 19,131 tonnes
Imports in the period from August 1, 2003 to July 31, 2004, were
17,378 tonnes, 123,557 tonnes, 33,259 tonnes, and 17,333 tonnes in
these four product categories, respectively.
6) Frozen Pork from the European Union
Frozen pork under tariff item 0203.29.00 was added to Canada’s
Import Control List (ICL), pursuant to subsection 53(2) and section
79 of the Customs Tariff, under the European Union Surtax Order. Effective
on August 1, 1999, the government established a tariff rate quota
(TRQ) for frozen pork imported from the European Union (EU), whereby
pork imports in excess of 2,970,000 kilograms during any 12-month
period commencing on August 1 are subject to a 100% surtax. The TRQ
is allocated on a first-come, first-served basis, whereby import permits
are normally issued to importers on demand until the TRQ has been
filled in a given year.
During the period from August 1, 2003 to July 31, 2004, import permits
were issued for 2,968,998 kg.
(c) Steel Products
Carbon steel products (semi-finished steel, plate, sheet and strip
steel, wire rods, wire and wire products, railway-type products, bars,
structural shapes and units, and pipes and tubes) were initially placed
on the ICL effective September 1, 1986 following a report by the Canadian
Import Tribunal recommending the collection of information on goods
of this type entering Canada. Speciality steel products (stainless flat-rolled
products, stainless steel bars, wire and wire products, alloy tool steel,
mold steel and high speed steel) were added to the ICL effective June
1, 1987 pursuant to an amendment to the Act providing for import monitoring
of steel products under certain conditions. The current mandate for
the steel monitoring program extends until August 31, 2008.
The purpose of placing carbon and speciality steel on the ICL is to
provide more timely and precise steel import data.
The program is global in nature. There are no quantitative restrictions,
and permits are issued upon the submission of a completed application
form.
In 2004 a total of 238,756 permits were issued, covering the importation
of 8.9 million tonnes of steel with a reported value of $9.0 billion.
(d) Weapons and Munitions
Pursuant to items 70 to 73 and 91 of the ICL, an import permit is required
to import into Canada all small- and large-calibre weapons, ammunition,
bombs, pyrotechnics, tanks and self-propelled guns. As well, all components
and parts specifically designed for these items also require import
permits.
Firearms classified as restricted or non-restricted, and their parts,
are exempt from an import permit provided that they are for sporting
or recreational use.
Issuance of Import Permits
Section 14 of the Act stipulates that:
“No person shall import or attempt to import any goods included
in an Import Control List except under the authority of and in accordance
with an import permit issued under this Act.”
Section 8(1) authorizes the Minister to:
"...issue to any resident of Canada applying therefor a permit
to import goods included in an Import Control List, in such quantity
and of such quality, by such persons, from such places or persons
and subject to such other terms and conditions as are described
in the permit or in the regulations."
Authority is provided under section 12 of the Act for the making
of regulations prescribing the information and undertakings to be
furnished by applicants for permits, the procedure to be followed
in applying for and issuing permits, and the requirements for carrying
out the purposes and provisions of the Act.
Section 5 of the Import Permit Regulations (C.R.C., c. 605) provides
for the issuance of general permits authorizing the import of specific
goods up to specified limits or subject to specified conditions.
The following is a statistical summary of applications for import
permits processed in 2004:
permits issued ................ 912,925
permits denied ................... 9,045
permits cancelled ............. 26,623
Import certificates and delivery verification certificates
The issuance of import certificates and delivery verification certificates
is provided for under section 9 of the Act and under the Import Certificate
Regulations (C.R.C., c. 603). Import certificates enable an importer
to describe goods in detail and to certify that he/she will not assist
in their disposal or diversion during transit. Such assurances may
be required by the country of export before permitting the shipment
of certain goods, most notably munitions and strategic goods. An import
certificate is not an import permit and does not entitle the holder
to import the goods described on the certificate into Canada. Delivery
verification certificates may be issued following arrival of the goods
in Canada to enable an exporter of goods to Canada to comply with
requirements of the exporting country.
In 2004, the Department issued 2,554 import certificates and 274
delivery verification certificates.
2. EXPORT CONTROL
Section 3 of the Act provides that the Governor in Council may establish
a list of goods, to be called an Export
Control List (ECL), including therein any article the export
of which the Governor in Council deems it necessary to control for any
of the following purposes:
-
to ensure that arms, ammunition, implements or munitions of war,
naval, army or air stores or any articles deemed capable of being
converted thereinto or made useful in the production thereof or otherwise
having a strategic nature or value will not be made available to any
destination where their use might be detrimental to the security of
Canada;
-
to ensure that any action taken to promote the further processing
in Canada of a natural resource that is produced in Canada is not
rendered ineffective by reason of the unrestricted exportation of
that natural resource;
-
to limit or keep under surveillance the export of any raw or processed
material that is produced in Canada in circumstances of surplus supply
and depressed prices and that is not a produce of agriculture;
-
to implement an intergovernmental arrangement or commitment;
-
to ensure that there is an adequate supply and distribution of the
article in Canada for defence or other needs; or
-
to ensure the orderly export marketing of any goods that are subject
to a limitation imposed by any country or customs territory on the
quantity of the goods that, on importation into that country or customs
territory in any given period, is eligible for the benefit provided
for goods imported within that limitation.
The Export Control List (ECL) comprises eight groups, as follows:
Groups 1 and 2 encompass Canada's multilateral strategic commitments
under the Wassenaar Arrangement.
Groups 3, 4, 6 and 7 represent our multilateral commitments under the
various non-proliferation regimes designed to control the proliferation
of weapons of mass destruction (chemical, biological and nuclear weapons)
as well as their delivery systems. Group 5 comprises various non-strategic
goods controlled for other purposes, as provided in the Act. It also includes
goods of U.S. origin. This provision is intended to prohibit the diversion
of US origin goods through Canada. Group 8 reflects commitments under
the 1988 United Nations Convention Against Illicit Traffic in Narcotic
Drugs and Psychotropic Substances.
Softwood Lumber
Effective April 1, 2001 the Department of Foreign Affairs and International
Trade introduced a national softwood lumber monitoring program. The
objective of this monitoring program is to collect data respecting softwood
lumber exports to the United States for all Canadian provinces and territories.
The Governor in Council authorized this program by placing softwood
lumber on the Export Control List (ECL), item 5105, which has the effect
of requiring permits issued by the Minister of International Trade for
exports to the United States. Export permits are issued under the authority
of section 7(1) of the Export and Import Permits Act, while fees are
levied under the authority of section 9(1) of the Financial Administration
Act. Any person who holds a permit to export softwood lumber to the
United States is required to keep records relating to its issuance for
60 months after the date of issuance of the permit.
From January 1, 2004 to December 31, 2004, exports of softwood lumber
totaled 19.04 billion board feet.
The following is a statistical summary of softwood lumber permit applications
processed in 2004:
permits issued .................47,512
permits rejected .................. 468
permits cancelled ............. 1,145
Agri-food Products
As part of its implementation of WTO commitments, the United States established
TRQs for imports of peanut butter, certain sugar-containing products (SCPs)
and refined sugar. Within these TRQs, Canada receives a country-specific
quota allocation. The U.S. Government administers these TRQs on a first-come,
first-served basis. In order to help ensure the orderly export of these
programs against Canada’s country-specific quotas, Canada placed
these products on the Export Control List (ECL). Accordingly, in order
to comply with the Act and to benefit from the in-quota U.S. tariff rate,
Canadian exports of peanut butter, certain SCPs and refined sugar to the
United States require an export permit issued by the EICB. There are no
quantitative restrictions or permit requirements for Canadian exports
of these products to non-U.S. destinations.
1. Peanut butter
Peanut butter was placed on the ECL on January 1, 1995. Within the
U.S. peanut butter TRQ of 20,000 tonnes, the United States provides
a country-specific quota to Canada of 14,500 tonnes. During 2004, permits
were issued for 14,053,972 kg, indicating that the quota was 97% utilized.
2. Sugar-containing products
Sugar-containing products (SCPs) were placed on the ECL on February
1, 1995. The United States’s SCP TRQ is 64,773 tonnes and applies
to imports of certain SCPs falling under Chapters 17, 18, 19 and 21
of the Harmonized Tariff Schedule of the United States. The quota year
for SCPs is from October 1 to September 30.
In September 1997, Canada and the United States exchanged letters of
understanding, under which Canada obtained a country-specific quota
of 59,250 tonnes within the U.S. SCP TRQ. The understanding also provides
that only goods that are "product of Canada" may benefit from
Canada's country-specific reserve. In 2003-04, export permits were issued
for 59,150,252 kg of SCPs, indicating that the quota was 99.8% utilized.
3. Refined sugar
Refined sugar was placed on the ECL on October 1, 1995. The United
States’s refined sugar TRQ is 60,000 tonnes (raw equivalent).
The quota year for refined sugar is from October 1 to September 30.
In September 1997, Canada and the United States exchanged letters of
understanding, under which Canada obtained a country-specific quota
of 10,300 tonnes, raw equivalent (i.e. 9,579 tonnes refined sugar),
within the U.S. refined sugar TRQ. The understanding also provides that
only goods that are "product of Canada" may benefit from Canada's
country specific reserve. In 2003-04, export permits were issued for
8,912,759 kg of refined sugar, indicating that the quota was 86.5% utilized.
The following summary of agricultural export permits processed in 2004
includes applications for peanut butter, SCPs and refined sugar:
permits issued ............ 7,144
permits rejected .............. 88
permits cancelled ........... 311
Area Control List
Section 4 of the Act provides for the control of "any goods to any
country included in an Area Control List" (ACL). Angola was removed
from the ACL in 2003 leaving only one country, Myanmar (Burma), on the
ACL at year's end.
Automatic Firearms
Country Control List
The Act provides for the establishment of an Automatic Firearms Country
Control List (AFCCL). Only countries on this list are eligible to receive
automatic firearms as defined in ECL Item 5500.
They are:
Australia |
Norway |
Belgium |
|
Botswana |
Saudi Arabia |
Denmark |
Spain |
France |
Sweden |
Germany |
|
Greece |
United Kingdom |
Italy |
United States |
Netherlands |
|
New Zealand |
|
Issuance of Export Permits
An export permit is required before any item included in the ECL may
be exported from Canada to any destination, with the exception (in most
cases) of the United States. This requirement enables Canada to meet international
commitments, such as its commitment to prevent the proliferation of missile
technology and biological, chemical and nuclear weapons. Nuclear material
and equipment, logs, automatic firearms, pulpwood, roe herring and red
cedar bolts and blocks are among the goods requiring permits for export
to the United States. Permits are also required to export any goods to
countries on the ACL, unless exempted.
In 2004, 7,176 individual permits were issued, up from 5,605 in 2001.
24 permits were denied, 377 applications were withdrawn, and 12 permits
were cancelled.
General Export Permits
(GEPs)
The Act provides for the issuance of general permits authorizing the
export of certain designated goods to all destinations or to specified
destinations. GEPs are intended to facilitate exports by enabling exporters
to export selected goods without applying for individual permits. They
also provide a means of identifying goods for which exports to countries
on the ACL are restricted. The GEPs in effect during 2004 included:
GEP EX. 1: |
Goods with a value of less than $100, household articles,
personal effects, business equipment required for temporary use outside
Canada and personal automobiles |
GEP EX. 3: |
Consumable stores supplied to vessels and aircraft
|
GEP EX. 5: |
Forest products |
GEP EX.12: |
US origin goods |
GEP EX.18: |
Personal computers |
GEP EX.26: |
Industrial chemicals |
GEP EX.27: |
Nuclear-related dual use goods |
GEP EX.29: |
Eligible industrial goods |
GEP EX.30: |
Certain industrial goods to eligible countries and
territories |
GEP EX.31: |
Peanut butter |
GEP EX 37: |
Chemicals and Precursors to the United States |
GEP EX 38: |
CWC Toxic Chemical and Precursor Mixtures |
GEP EX 40: |
Certain Industrial Chemicals |
3. OFFENCES
Penalties are listed in section 19 of the Act as follows:
"(1) Every person who contravenes any provision of this Act
or the regulations is guilty of:
(a) an offence punishable on
summary conviction and liable to a fine not exceeding twenty-five
thousand dollars or to imprisonment for a term not exceeding twelve
months, or to both; or
(b) an indictable offence and liable to a fine in an amount that
is in the discretion of the court or to imprisonment for a term
not exceeding ten years, or to both.
(2) A prosecution under paragraph (1)(a) may be instituted at any
time within but not later than three years from the time when the
subject matter of the complaint arose."
Section 25 of the Act delegates responsibility for the enforcement
of the Act to all officers as defined in the Customs Act (section 2(1)).
The Department of International Trade entrusts the enforcement of the
Act to the Canada Border Services Agency, and to the Royal Canadian
Mounted Police.
Status
of Export Controls Investigations for 2004
Voluntary compliance continued to be a key element in Canada's export
control system in 2004. Canada Border Services Agency issued 174 warning
letters and made 173 detentions; queries were made in another 170 cases,
and background information checks requested in 155 instances, and 82
cases were referred for investigation. Seizures were made in 2 cases.
|