Canada Gazette

The Minister of Foreign Affairs, pursuant to subsections 7(1.1) (see footnote a) and 10(1) (see footnote b) of the Export and Import Permits Act, hereby makes the Order Issuing the General Export Permit No. 40 — Certain Industrial Chemicals.

ORDER ISSUING THE GENERAL EXPORT PERMIT NO. 40 — CERTAIN INDUSTRIAL CHEMICALS

1. Subject to sections 2 and 3, any resident of Canada may export from Canada chemicals referred to in Group 8 of the schedule to the Export Control List.

2. This Order does not authorize the exportation of goods described in section 1 to Bolivia or Peru or to any country listed in the Area Control List.

(a) the exporter keep, at the exporter's place of business or residence, the documents in respect of each exportation for a period of six years after the date of the exportation; and

(b) the documents identify the final consignee.

4. Where any goods exported are required to be reported in the prescribed form under the Customs Act, that form shall contain the statement "Exported under the authority of Order Issuing the General Export Permit No. 40 — Certain Industrial Chemicals" or "Exporté en vertu de l'Arrêté portant délivrance de la licence générale d'exportation n^o 40 — Produits chimiques industriels".

5. General Export Permit No. Ex. 26 — Industrial Chemicals (see footnote 1) is cancelled.

Canada is party to the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, 1988. This Convention requires that controls be put in place on the export of precursors identified by the Chemical Action Taskforce (CATF) as being crucial for the production of narcotic drugs and psychotropic substances. In 1993, as an interim measure, these chemicals were placed on the Export Control List (ECL), (a regulation of the Export and Import Permits Act (EIPA)), where they comprise Group 8 of the ECL. As many of the precursors listed on the ECL have wide legitimate industrial uses, General Export Permit No. Ex. 26 — Industrial Chemicals (GEP 26) was put in place to facilitate the export of the less sensitive precursors to destinations that were not of concern. This allowed Canada to fulfill its essential international obligations to control precursors, while at the same time, remaining sensitive and responsive to the licit uses of these chemicals.

Effective January 4, 2003, Health Canada, under the authority of the Precursor Control Regulations of the Controlled Drugs and Substances Act (CDSA), will assume control over the export and import of part of the list of chemicals in Group 8 (specifically items 8011 and 8021). This corresponds with the Class A Precursors in the amended Schedules V and VI to the CDSA. The CDSA prohibits the import, export, and possession for export of precursors, except as authorized by regulation. The Precursor Control Regulations of the CDSA include: a licence and import/export permit scheme for Class A Precursors, a registration and an export permit scheme for Class B precursors, and, general record keeping and reporting requirements for both Classes. They also include an exemption for mixtures or preparations that are shown to pose little risk of diversion to clandestine laboratories. Contravention of the regulations is an offence under Section 46 of the CDSA.

When Health Canada assumes control over substances listed in Schedule B of the CDSA (which corresponds to ECL Item 8031) in 2004, it will control all the chemical precursors identified by the CATF. Group 8 will be then removed from the Export Control List. In the interim, GEP 26 is being cancelled and GEP 40 is being promulgated so that an individual export permit is not required under the EIPA for chemicals subject to a CDSA permit requirement. Individual permits would only be required in the unlikely event of an export to Peru or Bolivia, which both require pre-export notification for any CATF chemical.

Articles 3, 5 and 12 of the 1988 Convention placed many obligations on Canada regarding offences, sanctions, confiscation, monitoring and control of precursor chemicals. The placement of these precursors listed in Group 8 of the ECL was undertaken as an interim monitoring and control measure, pending Health Canada's development of the regulatory frameworks needed to implement the 1988 Convention provisions for precursor controls. In addition, the Royal Canadian Mounted Police (RCMP) developed the National Chemical Diversion Program, a voluntary country-wide program aimed at disseminating information to chemical companies regarding the diversion of precursor chemicals and the identification and reporting of suspicious transactions. The Canada Customs and Revenue Agency (CCRA) has also been monitoring the international movement of precursors to and from Canada more closely in recent years. The implementation of the Precursor Control Regulations of the CDSA will more effectively control diversion of these precursors. These measures fully address Canada's domestic needs, and meet the regulatory and administrative requirements of Canada's international obligations and commitments. The cancelling of GEP 26 and the promulgation of GEP 40 acts as a bridging mechanism pending full implementation of these Regulations.

The measures will pose no additional burden on exporters beyond what is required by Health Canada's Precursor Control Regulations. The measures will also ensure that all of Canada's obligations regarding the export of precursors will be met, pending Health Canada assuming control over Class B precursors.

Prior to the enactment of the Precursor Control Regulations, Health Canada undertook exhaustive consultations with other government departments and industry. In January 2001, an Interdepartmental Working Group was formed with representation from Health Canada, Department of Foreign Affairs and International Trade, Solicitor General, Canada Customs and Revenue Agency, Department of Justice, Industry Canada, and the RCMP. A Notice of Intent was pre-published in the Canada Gazette, Part I, on March 24, 2001. In June 2001, a consultation workshop was held in Ottawa, with stakeholders from industry and government from Canada, the United States and the European Union. An Advisory Working Group including key industry representatives was formed to assist in refining the regulatory framework. On April 27, 2002 the proposed Precursor Control Regulations and the Regulatory Impact Analysis Statement (RIAS) were pre-published in the Canada Gazette, Part I, with a 75-day comment period. The submissions received during the 75-day comment period following pre-publication in the Canada Gazette, Part I, were addressed prior to Part II publication of the Precursor Control Regulations. In light of this extensive consultation process, no additional consultation is required for what is essentially a housekeeping measure.

All items described on the ECL are subject to an export permit and are therefore subject to the terms and conditions of that permit. In this case, exporters will indicate the use of General Export Permit 40 in Box 9 of their B13A Export Declaration. Non-adherence to those terms and conditions is an offence and may lead to prosecution under the EIPA.

Mr. Roger V. Lucy
Deputy Director (Permits)
Export Controls Division
Export and Import Controls Bureau
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: (613) 992-9167
FAX: (613) 996-9933