The Export Controls Division of Foreign Affairs and
International Trade Canada (ECD) has launched another consultation
with industry regarding the control of encryption goods and
technology for export or transfer from Canada. This comes on the
heels of earlier consultations on the mass market exemption
launched in March of this year and further described at Canadian Government Launches Consultations on Encryption
Controls (March 2010).
Canada, as a Participating State of the Wassenaar
Arrangement, controls cryptography under Category 5, Group 1
of its Export Control List. The threshold for control is
relatively low — e.g., cryptography having a
symmetric algorithm employing a key length exceeding 56 bits. Those
seeking to export or transfer from Canada covered goods, software
and related technology employing cryptography must apply for and
obtain a permit for destinations other than the United States.
Because of the administrative burden, uncertainty and delays
experienced in having to obtain permits prior to shipment of these
items, and the difficulties these present for the just-in-time
business models employed across industry, some Canadian exporters
and vendors of these items have been expressing significant
concerns with the current process. They have also found that
streamlined export licensing procedures and more flexible
interpretations of exemptions in the United States and other
countries have placed them at a competitive disadvantage when
selling and supporting their products in the international market
These competitive issues have intensified recently with further
steps being taken in the United States to liberalize export
controls, and in particular the controls over encryption items,
putting Canadian vendors and exporters at a further
The ECD has stated that it is now seeking the views of industry
stakeholders on ways to improve the efficiencies of the
administration of export controls on these items while continuing
to meet Canada's Wassenaar commitments and national
security requirements. The ECD has drafted a brief paper intended
to provide broad context for these consultations: Export Controls on Information Security (Cryptography)
Items. The ECD has also created an Information
Security (Cryptography) Questionnaire that allows interested
parties to provide information and express their views on this
issue and that is available upon request.
The deadline for filing submissions is August 5, 2010.
McCarthy Tétrault's International Trade and
Investment Law Group has significant expertise in encryption
controls, and regularly assists clients in developing solutions to
compliance and enforcement issues in this area. We are available to
advise on these or any other export control, economic sanction or
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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