On February 2, 2011, Canada's Export Controls Division (ECD)
announced the availability of a new multidestination export permit
for the export or transfer of information security goods and
technology to the countries of the European Union (except Cyprus)
and Australia, Japan, New Zealand, Norway and Switzerland.
Canadian exporters of encryption-related items have been facing
significant challenges with transfers of these items from Canada
and have been expressing concerns regarding the impact of these
controls on their competitive position in the international
The new "EU+5" permit appears to be designed to offer
some flexibility in the terms and conditions applicable to
transfers to the identified countries. The key points are:
it applies to hardware, software, source and object code, and
technology that incorporate cryptography controlled in Category 5,
Part 2 of Group 1 of the Export Control List, excluding items in
1-5.A.2.a.2 (designed or modified to perform cryptanalytic
functions), 1-5.A.2.a.4 (specially designed or modified to reduce
the compromising emanations of information-bearing signals), and
1-5.A.2.a.9 (designed or modified to use quantum
it authorizes exports to final consignees in Australia,
Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Estonia,
Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan,
Latvia, Lithuania, Luxembourg, Malta, Netherlands, New Zealand,
Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain,
Sweden, Switzerland, and the United Kingdom;
it excludes any exports or transfers involving countries on
Canada's Area Control List or subject to Canadian economic
sanctions; at the present time these are Afghanistan, Belarus,
Burma (Myanmar), Congo, Côte d'Ivoire, Cuba, Eritrea,
Guinea, Iran, Iraq, Lebanon, Liberia, North Korea, Pakistan,
Rwanda, Sierra Leone, Somalia, Sudan, Syria, and Zimbabwe;
it excludes exports for end-use that is directly or indirectly
related to research, development or production of chemical,
biological or nuclear weapons, or any missile programmes for such
it has a validity period of five years and requests to extend
the validity of export permits may be made up to three weeks before
the expiry date;
there are no reporting requirements, however, exporters using
this permit must retain documentation which demonstrates that the
exporter has undertaken due diligence to verify that the
transaction complies with the permit terms and conditions; this
documentation includes contracts, invoices, requests for products,
statements of work, specific correspondence, (if applicable)
vendor/reseller/distributor agreements, and bills of lading.
Canada continues to apply broad export and technology transfer
controls to information security items. Subject to certain
exceptions, all hardware, software and related technology designed
or modified to use, work with or perform cryptographic functions
(employing a key length in excess of 56 bits) is controlled for
export or transfer to any non-US destination.
Failure to comply with these controls can have significant
financial and reputational consequences. In many cases when product
is detained or seized by the Canada Border Services Agency just
prior to export because of compliance uncertainties, the ensuing
delays can strain customer relations and result in lost business.
Any businesses that use or transfer encryption should be carefully
following developments in this area, not just to ensure that they
are in full compliance with the requirements but also that they are
using all available mechanisms to maintain or enhance their
competitive position internationally.
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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