On Jan. 21, 2015, the Government of Canada released a copy of an
order issued on Jan. 19, 2015 under the Foreign
Extraterritorial Measures Act that prohibits persons in
Canada from complying with "Buy America" requirements
pertaining to the redevelopment of the Prince Rupert Port
Authority. The Canadian Government has stated that, as a
result of the "Buy America" restrictions, suppliers of
Canadian iron and steel products and related services are not
permitted to participate in the redevelopment project as primary
contractors or subcontractors, thereby discriminating against
The order, available online at: Foreign Extraterritorial Measures Act
order, makes it a criminal offense for "any person in
Canada" to comply with specified US Regulations that require
all iron and steel products that are incorporated into the
redevelopment project to be manufactured in the United States , as
well as "any directive, instruction, intimation of policy or
other communication supporting their application from a person who
is in a position to direct or influence the policies of the person
in Canada, including those contained in any tender documents issued
in respect of those alterations or improvements". The Canadian
Government has stated that, as a result of the "Buy
America" restrictions, suppliers of Canadian iron and steel
products and related services are not permitted to participate in
the redevelopment project as primary contractors or subcontractors,
thereby discriminating against Canadian suppliers.
According to the Regulatory Impact Analysis Statement (RIAS),
the order will prohibit "persons in Canada" from
complying with any certification or declaration requirements that
state that the successful bidder will comply or has complied with
the applicable "Buy America" measures, such as those
found in tender documents or imposed within audit procedures.
The order is not the first to be issued under the Foreign
Extraterritorial Measures Act. The Foreign Extraterritorial
Measures (United States) order, 1992 (amended in 1996) has for many
years caused considerable angst for Canadian subsidiaries of U.S.
Corporations, which are subject to extraterritorially applied U.S.
embargos relating to Cuba. The 1992 Cuba order prohibits Canadian
corporations and their directors, officers, managers and employees
from complying with the U.S. embargos, therefore creating a
"catch-22" situation whereby compliance with U.S. law
creates non-compliance with Canadian law, and vice versa.
Importantly, the prohibition in the January 19th Prince
Rupert Port Authority order appears broader in its application than
the 1992 Cuba order, in that it is applicable to all "persons
in Canada," and not just to Canadian corporations and their
The RIAS to the January 19th order warns that
possible violations of the order would be investigated by the Royal
Canadian Mounted Police. The RIAS suggests that a prerequisite to
the commission of an offence under the order is service of a
ministerial order on the person. This requirement, and how exactly
it operates, has been a matter of speculation under the 1992 Cuba
Order, under which there have been no known prosecutions.
Contravention of FEMA attracts severe penalties. On conviction
on indictment, corporations are subject to a maximum fine of
$1,500,000, while individuals are subject to a maximum fine of
$150,000 or to imprisonment for a term not exceeding five years, or
to both. On summary conviction, fines for corporations are a
maximum of $150,000, while individuals face fines of up to $15,000
or a term of imprisonment not exceeding two years, or
On the same day as the FEMA Order was released, the government
of Alaska announced that it had suspended the ferry terminal
redevelopment until the trade issue can be resolved.
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