On May 7, 2016, Global Affairs Canada announced that it would begin the regulatory process required to remove Belarus from the Area Control List (ACL), thereby lifting export controls that have been in place since December 14, 2006.
The Government announced that this action was consistent with Canada's re-engagement with the international community and in acknowledgement of Belarus' improvements in key areas in recent months, including its role in facilitating negotiations toward a ceasefire and peace agreement in Ukraine and the conduct of a presidential election in October 2015, which demonstrated greater adherence to international norms and was not marked by the levels of violence and intimidation seen in past elections.
Export Controls and the ACL
The ACL is a regulation made pursuant to the Export and Import Permit Act (EIPA). A listing on the ACL – which currently includes only Belarus and North Korea – means that anyone in Canada is prohibited from transferring goods or technology to the listed country or causing any item that appears on the Export Control List (ECL) to be transferred to the listed country. The former restriction provided a near blanket prohibition of any export to Belarus from Canada, while the latter restriction ensured that no sensitive goods, originating in Canada, could be diverted to Belarus through a third party.
The ACL listing is meant to control the export or transfer not only of goods, but also of "technology". The scope of this prohibition is broad: not only is the export of the good or technology itself prohibited, it is also prohibited for any person subject to the EIPA to provide technical expertise or data which could assist with the development or production of a good. Accordingly, since the listing of Belarus in 2006 on the ACL, any company seeking to export goods to Belarus or to provide any technology, technical assistance or data of any kind was required to obtain a permit from Global Affairs Canada. With a few exceptions, permits were routinely denied as a matter of policy.
What does removal from the ACL mean for Canadian exporters?
Belarus has not yet been removed from the ACL. However, Global Affairs Canada has announced that it will generally issue an export permit for Belarus if applied for under the ACL, as an interim measure while the regulatory process to remove Belarus from the ACL moves forward.
It is important to recognize that while removal of Belarus from the ACL will allow Canadian companies to export a broad range of goods and technologies, exporters must still be mindful to comply with the export restrictions imposed by a separate regulation passed pursuant to the EIPA, the Export Control List (ECL). The ECL, which controls the export of sensitive items from Canada, applies to all exports from Canada of all goods and technologies that are listed on the ECL, to all destinations. The only exception is for exports to the United States, which generally do not require an export permit unless the list specifies otherwise.
If the item to be exported falls under the control of the ECL, a permit will continue to be required for its export. The ECL is divided into the following seven Groups:
Group 1: Dual-Use List
Group 2: Munitions List (mostly military items)
Group 3: Nuclear Non-Proliferation List
Group 4: Nuclear-Related Dual-Use List
Group 5: Miscellaneous Goods and Technology (includes all U.S. origin goods and items intended for restricted end-uses)
Group 6: Missile Technology Control Regime List (includes navigation systems)
Group 7: Chemical and Biological Weapons Non-Proliferation List
Most important for Canadian exporters will be the items listed in Group 1. Belarus has a growing technology sector and many international companies are using its educated population to contract out software development and IT systems production. A number of items related to this field continue to be controlled for export or transfer under the dual-use list of the ECL, including items such as encryption software, sensors, lasers, cryptography equipment, and related software and technology.
I want to export my goods or technology to Belarus, what do I need to do now?
Until such time as the regulatory changes have taken effect, a permit application for any export to Belarus will be required. This can be accomplished by submitting a permit application to Global Affairs Canada.
In addition, you will want to ensure that none of the goods being exported are also captured by the ECL. If they are, this would need to be flagged to Global Affairs Canada during the permit application process because these items will require special consideration before a permit can be issued. They will also continue to be subject to export controls once Belarus has been delisted from the ACL.
Canada does not currently impose additional economic sanctions against Belarus pursuant to the United Nations Act or the Special Economic Measures Act. Therefore, verification against these Acts is not required at present.
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.