Canada: Major Changes To Canada's Export And Technology Transfer Controls Coming Into Force Shortly

The Government of Canada has announced that a new version of the Guide to Canada's Export Controls (the "Guide") will come into effect on August 11, 2017. The Guide lists the goods and technology subject to export and technology transfer controls. The transfer from Canada of any items listed in the Guide must be made under the authority of an export permit, including transfers via physical export, telephone discussions, email, server access, upload and download, technical assistance and services, and other forms of information transmission. Companies doing business abroad, whether in connection with sales, sourcing or research and development, should be carefully reviewing the latest changes to the Guide to ensure full compliance with Canada's export control regime.

The new version of the Guide, referred to as the December 2015 Guide, reflects additions, deletions and clarifications regarding items subject to export control, incorporating Canada's commitments and obligations under various multilateral export control regimes up to December 31, 2015. This latest version replaces the December 2013 Guide which had been in effect since December 5, 2014.

Background – Regulatory Context of the Guide

Canada retains a vested national interest in controlling the export and transfer of certain goods and technology to parties outside of its borders. To that end, Canada enacted the Export and Imports Permits Act (the "EIPA"), which requires that a permit be obtained by any person or entity seeking to export or transfer such goods and technology. The principal objective of export controls is to ensure that exports of certain goods and technology are consistent with Canada's foreign and defence policies, such as national security, human rights protection and obligations not to contribute to the development of weapons of mass destruction.

The goods and technology which are so controlled are identified on the Export Control List (the "ECL"). The items on the ECL are subdivided into different groups:

  • Group 1, so-called "Dual-Use" goods and technology controlled under the Wassenaar Arrangement;
  • Group 2, the munitions list;
  • Groups 3 and 4, goods and technology with nuclear proliferation concerns;
  • Group 5, miscellaneous and strategic goods and technology (including all US-origin items);
  • Group 6, missile technology and components; and
  • Group 7, goods and technology subject to the chemical and biological weapons non-proliferation list.

The Guide is incorporated by reference into the ECL and provides detailed information and specifications for the items covered in each group. In addition, the Guide also contains detailed "de-control notes", that create specific exemptions for certain exports in certain circumstances. For example, many modern aviation engines are controlled under Category 9 of Group 1 (as they can have military uses). However, under the Guide, an engine for use in a civilian aircraft which has been type-certified by a Wassenaar Arrangement country is "de-controlled".

Overview of the Changes

While these latest changes impact every group within the Guide, it is Group 1 which is most significantly affected, with an extensive overhaul including a sizeable number of deletions from the ECL. Many of the definitions and specifications in Group 1 have been significantly refined.

Goods and technology have been added to Group 1 and are now subject to export control requirements. These include certain laser materials, technology for flight control systems, satellite and space goods and technology, and various aerospace goods and technologies.

The remaining changes have been more peripheral. Most of these have been clarification to specific items in the Guide inserting clarifications, changing cross-references to various new items or to account for removals, and to address typographical changes (such as changes to agency names). The most significant changes outside of Group 1 are the addition of certain types of rocket systems to Group 6 and a large increase in the number of viruses and other agents controlled under Group 7. Other additions include sight control equipment and technology, and the explosive mixture BTNEN.

Notably, there have been no changes to Canada's cybersecurity export and technology transfer controls in respect of intrusion software and IP network communications surveillance systems and related software and technology. This is an important contrast from the United States where these controls are not in place.

Certain items have also been removed from the Guide. These include certain items within the following categories: marine goods and technology (marine surface-effect vehicles and associated equipment, hydrofoil vessels and associated equipment), small-waterplane-area vessels and associated equipment, seals and gaskets, hydraulic fluids, polymers made from vinylidene fluoride, unprocessed fluorinated compounds, plasma dry etching equipment, laser-based telecommunication test/inspection equipment, thermopile arrays, and mirrors for terrestrial heliostat installations.

Changes to Canada's Crypto Controls

There have also been changes to Canada's control of cryptographic goods, technology, and software (so-called "Crypto") under Group 1, Category 5 – Part 2 ("Information Security"), including a restructuring of the relevant provisions. Crypto has long been a major issue in export controls, and one which surprises many Canadian exporters that suddenly find themselves unexpectedly offside the law. There are a few immediate points of interest.

First, there has been a small but important change to the "mass market" exemption under Cryptography Note 3. Previously, for the exemption to apply, the Guide required that price and information on the main functionality of the item had to be available before purchase without the need to consult the vendor or supplier. The new addition clarifies that a simple price enquiry is not considered to be a "consultation". This small change provides more latitude to include items within the "mass market" exemption.

Second, the changes provide for exclusions for routers, switchers or relays where the information security functionality is limited to "Operations, Administration or Maintenance" ("OAM") tasks which have been implemented using only published or commercial cryptographic standards. This liberalization is accompanied by a similar de-control for all general purpose computing equipment or servers where the information security functionality uses only commercial or published cryptographic standards and uses cryptographic equipment that is (1) subject to the mass market exemption under Note 3; (2) is integral to an operating system that would not otherwise be controlled; or (3) is limited to OAM functions.

Third, there is a clarification of controls on items, software, and equipment designed or modified to perform "cryptanalytic functions", which now appear under a new heading, "Defeating, Weakening or Bypassing 'Information Security'"". The Guide reorganization has added additional clarity on the definition of "cryptanalytic functions" to mean equipment designed to defeat cryptographic mechanisms in order to derive confidential variables or sensitive data, including clear text, passwords or cryptographic keys. This appears to be congruent with Canada's changes to its copyright regime which criminalized the use of software which was designed to defeat technological protective measures.

Fourth, additional clarity has been provided to control systems, equipment, and components, for non-cryptographic "information security". This confirms the status of such non-cryptographic items, and it remains to be seen the breadth with which this new provision will be enforced by the Canadian government.


These new changes bring Canada's export control regime into compliance with its international obligations as of December 2015. Those engaged in cross-border activities should review the full list of changes, which can be found here to determine whether your products or technology are impacted.

As important as what is included here is what is not included. Namely, there is no further significant guidance on cloud access and cloud computing. It remains critical that anyone using controlled goods and who is in possession of controlled technology, including plans, blueprints, or any technical information or data related to such goods, be fully aware of its data storage and backup solutions and how they are impacted by export control requirements. Barring official guidance to the contrary, companies should exercise caution using any backup or storage servers or facilities that are outside of Canada. Special care should also be taken if employees or contractors can access controlled information from abroad while travelling – which may also result in an illegal export or transfer.

The International Trade and Investment Law Group at McCarthy Tétrault will continue to monitor and provide guidance on key issues and developments regarding the new Guide and Canada's export control regime.

To view the original article click here

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions