During the COVID-19 global pandemic, an important economic sanctions (and possibley export controls) issue has arisen for individuals (friends and family), companies, and non-governmental organizations. Many Canadians and residents in Canada have asked whether they can export humanitarian goods (including personal protective equipment ("PPE")) to countries against whom Canada has imposed sanctions (called "Sanctioned Countries").
Canada imposes economic sanctions in various forms and various degrees against the following countries: Burma/Myanmar, Central African Republic; the Democratic Republic of Congo; Eritrea, Iran, Iraq, Lebanon, Libya, Mali, Nicaragua, North Korea, Russia, Somalia, South Sudan, Sudan, Syria, Ukraine, Venezuela, Yemen and Zimbabwe (the "Sanctioned Countries"). When we talk about humanitarian goods, we primarily are focusing on Canada's sanctions and trade restrictions sanctions under the Special Economic Measures Act.
The question that is being asked is whether goods can be exported from Canada to the sanctioned countries. The answer is there is a way to export goods for humanitarian purposes. Canada has various mechanisms to allow exports to sanctioned countries. That being said, there is red tape that causes serious challenges and delays – especially if the exports take place without the proper permits in place.
Canada's economics sanctions legislation and regulations often contain exemptions for humanitarian goods. In addition, and the better mechanism to utilize is, the Minister may grant a Ministerial Authorization to send goods to a Sanctioned Country after receiving an application setting out all the relevant details about the proposed transaction.
Any Canadian or resident of Canada who wants to send humanitarian goods to a listed person in a Sanctioned Country (or who is not sure if the recipient will be a designated person or it the payment might come from a designated person) may apply for a Ministerial Authorization, which is permission to engage in the proposed transaction. There is no guarantee that an application for a permit or certificate will be approved.
The application for a Ministerial Authorization must be in writing, and include the following:
- your name, address, email and telephone number, or if the applicant is an entity, the applicant's name and address and the name, email, and telephone number of a contact person;
- a full description of the specific goods or services to be imported or exported, if any, including such details as their quantity, origin, value and intended end-use;
- a detailed description of your proposed activity or transaction;
- copies of any documents related to the proposed transaction, including purchase orders, invoices, contracts, customs and shipping documents, as well as bills of sale and deeds, if applicable;
- information about if you will be paid and how you will be paid (the Ministerial authorization may have to cover the parties making financial payments);
- identifying information (name, address) for every person or entity involved, including financial institutions, brokers, consignees, and any other entity involved in the contractual arrangement;
- if applicable, proof of immigration application status, residence, and visas for persons involved;
- a detailed explanation of the reasons for the transaction and an explanation as to how the activity or transaction would violate the relevant regulation, or how your request otherwise meets the criteria for application;
- where possible, which section of the regulation and/or which permit authorization order is being relied on to support your application;
- the anticipated benefits to the recipient of the goods; and
- the anticipated effects on you or your company if a permit or certificate is not granted
It is important to note that any information provided in the application for a Ministerial Authorization, including personal information, may be communicated to the Royal Canadian Mounted Police and other agencies or departments of the Government of Canada if it is necessary to do so in order to establish if a permit or certificate can be issued.
What are the goods to be exported?
The first question that must be asked is "what are the goods to be exported?". It is important to consider whether an export permit is needed under the Export and Import Permits Act before the goods can be exported. While North Korea is not a significant export destination from Canada, North Korea is on the Area Control List and all exports to North Korea (even if transshipped through another country, such as China) require an export permit from Global Affairs Canada.
An export permit is required for goods listed in the Export Control List. The Export Control List mostly includes military and strategic goods, which are unlikely to be considered to be humanitarian goods. That being said, certain dual use goods, U.S.-origin goods, chemicals and goods containing lasers, goods containing encryption software, etc. may require an export permit. It is important to ask and answer this question.
Where are the goods being shipped to?
If the goods to be exported are not listed in the Export Control List (or you plan to obtain the necessary export permits), the next question is whether the goods are being sent to a Sanctioned Country or to Cuba (there are export controls on U.S.-origin goods going to Cuba). If the answer is "no", you will be able to ship the goods.
Are the goods being shipped to a designated person?
If the answer is "yes", you need to determine whether person you are shipping the goods to is a designated person. Canada primarily imposes sanctions against listed individuals and entities and parties related to those person (individuals and companies) or buying on behalf of those persons. If the intended user of the goods is not a designated person, it will still be necessary to determine if the goods themselves are subject to sanctions.
What if there are applicable sanctions or trade restrictions?
You still might be able to ship humanitarian goods – but you need to obtain a Ministerial Authorization to do so. What is important to understand is that there is a mechanism, usually in a regulation, to apply for permission from the Minister of Foreign Affairs to export goods to a sanctioned country or a designated person. The Canadian regulations made pursuant to the Special Economic Measures Act listing the sanctions against countries often contain an exception for :
"any activity, or the provision or acquisition of financial services in relation to an activity, that has as its purpose
i) the safeguarding of human life,
(ii) disaster relief, or
(iii) the provision of food, medicine and medical supplies."
See the following regulations for examples:
- Special Economic Measures (Burma) Regulations (SOR/2007-285)
- Special Economic Measures (Iran) Regulations (SOR/2010-165)
- Special Economic Measures (Nicaragua) Regulations (SOR/2019-232)
- Special Economic Measures (Russia) Regulations (SOR/2014-58)
- Special Economic Measures (Ukraine) Regulations (SOR/2014-60)
- Special Economic Measures (Venezuela) Regulations (SOR/2017-204)
It is important to apply for and receive a Ministerial Authorization before exporting goods to a designated person in a Sanctioned Country and to ask the right questions. The Canada Border Services Agency might intercept packages going to a designated country if you do not have the proper paperwork, which will cause delays.
If you are shipping goods to North Korea, you will have to obtain both an export permit and a Ministerial Authorization.
Cuba, Iran, Syria
If you are shipping U.S.-origin goods or technology to Cuba, Iran, North Korea or Syria, there are special export controls considerations.
U.S. Secondary Sanctions
The United States imposes secondary sanctions. Proposed transactions from Canada may be caught by the U.S. secondary sanctions.
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.