Public Works and Government Services Canada

Public Works and Government Services Canada

May 16, 2011 15:46 ET

Government of Canada Supports U.S. Amendment of the International Traffic in Arms Regulations for Dual-and Third-Country Nationals Employed by the Defence and Aerospace Industries in Canada

GATINEAU, QUEBEC--(Marketwire - May 16, 2011) - The Honourable Rona Ambrose, Minister of Public Works and Government Services and Minister for Status of Women, is pleased to express support on behalf of the Government of Canada for the steps taken by the United States (U.S.) to publish an important amendment to the U.S. International Traffic in Arms Regulations (ITAR). Canada considers this revised ITAR rule a positive step forward for Canadian aerospace, defence and security firms.

"We applaud both Canadian and U.S. officials who have worked together to remove an important obstacle to Canada-U.S. defence trade and cooperation. This important revision to the dual/third-country national issue is positive in that it replaces nationality-based screening with security measures that can be applied to all individuals equally," said Minister Ambrose.

The Government of Canada has been working with the U.S. for several years in order to eliminate the nationality-based impacts governing the International Traffic in Arms Regulations. Although some work remains to determine the impacts of implementation of the new rule, this is a positive step forward for Canadian aerospace, defence and security firms, which are part of the highly integrated North American defence industrial base. These firms depend heavily on imports of defence articles and information of U.S. origin.

"The Aerospace Industries Association of Canada (AIAC) welcomes and is encouraged by the publishing of the ITAR amendment issued today, as it reflects many of the improvements related to the dual- and third-country nationals issue our industry has been seeking. These changes should alleviate certain existing restrictions that did not contribute to our common security objectives and will therefore be beneficial to the competitiveness of the highly export-oriented aerospace and defence industries," said Claude Lajeunesse, President and Chief Executive Officer of AIAC.

"AIAC congratulates the Government of Canada in achieving this collaborative success with the U.S. Department of State. Throughout the negotiations our Government has led a thorough and inclusive process involving the various stakeholders affected by the regulations. The outcome achieved as a result will facilitate our trade south of the border, which represents approximately 60 percent of our industry's exports," added David Schellenberg, President and CEO of Cascade Aerospace and Vice-Chairman of the AIAC.

"The changes published today both improve our economic competitiveness and enhance our national security," says Jayson Myers, President and CEO of Canadian Manufacturers and Exporters. "Given the integrated nature of supply chains between Canada and the United States, CME welcomes the U.S. Administration's move towards a more common approach to risk management, based on trust and a mutual interest to prevent diversion of ITAR-controlled technologies."

"Today's announcement should permit Canada's defence industrial base to re-affirm its role in support of the shared security of North America," said Tim Page, President of the Canadian Association of Defence and Security Industries (CADSI). "CADSI, and its 850 members, thank the governments of Canada and the United States for having recognized the importance of a strong and integrated North American defence industrial base to our collective security interests."

Canada's security and enforcement regime around controlled goods, namely the Controlled Goods Program, is viewed as a strong model of compliance in this shared industrial base. The program prevents diversion and proliferation of tactical and strategic assets—including goods, technologies and services subject to ITAR. The program also helps strengthen Canada's defence trade controls and supports Canada's domestic and international security interests, under the auspices of the Defence Production Act and the Controlled Goods Regulations.

Program officials have been consulting with industry and association representatives and will continue to do so to ensure that future business processes of the Controlled Goods Program (CGP) and the Enhanced Security Strategy will allow registrants to remain compliant with ITAR.

"We look forward to working with our U.S. partners on the full and effective implementation of the new rule, which is aligned with ongoing enhancements to Canada's Controlled Goods Program," said Minister Ambrose.

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BACKGROUNDER

International Traffic in Arms Regulations

The United States' (U.S.) International Traffic in Arms Regulations (ITAR), administered by the Department of State, regulate the export of defence aerospace articles, technology and materials from the U.S.

Authorization or licensing must be obtained when any non-U.S. citizen or entity is to receive or handle items exported under ITAR. Therefore, goods and services transferred to Canadian industry under ITAR are subject to strict controls imposed on U.S. exporters by the Department of State.

However, Canada is the only country—to date—to have an exemption under ITAR, providing it with license-free access to a range of U.S. defence articles to which the ITAR applies. Any ITAR material not covered under the Canadian exemption is accessed through the application of export licenses to the U.S. Department of State.

Dual National Issue

In the post-9/11 era, one issue between Canada and the U.S. has been the increasingly restrictive application of ITAR on U.S. exporters as it relates to access for Canadian citizens with dual nationality, as well as third-country nationals employed at Canadian-based firms. Technical Assistance and Manufacturing Licensing Agreements issued under ITAR require that all dual nationals working on a project be identified.

Provisions under these regulations (see Section 126.1 of ITAR) prevent the transfer of any form of controlled good or data to Canadians who are born in, or are nationals of, a U.S.-proscribed country (at present there are 25 countries on this list). For additional information on the proscribed countries, go to the U.S. Department of State website at http://www.pmddtc.state.gov/.

The Government of Canada recognizes and upholds equality rights. As such, it prefers an approach that places the emphasis on security rather than focusing on an individual's country of origin.

Public Works and Government Services Canada's (PWGSC) Role

PWGSC is responsible for the Government of Canada's national Industrial Security Program, which includes the oversight of controlled goods and technology in Canada through the Controlled Goods Program (CGP). The CGP prevents diversion and proliferation of tactical and strategic assets (including goods, technologies and services subject to ITAR), helps strengthen Canada's defence trade controls and supports the country's domestic and international security interests. Under the auspices of the Defence Production Act and the Controlled Goods Regulations, these objectives are supported within a strong national security framework. Canada's security and enforcement regime around controlled goods, namely the Controlled Goods Program, is viewed as a strong model of compliance. PWGSC works in collaboration with the Department of National Defence and the Department of Foreign Affairs and International Trade.

U.S. Export Controls Reform and ITAR Amendment on Dual- and Third-Country Nationals

In August 2009, President Obama announced his intention to reform the U.S. Export Control System, and, as one of two immediate steps, to eliminate obstacles to exporting ITAR-controlled goods and services to certain foreign companies, including Canadian ones, who employ dual- and third-country nationals.

The approach proposed by the U.S. would remove the current need for separate identification or approvals of dual- and third-country national employees to access U.S. defence articles to which the ITAR applies. It requires foreign governments and foreign companies to have effective measures in place to protect against the risk of unauthorized diversion in order to comply with the ITAR.

Contact Information

  • Michelle Bakos
    Director of Communications
    Office of the Honourable Rona Ambrose
    819-997-5421

    Media Relations
    Public Works and Government Services Canada
    819-956-2315