Controlled Goods Regulations (SOR/2001-32)

Interpretation

1 The following definitions apply in these Regulations.

Act

Act means the Defence Production Act. (Loi)

business day

business day means a day other than a Saturday or a holiday. (jour ouvrable)

international student

international student means an individual who is authorized by a study permit or by the Immigration and Refugee Protection Regulations to engage in studies in Canada and who is not an officer, director or employee of a person registered under these Regulations. (étudiant étranger)

permanent resident

permanent resident has the same meaning as in subsection 2(1) of the Immigration Act. (résident permanent)

person

person includes a partnership or other business enterprise. (personne)

temporary worker

temporary worker means an officer, director or employee of a person registered under these Regulations who is not

• (a) a Canadian citizen ordinarily resident in Canada; or

• (b) a permanent resident ordinarily resident in Canada. (travailleur temporaire)

visitor

visitor means an individual — other than an international student — who is not an officer, director or employee of a person registered under these Regulations and who is not

• (a) a Canadian citizen ordinarily resident in Canada; or

• (b) a permanent resident ordinarily resident in Canada. (visiteur)

Application

1.1 Part 2 of the Act does not apply to members of the following classes of persons who act in good faith in the course of their duties and employment:

• a) public officers as defined in subsection 117.07(2) of the Criminal Code;

• (b) elected or appointed officials of the federal or a provincial government; or

• (c) members of a visiting force as defined in section 2 of the Visiting Forces Act.

Registration and Registered Persons

Eligibility for Registration

2 A person is eligible to apply for registration if

• (a) in the case of an individual, they carry on business in Canada, give their consent to a security assessment and are

  • (i) a Canadian citizen ordinarily resident in Canada, or

  • (ii) a permanent resident ordinarily resident in Canada; and

• (b) in the case of a corporation, partnership or any other business enterprise, it is either

  • (i) incorporated under federal or provincial law, or

  • (ii) authorized by federal or provincial law to carry on business in Canada.

Applications for Registration

3 A person who is eligible may apply for registration by sending to the Minister on a form supplied by the Minister an application that contains

• (a) the applicant's legal name, business name, address, telephone numbers for each place of business in Canada and, if applicable, electronic mail and facsimile numbers for each place;

• (b) evidence of the legal status of the applicant's business;

• (c) the name, residential address and position of each director, officer, partner or proprietor of the business;

• (d) the name and address of any owner of 20% or more of the outstanding voting shares or interests of the business and the percentage that each owns;

• (e) the name, date of birth, position, telephone number and, if applicable, facsimile number and email address of the individual who is proposed to be appointed as the designated official;

• (f) [Repealed, SOR/2016-201, s. 3]

• (g) a description of the controlled goods that the applicant intends to examine, possess or transfer and the addresses of the locations where those goods will be kept;

• (h) the addresses of the locations where the records required by these Regulations will be kept; and

• (i) a statement signed and dated by an individual authorized for that purpose, stating that the information contained in the application is accurate and complete.

3.1 The application shall be accompanied by the consent of the following individuals to a security assessment to be conducted by the Minister in accordance with section 15, including their consent to the disclosure of their personal information to — and its use by — Canadian government entities and credit reporting agencies for the purpose of that assessment:

• (a) each owner referred to in paragraph 3(d) that is an individual;

• (b) the proposed designated official referred to in paragraph 3(e), unless they were subjected to a security assessment in accordance with section 15 within the previous five years; and

• (c) the authorized individual referred to in paragraph 3(i).

Factor for Consideration

4 In deciding whether to register an applicant, the Minister shall assess, based on the security assessments referred to in section 3.1 and any other information obtained in respect of the applicant, the extent to which the applicant poses a risk of transferring a controlled good to a person who is neither registered nor exempt from registration.

Approval

5 If the Minister approves an application for registration, the Minister shall provide a certificate of registration to the applicant that sets out the period for which the registration is valid and any conditions under which they may examine, possess or transfer controlled goods.

Denial of Registration

6 If the Minister denies an application for registration, the Minister shall send a notice with reasons for the denial to the applicant.

Period of Validity

7 The registration of a person is valid for a period not exceeding five years from the date of approval by the Minister.

Non-assignability

8 The registration of a person is not assignable.

Changes to Application

• 9 (1) Every applicant and registered person shall advise the Minister of any change in any of the information contained in or accompanying the application for registration within ten business days after the day on which they become aware of the change.

• (2) A registered person shall, by the later of 32 business days before the date of an acquisition or one business day after the day on which they become aware of an acquisition, advise the Minister of the name and address of any person that will, as a result of the acquisition, own 20% or more of the outstanding voting shares or interests of the business.

Conditions of Registration

10 Every registration of a person is subject to the following conditions:

• (a) that the person keep and maintain, during the period of registration and for a period of five years after the day on which the person ceases to be registered, records that contain

  • (i) a description of any controlled goods received by the person, the date of their receipt and an identification of the person from whom they were transferred,

  • (ii) a description of any controlled goods transferred by the person, the date of their transfer and the identity and address of the person to whom they were transferred, and

  • (iii) a description of the manner and date of disposition of the controlled goods;

• (b) that the person keep records of the most recent security assessment in respect of each of their officers, directors, employees, temporary workers, international students and visitors who examine, possess or transfer controlled goods and maintain those records — as well as supporting documentation — for a period of two years after the day on which the individual in question ceases to act in that capacity;

• (c) that the person keep a copy of the evidence referred to in subsection 16(2) for a period of two years after the day on which the individual who is exempt ceases to have access to the controlled goods of the registered person;

• (d) that the person meets the requirements set out in section 11 and subsection 12(1);

• (e) that the person establish and implement a security plan in respect of each place of business in Canada where controlled goods are kept that contains written measures that set out

  • (i) the procedures used by the person to control the examination, possession and transfer of controlled goods,

  • (ii) the procedures for reporting and investigating security breaches in relation to controlled goods,

  • (iii) the description of the responsibilities of the person's security organization and the identity of individuals who are responsible for the security of controlled goods, and

  • (iv) the contents of security briefings and training programs given to visitors, officers, directors, employees and temporary workers, as the case may be;

• (f) that the person provide training programs in respect of the secure handling of controlled goods for officers, directors, employees and temporary workers who are authorized to possess or examine those goods;

• (g) that the person provide briefings in respect of the secure handling of controlled goods by visitors who are authorized to examine those goods;

• (h) that the person advise the Minister of any actual or potential security breach in relation to controlled goods within three days after the day on which they discover the breach;

• (i) that the person make available, at any reasonable time, to the Minister the records referred to in paragraph (a), the records and documents referred to in paragraph (b) and the copy of the evidence referred to in paragraph (c); and

• (j) that the person submit to the Minister, every six months, the name of each individual in respect of whom the designated official conducted a security assessment during the previous six months, as well as the individual’s date of birth and an indication of the extent to which they were authorized to access controlled goods.

Designated Officials

11 An applicant for registration or a registered person may propose to appoint as a designated official only

• (a) themselves, if they are an individual; or

• (b) one of their officers, directors or employees who is either a Canadian citizen ordinarily resident in Canada or a permanent resident ordinarily resident in Canada and who has obtained — or will obtain before the appointment is made — any certification required by the Minister.

• 12 (1) A registered person shall ensure that a designated official is subjected to a security assessment in accordance with section 15 before their appointment and at least once every five years.

• (2) An individual in respect of whom a security assessment is required under subsection (1) shall provide their consent to the security assessment, including their consent to the disclosure of their personal information to — and its use by — Canadian government entities and credit reporting agencies for the purpose of that assessment.

• (3) The Minister shall, on the basis of the security assessment, accept or reject the individual as a designated official and shall notify the registered person of the acceptance or the reasons for rejection.

Duties of Designated Officials

13 Every registered person shall ensure that the designated official

• (a) in respect of each officer, director and employee who is not a temporary worker of the registered person and who requires in the course of their duties access to controlled goods,

  • (i) conducts, at least once every five years and with the consent of the individual concerned, including their consent to the disclosure of their personal information to — and its use by — Canadian government entities and credit reporting agencies for the purpose of the assessment, a security assessment in accordance with section 15,

  • (ii) determines, on the basis of the security assessment, the extent to which the individual concerned poses a risk of transferring a controlled good to a person who is neither registered nor exempt from registration,

  • (iii) if the designated official is of the opinion that the individual concerned poses a high risk, requests that the Minister conduct his or her own security assessment in respect of the individual concerned and provides to the Minister, for the purpose of carrying out that assessment, all information and evidence obtained by the designated official under subsections 15(2), (4) and (5),

  • (iv) considers any recommendation provided by the Minister under subsection 15.1(2), and

  • (v) decides the extent to which the registered person ought to authorize the individual concerned to examine, possess or transfer controlled goods;

• (b) verifies the information provided to them by temporary workers, international students and visitors for the purpose of applications for exemption submitted under section 18; and

• (c) obtains and maintains any certification required by the Minister.

Scope of Registration

• 14 (1) The registered person shall be bound by the decision of the designated official under subparagraph 13(a)(v).

• (2) An authorization by the registered person applies to an officer, director or employee only when that individual is acting in the course of their duties with the registered person.

Security Assessments

• 15 (1) The Minister shall conduct a security assessment in respect of all proposed designated officials and all individuals referred to in paragraphs 3(d) and (i), and the designated official shall conduct a security assessment in respect of all officers, directors and employees referred to in paragraph 13(a), having regard to the information provided under subsection (4).

• (2) In conducting the security assessment, the Minister may also have regard to other information provided by any person and the designated official may have regard to other information provided by the Minister if the Minister or the designated official, as the case may be, has reasonable grounds to believe that the information is necessary to determine the extent of the risk referred to in subsection (3).

• (3) The purpose of the security assessment is to determine the extent to which the individual being assessed poses a risk of transferring a controlled good to a person who is neither registered nor exempt from registration.

• (4) The individual who is the subject of the security assessment shall provide the Minister or the designated official, as the case may be, with the following information and, on request, any additional information or evidence that the Minister or the designated official requires to verify it:

  • (a) their name and any previous names;

  • (b) their date and place of birth;

  • (c) all citizenships and any permanent resident status;

  • (d) personal references; and

  • (e) a description, in respect of the five-year period immediately before the day on which the individual consents to the assessment, of their

    • (i) criminal history,

    • (ii) places of residence,

    • (iii) education and employment history,

    • (iv) financial history,

    • (v) history of travel outside of Canada and the United States, including any denial of entry into another country,

    • (vi) significant personal and professional associations and relationships that could affect the extent to which the individual poses a risk of transferring a controlled good to a person who is neither registered nor exempt from registration, and

    • (vii) any security clearance held, denied, suspended or revoked.

• (5) An individual who is or has been the subject of a security assessment shall advise the Minister or the designated official, as the case may be, of any change concerning their criminal history within five business days after the day on which the change occurs.

• (6) The Minister or the designated official, as the case may be, shall reconduct a security assessment if new information is received or if there are other reasonable grounds for doing so.

• 15.1 (1) If a request is made to the Minister under subparagraph 13(a)(iii), the Minister shall conduct the security assessment of the individual concerned in accordance with section 15.

• (2) The Minister shall advise the designated official of his or her recommendation respecting the extent to which the individual concerned poses a risk of transferring a controlled good to a person who is neither registered nor exempt from registration and the extent to which, in the Minister’s opinion, the individual ought to be authorized to examine, possess or transfer controlled goods.

Exemptions

Class of Exempt Individuals

• 16 (1) Subject to subsection (2), an individual is exempt from registration if they are a director, an officer or an employee of a person registered to access controlled goods under the International Traffic in Arms Regulations, Title 22, Parts 120-130 of the Code of Federal Regulations (United States).

• (2) An individual is exempt from registration from the day on which they provide to the person registered under these Regulations from whom they will obtain access to the controlled goods

  • (a) evidence of the individual's status as a director, an officer or an employee of the person registered under the regulations referred to in subsection (1);

  • (b) evidence of the registration and eligibility of that person under the International Traffic in Arms Regulations; and

  • (c) evidence of the eligibility of the individual under the International Traffic in Arms Regulations.

• (3) An individual is also exempt from registration if they are an officer, employee or elected or appointed official of the United States federal government or of a state or territorial government of the United States and act in good faith in the course of their duties and employment.

Eligibility for Exemption from Registration

17 A temporary worker, international student or visitor is eligible for exemption from registration only if a registered person submits to the Minister an application on their behalf in accordance with section 18.

Applications for Exemption from Registration

18 A registered person may apply to exempt a temporary worker, international student or visitor from registration by sending to the Minister, on a form supplied by the Minister, an application that contains

• (a) the name of the registered person;

• (b) the name, any previous names, date of birth and citizenships of the temporary worker, international student or visitor;

• (c) in the case of a visitor, their address and the name and address of their employer, if applicable;

• (d) a description, including the country of origin if other than Canada, of the controlled goods that the temporary worker, the international student or the visitor will examine, possess or transfer;

• (e) the expected duration of the temporary worker’s employment or of the international student’s placement with the registered person or the expected duration and purpose of the visit; and

• (f) a statement signed and dated by the designated official, stating that

  • (i) the individual for whom the exemption is being sought meets the requirements of the definition of temporary worker, international student or visitor, as the case may be,

  • (ii) in the case of a temporary worker or international student, the designated official has contacted their personal references, and

  • (iii) the information contained in and accompanying the application is accurate and complete.

• 18.1 (1) An application for exemption from registration shall be accompanied by the consent of the temporary worker, international student or visitor to a security assessment to be conducted in accordance with section 19, including their consent to the disclosure of their personal information to — and its use by — Canadian government entities for the purpose of the assessment, as well as a copy of their valid passport.

• (2) In the case of a temporary worker or international student, the application shall also be accompanied by their consent to the disclosure of their personal information to — and its use by — credit reporting agencies for the purpose of the security assessment, as well as

  • (a) copies of all identity documents issued to them by the Government of Canada or any province;

  • (b) evidence that they are authorized to work or study in Canada, as the case may be, and, in the case of an international student, a document from the academic institution at which they are authorized to study indicating that the work they are doing for the registered person is integral to those studies;

  • (c) personal references;

  • (d) a description, in respect of the five-year period immediately before the day on which they consent to the assessment, of their

    • (i) criminal history,

    • (ii) places of residence,

    • (iii) education and employment history, and

    • (iv) history of international travel outside of Canada and the United States, including any denial of entry into another country; and

  • (e) the original results of a country-wide criminal record check conducted by the relevant authorities in every country other than Canada in which they resided during the period referred to in paragraph (d).

• (3) The temporary worker and the international student shall, on request, provide the designated official with any additional information or evidence that the designated official requires to verify the information provided under subsection (2).

Security Assessments for Temporary Workers, International Students and Visitors

• 19 (1) The Minister shall conduct a security assessment in respect of all temporary workers, international students and visitors in respect of whom an application for exemption from registration has been made under section 18, having regard to the information provided under section 18.1 and any other information that the Minister has reasonable grounds to believe is necessary to make a decision under section 20.

• (2) The purpose of the security assessment is to determine the extent to which the individual being assessed poses a risk of transferring a controlled good to a person who is neither registered nor exempt from registration.

• (3) The registered person shall advise the Minister of any change in any of the information contained in or accompanying an application for exemption within five business days after the day on which the change occurs.

• (4) The Minister shall reconduct a security assessment if new information is received or if there are other reasonable grounds for doing so.

Factor for Consideration

20 The Minister shall, on the basis of the security assessment conducted under section 19, decide whether to approve or deny the application for exemption from registration.

Approval of Application for Exemption

• 21 (1) If the Minister approves an application for exemption, the Minister shall provide a certificate of exemption from registration to the registered person that sets out the period for which the exemption is valid and any conditions under which the temporary worker, the international student or the visitor concerned may examine, possess or transfer controlled goods.

• (2) The registered person shall provide the temporary worker, the international student or the visitor with a copy of the certificate.

Denial of Exemption

22 If the Minister denies an application for exemption, the Minister shall send a notice with reasons for the denial to the registered person.

Period of Validity of Exemption

23 The exemption of an individual from registration is valid for a period not exceeding three years from the date on which the exemption is approved by the Minister.

Non-assignability of Exemption

24 The exemption of an individual from registration is not assignable.

25 [Repealed, SOR/2016-201, s. 15]

26 [Repealed, SOR/2016-201, s. 15]

Suspension and Revocation of Registrations and Exemptions

• 27 (1) If the Minister has reasonable grounds to believe that a registered person or an exempt individual poses an undue risk of transferring a controlled good to a person who is neither registered nor exempt from registration, the Minister shall suspend the registration or the exemption.

• (2) The Minister shall revoke the registration or the exemption if he or she determines that the registered person or the exempt individual poses an undue risk of transferring a controlled good to a person who is neither registered nor exempt from registration and that

  • (a) a material fact was, with the intent to mislead, deliberately omitted from or misstated in the application for registration or exemption or in connection with a security assessment referred to in section 3.1, 12 or 19; or

  • (b) the registered person or the exempt individual is bankrupt.

• (3) The Minister shall reinstate the registration or the exemption if, within 30 days after the date of the notice of suspension or revocation, the registered person makes representations to the Minister that satisfy him or her

  • (a) that there are no longer grounds for the suspension; or

  • (b) that the revocation was unfounded.

• (4) If the registered person does not, in the case of a suspension, meet the requirements of subsection (3), the Minister shall revoke the registration or the exemption.

• (5) The Minister shall provide to the registered person notice with reasons of any decision to suspend or to revoke a registration or exemption, or not to reinstate a revoked registration or exemption despite representations being made, as well as notice of any decision to reinstate a registration or exemption.

• (6) The registered person shall, within one business day after the day on which they receive a notice from the Minister concerning the exemption of a temporary worker, international student or visitor, provide to that individual a copy of the notice.

Coming into Force

28 These Regulations come into force on April 30, 2001.