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CONTROLLED GOODS PROGRAM RENEWALS

TIMELY RENEWAL APPLICATIONS NECESSARY TO AVOID MAJOR HEADACHES

Like many other western nations, Canada regulates the possession and transfer of various military weapons and technologies through its Controlled Goods Program (respectively (“Controlled Goods” and the “CGP”).

In order to possess, examine or transfer Controlled Goods, a person must be registered (or exempt therefrom) under the CGP ("Registration" and a "Registered Party").  As Registration does not last indefinitely, Registered Parties must ensure their Registration never lapses and that required Applications for Renewal ("Renewal Applications") are prepared well in advance of their due dates.  Lapses in Registration, even only one day, can result in technical breaches, exclusion from the CGP and very serious headaches for businesses reliant on the CGP. 

Registration Under the CGP

Registration under the CGP is a requirement pursuant to sections 37 and 38 of the Defence Production Act (“DPA”), as non-registered persons are prohibited from possessing, examining or transferring Controlled Goods.  Applications require various complex information and security requirements under the Controlled Goods Regulations (“CGR”), and all taking time and attention – and often professional advice – to get right.

When an application for Registration is approved, Registration lasts for a maximum of five years from the approval date and a Renewal Application must be made after that. 

Do Timely Renewal Applications Matter?

Timely Renewal Applications are required because a lapse in Registration will technically produce significant consequences for Registered Parties.

First, it is an offence under the DPA to possess, examine or transfer Controlled Goods when not registered:  see section 45 of the DPA.  Moreover, contravening this basic Registration requirement can result in an indictable offence, fines of up to $2,000,000 and/or up to 10 years imprisonment.  This is not to mention other civil requirements that affect former Registered Parties under the CGR – which can involve their own similar offence, fine and imprisonment rules.

Takeaways

The Canadian Controlled Goods Program is important for Canadian businesses dealing with Controlled Goods, but comes with important rules and requirements.  The most basic is to keep oneself properly Registered, and with significant monetary penalties and potential prison time at stake, businesses need to get their Registration correct the first time, and keep them from lapsing – even one day!

Experienced International Trade Counsel can often help keep things on track, as navigating the complexities of Canada’s CGP is quite a difficult process in and of itself. 

For help with Canada's Controlled Goods Program, click here.

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