International Trade Law News

As a follow-up to yesterday's article on the arrangement between the State Department and Canadian Department of National Defense (DND), the Directorate of Defense Trade Controls (DDTC) today published on its website additional details on the arrangement.

First, DDTC stated that:

DND has agreed to restrict access to ITAR controlled items to its employees who are issued a minimum SECRET-level security clearance by the Canadian Government. * * * DND intends to ensure SECRET-level security clearances are not granted to personnel with ties to known terrorist groups or who maintain significant ties to foreign countries, including those countries to which exports and sales of ITAR controlled defense articles and services are prohibited. In exchange, the State Department will revise its export authorizations, which have incorporated limitations/provisos that require specific identification of individuals and countries of dual nationals and execution of Non Disclosure Agreements, to permit Canadian citizen/dual-national DND employees access as needed to ITAR defense articles and services if they possess a SECRET-level security clearance. This applies only to the DND and is not extended to any other government agency or to private companies in Canada.

Second, DDTC stated that it will:

re-issue export authorizations to companies for export of defense articles or services to the DND where the restrictive limitations/provisos have been imposed. The reissued export authorizations will contain proviso language reflecting the May 17 State Department-DND arrangement mitigating the requirement for specific identification of dual nationals and execution of Non Disclosure Agreements. The Department has been provided a list of authorizations from the DND which require revision so it will not be necessary for companies to apply for an amendment to existing affected authorizations.

Update: In a related development, the Aerospace Industries Association of Canada (AIAC), which represents Canada's aerospace manufacturing and services sector, today voiced support of the ITAR agreement reached by the U.S. and Canada. AIAC president Peter Boag said that "both Canadian and U.S. authorities are taking an important first step toward resolving what is a costly impediment for aerospace companies requiring access to US-origin controlled technologies and articles " He also said that "a sustained effort by both sides is needed to fully include Canadian industry within the scope of the announced arrangement and to deal with remaining ITAR-related issues."

The Canadian Association of Defence and Security Industries also acknowledged that the ITAR arrangement is "a positive first step" and that it "looks forward to working with the government to ensure that Canadian industry becomes a full and equal partner within the agreement announced yesterday in the shortest possible timeframe." However, the association said that Canada's "ability to obtain, operate and maintain military equipment originating from U.S.-based suppliers will not be fully met until Canadian industry is included under a similar arrangement as the one negotiated for DND."