Controlled Goods Regulations

Link to law: http://laws-lois.justice.gc.ca/eng/regulations/SOR-2001-32/FullText.html

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Controlled Goods Regulations

SOR/2001-32DEFENCE PRODUCTION ACT
Registration 2001-01-09
Controlled Goods Regulations
P.C. 2001-8 2001-01-09Her Excellency the Governor General in Council, on the recommendation of the Minister of Public Works and Government Services, pursuant to section 43Footnote a of the Defence Production Act, hereby makes the annexed Controlled Goods Regulations.
Return to footnote aS.C. 2000, c. 31, s. 5Interpretation

1 The following definitions apply in these Regulations.

Act
Act means the Defence Production Act. (Loi)
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 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.

SOR/2004-132, s. 1.

Registration

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 names and addresses of the persons who each own more than 20% of the outstanding voting shares or interests of the business;
(e) the name, date of birth, position, telephone number and, if applicable, facsimile number and electronic mail address of the individual who is proposed to be the designated official together with evidence of the information set out in subsection 15(1);
(f) the consent to a security assessment of the proposed designated official and, in the case of an individual applicant, the applicant;
(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 by the applicant that states that the information contained in the application is true, complete and correct.

Factor for Consideration

4 In deciding whether to register a person, the Minister shall consider, based on a security assessment, the extent to which the applicant poses a risk of transferring a controlled good to a person who is not registered or exempt from registration.
SOR/2010-303, s. 1.
Previous Version

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.
SOR/2010-303, s. 1.
Previous Version

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.
SOR/2010-303, s. 1.
Previous Version

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 Every applicant and registered person shall, without delay, inform the Minister of any change in any of the information contained in the application for registration.

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 and maintain records of security assessments and supporting documentation in respect of each officer, director, employee and temporary worker who examines, possesses or transfers controlled goods, during the period of an individual's employment and for a period of two years after the day on which the individual ceases to be an officer, director, employee or temporary worker of the person;
(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 appoint as a designated official an individual who meets the qualifications set out in section 11;

(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, without delay, of any security breaches in relation to controlled goods; and
(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).
(j) [Repealed, SOR/2010-303, s. 2]

SOR/2010-303, s. 2.
Previous Version

Designated Officials

11 An applicant for registration or a registered person may propose to appoint as a designated official only an employee of the person who consents to a security assessment and who is either

(a) a Canadian citizen ordinarily resident in Canada; or
(b) a permanent resident ordinarily resident in Canada.

12 (1) The Minister shall conduct a security assessment in accordance with section 15 in respect of each proposed designated official and may, on the basis of that assessment, accept or reject the proposed appointment of a person as a designated official.
(2) The Minister shall notify an applicant for registration or a registered person of the acceptance of, or the reasons for the rejection of, a proposed designated official.

Duties of Designated Officials

13 Every registered person shall ensure that the designated official carries out the following duties:

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

(i) conducting, with the consent of the individual concerned, a security assessment in accordance with section 15,
(ii) determining, on the basis of a security assessment, the extent to which the individual concerned poses a risk of transferring controlled goods to any person who is not registered or exempt from registration,
(iii) making and keeping, on the basis of the security assessment, an evaluation as to the honesty, reliability and trustworthiness of the individual concerned,
(iv) authorizing, in respect of those individuals concerned who have been evaluated as being honest, reliable and trustworthy, the extent to which they may examine, possess or transfer controlled goods; and

(b) submitting applications for exemptions to the Minister in respect of temporary workers or visitors in accordance with section 18.

Scope of Registration

14 (1) The registration of a person extends to each officer, director and employee, other than a temporary worker, of the registered person authorized by the designated official in accordance with subparagraph 13(a)(iv).
(2) The extension of registration to an officer, director or employee applies only when the individual acts in the course of their duties with the registered person.

Security Assessments

15 (1) The designated official or the Minister, as the case may be, shall, for the purpose of determining the honesty, reliability and trustworthiness of a person and the extent to which the person poses a risk of transferring a controlled good to a person who is not registered or exempt from registration, conduct a security assessment that takes into account the following:

(a) personal references;
(b) criminal history;
(c) in the case of an individual, their places of residence, and their employment and educational histories; and
(d) in the case of a corporation or other business, its ownership.

(2) A person who is the subject of a security assessment shall provide to the designated official or the Minister, as the case may be, the individual's date of birth and evidence of the information referred to in subsection (1) in respect of the five- year period immediately before the date of the person's consent to the assessment.
(3) A person who is the subject of a security assessment shall provide to the designated official or the Minister, as the case may be, without delay, information regarding any change concerning ownership of the business or in criminal history.
(4) A designated official shall reconduct a security assessment after receiving information referred to in subsection (3).
(5) The evidence referred to in subsection (2) provided by the person shall be capable of being verified by the Minister or the designated official.
(6) The Minister may take into consideration other information provided by a person or another Minister if the Minister has reasonable grounds to believe that the information is necessary to determine the extent of the risk referred to in subsection (1).
(7) The Minister or the designated official, as the case may be, may, if there are reasonable grounds for doing so, reconduct a security assessment for the purpose of determining the extent of the risk referred to in subsection (1).

SOR/2010-303, s. 3.
Previous Version

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.

SOR/2004-132, s. 2.

Eligibility for Exemption from Registration

17 Temporary workers or visitors are eligible to apply for exemption from registration only if a registered person submits to the Minister an application on their behalf in accordance with section 18 and, in the case of a temporary worker, the temporary worker consents to a security assessment.

Applications for Exemption from Registration

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

(a) the name of the registered person;
(b) the full name, date of birth and citizenship of the temporary worker or visitor, as the case may be;
(c) in the case of a temporary worker, their consent to a security assessment together with evidence that they may be lawfully employed in Canada;
(d) in the case of a visitor, the name and address of the visitor's employer, if applicable;
(e) a description, including the country of origin if other than Canada, of the controlled goods that the temporary worker or visitor will examine, possess or transfer;
(f) the expected duration of the employment or the expected duration and purpose of the visit;
(g) in the case of a temporary worker, evidence of their places of residence, their employment and educational histories and personal references in respect of the five-year period immediately before the date of their consent to the security assessment;
(h) in the case of a temporary worker, an evaluation by the designated official of the registered person as to the honesty, reliability and trustworthiness of the temporary worker; and

(i) 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 or visitor, as the case may be, and
(ii) the information contained in the application is true, complete and correct.

Security Assessments for Temporary Workers

19 The Minister shall conduct a security assessment in accordance with section 15 in respect of a temporary worker.

Factor for Consideration

20 In deciding whether to exempt a temporary worker or a visitor from registration, the Minister shall consider the extent to which the proposed temporary worker or visitor poses a risk of transferring a controlled good to a person who is not registered or exempt from registration.
SOR/2010-303, s. 4.
Previous Version

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 or visitor concerned may examine, possess or transfer controlled goods.
(2) The registered person shall provide the temporary worker or visitor who is the subject of the exemption with a copy of the certificate.

SOR/2010-303, s. 5.
Previous Version

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.
SOR/2010-303, s. 6.
Previous Version

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.

Changes to Exemption Application

25 Every registered person shall inform the Minister, without delay, of any change in any of the information contained in an application for exemption.

Renewals and Amendments of Registrations and Exemptions

26 The Minister may renew or amend a registration or an exemption if the registered person submits an application for that purpose that complies with the requirements of section 3 or 18, as the case may be.

Suspension and Revocation of Registrations and Exemptions

27 (1) If the Minister receives credible information from which the Minister determines that a registered person or an individual who is exempt under a certificate of exemption

(a) has contravened any provision of the Act or these Regulations, the Export and Import Permits Act, the Security of Information Act or the Technical Data Control Regulations,
(b) has omitted from a security assessment or an application for registration or exemption any material fact or has misstated any material fact,
(c) poses an undue risk of transferring controlled goods to a person who is not registered or exempt from registration,
(d) has failed to comply with any condition of registration or exemption, or
(e) becomes insolvent or bankrupt or is unable to conduct their normal business activities for a period greater than 30 days,

the Minister may, by notice to the registered person suspend or revoke the registration or exemption, as the case may be.

(2) The registered person shall, without delay, provide the temporary worker or visitor who is the subject of the suspension or revocation with a copy of the notice furnished by the Minister under subsection (1).
(3) A notice of suspension or revocation shall state the reason for the suspension or revocation.
(4) Within 30 days after the date of a notice of suspension or revocation, the registered person may make representations to the Minister in respect of the suspension or revocation.
(5) If a registered person does not make representations or is unable to show to the Minister within 30 days after the date of the notice that the suspension should be removed the Minister may revoke the registration or exemption.

(6) The Minister may, by a notice to the registered person, reinstate the registration or exemption if the registered person, upon submitting new or additional information, is able to show to the Minister that

(a) the reason for the suspension or revocation no longer exists; or
(b) the decision to suspend or revoke the registration or exemption ought not to have been made.

(7) If the Minister does not reinstate the registration or exemption, a notice to that effect, with reasons, shall be given to the registered person.
(8) The registered person shall, without delay, provide the temporary worker or visitor who is the subject of the suspension or revocation with a copy of a notice furnished by the Minister under subsection (6) or (7), as the case may be.

2001, c. 41, s. 39.

Coming into Force

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