Key Russian Economic Sectors as Potential Target for Upcoming Sanctions by Canada

On July 9, 2022, Canada announced that it intends to further target key Russian sectors in a new round of sanctions against Russia under the Special Economic Measures (Russia) Regulations (“Russia Regulations”).

These new sanctions “will expand existing measures on the oil, gas and chemical sectors to include industrial manufacturing”. Together, these sectors represent more than 50% of Russia’s federal budget revenues. Canada’s new sanctions will “prohibit Canadian services to contribute to the production of goods [in the metals, transport, computer, electronic and electrical, and machinery] sectors”. The news release provides that, “[o]nce the measures are in effect, Canadian businesses will have 60 days to conclude contracts with targeted industries and services”.

Our team will continue to monitor the sanctions related to Russia, providing updates about important developments affecting trade and services.

The lawyers at Tereposky & DeRose have significant experience in the design and implementation of sanctions-related compliance programs, including policies, procedures, employee training, and internal control mechanisms. They also regularly assist both Canadian and international businesses, financial institutions, and individuals with internal investigations when “red flags” appear and provide advice on compliance in these areas. Where breaches have occurred, they have worked closely with their clients in making voluntary disclosures and in engaging with the ensuing investigations conducted by the RCMP and Global Affairs Canada. We also regularly assist clients with the application for delisting process as well as applications for exemption permits.

Vince DeRose
613.237.8862
vderose@tradeisds.com

Jennifer Radford
613.237.9777
jradford@tradeisds.com

Stephanie Desjardins
613.237.8680
sdesjardins@tradeisds.com

Peter Knowlton
613.237.4742
pknowlton@tradeisds.com

Russian Disinformation Targetted by Canada’s New Sanctions

On July 8, 2022, Canada announced a new round of sanctions against Russia, imposed under the Special Economic Measures Act by way of amendments to the Special Economic Measures (Russia) Regulations (“Russia Regulations”). The primary target of this latest round of sanctions is the Russian disinformation and propaganda campaigns.

The new measures consist of sanctions against fifteen (15) Russian disinformation entities controlled or owned by the Russian government and involved in disinformation efforts. Canada is also sanctioning thirty (30) state-sponsored disinformation and propaganda agents, who Canada considers to have “enabl[ed] and support[ed] Russia’s unprovoked and unjustified invasion of Ukraine”.

In support of Canada’s efforts against Russian disinformation and propaganda, Canada has launched a webpage identifying “a sample of the many lies by the Russian regime about its invasion of Ukraine, along with the truth”. The information provided on that webpage are based on information collected by Canada’s intelligence.

The announcement was also accompanied by a ban on imports of certain gold goods from Russia. Canada’s stated intention is to shut “these products out of formal international markets and further limi[t] Russia’s ability to raise funds to wage war”.

Our team will continue to monitor the sanctions measures related to Russia, providing updates to keep clients informed about important developments affecting trade and services. The lawyers at Tereposky & DeRose have significant experience in the design and implementation of sanctions-related compliance programs, including policies, procedures, employee training, and internal control mechanisms. They also regularly assist both Canadian and international businesses, financial institutions, and individuals with internal investigations when “red flags” appear and provide advice on compliance in these areas. Where breaches have occurred, they have worked closely with their clients in making voluntary disclosures and in engaging with the ensuing investigations conducted by the RCMP and Global Affairs Canada. We also regularly assist clients with the application for delisting process as well as applications for exemption permits.

Vince DeRose
613.237.8862
vderose@tradeisds.com

Jennifer Radford
613.237.9777
jradford@tradeisds.com

Stephanie Desjardins
613.237.8680
sdesjardins@tradeisds.com

Peter Knowlton
613.237.4742
pknowlton@tradeisds.com

Canada’s Latest Sanctions Against Russia, Belarus, Ukranian Individuals

On June 27, 2022, Canada announced a new round of sanctions against Russia and Belarus and against Ukrainian individuals imposed under the Special Economic Measures Act by way of amendments to the Special Economic Measures (Russia) Regulations (“Russia Regulations”), the Special Economic Measures (Belarus) Regulations (“Belarus Regulations”), and the Special Economic Measures (Ukraine) Regulations (“Ukraine Regulations”).

Russia Regulations

The new Russian sanctions prohibit the trade with Russia of certain “Restricted technologies” which include advanced technologies and goods that could be used to improve Russia’s domestic defence manufacturing capability. These items include components, materials, software, and technology related to quantum computers and advanced manufacturing equipment. Canada also sanctioned six (6) Russian individuals because they were elites or close associates of the Russian-regime and forty-six (46) Russian financial, defence, and energy entities.

Belarus Regulations

The new Belarussian sanctions bans the importation of luxury goods from Belarus as well as the export from Belarus of luxury goods, advanced technologies, and goods which could be used in the manufacturing of weapons. Canada also sanctioned thirteen (13) close individuals which it asserts are associates of the President of Belarus, Alexander Lukashenko, and two (2) corporate entities because Canada states that they enabled Russia’s invasion of Ukraine.

Ukraine Regulations

Through the new sanctions implemented under the Ukraine Regulations, Canada is targeting fifteen (15) individuals that it states are Russian-backed proxies, including senior officials and their family members, sanctioned for their complicity in Russia’s invasion of Ukraine.

Our team will continue to monitor the sanctions measures related to Russia, Ukraine, and Belarus providing updates to keep clients informed about important developments affecting trade and services. The lawyers at Tereposky & DeRose have significant experience in the design and implementation of sanctions-related compliance programs, including policies, procedures, employee training, and internal control mechanisms. They also regularly assist both Canadian and international businesses, financial institutions, and individuals with internal investigations when “red flags” appear and provide advice on compliance in these areas. Where breaches have occurred, they have worked closely with their clients in making voluntary disclosures and in engaging with the ensuing investigations conducted by the RCMP and Global Affairs Canada. We also regularly assist clients with the application for delisting process as well as applications for exemption permits.

Vince DeRose
613.237.8862
vderose@tradeisds.com

Jennifer Radford
613.237.9777
jradford@tradeisds.com

Peter Knowlton
613.237.4742
pknowlton@tradeisds.com

Canada Expands Sanctions Against Russia to Include the Provision of Services to Russian State and Russians

On June 6, 2022, Canada announced a new round of sanctions against Russia imposed under the Special Economic Measures Act by way of amendment to the Special Economic Measures (Russia) Regulations (“Russia Regulations”).

The June 6, 2022 amendments to the Russia Regulations “impose a ban on the export of 28 services vital for the operation of the oil, gas and chemical industries, including technical, management, accounting and advertising services.” Furthermore, the “banning of the exportation of oil, gas and chemical services targets an industry that accounts for about 50% of Russia’s federal budget revenues.”

The new amendments make it illegal for any Canadian or person inside of Canada “to provide to Russia or to any person in Russia any” of the following services:

1. Construction work
2. Retail sales of motor fuel
3. Sales on a fee or contract basis of fuels, metals, ores, timber, building materials, and industrial and technical chemicals
4. Wholesale trade services of solid, liquid and gaseous fuels and related products
5. Retail sales of fuel oil, bottled gas, coal and wood
6. Repair services of personal and household goods
7. Other lodging services not elsewhere classified
8. Transportation of petroleum and natural gas
9. Water transport services – Freight transportation
10. Water transport services – Towing and pushing services
11. Bulk storage services of liquids or gases
12. Leasing or rental services concerning machinery and equipment without operator
13. Computer and related services
14. Research and development services
15. Accounting, auditing and bookkeeping services
16. Market research and public opinion polling services
17. Management consulting services
18. Services related to management consulting services
19. Architectural services
20. Engineering services
21. Integrated engineering services
22. Related scientific and technical consulting services
23. Technical testing and analysis services
24. Advertising services
25. Services incidental to mining
26. Repair services incidental to metal products, machinery and equipment
27. Services incidental to energy distribution
28. Seward and refuse disposal, sanitation and other environmental protection services.

In relation to any of the following industries:

1. Mining of coal and lignite
2. Extraction of crude petroleum and natural gas
3. Mining of metal ores
4. Other mining and quarrying
5. Mining support service activities
6. Manufacture of coke and refined petroleum products
7. Manufacture of chemicals and chemical products

Our team will continue to monitor the sanctions measures related to Russia and Ukraine, providing updates to keep clients informed about important developments affecting trade and services. The lawyers at Tereposky & DeRose have significant experience in the design and implementation of sanctions-related compliance programs, including policies, procedures, employee training, and internal control mechanisms. They also regularly assist both Canadian and international businesses, financial institutions, and individuals with internal investigations when “red flags” appear and provide advice on compliance in these areas. Where breaches have occurred, they have worked closely with their clients in making voluntary disclosures and in engaging with the ensuing investigations conducted by the RCMP and Global Affairs Canada. We also regularly assist clients with the application for delisting process as well as applications for exemption permits.

Vince DeRose
613.237.8862
vderose@tradeisds.com

Jennifer Radford
613.237.9777
jradford@tradeisds.com

Peter Knowlton
613.237.4742
pknowlton@tradeisds.com

Spilling More Milk: Canada’s Dairy Quota Allocation Practices Under Siege as the United States requests consultations under the CUSMA for its second challenge against Canada’s TRQ allocation measures

On 25 May 2022, the United States invoked the dispute settlement procedures of the Canada-United States-Mexico Agreement (CUSMA) by requesting consultations concerning Canada’s dairy product tariff-rate quota (TRQ) allocation practices. Earlier this month, New Zealand challenged similar allocation practices under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) (see Daring to Challenge Dairy: New Zealand Challenges Canada’s Implementation of Dairy Quotas under the CPTPP).

Rather than the high Canadian tariffs otherwise applicable to dairy imports, the TRQs provide duty-free access for specified annual quantities of certain dairy products. Canada’s TRQs are set out in Appendix 2: Tariff Schedule of Canada (Tariff Rate Quotas) and the TRQ administration provisions are set out in Article 3.A.2 of the CUSMA.

This is the second Canada-US dispute over dairy TRQ allocation practices. A CUSMA dispute settlement panel found last December that “Canada’s practice of reserving TRQ pools exclusively for the use of processors is inconsistent with Canada’s commitment in Article 3.A.2.11(b) of the Treaty not to limit access to an allocation to processors.” Although Canada took measures to implement the panel’s ruling, the United States alleges that the revised TRQ allocation measures remain inconsistent with Canada’s CUSMA obligations. Specifically, it alleges that Canada denies access to TRQ allocations to all types of importers except for processors, further processors, and distributors. This means that other types of importers, including retailers and food service operators, are not eligible to apply for a TRQ allocation. The United States is also challenging Canada’s “12-month activity” requirement, which specifies that TRQ allocation recipients must remain active during all 12 months of the quota year, and it is challenging Canada’s failure to fully allocate the 2022 dairy TRQs.

The first CUMSA panel issued its report approximately 1 year after the United States requested consultations. If the same timeframe is followed in this dispute, a decision can be expected in May 2023.

Tereposky & DeRose LLP regularly provides advice and acts as counsel in international trade disputes. If you have any questions about the foregoing subject, please do not hesitate to contact us.

Daniel Hohnstein
613.237.9005
dhohnstein@tradeisds.com

Greg Tereposky
613.237.1210
gtereposky@tradeisds.com

Daring to challenge Dairy: New Zealand challenges Canada’s implementation of Dairy Quotas under the CPTPP

The first dispute has been initiated under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). On 12 May 2022, New Zealand requested consultations concerning Canada’s implementation of its obligations regarding tariff rate quotas (TRQs).  Rather than the high tariffs otherwise applicable to dairy imports, the TRQs provide duty-free access for specified annual quantities of the following dairy products:

TRQ-CA1: Milk

TRQ-CA2: Cream

TRQ-CA3: Skim Milk Powders

TRQ-CA4: Milk Powders

TRQ-CA5: Cream Powders

TRQ-CA6: Concentrated Milk

TRQ-CA7: Yogurt and Buttermilk

TRQ-CA8: Powdered Buttermilk

TRQ-CA9: Whey Powder

TRQ-CA10: Products Consisting of Natural Milk Constituents

TRQ-CA11: Butter

TRQ-CA12: Industrial Cheese

TRQ-CA13: Mozzarella and Prepared Cheese

TRQ-CA14: Cheeses of All Types

TRQ-CA15: Ice Cream and Mixes

TRQ-CA16: Other Dairy

New Zealand is a large exporter of dairy products. It claims that Canada’s implementation of the diary TRQs:

“is impacting New Zealand exporters who are not able to fully benefit from the market access that was negotiated under the agreement. Many of Canada’s dairy TRQs remain unfilled and this represents a tangible loss to New Zealand’s dairy exporters.  The value to New Zealand of this lost market access is estimated to be approximately $68 million over the first two years, with this expected to increase year on year as the size of these quotas increase under CPTPP”.

Under the CPTPP dispute settlement procedure, Canada has until 19 May 2022 to reply in writing to the request and then has until 11 June 2022 to enter into consultations with New Zealand. If consultations fail to resolve the dispute, New Zealand could request the establishment of a dispute settlement panel as early as 11 July 2022. Assuming the normal timeframes are followed, the panel process will take approximately eight months with a final report issued around March 2023.

Tereposky & DeRose LLP regularly provides advice and acts as counsel in international trade disputes. If you have any questions about the foregoing subject, please do not hesitate to contact us.

Daniel Hohnstein
613.237.9005
dhohnstein@tradeisds.com

Greg Tereposky
613.237.1210
gtereposky@tradeisds.com

Canada Imposes Additional Sanctions Against Russia and Ukraine

As a result of the ongoing Russian-Ukrainian conflict, Canada imposed additional sanctions as against Russia and Ukraine on February 24 and 28, 2022. These sanctions are enacted under the Regulations Amending the Special Economic Measures (Russia) Regulations (“Russia Regulations”) and Regulations Amending the Special Economic Measures (Ukraine) Regulations (“Ukraine Regulations”). As a result of these additional sanctions, persons located in Canada and Canadians outside of Canada that have economic dealings with Russia or Ukraine may be significantly affected.

Expansion of List of Designated Persons and Entities

Since 2014, both the Russia Regulations and Ukraine Regulations have included an asset freeze and dealings prohibition. With some very limited exceptions, persons in Canada (regardless of nationality) and Canadians outside of Canada are prohibited from any involvement with designated persons or entities.

The recent amendments dramatically increase the list of designated persons and entities. For Russia, the designated persons increased from 120 to 520 individuals and from 71 to 103 entities. For Ukraine, the designated persons increased from 202 to 206 individuals and has maintained 42 entities.

Financial Sector Sanctions

The Russia Regulations continue to impose restrictions on some Russian entities operating in the financial sector. Most notably, Canada has imposed new sanctions as against the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation and the Ministry of Finance of the Russian Federation.

Expanded Geographical Sanctions in Ukraine

Canada’s previous sanctions against Ukraine included broad prohibitions on dealings with the Crimea Region. Last week’s amendments expanded geographic prohibitions to also include the Donetsk People’s Republic (“DNR Region”) and the Luhansk People’s Region (“LNR Region”). With very limited exceptions, there is a complete prohibition of business between any person in Canada or Canadians outside of Canada and these three regions.

Export Controls Relating to Russia

On February 24, 2022, Canada issued a Notice to Exporters and Brokers – Export and Brokering of items listed on the Export Control List and the Brokering Control List to Russia (“Notice”). The Notice expressly stated that “Canada will stop the issuance of new permits for the export and brokering of controlled goods and technology to Russia”, and that “only permits and applications related to specific end-uses such as medical supply and humanitarian needs may be considered for exception, on a case-by-case basis”.

Canada’s controlled goods are identified in the Export Control List (“ECL”). The ECL includes dual-use technology that may not, on its face, be easily identifiable as controlled. Any persons in Canada or Canadians outside of Canada that continue to do business with Russia must ensure that none of the goods or technology being exported to Russia are subject to the ECL.

Heightened Importance of Understanding and Monitoring Changes to Canadian Sanctions

Canada’s sanctions as against Russia and Ukraine are currently in flux. It is expected that those sanctions will continue to be expended over the upcoming weeks and months. This, in and of itself, creates additional business risk for those that maintain business with Russia or Ukraine.

Our team will continue to monitor the sanctions measures related to Russia and Ukraine, providing updates to keep clients informed about important developments affecting trade and services. The lawyers at Tereposky & DeRose have significant experience in the design and implementation of sanctions-related compliance programs, including policies, procedures, employee training, and internal control mechanisms. They also regularly assist both Canadian and international businesses, financial institutions, and individuals with internal investigations when “red flags” appear and provide advice on compliance in these areas. Where breaches have occurred, they have worked closely with their clients in making voluntary disclosures and in engaging with the ensuing investigations conducted by the RCMP and Global Affairs Canada.

Vince DeRose
613.237.8862
vderose@tradeisds.com

Jennifer Radford
613.237.9777
jradford@tradeisds.com

Umair Azam
613.237.1208
uazam@tradeisds.com

 

Canada Imposes Additional Sanctions on Myanmar Military Officials

Canada, in coordination with the United Kingdom and the United States, imposed additional sanctions targeting military entities responsible for supporting Myanmar’s armed forces, including by securing arms and military equipment and providing technical assistance.

Canadian Minister of Foreign Affairs, The Honourable Mélanie Joly, announced on International Human Rights Day that additional sanctions had been imposed against four entities under the Special Economic Measures (Burma) Regulations (“Regulations”). She stated that the sanctions come in response to the “Myanmar military’s ongoing repression of the people of Myanmar and the escalating violence, eroding human rights situation and worsening humanitarian crisis in the country, as well as the regime’s refusal to take concrete action to restore democracy.” 

The specific prohibitions are set out in the Regulations. The following individuals have been added to the schedule of these regulations:

  • Dr. Thida Oo, Union Minister for Legal Affairs and Attorney-General of the Union
  • Htun Htun Oo, Chief Justice of Myanmar (also spelled Tun Tun Oo)
  • U tin Oo, Chairman of the Anti-Corruption Commission of Myanmar

Previously, on December 10, 2021, four (4) further entities were added to the Schedule in the Regulations, targeting key Myanmar military and defence-related entities. The entities subject to the sanctions supported and enable the continued abuse of human rights and ongoing insecurity in Myanmar.

The readers would recall that on February 18, 2021, in response to the coup d’état, Canada imposed sanctions against 9 Myanmar military officials, under the Regulations (See Canada Imposes Sanctions on Myanmar Military Officials).

Why does it matter for your organization or your proposed business activity?

To avoid breaching sanctions, companies need to screen new customers or existing customers whose Know Your Customer (KYC) profiles have changed, to check that they are not on a list of prohibited organizations or individuals. Companies also need to keep their sanctions lists up to date and, in the event of an update, check it against their customer database.

The lawyers at Tereposky & DeRose have significant experience in the design and implementation of sanctions-related compliance programs, including policies, procedures, employee training, and internal control mechanisms. They also regularly assist both Canadian and international businesses, financial institutions, and individuals with internal investigations when “red flags” appear and provide advice on compliance in these areas. Where breaches have occurred, they have worked closely with their clients in making voluntary disclosures and in engaging with the ensuing investigations conducted by the RCMP and Global Affairs Canada.

If you would like to discuss any aspect of the Canadian sanctions regime, contact Vince DeRose, Jennifer Radford or Umair Azam at:

Vince DeRose
613.237.8862
vderose@tradeisds.com

Jennifer Radford
613.237.9777
jradford@tradeisds.com

Umair Azam
613.237.1208
uazam@tradeisds.com

UNDER THE PUMP – CBSA & Tribunal Initiate Inquiry on Oil Country Tubular Goods from Mexico

On June 30, 2021, the Canada Border Services Agency (CBSA) launched its investigation under the Special Import Measures Act (SIMA) into the alleged injurious dumping imports into Canada of certain oil country tubular goods (OCTG) originating in or exported from the United Mexican States (Mexico). The complaint with CBSA was filed by EVRAZ Inc. NA Canada (Regina, Saskatchewan), and by Welded Tube of Canada Corp. (Concord, Ontario). On July 2, 2021, the Canadian International Trade Tribunal (CITT) initiated a preliminary injury inquiry into the same.

The CBSA’s Notice of Initiation lists the tariff classification numbers of both subject and non‑subject goods. Appendix 1 of the CBSA’s Notice of initiation of investigation defines subject goods as originating in or exported from Mexico:

  • … casing, tubing and green tubes made of carbon or alloy steel, welded or seamless, heat treated or not heat treated, regardless of end finish, having an outside diameter from 2 ⅜ inches to 13 ⅜ inches (60.3 mm to 339.7 mm), meeting or supplied to meet American Petroleum Institute specification 5CT or equivalent and/or enhanced proprietary standards, in all grades, excluding drill pipe, pup joints, couplings, coupling stock and stainless steel casing, tubing or green tubes containing 10.5 percent or more by weight of chromium …

For the purposes of this dumping investigation, products that are upgraded, prior to being exported to Canada, in the manner described above in an intermediate country, do not fall within the purview of the investigation as the CBSA considers products to originate in the intermediate country. Similarly, other products not covered by the product definition are accessory products used in conjunction with downhole OCTG tubing and those that are further manufactured products which use OCTG.

The CBSA will continue its investigation if the preliminary determination indicates that there has been dumping, and the Tribunal will initiate a final injury inquiry simultaneously.

Importer Responses

The Importer Request for Information (RFI) sets out the information required from importers of the subject goods. The questions relate to subject goods imported into Canada during the period from May 1, 2020 to April 30, 2021.

The investigation schedule indicates July 26, 2021, as the due date for importer responses to the CBSA’s Request for Information.

Exporter Responses

Exporter responses to the CBSA’s Request for Information are due on August 6, 2021.

The CITT will issue a decision by August 30, 2021. If the CITT determines that the goods shipped to Canada are causing injury and the CBSA determines that they are dumped, provisional duties may apply to future shipments, starting at the time of the CBSA preliminary determination, on or before September 28, 2021. Any interested person, association or government that wishes to participate in the Tribunal’s preliminary injury inquiry may do so by filing a Form I – Notice of Participation. Further information about the investigations will be available in a Statement of Reasons that will be available within 15 days on the CBSA’s website.

Tereposky & DeRose regularly provides advice on Canadian trade remedy matters, including anti-dumping and countervailing duty investigations and safeguard actions. Should you have any questions regarding these new procedures, we are at your disposal.

Umair Azam
613.237.1208
uazam@tradeisds.com

Daniel Hohnstein
613.237.9005
dhohnstein@tradeisds.com

Falling Off the Grid – CBSA Launches Anti-dumping Investigation Concerning Certain Small Power Transformers

On April 15, 2021, the Canada Border Services Agency (CBSA) initiated an investigation  concerning the alleged injurious dumping of certain small power transformers from Austria, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei), and South Korea (SPT 2021 IN). This investigation was triggered by a formal complaint filed on behalf of a group of Canadian transformer manufacturers, including Transformateurs Delta Star Inc., Northern Transformer Corporation, PTI Transformers Inc., and PTI Transformers L.P.

The CBSA’s Notice of Initiation explains that the subject goods are normally classified under tariff classification numbers 8504.22.00.20 and 8504.23.00.10, although parts and components of small power transformers and incomplete units may also be imported under tariff classification numbers 8504.90.90.10, 8504.90.90.82, and 8504.90.90.90.

According to the CBSA’s investigation schedule, responses to importer request for information (RFI) questionnaire are due by May 10, 2021, whereas responses to the exporter responses to the exporter RFI questionnaire are due by May 25, 2021. The preliminary determination (or termination) of the investigation will be issued on July 14, 2021, with the Statement of Reasons expected to follow on or about July 29, 2021.

This is not the CBSA’s first investigation of imported power transformers. Since November 2012, anti-dumping measures have been applied to large power transformers (i.e., “liquid dielectric transformers having a top power handling capacity equal to or exceeding 60,000 kilovolt amperes (60 megavolt amperes)” from the Republic of Korea).

Tereposky & DeRose regularly provides advice on Canadian anti-dumping and countervailing matters. Should you have any questions regarding this matter or trade remedies issues more generally, we are at your disposal.

Umair Azam
613.237.1208
uazam@tradeisds.com

Daniel Hohnstein
613.237.9005
dhohnstein@tradeisds.com

Greg Tereposky
613.237.1210
gtereposky@tradeisds.com

The European Union Takes a Jab at COVID-19 Vaccine Exports

On March 17, 2021, the European Union (EU) flexed its muscle by threatening to curb vaccine exports by banning them to certain countries. Canada, although not specifically targeted by the EU’s newest overture in the COVID-19 vaccine saga, could experience a spillover effect with disruptions in the vaccine supply. In the first quarter of this year, Canada relied heavily on assurances provided by the EU for securing the Covid-19 vaccine without formalizing the agreement (See A Friend in Need is A Friend Indeed – European Union Provides Verbal Assurances To Canada Against its Vaccine Export Controls).

The European Commission President, Von der Leyen, said that the COVID-19 action of export controls “is about making sure that Europe gets its fair share.” This announcement comes at a time when Canada is bolstering its efforts to secure a steady supply of COVID-19 vaccines after a slower than the anticipated start. She added that “all options are on the table” and the EU could invoke its emergency article 122 of the Treaty on the Functioning of The European Union “if severe difficulties arise in the supply of certain products” to member states allowing the EU to take exceptional measures such as seizing production of vaccines and suspending intellectual property rights.

Meanwhile, on March 16, 2021, the Canadian Minister of Public Services and Procurement, Anita Anand, stated that there will be no reduction in Canada’s supply of doses as the country is receiving over 2 million doses next week and a cumulative total of 8 million doses by the end of March. The White House confirmed on March 17, 2021, that Canada has asked the United States for help in procuring the Covid-19 vaccine. This was followed by another announcement by the Canadian Minister on March 18, 2021:

After numerous discussions with the Biden administration, Canada is in the process of finalizing an exchange agreement to receive 1.5 million doses of the AstraZeneca vaccine from the U.S. We look forward to providing an update to Canadians once the details are finalized.

On March 19, 2021, Canadian Prime Minister Justin Trudeau announced that starting March 22, 2021, Canada will receive at least a million doses of Pfizer’s vaccine each week to the end of May. Canada approved AstraZeneca’s shot and ordered 20 million doses of it directly from the company while some European countries, including Germany, France, Italy, and Spain suspended its use. The suspension was a result of reports that the AstraZeneca vaccine caused a dangerous blood clot in recipients. The EU regulator announced on March 18, 2021, that there was “no indication” the shot was responsible for the condition.

The logistical hurdles and the rising post-Brexit tension between the EU and the United Kingdom as Canada braces for a third wave of the pandemic could jeopardise plans to roll out the already delayed vaccination supply from the EU. Having secured, under a loan agreement, 1.5 million doses of the AstraZeneca vaccine from the US and two million doses from the Serum Institute in India, Canada should have a total of 9.5 million doses, up from the previously projected 8 million doses.

Tereposky & DeRose regularly provides advice on Canadian trade matters, including procurement,  safeguard actions, and export controls. Should you have any questions regarding this matter, we are at your disposal.

Vince DeRose
613.237.8862
vderose@tradeisds.com

Jennifer Radford
613.237.9777
jradford@tradeisds.com

Umair Azam
613.237.1208
uazam@tradeisds.com

Dinner is served – Food importers in Canada must apply for Canadian food inspection agency’s licence

The Canadian Food Inspection Agency (CFIA) has announced that as of March 15, 2021, importers must possess a valid Safe Food for Canadians (SFC) licence before importing food products that are covered under the Safe Food for Canadians Regulations. The announcement explains that (i) unless importers enter a valid SFC licence into their import declaration, the CFIA will reject their imports of meat, fish, eggs, dairy products, fruits, vegetables, honey, or maple products, and (ii) importers will not be able to obtain SFC licences for their shipments at the border.

The CFIA’s announcement should be read together with the new Customs Notice 20-01, which was issued by the Canadian Border Services Agency (CBSA) on January 6, 2021 (replacing the previous Customs Notice CN 19-01 concerning SFC requirements). The new customs notice explains the importance of obtaining new SFC licences, as licences and registrations issued under previous CFIA food legislation (e.g. the Fresh Fruit and Vegetable Regulations, or the Dairy Products Regulations) are no longer valid for registered foods. Rather, SFC licences are now mandatory for commercial importers of covered foods. The new customs notice also explains that “[s]hipments without an SFC licence may experience delays or refusal of entry at the border, and importers may be subject to enforcement actions”.

Under normal circumstances, SFC licence applications normally take up to 15 business days to process. If a pre-licence inspection is required, the process can take longer. Importers requiring an SFC licence are encouraged to submit their application as soon as possible to avoid delays or rejection of shipments at the border.

The SCFR identifies general exemptions from licensing requirements for certain categories of food imports. However, even if exempted from the SFCR requirements, food imports remain subject to CFIA requirements under the Health of Animals Act, Plant Protection Act and their associated regulations, as well as all other relevant Canadian legislation and regulations.

Tereposky & DeRose LLP regularly provides advice on the interpretation, application, and implementation of customs notices and provides representation to Canadian and international businesses at the CBSA. Should you have any questions regarding the CFIA requirements for a new SFC licence, or any other trade matter, we are at your disposal.

Daniel Hohnstein
613.237.9005
dhohnstein@tradeisds.com

Umair Azam
613.237.1208
uazam@tradeisds.com