Exchange of letters between Public Works and Government Services Canada and the United States Department of State Directorate of Defense Trade Controls

Through this exchange of letters, signed in August 2011, Canada and the United States reached an understanding for the safeguarding of most defence articles listed in the United States International Traffic in Arms Regulations (ITAR).

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• Exchange of letters signed by the United States Department of State Directorate of Defense Trade Controls
• Exchange of letters signed by the Department of Public Works and Government Services Canada

Exchange of letters signed by the United States Department of State Directorate of Defense Trade Controls

I have the honor to refer to discussions which have taken place between our two governments concerning two matters:

• the treatment to be afforded to registrants in the Controlled Good Program (CGP) and to holders of licenses or other approvals granted pursuant to the International Traffic in Arms Regulations (ITAR) when the latter export defense articles, including technical data, to the former
• information sharing

These discussions reflect our governments' high regard for the CGP as a means to mitigate the risk of diversion of defense articles and the shared objectives of ensuring the security of defense articles in order to facilitate enhanced defense cooperation between our two governments.

As a result of these discussions, it is the understanding of the government of the United States of America that arrangements of mutual interest have been reached which are described below and are intended to apply between our two governments.

Our two governments recognize that it is in the sovereign national security interests of both the United States and Canada that the effective administration and enforcement of traffic in arms laws and regulations are important to protect the safety of our populace, maintain the security of our societies and to promote international security by denying access to controlled goods to persons who pose a risk of diversion. Traffic in arms laws and regulations include the U.S. Arms Export Control Act and the ITAR and Canada's Defence Production Act, Export and Import Permits Act, Controlled Goods Regulations, Export Control List and Import Control List.

Further, our two governments acknowledge the importance that greater cooperation through the exchange of information and through the treatment to be accorded to registrants in the CGP can provide for protection of their own and each other's defense articles.

In this context, our governments recognize that the Controlled Goods Directorate (CGD) has enhanced its program to assist in the prevention of unauthorized transfer of controlled goods, including ITAR-controlled goods, through augmented security assessment procedures undertaken by Canadian registered end users who are involved in transactions where the exemption in sections 126.18(c) of the ITAR is used. As a precondition to registration with the CGP, the Defence Production Act requires that security assessments be conducted to determine the risk of diversion of controlled goods, including ITAR-controlled defense articles, by assessing the following key risk indicators:

• travel frequency, duration, and location
• significant and meaningful associations (foreign and domestic)
• criminal history
• financial

Canadian registered end users perform the security assessment, using a uniform assessment instrument, developed by the CGD. Where there is any question regarding whether there are potential substantive contacts with restricted or prohibited countries in section 126.1 of the ITAR, or other entities of concern, CGD requires that the Canadian registered end user send the matter to CGD, and CGD will undertake further enhanced screening. The Defence Production Act mandates that Canadian registered end users maintain all screening records, and technology security or clearance plans while they are in the program and for five years beyond. Where, for the purpose of civil or criminal law enforcement, the Directorate of Defense Trade Controls or its agents require a technology security/clearance plan and screening records, as they may relate to section 126.18(c)(2) of the ITAR, a request is to be made through CGD. Similarly, CGD is to make requests to Directorate of Defense Trade Controls as described in greater detail below. A copy of a CGP-issued Certificate of Registration respecting a Canadian end-user or consignee is sufficient to demonstrate the end-user or consignee is registered with and is in good standing with the CGP. A copy of a Department of State issued Registration or Letter indicating registration with the Directorate of Defense Trade Controls is sufficient to demonstrate registration for the purpose of the ITAR.

In order to facilitate the exchange of information and enhance cooperation on traffic in arms matters, our two governments intend, consistent with the applicable domestic law, to share information for the following purposes:

• promote both the effective administration and enforcement of the governments' traffic in arms laws and the carrying put of lawful investigations relating to traffic in arms
• facilitate the export by U.S. individuals of defense articles, including technical data, and defense services to persons registered in Canada's CGP
• promote international security by assuring that only authorized end-users receive access to ITAR controlled items, while fostering respect for human rights and by denying access to unauthorized persons

Our two governments are authorized to provide each other with such information. With respect to the information requested by the United States from Canada in furtherance of the above purposes, Public Works and Government Services Canada has considered it advisable under paragraph 8(2)(f) of the Privacy Act to make the information described in this exchange of letters available to the United States for these purposes.

Our two governments further intend, consistent with applicable domestic laws and regulations, to promote the sharing of such information when the following circumstances exist:

• there is reason to believe that the requested information would be relevant to the administration or enforcement of traffic in arms laws or regulations of either Canada or the United States
• there is reason to believe that the information would be relevant to the prevention, investigation or punishment of conduct that would constitute a civil offence under the traffic in arms laws of wither Canada or the United States
• the information is to be used for statistical or research purposes, provided that the use of information does not identify persons, and complies with Canadian or United States' laws, regulations, and policies for such exchanges of information

Exchange of such information may include requests for records pertaining to specific persons or entities, or for records pertaining to groups of persons. Such information may also be shared, consistent with domestic laws, at the initiative of either government when there is reason to believe that the receiving government has a need to know the information to properly enforce or administer its traffic in arms laws or regulations.

Directorate of Defense Trade Controls requests for information are to be addressed to CGD. Similarly, CGD requests for information are to be addressed to Directorate of Defense Trade Controls.

Each government intends to use its best efforts to provide the necessary background information to properly respond to any request. All requests should identify the reason for the request, as well as the intended use of the information. When reasonably practicable, requests for information should be made in writing in either a paper or electronic format. If it is not reasonably practicable to submit a written request for the information prior to its receipt, our two governments are to confirm its request in writing as soon thereafter as practicable.

Where the government to which a request for information is made is of the opinion that compliance with the request is likely to be detrimental to its country's sovereignty, security, public policy or other important national interest, it may require further discussion before providing the information requested in whole or in part, or may offer to provide the information, in whole or in part, subject to such terms and conditions as it may specify. The requesting government accepting the information so provided is to comply with such terms and conditions.

Our two governments confirm that any information provided may only be used with the following conditions:

• information is shared pursuant to an express understanding of strict confidentiality. Such information, as well as inquiries and requests for information, are to be accorded protection from disclosure to third parties as provided under the laws and policies of the receiving government with regard to such information
• information that is shared is not to be used by the receiving government for purposes other than effective administration and enforcement of traffic in arms laws and the carrying out of lawful investigations relating to traffic in arms
• written permission is to be obtained for the disclosure to third parties of any confidential information prior to such disclosure, unless there is a compelling need that would justify not making such a written request. In such a case, the requesting government is to provide written notice of the disclosure as soon as practicable
• written permission is not required for disclosure of information to the Directorate of Defense Trade Controls or the Department of Public Works and Government Services or other agencies in the performance of their citizenship, immigration or border management functions (including the U.S. Coast Guard, U.S. Department of Homeland Security, U.S. Department of Agriculture, U.S. Federal Bureau of Investigation, U.S. Central Intelligence Agency, U.S. Department of Defense, Canada Customs and Revenue Agency, Canadian Food Inspection Agency, Health Canada, Canadian Security Intelligence Service, Canadian Department of Fisheries and Oceans, Canadian Department of Foreign Affairs and International Trade, Canadian Department of National Defence, Royal Canadian Mounted Police or their successors and with oversight and review agencies within the United States and Canada)
• our two governments are to provide written notice to any third party to which it discloses confidential information that such third party is prohibited from further disclosure without written authorization
• each government, in order to prevent the unauthorized disclosure, copying, use, or modification of information received, is to restrict access to such information on a need to know basis, and use recognized security mechanisms such as passwords, encryption, or other reasonable safeguards to prevent unauthorized access or disclosure of such information
• each government intends to use its best efforts to ensure the accuracy of the information obtained from the other government before an administrative action or other use

A government is only to provide original documents in cases where copies would be insufficient. The providing government is to certify copies of records as true and correct when requested to do so by the receiving government. The receiving government is to return any original documents provided to it by the providing government as soon as possible.

Where the providing government has supplied information that is later subject to amendment or deletion to correct inaccuracy, the receiving government should, upon written request, promptly amend or delete its records in accordance with the request and confirm this action in writing.

Finally, our governments recognize that the information shared between the governments pursuant to this Exchange of Letters is to be collected, administered, maintained, destroyed or disposed of in accordance with applicable domestic laws, policies and procedures. It is also understood and agreed, that this letter does not hinder in anyway the authority or ability of Directorate of Defense Trade Controls to fulfill its legal obligations and authority to conduct any civil enforcement action necessary to investigate any potential violation of the ITAR. Except as outline above, Directorate of Defense Trade Controls will not be bound, in carrying out its legal authorities under the ITAR, to make requests directly to CGD.

If the arrangements set out above are acceptable to the Government of Canada, I have the honor to propose that this Letter and your reply, which instruments are not intended to be binding under international law, are the understandings of our two governments which are to come into effect on the date of your reply.

I avail myself of this opportunity to renew the assurance of my highest consideration.

Beth McCormick
Deputy Assistant Secretary for Defense Trade and Regional Security
Department of State

Exchange of letters signed by the Department of Public Works and Government Services Canada

I have the honour to acknowledge receipt of your letter dated August, 25, 2011, concerning the access of employees and in particular dual nationals and third country nationals to United States defense articles and technology controlled pursuant to the International Traffic in Arms Regulations (ITAR) and to confirm that the arrangements set out in your note are acceptable to the Government of Canada.

I furthermore confirm that the arrangements set out in your letter are the understandings of our two governments which are to come into effect on today's date. I avail myself of this opportunity to renew to the assurances of my highest consideration.

Yours sincerely,

Barbara Glover
Assistant Deputy Minister
Departmental Oversight Branch
Public Works and Government Services Canada