Brokering controls

The Government of Canada is a State Party to the Arms Trade Treaty (ATT or the Treaty) as of September 17, 2019. The ATT establishes standards for international trade in a broad range of conventional arms with the goal of ensuring that states have effective national systems to review and control arms trading. While Canada met most ATT requirements before acceding the ATT, it did not have in place brokering controls, which are required by Article 10 of the Treaty. Canada has now implemented brokering controls to fill this gap.

Through An Act to amend the Export and Import Permits Act and the Criminal Code (amendments permitting the accession to the Arms Trade Treaty and other amendments) (Bill C-47), the Government of Canada made legislative changes to the Export and Import Permits Act (EIPA) to create a framework for brokering controls, as well as other changes to increase the rigour of Canada’s export controls regime. This new legislation received Royal Assent on December 13, 2018.

Public consultations held from December 2018 to January 2019 solicited the views of Canadians on how to implement the new legislation, including the brokering controls, in a way that increases the rigour of Canada’s system, while minimizing undue burdens on Canadian industry.

Legislation: Bill C-47

Bill C-47 amended the EIPA to establish controls over brokering by:

• (1) defining brokering;
• (2) amending the Criminal Code to make brokering without a permit a criminal offence; and
• (3) giving the Government of Canada the authority to establish a Brokering Control List, Brokering Permit Regulations, and other regulations related to brokering.

Definition of “broker”

The amended EIPA defines “brokering” as “arranging or negotiating a transaction that relates to the movement of goods or technology included in a Brokering Control List from a foreign country to another foreign country.” Here are a few interpretive notes on that definition:

• A foreign country means a country other than Canada. Transactions that relate to items being imported to or exported from Canada would not be considered brokering.
• A “transaction that relates to the movement of goods or technology” includes a transaction related to the acquisition or disposition of these goods or technology.
• The definition of brokering does not include the provision of strictly administrative or support services (for example, booking of rooms, transportation, or marketing).

A broker as defined in the EIPA is not the same as a “broker” under any other legislation or context. The new brokering controls have no impact on customs brokers, or any other type of “broker”, just because of their professional title. For a person or a company to be impacted by the new brokering controls, they would have to conduct “brokering” activities as defined above.

Legal prohibition

The amended legislation will prohibit unauthorized brokering by any legal or natural person or organization in Canada. Canada’s brokering controls will also apply abroad for:

• (a) Canadian citizens,
• (b) Permanent residents, or
• (c) Organizations as defined in section 2 of the Criminal Code that are incorporated, formed or otherwise organized under the laws of Canada or a province

This means that Canada is making unauthorized brokering a criminal offence and that brokering obligations apply extraterritorially as well as domestically.

Brokering regulations

Bill C-47 authorizes the Government of Canada to make regulations to control brokering. Four regulations will create the framework for controlling brokering.

1. Brokering Control List (BCL):This regulation lists all items for which a brokering permit is required. It will include all items listed in Group 2 (Munitions List) and Group 9 (ATT items) of the Export Control List (ECL), as well as any other ECL item—including dual-use items—that is likely to be used to produce or develop a weapon of mass destruction. The scope of the proposed BCL is comparable to and informed by the existing brokering controls of Canada’s allies.
2. Brokering Permit Regulations (BPR): This regulation sets out the information that an applicant (meaning a person or organization) must submit in their application for an individual brokering permit. This includes the applicant’s name and contact details; information about the seller, buyer and any other agents or brokers involved; and information on the goods to be brokered, including on their proposed end use. Applicants for brokering permits will be able to use Export Controls On-Line (NEXCOL), the same dedicated website used for export permits.
3. Regulations Specifying Activities that Do Not Constitute Brokering (“Exclusions”): This regulation specifies activities that, while technically falling under the EIPA’s definition of “brokering,” will be excluded from the new controls. Two exclusions are proposed:
• (1) transfers between affiliates of a corporation, and,
• (2) Canadians who are directed by their non-Canadian employer to undertake brokering activities, so long as they do not control the employer. The first exclusion ensures that transnational operations within a company can continue without impediment, while the second exclusion ensures that individual Canadians are not placed at a disadvantage in the global labour marketplace. However, these exclusions do not apply to the movement of full-systems conventional weapons, as laid out in Group 9 of the Export Control List (see the Order Amending the Export Control List below).
4. General Brokering Permit (“GBP”) No. 1: This regulation creates a General Permit that can be used to broker in pre-defined, lower-risk circumstances. This GBP authorizes brokering to certain low-risk destinations, provided that the end use is in that destination and that the broker follows the requirements set out in the GBP. In response to feedback received during pre-publication of this regulation in Canada Gazette, Part I, it was amended to also allow for brokering when the item is destined for end-use by the Government of Canada. Brokers making use of this General Permit must:
• (a) notify Global Affairs Canada that they plan to use the GBP, and
• (b) subsequently report on the items and transactions for which they used the permit. The main advantage of the General Brokering Permit is that prospective brokers do not need to submit an individual application prior to the brokering activity or activities

More information on the legislative and regulatory changes related to the ATT, including brokering controls, can be found at the following links:

Resources for brokers and Trade Compliance Specialists

• Notice to Brokers
• Export and Brokering Controls Handbook
• Brokering Permit Reporting Form (to follow)

Other relevant regulations

• Order Amending the Export Control List (Arms Trade Treaty)

Brokering permit applications

You are encouraged to submit your application electronically through NEXCOL. As an alternative, you may also submit a paper application.

• NEXCOL
• Application for Brokering Permit (General Information Form) EXT 1043 (PDF, 146 KB)
• Application for Brokering Permit (Controlled Goods Detail Form) EXT 1043-1 (PDF, 147 KB)
• Application for Brokering Permit (Firearm Detail Form) EXT 1043-2 (PDF, 145 KB)

General information

• Arms Trade Treaty

Contact us

For any question related to Canada’s brokering controls, you can reach the Export Controls Policy Division:

• By email at tie.reception@international.gc.ca, or;
• By telephone on the Brokering Hotline at 343-203-6978