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Canada Canadian military goods suppliers up in arms over export permit delays under Liberals

16:00  21 january  2020
16:00  21 january  2020 Source:   nationalpost.com

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Export permit requirements for military and strategic goods and technologies. Complying with controlled goods regulations. Examining, possessing or transferring controlled goods in Canada .

Canadian Arms Sales are governed by the country's Export and Imports Permits Act. Sales with the United States are also specifically regulated by the 1959 Defence Production Sharing Arrangement. As of 2000, the largest Canadian -owned arms - exporters were Canadian Aviation Electronics

François-Philippe Champagne wearing a suit and tie: Growing frustrations over delays in the issuing of federal arms export permits has led to calls for Foreign Affairs Minister François-Philippe Champagne to rectify the situation.© Tolga Akmen/AFP via Getty Images Growing frustrations over delays in the issuing of federal arms export permits has led to calls for Foreign Affairs Minister François-Philippe Champagne to rectify the situation.

OTTAWA — Back in October, Marin Tanase, the chief executive of Montreal-based Canadian Technology Systems, applied for a federal permit to export his patented bomb-defusing equipment to the Kuwaiti government. It was the final stage in a contract that took him two years to secure.

But by mid-January the order still hadn’t left Canada and Tanase ultimately lost the US$200,000 order. His loss, he says, was the result of an increasingly backlogged export permitting process for Canadian-made military goods — including everything from firearms to night vision goggles to bullet-proof vests — that has caused delays across Canada’s $10-billion armaments industry and cost companies millions in voided contracts. Tanase says he’s lost roughly US$500,000 in contracts over the past three years.

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The government estimates that exports to States "account for over half of Canada 's exports of military goods Included in this data are some export -restricted goods that may end up in private or corporate hands Then there's Egypt, where Canada shipped more than million in arms in 2013.

For Germany, arms exports have long been a key instrument for security and foreign policy. Even though Germany is the world's fifth-largest arms exporter and the second-largest supplier of arms to Turkey, it's well behind an even bigger exporter — the United States, which has supplied nearly

Mounting frustrations over the delays has led to calls for Foreign Affairs Minister François-Philippe Champagne to rectify the situation. Companies who spoke to the National Post link the delays with a push by the Liberal government in 2017 to place deeper scrutiny on Canadian arms deals, following reports that Canadian military equipment had been used by a Saudi-led coalition in a war that killed thousands of Yemeni civilians.

Canadian vendors argue most of their equipment is being exported to allied countries, and typically used for defence-related activities.

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Data covering Canadian exports of military goods is also captured in two other key reports: the Annual Report on the Summary of Key Data. For the 2016 calendar year, Canada ’s total exports permitted under the Export and Import Permits Act of military goods and technology amounted to

Canadian weapons manufacturers need government-issued export permits to sell “controlled goods ” — which can include anything from sniper rifles to military -grade body armour — outside the country. When a manufacturer reaches a deal to sell such goods , Global Affairs Canada sometimes conducts

For Tanase, the lost order means he is likely to miss out on successive contracts he was eyeing with the Qatar government, which is preparing to spend big on security when it hosts the upcoming 2022 FIFA World Cup.

“It’s frustrating because you’re losing contracts and you’re losing opportunities,” Tanase said. “Two years it took me to reach a contract.”

His company sells what are essentially remote-controlled guns used to disarm bombs with high precision and from a distance. He has sold the technology into 40 countries, typically to national anti-terrorist units or municipal bomb squads.

Another company, who spoke to the National Post on the condition of anonymity due to commercial sensitivity, said bureaucratic delays had lost them a contract for several pieces of equipment that range in price between US$50,000 to US$300,000.

According to public data, the number of export permits that have not met Ottawa’s self-imposed deadline of 40 days increased in 2018 to 374 applications, up from 228 applications in 2017. That marks a sharp rise from 65 missed application deadlines in 2016.

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The British government suspended 49 licenses for the export of military and security equipment to Egypt. The Business, Innovation and Skills Department said the suspension blocked the export of everything from small arms ammunition to radars.

The release of the Canadian government’s Annual Report on the Export of Military Goods from Canada affords an annual opportunity to review the Although Canadian arms shipments to the US annually exceed the value of those to all other countries combined, the Canadian government does

a green truck parked in front of a building:  A General Dynamics Land Systems Canada security guard watches over two LAVs in London, Ont., Nov. 1, 2017..© Morris Lamont/Postmedia/File A General Dynamics Land Systems Canada security guard watches over two LAVs in London, Ont., Nov. 1, 2017..

The delays meant that Global Affairs Canada, who oversees the reviews, missed deadlines on 14 per cent of applications in 2018, up from just two per cent in 2016.

Christyn Cianfarani, president and CEO of the Canadian Association of Defence and Security Industries (CADSI), hopes the Liberal government’s minority mandate might provide an opportunity to rectify the backlog. She has called on minister Champagne to make amends.

“With every change in government there is an opportunity for the bureaucracy to put forward new files that require their attention,” she said. “We’re in that moment where minister Champagne is new, but not new to the trade file.”

Cianfarani said complaints from member companies have been on the rise amid the permit delays. Some contracts worth tens of millions have been delayed; a smaller firm recently lost 10 per cent of its annual revenues due to permitting backlogs, the association said.

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A pie chart showing global military expenditures by country for 2018, in US$ billions, according to SIPRI. Countries by military expenditures (absolute) in 2014, based on data from the World Bank. 2.3 Military expenditure as a share of goods exports (2018). 3 Notes.

This is a list of countries by estimated number of privately-owned guns per 100 persons. The Small Arms Survey 2017 provides estimates of the total number of civilian-owned guns in a country.

“When you’re a very small business, that can mean that you’re on the edge of maybe shutting your doors,” she said.

According to CADSI, only about five per cent of the Canadian armaments industry includes “sharp end” products like firearms and ammunition, while the vast majority sell more general products like protective gear or training simulators.

Moreover, most Canadian military goods, aside from the single LAV deal with Saudi Arabia, are exported to allied countries, Cianfarani said. Israel and the UK received the largest number of non-U.S. exports from Canada in 2018, at 15 per cent, followed by Germany (nine per cent) and France (eight per cent), according to public data.

Conservative defence critic James Bezan called on Ottawa to address the delays.

“The Trudeau Liberals have a responsibility to provide Canadian companies with certainty and clear timelines for export permit approval, while ensuring that permits are only approved if they are consistent with Canada’s foreign and defence policies, including human rights.”

Officials at Global Affairs Canada did not respond to a request for comment after one week.

Industry insiders largely peg the delays to a 2016 report in the Globe and Mail that found that Canadian-made light armoured vehicles (LAVs) had been used by Saudi-backed forces in their fight against Houthi rebels in Yemen, where thousands of civilians had been massacred.

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The Military Equipment ( Export Control) Regulations, 2001 provide for the issue of export authorizations in relation to arms , weapons, ammunition As in the case of the Dual-Use Items ( Export Control) Regulations, exporters of military equipment are bound under penalty to provide all

It is these export - permit applications that Mr. Dion approved in April. The Liberals on the Commons foreign affairs committee last month used their majority to kill an NDP proposal, backed by Bob Nault, the Liberal chair of the Commons foreign affairs committee, declined to comment on Wednesday on

The report brought renewed attention to Canada’s weapons exports and prompted human rights groups to call on Prime Minster Justin Trudeau to reconsider the $15-billion LAV sale, which Ottawa has said is the largest advanced manufacturing export contract in Canada’s history. The LAVs are manufactured in London, Ont., by General Dynamics Land Systems.

In 2017, former foreign affairs minister Chrystia Freeland introduced Bill C-47, which sought to further stem the flow of arms to countries that breach human rights laws. The legislation received royal assent in December 2018, and came into force mid-2019.

In a 2018 committee meeting, Freeland said Ottawa was “doing things differently, because we’re setting a higher standard,” by implementing the bill. She said the added scrutiny toward controlled goods would “consider serious violations of human rights law, peace and security, and gender-based violence before authorizing export permits.”

It sought to “ensure — before authorizing the export of arms — a high level of confidence that the arms will not be used to commit human rights abuses,” according to the Global Affairs Canada website.

Tanase at Canadian Technology Systems said he did not know what the root of the delays were, but said much of the problem is a lack of reciprocity from bureaucrats who oversee his files.

“If you ask questions they will not answer,” he said. “Their response is always ‘we don’t know,’ even if you are providing information to them on the day they ask for it.”

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