Canada’s ATT legislation: A loophole you could drive a tank through

Cesar Jaramillo Featured 0 Comments

For years Project Ploughshares has had deep concerns about the arrangement under which Canada exports military goods to the United States. This arrangement, which has long exempted the United States from licensing and reporting requirements applicable to every other destination, undermines oft-repeated claims from successive governments about the strength of Canada’s military export controls regime.

As stated in the annual Report on Exports of Military Goods from Canada, “due to close and long-standing military cooperation with the United States, including the integrated nature of North America’s defence industry, permit exemptions apply to most Group 2 exports destined for final use in that country. Statistics related to exports of military goods and technology to the United States therefore are not reported here.”

Published in The Ploughshares Monitor Volume 38 Issue 2 Summer 2017 by Cesar Jaramillo

To be sure, Canada does not enjoy the same latitude it affords its southern neighbour. Military exports from the United States to Canada are—and will likely continue to be—subject to the more stringent regulations of U.S. export controls.

The hope of the ATT

In June 2016, after a highly conspicuous delay, Canada announced that it would accede to the Arms Trade Treaty (ATT). We dared to hope that the process of legislative and regulatory changes required for Canada to become a state party to the Treaty would quell our concerns about U.S.-bound exports. It has now become clear that we were wrong.

Canada’s intent to join the ATT has made questions about the compatibility of exemptions with the expectations and promises of greater rigour and transparency around military exports more pressing. But those looking for answers in the draft ATT legislation recently tabled in the Canadian parliament will surely be dismayed.

Bill C-47, tabled by Minister of Foreign Affairs Chrystia Freeland on April 13, contains no provisions to end the special exemptions afforded to the United States. Not only will the preservation of such a loophole be considered highly problematic by civil society, but other ATT states parties may also question such special treatment.

The ATT calls for the “highest possible common international standards.” Yet the arrangement with the United States neither constitutes the highest possible standard nor is it common to the standards applied to others.

Besides the obvious economic benefits to Canada’s arms manufacturing industry, Ottawa’s position seems to be founded on blind trust in the United States. Not only is the assumption of trustworthiness debatable, it is not even relevant. The ATT is most definitely not a trust-based regime—it is a binding legal instrument with unambiguous obligations, including an obligation to issue reports on ALL military exports.

A customer like no other

It is hard to see how Canadian exemptions could be compatible with ATT obligations, regardless of the recipient. In the case of the United States, they are especially suspect. Here’s why:

  • The United States is, by far, the largest recipient of Canadian military goods, year after year. Of course, we have no exact figures because of the reporting exemption, but analysts estimate that Canada exports military goods worth as much as $2-billion to the United States annually—more than half of total military exports. So even after Canada joins the Arms Trade Treaty, the majority of all Canadian military exports will not be reported and will thus be shielded from public opinion and scrutiny.
  • Canada considers the United States the end-user of Canadian-made military goods and components—and it is, for the most part. But the United States is also the largest exporter of weapons and military equipment in the world. Some Canadian components are incorporated into systems in the United States and then exported to third parties. This does not require further authorization from Canada, even though recipients could be countries to which Canada would not export military goods. For example, Canada might impose sanctions targeting a specific state through the Special Economic Measures Act, which does not fully align with the U.S. sanctions regime. The inverse situation—Canada’s exporting U.S. military goods to a third party without prior authorization—would not be allowed by the United States.
  • The United States is not an ATT state party, and is not expected to become one in the foreseeable future. While the Obama administration did sign the ATT, the United States has not ratified it and is not bound by its obligations. Canada, on the other hand, will be a state party and the expectation is that all its arms export regulations will be entirely consistent with the provisions of the treaty, including those related to licensing and reporting obligations. Moreover, a widely shared goal is the universal adoption of the ATT, but it is hard to see how Canada will contribute to that objective when it offers laxer conditions to a non-state party than it does to those states that have agreed to be bound by the obligations of the treaty.
Falling on deaf ears

Following the announcement that Canada would accede to the Arms Trade Treaty, Project Ploughshares, Amnesty International Canada, Oxfam Canada, and Oxfam Quebec jointly produced a detailed briefing that outlined key elements of Canada’s military export controls regime that require attention. This briefing was the basis for discussions with Global Affairs Canada that attempted to support Canada’s effective implementation of its Treaty obligations. Specific recommendations included:

  • R4.1 Canada must amend its national control system to control the transfer of ammunition and parts and components to the United States, which are currently exempt from regulation.
  • R5.1 Canada’s export regulations must be adjusted so that export permit authorization applies to all Group 2 equipment shipped to U.S. destinations, as it does for all other states. Subcontracted shipments to the United States—largely components and subsystems—must also be regulated.

Rather than heed these recommendations, Global Affairs Canada left in place precisely the type of scenario that not only runs contrary to the spirit and objective of the Treaty, but also could set a troubling international precedent. If more and more countries set up bilateral special arrangements instead of common standards, the ATT regime will be gradually but effectively weakened.

Bill C-47 does put Canada one step closer to becoming a state party—a goal that Project Ploughshares, among many stakeholders at home and abroad, has worked for. It covers important issues that were known to require attention, such as establishing controls over brokering in military goods between two countries outside of Canada. In this instance, it will raise the regulatory bar.

Further, Bill C-47 creates a legal obligation for the Minister of Foreign Affairs to consider certain assessment criteria before authorizing permits. However, while moving from the current guidelines to legal obligations is positive in principle, the value lies in the details of pending regulations. Will these regulations indicate clearly that export authorizations must be denied if certain factors are unfavorably assessed? Or will new regulations still allow the Minister to authorize permits as long as all factors are merely “considered”?

Illicit and irresponsible transfers of conventional weapons are a significant factor in human suffering worldwide, fueling armed violence in all its forms. The ATT aims to establish global standards for responsible national decision-making on the transfer of conventional weapons.

If Canada becomes a state party to the ATT while preserving exemptions to the largest recipient of Canadian-made military goods, some may applaud the accession—but there will be no standing ovation.

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