Legislative Alert: Canadian Controlled Good Program re Cryptography Equipment
December 12, 2014

The Canadian Controlled Goods Program (CGP) amended its Schedule (May 2014) of controlled goods with potential impact regarding the control of "cryptography equipment". 

The CGP Schedule of controlled goods ('schedule') is essentially a derivative of Canada's Export Control List (ECL).  Under ECL Item 2-11 the opening statement refers to certain listed goods and technology "specially designed for military use".  Under the CGP Schedule it refers to listed goods and technology for "military use"

There is a significant difference between "specially designed for military use" vs. "for military use".  There are also additional items included in the revised 2-11 which could impact enterprises because many items like microcircuits, spacecraft components, converters, etc. could be inadvertently caught under the CGP if such goods are destined to a "military use".  Part of 2-11 in the new Schedule is repeated below:
2-11. Electronic equipment not specified elsewhere as a controlled good of Group 2 of the Guide as set out in the schedule to the Defence Production Act , as follows:

·      a. Miscellaneous electronics, auxiliary equipment or “spacecraft” for military use, as follows:

o 1. “Spacecraft”, components for “spacecraft”, and ground control equipment for “spacecraft”;

o 2. Analogue-to-digital converter “microcircuits”, which are “radiation-hardened” or are rated for operation in the temperature range from below -54° C to above +125° C;

o 3. Electrical input type analogue-to-digital converter printed circuit boards or modules, that are rated for operation in the temperature range from below -45° C to above +55° C and that incorporate “microcircuits” that are described in 2-11.a.2. as set out in the schedule of the Defence Production Act;

o 4. Electronic countermeasure (ECM) and electronic counter-countermeasure (ECCM) equipment;

o 5. Frequency agile tubes;

o 6. Electronic systems or equipment, designed either for surveillance and monitoring of the electro-magnetic spectrum for intelligence or security purposes or for counteracting such surveillance and monitoring;

o 7. Underwater countermeasures, including acoustic and magnetic jamming and decoy, equipment designed to introduce extraneous or erroneous signals into sonar receivers;

o 8. Cryptographic equipment;

o 9. Guidance and navigation equipment;

o 10. Digital demodulators specially designed for signals intelligence; or

o 11. “Automated Command and Control Systems”.

It is our understanding that CGP does not intend to correct this by regulation but rather fix it by policy.  Regulations and laws cannot be corrected via policy decisions.
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