Directive on the Management of Materiel

Mandatory procedures are as follows:

• B.2.3.1

  When controlled goods are transferred from Canada or are divested outside Canada, departments must liaise with the following:

  • B.2.3.1.1Global Affairs Canada (GAC) to determine applicable export restrictions and/or additional export requirements; and/or
  • B.2.3.1.2The United States Department of State when goods are subject to the United States International Traffic in Arms Regulations (ITAR), to determine applicable export restrictions and/or other export requirements.
• B.2.3.2

  The senior designated official for the management of materiel, in cooperation with the chief security officer, is responsible for the following:

  Access to controlled goods

  • B.2.3.2.1

    Ensuring that, prior to accessing controlled goods in Canada, a person is registered with the Controlled Goods Program of Public Services and Procurement Canada unless:

    • B.2.3.2.1.1Excluded from registration, for example, the person occupies a position in the federal public administration, including a position in a federal Crown corporation, or is employed by Her Majesty in right of a province, a public officer as defined in subsection 117.07(2) of the Criminal Code, an elected or appointed official of the federal or a provincial government, or a member of a visiting force as defined in section 2 of the Visiting Forces Act, and acts in good faith in the course of their duties and employment (see section 36 of the Defence Production Act and section 1.1 of the Controlled Goods Regulations); or
    • B.2.3.2.1.2Exempted from registration by PSPC upon provision of evidence to the Controlled Goods Program registrant of the individual’s status as a director, an officer or an employee of a person registered to access controlled goods under the ITAR, or an officer, employee or elected or appointed official of the United States federal government or of a state or territorial government of the United States, or an application by the designated official of a registrant (for a temporary worker, international student or visitor) to the Controlled Goods Program;
  • B.2.3.2.2

    Ensuring that the department’s controlled goods are:

    • B.2.3.2.2.1Examined, possessed or transferred only by persons who are excluded, registered or exempted from registration with the Controlled Goods Program; and
    • B.2.3.2.2.2Addressed, as required, in their procurement, divestment and security plans;
  • B.2.3.2.3Ensuring that all federal government personnel in Canada and at Canadian government offices abroad, including personnel deployed overseas, have the appropriate security clearances for accessing controlled goods, and only on an as-required basis;

  Identification of controlled goods

  • B.2.3.2.4

    Identifying and/or defining potential controlled goods by consulting the following to determine whether materiel in their custody is considered controlled goods:

    • The Controlled Goods List in the Schedule to the Defence Production Act;
    • The accompanying Schedule Guide; and
    • GAC’s A Guide to Canada’s Export Controls;
  • B.2.3.2.5

    Consulting the following to determine the Schedule control of materiel that may be considered controlled goods:

    • B.2.3.2.5.1The Controlled Goods List in the Schedule to the Defence Production Act;
    • B.2.3.2.5.2The accompanying Schedule Guide; and
    • B.2.3.2.5.3GAC’s A Guide to Canada’s Export Control;
  • B.2.3.2.6Identifying whether the controlled goods are subject to the controls of other governments, such as the United States ITAR. Departments with controlled goods that are “defense articles” controlled by the ITAR must also adhere to the provisions of the ITAR, including those provisions relating to third-party transfers and re-transfers of United States defense articles; and
  • B.2.3.2.7Directing questions pertaining to the ITAR or to the ITAR control status of goods to the United States Department of State’s Directorate of Defense Trade Controls, Regional Security and Arms Transfers, or other foreign regulatory bodies, as appropriate;

  Security plans, procedures and breaches

  • B.2.3.2.8Developing procedures for proper handling, storage, access, security and responsibility structures for assets determined to be controlled goods, and the reporting and investigation of breaches thereof;
  • B.2.3.2.9

    Establishing and implementing a security plan for each place of business in Canada where controlled goods are kept. This security plan must set out the following in writing:

    • B.2.3.2.9.1The procedures used to control the examination, possession and transfer of controlled goods;
    • B.2.3.2.9.2The procedures for the full demilitarizationof controlled goods;
    • B.2.3.2.9.3The procedures for reporting and investigating security breaches in relation to controlled goods;
    • B.2.3.2.9.4The description of the responsibilities of the department’s security organization and the identity of the individuals who are responsible for the security of controlled goods; and
    • B.2.3.2.9.5The contents of security briefings and training programs given to employees and to registered or exempt contracted workers, as the case may be;
  • B.2.3.2.10Notifying the deputy head or their delegate of any breaches to controlled goods immediately after a security breach has occurred or been discovered; and
  • B.2.3.2.11Providing appropriate awareness training to all employees and contractors on the proper handling, storage, access, security and responsibility structures for controlled goods and breaches thereof;

  Records

  • B.2.3.2.12

    Keeping and maintaining records that contain:

    • B.2.3.2.12.1A description of any controlled goods in their custody, the date of their receipt, any applicable licences or restrictions, and identification of the person from whom they were transferred;
    • B.2.3.2.12.2A description of any controlled goods transferred by the department, the date of their transfer, and the identity and address of the person to whom they were transferred;
    • B.2.3.2.12.3A description of the manner and date of divestment of all controlled goods; and
    • B.2.3.2.12.4A separate description of ITAR “defense articles,” kept for a period of five years from the expiration of the licence or other approval;

  Acquisition

  • B.2.3.2.13Ensuring that, with respect to a procurement process, departments are responsible for determining the potential involvement of controlled goods, including any technical data, as early as possible;
  • B.2.3.2.14In the case of acquisition from Canadian business enterprises, allowing potential bidders or buyers in a procurement process that involves controlled goods sufficient time to seek registration with the Controlled Goods Program; and
  • B.2.3.2.15Ensuring that, where a department retains the services of a third party to aid or participate in the administration of a procurement process that involves controlled goods, that any third party with access to controlled goods is registered or exempted from the Controlled Goods Program and has the approval of any applicable foreign government’s office of primary interest, as appropriate;

  Divestment

  • B.2.3.2.16Ensuring, when divesting of controlled goods domestically, that such goods are transferred only to current registrants of the Controlled Goods Program or entities excluded from Controlled Goods Program registration, or that these items are fully demilitarized before divestiture;
  • B.2.3.2.17When divesting of controlled goods through GCSurplus, it is the responsibility of departments to notify GCSurplus that the items are controlled in order for GCSurplus to follow the appropriate procedures;
  • B.2.3.2.18Ensuring, when divesting of controlled goods through export, that the Export Control List, the Arms Trade Treaty and other applicable international treaties are consulted, end use assurances are provided and that all necessary export permits are obtained from GAC. When controlled goods are sold internationally through GCSurplus, GCSurplus will verify that the appropriate approvals are obtained on behalf of departments;
  • B.2.3.2.19Ensuring that potential bidders or buyers in a divestment process that involves controlled goods have sufficient time to obtain foreign and domestic authorization in the case of foreign business enterprises if their proposals contain reference to transfers, sales, donations, trade-ins or conversion to waste of controlled goods;
  • B.2.3.2.20Ensuring that, when divesting of controlled goods, the item is fully demilitarized unless it is being transferred to a current registrant of the Controlled Goods Program or entities excluded from Controlled Goods Program registration; and
  • B.2.3.2.21Before the divestment, re-transfer or re-export of any ITAR “defense article” to any end-user or destination, determining whether the department needs to obtain written approval from the United States Department of State’s Directorate of Defense Trade Controls or the Office of Regional Security and Arms Transfers, as appropriate. When selling controlled goods through GCSurplus, GCSurplus will verify that the appropriate approvals are obtained.