Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



Compliance with U.S. ITARs Causes Problems for Canadian Companies - Part II - U.S. ITARS vs Human Rights Laws in Quebec/Canada

On January 17, 2008, the Quebec Human Rights Commission issued a press release regarding the settlement of the Bell Helicopter Textron Canada Ltd. case, which involved the company's decision not to hire a prospective intern who held dual Haitian-Canadian citizenship in order to comply with the U.S. International Traffic in Arms Regulations (ITARs).  The reason for the settlement was that the Quebec Human Rights Commission held a strong view that the application of the U.S. ITARs in this case (and similar cases) is discriminatory.

The Quebec Human Rights Commission's view is consistent with a statement made by the Canadian Department of National Defence and the Canadian Forces that following the ITARs is inconsistent with Canada's Charter of Rights and Freedoms (see the following link to the Department of National Defence website - http://www.forces.gc.ca/site/newsroom/view_news_e.asp?id=2290).  It is also consistent with a settlement made in 2007 between General Motors Defence and a number dual citizens who also found their employment activities restricted as a result of the company's choice to comply with the U.S. ITARs.  Please see the Trade Lawyers Blog Article written by Cyndee Todgham Cherniak on December 20, 2007 - http://tradelawyersblog.com/blog/archive/2007/december/article/compliance-with-us-itars-can-cause-legal-problems-for-canadian-companies/?tx_ttnews%5Bday%5D=20&cHash=f8509c866d

Another case was filed with the Manitoba Human Rights Commission and settled out-of-court.

Let's back up for a moment.  The complainant who brought the human rights case against Bell Helicopter was a Haitian-born man who had lived in Canada for 30 years and had obtained Canadian citizen in addition to his Haitian citizenship. He applied for an internship at Bell Helicopter's Mirabel factory as part of a training program, and was initially accepted, but then told he didn't qualify because he is a Haitian citizen.

Bell Helicopter is owned by a U.S company and, therefore, is subject to the U.S. ITARs.  Under ITARs, individuals who hold citizenship from 25 countries including Haiti, Cuba, Venezuela, China, North Korea, Iran and Syria cannot work on U.S. military contracts.

The Quebec Human Rights commission found that the ITARs restrictions on who in Canada can work on contracts that have a U.S. military component violate Canada's human rights laws.  The Commission held that the U.S. ITARs "infringe the right to equality without discrimination based on ethnic or national origin".

The discrimination is clear to see.  A good man who had lived in Canada for 30 years and done all that was required to become a Canadian citizen was precluded from an opportunity for the sole reason that we was born in Haiti.  there was no evidence that this person was a threat to U.S. national security.

The bigger problem falls on Canadian companies who are owned by U.S. companies or who provide goods and/or services to the U.S. military.  According to the Quebec Human Rights Commission, under Quebec law (and presumably under the laws of other provinces), a company is exposed to litigation risk if it fails to hire an applicant due to the restrictions in the U.S. ITARs.  In the Bell Helicopter case, the complainant was not an existing employee with many years of service to the company - the complainant was an individual who was applying for an internship.

The details of the out-of-court settlement between the complainant and Bell Helicopter are confidential.  However, it is presumed that the settlement involved a payment of damages.

It is important to note that the Quebec Human Rights Commission's news release encourages other individuals of dual citizenship to bring cases to the provincial human rights commissions if they have suffered, are suffering or suffer in the future discrimination by companies who are complying with the U.S. ITARs.  This guarantees future cases.  In fact, another ITAR-discrimination case has been filed by a Venezuelan man with the Quebec Human Rights Commission.  

As a result, it is important for companies to seek the assistance of Canadian export controls counsel (such as Cyndee Todgham Cherniak, Michael Flavell, Geoffrey Kubrick and Martin Masse at Lang Michener LLP) to learn more about Canadian law, update their codes of conduct, and develop policies and procedures to comply with Canadian laws.  It may not be appropriate to assume that the policies and procedures that work in the United States to minimize risk will also work in Canada.  This is a problem that has litigation exposure.

To read a Globe & Mail article about the Bell Helicopter case, please click on the following link - http://www.theglobeandmail.com/servlet/story/RTGAM.20080117.witar17/BNStory/National/home

To read a CBC report about this decision, please click on the following link - http://www.cbc.ca/canada/ottawa/story/2008/01/18/qc-bellhelicopter0118.html?ref=rss

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