Contributing Lawyers


Cyndee Todgham Cherniak

United States

Susan Kohn Ross


Andrew Hudson

A Common Misconception About Need to Register for Domestic Transactions Involving Controlled Goods

There is a common misconception in Canada that if a business or person is not exporting a controlled good, there is no need to register under Canadian law. THIS IS WRONG.

Pursuant to the Defence Production Act, Canadian businesses that manufacture, distribute and/or sell Controlled Goods in Canada must be registered with the Controlled Goods Directorate. The Controlled Goods Directorate (CGD) is a division of Public Words and Government Services Canada.

In particular,

1. Persons shall not knowingly examine or possess a Controlled Good or transfer a Controlled Good to another person, unless the person is registered with the CGD or is exempt from registration requirements.

2. Persons shall not knowingly transfer a Controlled Good or permit the examination of a Controlled Good by a person who is not registered with the CGD or otherwise exempt from registration.

In short, businesses in Canada that deal in Controlled Goods must (1) be registered with the CGD and (2) make sure that the persons to whom they transfer Controlled Goods in Canada are registered with the CGD.

For example, if a Canadian company manufactures a Controlled Good (such as a part for a good listed in Item 5504), the company must register with the CGD. In addition, if the Canadian company outsources any element of the manufacturing process (e.g. anodizing the part), the Canadian company has record-keeping requirements AND must make sure that the anodizing entity is also registered with the CGD because the anodizing entity will be given possession of the Controlled Good.

The schedule to the Defence Production Act sets out a positive list of covered Controlled Goods:

(a) Group 2: goods listed in item 2001 [of the Export Control List] that are prohibited firearms, as defined in paragraph (c) of the definition “prohibited firearm" in subsection 84(1) of the Criminal Code;

(b) Group 2: goods listed in item 2003 [of the Export Control List] that are ammunition with a caliber greater than 12.7mm;

(c) Group 2: goods listed in items 2002 and 2004 to 2022 [of the Export Control List];

(d) Group 5: goods listed in item 5504 [of the Export Control List]; and

(e) Group 6: all goods listed [in Group 6 of the Export Control List].

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