Posted by Gordon LaFortune on Nov 9, 2015

Over the past year, international trade agreements have been an issue in Canadian news and politics, and particularly the benefits that would flow from the Trans Pacific Partnership Agreement (“TPP”) and from the Comprehensive Economic and Trade Agreement (“CETA”) between Canada and the European Union.  Both Agreements have been signed by the Parties and, once implemented, will result in greater preferential market access for Canadian traders.  However, neither Agreement has yet to be implemented and, once they are, the potential benefits will only be realized if Canadian companies take advantage of the market opportunities offered by the Agreements.  Which begs the questions, what are the next steps in the implementation process, how long will the process take and how can Canada benefit from these Agreements? The first questions concern implementation and the time required to implement the Agreements.  In both cases, the Agreements are not self-executing and have to be put into effect by national and sub-national legislatures.  Implementation usually takes some time, particularly as the number of Parties to an Agreement an increase.  However, implementation may take longer in the case of these two Agreements. After the CETA was completed, some European member states signalled that they would need changes to the Agreement before they would agree to implementation, which signalled delay.  Furthermore, since the CETA was signed, the E.U. has started negotiating the Transatlantic Trade and Investment Partnership (“TTIP”) with the United States.  Regardless of European intentions with respect to the CETA, they are likely now fully engaged in negotiations with the U.S. and this may slow implementation of the CETA. The TPP raises its own issues with respect to implementation.  The new government has indicated that it intends to review the Agreement before signing off, which would be prudent since the text has not yet been released.  Some Canadian industries, such as Ford Canada, have already indicated that they are seeking amendments to the Agreement.  Requests to change the Agreement will likely result in delays in implementation but given the difficulties involved in coming to an agreement among 12 parties, it is unlikely that there could be significant changes to the Agreement at this point.  It...

Posted by Michael Woods on Oct 8, 2015

  by  Ghislaine Murango* and Michael Woods Having addressed sanctions in the business immigration context, we will examine the question of the overall effectiveness of sanctions.  To re-cap, economic sanctions are used by states as instruments of foreign and trade policy a response to actions and or measures by another state that poses real or potential threats to international security, or which relate to humanitarian concerns or other trade related violations. Scholars and policymakers, sometimes describe sanctions as a preferable alternative to military action as a means to influence a state’s action.  On the other hand, it has also been argued that the overall effects of sanctions can be as or more destructive than military action with innocent civilians as principal casualties.  Before reviewing the issue of the overall effectiveness of sanctions, here is summary of types of sanction related measures: The arms embargo[1] : This is a counteractive measure often imposed in response to an ongoing civil war, illegal coup, war crimes, and other serious humanitarian crises. Arms embargo measures aim to block the import of arms and other strategic military materials by the targeted country. One of the problems encountered in such cases is the sometimes exponential growth in illegal arms which can seriously undermine the embargo and its objectives. Asset freeze: This measure aims to block specified individuals or entities to from access to property or assets that they hold in the country putting the freeze in place. The measures usually prohibit any persons in the country putting the measures in place from dealing in any property held by or on behalf of the individual or the entity targeted by the asset freeze – often to the detriment of that business or person. Export/import restrictions: The government imposing the restrictions impedes the economy of a specific sector by prohibiting the buying, selling or shipping of identified goods to or from the targeted state. These restrictions often target specific sectors. Financial prohibitions: These measures prohibit listed entities and/or person in a targeted state from conducting financial transactions with persons in the implementing country. They often include specific types of financial transactions and/or financial transactions with specified or...

Posted by Woods LaFortune LLP on Oct 1, 2015

Taking your business abroad can be a great way to expand your customer base, increase market share and lower production costs. Although the benefits of an international business venture are plentiful, they are accompanied by a significant amount of risk, which, if not properly mitigated, can far outweigh the rewards. Due diligence is your best ally in risk mitigation, even more so when it comes to international contracts. The contract is king Your contract, whether national or international, is always the first point of reference when a dispute arises between two commercial parties, and will guide an arbitrator or judge in determining your respective rights, obligations and remedies. If you are conducting business internationally, an airtight contract is by far the best way to ensure predictability and efficiency in your business transactions, and properly protect your interests in the case of a disagreement. An international contract can take on many forms, but all solid contracts have this one thing in common: they clearly outline the detailed rights and obligations of the parties involved. Unfortunately, it’s common for entrepreneurs, in a rush to close a deal and get their business up and running, to neglect taking the proper time to review the agreements that will govern their business relationships, much to their detriment. Although your contract is unique in that it will reflect your company’s specific needs and goals, there are at least two provisions which you should always include in your agreement: governing law; and dispute resolution. In my experience, these are the clauses that are most often overlooked, and that have the potential to cause the most damage when not properly addressed in your contract. Clearly identify the jurisdiction of authority in your “Governing Law Clause” Governing law, otherwise known as “choice of law”, is a fundamental component of an international contract. What this means is that somewhere in your contract, you should clearly state the mutually agreed upon law of a jurisdiction that will apply to and govern the terms of your contract in the event of a challenge. An example of what this would look like in your contract is: 1.1 Governing Law – This Agreement...

Posted by Gordon LaFortune on Sep 21, 2015

The Canadian International Trade Tribunal’s (“CITT”) recent decision in ContainerWest Manufacturing (CITT File Nbr. AP-2014-025) points to the possibility that the Canada Border Services Agency (“CBSA”) has taken action which may violate Canada’s WTO obligations.  While the issue before the CITT concerned the question of whether the Appellant in that case filed documents required to benefit from General Preferential Tariff (“GPT”) treatment, the admissions the CBSA made in the case point to an administrative practice that may violate the WTO’s Most Favoured Nation (“MFN”) requirement set out in GATT 1994 Article I:1. The ContainerWest appeal concerned the CBSA’s decision to reject ContainerWest’s request for GPT treatment for 22 import transactions relating to 1,678 containers purchased by ContainerWest from its Hong Kong supplier.  The issue before the CITT was whether ContainerWest’s importations complied with the “direct shipment” requirement that must be met for GPT treatment.  Pursuant to Customs Act Section 17(1), ContainerWest had to provide a through bill of lading to prove direct shipment of goods to Canada. At paragraph 26 of its Statement of Reasons, the CITT noted that the CBSA argued that the GPT Regulations and the Customs Tariff both require a through bill of lading to prove direct shipment to Canada.  At paragraph 56, the CITT noted that the CBSA agreed that the MFN Regulations also require that goods be conveyed on a through bill of lading.  Consequently, pursuant to regulatory requirements, entitlement to GPT and MFN tariff treatment could only be accorded to importers who filed the required through bill of lading. Notwithstanding these regulatory requirements, at paragraph 29 of its Statement of Reasons, the CITT noted that the CBSA indicated that it has adopted an administrative exception with respect to the MFN tariff that allows importers to be accorded MFN tariff treatment regardless of whether they have the through bill of lading required by the Regulations.  Regardless of whether this administrative practice is consistent with the regulatory requirements, the result is that, due to the CBSA’s administrative practice, importers seeking MFN tariff treatment are granted the treatment regardless of whether they met the regulatory requirement of filing a through bill of lading while importers seeking...

Posted by Michael Woods on Sep 10, 2015

Advising clients on the operations of international trade sanctions is an important part of a trade lawyer’s practice. Governments use economic sanctions as instruments of foreign and trade policy, imposing them in response to threats to international security, concerns with humanitarian violations, or in pursuit of trade related goals. These restrictions are often applied to dealings with entire countries, non-state actors, such as terrorist organizations, or designated persons from a target country. These restrictions can have a significant impact on their businesses as they can: prohibit trade and other economic activity with a foreign market; block financial transactions and affect foreign investments or acquisitions; or lead to the seizure of property, fines, and imprisonment. There is an on-going debate about the effectiveness of sanctions and the way that innocent people can be sideswiped by the measures. We will explore this topic further in our following articles on sanctions and export controls. Here however, we want to focus on the way that Canada’s economic sanctions regime can and does affect would-be business immigrants. In the Canadian context, the Department of Foreign Affairs, Trade and Development (DFATD) is responsible for the administration of sanctions which are implemented under the authority of the Special Economic Measures Act (SEMA), the United Nations Act (UN Act) or the Freezing Assets of Corrupt Foreign Officials Act (FACFOA). Some of the sanctions that are currently in place have a particular effect on investor-class immigrants from Syria and Iran and their applications to move to Canada, as sanctions have frozen all financial transactions with these countries in an attempt to put pressure on theses regimes. Syrian and Iranian nationals applying to immigrate to Canada under the federal investor class process must pledge to invest $800,000 in the Canadian economy to qualify. In addition, the provinces have business immigration programs that require selected applicants to make investments ranging from $200,000 to $800,000 as a pre-condition to their successful immigration. It is interesting to note that Iranian investor-class applicants are estimated to have contributed $350 million to the Canadian economy in the past five years. In the context of Syria, effective March 5, 2012, Syrian nationals are unable to...