On September 10, 2019, the federal government announced the appointment of the first ever federal Pay Equity Commissioner. The Pay Equity Commissioner’s role is to provide leadership and direction for the administration and enforcement of the new federal Pay Equity Act (the “Act”). The Act establishes a new pay equity regime which is aimed at reducing gender based pay discrimination by ensuring all federally regulated employers take proactive steps to ensure they are providing equal pay for equal value.read more
Cracking Down: Canadian Court Emphasizes Compliance with Export Procedures
Over recent years there has been an increase in the enforcement of legislation aimed at businesses exporting their goods or services overseas. Recently, an Alberta company was fined $90,000.00 for mistakenly shipping $15.00 worth of prohibited equipment to Iran in contravention of the federal Special Economic Measures Act (the “SEMA”). The following is a general overview of that case.
- Lee Specialties Ltd. (“Lee Specialties”), an equipment manufacturer, entered into an export contract to ship various parts to a foreign company (the “Customer”) with offices in both the United Arab Emirates and Iran. Lee Specialties mistakenly addressed the shipment to the Customer’s Iran address.
- The shipment had a total value of $6,000.00 and included $15.00 worth of 50 small O-Rings made of Viton, a synthetic rubber used in oilfield operations.
- Under the SEMA, the shipment of Viton to Iran is prohibited due to Viton’s potential use in the production of nuclear energy.
- Canada Border Services Agency officers inspected the shipment and discovered the prohibited Viton destined for Iran.
- After learning of its mistake, Lee Specialties cooperated in a full investigation of its export procedures and eventually pleaded guilty to breaching the SEMA.
The Honourable Judge Allan Fradsham of the Alberta Provincial Court considered the following factors when assessing Lee Specialties’ breach of the SEMA:
The potential harm that could have come about due to Lee Specialties breach of the SEMA;
- The low value of the prohibited goods;
- The fact that Lee Specialties’ breach of the SEMA was unintentional;
- Lee Specialties’ cooperation with authorities after the breach was discovered; and,
- Lee Specialties’ low risk of re-offending in the future.
Notwithstanding these factors, which one would think support the imposition of a small fine, the Court imposed a fine of $90,000.00 on Lee Specialties for breaching the SEMA.
The Lee Specialties case emphasizes that non-compliance with Canadian export requirements will not be tolerated, regardless of whether the breach was intentional or not. The hefty fine imposed demonstrates the vigour with which export laws will be enforced.
Judge Fradsham’s decision highlights the need for Canadian exporters to seek appropriate counsel and fully understand the nature and destination of the product being exported. The export landscape is complex and evolving constantly – Canadian exporters risk significant penalties if they fail to ensure all export requirements are met.