Introduction When we hear the term “export controls,” we may think it only applies to weapons and other highly sensitive technologies, but that is not the case. There are a multitude of circumstances—some unexpected—to which it is important to know that export controls apply. This is especially true if you are involved in research or in the design and development of seemingly innocuous solutions that are not necessarily tangible objects. Today, technological knowledge is shared not only through conventional partnerships between businesses or universities, but also through data sharing or access to databases that feed large language models. Artificial intelligence is, in itself, a means of sharing knowledge. Feeding such algorithms with sensitive data, or data that can become sensitive when combined, carries a risk of violating the applicable legal framework. Here are some key concepts. Overview of the federal export control framework The Export and Import Permits Act In Canada, the Export and Import Permits Act (the “EIPA”) establishes the primary framework governing the export of controlled goods and technologies. The EIPA gives the Minister of Foreign Affairs the power to issue, to any resident of Canada who applies for one, a permit authorizing the export or transfer of a wide range of items included on the Export Control List (the “ECL”) or destined for a country listed on the Area Control List. In other words, the EIPA regulates, and at times prohibits, the trade of critical goods and technologies outside Canada. The Export Control List To get the full picture of the ECL, we need to refer to the Guide to Canada's Export Control Listas published by the Department with its successive amendments, the most recent of which date back to May 2025 (the “Guide”). In summary, the Guide includes military goods and technologies, strategic goods and dual-use (civilian and military) goods and technology that are controlled in accordance with Canada’s commitments made in multilateral regimes, such as the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies, bilateral agreements, and certain unilateral controls implemented by Canada as part of its defence policy. The Guide also includes forest products, agricultural and food products, apparel goods and vehicles. Other laws that affect exports Also to take into account are the sanctions that Canada imposes under laws that affect exports, such as: the United Nations Act the Special Economic Measures Act the Justice for Victims of Corrupt Foreign Officials Act These sanctions against specific countries, organizations or persons include a number of measures, including restricting or prohibiting trade, financial transactions or other economic activities with Canada, or the freezing of property located in Canada.1 Finally, in order for an individual (or an organization) to transfer controlled goods outside Canada, they must register with the Controlled Goods Program (the “CGP”) to obtain an export permit, unless exempt. Key concepts Did you know? Certain goods and technologies are referred to as “dual-use” goods and technologies. This means that even though they were initially designed for civilian use or appear harmless, they may be subject to export controls if they can be used for military purposes or to produce military items. A “technology” is broadly defined to include technical data, technical assistance and information necessary for the development, production or use of an item listed on the ECL. Also included in this notion, albeit indirectly, are the technologies referred to in any of the regulations associated with the laws listed above, which make certain countries subject to specific technology transfer restrictions. A “transfer” in relation to a technology, means to dispose of it (e.g. sell it) or disclose its content in any manner from a place in Canada to a place outside Canada. This definition stems from legislative amendments to the EIPA, which expanded the scope of the law to include the mere transfer of intangible technologies by various means, thereby broadening the circumstances to which permits apply as regards transfers.2 Regarding trade relations with the United States, Canadian exporters may face additional restrictions and considerable challenges, particularly in situations where their employees or other stakeholders involved are foreign nationals.The International Traffic in Arms Regulations (“ITAR”) and the Export Administration Regulations(“EAR”) are two key sets of rules that govern exports from the United States.3 They protect both similar and distinct interests. While the ITAR aim to protect defence articles and defence services (including weapons and information), the EAR govern dual-use items.4 Both prevent exports5 in a broad sense, i.e., up to and including the transfer of information to so-called “foreign” persons, except with the permission of the authorities. It is thus quite possible that Canadian exporters will be required to comply with these American regulations, which, in addition to targeting territories, target the national origin of individuals. This is diametrically opposed to Canada’s export regime, which rather centres on prohibiting trade with a country or anyone located there. In this regard, note that Quebec’s Charter of Human Rights and Freedoms considers national origin to be a ground for discrimination. 6 A Quebec business can thus find itself struggling to balance its contractual obligations under a contract with an American company with the requirements of the Quebec Charter. Artificial intelligence: novel challenges The development of large language models in the field of artificial intelligence represents a new challenge from an export control standpoint, and a significant one at that. For example, if a large language model is trained using restricted data, a state subject to the aforementioned sanctions might attempt to use the large language model to indirectly obtain information to which it would not otherwise have had direct access. As a result, training a large language model on plans, technical specifications or textual descriptions of technologies covered by transfer restrictions (which can include knowledge transfers) can create a risk of non-compliance with the law. The same applies to accessing such data for retrieval-augmented generation, a widely used technique to expand and improve large language model responses. To limit the risk during research and development, a company that trains a large language models on such data or allows access to such data for retrieval-augmented generation will need to consider where the data will be hosted and processed. Similarly, once the artificial intelligence application is developed, it will be important to restrict access to it in a manner consistent with the law, both in terms of locating the servers on which the large language model will be installed and in terms of user access. Sanctions Any person or organization that contravenes any provision of the EIPA or its regulations commits an offence punishable by fine and/or imprisonment, as applicable. Also, failure to register with the CGPmay constitute an offence under federal laws that can lead to prosecution and substantial sanctions against the offender(s).7 Conclusion Canada’s export controls are quite complex, not only in how they are structured, but also in how they must be implemented. With the changing geopolitical and commercial landscape, it is advisable to periodically read the resources made available by the relevant authorities and put in place appropriate policies and measures, or to seek professional advice in this regard. Government of Canada, “Types of sanctions” (date modified: 2024-09-10): Types of sanctions Martha L. Harrison & Tonya Hughes, “Understanding Exports: A Primer on Canada’s Export Control Regime” (2010) 8(2) Canadian International Lawyer, 97 The ITAR and EAR are included in the Code of Federal Regulations (“CFR”). Austin D. Michel, “Hiring in the Export-Control Context: A Framework to Explain How Some Institutions of High Education Are Discriminating against Job Applicants” (2021) 106:4 Iowa L Review, 1993 The ITAR and EAR also provide for restrictions on re-exportation. See Maroine Bendaoud, “Quand la sécurité nationale américaine fait fléchir le principe de non-discrimination en droit canadien : le cas de l'International Traffic in Arms Regulations (ITAR)” (2013) Les cahiers de droit, 54 (2–3), 549 Government of Canada, “Guideline on Controlled Goods Program registration” (date modified: 2025-05-08): Guideline on Controlled Goods Program registration – Canada.ca

On August 11, 2023, the Court of Appeal of Quebec handed down a decision in CFG Construction inc. c. R.,1 dismissing the appeal of the guilty verdict against an employer, CFG Construction inc. (“CFG”), for criminal negligence having caused the death of one of its employees. This decision serves as a reminder of the potential criminal liability of an employer, depending on its legal form, for the death or bodily injury of its employees in the workplace. More specifically, the case provides unique insight into the sanctioning of an “organization,” a term that includes a body corporate or an association of persons,2 for faults committed by a “senior officer” under the Criminal Code (“Cr.C.”). The facts The decision stems from a fatal accident that occurred on September 11, 2012, on the site of a wind farm in Saint-Ferréol-les-Neiges, involving a heavy container truck owned by CFG. The truck flipped over on a downhill curve, killing the driver, a CFG employee with 25 years of experience as a truck driver. At the trial, emphasis was placed on the maintenance of the truck and its braking system. The case A number of decisions were rendered in this case. Regarding criminal liability, the Court of Québec handed down two judgments, one finding CFG guilty and the other establishing the sentence. On February 14, 2019, CFG was found guilty of criminal negligence causing the death of the aforementioned truck driver. Essentially, the Court found that CFG’s failure to perform maintenance on the truck, which it had a legal obligation to do, constituted a [translation] “marked and significant departure from the conduct expected of a reasonable person, given the nature and circumstances of the activity in question”.3 For instance, the truck involved in the accident had 14 major pre-existing defects, all of which related to its braking system.4 The Court was decisive in establishing CFG’s liability through its foreman-mechanic, whom it considered to be a “senior officer” within the meaning of the Cr.C., and whose faults could be ascribed to CFG in this case,5 as explained below. On December 3, 2019, CFG was fined $300,000, plus a victim surcharge of 15% of the fine, and placed on a three-year probation with many conditions. This decision brings to light the factors to consider in sentencing an organization, as well as the only penalty that may be imposed, namely a fine of any amount in the case of a criminal act.6 Among these factors, the court must consider “any advantage realized by the organization as a result of the offence”.7 In this regard, failure to incur the necessary expenses to perform maintenance on a vehicle driven by an employee may be construed as an “advantage” for the employer-owner and is considered an aggravating factor in sentencing.8 Case law on this subject is “tenuous”, but fines ranging from $100,000 to $750,000 have been given in various situations.9 The notion of “senior officer” set out in the Criminal Code In its decision, the Court of Appeal provides the historical context that led to the inclusion of a legal mechanism in the Cr.C. governing the liability of organizations for death and bodily injury in the workplace. In 2003, Parliament passed Bill C-45, An Act to amend the Criminal Code (criminal liability of organizations) further to the 1992 tragedy at the Westray mine in Nova Scotia, where 26 miners were killed after methane detectors were disconnected with mine supervisors’ knowledge.10 Among the key amendments central to the CFG case, sections 217.1 and 22.1 of the Cr.C. provide not only for the legal obligation of any person who directs or has the authority to direct how another person does work or performs a task to take reasonable steps to prevent bodily harm to that person, but also for the possibility of holding an organization “liable” for an offence of negligence by reason of the actions of certain persons working for it, either a “representative” or a “senior officer,” as these terms are defined in section 2 of the Cr.C. The CFG case as a whole is an example of how the aforementioned legal mechanism applies where an employee considered to be a “senior officer” departs from the reasonable standard of care expected in the circumstances. As mentioned above, CFG was found guilty because of the important role that the head mechanic played, in that he had the authority to carry out the maintenance required on vehicles, including on the defective truck.11 As a result, CFG was legally obliged to ensure that the mechanic had the skills to do the work and provide him with the necessary instructions and equipment, as well as an adequate work environment.12 In short, it is important to remember that: The term “senior officer” refers to “a representative who plays an important role in the establishment of an organization’s policies or is responsible for managing an important aspect of the organization’s activities and, in the case of a body corporate, includes a director, its chief executive officer and its chief financial officer”.13 This definition [translation] “does not only include senior executives and a company’s board of directors”.14 Ultimately, an employee will be considered as a “senior officer” according to the functions s/he performs and the responsibilities s/he assumes in a given organization.15 Finally, the Court of Appeal points out that failure to fulfill the legal obligation set out in section 217.1 of the Cr.C. does not, in and of itself, constitute an offence.16 In the circumstances of this case, failure to comply with the aforementioned section along with the provisions on criminal negligence causing death provide the basis for CFG’s guilt, which constitutes the defining characteristic of this “positive” obligation in criminal law. In this regard, section 22.1 of the Cr.C. serves as the basis for CFG’s liability insofar as the organization was a “party to the offence” given the role that its mechanic played in the matter. Conclusion The CFG case shows how criminal negligence in the workplace is condemned outside of the penal provisions applicable under Quebec’s labour laws. Incidentally, the notion of “senior officer” within the meaning of these laws should not be confused with that codified in the Cr.C. While the former is limited in scope, the term “senior officer” in the Cr.C. is defined more broadly to include, in addition to directors and senior executives, other persons who play a significant role in leading or managing a given area of activity within an organization. Note that in this case, CFG’s guilt could have resulted from the conduct of more than one representative or senior officer.17 It is also important to remember that the extent to which proceedings in such matters involve natural persons rather than organizations, or extend to every person who may be held liable, is a matter of prosecutorial discretion. 2023 QCCA 1032. “organization,” section 2 of the Cr.C. Supra note 1 at para. 10 (as the Court of Appeal pointed out, the analytical framework for determining criminal negligence was updated further to the decision of the Supreme Court of Canada in R. v. Javanmardi, 2019 SCC 54). R. c. CFG Construction inc., 2019 QCCQ 1244, para. 141. Ibid, paras. 255 and 285. R. c. CFG Construction inc., 2019 QCCQ 7449, paras. 84 and 149. Section 718.21a) of the Cr.C. Supra note 6, para. 91. Ibid, paras. 163 to 167. Supra note 1, paras. 60 and 62. Supra note 4, para. 35. Ibid, para. 381. “senior officer”, section 2 of the Cr.C. Supra note 4, para. 256. Ibid. Supra, note 1, para. 73. Ibid, para. 72; see also supra note 6, para. 14.