Canadian companies whose business operations involve Controlled
Goods must report ownership changes in respect of their Controlled
Goods Directorate registration before an acquisition. This means
that Canadian companies and their in-house and outside lawyers must
ensure that the closing checklist includes the Controlled Goods Directorate reporting
requirement - failure may result in fines or imprisonment in
serious cases. The due diligence checklist should also include
questions about Controlled Goods registrations so that the
reporting requirement is included on the closing checklist.
Subsection 9(2) of the Controlled Goods Regulations provides
as follows:
"A registered person shall, by
the later of 32 business days before the date of an acquisition or
one business day after the day on which they become aware of an
acquisition, advise the Minister of the name and address of any
person that will, as a result of the acquisition, own 20% or more
of the outstanding
