Deputy Minister

Confidential

Memorandum for the Honourable David Anderson

Subject: Illegal Exports of Wheat and Barley to the United States

Further to the briefing note I sent you on November 7, 1995, the purpose of this memorandum is to obtain your approval to:

• implement a revised penalty structure to deal with the increasing problem of the illegal export of wheat and barley; and
• proceed with next steps on this file.

On August 30, 1994, you signed an Administrative Order establishing the terms of release for export shipments of wheat and barley products that are seized or subject to ascertained forfeiture for failure to report to customs.

Senior officials of this Department and AAFC have agreed that Revenue Canada customs should increase the penalties for illegal exportation of wheat and barley products, as follows.  It is recommended that the conveyance penalty be increased from $400 for the first offence and $2,000 for the second offence to $1,000 and $5,000 respectively, and on fines from $100 per tonne on wheat and $40 per tonne on barley to $190 per tonne on wheat and $100 per tonne on barley.

We understand the the Minister of AAFC wishes to move very quickly on this issue and intends to issue the media release as early as possible once you have signed the Administrative Order.  We have insisted, along with the Privy Council Office, that the effective date for implementing the increased penalties should be no less than 48 hours following Minister Goodale's media release.  This will ensure that the farmers are fully aware of the increased penalties and the consequences of continuing this illegal activity.

We have reiterated with AAFC that Minister Goodale is the lead Minister in dealing with this issue and that we are acting as an agent for them regarding the implementation of enforcement measures.  AAFC agree that they will take the communication lead on this issue generally, and particularly on the enforcement aspect.  I have attached a briefing note prepared by AAFC officials for  Minister Goodale and the media release that he intends to issue.  Media lines and questions and answers are being prepared for you in anticipation of mediate attention to this matter.

Attached, is a draft of the Administrative Order establishing the terms of release for wheat, barley and the conveyances which have been seized, or where an ascertained forfeiture has been carried out, as a result of export contravention under the Customs Act.  I will provide you with the final document after you and Minister Goodale have agreed on an effective date.

I am available, at your convenience, should you wish to discuss this matter further.

Pierre Gravelle

Att.