Canada Invokes Extraterritorial Measures Law Against US Buy America

January 19, 2015

The Government of Canada today invoked a rarely used law to prohibit compliance with the U.S. Buy America legislation in relation to a proposed ferry terminal to be built by the State of Alaska in Prince Rupert, B.C. In order to qualify for U.S. federal funding, the bidding documents published by the Alaska Department of Transportation require that the steel used in the construction of the terminal (leased to the Alaska Marine Highway System) must be of U.S. origin. Canada has repeatedly objected to the Buy America legislation.

The Government of Canada issued an Order on January 19, 2015 under the Foreign Extraterritorial Measures Act (FEMA) prohibiting compliance with the Buy America requirement in connection with the terminal project. The Order can be enforced directly by the Government since the project is located in Canada. The FEMA has been used only once to date (in 1992) to block compliance by Canadian corporations with the U.S. Cuba embargo. The 1992 Order, which is still in force, makes it a criminal offence for a Canadian corporation (including a Canadian subsidiaries of a U.S. corporation) to comply with the U.S. Cuba embargo.

See Trade Minister Fast's Statement on U.S. Buy America Restrictions at Port of Prince Rupert on the Foreign Affairs, Trade and Development Canada website.

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