The leaked memo was circulating among top Canadian military and defense industry officials as senior United States State Department officials began two days of negotiations in the capital Ottawa on Oct. 31 to negotiate a solution to the impasse, which is delaying the purchase of tactical lift helicopters, transport planes and other equipment for Canadian troops in Afghanistan.

Canada's military and defense officials are complaining about the U.S. International Traffic in Arms Regulations, which determine who in Canada can see classified United States military data.

Access to the materials is critical if Canadian companies are to benefit from lucrative industrial side effects of government purchases of United States-made military hardware.

ITAR regulations require Canadian companies competing for contracts to submit expansive paperwork on their employees, which ensnares companies in months of red tape.

ITAR regulations also prevent dual-national Canadian citizens from countries of concern to Washington such as Lebanon, Venezuela or Cuba, from working on sensitive defense projects.

A recent Department of National Defense assessment said, "To undertake discriminatory employment practices based on nationality is contrary to Canada's Charter of Rights and Freedoms. Access is generally denied to DND employees who were born in or hold citizenship of a 'proscribed country,' e.g. Vietnam or China, among the 17 in total. DND's recent defense procurement announcements of $17 billion could be negatively impacted by the dual-national ITAR requirement."

Since the memo was written earlier this year the U.S. State Department's "proscribed list" has added six more countries. Lebanon and Venezuela were added in August.

The Canadian DND is currently attempting to devise solutions for its personnel, including the creation of a special security clearance "potentially up to the secret level in exchange for an effective exemption" for the dual-nationality requirement.

Critics note that the DND proposal does not address issue of the 70,000 civilian employees in Canada's security and aerospace industry who are affected by the U.S. arms rules.

Canadian Association of Defense and Security Industries President Timothy Page said, "You can be a Lebanese-American born in Lebanon who migrated to the United States when you were 1 (year old), and you're not impacted by this. If you're the twin of that same Lebanese and you migrated to Canada when you were 1, you would be implicated in the dual-national rules.

"We're concerned about the loss of business, loss of jobs, migration of Canadian business into the U.S markets. If a Canadian company is obliged to apply for a technical-assistance agreement and it takes nine months for that technical-assistance agreement to be processed, a U.S. customer sooner or later is going to more likely look to a U.S. supplier to provide him with that requirement."

The senior State Department official leading the current negotiations, Greg Suchan, commented that while he hoped a solution could be found, Washington controls access to military technology because "we have a feeling in our gut" about the link between nationality and possible threats.

"I understand there is concern here in Canada about the treatment of nationality. If somebody is a citizen of a country that is very, very problematic for export-control purposes, we need to take that into account."

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