July 1, 2014 is the official date when Canada’s new Anti-Spam legislation (CASL, formerly known as the Electronic Commerce Protection Act and the Fighting Internet and Wireless Spam Act) will come into effect. The final version of Electronic Commerce Protection Regulations, published by Industry Canada, will govern emails and messages, mass mailing, and entities that are exempt from following this legislation. These regulations were previously published by the Canadian Radio-television and Telecommunications Commission (CRTC). AG Tax professionals have compiled important information regarding the CASL and the necessity for all domestic and cross-border organizations to comply with it.
Canadian Anti-Spam Legislation Workings (CASL)
As per CASL, organizations will need to obtain consent for almost every form of Commercial Electronic Messages (CEM) that are sent by means of telecommunication to an electronic address (e-mail address). In cases where a relationship exists (business or non-business) a formal consent may not be necessary, but this could be subject to expiration if there is significant gap in the time period of communication (such as 6 months following an inquiry or 2 to 3 years from a purchase).
Application
As mentioned earlier, CASL is applicable on all e-messages that encourage participation in “commercial activity” (including non-profit activities), such as mass mails sent out for research purpose or polls, advertisements, or offers.
Organizations require consent for any kind of electronic form of communication including:
– Instant Messaging
– Telephone accounts
– Other forms of Social Media
However, it would not apply to e-mails sent directly to personal e-mail addresses, or e-mails which do not have any commercial activity agenda.
Messages that are exempt from CASL
The final CASL regulations include exemptions for certain messages in businesses in order to not obstruct their daily activities. Some of these are:
- Internal and Established External Communication (business/ non-business); i.e. e-mails or instant messages sent between employees, representatives, contractors, or franchisees of an organization where the message relates to the activities of the organization or regular clients, or referrals from existing business relationships.
- Replies sent for request, inquiry, or complaint from the recipient of the message. The expiration timeline or reply window period also does not apply in this case.
- Messages sent from Canadian-based computers but received in a listed foreign country will not be subject to CASL; provided the CEM is in compliance with the anti-spam laws of the foreign country. Example: Canadian Service Providers who only send messages to foreign recipients on behalf of foreign clients. *However, if the sent message is non-compliant with the foreign country laws, the exemption would not apply and the sender could be subject to penalties under both CASL and the applicable foreign law.
- Messages sent by or on behalf of registered charities for fundraising purposes
- Messages sent to limited access, secure accounts to which messages may only be sent to recipients only by individuals who provided the account, such as financial institutions and banks having state-of-the-art technology for security.
- Commercial Electronic messages sent to satisfy legal obligations, or to enforce or provide notice of a legal right.
Penalties
Individuals and Corporations can be penalized up to $1,000,000 and $10,000,000 respectively for not complying with CASL policies. CASL also provides for a private right of action allowing any individual to apply to the courts and obtain financial compensation for damages incurred due to breach of this Act.
Although majority of the requirements under CASL regarding consent and disclosures will be effective from July 1, 2014, several provisions (consent for installation of computer programs, for example) of the act will not come into force until January 15, 2015. Industry Canada and the CRTC will be publishing compliance guidelines providing further information regarding their interpretation of CASL.
As of now, AG Tax recommends that organizations consult a cyber-law professional to ensure compliance with CASL.
AG Tax LLP Can Help
If you have any tax-related queries, need assistance with tax planning or filing your tax returns please contact us. Our team comprises of highly experienced tax professionals with extensive knowledge of U.S. and Canadian tax laws as well as cross-border compliance
Furthermore, as a full service accounting firm, AG Tax assures complete assistance with even your most complex tax needs.
We can assist with:
- Canadian Personal and corporate tax returns
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