Foreigners set-up front companies in Canada in order to export weapons: cable

On the heels of the Auditor General's report which lambasts the Canada Border Services Agency, CTV News has discovered a shocking loophole involving the sale of Canadian weapons technology.

According to the WikiLeaks cable CTV cites, there are "hundreds of foreigners and dual-citizens" in Canada "creating front companies to procure weapons parts and technologies that they then export to their home countries."

The cable, from 2008,  says George Webb of CBSA, telling Frank Ruggiero of the U.S. State Department that his "hands were full targeting hundreds of mostly Iranian and Chinese foreigners and 'lots of Canadian dual-nationals' involved in 'non-legitimate businesses.'

"They create front companies for the purpose of procuring defense technologies," Webb said in the cable, which was written by a U.S. State Department official and approved by Ruggiero.

Webb also complained that after CBSA officials make the arrests, the suspects are often released on bail by judges, and they "simply disappear," according to CTV News.

While it's difficult to know the total dollar amount of the arms illegally exported, some may be suprised to learn Canada also has a buoyant, legitimate, arms industry.

According to CBC News, Canadian companies exported about $1.4-billion in arms between 2007 and 2009.  Those figures don't include the United States, which is by far the largest buyer of arms from Canada. Because of a long-standing agreement between the two countries, Canada doesn't track sales to the United States the way it does for other countries.

Between 2007 and 2009, sales to Saudi Arabia alone totalled about $80 million. During the same time period, Canada also sold arms to other Middle Eastern countries including Tunisia ($971,822), Lebanon ($1,468,952), Algeria ($9,235,132) and Libya ($86,682).