CEMS

Report
CANADA’S ANTI-SPAM LEGISLATION

An Act to promote the efficiency and adaptability of the
Canadian economy by regulating certain activities that
discourage reliance on electronic means of carrying out
commercial activities, and to amend the Canadian Radiotelevision and Telecommunications Commission Act, the
Competition Act, the Personal Information Protection and
Electronic Documents Act and the Telecommunications Act.

Referred to as “CASL”

Comes into force on July 1, 2014
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
CASL prohibits various types of behavior including
the sending of unsolicited commercial electronic
messages, the unauthorized alteration of
transmission data, the installation of computer
programs without consent, false and misleading
electronic representations (including websites), the
unauthorized collection of electronic addresses and
the collection of personal information by accessing a
computer system in contravention of an Act of
Parliament.
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COMMERCIAL ELECTRONIC MESSAGES



CASL prohibits the sending of “commercial electronic
messages” or “CEMS” that are designed, in whole or in part, to
encourage participation in a commercial activity.
CEMS are defined as any “message sent by any means of
telecommunication, including a text, sound, voice or image
message.”
A “commercial activity” is defined as:

any particular transaction, act or conduct or any regular
course of conduct that is of a commercial character,
whether or not the person who carries it out does so in the
expectation of profit, other than any transaction, act or
conduct that is carried out for the purposes of law
enforcement, public safety, the protection of Canada, the
conduct of international affairs or the defence of Canada.
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
The CEM must be sent to an electronic address, which is
defined as:



an address used in connection with the transmission of an
electronic message to an electronic mail account, an
instant messaging account or any similar account.
Any person (which includes corporations, partnerships and
other entities) will be prohibited from sending a CEM unless:

The sender has the consent (which can be express or
implied) of the recipient of the CEM; or

The CEM is exempt under CASL.
There are certain CEM’s that are only exempt from the consent
requirement of CASL, but not its form and content
requirements.
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Express Consent

Express consent may be obtained orally or in writing


Oral consent may be used only if it can be verified by an
independent third party or where a complete and unedited
audio recording of the consent is retained by the person
seeking consent.
A request for express consent must be sought separately and
must set out:

The purpose for which consent is being sought;

Specific information about the person seeking consent and,
if applicable, the person on whose behalf consent is
sought; and

A statement that the recipient can withdraw their consent.
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Implied Consent

“Implied Consent” is established under CASL where the
sender and recipient have:

an “existing business relationship”; or

an “existing non-business relationship”; or

the person to whom the message is sent has
conspicuously published, or has caused to be
conspicuously published, the electronic address to
which the message is sent, the publication is not
accompanied by a statement that the person does not
wish to receive unsolicited commercial electronic
messages at the electronic address and the message
is relevant to the person’s business, role, functions or
duties in a business or official capacity;
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
the person to whom the message is sent has
disclosed, to the person who sends the message, the
person who causes it to be sent or the person who
permits it to be sent, the electronic address to which
the message is sent without indicating a wish not to
receive unsolicited commercial electronic messages
at the electronic address, and the message is
relevant to the person’s business, role, functions or
duties in a business or official capacity; or
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Existing Business Relationship

Existing Business Relationship” is defined as a business relationship
between a recipient of a CEM and the sender of a CEM (including if
the sender permitted the CEM to be sent)– arising from

(a) the purchase or lease of a product, goods, a service, land or
an interest or right in land, within the two-year period immediately
before the day on which the message was sent, by the person to
whom the message is sent from any of those other persons;

(b) the acceptance by the person to whom the message is sent,
within the period referred to in paragraph (a), of a business,
investment, or gaming opportunity offered by any other those
other persons;

(c) the bartering of anything mentioned in paragraph (a) between
the person to whom the message is sent and any of those other
persons within the period referred to in that paragraph;
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
(d) a written contract entered into between the person to
whom the message is sent and any of those other persons
in respect of a matter not referred to in any of the
paragraphs (a) to (c), if the contract is currently in
existence or expired within the period referred to in
paragraph (a); or

(e) an inquiry or application, within the six-month period
immediately before the day on which the message was
sent, made by the person to whom the message is sent to
any of those persons, in respect of anything mentioned in
any paragraphs (a) to (c).
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Non-Existing Business Relationship

Existing non-business relationship" is defined as a nonbusiness relationship between a recipient of a CEM and the
sender of a CEM (including if the sender permitted the CEM to
be sent)– arising from:

(a) a donation or gift made by the person to whom the
message is sent to any of those other persons within the
two-year period immediately before the day on which the
message was sent, where that other person is a registered
charity, a political party or organization, or a person who is
a candidate — as defined in an Act of Parliament or of the
legislature of a province — for publicly elected office;
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
(b) volunteer work performed by the person to whom the
message is sent for any of those other persons, or
attendance at a meeting organized by that other person,
within the two-year period immediately before the day on
which the message was sent, where that other person is a
registered charity, a political party or organization or a
person who is a candidate — as defined in an Act of
Parliament or of the legislature of a province — for publicly
elected office; or

(c) membership, as defined in the regulations, by the
person to whom the message is sent, in any of those other
persons, within the two-year period immediately before the
day on which the message was sent, where that other
person is a club, association or voluntary organization, as
defined in the regulations.
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
CASL also contains a transitional provision which
provides that the consent of the recipient of a CEM
is implied until July 1, 2014, if, and only if:


The sender and recipient have an “existing
business relationship” or an “existing nonbusiness relationship” on July 1, 2014; and
The relationship includes the communication
between them of commercial electronic
messages.
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Prescribed Information

All CEMS must:

Identify the person(s) who sent the message and, if
applicable, identify who the message is sent on behalf of;

Provide contact information for the sender of the message,
which must be valid for a minimum of 60 days after the
message is sent; and

Must include an unsubscribe mechanism.
o
Must be included in every CEM;
o
Must set out clearly and prominently the right to
unsubscribe and must be able to be readily performed;
o
Cannot charge a fee to unsubscribe; and
o
If the recipient unsubscribes, the sender must ensure that
within ten (10) business days no further messages are
sent.
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Exemptions

CEMS between those with a personal or family relationship;


“Personal Relationship” is defined as a relationship between an
individual who sends a message and the individual to whom the
message is sent, if those individuals have had direct, voluntary,
two-way communications and it would be reasonable to conclude
that they have a personal relationship, taking into consideration
any relevant factors such as the sharing of interests, experiences,
opinions and information evidenced in the communications, the
frequency of communication, the length of time since the parties
communicated or whether the parties have met in person; and
“family relationship” is defined as a relationship between an
individual who sends a message and the individual to whom the
message is sent if those individuals are related to one another
through a marriage, common-law partnership or any legal parentchild relationship and those individuals have had direct, voluntary,
two-way communication.
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
CEMS responding to an inquiry, request or complaint;

CEMS within organizations or between organizations in a
relationship if the message concerns the activities of the
recipient organization;

CEMS that deliver legal notices;

CEMS from electronic messaging services provided
certain conditions are met;

CEMS from secure limited-access accounts where
messages can only be sent by the person who provides
the account;
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
CEMS sent from Canada to one of a list of prescribed
foreign countries so long as the messages comply with
the law of the recipient country that addresses the
conduct that is substantially similar to conduct prohibited
under CASL;

CEMS for fundraising by charities and political parties;
and

A CEM for third party referrals (as discussed below).
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Third Party Referrals

Only one CEM will be permitted without consent
stemming from a referral where:

The sender has an existing business relationship, and
existing non-business relationship, a family
relationship, or a personal relationship with the
referring third party;

The referring third party has an existing business
relationship, an existing non-business relationship, a
family relationship, or a personal relationship with the
recipient; and

The sender discloses the full name of the referring
third party to the recipient, and states that the
message was sent as a result of the referral.
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Exempt from Consent Requirements

Any senders of CEM do not need the recipient consent
for the following CEMS, but the messages must contain
CASL’s form and content requirements:

CEMS that provide a requested quote or estimate for
the supply of a product, good or service;

CEMS that facilitate, confirm or complete a
commercial transaction that the recipient previously
agreed to enter into;

CEMS that provide warranty, product recall or safety
information on a product or service used by the
recipient;
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
CEMS offering factual information about a
subscription, membership, account or loan;

CEMS delivering ongoing information about the
recipient’s employment or benefit plan; and

CEMS delivering a product or service, including
updates/upgrades, as part of pre-existing,
agreed-upon transaction.
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Penalties and Liability

There is a due diligence defence

Penalties for individuals can be up to $1,000,000
and up to $10,000,000 for corporations.

There is a private right action, but won’t be in force
for any three years. Once it is in force, statutory
penalties of $200 per offence - if the organization
commits more than one offence on a day – up to a
maximum of $1,000,000 for each day.
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
There is vicarious liability for employees

Directors and officers can be held personally liable
for any violation(s) if they directed, authorized,
assented to, acquiesced in or participated in the
violation
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Compliance Steps

Review all messages that are sent electronically and
determine whether any could be considered CEMS

If any are CEMS, determine whether they would be
subject to CASL exemptions

If not, determine what consents (whether express or
implied) you have during the three-year transition period.

Collect any express consent that you need to send
CEMS before July 1, 2014.

Identify any CEMS where a consent is not required but
the form and content requirements must be included.
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
Put in place a system or database that:

Organizes and records all consents;

And allows easy amendment so that the consents
can easily be varied or up-dated. Maintain policies to
ensure that CEMs are not sent where there is no
consent or where implied consent has expired.

Create and maintain an easy-to-use and effective
unsubscribe mechanism for the CEMs.

Create templates for CEMs which satisfy the
informational requirements and formalities, as applicable.

Develop and implement a CASL-compliance policy to
address applicable provisions in CASL.
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
Educate all relevant employees and service providers
about CASL, and the organization's CASL compliance
strategies.

Ensure that all records of your compliance procedures
and policies are maintained (as such documentation may
support a due diligence defense at a later point in time).

Review your CASL compliance activities from time to
time and adapt as needed.

Review developments in the law concerning CASL from
time to time and adapt your compliance policies as
necessary.
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Mergers and Acquisitions

Due Diligence should now include consideration of
CASL compliance

Share Purchase Agreements should
representations on CASL compliance
include
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Thank You

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