Canada and other arms-producing nations are taking advantage of a legal loophole to sell weapons components to countries subject to international arms embargoes, a new report says.

The report by Control Arms, a group comprising organizations including Amnesty International and Oxfam, says the arms trade, worth $1 trillion annually, has globalized, meaning weapons are being assembled using components from countries around the world with little control on where they end up.

For example, China's Z-10 military helicopter is built from components made in the United States, Britain and Canada. Pratt & Whitney Canada manufactures the helicopter's turboshaft engine.

Canadian, British or American rules would prohibit the sale of an entire helicopter to China because of its human-rights record and its sale of weapons to countries with a history of human-rights abuses.

However, selling only parts of a weapon is perfectly legal, a loophole the report, "Arms without Borders," says needs to be closed.

The report calls for a global treaty to block the sale of weapons components to countries that violate human rights, block the resale of weapons to these countries and limit the supply of such weapons to rebel groups around the world.

The report also urges the United Nations to do more to block the trade in military hardware and small arms that kill at least 300,000 people every year. The UN is to debate disarmament measures this week.