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It's not automatically legal to carry a blade under 3 inches,

(2)Subject to subsection (3) below, this section applies to any article which has a blade or is sharply pointed except a folding pocketknife.

(3)This section applies to a folding pocketknife if the cutting edge of its blade exceeds 3 inches.

The three inches is clarification around folded pocketknives, it's not blanket authorisation to carry knives less than that length.

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