CCS Course - ALL PDF

10/1/2015
Welcometothe201516CCS(CertifiedCustomsSpecialist)Course!
PublishedonCSCBNationalOffice(http://cscb.ca)
Home>201516CCSHome
Welcometothe201516CCS(Certified
CustomsSpecialist)Course!
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TheCCScourseisaoneyearonlinecourse.Onceyouhave
successfullycompletedthiscourseandthefinalexamination,
youmaycallyourselfaCCS(CertifiedCustomsSpecialist).For
moreinformationonmaintainingtheCCSdesignation,please
refertoMaintenanceofCCSdesignation.
TheCCSOnlineCourse
TheCCSonlinecourseconsistsoffourparts,brokendowninto
modules,lessonsandtopics,asfollows:
Part
Modules
Lessons
Topics
Itincludesinteractiveexercises,linkstoreferencematerials,andknowledgeselfchecksand
quizzesthatallowforbetterunderstandingofthematerial.
Toaccessthecoursematerials,pleaseclickonaPartfromthePartmenuaboveorlinks
below.
CCSCoursePart1
CCSCoursePart2
CCSCoursePart3
CCSCoursePart4
Bookmarks
Ifyouwishtobookmarkapage,clickontheBookmarkthislink,shownatthebottomofeach
http://cscb.ca/print/book/export/html/183223
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page.YoumayretrieveyourbookmarksthroughtheBookmarkssectionofMyProfileinyour
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PrintVersion
Youhaveavarietyofoptionswithrespecttoprinting.Ifyouwishtoprinttheentirepart,
pleaseclickonthePrinterfriendlyversionlinkatthebottomoftheIntroductiontoPartpage.
Ifyouwishtoprintamodule,pleaseclickonthePrinterfriendlyversionlinkatthebottomof
theModuleOverviewpage.Ifyouwishtoprintonelesson,pleaseclickonthePrinterfriendly
versionlinkatthebottomoftheLessonOverviewpage.
Werecommendthatyouprintamoduleatatimetoensureyouhavethemostuptodate
content.
PartTests
ParttestsandresultswillbeavailableintheStudentServicestabinyourCSCB
account.TherearefourparttestsintheCCScourse.Theresultofeachtestisworth5%of
yourfinalmark.
Part1TestwillbeavailableJanuary14,2016,dueJanuary28,2016at2p.m.EST
Part2TestwillbeavailableMarch24,2016,dueApril7,2016at2p.m.EDT
Part3TestwillbeavailableJune2,2016,dueJune16,2016at2p.m.EDT
Part4TestwillbeavailableJuly28,2016,dueAugust11,2016at2p.m.EDT
FinalExamination
Thefinalexaminationwilltakeplacebetween9:30a.m.and12noononSaturday,
September24,2016.Youwillbeprovidedwiththelocationoftheexamtwoweekspriorto
theexamdate.
StudentForum
ThediscussionforumisavailableintheStudentServicestabinyourCSCBaccount,
displayingthemostrecentdiscussionsintheStudentDiscussionForummenu.
Questions/Comments
Yourfeedbackisveryimportanttous,sopleasedon'thesitatetocontactusat
students@cscb.ca.
Wewishyouallthebestinyourstudies!
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SourceURL(modifiedon2015093015:25):http://cscb.ca/repository/welcome201516ccscertifiedcustoms
specialistcourse
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201516CCSCoursePart2
Home>Part2
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IntroductiontoPart2
Part2oftheCCScourseincludesthefollowingsixmodules:
8.InvoiceRequriementsAdvanceCommercialInformationReportingofGoods
9.ClassificationofGoods
10.DeterminingTariffTreatments
11.TheNorthAmericanFreeTradeAgreement
12.ValuationandCalculationofDuty
13.CalculatingTaxesPayable
Itisrecommendedthatyouviewthesemodulessequentially.
Selfchecksandquizzesareincluded.
OnMarch24,2016,youwillbeprovidedwithinformationonhowtoaccessthefinaltestonthecontentsofPart2,whichmustbecompletedbyApril
7,2016.Responsesmustbesubmittedby2p.m.EDT(forexample,11a.m.PDTinVancouverand3p.m.ADTinHalifax).
Onceyouaccessthetest,pleaseprintacopyforyourrecords.Youwillneedacopywhenitcomestimetostudyforthefinalexamination.
Theresultofthistestisworth5%ofyourfinalmark.
Module8:InvoiceRequirementsAdvanceCommercialInformation
ConveyanceandCargoReporting
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Thismoduleprovidesinformationoninvoicerequirementsforimportedgoods,therequirementtoprovideAdvanceCommercialInformationabout
importedgoods,andthelegislativerequirementforreportingconveyancesandcargoinallmodesoftransportation.Penaltiesforfailuretoreportare
alsoincluded.Thismodulealsointroducesbillsofladingandlettersofcredit.
ModuleObjective
Whenyouhavecompletedthismodule,youwillbefamiliarwiththebasicdocumentusedtolistimportedgoods,theprocessbywhichAdvance
CommercialInformationisprovidedtoCBSA,andhowconveyanceandcargoarereportedtoCBSA.Youwillalsobeawareofpenaltiesthatcanbe
assessedforfailingtoreportimportedgoodsandforincorrectreportingofgoods.
Lesson1:InvoiceRequirements
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Inthislesson,youwilllearnabouttheinvoicerequirementsforimportedgoods.
Rationale
InyourjobasaCCS,youmayberequiredtocompleteaninvoiceforgoodsenteringCanada.
LessonObjective
AttheendofLesson1,youwillbeabletorecognizeandmeettheinvoicerequirementsforgoodsenteringCanada.
Topic1:InvoiceRequirements
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ForallgoodsenteringCanada,CBSArequiresvariouspiecesofinformation.Forcommercialgoods,thisinformationisoftenincludedonacommercial
invoice,itmayalsobelistedonaCanadaCustomsInvoice(CCI),orboth.YoumaywishtoprintacopyoftheCCI,aswewilllaterdescribeeachofits
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fields.
InformationonaninvoicecanbeusedbyCBSAtodeterminetheriskofcertainshipments.Forexample,thecountryoforiginmaybeknownasa
sourceofillicitdrugsandtheimporterofthegoodsmaynotbeknowntoCBSA.CBSAmaythenidentifytheshipmentashighriskandselectthegoods
forexamination.
InvoicerequirementscanbemetbyprovidingCBSAwith:
acommercialinvoice,preparedbyanymeans(handwritten,typed,orcomputergenerated),andcontainingallrequireddata
acommercialinvoice,preparedbyanymeans,andindicatingthebuyerandsellerofthegoods,thepricepaidorpayableforthegoods,andan
accuratedescriptionincludingquantityofthegoodscontainedintheshipment,plusaCanadaCustomsInvoice(CCI,FormCI1),containingthe
balanceofinformationrequiredor
afullycompletedCanadaCustomsInvoice(CCI).
Thevaluefordutyofgoodsisusuallybasedontheinformationprovidedontheinvoicesthatcorrespondtotheimportedgoods.
Theexporter,importer,ownerofthegoods,oracustomsbrokermaycompleteaCCI.
Topic1:InvoiceRequirements(cont.2)
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ThefollowingincludesadescriptionofeachfieldontheCCI.Rollovereachfieldtoseeadescription.YoumaywanttoprintaCCItofollowalong.
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Field1:Vendor(nameandaddress)
Thisfieldmayincludetheseller,soldby,remitto,consignor,orshipper.
Indicatesthenameandaddressof:
a)thepersonsellingthegoodstothepurchaser,or
b)thepersonconsigningthegoodstoCanada.
Field2:DateofDirectShipmenttoCanada
ShowsthedateonwhichthegoodsbegantheircontinuousjourneytoCanada.Thisisthedateuponwhichtheexchangerateforforeigncurrency
conversionisbased.
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Field3:OtherReferences
Maybeusedtorecordotherusefulinformationsuchasacommercialinvoicenumberorpurchaseordernumber.
Field4:Consignee
IndicatesthenameandaddressofthepartyinCanadatowhomthegoodsareshipped.Notethatthispartymayormaynotbetheactualimporter
ofthegoods.
Field5:Purchaser'sNameandAddress
Thisisthepartytowhomthegoodsaresoldbythevendor.Thepartyshowninthisfieldistheimporter.Theymayalsobeidentifiedasthebuyer.
Field6:CountryofTranshipment
ThisisthecountrythroughwhichthegoodswereshippedintransittoCanadaundercustomscontrol.Iftranshipmenthasnotoccurred,forexample,if
goodsareshippeddirectlytoCanadafromtheUnitedStates,thisfieldisleftblank.
Field7:CountryofOriginofGoods
Forcustomspurposes,thecountryoforiginofthegoodsisthecountrywherethegoodsaregrown,producedormanufactured.Acriterionforthisfield
issetoutintheCustomsTariffActandthroughquantitativerestrictions.Manufacturedgoodsmusthavebeensignificantlytransformedinthecountry
specifiedasthecountryoforiginintoitsformreadyforexporttoCanada.
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Field8:Transportation
Indicatethemodeoftransportationused,forexample,vessel,rail,etc.andtheplacefromwhichthegoodsbegantheircontinuousjourneytoCanada.
Field9:ConditionsofSaleandTermsofPayment
Describethetermsandtheconditionsagreeduponbythevendorandthepurchaser.Forexample,sale,lease,or3%net10days.3%net10days
meansthatthepurchaserisentitledtoa3%discountifpaymentismadewithin10days.
Field10:CurrencyofSettlement
Indicatethecurrencyinwhichthevendor'sdemandforpaymentismade.ForgoodsthatareexportedfromtheUnitedStates,itwouldlikelysayUSD.
Carefulattentionmustbepaidtothisfield,sinceincaseswherethecurrencyisnotCanadian,itmustbeconvertedtoCanadiandollars.
Field11:NumberofPackages
Indicatethenumberofpackages.Onlyanumberislistedinthisfield,forexample,1,3,30,etc.
Field12:SpecificationofCommodities
Thisfieldmustshowthekindofpackages,marksandnumbers,generaldescription,andcharacteristicsofthegoods.
Forexample:
Kindsofpackagescouldbeskids,cartons,barrels,orboxes.
Marksandnumberscouldbeserialnumbersorpartnumbers.
Generaldescriptionandcharacteristicscouldbefreshstrawberries,number1gradeormens100%woolsuits,sizes40and42.
Ifthegoodsarenotnew,oneofthefollowingmightbeindicated:notprimequalitygoods,remnants,joblots,closeouts,discontinued,obsolete,or
used.
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Field13:Quantity
Thequantityofeachitemincludedinthedescriptionfieldmustbeindicatedintheappropriateunitofmeasure.Forexample,ifthegoodswere100pairs
ofshoes,thequantitywouldbe100andifyouhad1,000barrelsofoil,thequantitywouldbe1,000.
Field14:UnitPrice
Thisfieldshowsavalueinthecurrencyofsettlementforeachitemspecifiedinthedescription.Forshoes,youwouldshowthepriceperpairandforoil
youwouldshowthepriceperbarrel.Ifthecurrencyinfield10indicatesUSD,theunitpriceisinUSdollars.
Field15:Total
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Indicatethepricepaidorpayableinthecurrencyofsettlementforthenumberofitemsrecordedinthequantityfield.Thisistheresultofmultiplyingthe
quantityinfield13bytheunitpriceinfield14.
Field16:TotalWeight
Showbothnetandgrossweights.
Netweightistheweightofthegoodsexcludingthepackagingorthecontainer.
Field17:InvoiceTotal
Thisisthetotalpricepaidorpayableforallgoodslistedontheinvoiceandonanycontinuationsheet(s)ifused.Ifthegoodswerenotsold,N/A(not
applicable)canbeshownhowever,fields10and15mustbecompletedsothatdutyandtaxescanbecalculated.
Field18:Ifanyoffields1to17areincludedonanattachedcommercialinvoice,checkthisboxCommercialInvoiceNo.
Thisfieldischeckedifanyoffields1to17areincludedonanattachedcommercialinvoice.Ifso,thecommercialinvoicenumbermustbenoted.
Field19:Exporter'sNameandAddress(ifotherthanvendor)
Indicatethenameandaddressofthepersonororganizationshippingthegoods,iftheyarenotthevendor.
Field20:Originator
Wheretheinvoiceiscompletedonbehalfofthevendor,thenameandaddressofthecompanycompletingtheinvoicemustbeindicated.Thenameof
thepersoncompletingtheinvoicemayalsobeindicated.Invoicescompletedonbehalfofindividualsmustindicatethenameandaddressoftheperson
completingtheinvoice.Thisfieldmaybeleftblankifthisinformationisprovidedelsewhereontheinvoice.
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Field21:AgencyRuling
ProvidethenumberanddateofanyCBSArulingapplicabletothegoodsbeingimported.
Field22
Field22ischeckedwhentherearenoitemslistedinfields23,24,or25.
Fields2325
Thesefieldscanbeconfusingandcarefulattentionmustbepaidtothewordingofeach.Whenfields2325arecompleted,thecurrencymustbe
noted.
Field23oftheCCIreads:Ifincludedinfield17indicateamount:
Thekeywordinfield23isincluded.
Field23(i)iscompletedwhentherearetransportationcharges,expensesandinsurancefromtheplaceofdirectshipmenttoCanadaandthese
chargeshavebeenincludedintheamountshowninfield17.
Field23(ii)iscompletedwhentherearecostsforconstruction,erectionandassemblythatareincurredafterimportationintoCanadaandthesecosts
havebeenincludedintheamountshowninfield17.
Field23(iii)iscompletedwhenthereisexportpackingandthepackingchargeshavebeenincludedintheamountshowninfield17.
Iftherearefiguresquotedinfields23(i)or23(ii),theymaybedeductedfromtheinvoicetotalshowninfield17,sincethesechargesarenotdutiable.
However,exportpacking,field23(iii),isadutiableitemandifthecostofexportpackinghasbeenincludedinfield17,itmaynotbededucted.
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Field24oftheCanadaCustomsInvoicereads:Ifnotincludedinfield17indicateamount:"
Thekeywordsinfield24arenotincluded.
Field24(i)iscompletedwhentherearetransportationcharges,expensesandinsurance,totheplaceofdirectshipmenttoCanadaandthese
chargeshavenotbeenincludedintheamountshowninfield17.
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Field24(ii)iscompletedwhentherearechargesforamountsforcommissions,otherthanbuyingcommissions,andthesechargeshavenotbeen
includedintheamountshowninfield17.
Field24(iii)iscompletedwhenthereisexportpackingandthepackingchargeshavenotbeenincludedintheamountshowninfield17.
Iftherearefiguresquotedinfields24(i),24(ii),or24(iii),theymustbeaddedtotheinvoicetotalshowninfield17,sinceeachitemlistedinfield24is
dutiable.
Field25oftheCanadaCustomsInvoicereads:"Check(ifapplicable):(i)Royaltypaymentsorsubsequentproceedsarepaidorpayablebythe
purchaser,or(ii)Thepurchaserhassuppliedgoodsorservicesforuseintheproductionofthesegoods".
Thekeywordsinfield25(i)arepaidorpayablebythepurchaser.Thesearedutiablecharges.
Thekeywordsinfield25(ii)arethepurchaserhassupplied.ThisfieldallowsCBSAtoseewhetherornotthepurchaserhasbeenresponsibleforany
goodsandservicestodowiththeproductionofthegoodsbeingimported.Thesetooaredutiablecharges.
Lesson1Summary:InvoiceRequirements
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InthislessonyoulearnedabouttheinvoicerequirementsforimportedgoodsandhowtocompleteaCanadaCustomsInvoice.
Keypointsinthislessonare:
CBSArequiresinformationonallgoodsenteringCanada
Informationcanbeprovidedinmorethanoneway
Thevaluefordutyofimportedgoodsisgenerallybasedontheinformationprovidedontheinvoicesforthoseimportedgoodsand
IfaCCIisused,carefulattentionmustbepaidtofields23and24.
Lesson2:AdvanceCommercialInformation
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InLesson2,youwilllearnabouttherequirementsforprovidingAdvanceCommercialInformation.Thetimeframesforprovidingthisinformationwill
dependonthemodeoftransportation.
Rationale
ItisveryimportantthatCBSAisawareofallgoodsenteringCanada.Significantpenaltiescanapplyadvanceinformationisnotprovided,and,asa
CCS,youwillneedtobeawareoftheobligationtoprovideadvanceinformationtoCBSA.
LessonObjective
Youwillbeabletoadvisecarriers,importers,andexporters,oftherequirementtoprovide,andthetimeframesinwhichtoprovide,advanceinformation
toCBSA.
Topic1:AdvanceCommercialInformation
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AdvanceCommercialInformation(ACI)isareportingprocesswherebymandatoryconveyanceandcargodataistransmittedelectronicallytoCBSA
priortothearrivalofgoods.Conveyancedataisinformationaboutthetruck,ship,planeorrailthatiscarryingthegoodsandcargodataisinformation
aboutthegoodstheyarecarrying.
Havinginformationaboutthegoodsbeforetheyreachtheborder,and,insomecases,evenbeforetheyareloadedontotheconveyance,helpsprotect
Canadiansfromhealth,safety,security,terroristandcontrabandthreats.
ACIallowsCBSAtomakeinformeddecisionsaboutwhethertoexamineshipmentsatthefirstpointofarrivalorintheforeignportbeforetheyare
shipped.
TheimplementationofACIisamultiphaseproject.ThefirstmodeoftransportationtoimplementACIwasmarineinApril2004.AirfollowedinJuneof
2006.ThefinalphaseoftheprojectiseManifestanditwasimplementedonMay6,2015.Thisphaserequirestheelectronictransmissionofcargoand
conveyanceinformationforallhighwayandrailshipments.Fullimplementationofthethirdphase,whichincludestheissuingofpenaltiesfornon
compliance,willbeonJanuary10,2016.
Topic1:AdvanceCommercialInformation(cont.2)
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MarineACI,ConveyanceReporting
Allvesselscarryingcommercialgoods,whetherthosegoodsarebeingimported,travellingintransitorremainingonboard,andthatareloadedina
countryotherthanCanadaandarrivingataCanadianport,musttransmitelectronicconveyanceandcargoreportsinadvanceofthearrivalofthe
goods.ConveyancedataisbasedontheinformationfromtheA6,thepapergeneraldeclaration,andincludesdetailssuchasvesselidentification,its
capabilities,tradechainpartners,andschedulingandroutinginformation.ThecarriermustsendtheconveyancedatatoCBSA.
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Conveyancedatatimelimitsareimpactedbywheretheloadingofthevesseloccurs.Wewilllookateachseparately.
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ReportingTimeframesforConveyancesLoadedinaCountryOtherthantheUnitedStates
Ifallgoodsonboardthevesselarewithincargocontainers,theconveyancedatamustbetransmittedelectronicallytoCBSAatleast96hours
beforethearrivalofthevesselatthefirstCanadianportofarrival.
Ifallgoodsonboardthevesselarebulkcargo,theconveyancedatamustbetransmittedelectronicallytoCBSAatleast24hoursbeforethe
arrivalofthevesselatthefirstCanadianportofarrival.
Ifallgoodsonboardthevesselarenonexemptbreakbulkcargo,theconveyancedatamustbetransmittedelectronicallytoCBSAatleast96
hoursbeforethearrivalofthevesselatthefirstCanadianportofarrival.
Ifallgoodsonboardthevesselareexemptbreakbulkcargo,theconveyancedatamustbetransmittedelectronicallytoCBSAatleast24hours
beforethearrivalofthevesselatthefirstCanadianportofarrival.
Ifthevesselisladensolelywithemptycargocontainersthatareininternationalshuttleservice,theconveyancedatamustbetransmitted
electronicallytoCBSAatleast96hoursbeforethearrivalofthevesselatthefirstCanadianportofarrival.
Ifthegoodsonboardthevesselareacombinationofgoodsdescribedabove,conveyancedatamustbetransmittedwithinthemostadvanced
(longest)timeframerequired.Theconveyancereportmustindicateifasupplementarycargoreportwillfollowornot.
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ReportingTimeframeforConveyancesLoadedintheUnitedStates
ConveyancedatamustbetransmittedelectronicallytoCBSAatleast24hoursbeforethearrivalofthevesselatthefirstCanadianportofarrival.
Theconveyancedatashallbetransmittedatthetimeofthevessel'sdeparturefromtheU.S.PortifthelengthofthevoyagetoCanadaisless
thantherequiredreportingtimeframeasspecifiedabove.
ReportingTimeframesforConveyancesLoadedinbothaCountryOtherthantheUnitedStatesandtheUnitedStates
ConveyancedatamustbetransmittedelectronicallytoCBSAasperthetimeframesspecifiedforconveyancesloadedinacountryotherthanthe
UnitedStates.InthecaseofunscheduledstopsintheU.S.,anupdatedconveyancereportincludinganychanges,suchastheU.S.Portof
call/ETAattheCanadaportofarrival,mustbetransmittedelectronicallytoCBSAassoonasthecarrierisawareofthechanges.
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MarineACI,CargoReporting
Allcargodescriptionsmustbeclearandaccurate.DescriptionssuchasFreightofAllKinds(FAK),ShippersLoadandCount,andSaidtoContain
arenotacceptable.Thedescriptionofthegoodsshouldbeaplainlanguagedescriptionthatissufficienttoidentifythemforcustomspurposes.
Thecarrier/freightforwardermustidentifyanydangerousgoodsusingtheUNDangerousGoodscodeortheMaterialsHazardousonlyinBulk(MHB)
codewhenapplicable.MHBisonlyapplicableinthemarinemode.
ReportingTimeframesforCargoLoadedintheUnitedStates
CargodatamustbetransmittedelectronicallytoCBSAatleast24hoursbeforethearrivalofthevesselatthefirstCanadianportofarrival
regardlessofthetypeofcargo.
Thecargodatashallbetransmittedatthetimeofthevessel'sdeparturefromtheU.S.portifthelengthofthevoyagetoCanadaislessthanthe
requiredreportingtimeframe.
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ReportingTimeframesforEmptyCargoContainersLoadedinaCountryOtherthantheUnitedStates
MustbetransmittedtoCBSAelectronicallyatleast96hourspriortothearrivalofthevesselatthefirstCanadaportofarrival.
Ifthevoyageislessthan96hours,thenthereportisrequiredbeforedeparturefromtheforeignport.
ReportingTimeframesforEmptyCargoContainersLoadedintheUnitedStates
MustbetransmittedelectronicallytoCBSAatleast4hoursbeforethearrivalofthevesselatthefirstCanadianportofarrival.
Ifthelengthofthevoyageislessthan4hours,thetransmissionisrequiredatthetimeofdeparture.
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ForCargoLoadedinaCountryOtherthantheUnitedStates
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Forcontainerizedcargo,thecargodatamustbetransmittedelectronicallytoCBSAatleast24hourspriortotheloadingofthegoodsonboardthe
vessel.
Forbulkgoods,thecargodatamustbetransmittedelectronicallytoCBSAatleast24hourspriortothearrivalofthevesselatthefirstCanadian
portofarrival.
Fornonexemptbreakbulkcargo,thecargodatamustbetransmittedelectronicallytoCBSAatleast24hourspriortotheloadingofthegoodson
boardthevessel.
Forexemptbreakbulkcargo,thecargodatamustbetransmittedelectronicallytoCBSAatleast24hourspriortothearrivalofthevesselatthe
firstCanadianportofarrival.
Thecargodatashallbetransmittedbeforethevessel'sdeparturefromaforeignportifthelengthofthevoyageislessthantherequiredreporting
timeframeasspecifiedabove.
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ElectronicMessagingfromCBSA
TherearethreetypesofresponsemessagesthatclientscanexpecttoreceivefromCBSAwhentransmittingmarinecargo/conveyancereports.
1.PositiveResponseMessages
Thesemessagesareissuedintheformofacknowledgements.Therearetwotypesofacknowledgements:FunctionalandApplication.
FunctionalAcknowledgement:AnacknowledgementthatnotifiesthesenderthatCBSAhasreceivedthemessageandthemessagewassyntactically
correct.Thisacknowledgementisgeneratedbeforethevalidationisperformed.
ApplicationAcknowledgement:AnacknowledgementthatnotifiesthesenderthatCBSAhasreceivedandsuccessfullyvalidatedthedataandfoundno
error.
ValidationoccurswhenthetransmitteddatahasbeenvalidatedforspecificeditsbyCBSAsystemsandhaspassedthoseedits.
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2.ErrorandMatchResponseMessages
ErrormessagesareissuedintheformofRejectNoticesandcanbeeitherSyntaxorValidation.Aspecificerrorwillcauseonlythespecificmessage
withinwhichitoccurredtoberejected.
Whenasuccessfullinkismadebetweenasupplementaryreportandacargoreport,apairofMatchnoticesisgenerated.Foreachsetofnotices,
onenoticeissenttotheoriginatorofthesupplementarycargoreportandtheothernoticeissenttotheoriginatoroftheprimarycargoreport.TheA6is
consideredtheprimarycargoreportbutincaseswherethereisnotenoughinformationincluded,asupplementarycargoreportmustalsobeissued.
3.RiskAssessmentNotices
ThesenoticesmaybeissuedwhenCBSArequirestheclienttoprovidemoreinformationregardingthecargoortoprovidetheclientwithspecific
instructionsregardingtheloading/unloadingofthecargo.RiskAssessmentnoticesmayalsoincludefreetextremarksprovidingexternalclientswith
additionalinformationandinstructions.CBSAsystemswillsendoutDoNotLoad,Hold,DoNotUnloadandCancellationmessagesbacktothe
senderandrelevantparties.ThesemessageswillreferencetheCCN,and/orcontainernumberswhereapplicable.
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DoNotLoadMessages
Thistypeofmessagemaybetransmittedtotheclientpriortotheloadingofthecargoonthevessel.IfaDoNotLoadmessageisreceived,thecargois
notauthorizedtobeloadedonthevessel.
**NOTE**:DoNotLoadMessageswillnotbeissuedformarinecargoloadedintheUnitedStatesastheyarenotapplicable.
PossibleReasonsforaDoNotLoadMessage
ThereareseveralreasonsthataDoNotLoadmessagecouldbeissuedbyCBSA.
1. CBSArequiresinformationpertainingtothecargosuchasdescriptionofgoods,ultimateconsigneeorshipper.
2. CBSArequiresthecarriertoawaitinstructionsfromtheforeignCustomsadministration.
3. CBSAadvisesthatthegoodsarenottobeloadedonanyvesselboundforCanada.
IfaDoNotLoadMessageisissued,thecarriermustnotloadthecargountilauthorizationisgrantedbyCBSAintheformofaCancellationmessage
fortheDoNotLoad.InthecaseofanA6Acargoreport,ifaCancellationmessageistobeissued,thecarriercanexpecttoreceiveitpriortothe
actualdateandtimeofloading.
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HoldMessages
Thistypeofmessagemaybetransmittedtotheclientsubsequenttotheloadingofthecargoonthevesselintheforeignport.AHoldmessagemay
beissuedsubsequenttotheladingofthecargoonthevesselintheforeignportwhere:
1. CBSArequiresinformationpertainingtothecargosuchasdeliveryaddressorthenotifyparty.
2. CBSAmayrequireanexaminationofthecargouponarrival.
InbothcasesthecargomaybeunloadedfromthevesselinCanadabutisnotauthorizedtomoveuntilpermissionisgrantedbyCBSAintheformofa
HoldCancellationmessage.
DoNotUnloadMessages
Thistypeofmessagemaybetransmittedtotheclientsubsequenttotheloadingofthecargoonthevessel.IfaDoNotUnloadmessageisreceived,
thecargoisnotauthorizedtobeunloadedfromthevesselinCanada.
CancellationMessage
ThistypeofmessagemaybetransmittedtotheclientanytimesubsequenttotheissuanceofDoNotLoad,HoldandDoNotUnloadmessagesin
ordertocanceltheseinstructions.
TheEDISystemreceivesandprocessestransmittedcargo,cargoandconveyanceinformation24hoursaday,7daysaweek.
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CBSA'sEDISystemwill,undernormalconditions,endeavourtosendacknowledgementanderrormessagesbackthroughtherespectivemethodof
transmissionfromtheclientwithin15minutesfromthereceiptofthetransmittedmessage.CBSAwillendeavourtosendtheEDIresponsemessage
forRiskAssessmentNoticespriortotheestimatedtimeofarrivaltoidentifyaHoldonashipment,andwithin24hoursoftheestimateddateandtime
ofloadingtoidentifyaDoNotLoadformarinecargoloadedinacountryotherthantheU.S.
InthecaseofaDoNotLoadmessagenotsentpriortothecargobeingloaded,thecargowouldbehelduponarrivalinCanada.Inthecaseofa
Holdmessagenotsentpriortotheestimatedtimeofarrival,thecargowouldbeconsideredauthorizedtomoveunlessasignificantriskwas
associatedwiththecargo.
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TheBayPlan
Thebayplan,orstowageplan,isadocumentusedbypartiesinthemarinetransportationindustrytoidentifyallthecontainersandtheirlocationsona
containervessel.Thisinformationisusedtoplantheloadinganddischargeofthecontainersandcargoforeachport.
ProvidingelectronicbayplanswillaidCBSAinidentifyingunreportedcontainers,and/orcontainerswhichposesignificantrisktonationalsecurity.
VesselOperatingCarriersarerequiredtoincludetheConveyanceReferenceNumber(CRN)intheirbayplansubmissions.TheCRNisrequiredto
ensurethatthevesselbayplan,conveyancereport(A6),andrelatedcargodocumentsarelinkedcorrectly.
CBSArequiresVesselOperatingCarrierstoelectronicallysubmittheentirevesselbayplanwithin48hoursofdeparturefromthevessel'slastforeign
portofcall,priortosailingtoCanada.Whenthevoyageislessthan48hoursinduration,bayplansarerequiredtobesubmittedtoCBSApriortothe
vessel'sarrivalatthefirstCanadianport.
BeginningNovember6,2015anduntilMay6,2016,marinecarrierswhodonotcomplywithBayPlanrequirementsmaybeissuedzeroratedpenalties
(nonmonetary)underCBSA'sAdministrativeMonetaryPenaltySystem(AMPS).
AfterMay6,2016,marinecarrierswhodonotcomplywithBayPlanrequirementsmaybeissuedmonetaryAMPSpenalties.
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AirACI,ConveyanceandCargoData
Aircarriersandfreightforwardersarerequiredtotransmitconveyance,cargo,andsupplementarydatatoCBSAatleast4hourspriortoitsarrivalatthe
firstpointofarrivalinCanada.Ifthedurationoftheflightislessthanfourhours,conveyanceandcargodatamustbesenttoCBSAbeforethetimeof
departure.
Anestimatedtimeofarrival,inEasternTimeZone(EST),mustbeprovided.
ShipmentstravellingbyairfromforeigncountriesmayonlyenterCanadaatauthorizedinternationalairports.Aircarrierswhoarenotbondedcarriers
mustreporttheirgoodsatthefirstpointofarrival(FPOA).TheFPOAisthefirstairportinCanadawheretheaircraftwillland.Thisisregardlessofthe
reasonforlanding,includingastopforfuel,crewchange,ordiversion.
ThetransportingcarrierwillberequiredtotransmitachangetotheAirConveyanceReporttoamendtheFPOAand/orEstimatedDateandTimeof
ArrivaltoCBSAifthereareanyunscheduledreroutes,changestotheETAgreaterthan30minutes,orchangestotheaircraft'sitinerary.
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HighwayACI,ConveyanceandCargoData
CargoandconveyancedatamustbereceivedandvalidatedbytheCBSAnolaterthanonehourbeforearrivalattheFPOA.Cargoandconveyance
datamaybepresentedupto30daysbeforearrival.Achangetotheconveyancereportmustbemadeiftheestimatedtimeofarrival(ETA)is30
minutes(ormore)earlier,oriftheETAis8hours(ormore)thanwhatwasstatedontheoriginalconveyancereport.
ShipmentsthatqualifyforCSA(CustomsSelfAssessment)clearanceareexemptfromtherequirementfortoprovideACI.However,wherethereisa
mixedloadofbothCSAexemptandCSAnonexemptcargo,CSAclientswillberequiredtosendconveyancedataandcargodataforthenonexempt
cargo.
TransitionPeriod
BeginningMay6,2015andendingJuly10,2015,CBSAwillprovidecarrierswithaperiodoftransitionduringwhichpenaltiesfornoncompliancewith
eManifestregulationswillnotbeissued.
FromJuly20,2015toJanuary10,2016,carrierswhodonotcomplywitheManifestrequirementswillbeissuedzeroratedpenalties(nonmonetary)
undertheCBSA'sAdministrativeMonetaryPenaltySystem(AMPS)
ThegraceperiodwillcometoacloseJanuary10,2016andcarrierswhodonotcomplywitheManifestmaybeissuedmonetaryAMPSpenalties.
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RailACI,ConveyanceandCargoData
RailcarrierstransportinggoodsintoCanadaarerequiredtotransmitcargoandconveyancedataelectronicallytotheCBSApriortoarrival.Thecargo
andconveyancedatamustbereceivedandvalidatedbytheCBSAaminimumoftwohoursbeforetheconveyancearrivesattheborder.
FromJuly10,2015,toJanuary10,2016,carrierswhodonotcomplywitheManifestrequirementsmaybeissuedzeroratedpenalties(nonmonetary)
undertheCBSA'sAdministrativeMonetaryPenaltySystem(AMPS).And,beginningJanuary11,2016,carrierswhodonotcomplywitheManifest
requirementsmaybeissuedmonetaryAMPSpenalties.
Lesson2Summary:AdvanceCommercialInformation
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InthislessonyoulearnedabouttherequirementtoprovideAdvanceCommercialInformationtoCBSA.
Keypointscoveredinthislessoninclude:
ACIallowsCBSAtomakeinformeddecisionsaboutwhethertoexaminegoods
allmodesoftransportationmusttransmitconveyanceandcargodatawithinspecifiedtimeframes
forgoodsshippedbysea,thetypeofgoodsandplaceofladingwilldeterminethetimeframesforprovidingACI
CBSAwillprovidevariousresponsesmessagestomarineACIreports
CBSAsEDISystemreceivesandprocessestransmittedcargo,cargoandconveyanceinformation24hoursaday,7daysaweek
abayorstowageplanisusedbymarinecarrierstoidentifythelocationofcontainersonthevessel
goodstravellingbyairfromforeigncountriesmayonlyenterCanadaatauthorizedinternationalairports
foraircarriers,theFirstPointofArrival(FPOA)isthefirstairportinCanada,regardlessofthereasonforlandingand
shipmentsthatqualifyforCSA(CustomsSelfAssessment)clearanceareexemptfromtherequirementforadvancecommercialinformationof
cargoandconveyance.
SeeifyoucananswerthefollowingquestionsaboutAdvanceCommercialInformation.
Lesson3:ConveyanceandCargoReporting
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Inthislesson,youwilllearnabouttherequirementtoreportallconveyanceandimportedgoodstoCBSAupontheirarrival.Themannerofreportingwill
vary,dependingonthemodeoftransportation.
Rationale
ItisveryimportantthatCBSAisawareofallconveyancesandgoodsenteringCanada.Significantpenaltiescanapplyfornonreport.AsaCCS,you
willneedtobeawareoftheobligationtoreportgoods.
LessonObjective
Youwillbeabletoadvisecarriers,importers,andexporters,oftherequirementtoreportgoods,andthepropermannerinwhichconveryancesand
cargoarereported.
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Topic1:ConveyanceArrival
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ConveyanceArrivalCertificationMessages
UnderSection12oftheCustomsAct,allgoodsthatareimported,movingintransitthroughCanada,orfreightremainingonboard(FROB)mustbe
reportedtoCBSAatthefirstportofarrivalinCanada,eveniftheyareexemptfromprovidingAdvanceCommercialInformation(ACI).FROBrefersto
goodsthatremainonboardaconveyance,usuallyavessel,whichtheshipstopsand/ordischargesothercargo.
ReportingtakesplacewhentheconveyancearrivesinCanadaandareportismadetoCBSAbywayofsubmittingaConveyanceArrivalCertification
Message(CACM).
MarineCACM
TheCACMmustbetransmittedelectronicallytotheCBSAwhenthemarinevessellandsataCBSAofficeuponarrivalinCanada.Themarinevessel
willmeetthedefinitionoflandingwhenitfirstcomestorestinCanadawhetheratanchor,atdockorberthedalongsideatthenearestCBSAoffice
designatedforthatpurpose.TheCACMcanbetransmittedandreceivedbytheCBSAwithinatwo(2)hourwindowpriortoarrival,allowingmarine
carrierstotransmittheirarrivalrequestuptotwohoursinadvanceoftheiractualarrivalataCanadianport.Thistwohourwindowisconditionalonthe
vesselbeingwithinCanadianwatersatthetimethearrivalrequestissubmittedtotheCBSA.
Topic1:ConveyanceArrival(cont.2)
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AirCACM
Forair,theCACMmustbetransmittedelectronicallytotheCBSAwithoutdelayaftertheaircraftthatistransportingcargo(specifiedgoods)iscleared
byNAVCanadatolandatanairportfollowingarrivalinCanada.
RailCACM
ToadvisetheCBSAthatthetrainhasphysicallyarrivedinCanada,thecarrieroperatingtheconveyancemusttransmithisCACMassoonasthetrain
crossestheU.S./Canadianborder.
HighwayCACM
HighwaycarriersreporttoCBSAatthePIL(PrimaryInspectionLine).HighwaycarrierswhoareusingeManifestmustpresentaleadsheettotheBSO
atthePIL.
ALeadSheetincludes:
abarcodedConveyanceReferenceNumber(CRN),or
abarcodedCargoControlNumber(CCN)withahandwrittenCRN,or
ahandwrittenCRNifanalternatebarcodeddocumentisalsobeingpresentedwiththeleadsheet.
TheCRNisauniquereferencenumberassignedbythecarriertoidentifyaparticularvoyageforaparticularconveyance.TheCCNisanumberthat
beginswithafourdigitcodethatidentifiesthecarrier,followedbyauniquenumber,assignedbythecarrier.
TheBSOwillstamptheleadsheetasproofofreportandreturnittothedriver.
Important:PleasebeawarethatthereportingofgoodstoCBSAdoesnotmeanthatthegoodshavebeenreleased.
EDIarrivalbecamemandatoryonMay6,2015.BeginningonJuly10,2015,carrierswhodonotcomplywillbeissuedzeroratedpenalties.Thisgrace
periodwillendonJanuary10,2016andcarrierswhodonotcomplyafterthisdatemaybeissuedmonetarypenalties.
Topic2:ReportingofGoods
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Therearefivebasicstepsinvolvedintheproperimportationofcommercialgoods.Thesestepsare:
1.
2.
3.
4.
PrearrivalnoticeisprovidedtoCBSA.
GoodsarereportedtoCBSA.
GoodsarereleasedbyCBSA(thismayalsobecalledinterimaccounting).
Goodsareaccountedfor(thatis,allshipmentdetails,includingtheamountofdutyandtaxespayable,iscommunicatedtoCustoms),bythe
customsbrokerorimporter.
5. Dutiesandtaxesarepaid,bythecustomsbrokerorimporter.
ThereportingofgoodsenteringCanadaismandatoryandisprovidedforinSection12oftheCustomsAct.Section12states:
"...allgoodsthatareimportedshall,exceptinsuchcircumstancesandsubjecttosuchconditionsasmaybeprescribed,bereportedatthenearest
customsofficedesignatedforthatpurposethatisopenforbusiness."
Thismeansthatallimportedgoodsmustbereportedattheclosestcustomsofficethatisopen,withinaparticulartimeframeandinaparticularmanner,
andbyoneofthepersonsreferredtoinSection12oftheCustomsAct.
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Topic2:ReportingofGoods(cont.2)
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Generally,forcommercialgoods,itisthecarrierwhoisresponsibleforreporting.CommercialgoodsaregoodsimportedintoCanadaforsaleorforany
industrial,occupational,commercial,institutionalorotherlikeuse.
Othersthatareresponsibleforreportingimportedgoodsare:
inthecaseofgoodsthataccompanytheirowner,orthatformpartofhisbaggage,bythatperson(inotherwords,atravellercarryingtheirown
baggageoratradesmancarryingtheirtools)
inthecaseofgoodsthatareimportedbycourierorbymail,bythepersonwhoexportedthegoods
inthecaseofgoodsnotincludedinthefirsttwoexamples,itistheresponsibilityofthecarriertoreportthegoodsand
inanyothercase,bythepersononbehalfofwhomthegoodsareimported.
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CarriersExemptfromeManifest
Insomeinstances,ahighwaycarriermaybeexemptfromfilingACIandusingeManifest,orhemaybetravellinginlandforclearance.Inthatcase,a
paperCargoControlDocument(CCD)mustbecompletedandpresentedatthePIL.
ThestandardCCDforgoodsenteringCanadabyhighwayistheA8A(B).AnA8A(B)canalsobeusedbyothermodes.Youmaywanttoprintacopyof
thisformsincewewillbediscussingeachofthefields.
ThefieldsontheA8A(B)areasfollows:
U.S.PortofExit
ThisistheportwherecargocrossestheUnitedStatesborderintoCanada.Bothcityandstatemustbeindicated.UnitedStatesportofexitcodesmay
beusedinsteadofcityandstate.FortransborderairshipmentsthatenterCanadaintheserviceofahighwaycarrier,indicatetheUSCBPportatwhich
ornearesttowhichthehighwaycarriercrossestheborderoftheUnitedStatesintoCanada.
InTransit
Thecountryofdestinationisnotedhere.WhengoodsaretravellingthroughCanada,"Canada"isnotedinthisfield.
ManifestFrom
ThisisthecustomsofficewheregoodsarereportedtoCBSA,thatis,thefirstpointofentryintoCanada.ThisiswherethecarrieradvisesCBSAofthe
goodsheiscarryin
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To
ThisistheCBSAofficewherethegoodswillbereleased.GoodsarenotalwaysreleasedatthesameportatwhichtheyenterCanada.Forexample,
theymaybetravellinginlandforclearanceataCBSAofficeotherthanatthefirstpointofarrival.Whenthisisthecase,thisfieldwillindicateadifferent
CBSAofficethantheoneindicatedinthe"manifestfrom"field.
ConsigneeNameandAddress
Indicatethenameofthepersonandaddressoftheplacetowherethegoodsarebeingdelivered.Incertaincases,onecompanywillbetheimporter
(responsibleforthepaymentofanyapplicabledutiesandtaxes)andthegoodswillinfactbedeliveredtotheimporter'scustomeroranalternate
location.Inthiscase,itisimportantthattheCCDshowthedeliveryaddress,nottheimporter'saddress.
ShippersNameandAddress
Indicatethenameandaddressofthepersonorfirmshippingthegoods.
AcquittalNo.
Thisfieldiscompletedbytheimporter,customsbroker,orCBSA.Theacquittalnumbermayalsobecalledthetransactionnumber.Thisnumberisina
barcodedformatanditsfirstfivedigitsaretheaccountsecuritynumberoftheimporterorcustomsbroker.Thisnumberreferencesaparticular
shipmentthroughoutthereporting,release,accountingandpaymentprocesses.
CarrierCode/CargoControlNo.
Thefourdigitcarriercodeandcargocontrolnumberisindicatedinthisfield.Allcommercialcarriersmusthaveafourdigitcarriercode.Carriersmust
applytoCBSAforacarriercodeandthecarriercodeisassignedbyCBSA.
PreviousCargoControlNo.
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IfgoodshavebeenlistedonanotherCCDforonereasonoranother,andnowhaveadifferentcargocontrolnumber,thepreviouscargocontrolnumber
isindicatedinthisfield.
No.ofpkgs.
Thequantityofgoodsbeingreportedisindicatedinthisfield.Onlynumbersareshown.Thereisnotextinthisfield.Forexample,ashipment
consistingof22boxesofpictureframes,30rollsofpaper,and3sheetsofglasswouldindicatethefollowingundernumberofpackages:
22
30
3
55
Atotalmustbeindicatedifmorethanonepackageisbeingshipped.
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DescriptionandMarks
Usingtheaboveexample,thedescriptionandmarksfieldwouldreadlikethis:
boxesofpictureframes
rollsofpaper
sheetsofglass
Themethodofpackaging(boxes,rolls,andsheets)mustbeindicated,aswellasacleardescriptionofthegoods.Ifthegoodsareinacontainer,the
containernumbermustbenotedinthisfield.
Weight
Selfexplanatory.Ifmorethanoneitemislisted,atotalweightmustbeindicated.
HavealookatapartiallycompletedA8A(B)CCDshowingthefieldsthataredescribedonthispagewithacargocontrolnumber.
ForeignPointofLading
Thisfieldisonlycompletedbyfreightforwardersandmarinecarriersandindicatesthecityandcountrywherethegoodswereloadedontotheship,
aircraft,vehicle,orrailconveyance.
LocationofGoods
Ifgoodsaretobestoredatasufferancewarehouseawaitingrelease,thenameoftheagenthandlingtheloadandthesufferancewarehousenameand
locationmustbeindicated.
NameofCarrier
Thenameofthetransportingcompanymustbeindicated.
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ConveyanceIdentification
Forroadcarriers,thelicencenumber,provinceorstate,year,andtrailernumbermustbeindicated.Othercarriersshouldindicateotheridentifierssuch
asrailcarinitialsorvesselnumber.
Itmaybenecessaryforabroker,importer,orcarriertomakeamendmentstoacompletedcargocontroldocument.Ifthedocumentisrewritten,the
rewrittendocumentmustindicatethesamecargocontrolnumberastheoriginalandthefieldlabelled"descriptionandmarks"mustindicatethereason
foramendment,forexample,"rewrittentoindicatepropershipper".Theoriginalcargocontroldocument,andtherewrittencargocontroldocument,must
bepresentedtoCBSA.
Regulationsexistwhichallowcarrierstotransportgoods"inbond",thatis,totransportgoodstoaninlandportforrelease,and"intransit",whichisto
carrygoodsthroughanintermediarycountry.Inordertotransportgoodsinbondorintransit,securitymustbepostedwiththeCBSAoneitheraone
timeorongoingbasis.
Goodsmaytravelinbondforavarietyofreasons,suchas:
deliverytoabondedwarehouseor
personaleffectsofsomeonemovingtoCanadathataredestinedtoawarehouseforexaminationandrelease.
CarrierswhowishtotransportgoodsinbondapplytodosoonformE370,anApplicationtoTransactBondedCarrierandForwardingOperations.
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CustomsCargoControlAbstractA10
Insomecases,thegoodslistedontheCCDwillbeaccountedforonmorethanoneaccountingdocument.Forexample,onecarriermaybecarrying
goodsforseveralimporters,buthaslistedallgoodsonasingleCCD.Sinceeachimporterwillbeaccountingforgoodsseparatelyandintheirown
name,itbecomesnecessarytosplit,orabstract,theoriginalCCD.
TheCCDusedtoreportgoodsthathavebeenincludedonasingleCCDisanA10,CustomsCargoControlAbstract.
AnexplanationofeachfieldofformA10follows.
U.S.PortofExit
SameasportofexitfortheoriginalCCD.
CBSAOffice
ThecustomsofficewheretheA10sarebeingpresented.Thiscouldbeattheborder,or,ifthedriverproceedsinland,theycanbepresentedatan
inlandcustomsoffice.
ConsigneeNameandAddress
SameformatasconsigneenameandaddressfortheA8A(B)CCD.However,thisfieldmaybedifferentiftheconsigneehaschanged.
Shipper'sNameandAddress
Sameasshipper'snameandaddressfortheA8A(B)CCD.
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WaybilledFromorPointLoaded
Cityandcountrywherethegoodswereloadedontheconveyance.
AcquittalNo.
EachoftheA10swillhaveadifferentacquittalortransactionnumber.
CarrierCode
ThesamecarriercodeisindicatedasthatwhichisshownontheoriginalA8A(B)CCD.
CargoControlNo.
Thesamenumberthatisindicatedonthemastercargocontroldocumentfollowedbytheletter"x"andanidentifier.Forexample,iftheoriginalCCD
numberis123456789543andthegoodswillbeaccountedforonthreeseparateaccountingdocuments,threeA10smustbeprepared.
ThecargocontrolnumbersonthethreeA10sare:
123456789543X1
123456789543X2
123456789543X3
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Thecargocontrolnumberindicatedontheinitialcargocontroldocumentthatisnowbeingabstracted.Inourexample,itwouldbe123456789543.
UsingtheexampleofthepreviousA8A(B),havealookatthethreeA10screatedfromtheA8A(B).
123456789543X1
123456789543X2
123456789543X3
Important!
AllamountsinthenumberofpackagesfieldonalloftheA10smustadduptothenumberontheA8A(B).
LocationofGoods
SameastheA8A(B)CCD.
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No.ofPieces
CompletethesamewayastheA8A(B)CCD.RememberthetotalnumberofpiecesoneachA10mustadduptothenumberofpiecesontheA8A(B)
CCD.
DescriptionandMarks
CompletedthesamewayastheA8A(B)CCD.
Weight
SameastheA8A(B)CCD.
NameandAddressofdeconsolidator/broker/importer
Indicatethenameandaddressofthedeconsolidator,brokerorimporterpreparingtheA10s.
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TheFreightForwarder
Theroleofthefreightforwarderistoarrangefortheinternationalmovementofgoodsinthemosteconomical,timelyandsafefashion.Theywillbook
spacewithacarrierandcanrecommendappropriatepacking,marking,andlabelling.Theycanarrangeforinsurance,andstorageanddelivery.
Freightforwardersalsoconsolidatefreight,thatis,groupshipmentstogetherasoneandincludethemononebillofladingandoneCCD.Inmostcases,
freightisconsolidatedinordertogetbettertransportationratesfromthecarriersincetransportationcompaniesofferthebestratesforfullcontainersor
conveyances.Atsomepoint,theshipmentwillhavetobebrokendownintoindividualshipments,or"deconsolidated".
ShipmentsthataredeconsolidatedinCanadamustbedocumentedonapprovedCCD's.Freightforwarderswhoarebonded,thatis,whohaveposted
securitywithCBSAinorderthattheymayshipgoodsinbondtovariouspointsinCanada,mayusethestandardformA8A(B),orhavetheirownCCDs
privatelyprinted.FreightforwarderswhoarenotbondedmustuseformA10toreportdeconsolidationstocustoms.
Aswellasconsolidatinganddeconsolidatingfreight,andarrangingforthetransportationofgoods,manyfreightforwardersarealsocustomsbrokers.
Lesson3Summary:ConveyanceandCargoReporting
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InLesson3youlearnedaboutreportinggoodsandcargocontroldocuments.
conveyancesmustbereportedupontheirarrival
conveyancearrivaltimeframesvary,accordingtomode
thereportingofgoodsenteringCanadaismandatoryandisprovidedforinSection12oftheCustomsAct
allimportedgoodsmustbereportedattheclosestcustomsofficethatisopen,withinaparticulartimeframeandinaparticularmanner,andby
oneofthepersonsreferredtoinSection12oftheCustomsAct
itisusuallythecarrierwhoisresponsibleforreporting
commercialgoodsaregoodsimportedintoCanadaforsaleorforanyindustrial,occupational,commercial,institutionalorotherlikeuse
evengoodsforwhichACIisnotrequiredmustbereported
reportingtakesplacewhentheconveyancearrivesinCanadaandareportismadetoCBSAbywayofsubmittingaConveyanceArrival
CertificationMessage(CACM)
theCACMmustbetransmittedtoCBSAwithintimeframesspecifiedforeachmode
highwaycarriersreporttoCBSAatthePIL(PrimaryInspectionLine)
highwaycarriersusingeManifestmustpresentaleadsheettotheBorderServicesOfficeratthePIL
carriersnotusingeManifestwillpresentapaperCargoControlDocument(CCD)
thestandardCCDforgoodsenteringCanadabyhighwayistheA8A(B)and
anA8A(B)canbebrokendownbyusinganA10(AbstractManifest).
NowtakesometimeandanswersomequestionstotestyourknowledgeofLesson3.
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Lesson4:OtherDocumentation
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Inthislessonyouwilllearnaboutbillsofladingandlettersofcredit.
Rationale
Youshouldunderstandthepurposeofabillofladingandletterofcredit.
LessonObjective
AttheendofLesson4,youshouldbeabletoexplainwhenabillingofalading,andletterofcredit,areused.
Topic1:BillofLading
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Abillofladingisacontractbetweenthecarrierandtheshippertotransportgoods.Itisissuedbythecarriertotheshipper.
Abillofladingmayalsobeused:
asareceiptforgoodsreceivedbythecarrieranddescribestheconditioninwhichthegoodswereloadedonboard
tosupportaclaimagainstthecarrierforlossordamageand
tosupportaspecifictarifftreatment,sinceitindicatesthepointwherethegoodsoriginatedandanytranshipment.
Billsofladingareeitherorderbillsoflading(negotiable)orstraightbillsoflading(nonnegotiable).
OrderBillofLading
Anorderbillofladingisonethatismadeouttotheorderofaparty,usuallytheseller.Thistypeofbillofladingcanbebought,sold,ortradedwhilethe
goodsareintransit,anunlimitednumberoftimes.Anorderbillmustbesurrenderedtothecarrierinorderfortheconsigneetoobtainpossessionofthe
goods.
StraightBillofLading
Astraightornonnegotiablebillofladingismadeouttoaspecificallynamedconsigneeandprovidesfordeliverytothatconsigneeandnooneelse.
Thisbillofladingdoesnotprovidetitletothegoods,and,inordertoclaimthegoods,theconsigneemustidentifyhimself.Astraightbilldoesnothave
tobesurrenderedtothecarrierinorderfortheconsigneetoobtainpossessionofthegoods.
Abillofladingcontainsthenameoftheshipper,theconsignee,thenameofthepartythatistobenotifiedwhenthegoodsarrive,andthemodeof
transportation.Otherfieldsincludeadescriptionofthegoods,weight,termsofpaymentforshipping,andanyreferencestootherbillsofladingusedto
carrythesamegoods.
Oncethegoodsbegintheirjourney,thecarrierwillsendtheimporteratleasttwocopiesofthebillofladingtoserveasnoticeofimminentarrivalofthe
goods.Tocollectthegoods,theimporter,orowner,mustpresentthecarrierwiththeoriginal,endorsed(signed)billoflading.
Acleanbillofladingisonethatdoesnotcontainanynotationsorcommentsthatindicatethatthegoodsbeingcarriedaredamagedinanyway.
Topic2:LetterofCredit
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Aletterofcreditisaguaranteeofpayment.Itisacommitmentbyafinancialinstitutiontopayanagreedamounttoavendorunderprecisetermsand
conditions.
Typicalconditionsthataredocumentedontheletterofcreditmightinclude:
thatthegoodsmustarrivewithinaspecifiedtime
thatproperdocumentation,orcertificates,necessaryforcustomsclearance,willbeprovidedbythesupplierand/or
thatthegoodsorderedwillbethegoodsshipped(thatis,nosubstitutions).
Lettersofcreditactassecurityfortheexportersincealetterofcreditassuresthemthattheywillbepaidfortheirgoods.Italsoassurestheimporter
thatpaymentforthegoodswillbemadeonlyafterthetermsoutlinedintheletterofcredithavebeenmet.Thebuyer(importer)ofthegoodsisthe
applicantfortheletterofcreditandtheseller(exporter)isthebeneficiary.
Theletterofcreditisissuedbyabank(issuingbank)attherequestoftheimporter,andthebankagreestopaytheexporter(beneficiary)forthegoods,
oncethetermsintheletterofcredithavebeenmet.
Theexporterofthegoodsisthepartyinwhosefavouraletterofcreditisissued.Theadvisingbankisthebankintheexporterscountry.
Thesequenceofeventsforatypicaltransactioninvolvingaletterofcreditwouldbeasfollows:
Thebuyerandtheselleragreeonapriceforgoods
Thesellerasksthebuyerforaletterofcredittoguaranteepayment
Thebuyerappliestohisbank(theissuingbank)foraletterofcreditinfavouroftheseller
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Thebankapprovestheletterofcreditapplication,basedonthecreditriskofthebuyer,andforwardstheletterofcredittotheadvisingbank
Theadvisingbankauthenticatestheletterofcreditandadvisestheseller
Theseller/exportershipsthegoods,andcomplieswithanyrequirementsnotedintheletterofcredit
Thesellersendsanyrequireddocumentstotheadvisingbank,includingabilloflading,inorderthatpaymentforthegoodsisprocessed
Ifallisinorder,theadvisingbankwillclaimthefundsfromtheissuingbank
Documentswillbeforwardedfromtheadvisingbanktotheissuingbankand
Theissuingbankwilldebitthebuyer'saccountandprovidethebuyerwithanyrequireddocuments.
Theadvisingbankwillprovidetheissuingbankwiththebilloflading.Thebuyerisprovidedwithacopyofthebilloflading,whichtheywillneedinorder
totakedeliveryofthegoods.Toobtainreleaseofthegoodsattheportofarrival,theoriginalendorsedbillofladingmustbepresented.
Lesson4Summary:OtherDocumentation
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InLesson4youlearnedaboutthebilloflading,letterofcredit,androleofthefreightforwarder.
Abilloflading:
isacontractbetweenthecarrierandtheshipper/exportertocarrygoods,andisissuedbythecarriertotheshipperorexporter
canactasareceiptforgoodsreceivedbythecarrieranddescribestheconditioninwhichthegoodswereloadedonboard
containsshippinginstructions
canbeusedtosupportaclaimagainstthecarrierforlossordamageand
canbeusedtosupportaspecifictarifftreatment
billsofladingareeithernegotiable(orderbilloflading)ornonnegotiable(straightbilloflading)
acleanbillofladingisonethatdoesnotcontainanymarkingsornotationsindicatingdamagetothegoods
aletterofcreditisaguaranteeofpaymenttotheseller
thefreightforwarderusuallyarrangesfortheinternationalmovementofgoods
freightforwardersalsoconsolidatefreight,thatis,groupshipmentstogetherasoneandincludethemononebillofladingandoneCCD
atsomepoint,theshipmentwillhavetobebrokendownintoindividualshipments,or"deconsolidated".
shipmentsthataredeconsolidatedinCanadamustbedocumentedonapprovedCCDs
freightforwarderswhoarebonded,thatis,whohavepostedsecuritywithCBSAinorderthattheymayshipgoodsinbondtovariouspointsin
Canada,mayusethestandardformA8A(B),orhavetheirownCCDsprivatelyprintedand
manyfreightforwardersarealsocustomsbrokers.
Nowtakeafewminutesandtestwhatyouhavelearnedaboutbillsofladingandlettersofcredit.
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Module8Summary:InvoiceRequirementsAdvanceCommercial
InformationConveyanceandCargoReporting
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InvoiceRequirements
InformationmustbeprovidedtoCBSAforallgoodsenteringCanada.
ThisinformationisusuallycontainedonacommercialinvoiceorCanadaCustomsInvoice.
Invoiceinformation:
allowsCBSAtodeterminetheriskofgoodsenteringCanada
providesthedateofdirectshipmentforcurrencyexchangepurposesand
allowsthevaluefordutytobedetermined.
Theexporter,importer,ownerofthegoods,oracustomsbrokermaycompletetheinvoice.
Carefulattentionmustbepaidtoinformationonfields23and24oftheCanadaCustomsInvoice.
AdvanceCommercialInformation(ACI)MarineandAir
AdvanceCommercialInformation(ACI)isareportingprocesswherebymandatorydataistransmittedelectronicallytoCBSA.
ACIdataissenttoCBSApriortothearrivalofgoods.
Timeframesforsubmittingdatavaryforeachmodeoftransportation.
IfCBSAdoesnotauthorizetheloadingofgoodsontothemarineconveyance,theywillissueaDoNotLoadmessage.
IfaDoNotLoadmessageisnotsentbyCBSAinthe24hourperiodafterthecargodataistransmitted,thecargocanbeloaded.
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Module8Summary:InvoiceRequirementsAdvanceCommercial
InformationConveyanceandCargoReporting(cont.2)
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ConveyanceReporting
WhenaconveyancearrivesatitsFirstPointofArrivalinCanada,itmustindicateitsarrivaltoCBSA.
ArrivalmessagesmustbesentusingEDI.
MarinearrivalmessagesmustbetransmittedwhenthevessellandsataCBSAofficeuponarrivalinCanadaandmaybetransmittedand
receivedbytheCBSAwithinatwo(2)hourwindowpriortoarrival,aslongasthethevesselisinCanadianwaters.
AirarrivalmessagesaretransmittedassoonattheNAVCANhasclearedtheaircrafttoland.
Railarrivalsmessagesaretransmittedupto30minutesinadvanceoftheactualarrivaloftheconveyanceattheCanadianborder.
HighwaycarriersreporttheirarrivalwhentheystopatthePrimaryInspectionLine.
CargoReporting
ReportingofgoodsenteringCanadaismandatoryandisprovidedforinSection12oftheCustomsAct.
Goodsmustbereportedattheclosestcustomsofficethatisopen,withinaparticulartimeframeandinaparticularmanner,andbyoneofthe
personsreferredtoinSection12.
Generally,forcommercialgoods,itisthecarrierwhoisresponsibleforreportinggoods.
ReportingisdonethroughuseofCACM(ConveyanceArrivalCertificationMessage),viaEDI.
Insomecases,apaperCargoControlDocument(CCD)isusedtoreportgoods.
ThestandardCCDistheA8A(B).
InformationontheA8A(B)maybebrokendownintotwoormoreA10CCD'sifthegoodsontheA8A(B)willbeaccountedforonmorethanone
accountingdocument.
HighwayandRailReporting
Highwaycargomustbereportedbythecarrier,toCustoms,atthefirstpointofarrival.
FailuretoreportgoodstoCBSAcanresultinpenaltiesissuedtothecarrier.
WhenatrainarrivesinCanada,anarrivalmessageissenttoCBSAelectronically(CACM).
BillofLading
Abillofladingisacontractbetweenthecarrierandtheshippertotransportgoods.
Abillofladingisissuedbythecarriertotheshipper.
Abillofladingmayalsobeused:
asareceiptforgoodsreceivedbythecarrierwhichdescribestheconditioninwhichthegoodswereloadedonboard
tosupportaclaimagainstthecarrierforlossordamageand
tosupportaspecifictarifftreatment,sinceitindicatesthepointwherethegoodsoriginatedandanytranshipment.
Abillofladingiseitheranorderbilloflading(negotiable)orastraightbilloflading(nonnegotiable).
Acleanbillofladingisonethatdoesnotcontainanynotationsorcommentsthatindicatethatthegoodsbeingcarriedaredamagedinanyway.
LetterofCredit
Isacommitmentbyafinancialinstitutiontopayanagreedamounttoavendorunderprecisetermsandconditions.
Actsassecurityfortheexporter.
Assurestheimporterthatpaymentforthegoodswillbemadeonlyafterthetermsoutlinedintheletterofcredithavebeenmet.
Isissuedbyabankattherequestoftheimporter,andthebankagreestopaytheexporterforthegoodsoncethetermsintheletterofcredithave
beenmet.
FreightForwarders
Arrangefortheinternationalmovementofgoodsinthemosteconomical,timelyandsafefashion.
Bookspacewithacarrier,andcanrecommendappropriatepackaging,marking,andlabelling.
Canarrangeforinsurance,andsubsequentstorageanddelivery.
Mayconsolidatefreightinordertogetbettertransportationratesfromthecarrier.
AshortquizonwhatyouhavelearnedinModule8follows.
Module8:Quiz
Questions:
Attemptsallowed:
Available:
Passrate:
20
Unlimited
Always
60%
Allowed
Toconcludethismodule,herearesomequestionstotestyourknowledgeon.
ClickontheStartquizbuttontostart.YoumaymovebetweenquestionsbyusingtheNextandBackbuttonsbutyoumustprovideananswerbefore
youcanmoveontothenextquestion.Onceyoucompletethequiz,you'llhavetheopportunitytoreviewyouranswersandviewthecorrectanswersas
well.Youmayredothequizasmanytimesasyouwish.
Startquiz
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Module9:ClassificationofGoods
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Module5providedyouwithanexplanationofthetoolsyouneedtoclassifygoodsandanoverviewofthestructureoftheCustomsTariff.Thismodule
willteachyouhowtousethesetoolsinordertoproperlyclassifygoods.
ModuleObjective
YouwillbeabletoclassifygoodsundertheHarmonizedSystemofTariffClassification.
Lesson1:GatheringInformationontheImportedGoods
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Inordertoproperlyclassifygoods,itisimportanttoknowasmuchaspossibleaboutthegoodsbeingclassified.
Rationale
Unlessyouknowwhatexactlyisbeingimported,itisimpossibletodeterminethecorrectclassification.
LessonObjective
AttheendofLesson1,youshouldbeabletodescribethegoodsintermsthatwillenableyoutodeterminethecorrectclassification.
Topic1:GatheringInformationontheImportedGoods
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Beforeyoucanattempttoclassifygoods,youmustknowwhattheyare.
Forexample,letssayyouareaskedtoclassifyfish.Youwillneedtoaskyourselfthefollowingquestions:
Whatkindoffish?
Isthefishfresh?Frozen?Canned?
Isitwhole?Steaks?Fillets?
Whatwillitbeusedfor?Humanconsumption?Forcommercialsale?Canning?Petfood?
Themoreyouknowaboutaproduct,theeasieritwillbetofindthecorrectclassification.
Herearesomewaystogatherasmuchinformationasyoucanontheimportedgoods.
Sometimes,theinvoicethataccompaniesimportedgoodsisvagueandmayevenonlycontainapartnumber.Unlessyouhaveacataloguethat
describeseachitemaccordingtopartnumber,youmustcontacttheimporterorthesuppliertodeterminethenatureofthegoods.
Askyourclientorthesupplierfordescriptiveliterature.Machineryandmechanicalitemsoftencomewithabrochurethathelpsidentifythegoods.
YoucanalsolookontheInternetitcanbeagoodsourceofinformationsincemanyproductscanbepurchasedonlineandarefullydescribedonthe
vendorswebsite.
AskyourclientiftheyhaveeverbeenadvisedbyCBSAonwhatclassificationtheyshoulduse.Wewilldiscusspenaltieslaterinthiscourse,butifthe
CBSAhasadvisedtheimporterofthetariffclassificationtheybelieveiscorrect,apenaltywillbeissuedagainsttheimporterifanotherclassificationis
used.
Askyourclienthowthegoodswillbeused.Inmanycases,theenduseofthegoodscandeterminethetariffclassification.Forexample,theremaybea
reductionindutyforgoodsbeingmanufacturedinCanadaforspecificindustrysectors.
Lesson1Summary:GatheringInformationontheImportedGoods
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Lesson1stressedthatinordertoproperlyclassifygoods,youmustbeabsolutelysureofwhatitisyouareclassifying.
Keypointsfromthislessonare:
descriptiveliteraturesuppliedbythevendorortheimporter,tradecatalogues,andInternetresearchmaybeusedtohelpyoudeterminethe
natureofthegoodsyouareattemptingtoclassify
checkwithyourclienttoseeifthereareanypreviousrulingssuppliedtotheimporterregardingtheimportedgoodsand
importersmaybepenalizedforincorrecttariffclassification.
Youshouldnowknowhowtoobtaininformationthatwillenableyoutoclassifygoods.
Lesson2:HSClassificationNumbers
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InModule5,youlearnedabouttheCustomsTariff.Inthislesson,wewilllearnmoreabouttheHSclassificationnumber.
Rationale
InordertoselectthecorrectHSclassificationnumber,youwillneedtoknowitsstructure.
LessonObjective
AttheendofLesson2,youwillbeabletoidentifythepartsofatariffclassificationnumber.
Topic1:WhattheHSClassificationNumberTellsUs
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WithintheHarmonizedSystem,goodsareclassifiednumericallyinahierarchicalmanner.
HierarchicalmeanstheleastprocessedgoodsarefoundintheearliersectionsandchaptersoftheCustomsTariffandthemorecomplexgoodsare
foundtowardstheback.
TherearetwentyonesectionsintheCustomsTariff,listedinRomannumeralsfromItoXXI.Thesesectionsarefurtherdividedintoninetynine
chapters.
AcompleteHSclassificationconsistsofatendigitnumber,andlookslikethis:
0801.22.00.00
ThisexamplereferstoBrazilnuts(shelled),andthenumberisbrokendowninthefollowingmanner:
Chapter(first2digits)=08
Heading(first4digits)=08.01
Subheading(first6digits)=0801.22
TariffItem(first8digits)=0801.22.00
ClassificationNumber(alltendigits)=0801.22.00.00
Note:Thesectionnumberdoesnotformpartofthetariffclassificationnumber.
Chapter
ThefirsttwodigitsofthecompleteHSclassificationnumberarethechapter.Forexample,tariffclassificationnumber1504.10.10.10isinChapter15.
Heading
ThefirstfourdigitsofacompleteHSclassificationnumberaretheheading,08.01isanexample.Thefirsttwodigits:08indicatethechapter.Thelast
twodigits:01indicatewheretofindtheheadinginthechapter.Notethatwhenaheadingisusedonitsown,itispresentedas08.01(aperiodisadded
afterthechapternumber).
Topic1:WhattheHSClassificationNumberTellsUs(cont.2)
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Subheading
Eachsixdigitsubheadingincludestextthatisprecededbyeitheroneortwodashes.Thefirstsixdigitsarethesameforallcountriesadheringtothe
HarmonizedCommodityDescriptionandCodingSystem.
Subheadingsfurtherdescribetheheading.Informationinanysubheadingrelatesonlytothegoodsinitsheading.
Havealookatthesubheadingsbeneathheading06.01.Theseareonedashsubheadings,sincetheyareeachprecededbyonedash.
06.01Bulbs,tubers,tuberousroots,corms,crownsandrhizomes,dormant,ingrowthorinflowerchicoryplants
androotsotherthanrootsofheading12.12.
Bulbs,tubers,tuberousroots,corms,crownsandrhizomes,dormant
Bulbs,tubers,tuberousroots,corms,crownsandrhizomes,ingrowthorinflowerchicoryplantsandroots
Sincetheyareeachprecededbyonedash,thesetwosubheadingsmayonlybecomparedtoeachother.Thegoodsbeingclassifiedmustfitintooneof
thesetwosubheadings,andalsointotheheading(06.01).
Hereisanotherexampleofonedashsubheadings.
27.08Pitchandpitchcoke,obtainedfromcoaltarorfromothermineraltars.
Pitch
Pitchcoke
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Inthisexample,pitchandpitchcokeareonedashsubheadingsthatfallundertheheading27.08.
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Therearealsosubheadingswithtwodashes().Subheadingsatthislevelmust
fitintothesingledashsubheadingthatprecedesit.
Thisisanexampleofthenumberingprotocolforcoconuts,andhowsubheadings
arepresentedinthetariffclassificationnumber.
Subheadingswithonedashcanonlybecomparedtoothersubheadingswithone
dash.Allonedashsubheadingsfallintothesamefourdigitheading.
Subheadingswithtwodashescanonlybecomparedtoothersubheadingswith
twodashes.Theymustalsofallwithinthescopeoftheprecedingonedash
subheading,aswellasthefourdigitheading.
Inthecoconutsexample,youwouldchecktoseewhatsubheadingthecoconuts
wouldfallunder,either
"Dessicated",Intheinnershell(endocarp),or"Other".
Topic1:WhattheHSClassification
NumberTellsUs(cont.4)
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TariffItem
Theseventhandeighthdigitsofthetariffclassification,aswellasthefirstsix,makeupthetariffitem.Thetariffitemincludesthechapter,theheading,
andthesubheading.
Tariffitemsareprecededbythreeorfourdashes.
Anexampleofathreedashtariffitem,includedinheading64.01,follows.Forillustrativepurposes,notallitemsinthehierarchyareshown.
64.01Waterprooffootwearwithoutersolesanduppersofrubberorofplastics,theuppersofwhichareneitherfixedtothesolenorassembledby
stitching,riveting,nailing,screwing,pluggingorsimilarprocesses(heading).
Footwearincorporatingaprotectivemetaltoecap(onedashsubheading)
Otherfootwear:(onedashsubheading)
Coveringtheanklebutnotcoveringtheknee(twodashsubheading)
Ridingboots:(threedashtariffitem)
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Asanexample,followingisatariffclassificationexerciseforunfinishedbamboofurnitureforuseinthemanufactureoffurnitureforthehome.Clickon
thePlaybuttontolookatatariffclassificationexerciseforunfinishedbamboofurnitureforuseinthemanufactureoffurnitureforthehome.
Toplaythevideo,clickonthePlaybutton
.Topausethevideo,clickonthePausebutton
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Anexampleofafourdashtariffitem,includedin94.03,follows:
Furnitureofothermaterials,includingcane,osier,bambooorsimilarmaterials(onedashsubheading)
9403.81Ofbambooorrattan(twodashsubheading)
Fordomesticpurposes(threedashtariffitem)
9403.81.11.00Unfinishedandunassembled,foruseinthemanufactureoffurnitureofbambooorrattan(fourdashtariffitem)
Thetariffitemis9403.81.11.
Tariffitemswiththreedashescanonlybecomparedtoothertariffitemswiththreedashes,andthosewithfourdashescanonlybecomparedtoothers
withfourdashes.
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Anotherexampleofafourdashtariffitemfollows.Inordertomaketheillustrationclear,notallitemsinthehierarchyareshown.
94.01Seats(otherthanthoseofheading94.02),whetherornotconvertibleintobeds,andpartsthereof.(heading)
Otherseats,withmetalframes:(onedashsubheading)
Upholstered(twodashsubheading)
Fordomesticpurposes(threedashtariffitem)
Parts(onedashsubheading)
Ofseatsfordomesticpurposes,excludingthoseconvertible...(threedashtariffitem)
Cutandsewnleatherandvinylcovers,ofavaluenot...(fourdashtariffitem)
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ComparingSubheadingsandTariffItemNumbers
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Todeterminethetariffclassificationnumber,youmustfindthepropersubheadingandtariffitem.Todothis,youfollowthissequence:
a)Compareallonedashsubheadingdescriptions.Whichbestdescribesyourgoods?
b)Onceyoulocatetheonedashsubheading,compareanytwodashsubheadings.Whichbestdescribesyourgoods?
c)Iftherearethreedashtariffitemdescriptions,compareyourgoodsagainsteachofthose.
d)Continuecomparingitemswiththesamenumberofdashesuntilyoufindtheappropriatedescription,andyouwillthenbeabletopiece
togetherthefull,tendigittariffclassificationnumber.
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StatisticalSuffix
Thelasttwodigits,theninthandtenth,arethestatisticalsuffix.ThestatisticalsuffixconsistsoftwodigitsthatarespecificallyCanadianandprovidesa
moredetailedproductdescriptionthatisrequiredbyStatisticsCanada.
CBSAprovidestheclassificationnumbersofallimportedgoodstoStatisticsCanada.Thisinformationissubsequentlyused,amongotherthings,to
assessCanadaseconomicsituation.ItcanalsobeusedinternationallybyforeigninvestorswhoareconsideringCanadaforpotentialbusiness.
IftherearenoCanadianstatisticalrequirements,thesedigitsarezeros.
ClassificationNumber
Thefinaltendigitnumberistheclassificationnumberandprovidesthemostdetaileddescriptionofthegoods.
ItisthisnumberthatissubmittedtotheCanadaBorderServicesAgencywhenprovidingthemwithdetailsonimportedgoods.
Lesson2Summary:ClassificationofGoods
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InLesson2youlearnedaboutthepartsoftheclassificationnumberandthelegalnotes.
thefirsttwodigitsofthetariffclassificationnumberarethechapter
thethirdandfourthdigits,togetherwiththechapter,makeuptheheading
thefifthandsixthdigits,togetherwiththeheading,makeupthesubheading
thesubheading,plustwoadditionaldigits,makeupthetariffitem
acompletetariffclassificationnumberconsistsofatendigitnumber
thelasttwodigitsareforstatisticalpurposes
subheadingscanbeprecededbyoneortwodashes
tariffitemsareprecededbythreeorfourdashesand
subheadingswithonedashcanonlybecomparedtoothersubheadingswithonedash.
Takeafewminutesnowandanswerthequestionsthatfollow.
Questions:
Attemptsallowed:
Available:
Passrate:
5
Unlimited
Always
60%
Allowed
Toconcludethislesson,herearesomequestionstotestyourknowledgeon.
youcanmoveontothenextquestion.Onceyoucompletetheselfcheck,you'llhavetheopportunitytoreviewyouranswersandviewthecorrect
answersaswell.Youmayredotheselfcheckasmanytimesasyouwish.
Startquiz
Lesson3:SelectingtheAppropriateTariffClassification
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Lesson3willdemonstratethestepstotakeinselectingthetariffclassification.
Rationale
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Whenclassifyinggoods,itisimportantthatitbedonecorrectly.Iferrorsaremade,penaltiesmaybeassessed.
LessonObjective
AttheendofLesson3youshouldbeabletocorrectlyclassifygoods.
Topic1:SelectingtheAppropriateTariffClassification
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Onceyouknowasmuchasyoucanaboutthegoodsyouareclassifying,thefirststepinclassifyingthegoodsisdetermininginwhichsectionof
theCustomsTariffthegoodsmightfall.
Letsuseanexampleofanumbrella.Youvegatheredinformationabouttheumbrellaandyouknowthattheumbrellaisthecollapsibletypewithan
extendablehandle,usedintherain.
FromtheTableofContents,havealookatthe21sectionstoseewherethesegoodsmightfit.
SectionsoftheCustomsTarifftendtobeorganizedintheorderoftheirtechnologicalcomplexity.Thus,liveanimalsandotheragriculturalproductsare
inSectionI,whilemorecomplexgoodssuchasmachineryandprecisioninstrumentsareinthelatersections.
Bylookingatthetableofcontents,youprobablyselectedSectionXII:Footwear,Headgear,Umbrellas,SunUmbrellas,Walkingsticks,Seatsticks,
Whips,RidingcropsandPartsThereofPreparedFeathersandArticlesMadeTherewithArtificialFlowersArticlesofHumanHair.
Ifyoudid,thatiscorrectumbrellasarelistedinthesectiontitle.
Beforeyougotoomuchfurther,havealookatSectionXIIandseeifthereareanysectionnotes.
Next,lookatthechapterswithinSectionXII.ListedbelowarethefourchaptersinSectionXII.
64.Footwear,gaitersandthelikepartsofsucharticles
65.Headgearandpartsthereof
66.Umbrellas,sunumbrellas,walkingsticks,seatsticks,whips,ridingcropsandpartsthereof
67.Preparedfeathersanddownandarticlesmadeoffeathersorofdownartificialflowersarticlesofhumanhair
Chapter66certainlydeservesacloserlook.Butfirst,arethereanychapternotesthatmayaffecttheclassification?
Havealookatthechapternotes.
Topic1:SelectingtheAppropriateTariffClassification(cont.2)
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TherearenochapternotesthatwouldpreventyoufromclassifyingthegoodsinChapter66.
Thenextstepistohavealookattheeachoftheheadingsinthechapteryouhaveselected.
Note:RememberfromModule6,youcanonlycompareheadingswithheadings.
66.01Umbrellasandsunumbrellas(includingwalkingstickumbrellas,gardenumbrellasandsimilarumbrellas).
66.02Walkingsticks,seatsticks,whips,ridingcropsandthelike.
66.03Parts,trimmingsandaccessoriesofarticlesofheading66.01or66.02.
Afterreadingtheseheadings,youcannowrestrictyoursearchtothosetariffitemsthatbeginwithheading66.01.
Next,compareallthesubheadingsprecededbyonedash.
Remember:youcanonlycomparesubheadingswithonedashtoothersubheadingswithonedash.
Therearetwoonedashsubheadingsinheading66.01.Theseare:
6601.10.00.00Gardenorsimilarumbrellas
Other:
Nowyoumustchoosebetweenthesetwoonedashsubheadings.Sinceyouknowthattheyareumbrellasforuseintherain,andnotgardenorsimilar
umbrellas,youmustchecktoseeifthereisanythingafter"Other:"
FromModule6,youknowthatotherinformationfollows,sincethereisacolon(:)after"Other:.
Important:Inmanycases,therearenoonedashsubheadings.Iftherearenoonedashsubheadings,youimmediatelygotoanytwodash
subheadingsfollowingtheheading.Thesameholdstrueoftariffitems.Iftherearenothreedashtariffitems,yougodirectlytothefourdashtariffitems
thatfollowthesubheadingorsubheadings.Youmustlookatthesection,chapter,heading,onedashsubheading,twodashsubheading,threedash
tariffitemandfourdashtariffitem,andstatisticalsuffixinthatorder.
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UnderOthertherearetwotwodashsubheadings:
6601.91.00.00Havingatelescopicshaft
6601.99.00.00Other
Neitherofthesetwodashsubheadingshaveinformationthatfollows.
Thetwotendigitclassificationsthatyoumustchoosebetweenare6601.91.00.00and6601.99.00.00.
Whathaveyoudecided?
Theansweris6601.91.00.00.
WhatabouttheGeneralInterpretiveRules?Letshavealook.
GIR1
ThisrulestatesthattitlesofSections,ChaptersandsubChaptersareprovidedforeaseofreferenceonlyforlegalpurposes,classificationshallbe
determinedaccordingtothetermsoftheheadingsandanyrelativeSectionorChapterNotesand,providedsuchheadingsorNotesdonototherwise
require,accordingtothefollowingprovisions.
Explanation
ThetitleofSectionXIIandthetitleofChapter66areforreferenceonly,andtherearenosubchapters.However,thetitleoftheheadingandany
relativesectionorchapternotesmustbeconsidered.
Heading66.01says:Umbrellasandsunumbrellas(includingwalkingstickumbrellas,gardenumbrellasandsimilarumbrellas).
Sofar,sogood.AccordingtoGIR1,thegoodsareclassifiedcorrectlyinheading66.01sinceumbrellasarespecificallynamed.
Didthesectionorchapternotescontradictanythinginthisheading?No,theydidnot.
TheGIRsareappliedsequentiallyanditappearsthatwehavecorrectlyclassifiedthegoodsaccordingtoGIR1.TobetterunderstandtheGIRs,let's
lookattherestofthemwithrespecttotheumbrellayouareclassifying.
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GIR2
(a)Anyreferenceinaheadingtoanarticleshallbetakentoincludeareferencetothatarticleincompleteorunfinished,providedthat,aspresented,the
incompleteorunfinishedarticlehastheessentialcharacterofthecompleteorfinishedarticle.Itshallalsobetakentoincludeareferencetothatarticle
completeorfinished(orfallingtobeclassifiedascompleteorfinishedbyvirtueofthisRule),presentedunassembledordisassembled.
(b)Anyreferenceinaheadingtoamaterialorsubstanceshallbetakentoincludeareferencetomixturesorcombinationsofthatmaterialorsubstance
withothermaterialsorsubstances.Anyreferencetogoodsofagivenmaterialorsubstanceshallbetakentoincludeareferencetogoodsconsisting
whollyorpartlyofsuchmaterialorsubstance.Theclassificationofgoodsconsistingofmorethanonematerialorsubstanceshallbeaccordingtothe
principlesofRule3.
Theumbrellaswerenotincompleteorunfinished,norweretheymixtures.GIR2doesnotapply.
GIR3
GIR3isusedwhen,byapplicationofRule2(b)orforanyotherreason,goodsare,primafacie,classifiableundertwoormoreheadings.
Explanation
GIR3providesthreemethods,appliedinorder,todeterminethetariffclassificationofgoodsthatappeartobeequallysuitedtomorethanoneheading.
Sincewehavenotfoundanyotherheadingthatsuitstheumbrellaaswellasheading66.01,GIR3doesnotapply.
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GIR4
GoodswhichcannotbeclassifiedinaccordancewiththeaboveRulesshallbeclassifiedundertheheadingappropriatetothegoodstowhichtheyare
mostakin.
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Explanation
IfGIRS1,2,or3cannotbeused,thentheumbrellacanbeclassifiedundertheheadingforgoodstowhichtheumbrellaismostalike,orakin.
Isitnecessarytolookforanotherheading?No,itisnottheumbrellaswereclearlynamedinheading66.01anditisnotnecessarytofindanotheritem
thatismostlikeanumbrella.
GIR5
Inadditiontotheforegoingprovisions,thefollowingRulesshallapplyinrespectofthegoodsreferredtotherein:
(a)Cameracases,musicalinstrumentcases,guncases,drawinginstrumentcases,necklacecasesandsimilarcontainers,speciallyshapedorfittedto
containaspecificarticleorsetofarticles,suitableforlongtermuseandpresentedwiththearticlesforwhichtheyareintended,shallbeclassifiedwith
sucharticleswhenofakindnormallysoldtherewith.ThisRuledoesnot,however,applytocontainerswhichgivethewholeitsessentialcharacter.
(b)SubjecttotheprovisionsofRule5(a)above,packingmaterialsandpackingcontainerspresentedwiththegoodsthereinshallbeclassifiedwiththe
goodsiftheyareofakindnormallyusedforpackingsuchgoods.However,thisprovisionisnotbindingwhensuchpackingmaterialsorpacking
containersareclearlysuitableforrepetitiveuse.
Explanation
ArethegoodsofatypelistedinGIR5?Absolutelynot.
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GIR6
Forlegalpurposes,theclassificationofgoodsinthesubheadingsofaheadingshallbedeterminedaccordingtothetermsofthosesubheadingsand
anyrelatedSubheadingNotesand,mutatismutandis,totheaboveRules,ontheunderstandingthatonlysubheadingsatthesamelevelare
comparable.ForthepurposeofthisRuletherelativeSectionandChapterNotesalsoapply,unlessthecontextotherwiserequires.
Explanation
Didweremembertocompareonlythosesubheadingsatthesamelevel?Yes,wedidwecomparedthefollowing:
Gardenorsimilarumbrellas
with
Other:
Andwecompared:
Havingatelescopicshaft
with
Other
Wecannowsatisfyourselvesthatthecorrecttendigittariffclassificationis6601.91.00.00.
DoanyofthethreespecificallyCanadianGIRsapply?
1.Forlegalpurposes,theclassificationofgoodsinthetariffitemsofasubheadingorofaheadingshallbedeterminedaccordingtothetermsofthose
tariffitemsandanyrelatedSupplementaryNotesand,mutatismutandis,totheGeneralRulesfortheInterpretationoftheHarmonizedSystem,onthe
understandingthatonlytariffitemsatthesamelevelarecomparable.ForthepurposeofthisRuletherelativeSection,ChapterandSubheadingNotes
alsoapply,unlessthecontextotherwiserequires.
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Explanation
Didwehavetocomparethreedashorfourdashtariffitems?Wedidnot.
2.WherebothaCanadiantermandaninternationaltermarepresentedinthisNomenclature,thecommonlyacceptedmeaningandscopeofthe
internationaltermshalltakeprecedence.
Explanation
WerethereanyspecificallyCanadiantermsinthetariff?Therewerenot.
Explanation
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Wereweclassifyingpackingmaterialsorpackingcontainers?Wewerenot.
Letstryanotherexamplebyfindingthetariffclassificationforladies'leatherhandbags.
Remember:lookatthesectiontitlesfirst.
Bylookingatthetableofcontents,youshouldbeabletodeterminethatthesegoodswouldlikelybeclassifiedinSectionVIII.RawHidesandSkins,
Leather,FurskinsandArticlesThereofSaddleryandHarnessTravelGoods,HandbagsandSimilarContainersArticlesofAnimalGut(OtherthanSilk
wormGut)
Arethereanyrelevantsectionnotes?
Letslooknextatthechapters.Therearethreechaptersinthissection.
41.Rawhidesandskins(otherthanfurskins)andleather
42.Articlesofleathersaddleryandharnesstravelgoods,handbagsandsimilarcontainersarticlesofanimalgut
(otherthansilkwormgut)
43.Furskinsandartificialfurmanufacturesthereof
Whichchapterdoyouthinkshouldbelookedatmoreclosely?
Now,arethereanyChapter42notesthatwouldprecludeyoufromclassifyingthesegoodsinChapter42?
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NoneoftheexclusionsinthenotestoChapter42apply.
LetslooknowattheheadingsthatareincludedinChapter42.Remember,youcanonlycompareheadingswithheadings.
Theheadingsare:
42.01Saddleryandharnessforanyanimal(includingtraces,leads,kneepads,muzzles,saddlecloths,saddlebags,dogcoatsandthelike),ofany
material.
42.02Trunks,suitcases,vanitycases,executivecases,briefcases,schoolsatchels,spectaclecases,binocularcases,cameracases,musical
instrumentcases,guncases,holstersandsimilarcontainerstravelingbags,insulatedfoodorbeveragebags,toiletbags,rucksacks,handbags,
shoppingbags,wallets,purses,mapcases,cigarettecases,tobaccopouches,toolbags,sportsbags,bottlecases,jewelleryboxes,powderboxes,
cutlerycasesandsimilarcontainers,ofleatherorofcompositionleather,ofsheetingofplastics,oftextilematerials,ofvulcanizedfibreorofpaperboard,
orwhollyormainlycoveredwithsuchmaterialsorwithpaper.
42.03Articlesofapparelandclothingaccessories,ofleatherorofcompositionleather.
42.05Otherarticlesofleatherorofcompositionleather.
42.06Articlesofgut(otherthansilkwormgut),ofgoldbeater'sskin,ofbladdersoroftendons.
Ofthese,whichlookslikeitmightbetheonetolookatmoreclosely?
WhataretheonedashsubheadingsunderHeading42.02?Theyare:
4202.11Trunks,suitcases,vanitycases,executivecases,briefcases,schoolsatchelsandsimilarcontainers:
4202.21Handbags,whetherornotwithshoulderstrap,includingthosewithouthandle:
4202.31Articlesofakindnormallycarriedinthepocketorinthehandbag:
4202.91Other
Compareeachoftheonedashsubheadings.Remember:youcanonlycomparesubheadingswithonedashtoothersubheadingswithonedash.
Afterreviewingtheonedashsubheadingsincludedinheading42.02,youlikelydeterminedthatthecorrectsubheadingis4202.21.
Letsnowlookatthetwodashsubheadingsunderthisonedashsubheading.
Thetwodashsubheadingsfollowing4202.21are:
4202.21.00.00Withoutersurfaceofleather,ofcompositionleatherorofpatentleather
4202.22Withoutersurfaceofsheetingofplasticsoroftextilematerials
4202.29.00Other
Topic1:SelectingtheAppropriateTariffClassification(Cont.9)
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Nowyoumustcomparethesethreetwodashsubheadings.Sincethehandbagsareleather,thefirstisthemostaccurate.
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Doesanythingfollowthistwodashsubheading?No,thereisnothingthatfollowsthistwodashsubheading.
Anotherwayofrecognizingthatnothingfollowsthetwodashsubheadingisthatthebalanceoftheclassificationnumberismadeupofzeros.
Itlooksliketheclassificationnumbermightbe4202.21.00.00.
Fromourpreviousexample,whatdoyoudonext?
WhatabouttheGeneralInterpretiveRules?Havealookatthem,andseeifyoustillthinkthattheclassificationyouhaveselectediscorrect.
Isit?
Letstryanotherexample.Wearegoingtoclassifychildrenspicturebooks,madeofplastic.
Whatsectionshouldbelookedatfirst?
Therearenosectionsthatspecificallynamebooks,sowemightwanttolookatSectionVII:PlasticsandArticlesThereofRubberandArticlesThereof.
Remember:accordingtoGIR1,thetitlesofsections,chaptersandsubchaptersareprovidedforeaseofreferenceonlyforlegalpurposes,
classificationshallbedeterminedaccordingtothetermsoftheheadingsandanyrelativesectionorchapternotesand,providedsuchheadingsornotes
donototherwiserequire,accordingtoGIRs2through6.
LetslookatthesectionnotesforSectionVII.
Doanyofthesectionnotesmakeyouthinkyoushouldlookelsewhere?
Note2toSectionVIIprovidessomeguidance.
Thisnotestatesthat:Exceptforthegoodsofheading39.18or39.19,plastics,rubber,andarticlesthereof,printedwithmotifs,charactersorpictorial
representations,whicharenotmerelyincidentaltotheprimaryuseofthegoods,fallinChapter49.
Thismeansthatunlessthegoodsareclassifiedinheading39.18or39.19,goodsthataremadeofplasticorrubberandthatareprintedwithmotifs,
charactersorpictorialrepresentationsthatarenotincidentaltotheuseofthegoods,theyareclassifiedinChapter49.
Topic1:SelectingtheAppropriateTariffClassification(Cont.10)
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Picturesinpicturebookscannotbeconsideredincidental,and,sinceheadings39.18and39.19arenotcorrect,weshouldhavealookatChapter49.
Chapter49isentitled:Printedbooks,newspapers,picturesandotherproductsoftheprintingindustrymanuscripts,typescriptsandplans.
ArethereanynotestoChapter49thatarehelpful?
NoneofthenotestoChapter49indicatesthatChapter49cannotbeused.
Remember:AccordingtoGIR1,forlegalpurposes,classificationshallbedeterminedaccordingtothetermsoftheheadingsandanyrelativeSection
orChapterNotesand,providedsuchheadingsorNotesdonototherwiserequire,accordingtothefollowingprovisions,thatis,GIRs2through6.
LetslookattheheadingsinChapter49.
TheheadingsinChapter49are:
49.01Printedbooks,brochures,leafletsandsimilarprintedmatter,whetherornotinsinglesheets.
49.02Newspapers,journalsandperiodicals,whetherornotillustratedorcontainingadvertisingmaterial.
49.03Children'spicture,drawingorcolouringbooks.
49.04Music,printedorinmanuscript,whetherornotboundorillustrated.
49.05Mapsandhydrographicorsimilarchartsofallkinds,includingatlases,wallmaps,topographicalplansandglobes,printed.
49.06Plansanddrawingsforarchitectural,engineering,industrial,commercial,topographicalorsimilarpurposes,beingoriginalsdrawnbyhandhand
writtentextsphotographicreproductionsonsensitizedpaperandcarboncopiesoftheforegoing.
49.07Unusedpostage,revenueorsimilarstampsofcurrentornewissueinthecountryinwhichtheyhave,orwillhave,arecognizedfacevalue
stampimpressedpaperbanknoteschequeformsstock,shareorbondcertificatesandsimilardocumentsoftitle.
49.08Transfers(decalcomanias).
49.09Printedorillustratedpostcardsprintedcardsbearingpersonalgreetings,messagesorannouncements,whetherornotillustrated,withorwithout
envelopesortrimmings.
49.10Calendarsofanykind,printed,includingcalendarblocks.
49.11Otherprintedmatter,includingprintedpicturesandphotographs.
Whichoneshouldyouconsider?
Letslookatheading49.03andanythingthatfallsafter49.03andbefore49.04.
4903.00Children'spicture,drawingorcolouringbooks.
4903.00.00.10Picturebooks
4903.00.00.20Drawingorcolouringbooks
Therearenosubheadings.Therearetwofivedashtariffitemsbutnosixdashtariffitems.Thefinaltariffclassificationiseither4903.00.00.10or
4903.00.00.20.
Whichonehaveyouselected?
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Trythisexample.Rolloverthelinethatdescribeswholedriedchilipeppers.Remembertocheckanysectionandchapternotesfirst.
Lesson3Summary:
SelectingtheAppropriateTariffClassification
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Lesson3summarizesthestepsyoumusttakewhenclassifyinggoods:
startbyselectingthesectionorsectionsintheCustomsTariffthatbestdescribethegoodsyouareclassifying
consultthesectionnotestoseeifthereisanyreasonyoumaynotusethesectionorsectionsyouhaveselected
determinethesection,orsections,applicable
lookatthetitlesofeachchapterinthatsectionorsections
consultthechapternotestoseeifthereisanyreasonyoumaynotusethechapteryouhaveselected
determinethechapter
lookattheonedashsubheadingsinthatchapterandcomparethemtoeachother
determinethecorrectonedashsubheading
lookatanytwodashsubheadingsandcomparethemtoeachother
determinethecorrecttwodashsubheading
lookatanythreedashtariffitemsandcomparethemtoeachother
determinethecorrectthreedashtariffitem
lookatanyfourdashtariffitemsandcomparethemtoeachother
determinethecorrectfourdashtariffitem
reviewtheGeneralInterpretiveRulesand
assignthecorrecttendigittariffclassificationnumber
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Lesson4:ClassificationofParts
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Goodsarenotalwaysimportedintheirentirety.Inmanycases,partsareshippedtoCanadatorepairormaintaingoodsthathavealreadybeen
imported.
Rationale
Alongwithclassifyinggoods,youwillalsoneedtoknowhowtoclassifyparts.
LessonObjective
AttheendofLesson4,youwillbeabletoclassifyparts.
Topic1:EstablishingtheTariffClassificationofParts
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PartsaregenerallyclassifiedinthesamemannerascompletearticlesandtheGeneralInterpretativeRules,CanadianRules,andLegalNotesmustbe
consulted.
Theclassificationofpartscanbedifficult.Itisimportanttounderstandthatthereisadistinctionmadebetweenpartsofaspecificmachineandpartsof
generaluse.
Partsandaccessoriesfallintooneofthefollowingfourcategories:
partsoraccessoriesspecificallynamedinaheadingorfallingwithinagenericclassnamedinaheading
partsofgeneraluse,asdefinedinSectionXV,Note2
partsoraccessoriessuitableforusesolelyorprincipallywithaparticularkindofmachineorwithmachinesofthesameheadingor
multipurposepartsandaccessories.
Forpartsoraccessoriesspecificallynamedinaheadingorfallingwithinagenericclassnamedinaheading,GIR1isapplied.
ThisGIRstatesthattheclassificationofgoodsisdeterminedaccordingtothetermsoftheheadingsandanyrelativesectionorchapternotes,and,
whereappropriate,providedtheheadingsornotesdonototherwiserequire,accordingtotheprovisionsofGIRs2,3,4,and5.
AccordingtothisGIR,anypartsoraccessoriesreferredtoinaheading,orclassifiedinaparticularheadingduetoalegalnote,mustbeclassified
underthatheading.
Topic1:EstablishingtheTariffClassificationofParts(cont.2)
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Anexampleofthisisheading40.11Newpneumatictires,ofrubber.
Sincerubbertiresarespecificallyprovidedforinheading40.11,theywillalwaysbeclassifiedunder40.11.Theywillneverbeclassifiedasapartor
accessoryofanotheritem.
PartsofgeneralusearedefinedinNote2ofSectionXV:BaseMetalsandArticlesofBaseMetal
Thisnotereads:
2.ThroughouttheNomenclature,theexpression"partsofgeneraluse''means:
(a)Articlesofheading73.07,73.12,73.15,73.17or73.18andsimilararticlesofotherbasemetal
(b)Springsandleavesforsprings,ofbasemetal,otherthanclockorwatchsprings(heading91.14)and
(c)Articlesofheadings83.01,83.02,83.08,83.10andframesandmirrors,ofbasemetal,ofheading83.06.
InChapters73to76and78to82(butnotinheading73.15)referencestopartsofgoodsdonotincludereferencestopartsofgeneraluseasdefined
above.
SubjecttotheprecedingparagraphandtoNote1toChapter83,thearticlesofChapter82or83areexcludedfromChapters72to76and78to81.
Anexampleofthisisashipmentofstainlesssteelscrews.Screwsareclassifiedinheading73.18,and,accordingtonote2(a)toSectionXV,youmust
classifytheminheading73.18asscrewsandnotasamachinepart.Partsofgeneralusecannotbeclassifiedaspartsofthemachineforwhichthey
areintended.
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Partsofgeneralusearealsonotedinnote1(g)toSectionXVI,Machineryandmechanicalapplianceselectricalequipmentpartsthereofsound
recordersandreproducers,televisionimageandsoundrecordersandreproducers,andpartsandaccessoriesofsucharticles.
Note1(g)states:Partsofgeneraluse,asdefinedinNote2toSectionXV,ofbasemetal(SectionXV),orsimilargoodsofplastics(Chapter39).
ThismeansthatthegoodsdescribedinNote2toSectionXVaspartsofgeneraluse,(suchastubeorpipefittings,screws,bolts,andnuts)arenot
limitedtogoodsmadeofbasemetal.
AnotherreferencetopartsofgeneraluseisfoundinNote2ofChapter82.
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Insummary,goodsdescribedaspartsofgeneralusecannotbeclassifiedasmachinerypartsbutmustbeclassifiedintheirrespectiveclassifications.
Anexampleofpartsthataresuitableforusesolelyorprincipallywithaparticularkindofmachineisinheading88.03.
88.03Partsofgoodsofheading88.01or88.02.
8803.10.00.00Propellersandrotorsandpartsthereof
8803.20.00.00Undercarriagesandpartsthereof
8803.30.00.00Otherpartsofairplanesorhelicopters
8803.90.00Other
Thepartsincludedinsubheadings8803.10,20,30,and90mustallbepartsforgoodsofheading88.01or88.02.
Note3toSectionXVIIclarifiesthis:ReferencesinChapters86to88to''parts''or''accessories''donotapplytopartsoraccessorieswhicharenot
suitableforusesolelyorprincipallywiththearticlesofthoseChapters.Apartoraccessorywhichanswerstoadescriptionintwoormoreofthe
headingsofthoseChaptersistobeclassifiedunderthatheadingwhichcorrespondstotheprincipaluseofthatpartoraccessory.
Inotherwords,thereferencetopartsin88.03onlyappliestopartsthataresuitableforgoodsfoundinChapter88.And,ifyouweretofindPropellers
androtorsandpartsthereofinanotherheadinginchapter88,theheadingultimatelyselectedforthepartsistheonethatreferstotheprincipaluseof
thatpart,inthiscase,goodsof88.01or88.02only.
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Anexampleofpartsthatareclassifiedinthesameheadingasthegoodsis8804.00.30.00thepartsandthegoodsarebothincluded.
8804.00Parachutes(includingdirigibleparachutesandparagliders)androtochutes
partsthereofandaccessoriesthereto.
8804.00.10.00Parachutes(includingdirigibleparachutes)androtochutes
8804.00.20.00Partsandaccessoriesforparachutes(includingdirigibleparachutes)androtochutes
8804.00.30.00Paragliderspartsthereofandaccessoriesthereto
Important:WhenpartsarenotedintheTariff,itneverincludespartsofgeneraluse.Partsofgeneralusearealwaysclassifiedaccordingtowhatthey
are.Intheexampleabove,anybolts,nuts,orscrews,orotherpartsofgeneralusedescribedinNote2toSectionXVcannotbeclassifiedin
8804.00.30.00.
Multipurposepartsandaccessoriesarethosethatdonotfallintoanyoftheprecedingcategories.Thesepartsareclassifiedaccordingtochapter
notes.Asanexample,lookatnote2(c)ofChapter90.
Lesson4Summary:ClassificationofParts
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Lesson4showedyouthestepsusedtoclassifyparts.
Pointstoremember:
partsofgeneraluseareneverclassifiedaspartsofmachines
thereisadistinctionbetweenpartsofaspecificmachineandpartsofgeneraluseand
partsandpartsoraccessoriesspecificallynamedinaheadingorfallingwithinagenericclassnamedinaheadingareclassifiedinthatheading.
Takeafewminutestoanswerthequestionsononlineversiontoseehowmuchyouhavelearnedaboutclassifyingparts.
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Lesson5:Chapters98and99oftheCustomsTariff
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Chapters98or99oftheCustomsTariffmaybeappliedifgoodshaveaconditionalorenduse.
Rationale
Afteryouhavecorrectlyclassifiedgoodstothetendigitlevel,youmaybeabletoreducethedutypayableifthegoodsmeettherequirementsof
Chapter98or99.Neglectingtocheckthesechaptersmayresultintoomuchdutybeingpaid.
Chapter98oftheCustomsTariffisreservedfornoncommercialgoods.LikethegoodsofChapter99,thegoodsclassifiedinChapter98alsohavean
enduseprovision.
LessonObjective
AttheendofLesson5,youshouldbeabletoapplytheprovisionsofChapter98or99oftheCustomsTariff.
Topic1:Chapter99oftheCustomsTariff
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Chapter99oftheCustomsTariffcontainsalistofgoodswhosedutyratemaybereducedorremovedifcertainconditionsaremet.
ThefollowingareafewexamplesfromChapter99notethattheconditionswhichmustbemethavebeenitalicized.
9920.00.00Materialsforuseinthemanufactureofadhesiveorsurgicaldressings,plasters,slabsorbandagesoroftextilefabricscoatedwithplasterof
Pariscompound.
9933.00.00FabricsofSectionXIforusebycostumersorprofessionalorganizationsfortheperformingarts,inthemanufactureofcostumesforthe
performingartsortelevisionrepresentations.
9935.00.00Wovenfabricsofcotton(excludingdenimorunbleachedfabrics),containing85%ormorebyweightofcotton,ofChapter52,foruseinthe
manufactureofapparelorapparelaccessories.
Iftheenduseorconditionisnotmet,Chapter99maynotbeused.
Thewords"forusein"appearthroughoutChapter99.GoodslistedinChapter99mustbeusedforaspecificpurpose.
TheCustomsTariffActdefines"forusein"asfollows:whereveritappearsinatariffitem,inrespectofgoodsclassifiedinthetariffitem,meansthatthe
goodsmustbewroughtorincorporatedinto,orattachedto,othergoodsreferredtointhattariffitem.
Inordertoproveenduse,andthattherequiredconditionshavebeenmet,CBSAmayrequireacopyofacontractorpurchaseorder.
BeforeapplyingacodefoundinChapter99,thetariffclassificationnumberofthegoodsmustbeselectedfromchapters197.
Oncethetariffclassificationnumberhasbeenselected,thefirstfourdigitsoftheChapter99classificationareaddedafterthestatisticalsuffix.These
fourdigitsarereferredtoasthetariffcode.
Example:ifimportedcotton,knitfabricwillbeusedtomanufacturesurgicaltrusses,tariffclassification6003.20.90.00isindicatedinfield27oftheB3
accountingdocumentandtariffcode9915isshowninfield28.ThetheB3accountingdocumentisdescribedinPart3ofthiscourse.
ThedutyratesapplicabletogoodsqualifyingforentryunderthetermsofChapter99vary.
Topic2:Chapter98oftheCustomsTariff
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Chapter98oftheCustomsTariffisreservedfornoncommercialgoods.LikethegoodsofChapter99,thegoodsclassifiedinChapter98alsohavean
enduseprovision.
IfgoodsinChapter98meettheprovisionsofoneoftheitemsofChapter99,Chapter98takesprecedenceoverChapter99andChapter98mustbe
selected.
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UnlikeChapter99,wheregoodsarefirstclassifiedinChapters197,thegoodsofChapter98arenotfirstclassifiedinChapters197.
WhenusingaclassificationnumberfromChapter98,alltendigitsoftheChapter98itemareshown.
Lesson5Summary:Chapters98and99oftheCustomsTariff
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ThislessonshowedyouwhenChapter98or99oftheCustomsTariffmaybeused.
chapter98or99oftheCustomsTariffmaybeappliedifgoodshaveaconditionalorenduse
neglectingtoconsidertheprovisionsofChapter99mayresultintoomuchdutybeingpaid
forusein,whereveritappearsinatariffitem,inrespectofgoodsclassifiedinthetariffitem,meansthatthegoodsmustbewroughtor
incorporatedinto,orattachedto,othergoodsreferredtointhattariffitem
inordertoproveenduse,andthattherequiredconditionsofChapter99havebeenmet,CBSAmayrequireacopyofacontractorpurchase
order
goodsmustfirstbeclassifiedintoatariffclassificationnumberinchapters197beforeconsultingChapter99and
thefirstfourdigits(thetariffcode)oftheChapter99tariffitemareappendedtothe10digittariffclassification.wWhenusingaclassification
numberfromChapter98,alltendigitsoftheChapter98itemareshown.
AnswerthequestionsintheonlineversiontoseehowmuchyouhavelearnedabouttheapplicationofChapter98and99.
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Module9Summary:ClassifyingGoods
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ClassificationofGoods
getasmuchinformationaspossibleaboutthegoodsbeingclassified.(Remembertokeeparecordofwheretheinformationcamefrom)
selectthesectionoftheCustomsTariffthatbestappliestotheimportedgoods
titlesofsectionsandchaptersareprovidedforreferenceonly
classificationisdeterminedaccordingtotheheadingandanyrelativesectionorchapternotes
readsectionnotes
selectthechapter,andreadanychapternotes
selecttheheading
comparewitheachother,anyonedashsubheadingsundertheheading
comparewitheachother,anytwodashsubheadingsundertheonedashsubheading
comparewitheachother,anythreedashtariffitemsunderthetwodashsubheading
comparewitheachother,anyfourdashtariffitemsunderthethreedashtariffitemsand
refertotheGeneralInterpretiveRules.
ClassificationofParts
partsaregenerallyclassifiedinthesamemannerascompletearticles
generalInterpretativeRules,CanadianRules,andLegalNotesmustbeconsulted
thereisdistinctionmadebetweenpartsofaspecificmachineandpartsofgeneraluse
partsofgeneralusearedefinedinthetariffand
partsofgeneralusecannotbeclassifiedaspartsofthemachineforwhichtheyareintended.
Chapters98and99
chapter98or99maybeappliedifgoodshaveaconditionalorenduse
beforeusingatariffcodefoundinChapter99foraparticulargood,thetariffclassificationnumberinChapters197mustbeassigned
becauseCBSAmayaskforprooftosatisfytheenduseorconditionsofChapter99,recordsmustbekeptthatrelatetoenduse
thefirstfourdigits(tariffcode)oftheChapter99tariffitemisappendedtothetendigittariffclassification
ifgoodsinChapter98meettheprovisionsofoneoftheitemsofChapter99,Chapter98takesprecedenceoverChapter99andChapter98must
beselected
unlikeChapter99,wheregoodsarefirstclassifiedinChapters197,thegoodsofChapter98arenotfirstclassifiedinChapters197and
whenusingaclassificationnumberfromChapter98,alltendigitsoftheChapter98itemareshown.
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Ashortquizonwhatyouhavelearnedinthismoduleisavailableonline.
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Module10:DeterminingTariffTreatments
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Thismoduleprovidesinformationondeterminingthetarifftreatmentofimportedgoods.Thetariffclassificationnumber,plustheapplicabletariff
treatment,willdeterminetherateofdutythatisappliedtoimportedgoods.
ModuleObjective
YouwillbeabletodeterminethetarifftreatmentthatisappliedtogoodsimportedintoCanada.
Lesson1:TariffTreatmentsandTradeAgreements
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Inthislessonyouwilllearnaboutthevarioustarifftreatments,tradeagreementsandothertradearrangementsinwhichCanadaisinvolved.Youwill
alsolearnaboutthecodesusedtoidentifythetarifftreatment.Thetariffclassificationnumber,togetherwiththetarifftreatment,determinestherateof
dutypayable.
Rationale
AsaCCS,youwillberequiredtodeterminethecorrecttarifftreatmentthatisappliedtoimportedgoods.
LessonObjective
AttheendofLesson1,youshouldbeabletodescribethevarioustarifftreatmentsandtheircodes,aswellasdescribeatradeagreement,or
arrangement.
Topic1:TariffTreatmentsandTradeAgreements
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Atarifftreatmentdeterminestherateofdutyappliedtoimportedgoods.
Thetarifftreatmentisdeterminedbythetermsofaparticulartradeagreement,oratradearrangement.
Atradeagreementisalegalagreementbetweentwoormorecountriesthatprovidesbenefitstoallcountriesthataresignatoriestoit.Aswellas
reducingtherateofdutyonimportedgoods,atradeagreementmayalsoincludeprovisionson:
governmentprocurement(governmentcontracts),
services,
intellectualproperty,
labour,
investment,and
theenvironment.
Thismodulefocusesondutyratereductionoreliminationundervarioustradeagreements.
Canadaisalsoinvolvedwithothertradearrangements.
Atraderelationshipcanbebilateralinwhichthepartieshaveagreedtogranteachotherpreferentialtariffratesonalimitednumberofproducts.
CanadahassucharelationshipwithAustraliaandNewZealand.
Canadaalsogivespreferentialtariffratesunilaterallytoleastdevelopedcountries.Inthisarrangement,thepreferentialratesarenotprovidedinreturn
toCanada.
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Canadahassignedanumberoftradeagreementsincluding:
theAgreementonInternalTrade(AIT),anagreementbetweentheFederalGovernmentandtheProvinces
theNorthAmericanFreeTradeAgreement(NAFTA),anagreementbetweenCanada,theUnitedStatesandMexicoand
theWorldTradeOrganizationAgreementonGovernmentProcurement(GPA),anagreementbetweenanumberofcountriesworldwide.
Ourfocusisonthefollowingtradeagreementsandtradearrangements:
WorldTradeOrganizationGeneralAgreementonTariffsandTrade(GATT)
Australianbilateraltradearrangement
NewZealandbilateraltradearrangement
CommonwealthCaribbeanCountriestradearrangement
NorthAmericanFreeTradeAgreement(NAFTA)
CanadaIsraelFreeTradeAgreement(CIFTA)
CanadaChileFreeTradeAgreement(CCFTA)
CanadaCostaRicaFreeTradeAgreement(CCRFTA)
CanadaEuropeanFreeTradeAssociationFreeTradeAgreement(CEFTA)
CanadaHondurasFreeTradeAgreement(CHFTA)
CanadaKoreaFreeTradeAgreement(CKFTA)
CanadaPeruFreeTradeAgreement(CPFTA)
CanadaColombiaFreeTradeAgreement(CCOFTA)
CanadaJordanFreeTradeAgreement(CJFTA)
CanadaPanamaFreeTradeAgreement(CPAFTA)
Topic1:TariffTreatmentsandTradeAgreements(cont.2)
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OnJanuary26,2008,CanadasignedafreetradeagreementwiththeEuropeanFreeTradeAssociation(EFTA).TheCanadaEuropeanFreeTrade
AssociationFreeTradeAgreement(CEFTA)aimsatliberalizingandfacilitatingtradeingoodsinconformitywithWTOprovisions,andmostindustrial
goods,includingfishandothermarineproducts,arebenefittingfromdutyfreeaccesstotheirrespectivemarkets.OnJuly1,2009thisCEFTAentered
intoforce.
Forships,boatsandfloatingstructuresimportedintoCanada,customsdutiesaretobeeliminatedafteratransitionalperiodofupto15years.
CEFTARulesofOriginareusedtodeterminewhetheraproductiseligibleforpreferentialtreatment.
OnMay29,2008,CanadaenteredintoafreetradeagreementwiththeRepublicofPeru.
MajorCanadianmerchandiseexportstoPeruarecereals,leguminousvegetables(pulses),paper,technicalinstrumentsandmachinery.Majorimports
fromPeruconsistofgold,zincandcopperores,oil,animalfeedandvegetables.
Immediatelyuponimplementationoftheagreement,Perueliminatedtariffson95percentofcurrentCanadianexports,withtheremainingtariffstobe
eliminatedoverafivetotenyearperiod.ProductsthathaveenjoyedimmediatedutyfreeaccesstoPeruincludewheat,barley,lentils,peasand
selectedbonelessbeefcuts,aswellasavarietyofpaperproducts,machineryandequipment.
Canadaimmediatelyeliminated97percentofitstariffsonPeruvianimports.Therestwillbeeliminatedoverathreeorsevenyearperiod,withthe
exceptionofoverquotatariffsondairy,poultry,eggsandrefinedsugar,whichareexcludedfromtariffreductions.Forrefinedsugar,atariffratequota
willapply.OnJanuary1,2009thisagreemententeredintoforce.
Topic1:TariffTreatmentsandTradeAgreements(cont.3)
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OnJune7,2008,CanadaconcludedfreetradeagreementnegotiationswithColombia.ColombiaisanestablishedandgrowingmarketforCanadian
exportersofwheat,pulses,barley,chemicals,paperproducts,andheavyequipment,andserviceprovidersinthemining,oilandgas,engineering,
informationandcommunicationsectors.
OnMarch26,2009,theGovernmentofCanadaintroducedlegislationtoimplementtheCanadaColombiaFreeTradeAgreement,andonAugust15,
2011thisagreemententeredintoforce.
OnMay14,2010,theCanadaPanamaFreeTradeAgreementwassigned.Onceimplemented,thisFTAwillbenefitCanadianexportersthroughthe
eliminationofPanamaniantariffs,including:agricultureandagrifoodproductspharmaceuticalswood,pulpandpaperproductselectricaland
industrialmachineryvehiclesandautopartsinformationandcommunicationtechnologyaerospaceplasticproductsfishandseafoodandironand
steelproducts.
OnAugust12,2011negotiationsforaCanadaHondurasFreeTradeAgreementwereconcluded.ThiswillbenefitCanadianbusinessesinmany
sectorsincludingagriculture,professionalservices,valueaddedfoodprocessingandmanufacturing,aswellascommodityandresourcebased
industries.
OnOctober1,2012,theCanadaJordanFreeTradeAgreementcameintoforce.KeyCanadiansectorsthatbenefittedfromimmediatedutyfreeaccess
includeforestproducts,manufacturingandagricultureandagrifood.
OnJanuary1,2015,theCanadaKoreaFreeTradeAgreementcameintoforce.
Topic2:CodesforTariffTreatments
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ThespecifictarifftreatmentusedonanimportationisidentifiedtoCBSAbyuseofacode.Thefollowingtableshowsthetradeagreement,trade
arrangement(OrderinCouncil)thetarifftreatmentresultingfromthattradeagreement,anditscode.
TradeAgreementorArrangement,whereapplicable
TariffTreatment
TariffTreatmentCodes
WorldTradeOrganization(GATT)
MostFavouredNation(MFN)
AustraliaTradeAgreement(CANATA)
Australian(AUT)
NewZealand
NewZealand(NZT)
CommonwealthCaribbeanCountries
CommonwealthCaribbeanCountries(CCCT) 7
LeastDevelopedCountry(LDCT)*
GeneralPreferential(GPT)*
NorthAmericanFreeTradeAgreement(NAFTA)
UnitedStates(UST)
10
Mexico(MT)
11
MexicoUnitedStates(MUST)
12
CanadaIsraelFreeTradeAgreement(CIFTA)
CanadaIsrael(CIAT)
13
CanadaChileFreeTradeAgreement(CCFTA)
Chile(CT)
14
CanadaCostaRicaFreeTradeAgreement(CCRFTA)
CostaRica(CRT)
21
CanadaEuropeanFreeTradeAssociationFreeTradeAgreement(CEFTA) IcelandTariff(IT)
22
NorwayTariff(NT)
23
SwitzerlandLiechtensteinTariff(SLT)
24
CanadaPeruFreeTradeAgreement(CPFTA)
PeruTariff(PT)
25
CanadaColombiaFreeTradeAgreement(CCOFTA)
ColombiaTariff(COLT)
26
CanadaJordanFreeTradeAgreement(CJFTA)
JordanTariff(JT)
27
CanadaPanamaFreeTradeAgreement
PanamaTariff(PAT)
28
CanadaHondurasFreeTradeAgreement(CHFTA)
Honduras(HNT)
29
CanadaKoreaFreeTradeAgreement(CKFTA)
Korea(KRT)
30
TheNorthAmericanFreeTradeAgreement(NAFTA),andtheUnitedStates,Mexico,andMexicoUnitedStatesTarifftreatmentsarediscussedin
Module11.
Clickherefor*.
Topic3:ListofCountriesandApplicableTariffTreatments
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Inordertodeterminethetarifftreatmentortreatmentsthatcanapplytogoodsfromaspecificcountry,youmustconsulttheListofCountriesand
ApplicableTariffTreatments.Asanexample,letshavealookatItaly.Hereislinktothelist.
Ifyoufollowdownthealphabeticallistundertheheading"CountryName"toItaly,youwillseean"X"inthecolumnunderMFN(MostFavouredNation
Tarifftreatment).ThismeansthattheonlyTarifftreatmentavailabletogoodsthatoriginateinItalyistheMostFavouredNationTarifftreatment.
WhataboutMongolia?Whattarifftreatment(s)maybeusedforgoodsthatoriginateinMongolia?
HowdoyouknowwhichtarifftreatmenttoselectforMongolia?MostFavouredNationorGeneralPreferential?
InordertouseaparticularTarifftreatment,certainrequirementsmustbemet.TherequirementsforeachTarifftreatmentaredescribedinthefollowing
lesson.Iftherequirementsformorethanonetarifftreatmentaremet,selectthetarifftreatmentwiththelowestdutyrate.
Lesson1Summary:TheTariffTreatmentsandTradeAgreements
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Inthislessonyoulearnedthatthetariffclassificationnumber,togetherwiththeTarifftreatment,determinestherateofdutypayable.
tarifftreatmentisdeterminedbythetermsofatradeagreement,ortradearrangement
tradeagreementsorarrangementsmaybebetweentwoormorecountries
tradeagreementsandarrangementscanaffectmorethanjusttherateofduty
theCBSAidentifieswhichTarifftreatmentisbeingappliedbytheuseoftheappropriateTarifftreatmentcode
theTarifftreatment(s)forgoodsfromaparticularcountryarefoundintheListofCountriesandApplicableTariffTreatments
goodsmaybeeligibleformorethanoneTarifftreatment
certainrequirementsmustbemetinordertouseaparticularTarifftreatmentand
iftherequirementsformorethanoneTarifftreatmentaremet,selecttheTarifftreatmentwiththelowestdutyrate.
HavealookatthefollowingquestionstoseehowmuchyouhavelearnedaboutTarifftreatments,tradeagreements,andtrade
arrangements.
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Questions:
Attemptsallowed:
Available:
Passrate:
5
Unlimited
Always
60%
Allowed
Startquiz
Lesson2:TariffTreatmentEssentials
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Lesson2willprovideyouwithessentialinformationthatiscommontomostTarifftreatments.
Rationale
BeforeyouselectaparticularTarifftreatment,youmustbeawareofbasicinformationandcommontermsusedindescribingaparticularTariff
treatment.Aswell,therearerequirementsthatarecommontomostTarifftreatments.
LessonObjective
AttheendofthislessonyouwillrecognizethebasicrequirementsthatmustbemetformostTarifftreatments.
Topic1:LegislativeAuthorities
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Thefollowinglegislativeauthoritiesaretheonesmostoftenconsultedwhendeterminingthetarifftreatmentofimportedgoods.Theyaretakendirectly
fromtheCustomsTariffAct.
Section24.(1)oftheCustomsTariffActstates:
Conditions
24.(1)Unlessotherwiseprovidedinanordermadeundersubsection(2)orotherwisespecifiedinatariffitem,goodsareentitledtoatarifftreatment,
otherthantheGeneralTariff,underthisActonlyif
(a)proofoforiginofthegoodsisgiveninaccordancewiththeCustomsActand
(b)thegoodsareentitledtothattarifftreatmentinaccordancewithregulationsmadeundersection16oranordermadeunderanyofthefollowing
provisions:(i)paragraph31(1)(a),(ii)paragraph34(1)(a),(iii)paragraph38(1)(a),(iv)paragraph42(1)(a),(v)subsection45(13),(vi)subsection48,(vii)
subsection49.01(8),(viii)section49.2,(ix)subsection49.5(8).
Thismeansthatinordertouseaparticulartarifftreatment,otherthantheGeneralTariff,proofoforiginmustbeprovidedandotheroriginrequirements
mustbemet.
Note:TheGeneralTariff,whilenottechnicallyaTarifftreatment,willbediscussedlaterinthismodule.
Section25oftheCustomsTariffActstates:
Mostfavourabletariff
25.If,underthisAct,goodsareentitledtoboththeMostFavouredNationTariffandanotherTariffandtheamountofcustomsdutyimposedunderthe
MostFavouredNationTariffislowerthantheamountimposedundertheotherTariff,therateofcustomsdutyundertheMostFavouredNationTariff
appliestothosegoodsinlieuoftherateundertheotherTariff.
ThissectionmeansthatifboththeMostFavouredNationTarifftreatmentandanothertarifftreatmentapplies,andtheMostFavouredNationdutyrate
islower,thentheMostFavouredNationrateofdutymaybeused.
Section28oftheCustomsTariffActstates:
Ifratenotspecified
28.Thesymbol"N/A",ifitissetoutinthecolumnentitled"MostFavouredNationTariff"intheListofTariffProvisions,orinthecolumnentitled
"PreferentialTariff"inthatListincombinationwithanabbreviationdesignatingapreferentialtarifftreatmentofatariffitem,indicatesthatthattariff
treatmentdoesnotapplytothattariffitem.
Thismeansthatif"N/A"isindicatedinthecolumnunderMFNTarifforitisfoundnexttoaparticulartarifftreatmentinthecolumnApplicable
PreferentialTariffsintheCustomsTariff,thenthattariffitemcannotbeusedwiththattarifftreatmentandanalternatetarifftreatmentmustbeselected.
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Havealookattariffitem9938.00.00.N/AisquotedintheMFNTariffcolumnthismeansthereisnoapplicableMFNdutyrateforthistariffitem.
Forclassificationnumber0604.20.10.40,NZTisnotlistedintheApplicablePreferentialTariffscolumnthismeansthatthereisnoapplicableNZTduty
ratefortariffitem0604.20.10.40.
Topic2:DirectShipmentandTranshipment
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Directshipmentandtranshipment,whicharebothdefinedintheCustomsTariffAct,mustbeconsideredwhendeterminingtheorigin,andultimatelythe
tarifftreatment,ofimportedgoods.
DirectshipmenttakesplacewhengoodsareshippeddirectlytoaconsigneeinCanadaonathroughbilloflading.Goodsmaypassthroughanother
countryontheirwaytoCanada,butthejourneymustbeuninterrupted.Thetransferofgoodsfromonecarriertoanothercarrierisnotconsideredan
interruptionofthejourney.
Transhipmentistheshipmentofgoodstoanintermediatedestination,andthenfromthatdestinationtoanotherdestination.Transhipmentisallowed
whendeterminingoriginifcertainconditionsaremet.Theseconditionsare:
thegoodsremainundercustomstransitcontrol(thismeansthatwhenthegoodsareintheintermediatecountrytheymustremainunderthe
controlofcustomsinthatcountry)
thegoodsmaynotundergoanyprocessintheintermediatecountryotherthanunloading,reloading,splittingupofloads,orotherprocess
necessarytokeepthegoodsingoodcondition
thegoodsmustnotbeusedintheintermediatecountryor
thegoodsmustnotremainintheintermediatecountryforlongerthansixmonths.
Topic3:CostofProduction
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Costsofproductionareanyspecificcoststhatareincludedinthecosttomanufacturegoods.
Thecostofproductionincludes:
materials(butnotincludinganydutiesortaxespaidonimportedmaterialsusedtomanufacturethefinishedgood),
labour,and
factoryoverhead.
Thecostofproductiondoesnotinclude:
anydutiesandtaxespaidorpayableonimportedmaterialsusedtomanufacturethefinishedgood,
outsidepackingandexpensesrelatedthereto,requiredforthetransportationofthegoods,
grossprofitofthemanufacturerorexporterandtheprofitorremunerationofanypersondealinginthearticleinitsfinishedmanufactured
condition,
royalties,
customsorexcisedutyortaxpaidorpayableonimportedmaterials,carriage,insuranceandotherchargesfromtheplaceofproductionor
manufactureinthecountryoforigintotheportofshipment,and
anyothercostsorchargesincurredortobeincurredsubsequenttothecompletionofthemanufactureofthegoods.
Topic4:RulesofOrigin
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Inordertobeeligibletouseaparticulartarifftreatment,theimportedgoodsmustoriginateinacountrythatisapartytothatparticulartarifftreatment.
Section16(1)oftheCustomsTariffActprovidesthefollowingdefinitionoforiginate:
Subjecttoanyregulationsmadeundersubsection(2),forthepurposesofthisAct,goodsoriginateinacountryifthewholeofthevalueofthegoodsis
producedinthatcountry.
Thismeansthatunlessregulationsmadeundersubsection16(2)statessomethingtothecontrary,goodsoriginateinaparticularcountryiftheentire
valueofthegoodshasderivedfromproductioninthatcountry.
Subsection16(2)oftheCustomsTariffActstates:
(2)RulesoforiginregulationsTheGovernorinCouncilmay,ontherecommendationoftheMinister,makeregulations
(a)respectingtheoriginofgoods,includingregulations
(i)deeminggoods,thewholeoraportionofwhichisproducedoutsideacountry,tooriginateinthatcountryforthepurposesofthisActorany
otherActofParliament,subjecttosuchconditionsasarespecifiedintheregulations,
(ii)deeminggoods,thewholeoraportionofwhichisproducedwithinageographicareaofacountry,nottooriginateinthatcountryforthe
purposesofthisActoranyotherActofParliamentandnottobeentitledtothepreferentialtarifftreatmentotherwiseapplicableunderthisAct,subject
tosuchconditionsasarespecifiedintheregulations,and
(iii)fordeterminingwhengoodsoriginateinacountryforthepurposesofthisActoranyotherActofParliamentand
(b)fordeterminingwhengoodsareentitledtoatarifftreatmentunderthisAct.
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Subsection16(2)meansthattheGovernorinCouncilmaymakeregulationsregardingtheoriginofgoodsthatarenotentirelyproducedinaparticular
country.
Topic4:RulesofOrigin(cont.2)
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Whengoodsarenotentirelyproducedinaparticularcountry,therearespecificrulesthatareusedtodeterminetheoriginunderspecifictariff
treatments.Aspecificruleoforigincanlooklikethis:
72.01AchangetoheadingNo.72.01fromanyotherchapter.
Theheadingontheleft,72.01,istheheadingofthefinishedgood.Inthiscase,itmightbepigiron.
Thisparticularrulemeansthatnonoriginatingpartsandmaterialsthatareclassifiedinanyotherchapter(notchapter72)canbeincorporatedintothe
finishedgoodandthefinishedgoodwillstillbeconsideredasoriginating.Forexample,thepigironmightcontainnonoriginatingcoke(chapter27)and
stilloriginateinthecountryinwhichthefinishedgoodwasmanufactured.
Thisiscalledatariffshiftrule,sincethenonoriginatingpartsandmaterialsunderwentachange,orshift,inclassification.
Hereisanotherexampleofaspecificruleoforigin.
8410.118410.13AchangetosubheadingNos.8410.11through8410.13fromanyotherheadingnumber.
Thesubheadingsontheleft,8410.118410.13,arethesubheadingsforthefinishedgood.
Nonoriginatingpartsandmaterialsthatareinanyotherheading(notheading84.10)canbeincludedandthegoodswillretaintheoriginofthecountry
ofmanufacture.
Forexample,nonoriginatingpartsandmaterialsofheadings73.26and39.20wouldbeallowed.Nonoriginatingpartsandmaterialsofheading84.10
wouldnot.
Thisisanotherexampleofatariffshiftrule.
Topic5:RegionalValueContent
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Whenreadingthespecificrulesoforiginforaparticulartarifftreatment,thephrase"RegionalValueContent"iscommon.TheRegionalValueContent
(RVC)isalwaysexpressedasapercentage.
Aspecificruleoforiginthathasaregionalvaluecontentrequirementmightlooklikethis:
74.13
AchangetoheadingNo.74.13fromheadingNos.74.07through74.08,whetherornotthereisalsoachangefromanyotherheadingNo.,
providedthereisa
regionalvaluecontentofnotlessthan:
(a)60percentwherethetransactionvaluemethodisused,or
(b)50percentwherethenetcostmethodisused.
Rememberthattheheadingontheleftistheheadingofthefinishedgood.Inthiscase,ifthefinishedgoodcontainsnonoriginatingpartsandmaterials
fromanyheadingotherthan74.13ANDmeetstheRVCrequirement,thefinishedgoodoriginatesinthecountryofmanufacture.
TherearetwoformulaeusedtodetermineRVC.Oneusesthetransactionvaluemethodofthefinishedgoodandtheotherusesthenetcostmethodof
thefinishedgood.
TheformulafortheRVCwhenusingtheTransactionValue(TV)methodis:
RVC=TVValueofNonoriginatingMaterialsX100
TV
TheformulafortheRVCwhenusingtheNetCost(NC)methodis:
RVC=NCValueofNonoriginatingMaterialsX100
NC
LetsusethefollowingfiguresandcalculatetheRVCrequiredforthisparticularruleoforiginforgoodsofheading74.13.
TransactionValue(TV)=$200.00
NetCost(NC)=$180.00
Valueofnonoriginatingmaterialsincludedinthefinishedproduct=$90.00
Topic5:RegionalValueContent(cont.2)
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UsingtheTV,ourcalculationis:
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RVC=200.0090.00X100
200.00
RVC=110.00X100
200.00
RVC=55%
ThegoodshavenotmettheRVCrequirementof60%whenusingthetransactionvaluemethod.Younowhavetheoptionofcheckingtoseeifthe
goodsqualifyasoriginatingusingthenetcostmethod.
UsingtheNC,ourcalculationis:
RVC=18090.00X100
180.00
RVC=90.00X100
180.00
RVC=50%
ThegoodshavemettheRVCrequirementof50%whenusingtheNCmethod.Thegoodsareconsideredtobeoriginatinginthecountryof
manufactureeventhoughnonoriginatingpartsandmaterials(outsideofheading74.13)wereincorporatedintothefinishedgood.
Topic6:DeMinimisRule
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Certaintarifftreatmentsallowthedeminimisruletobeusedwhendeterminingorigin.
Thedeminimisruleexcludesacertainpercentageofnonoriginatingpartsandmaterialsfrommeetingthetariffshiftrequirement.
However,ifthereisbothatariffshiftrequirementandaregionalvaluecontentrequirement,thenonoriginatingpartsandmaterialsareincludedwhen
calculatingtheregionalvaluecontentpartoftherule.
But,ifthereisonlyaregionalvaluecontentrequirement,thatis,thereisnorequiredtariffshift,thedeminimisvalueofallnonoriginatingmaterialsmust
beconsideredwhencalculatingtheregionalvaluecontentrequirement.
Thepercentageallowedfordeminimisvariesbetweentarifftreatmentsandcanalsovarywithinatarifftreatmentaccordingtothetariffitemofthe
finishedgood.
Lesson2Summary:TariffTreatmentEssentials
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Thislessondescribedsomeofthetermsandconditionsthatarecommontomosttarifftreatments.Italsotaughtyouhowtoapplythespecificrulesof
origin.
certainrequirementsmustbemetinordertouseaspecifictarifftreatment
directshipmentcanbeaconditionforaparticulartarifftreatment
transhipmentcanbeaconditionforaparticulartarifftreatment
sometarifftreatmentscannotbeusedwithspecifictariffitems
thecostofproductionmaybeafactorindeterminingorigin
oneofthewaysinwhichgoodsmayoriginateinaparticularcountryisiftheentirevalueofthegoodsisderivedfromproductioninthatcountry
certaintarifftreatmentshavespecificrulesoforiginthatmustbeconsultedtodetermineorigin.Specificrulesoforiginmayinvolveatariffshiftor
regionalvaluecontentrequirement
therearetwoformulaethatcanbeusedtodetermineregionalvaluecontent
thedeminimisruleexcludesacertainpercentageofnonoriginatingpartsandmaterialswhenlookingatatariffshiftruleand
thedeminimisruleexcludesacertainpercentageofnonoriginatingpartsandmaterialswhencalculatingtheregionalvaluecontentrequirement.
Takeafewminutesandanswerthefollowingquestionstoseehowmuchyouhavelearnedabouttarifftreatmentessentials.
Questions:
Attemptsallowed:
Available:
Passrate:
9
Unlimited
Always
60%
Allowed
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Startquiz
Lesson3:SpecificTariffTreatmentsandtheGeneralTariff
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Inordertoselectthecorrecttarifftreatment,youmustbeawareofanyrequirementsthatmustbemetforthattarifftreatment.
Rationale
Aswellasdeterminingthetariffclassificationnumber,youmustalsobeabletodeterminethecorrecttarifftreatmentsinceitisthetarifftreatment,in
combinationwiththetariffclassificationnumberthatdeterminestherateofdutythatisapplied.
LessonObjective
Inthislessonyouwillbeabletodescribetherequirementsforthemostcommonlyusedtarifftreatments.YouwillalsolearnabouttheGeneralTariff
andwhenitisused.
Topic1:MostFavouredNationTariffTreatment
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CountriesthatareentitledtousetheMostFavouredNation(MFN)TarifftreatmentarethosethataresignatoriestotheGeneralAgreementonTariffs
andTrade,orGATT.
GATTwasfirstnegotiatedin1947afterWorldWarII.Itsobjectivewastoreducebarrierstointernationaltrade.
SeveralroundsofGATTtookplace,withvariousoutcomes.Forexample,thefirstround,theTorquayRound,dealtwithidentifyingthegoodsthat
wouldbecontainedinGATTandestablishedanagreementtocontinueexistingtarifflevels.
AsecondroundofGATT,theAccecyRound,focusedonreducingdutyrates,andthethird,theUruguayRound,extendedGATTtoincludetradein
intellectualproperty,services,andagriculture.Thisround,completedin1994,resultedintheformationoftheWorldTradeOrganization.Fromthatpoint
forward,theWTOhasbeentaskedwithimplementingtheagreementsthatweremadeunderthetermsofGATT.
Article1ofGATTincludestheprincipleofMostFavouredNation.ThisprinciplestatesthatallmembersofGATTwillguaranteeMostFavouredNation
Tarifftreatmenttogoodsfrommembercountriesandthatconcessionsthataregrantedtoproductsfromonemembercountrymustbeextendedtothe
productsofallotherGATTmembercountries.Aswellasimportduties,theseconcessionsmayincludeotherimportorexportcharges.
TheMFNTarifftreatmentpreventsmembercountriesfrombeingsubjecttocustomsdutyratesthatarehigherthanthosegrantedtootherGATT
signatories.
TherequirementtoextendMFNTarifftreatmenttoallGATTmembercountriesdoesnot,however,preventmembercountriesfromenteringinto
separatetradeagreementswitheachother.
GoodsoriginateinacountrythatisabeneficiaryoftheMostFavouredNationTariffif:
notlessthan50%ofthecostofproductionofthegoodsisincurredbytheindustryofoneormorecountriesthatarebeneficiariesoftheMost
FavouredNationTariff,orbytheindustryofCanadaand
thegoodswerefinishedinacountrythatisabeneficiaryoftheMostFavouredNationTariffintheforminwhichtheyareimportedintoCanada.
Thatis,atleast50%ofthecostofproducingthegoodstookplaceinoneormorecountries,includingCanada,thataresubjecttotheMostFavoured
NationTarifftreatment.Furthermore,thecountrythatfinishesthegoodsintheconditioninwhichtheywillbeshippedtoCanadamustbeentitledtouse
theMostFavouredNationTarifftreatment.
Aswell,toqualifyforMFNTarifftreatment,goodsmustbeshippeddirectlytoCanadafromacountrythatisaMFNbeneficiarycountry,withorwithout
transhipment.
Topic1:MostFavouredNationTariffTreatment(cont.2)
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ProofofOrigin
InordertoclaimthebenefitsoftheMFNtarifftreatment,theownerorimporterofthegoodsmustprovide:
aCanadaCustomsInvoice,completedinEnglishorFrenchbytheimporterorownerthatindicatesthatthegoodsoriginateintheapplicable
beneficiarycountry
wheretheCanadaCustomsInvoicedoesnotindicatethatthegoodsoriginateintheapplicablebeneficiarycountry,acommercialinvoice,
completedinEnglishorFrenchbythevendororthetransfereeinthecountryofexport,thatindicatesthatthegoodsoriginateintheapplicable
beneficiarycountryor
anyotherdocumentation,completedinEnglishorFrenchthatindicatesthatthegoodsoriginateintheapplicablebeneficiarycountry.
Topic2:NewZealandandAustraliaTariffTreatments
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GoodsoriginateinAustraliaifnotlessthan50percentofthecostofproductionofthegoodsisincurredbytheindustryofAustraliaorCanadaorboth
andthegoodswerefinishedinAustraliaintheforminwhichtheyareimportedintoCanada.
GoodsareentitledtotheAustraliaTariff(AUT)onlyifthegoodsareshippeddirectlytoCanada,withorwithouttranshipment,fromAustralia.
GoodsoriginateinNewZealandifnotlessthan50percentofthecostofproductionofthegoodsisincurredbytheindustryofNewZealandorCanada
orbothandthegoodswerefinishedinNewZealandintheforminwhichtheyareimportedintoCanada.
GoodsareentitledtotheNewZealandTariff(NZ)onlyifthegoodsareshippeddirectlytoCanada,withorwithouttranshipment,fromNewZealand.
Generallyspeaking,whentariffclassificationnumbersdonotincludeadutyrateforAUTorNZ,theMFNrateapplies.
ProofofOrigin
ordertoclaimthebenefitsoftheAustraliaorNewZealandTarifftreatments,theownerorimporterofthegoodsmustprovide:
aCanadaCustomsInvoice,completedinEnglishorFrenchbytheimporterorownerthatindicatesthatthegoodsoriginateintheapplicable
beneficiarycountry
wheretheCanadaCustomsInvoicedoesnotindicatethatthegoodsoriginateintheapplicablebeneficiarycountry,acommercialinvoice,
completedinEnglishorFrenchbythevendororthetransfereeinthecountryofexport,thatindicatesthatthegoodsoriginateintheapplicable
beneficiarycountryor
anyotherdocumentation,completedinEnglishorFrenchthatindicatesthatthegoodsoriginateintheapplicablebeneficiarycountry.
Topic3:CanadaIsraelAgreementTariff
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CountriesthatareentitledtousetheCanadaIsraelAgreementTariff(CIAT)areIsraelandanyothercountrytowhichthelawsofIsraelapply.These
includetheWestBankandtheGazaStrip.TheCanadaIsraelFreeTradeAgreement(CIFTA)wasimplementedonJanuary1,1997.
CIFTARulesofOriginareusedtodetermineifgoodsoriginateunderthistradeagreement.
NotethatnoneoftheCIFTAspecificrulesoforigincontainaregionalvaluerequirement.
ProofofOrigin
OnceithasbeendeterminedthatthegoodsqualifyundertheCIFTA,theexporter,producerormanufacturermustcompleteaCertificateofOrigin.For
CIFTAgoodsexportedfromCanada,theCertificateofOrigincanbecompletedbytheexporter,producerormanufacturerinCanada.
TheCertificateofOriginforCIFTAgoodsmaybecompletedinEnglish,French,HebreworArabic.
TheOriginCriteriamustbenotedinfield7ofthecertificate.
OriginCriteria
Regardlessofthespecifictarifftreatmentbeingused,whenthereisarequirementforaCertificateofOrigin,theorigincriteriamustbestatedonthe
certificate.Dependingonthecertificatethatisused,oneofthecriteriacouldbethis:
CriterionAThegoodis"whollyobtainedorproducedentirely"inthefreetradearea.
Explanation
CriterionAincludesgoodssuchasapplesthataregrowninthefreetradearea,ananimalthatisbornandraisedinthearea,andmineralsthatare
minedinthearea.Theremustbeabsolutelynoforeignpartsormaterialsincludedintheexportedorimporteditem.Keepinmindthatsimply
purchasinggoodsinacountrythathasafreetradeagreementwithCanadadoesnotentitlethegoodstoapreferentialrateofduty.
Anotherexampleofanorigincriterionis:
CriterionBThegoodisproducedentirelyinthefreetradeareaandsatisfiesthespecificruleoforiginthatappliestoitstariffclassification.The
goodmustalsosatisfyallotherapplicablerequirements.
Explanation
CriterionBmeansthattheimportedorexportedgoodmustmeetthespecificruleoforiginforthatgood.Thiscanbeeitherthetariffshiftruleorthe
regionalvaluecontentrule.
Thecriterionthatcanbeappliedtoaparticulartarifftreatmentisnotedonpagetwoofthecorrespondingcertificateoforigin.
Topic4:ChileTariffTreatment
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CanadaandChilearesignatoriestotheCanadaChileFreeTradeAgreement(CCFTA).OriginatinggoodsareentitledtousetheChileTarifftreatment
(CT),implementedonJuly5,1997.
RulesofOrigin
CCFTARulesofOriginareusedtodetermineifgoodsoriginateunderthistradeagreement.
ProofofOrigin
ACertificateofOriginmustbecompletedforgoodsqualifyingundertheCCFTAratesofduty.Forimportedgoods,itiscompletedbytheexporter,
producerormanufacturerandforqualifyinggoodsexportedfromCanadaitmustbecompletedbytheexporter,producerormanufacturerinCanada.
TheCertificateofOriginforCCFTAgoodsmaybecompletedinEnglish,FrenchorSpanish.
SpecificorigincriteriamustbenotedwhencompletingtheCertificateofOrigin.
Topic5:CostaRicaTariffTreatment
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CanadaandCostaRicaaresignatoriestotheCanadaCostaRicaFreeTradeAgreement(CCRFTA).OriginatinggoodsareentitledtousetheCosta
RicaTarifftreatment(CRT),implementedonNovember1,2002.
RulesofOrigin
CCRFTARulesofOriginareusedtodetermineifgoodsoriginateunderthistradeagreement.
ProofofOrigin
ACertificateofOriginmustbecompletedforgoodsqualifyingundertheCCRFTAratesofduty.Forimportedgoods,itiscompletedbytheexporter,
producerormanufacturerandforqualifyinggoodsexportedfromCanada,itmustbecompletedbytheexporter,producerormanufacturerinCanada.
TheCertificateofOriginmaybecompletedinEnglish,FrenchorSpanish.
SpecificorigincriteriamustbenotedwhencompletingtheCertificateofOrigin.
Topic6:BritishPreferentialTariffTreatment
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TheformerBritishPreferentialTariff(BPT)treatmentwasanagreementthatstemmedfromaninternationalagreementsignedbyCanada.Itgranted
BritishCommonwealthcountriesthebenefitofmorefavourablecustomsdutyratesongoodsproducedinthesecountrieswhenexportedtoCanada
undercertainconditions.
BPTtreatmentwasaccordedtogoodsproducedinBritishCommonwealthcountries.ItdidnotincludegoodsfromtheUnitedKingdomorNorthern
IrelandthesecountriesweresubjecttoMFNrates.
In1998,theBPTwasrescindedsincethe1998tariffrevisionsincludedMFNdutyratesthatwereequaltothoseunderBPT.
ForthosefewcaseswheretheBPTratewaslessthanthatundertheMFN,however,anOrderinCouncilwascreatedtoallowtheuseofthefavourable
BPTratesofduty.WhenusingthisOrderinCouncil,theimportdocumentmustshow"1"asthetarifftreatmentcode.TheOrderinCouncilnumberdoes
notneedtobeindicated.
RulesofOrigin
InordertousetheBritishPreferentialTarifftreatment,atleast50%ofthecostofproductmustbeincurredinoneormorecountrieseligiblefortheBPT
ratesorCanada.
GoodsmustbefinishedinthebeneficiarycountryintheforminwhichtheyareimportedintoCanada.
ProofofOrigin
AcommercialinvoiceorCanadaCustomsInvoicepreparedbythevendorandclearlyindicatingthecountryoforiginofthegoodsprovidesproofof
originforBPTgoods.Otherdocumentationthatconfirmstheoriginofthegoodsmayalsobeused.
Topic7:GeneralPreferentialTariffTreatment
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ImplementedinJuly1974,theGeneralPreferentialTariff(GPT)treatmentwastohavebeenineffectforaperiodoftenyearsthishassincebeen
extendeduntilJune2014.
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RulesofOrigin
InordertousetheGPTratesofduty,goodsmust
meettheGPTRulesofOrigin
befinishedintheGPTbeneficiarycountryintheforminwhichtheywereimportedintoCanadaand
beshippeddirectlytoCanada,withorwithouttranshipment,fromabeneficiarycountry.
ProofofOrigin
AlloriginatinggoodsmustbedocumentedoneitherFormACertificateofOriginoranExporter'sStatementofOrigin.
Topic8:LeastDevelopedCountryTariffTreatment
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TheGPTandtheLeastDevelopedCountryTarifftreatmentarecloselyrelated.GoodsfromcountriesentitledtousetheLDCTmayalsousetheGPT.
RulesofOrigin
InordertousetheLDCTratesofduty,goodsmust
meettheLDCTRulesofOrigin
befinishedinaLDCTbeneficiarycountryintheforminwhichtheywereimportedintoCanadaand
beshippeddirectlytoCanada,withorwithouttranshipmentfromaleastdevelopedcountry.
ProofofOrigin
Otherthanfororiginatinggoodsfoundinchapter5063oftheCustomsTariff,eitheraFormA,CertificateofOriginoranExporter'sStatementofOrigin
maybesubmittedasproofoforigin.
Fororiginatinggoodsofchapters5063(textilesandapparel),aCertificateofOriginTextileandApparelGoodsOriginatinginaLeastDeveloped
Country,formB255,mustbesubmittedasproofoforigin
Topic9:CommonwealthCaribbeanCountriesTariffTreatment
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ThistarifftreatmentmaybeknownasCCCTorCaribcan.
RulesofOrigin
InordertousetheCCCTratesofduty,goodsmust
meettheCCCTRulesofOrigin
befinishedinthebeneficiarycountryintheforminwhichtheywereimportedintoCanadaand
beshippeddirectlytoCanada,withorwithouttranshipment,fromabeneficiarycountry.
ProofofOrigin
AlloriginatinggoodsmustbedocumentedoneitherFormACertificateofOriginoranExporter'sStatementofOrigin.
Topic10:TheGeneralTariff
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TheGeneralTariffisnotaTarifftreatment.
GoodsthatoriginateincountriesthatarenotincludedintheListofCountriesandApplicableTariffTreatmentsorwhichoriginateinacountryincluded
onthislistbutdonotmeettherequirementsforanothertarifftreatment,includingMFN,aresubjecttotheGeneralTariffrateofduty.
TherateofdutyundertheGeneralTariffis35%,andthecodeusedontheimportdocumenttoindicateuseofthistariffis3.
Topic11:EuropeanFreeTradeAssociationTariffTreatments
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OnJuly1,2009CanadaimplementedtheCanadaEuropeanFreeTradeAssociationFreeTradeAgreement(CEFTA).Fourcountriesmakeupthe
EuropeanFreeTradeAssociation(EFTA):Iceland,Norway,Switzerland,andLiechtenstein.
CEFTAconsistsofacentralagreement,whichincludesindustrialproductsandselectedprocessedagriculturalproducts.Threebilateralagreementson
agricultureweresignedwithNorway,IcelandandSwitzerland.
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RulesofOrigin
InordertousetheCEFTAratesofduty,goods
mustmeettheCEFTARulesofOrigin
mustbeshippeddirectlyfromtheEFTAcountryinwhichthegoodoriginates,withorwithouttransshipment,toCanadaforeachrespective
agriculturebilateralagreementand
otherthanthosecontainedintheagriculturebilateralagreements,maybeshippeddirectlyfromanyoftheEFTAcountries,withorwithout
transshipment,toCanada.
ProofofOrigin
TherequiredproofoforiginisastatementandisreferredtointheCEFTAastheOriginDeclaration.
Topic12:PeruTariffTreatment(PT)
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CanadaandPeruaresignatoriestotheCanadaPeruFreeTradeAgreement(CPFTA).OriginatinggoodsareentitledtousethePeruTarifftreatment
(PT),implementedonAugust1,2009.
RulesofOrigin
PeruRulesofOriginareusedtodetermineifgoodsoriginateunderthistradeagreement.
ProofofOrigin
TherequiredproofoforiginistheCanadaPeruCertificateofOriginavailableinEnglish,FrenchorSpanish.Inordertoclaimthepreferentialtariff
treatmentaccordedundertheCPFTA,importersmusthaveintheirpossessiontheCanadaPeruCertificateofOrigincompletedbytheexporterinPeru.
GoodsmaybeshippeddirectlyfromPeru,withorwithouttransshipment,toCanada.
Topic13:ColombiaTariffTreatment(COLT)
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CanadaandColombiaaresignatoriestotheCanadaColombiaFreeTradeAgreement(CCOFTA).OriginatinggoodsareentitledtousetheColombia
Tarifftreatment(COLT).
RulesofOrigin
ColombiaRulesofOriginareusedtodetermineifgoodsoriginateunderthistradeagreement.
ProofofOrigin
TherequiredproofoforiginistheCanadaColombiaCertificateofOriginavailableinEnglish,FrenchorSpanish.Inordertoclaimthepreferentialtariff
treatmentaccordedundertheCCOFTA,importersmusthaveintheirpossessiontheCanadaColombiaCertificateofOrigincompletedbytheexporter
inColombia
GoodsmaybeshippeddirectlyfromColombia,withorwithouttransshipment,toCanada.
Topic14:JordanTariffTreatment(JT)
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CanadaandJordanaresignatoriestotheCanadaJordanFreeTradeAgreement(CJFTA).OriginatinggoodsareentitledtousetheJordanTariff
treatment(JT).
RulesofOrigin
JordanRulesofOriginareusedtodetermineifgoodsoriginateunderthistradeagreement.
ProofofOrigin
TherequiredproofoforiginistheCanadaJordanCertificateofOriginavailableinEnglish,FrenchorArabic.Inordertoclaimthepreferentialtariff
treatmentaccordedundertheCJFTA,importersmusthaveintheirpossessiontheCanadaJordanCertificateofOrigincompletedbytheexporterin
Jordan.
GoodsmaybeshippeddirectlyfromJordan,withorwithouttransshipment,toCanada.
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Lesson3Summary:SpecificTariffTreatmentsandtheGeneralTariff
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ThislessondescribedthespecificrequirementsforcertaintarifftreatmentsandtheGeneralTariff.
KeypointsinLesson3are:
MostFavouredNationTariffTreatment
countriesthataresignatoriestoGATTareentitledtouseMFNTarifftreatment
signatoriestoGATTmayenterintoseparatetradeagreementsoutsideofMFN
toqualifyforMFN,goodsmustbefinishedinacountrythatisentitledtoMFNintheforminwhichtheyareimported
toqualifyforMFN,notlessthan50%ofthecostofproductionofthegoodsisincurredbytheindustryofoneormorecountriesthatare
beneficiariesoftheMostFavouredNationTariff,orbytheindustryofCanadaand
proofofMFNorigincanbeaCanadaCustomsInvoice,acommercialinvoice,orotherdocumentthatindicatesorigin.
AustraliaTariffTreatment
goodsoriginateinAustraliaifnotlessthan50percentofthecostofproductionofthegoodsisincurredbytheindustryofAustraliaorCanadaor
bothandthegoodswerefinishedinAustraliaintheforminwhichtheyareimportedintoCanada
goodsareentitledtotheAustraliaTariff(AUT)ifthegoodsareshippeddirectlytoCanada,withorwithouttranshipment,fromAustraliaand
proofofAUTorigincanbebywayofaCanadaCustomsInvoice,acommercialinvoice,orotherdocumentthatindicatesorigin.
NewZealandTariffTreatment
goodsoriginateinNewZealandifnotlessthan50percentofthecostofproductionofthegoodsisincurredbytheindustryofNewZealandor
CanadaorbothandthegoodswerefinishedinNewZealandintheforminwhichtheyareimportedintoCanada
goodsareentitledtotheNewZealandTariff(NZ)onlyifthegoodsareshippeddirectlytoCanada,withorwithouttranshipment,fromNew
Zealandand
proofofNZorigincanbebywayofaCanadaCustomsInvoice,acommercialinvoice,orotherdocumentthatindicatesorigin.
CanadaIsraelTariffTreatment
CIFTAspecificrulesoforiginareusedtodetermineifgoodsqualifyfortheCIFTAratesofduty
proofoforiginforCIFTAgoodsisprovidedbyaCertificateofOriginand
origincriteriamustbenotedontheCertificateofOrigin.
ChileTariffTreatment
CCFTAspecificrulesoforiginareusedtodetermineifgoodsqualifyfortheCCFTAratesofduty
proofoforiginforCCFTAgoodsisprovidedbyaCertificateofOriginand
CostaRicaTariffTreatment
CCRFTAspecificrulesoforiginareusedtodetermineifgoodsqualifyfortheCCRFTAratesofduty
proofoforiginforCCRFTAgoodsisprovidedbyaCertificateofOriginand
Lesson3Summary:SpecificTariffTreatmentsandtheGeneralTariff
(Cont.)
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PeruTariffTreatment
CPFTAspecificrulesoforiginareusedtodetermineifgoodsqualifyfortheCPFTAratesofduty
ProofoforiginforCPFTAgoodsisprovidedbyaCertificateofOriginand
OrigincriteriamustbenotedontheCertificateofOrigin.
ColombiaTariffTreatment
CCOFTAspecificrulesoforiginareusedtodetermineifgoodsqualifyfortheCCOFTAratesofduty
proofoforiginforCCOFTAgoodsisprovidedbyaCertificateofOriginand
JordanTariffTreatment
CJFTAspecificrulesoforiginareusedtodetermineifgoodsqualifyfortheCJFTAratesofduty
proofoforiginforCJFTAgoodsisprovidedbyaCertificateofOriginand
Other
notallTarifftreatmentsapplytoalltariffclassificationnumbers
BPTisinplaceforcertainqualifyinggoodswhosedutyrateishigherunderMFNthanitwasundertheformerBPTrates
touseGPT,goodsmustmeettherulesoforigin,befinishedintheGPTbeneficiarycountryintheforminwhichtheywereimportedintoCanada,
andbeshippeddirectlytoCanada,withorwithouttranshipment,fromabeneficiarycountry
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proofoforiginforGPTgoodsisprovidedbyaFormACertificateofOriginoranExportersStatementofOrigin
goodsfromcountriesentitledtousetheLDCTmayalsouseGPT
touseLDCT,goodsmustmeettherulesoforigin,befinishedintheLDCTbeneficiarycountryintheforminwhichtheywereimportedinto
Canada,andbeshippeddirectlytoCanada,withorwithouttranshipment,fromabeneficiarycountry
proofoforiginforLDCTgoodsisprovidedbyaFormACertificateofOrigin,anExportersStatementofOrigin,or,fororiginatinggoodsofchapter
5063,aCertificateofOriginTextileandApparelGoodsoriginatinginaLeastDevelopedCountry
touseCCCT,goodsmustmeettherulesoforiginandbeshippeddirectlytoCanada,withorwithouttranshipment,fromabeneficiarycountry
theGeneralTariffisnotaTarifftreatment
goodsthatoriginateincountriesthatarenotincludedontheListofCountriesandApplicableTariffTreatmentsorwhichoriginateinacountry
includedonthislistbutdonotmeettherequirementsforanotherTarifftreatment,includingMFN,aresubjecttotheGeneralTariffrateofduty
therateofdutyundertheGeneralTariffis35%and
inadditiontoCEFTA,CPFTA,COOFTA,CanadahasimplementedtheCJFTA.
TakesometimeandanswerthefollowingquestionsonspecificTarifftreatments.
Questions:
Attemptsallowed:
Available:
Passrate:
5
Unlimited
Always
60%
Allowed
Startquiz
Lesson4:DutyRates
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Inthislessonyouwilllearnthattherateofdutyvariesaccordingtothetarifftreatmentofthegoods.
Rationale
Onceyouhavedeterminedthecorrecttariffclassificationofgoods,youmustthenselectthecorrectdutyrate.
LessonObjective
Youwillbeabletoselectthecorrectdutyratebasedonthetarifftreatmentofthegoods.
Topic1:DutyRates
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Nowthatyouhavelearnedhowtodeterminethecorrecttarifftreatment,letsgobacktotheCustomsTariffandseethevariousdutyratesunderthe
specifictarifftreatments.
Asanexample,fortariffclassificationnumber3209.10.00.10,thefollowingratesofdutycouldapply.
DutyRate TariffTreatment
6.5%
MFN
free
CCCT,LDCT,UST,MT,MUST,CIAT,CT,CRT,IT,NT,SLT,PT,COLT,JT
3%
GPT
LetshavealookatanotherexamplefromtheCustomsTariff.Thistime,letslookattariffclassificationnumber9503.00.10.10.
Inthiscase,thefollowingratesofdutycouldapply.
DutyRate TariffTreatment
8%
MFN
free
CCCT,LDCT,UST,MT,MUST,CIAT,CT,CRT,IT,NT,SLT,PT,COLT,JT
5%
GPT
Aswell,theGeneralTariffrateof35%mightapply.
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Lesson4Summary:DutyRates
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Thislessondemonstratedthatthetarifftreatmenthasaneffectonthedutyrateofimportedgoods.
Takesometimeandanswerthefollowingquestionstotestwhatyouhavelearnedinthislesson.
Questions:
Attemptsallowed:
Available:
Passrate:
4
Unlimited
Always
60%
Allowed
Startquiz
Module10Summary:DeterminingTariffTreatments
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InthismoduleyoulearnedaboutthevarioustradeagreementsandtradearrangementsthatCanadahaswithothercountries,andhowtheTariff
treatmentaffectstherateofduty.
Youalsolearnedabouttheconditionsthatmustbemettouseaparticulartarifftreatment,andhowproofoforiginisprovided.
Eachtarifftreatmentwasdescribed,aswastheGeneralTariff.
Youshouldnowbeabletodeterminetherateofdutyonimportedgoodsbasedonboththetariffclassificationnumberandthetarifftreatment.
Followingisashortquizonwhatyouhavelearnedabouttarifftreatmentsandtradeagreements.
Module10:Quiz
Questions:
Attemptsallowed:
Available:
Passrate:
14
Unlimited
Always
60%
Allowed
Startquiz
Module11:TheNorthAmericanFreeTradeAgreement
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ThismoduleprovidesinformationontheNorthAmericanFreeTradeAgreement(NAFTA)betweenCanada,theUnitedStatesandMexico.Itreplaced
theformerFreeTradeAgreement(FTA)betweenCanadaandtheUnitedStates.AlthoughMexicoisincludedinNAFTA,theUnitedStatesisCanadas
largesttradingpartnerandthistradeagreementaffectsthedutyrateofmanygoodstradedbetweenCanadaandtheUnitedStates.
ModuleObjective
YouwilllearnabouttheNorthAmericanFreeTradeAgreement,howtodeterminehowgoodsqualifyforreducedratesofdutyunderNAFTA,andhow
tocompleteaNAFTACertificateofOrigin.
Lesson1:NAFTA
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InthislessonyouwilllearnaboutNAFTA.ThisisatradeagreementsignedbythegovernmentsofCanada,theUnitedStatesandMexico.
Rationale
InyourjobasaCCS,youwillberequiredtoknowhowtodeterminetheoriginofgoodsunderNAFTA.TheUnitedStatesTarifftreatment(UST)isone
ofthetarifftreatmentsusedmostoftenforgoodsimportedintoCanada.
LessonObjective
AttheendofLesson1,youshouldbeabletodescribeNAFTA.
Topic1:AboutNAFTA
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TheNorthAmericanFreeTradeAgreement(NAFTA)tookeffectonJanuary1,1994andreplacedtheformerFreeTradeAgreement(FTA)between
CanadaandtheUnitedStates.NAFTAisatrilateraltradeagreementamongCanada,theUnitedStatesandMexico.Totheimportingcommunityand
thecustomsbrokerageindustry,themostrelevantandtherefore,mostimportantaspectsoftheAgreementarethoseportionsinvolvingthemovement
ofgoodsamongthethreecountries.However,youshouldbeawareoftheoverallpurposeandobjectiveofthistradeagreement.
NAFTAhasprovidedforacceleratedeliminationofdutyongoodstradedbetweenthethreecountries,subjecttoconsultationbetweenthegovernments
ofthethreecountriesinvolved.Anyoneofthethreecountriescouldhavedecidedagainsteliminatingitstariffsmorequicklythantheothertwo,butit
couldnotpreventtheothertwofromproceedingwithacceleratedtariffelimination.
ThepreambletotheAgreementestablishesthat:theGovernmentofCanada,theGovernmentoftheUnitedMexicanStates,andtheGovernmentofthe
UnitedStatesofAmerica,resolvedto:
STRENGTHENthespecialbondsoffriendshipandcooperationamongtheirnations
CONTRIBUTEtotheharmoniousdevelopmentandexpansionofworldtradeandprovideacatalysttobroaderinternationalcooperation
CREATEanexpandedandsecuremarketforthegoodsandservicesproducedintheirterritories
REDUCEdistortionstotrade
ESTABLISHclearandmutuallyadvantageousrulesgoverningtheirtrade
ENSUREapredictablecommercialframeworkforbusinessplanningandinvestment
BUILDontheirrespectiverightsandobligationsundertheGeneralAgreementonTariffsandTradeandothermultilateralandbilateral
instrumentsofcooperation
ENHANCEthecompetitivenessoftheirfirmsinglobalmarkets
FOSTERcreativityandinnovation,andpromotetradeingoodsandservicesthatarethesubjectofintellectualpropertyrights
CREATEnewemploymentopportunitiesandimproveworkingconditionsandlivingstandardsintheirrespectiveterritories
UNDERTAKEeachoftheprecedinginamannerconsistentwithenvironmentalprotectionandconservation
PRESERVEtheirflexibilitytosafeguardthepublicwelfare
PROMOTEsustainabledevelopment
STRENGTHENthedevelopmentandenforcementofenvironmentallawsandregulationsand
PROTECT,enhance,andenforcebasicworker'srights.
Topic1:AboutNAFTA(cont.2)
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TheobjectivesoftheAgreement,foundinparagraph1ofArticle102,areto:
Eliminatebarrierstotradein,andfacilitatethecrossbordermovementof,goodsandservicesbetweentheterritoriesoftheparties
Promoteconditionsoffaircompetitioninthefreetradearea
IncreasesubstantiallyinvestmentopportunitiesintheterritoriesoftheParties
ProvideadequateandeffectiveprotectionandenforcementofintellectualpropertyrightsineachParty'sterritory
CreateeffectiveproceduresfortheimplementationandapplicationofthisAgreement,foritsjointadministrationandforresolutionofdisputesand
Establishaframeworkforfurthertrilateral,regional,andmultilateralcooperationtoexpandandenhancethebenefitsofthisAgreement.
ThePartiesshallinterpretandapplytheprovisionsofthisAgreementinthelightofitsobjectivessetoutinparagraph1andinaccordancewith
applicablerulesofinternationallaw.
AsoutlinedinthetableofcontentsfoundatthebeginningofNAFTA,thetextisdividedintothefollowingeightparts:
PartOne:GeneralPart
PartTwo:TradeinGoods
PartThree:TechnicalBarrierstoTrade
PartFour:GovernmentProcurement
PartFive:Investment,ServicesandRelatedMatters
PartSix:IntellectualProperty
PartSeven:AdministrativeandInstitutionalProvisions
PartEight:OtherProvisions
Eachoftheeightpartsisfurtherdividedintochaptersandeachchapterisdividedintoarticles.Thearticlesinturnaredividedintonumbered
paragraphs.Articlesarenumberedaccordingtothechapterinwhichtheyarefound.Forexample,Article201isthefirstarticleinChapter2.
Attheendofeachchapterthereisalistofannexes.Eachoftheseannexeshasbeenreferredtointhatparticularchapterandprovidesdetailsand
clarificationofinformationfoundinthechapter.
ToensurethattheAgreementiscorrectlyinterpreted,definitionsofthetermsusedintheAgreementareprovided.Thefollowingaredefinitionsthatare
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essentialtothoseusingtheAgreement.
Topic1:AboutNAFTA(cont.3)
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TERRITORYmeans:
a)withrespecttoCanada,theterritorytowhichitscustomslawsapply,includinganyareasbeyondtheterritorialseasofCanadawithinwhich,in
accordancewithinternationallawsanditsdomesticlaw,Canadamayexerciserightswithrespecttotheseabedandsubsoilandtheirnaturalresources
b)withrespecttoMexico,
(i)thestatesoftheFederationandtheFederalDistrict,
(ii)theislands,includingthereefsandkeys,inadjacentseas,
(iii)theislandofGuadalupeandRevillagigedosituatedinthePacificOcean,
(iv)thecontinentalshelfandthesubmarineshelfofsuchislands,keysandreefs,
(v)thewatersoftheterritorialseas,inaccordancewithinternationallaw,anditsinteriormaritimewaters,
(vi)thespacelocatedabovethenationalterritory,inaccordancewithinternationallaw,andAnnex201.1
(vii)anyareasbeyondtheterritorialseasofMexicowithinwhich,inaccordancewithinternationallaw,includingtheUnitedNationsConventiononthe
LawoftheSea,anditsdomesticlaw,Mexicomayexerciserightswithrespecttotheseabedandsubsoilandtheirnaturalresourcesand
c)withrespecttotheUnitedStates,
(i)thecustomsterritoryoftheUnitedStates,whichincludesthe50states,theDistrictofColumbiaandPuertoRico,
(ii)theforeigntradezoneslocatedintheUnitedStatesandPuertoRico,and
(iii)anyareasbeyondtheterritorialseasoftheUnitedStateswithinwhich,inaccordancewithinternationallawanditsdomesticlaw,theUnited
Statesmayexerciserightswithrespecttotheseabedandsubsoilandtheirnaturalresources.
ORIGINATINGmeans:
qualifyingundertherulesoforiginsetoutinChapter4(RulesofOrigin).(Note:ThisreferstothespecificNAFTArulesoforigin.Intheprevious
lesson,welearnedabouttherulesoforiginwhenappliedtotradeagreementsotherthanNAFTA.TheNAFTArulesoforiginarediscussedin
Lesson2ofthismodule).
MATERIALmeans:
agoodthatisusedintheproductionofanothergood,andincludesapartoraningredient.
Topic2:NAFTATariffTreatments
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TherearethreetarifftreatmentsthatcanbeusedunderNAFTA:
TariffTreatment
TariffTreatmentCode Abbreviation
UnitedStates
10
UST
Mexico
11
MT
MexicoUnitedStates 12
MUST
InordertodetermineifgoodsqualifyforaNAFTAtarifftreatment,NAFTAeligibilityisfirstestablished.Oncethatoccurs,asecond
determinationmustbemadeastowhichofthethreeNAFTAtarifftreatmentsapply.
Lesson1Summary:NAFTA
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InthislessonyoulearnedaboutNAFTA,atradeagreementsignedbythegovernmentsofCanada,theUnitedStatesandMexico,andthethreetariff
treatmentsunderNAFTA.
Keypointsinlesson1are:
NAFTAisatrilateralagreement
NAFTAhasprovidedfordutyreductionsongoodstradedbetweenCanada,Mexico,andtheUnitedStates
simplifiedtradeingoodsisnottheonlyobjectiveofNAFTA
originatingmeansqualifyingundertheNAFTArulesoforigin
materialmeansagoodthatisusedintheproductionofanothergood,andincludesapartoraningredientand
therearethreetarifftreatmentsunderNAFTA:UST,MT,andMUST.
Nowtakeafewminutesandanswerthefollowingquestionstoseehowmuchyouhavelearned.
Questions:
Attemptsallowed:
Available:
Passrate:
4
Unlimited
Always
60%
Allowed
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Startquiz
Lesson2:NAFTARulesofOrigin
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InthislessonyouwilllearnabouttherulesoforiginthatarespecifictotheNorthAmericanFreeTradeAgreement.Youwillalsolearnaboutorigin
criteriaandthedeminimisrule.
Rationale
InordertodetermineifgoodsqualifyforentryunderoneoftheNAFTAtarifftreatments,youmustbeabletoapplytheNAFTArulesoforigin.
LessonObjective
YouwillbeabletodetermineoriginusingtheNAFTArulesoforigin.
Topic1:TariffTreatmentandCasualGoods
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GoodsqualifyunderNAFTAiftheyfallunderspecificorigincriteria.Nevertheless,beforeorigincriteriacanbedetermined,itisimperativethatthe
correcttariffclassificationbeapplied.Oncethecorrecttariffclassificationhasbeendetermined,therulesoforiginmustbereviewedtodetermine
NAFTAeligibility.Therulesoforiginarebasedonthetariffclassificationofthefinishedgood,andanerrorintariffclassificationcouldmakeadifference
inwhethergoodsqualifyforNAFTAdutyratesornot.
NAFTArulesoforiginareinAnnex401oftheAgreement.
CasualgoodsthatareacquiredintheUnitedStatesaredeemedtooriginateintheUnitedStatesandareentitledtotheUnitedStatesTarifftreatment
(UST)if:
themarkingofthegoodsisinaccordancewiththemarkinglawsoftheUnitedStatesandindicatesthatthegoodsaretheproductoftheUnited
StatesorCanadaor
thegoodsdonotbearamarkandthereisnoevidencetoindicatethatthegoodsarenottheproductoftheUnitedStatesorCanada.
Inotherwords,ifthegoodsimportedfromtheUnitedStatesarecasualgoodsandaremarked"madeintheUnitedStates",theUSTcanbeused.The
rulesoforigindonothavetobeconsulted.
Aswell,ifthegoodsdonotstatethattheyweremadeintheUnitedStates,butalsodonotstatethattheyweremadesomewhereotherthanCanadaor
theUnitedStates,theUSTcanbeused.
Itisimportanttonotethatthisdoesnotapplytocommercialgoods.
CasualgoodsacquiredinMexicoaredeemedtooriginateinMexicoandareentitledtotheMexicoTarifftreatment(MT)if:
themarkingofthegoodsisinaccordancewiththemarkinglawsofMexicoandindicatethatthegoodsaretheproductofMexicoorCanadaor
thegoodsdonotbearamarkandthereisnoevidencetoindicatethatthegoodsarenottheproductofMexicoorCanada.
Inotherwords,ifthegoodsimportedfromMexicoarecasualgoodsandaremarkedmadeinMexico,theMTcanbeused.Therulesoforigindonot
havetobeconsulted.
Aswell,ifthegoodsdonotstatethattheyweremadeinMexico,butalsodonotstatethattheyweremadesomewhereotherthanCanadaorMexico,
theMTcanbeused.
Topic2:CriterionA
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OriginCriteria
GoodsthatqualifyasNAFTAgoodsdosoaccordingtooneofsixorigincriteria.
CriterionAindicatesthatthegoodis"whollyobtainedorproducedentirely"intheterritoryofoneormoreoftheNAFTAcountries.
"Whollyobtained"meansthatthegoodscontainnoforeignmaterialsorpartsfromoutsideCanada,theUnitedStatesorMexico.Simplypurchasingthe
goodinoneoftheNAFTAcountriesdoesnotrenderit"whollyproducedorobtained".
ExamplesofgoodsthatqualifyunderCriterionAare:
mineralgoodsextractedinCanada,Mexico,ortheUnitedStates,
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vegetablesharvestedinCanada,MexicoortheUnitedStates,
liveanimalsbornandraisedinCanada,Mexico,ortheUnitedStates,and
goodsproducedinCanada,Mexico,ortheUnitedStatesexclusivelyfromanygoods"whollyproducedorobtained".
AlthoughCriterionAisthemoststraightforwardcriterion,itistheonemostoftenmisused.Youshouldbeawarethatgoodssuchasmachineryand
electronicitemsseldomqualifyunderCriterionA.
Topic3:CriterionB
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CriterionBindicatesthatthegoodsareproducedentirelyinCanada,Mexico,ortheUnitedStates,andsatisfyaspecificNAFTAruleoforigin.Useof
CriterionBontheNAFTACertificateofOriginindicatesthatoneofthespecificNAFTArulesoforiginwasmet.Theruleoforiginmayincludeatariff
shift,aRegionalValueContent(RVC)requirement,oracombinationofthetwo.
RulesoforigintarifftreatmentsotherthanNAFTAmayalsorequireathatatariffshiftruleand/orregionalvaluecontentbemet.
Example
Havealookatheading73.09to73.11intheNAFTArulesoforigin:
73.0973.11Achangetoheading73.09through73.11fromanyheadingoutsidethatgroup.
Thismeansthatgoodsclassifiedinheadings73.09to73.11maycontainparts(orrawmaterials)fromanonNAFTAcountryandstillqualifyforentry
underNAFTA,aslongasthenonNAFTAparts(orrawmaterials)arethemselvesclassifiedunderanyheadingotherthanheadings73.09to73.11.
ItisimportanttokeepinmindthateachnonNAFTApart(orrawmaterial)mustundergothetariffchangeindicatedasaresultofproductionoccurring
entirelyintheterritoryofCanada,theUnitedStates,orMexico.
AnexampleofaspecificruleinvolvinganRVCrequirementisthefollowingrulethatappliestogoodsofsubheading9015.90.
9015.90Achangetosubheading9015.90fromanyotherheadingor
Norequiredchangeintariffclassificationtosubheading9015.90,providedthereisaregionalvaluecontentofnotlessthan:
a.60percentwherethetransactionvaluemethodisused,or
b.50percentwherethenetcostmethodisused.
Inthiscase,thegoodsmayqualifyforNAFTAunderthefirstpartoftheruleoforigin.However,iffirstpartdoesnotapply,theproducermayattemptto
qualifygoodsunderthesecondpart.
Inthesecondpartofthisrule,notariffclassificationchangeisrequiredaslongastheRVCrequirementismet.
Topic4:CriterionC
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CriterionCrequiresthatthegoodsbeproducedentirelyintheterritoryofoneormoreoftheNAFTAcountriesexclusivelyfromoriginatingmaterials.A
nonoriginatingmaterialwhichitselfundergoestransformationinaNAFTAcountrymaybeconsideredasoriginating.
Example
AfirminMexicomanufactureswoodenofficedesksoftariffitem9403.30.00.AllcomponentsofthedeskarewhollyobtainedorproducedinMexico
exceptonemetalhingeoftariffitem8302.10.90.ThehingewasmanufacturedinMexicofromnonoriginatingironore(heading26.01).
Theruleoforiginfor83.02(themetalhinge)requiresachangefromanyotherheading.
83.0283.04Achangetoheading83.02through83.04fromanyotherheading,includinganotherheadingwithinthatgroup.
Thechangefrom26.01to83.02meetsthisrule.Accordingly,thehingeoriginatesunderCriterionBandtheothercomponentsofthedeskoriginate
underCriterionA.
ThedeskthereforeisconsideredmadeexclusivelyfromoriginatingmaterialsandqualifiesunderCriterionC.
ThedifferencebetweenCriterionBandCis:
CriterionBisusedwhengoodsareproducedinaNAFTAcountrypartlyorcompletelywithnonNAFTAmaterialsandoneofthespecificNAFTA
RulesorOriginwasmet.
CriterionCisusedwhenthematerialsusedtoproducethefinalproductareoriginating.EachcomponentofthegoodmustqualifyforNAFTAfirst.
Topic5:CriterionD
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CriterionDcoversgoodsthatareproducedintheterritoryofoneormoreoftheNAFTAcountriesbutdonotmeettheapplicableruleoforiginsetoutin
Annex401,sincecertainnonoriginatingmaterialsdonotundergotherequiredtariffchangeduetooneofthefollowingreasons:
1. thegoodswereimportedintoaNAFTAcountryinanunassembledordisassembledformbutwereclassifiedpursuanttoGeneralInterpretiveRule
2(a)asanassembledgood,or
2. thegoodsincorporateoneormorenonoriginatingmaterials,classifiedas"parts"undertheHSandthereforecouldnotundergoatariff
classificationchangebecausetheheadingorsubheadingusedprovidesforboththegoodanditsparts.
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Inbothinstances,theRegionalValueContent(RVC)ofthegoodcannotbelessthan60%whenthetransactionvaluemethodisused,or50%whenthe
netcostmethodisused.
ExampleReason1
Considerabicycleoftariffitem8712.00.00thatismanufacturedinFrance,butshippedtotheUnitedStatesinanunassembledstate.Whileinthe
UnitedStates,thebicycleisassembled,andoriginatingcomponentsareadded.
AccordingtoGeneralInterpretiveRule2(a),whetherassembledorunassembled,thebicycleisclassifiedunder8712.00.
Theruleoforiginfor87.12is:
87.1187.13Achangetoheading87.11through87.13fromanyotherheading,includinganotherheadingwithinthatgroup,exceptfromheading
87.14or
Achangetoheading87.11through87.13fromheading87.14,whetherornotthereisalsoachangefromanyotherheading,includinganother
headingwithinthatgroup,providedthereisaregionalvaluecontentofnotlessthan:
60percentwherethetransactionvaluemethodisused,or
50percentwherethenetcostmethodisused.
Neitherrulecanbemet,sincetherewasnotariffshift.
However,sincethefinishedbicycleandbicyclepartsareclassifiedunderthesameheading,duetotheapplicationofGeneralInterpretiveRule2(a),the
bicyclemayqualifyiftheRVCrequirementismet.
ExampleReason2
Toillustratepart2ofCriterionD,considerabarberschair,producedintheUnitedStatesandshippedtoCanada.Thetariffitemforthechairis
9402.10.00.
94.02Achangetoheading94.02fromanyotherchapter.
However,thebarberschaircontainsnonoriginatingpartsandthetariffshiftrequirementcannotbemet.
CriterionDallowsthegoodstobeconsideredasoriginating,sinceheading94.02providesforboththechairandparts.TheRVCrequirementmustbe
met.
CriterionDisrarelyused.Aswell,itcannotbeusedforwearingapparelofchapters61and62orfortextilearticlesofchapter63.
Topic6:CriterionE
Bookmarkthis
CriterionEprovidesforcertainautomaticdataprocessinggoodsandtheirpartsthatdonotoriginateinoneoftheNAFTAcountries.Alistofapplicable
tariffitemsforCriterionEisfoundinAnnex308.1oftheAgreement.
WhenallthreeNAFTAcountrieschargethesamerateofdutyforanyofthegoodslistedinAnnex308.1,goodsimportedintooneoftheNAFTA
countriesfromanyotherNAFTAcountryareconsideredoriginating.
Topic7:CriterionF
Bookmarkthis
AgriculturalprovisionsofNAFTAwerenotnegotiatedtrilaterallythatis,thereareseparateagreementsbetweentheU.S.andMexico,andCanadaand
Mexico.
ForagriculturalgoodsimportedintoCanada,CriterionFappliesonlytothoseagriculturalgoodsoriginatinginMexicothat:
alsoqualifyunderorigincriteriaA,B,orC
arenotsubjecttoaquantitativerestrictioninCanadaand
arelistedinAnnex703.2,SectionB(CanadaandMexico)ofNAFTA.
ThiscriteriondoesnotapplytoagriculturalgoodstradedbetweenCanadaandtheUnitedStatesthesearecoveredbyCriteriaA,B,orC.
Note:Atariffratequotaisnotaquantitativerestriction.
Topic8:DeMinimisRule
Bookmarkthis
WhenaNAFTAruleoforiginrequiresatariffshift,allnonoriginatingpartsandmaterialsmustundergotherequiredtariffchange.
However,ifevenaverysmallandinsignificantpartormaterialdidnotundergothetariffchange,thegoodsarepreventedfromqualifyingunderNAFTA.
Tocircumventthisproblem,NAFTAcontainsa"deminimis"provisionthatallowsgoodstoqualifyasoriginatingaslongasthenonoriginatingpartsand
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materialsthatdonotundergotherequiredtariffchangearenomorethanacertainpercentage.
Thispercentageis7%byvalueformostproductsand7%byweightfortextiles.Therearesomeexceptionstousingthedeminimisruleinparticular,it
cannotbeappliedtocertainproductsofchapters1to27andtocertainchapter73,84,and85items.
Topic8:DeMinimisRule(cont.2)
Bookmarkthis
AnexampleofthedeminimisruleisawatchthatismadeintheUnitedStatesfromthefollowingcomponents:
Part
Origin Subheading Value
Battery
China 8506.80
$.25
Watchband Korea 9113.10
$.70
Thetransactionvalueofthewatchis$16.00thesubheadingofthewatchis9101.19.
Thespecificruleoforiginforthefinishedwatchis:
91.0191.06[1]Achangetoheading91.01through91.06fromanyotherchapteror
[2]Achangetoheading91.01through91.06fromheading91.14,whetherornotthereisalsoachangefromanyotherchapter,providedthereisa
regionalvaluecontentofnotlessthan:
60percentwherethetransactionvaluemethodisused,or
50percentwherethenetcostmethodisused.
Dothenonoriginatingpartsandmaterials(thebatteryandthewatchband)undergotherequiredtariffchangetosatisfypart(1)oftheruleoforigin?The
batterydoes,asthereisachangefromchapter85(thebattery)tochapter91(thefinishedwatch).However,sincethewatchbandandthefinished
watcharebothinchapter91,therequiredtariffchangeforthewatchbandcannotbemet.
And,becausethewatchbandisnotincludedinheading91.14,part(2)oftheruleoforigincannotbemeteither.
Topic9:FungibleGoodsandMaterials
Bookmarkthis
Fungiblegoodsaregoodsthatareinterchangeableforcommercialpurposesandhaveessentiallyidenticalproperties.Forexample,fungiblegoodscan
includenuts,bolts,andscrews,orproductssuchassand,oil,sugar,ornaturalgas.
Whenaproducermixesoriginatingandnonoriginatingfungiblegoods,andphysicalidentificationoforiginatinggoodsisimpossible,theproducermay
determinetheoriginofthegoodsbasedononeofthefollowingstandardinventoryaccountingmethods.
SpecificIdentificationMethod
Tousethismethod,theproducermustphysicallysegregate,intheirinventory,originatingmaterialsthatarefungiblematerialsfromnonoriginating
materialsthatarefungiblematerials.Whereoriginatingmaterialsornonoriginatingmaterialsthatarefungiblematerialsaremarkedwiththeirorigin,the
producerdoesnothavetophysicallysegregatethegoodsaslongastheoriginremainsvisiblethroughoutproduction.Thegoodsthatareoriginating
willbeeligibleforNAFTAdutyrates.
FIFO(FirstIn,FirstOut)
TheFIFOmethodmeansthemethodbywhichtheoriginoffungiblematerialsfirstreceivedininventoryisconsideredtobetheoriginoffungible
materialsfirstwithdrawnfrominventory.Inotherwords,theoriginofthegoodsthatfirstenterinventoryistheoriginofthegoodsthatareremovedfirst
frominventory.
LIFO(LastIn,FirstOut)
TheLIFOmethodmeansthemethodbywhichtheoriginoffungiblematerialslastreceivedininventoryisconsideredtobetheoriginoffungible
materialsfirstwithdrawnfrominventory.Inotherwords,theoriginofthegoodsthatareplacedlastininventoryistheoriginforthegoodsthatare
removedfirstfrominventory.
ForbothFIFOandLIFO,stricttrackingmusttakeplacetoensurethatwhatistakenoutofinventoryandconsideredoriginatingisthesamequantityof
thosegoodsenteringthewarehouseandofthesameorigin.
AverageMethod
Thismeansthattheoriginoffungiblematerialswithdrawnfrominventoryisbasedontheratiooforiginatingmaterialsandnonoriginatingmaterialsin
inventory.Forexample,ifaspecificpercentageofinventoryisoriginating,thenthesamepercentageofgoodsisconsideredoriginatingwhenremoved
frominventory.
AswithFIFOandLIFO,stricttrackingisanabsolutenecessityintheeventofacustomsaudit.
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Topic10:Accessories,SparePartsandTools
Bookmarkthis
Accessories,sparepartsandtoolsthataredeliveredwithgoodsandarestandardaccessoriesforthosegoods,areconsideredoriginatingifthegood
originates.
Theaccessories,sparepartsandtoolsaredisregardedwhenthereisatariffshiftrequirementforthegoodstowhichtheybelong.hostgood,
betterexplanatinrequied
atariffshiftruleisrequiredbytheNAFTArulesoforigin,thatis,iftheaccessories,sparepartsortoolsarenonoriginating,theydonothavetoundergo
thetariffshiftrule.However,thisonlyappliesif:
theaccessories,sparepartsortoolsarenotinvoicedseparatelyfromthegood
thequantitiesandvalueoftheaccessories,sparepartsortoolsarecustomaryforthegoodand
thegoodissubjecttoanRVCrequirement,thevalueoftheaccessories,sparepartsortoolsaretakenintoaccountasoriginatingornon
originatingmaterials,asthecasemaybe,incalculatingtheregionalvaluecontentofthegood.
Topic11:PackagingandPackingMaterials
Bookmarkthis
ForthepurposesofNAFTA,thetermpackagingisusedwhenreferringtoretailsale,whilepackingisusedforshippingpurposes.
Packagingmaterialsandcontainersinwhichthegoodsarepackagedforretailsale,ifclassifiedwiththegoods,aredisregardedwhendetermining
whetherallthenonoriginatingmaterialsusedintheproductionofthegoodsfallundertheapplicablechangeintariffrequired.However,ifthegoodsare
subjecttoaregionalvaluecontentrequirement,thevalueoftheretailpackagingmaterialsandcontainersistakenintoaccountaseitheroriginatingor
nonoriginating,whicheverisapplicable,whencalculatingtheregionalvaluecontentofthegoods.
Packingmaterialsandcontainersinwhichgoodsarepackedforshippingaredisregardedwhendeterminingwhetherthenonoriginatingmaterialsused
intheproductionofthegoodsundergoanapplicabletariffchange.Theyarealsodisregardedwhendeterminingwhetherthegoodssatisfyaregional
valuecontentrequirement.
Topic12:Transhipment
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Paragraph18.(1)oftheCustomsTariffActdefinestranshipmentas:
18.(1)TranshipmentNotwithstandingsection17,forthepurposesofthisAct,ifgoodsthatareexportedtoCanadafromacountryhavebeen
transhippedinanintermediatecountry,thegoodsaredeemednottohavebeenshippeddirectlytoCanadafromthefirstmentionedcountryif:
(a)thegoodsdonotremainundercustomstransitcontrolintheintermediatecountry
(b)thegoodsundergoanoperationintheintermediatecountryotherthanunloading,reloadingorsplittingupofloads,oranyotheroperationrequiredto
keepthegoodsingoodcondition
(c)thegoodsenterintotradeorconsumptionintheintermediatecountryor
(d)thegoodsremainintemporarystorage,underanyconditionsasmaybeprescribed,intheintermediatecountryforaperiodexceedingthe
prescribedperiod.
Topic13:UST,MT,orMUST?
Bookmarkthis
OnceithasbeendeterminedthatgoodsqualifyasoriginatingunderNAFTA,andtherearebothAmericanandMexicanpartsandmaterialsincludedin
thefinishedgood,youwillhavetodeterminewhetherUST,MT,orMUSTapplies.
Forexample,letssaythatyouareaskedtodeterminetheoriginofawoodendesk(tariffitem9403.30.00)thathasbeenmanufacturedintheUnited
Statesfromthefollowing:
Part
Origin
Wood
UnitedStates 4407.91
Subheading Value
$200.00
Wood
Mexico
4407.91
$100.00
Hardware Japan
7318.12
$30.00
Glue
3503.00
$10.00
China
Thetransactionvalueofthedeskis$480.00.
ThefirststepistodetermineifthegoodsqualifyasoriginatingunderNAFTA.Thespecificruleoforiginfor9403.30is:
9403.109403.80(1)AchangetosubheadingNos.9403.10through9403.80fromanyotherchapteror
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(2)AchangetosubheadingNos.9403.10through9403.80fromsubheadingNo.9403.90,
whetherornotthereisalsoachangefromanyotherchapter,providedthereisaregional
valuecontentofnotlessthan:
Lookingatpart(1)oftherule,dothegoodsqualify?
Rememberitisonlythenonoriginatingpartsandmaterialsthatmustundergothetariffshift.Thenonoriginatingpartsandmaterialsarethehardware,
7318.12,andtheglue,3503.00.
Sinceachangefromanychapterotherthanchapter94isallowed,part(1)hasbeensatisfiedandthegoodsqualify.Thereisnoneedtolookatpart(2),
regionalvaluecontentrequirement.However,sincesomeofthewoodisfromMexico,arethegoodssubjecttotheUST,theMT,ortheMUST?
TodeterminewhichofthethreeNAFTAtarifftreatmentsshouldbeused,asecondcalculationmustbeperformed.
Topic13:UST,MT,orMUST?(cont.2)
Bookmarkthis
TheUSTisusedwhenthegoodssatisfytherulesoforiginconsideringonlyU.S.andCanadianpartsandmaterialsasoriginating.Inotherwords,any
partsandmaterialsoriginatinginMexicoaretreatedasnonoriginating.
Inourexample,thewoodfromMexico,thehardwarefromJapan,andthegluefromChinaareconsiderednonoriginatingwhencalculatingtheRVC.
ThisRVCcalculationwouldlooklikethis:
RVC=TVNonoriginatingmaterialsX100
TV
RVC=480(100+30+10)X100
480
RVC=480140X100
480
RVC=340X100
480
RVC=70.8%
SincetheRVCrequirementhasbeenmetconsideringonlyU.S.goodsasoriginating,theoriginofthegoodsistheU.S.andtheUSTcanbeused.
Conversely,goodsareentitledtotheMTwhenthegoodssatisfytherulesoforiginconsideringonlyMexicanandCanadianmaterialsasoriginating.
Thatis,ifpartsandmaterialsfromtheU.S.areconsiderednonoriginating,andthegoodsstilloriginate,thegoodsareeligibleforMTtreatment.
Forexample,considerarticlesofironofsubheading8402.90,manufacturedintheUnitedStates.Thenetcostofthegoodsis$2,000.00.
Partsandmaterialsthatgointothemanufactureofthesegoodsare:
Material
Origin
Subheading Value
MaterialA Mexico
72.04
$1000.00
MaterialB Brazil
84.02
$100.00
MaterialC UnitedStates 73.26
$200.00
Bookmarkthis
8402.90(1)AchangetosubheadingNo.8402.90fromanyotherheadingNo.or
(2)NorequiredchangeintariffclassificationtosubheadingNo.8402.90,providedthereisaregional
valuecontentofnotlessthan:
Thetariffchangerequiredinpart(1)hasnotbeenmetsincethematerialfromBrazilisinthesamesubheadingasthefinisheditem.Thenextstepisto
calculatetheregionalvaluecontent.
TheRVCcalculationisasfollows:
RVC=2000100X100
2000
RVC=1900X100
2000
RVC=95%
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ClearlytheRVCrequirementhasbeenmet,andthegoodsqualifyforoneoftheNAFTAtarifftreatments.Butwhichone?
TodetermineiftheUSTapplies,theRVCiscalculatedwiththematerialsfromMexicotreatedasnonoriginating,asfollows:
RVC=2000(1000+100)X100
2000
RVC=
900X100
2000
RVC=45%
ThegoodsdonotmeettheRVCrequirementandtheUSTcannotbeconsidered.YoumustnowcalculatetheRVCtoseeiftheMTappliesinthis
case,theU.S.materialsaretreatedasnonoriginating.
TheRVCcalculationisasfollows:
RVC=2000(200+100)X100
2000
RVC=
1700X100
2000
RVC=85%
SincethegoodsoriginatewhentheU.S.materialsareconsiderednonoriginating,theMTapplies.
Bookmarkthis
MexicoU.S.TariffTreatment(MUST)
GoodsareentitledtotheMUSTwhentheyarenotentitledtoeithertheUSTtreatmentortheMTtreatment,butstilloriginateinaccordancewiththe
NAFTArulesoforigin.Forexample,considergoodsofsubheading2903.21,madeintheU.S.Thetransactionvalueofthegoodsis$300.00.
Partsandmaterialsthatgointothemanufactureofthesegoodsare:
Material
Origin
Subheading Value
MaterialA China
29.01
$80.00
MaterialB Mexico
29.01
$90.00
MaterialC UnitedStates 28.49
$65.00
2903.212903.30(1)Achangetosubheadings2903.21through2903.30fromanyothersubheading,includinganothersubheadingwithin
thatgroup,exceptfromheadings29.01through29.02or
(2)Achangetosubheadings2903.21through2903.30fromheadings29.01through29.02,
whetherornotthereisalsoachangefromanyothersubheading,including
anothersubheadingwithinsubheadings2903.21through2903.30,providedthereisaregionalvaluecontentofnotless
than:
Part(1)oftheruleoforiginhasnotbeenmetsincematerialsofheading29.01havenotundergonetherequiredtariffchange.Usingpart(2)oftherule
oforigin,dothegoodsmeettheRVCrequirement?
Bookmarkthis
NAFTATariffTreatments
TheRVCcalculationis:
RVC=30080X100
300
RVC=220X100
300
RVC=73%
ThegoodsdefinitelyqualifyasNAFTAgoodssincetheRVCrequirementhasbeenmet.But,becausetherearebothU.S.andMexicanmaterials,you
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mustnowdetermineiftheUST,MT,orMUSTapplies.
TodetermineiftheUSTapplies,theRVCiscalculatedwithMexicanmaterialsconsiderednonoriginating,asfollows:
RVC=300(90+80)X100
300
RVC=130X100
300
RVC=43%
ThegoodsdonotqualifyundertheUST.
ToseeifthegoodsqualifyundertheMT,theRVCiscalculatedwithU.S.materialsconsiderednonoriginating,asfollows:
RVC=300(65+80)X100
300
RVC=300145X100
300
RVC=52%
ThegoodsalsodonotqualifyundertheMTtheMUSTisthereforeused.
Lesson2Summary:NAFTARulesofOrigin
Bookmarkthis
InthislessonyoulearnedaboutthevariousorigincriteriaunderNAFTA.YoualsolearnedhowtousethespecificNAFTArulesoforigin,aswellasthe
deminimisrule.
assigningthecorrecttariffclassificationmustbedonebeforeorigincanbedetermined
oneofsixorigincriteriamustbesatisfiedforgoodstooriginateunderNAFTA
forcasualgoodsonly,markingmaybeusedtodetermineorigin
theNAFTArulesoforiginrequireeither:
atariffchange,
aregionalvaluecontentrequirement,or
bothatariffchangeandaregionalvaluecontentrequirement
thedeminimisruleallowsgoodstoqualifyasoriginatingaslongasthenonoriginatingpartsandmaterialsthatdonotundergotherequiredtariff
changearenotmorethanacertainpercentage
thedeminimisrulecannotbeusedforallHSchapters
fungiblegoodsaregoodsthatareinterchangeableforcommercialpurposesandhaveessentiallyidenticalproperties
undercertainconditions,accessories,sparepartsortoolsthataredeliveredwithgoodsandformpartofthegood'sstandardaccessories,spare
parts,ortools,areconsideredoriginatingifthegoodoriginates
thetermpackaging,forpurposesofNAFTA,isusedwhenreferringtoretailsale,whilepackingisusedforshippingpurposes
goodsarenonoriginatingiftheyhaveundergoneafinalphaseofproductionoutsidetheterritoriesofanyoftheNAFTAcountriesand
ifU.S.andMexicopartsandmaterialsareincludedinafinishedproduct,asecondcalculationmustbemadetodetermineifUST,MT,orMUST
applies.
Takeafewminutesnowandanswerthefollowingquestionstoseewhatyouhavelearned.
Questions:
Attemptsallowed:
Available:
Passrate:
8
Unlimited
Always
60%
Allowed
Startquiz
Lesson3:NAFTACertificateofOrigin
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InthislessonyouwilllearnabouttheNAFTACertificateofOrigin.
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Rationale
InyourjobasaCCS,youmaybeaskedtoassistaclientincompletingtheNAFTACertificateofOriginforgoodsbeingexportedfromCanada.Youwill
alsoberequiredtorecognizewhenaCertificateofOriginthathasbeencompletedbyaforeignsupplierhasbeenincorrectlycompleted.Statingthat
goodsqualifyforaparticulartarifftreatmentwhentheydonotcanresultinapenalty.
LessonObjective
AttheendofLesson3youshouldbeabletodescribeandcompleteaNAFTACertificateofOrigin.
Topic1:StatementsofOrigin
Bookmarkthis
Exportersofgoodsvaluedat$2,500CADorlessmayprovidetheimporterwithanExporter'sStatementofOrigin.Thisisaninformaldocumentandthe
followingformatmaybeused:
"Icertifythatthegoodsreferencedinthisinvoice/salescontractoriginateundertherulesoforiginspecifiedforthesegoodsintheNorthAmericanFree
TradeAgreement(NAFTA),andthatfurtherproductionoranyotheroperationoutsidetheterritoriesofthePartieshasnotoccurredsubsequentto
productionintheterritories."
NAME:___________________________________________________________________
TITLE:____________________________________________________________________
COMPANY:_______________________________________________________________
STATUS:EXPORTER_____________PRODUCER___________OFTHECERTIFIEDGOODS
TELEPHONE:_____________________________FAX:___________________________
COUNTRYOFORIGIN:UNITEDSTATES:_______________MEXICO:_________________
MEXICOANDUNITEDSTATES:__________
(ForpurposesofdeterminingtheapplicablepreferentialrateofdutyassetoutinAnnex302.2,inaccordancewiththeMarkingRulesorineachParty's
scheduleoftariffelimination.)
SIGNATURE:________________________________________DATE:_________________
Statementsoforiginforgoodsvaluedat$2,500.00CADorlessmaybehandwritten,stamped,ortypedonthecommercialcontractoractualinvoice
coveringthegoodsforwhichthebenefitsoftheNAFTAarebeingclaimed.
ExportersarenotrequiredtocompleteaCertificateofOriginforgoodsconsideredtobecasualornoncommercial.Thesegoodsareexemptfromthe
formalcertificationprocessandareinsteadgivenpreferentialtarifftreatmentonthebasisofmarking.Inthecaseofgoodsthatarenotmarked,there
mustbenoindicationthatthegoodsarefromotherthanaNAFTAcountry.
Topic2:CertificateofOrigin
Bookmarkthis
Commercialshipmentsvaluedmorethan$2,500.00CADmustbelistedonaproperlycompletedformB232E,NorthAmericanFreeTradeAgreement
CertificateofOrigin,inordertobeenteredatthelowerdutyratesprovidedunderNAFTA.YoumayfindithelpfultoprintoutacopyoftheCertificateof
Origintouseasareferencethroughoutthistopic.
TheCertificateofOriginisuniformamongCanada,theUnitedStates,andMexicoandisacceptableforuseinanyofthecountries.
ForgoodsimportedintoCanada,theCertificateofOrigincanbecompletedinEnglish,French,orSpanish.Whenthecertificatehasbeencompletedin
Spanish,CBSAmayasktheimportertohavethecertificatetranslated.
InCanada,theCertificateofOriginmustbecompletedbytheexporterorproducerinEnglishorFrench.Theexporterorproducermay,inadditionto
theEnglishorFrenchcertificate,completeoneinSpanishforusebytheimporterinanotherNAFTAcountry.
CommercialimportersseekingNAFTAbenefitsmusthaveintheirpossessionatthetimethegoodsareimportedaproperlycompletedCertificateof
Originpertainingtotheimportedgoods.
AlthoughitisnotnecessarytopresenttheCertificateofOrigintoCBSA,theimportermustbeabletoprovideacopyofthecertificatetoCBSAupon
request.FailuretoprovidetheCertificateofOriginwithinthestatedtimelimitcanresultinpenalties.Aswell,theNAFTAtarifftreatmentmaynotbe
used.
CompletingtheCertificateofOrigin
EachfieldoftheCertificateofOriginisdescribedbelow.
Field1
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Thefulllegalname,address(includingcountry)andlegaltaxidentificationnumberoftheexportermustbeindicated.
InCanada,thelegaltaxidentificationnumberiseithertheemployernumberortheimporter/exporternumber(BusinessNumber)assignedbythe
Agency.InMexico,itisthefederaltaxpayer'sregistrynumber.IntheUnitedStates,itistheemployer'sidentificationnumberorSocialSecurityNumber.
Field2
IftheCertificateofOriginisablanketcertificate,thatis,ifitcoversmultipleshipmentsofidenticalgoods,itmaybecompletedforaperiodofoneyear.
"From"isthedatethecertificatebecomesvalid"to"isthedateuponwhichthecertificateexpires.Theimportationofthegoodslistedonthecertificate
musttakeplacebetweenthesedates.
Topic2:CertificateofOrigin(cont.2)
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Field3
Thisfieldmustbecompletedwithoneofthefollowing:
a)thefulllegalname,address(includingcountry)andlegaltaxidentificationnumberoftheproducer/manufacturerofthegoods.
b)"SAME"iftheexporterandthemanufacturer/producerareoneandthesame.
c)"UNKNOWN"iftheproducerormanufacturerofthegoodsinquestionareunknowntotheexporter.
d)AvailabletoCustomsuponrequestiftheexporterisawareoftheproducer/manufacturer,butforreasonsofconfidentialitydoesnotwishthe
importertoknowtheproducer/manufactureroftheproductbeingsold.
Field4
Thefulllegalname,address(includingcountry)andlegaltaxidentificationnumberoftheimporter.Itispossiblethatthemanufacturer/producerofthe
goodslistedonthecertificateisunawareofthepartythatwilleventuallybeclaimingNAFTAdutyrates.Or,themanufacturer/producerwishestohave
morethanonepartytakeadvantageofNAFTAratesofduty.Inthesecases,itispermissiblefortheCertificateofOrigintoshow"UNKNOWN"or
"VARIOUS"inField4.
Field5
Goodsshouldbefullydescribed.Thedescriptionshouldbeclearenoughtorelateittothetariffitem.Ifnotablanketcertificate,theinvoicenumberof
thecommercialinvoice,oranotheruniquereferencenumbershouldbequoted.
Field6
Foreachitemlistedinfield5,thetariffclassificationtosixdigitsmustbeshown.Somespecificrulesoforiginrequirethatthetariffclassificationtoeight
digitsmustbeshown.Inthesecases,theeightdigitclassificationusedistheoneapplicabletothecountryintowhoseterritorythegoodsarebeing
imported.
Field7
Foreachitemlistedinfield5,criterionAthroughFmustbestated.Theserelatetotherulesoforigin.
Topic2:CertificateofOrigin(cont.3)
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Field8
ForeachitemlistedinField5,state"YES"ifthepartycompletingtheCertificateofOriginistheproducerofthegoods.Ifthatpartyisnottheproducer,
state"NO"followedby(1),(2),or(3)dependinguponwhichofthefollowingtheorigincriterionwasbased:
(1)theirknowledgeofwhetherthegoodsqualifyasoriginatinggoods
(2)theirrelianceontheproducer'swrittenrepresentation(otherthanaCertificateofOrigin)thatthegoodsqualifyasoriginatinggoodsor
(3)acompletedandsignedCertificateofOriginforthegoods,voluntarilyprovidedtotheexporterbytheproducer.
Field9
ForeachitemlistedinField5,wherethegoodsaresubjecttoaregionalvaluecontent(RVC)requirement,indicate"NC"iftheRVCiscalculated
accordingtothenetcostmethodotherwisestate"NO".IftheRVCiscalculatedaccordingtothenetcostmethodoveraperiodoftime,identifythe
beginningandendingdatesofthatperiod.
Field10
Identifythenameofthecountry(MXorUSforagriculturalandtextilegoodsexportedtoCanadaUSorCAforallgoodsexportedtoMexicoorCAor
MXforallgoodsexportedtotheUnitedStates)towhichthepreferentialrateofcustomsdutyappliesinaccordancewiththeMarkingRulesorineach
Party'sscheduleoftariffelimination.ForallotheroriginatinggoodsexportedtoCanada,indicateMXorUSifthegoodsoriginateinthatNAFTAcountry,
withinthemeaningoftheNAFTARulesofOrigin,andanysubsequentprocessingintheotherNAFTAcountrydoesnotincreasethetransactionvalue
ofthegoodsbymorethan7%otherwiseindicate"JNT"forjointproduction.
Field11
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Thisfieldistobecompleted,signedanddatedbytheexporter.Ifcompletedbytheproducer/manufacturerforusebytheexporter,itistobecompleted,
signedanddatedbytheproducer/manufacturer.Thedateistobethedatethecertificateisactuallycompletedandsigned.
Lesson3Summary:NAFTACertificateofOrigin
Bookmarkthis
InthislessonyoulearnedhowtocompleteaNAFTACertificateofOrigin.
exportersofgoodsvaluedat$2,500CADorlessmayprovidetheimporterwithanExporter'sStatementofOrigin.StatementsofOriginforgoods
valuedat$2,500CADorlessmaybehandwritten,stamped,ortypedonthecommercialcontractoractualinvoiceforthegoodsforwhichthe
benefitsoftheNAFTAarebeingclaimed
commercialshipmentsvaluedatmorethan$2,500.00CADmustbelistedonaproperlycompletedCertificateofOrigin
thecertificateisuniformamongCanada,theUnitedStates,andMexicoandisacceptableforuseinanyofthecountries
forgoodsimportedintoCanada,thecertificatecanbecompletedinEnglish,French,orSpanish
inCanada,thecertificatemustbecompletedbytheexporterorproducer,inEnglishorFrench
ifrequestedbyCBSA,theimportermustbeabletoprovideacopyofthecertificateand
failuretopresentacertificatewhenrequestedmayresultinapenalty.
TakeafewminutesnowandanswerthefollowingquestionsaboutNAFTAStatementsofOriginandCertificatesofOrigin.
Questions:
Attemptsallowed:
Available:
Passrate:
3
Unlimited
Always
60%
Allowed
Startquiz
Lesson4:Textiles
Bookmarkthis
InthislessonyouwilllearnabouthowtextilescanqualifyforNAFTAratesofduty.
Rationale
InordertoapplyNAFTAratesofdutytotextiles,therearecertainconditionsthatmustbemet.
LessonObjective
AttheendofLesson4youshouldbeabletodescribehowtextilescanqualifyforNAFTAaswellasdescribeaTariffPreferenceLevelunderNAFTA.
Topic1:Conditions
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Textiles,textilearticles,andapparelarelistedinAnnex300BofNAFTA.
Themajorityofthesegoodsarelistedinchapters5063oftheNAFTArulesoforigin.However,thesearenottheonlychaptersthatmayapply.Aswith
alldeterminationsoforigin,itisveryimportantthatthecorrecttariffclassificationbeused.
TheNAFTAprovisionsontradeintextilesandapparelarequitedetailed.Therulesoforiginattempttoensurethatmostoftheproductionoftextilesand
appareloccursinCanada,theUnitedStatesorMexico.
Basically,inordertooriginate,mosttextilesandapparelmustbeproduced(forapparel,thismeansbothcutandsewn)inaNAFTAcountryfromyarn
madeinaNAFTAcountry.
Thesegoodswillqualifyasoriginatingwhen:
theymeetoneoftheNAFTArulesoforigin,or
whenaspecifiedquantityofcertainyarns,fabrics,apparel,andtextilearticlesmeetTariffPreferenceLevels(TPLs),butdonotmeettherulesof
originofNAFTA.
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Topic2:TariffPreferenceLevels
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ATariffPreferenceLevel(TPL)isaNAFTAmechanismthatprovidesfordutyattheNAFTArateforparticulargoodsuptoaspecifiedquantity,andata
higherrateofdutyafterthatquantityisexceeded.
InordertousetheTPL,goodsmustundergospecificmanufacturingprocessesinoneormoreoftheNAFTAcountries.
ToidentifygoodsthatarebeingimportedunderaTPL,theimportermusthaveacompletedExporter'sCertificationofNonOriginatingTextileGoodson
handattimeofimportation.(ToidentifygoodsthatareimportedunderaCCFTA,orCCRFTAtheimportermustcompletealsocompleteanExporters
CertificationofNonOriginatingTextileGoodsdeclaration.)
SinceTPLgoodsdonotoriginateunderNAFTA,CCFTA,orCCRFTA,theapplicableCertificateofOriginisnotrequired.
Lesson4Summary:Textiles
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Inthislessonyoulearnedabouttextiles,textilearticles,andapparelunderNAFTA.
KeypointsfromLesson4are:
therulesoforiginattempttoensurethatmostoftheproductionoftextilesandappareloccursinCanada,theUnitedStatesorMexico
basically,inordertooriginate,mosttextilesandapparelmustbeproduced(forapparel,thismeansbothcutandsewn)inaNAFTAcountryfrom
yarnmadeinaNAFTAcountry
thesegoodswillqualifyasoriginatingwhentheymeetoneoftheNAFTArulesoforigin,orwhenaspecifiedquantityofcertainyarns,fabrics,
apparel,andtextilearticlesmeetTariffPreferenceLevels(TPLs)
aTariffPreferenceLevel(TPL)isaNAFTAmechanismthatprovidesfordutyattheNAFTArateforparticulargoodsuptoaspecifiedquantity,
andatahigherrateofdutyafterthatquantityisexceeded
inordertousetheTPL,goodsmustundergospecificmanufacturingprocessesinoneormoreoftheNAFTAcountries
toidentifygoodsthatarebeingimportedunderaTPL,theimportermusthaveacompletedExporter'sCertificationofNonOriginatingTextile
Goodsonhandattimeofimportation
sinceTPLgoodsdonotoriginateunderNAFTA,aCertificateofOriginisnotrequiredand
TPLsalsoapplyundertheCanadaChileFreeTradeAgreement(CCFTA)andtheCanadaCostaRicaFreeTradeAgreement(CCRTFA).
Takeafewminutesnowandanswerthefollowingquestionsabouttextiles,textilearticles,andapparelunderNAFTA.
Questions:
Attemptsallowed:
Available:
Passrate:
2
Unlimited
Always
60%
Allowed
Startquiz
Lesson5:AutomotiveProducts
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InthislessonyouwilllearnhowautomotiveproductsaretreatedunderNAFTA.
Rationale
Canadaistheworldsthirdlargestexporterofautomotiveproducts,afterJapanandtheUnitedStates.Over80percentofthevehiclesbuiltinCanada
areexportedwiththeU.S.beingtheprimarydestination.Today,Canadasautomotivegoodsaccountfor16percentofthetotalNorthAmerican
production.Giventhevolumeoftradeinautomotiveproducts,itisimportanttounderstandhowautomotivegoodsaretreatedunderNAFTA.
LessonObjective
AttheendofLesson5youwillbeabletodescribehowautomotiveproductsaretreatedunderNAFTA.
Topic1:AutomotiveProducts
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PriortotheimplementationofNAFTA,theFreeTradeAgreement(FTA)betweenCanadaandtheUnitedStatesandtheAutoPactdeterminedthe
treatment,withrespecttodutyandtrade,ofimportedandexportedautomotivegoods.
PartVoftheNAFTARulesofOriginRegulationspertainstoautomotivegoods.Itcontainsdefinitionsandotherinformationthatmustbereadbefore
consultingthespecificruleoforiginforautomotivegoods.
Aswithmostothergoods,therulesoforiginareusedtodeterminetheoriginofautomotivegoods.Therulesoforiginforautomotivegoodsarebased
oneitheratariffchangealone,oratariffchangeplusanRegionalValueContent(RVC)requirement.
NAFTArequirestheRVCforautomotivegoodstobecalculatedusingthenetcostmethodthatis,thetransactionvaluemethodcannotbeused.The
RVCrequirementforautomobilesandlightvehiclesandtheirenginesandtransmissionsis62.5%.TheRVCrequirementforothervehicles(e.g.,
tractors,vehiclesforthetransportof16ormorepersons,trucks),andtheirenginesandtransmissionsis60%.
TheNAFTArulesoforiginprovidethatinordertoqualifyforpreferentialtarifftreatment,automotivegoodsmustcontainaspecifiedpercentageofNorth
Americancontent,basedonthenetcost.
WhencalculatingtheRVC,thetermtracedmaterialsisoftenused.Tracedmaterialmeansamaterial,producedoutsidetheterritoriesoftheNAFTA
countries,thatisimportedfromoutsidetheterritoriesoftheNAFTAcountriesandis,whenimported,ofatariffprovisionlistedinScheduleIV.Inorder
toseehowtracedgoodsaretreated,PartVoftheNAFTARulesofOriginRegulationsmustbeconsulted.
Forthosecomponentssubjecttotracing,anynonoriginatingvaluewillremainnonoriginatingthroughallstagesofassemblytothetimeofcalculation
oftheregionalvaluecontentofthemotorvehicleorautopartdestinedfororiginalequipmentuse.
Tracingensuresgreateraccuracyincalculatingtheregionalvaluecontentbytrackingthevalueofmajorautomotivecomponentsandsubassemblies
importedintotheNAFTAregion,sothatthenonoriginatingvalueofthesecomponentsandsubassembliesisreflectedintheregionalvaluecontent.
Topic1:AutomotiveProducts(cont.2)
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ElectiontoAverage
Producersofautomotivegoodscanelecttoaveragetheircostswhencalculatingtheregionalvaluecontent.Motorvehicleproducerscanaveragethe
calculationovertheirfiscalyear,eitherbyallmotorvehiclesoronlythosemotorvehiclesinacategorythatareexportedtoanotherNAFTAparty.
Thefourcategoriesare:
thesamemodellineofmotorvehiclesinthesameclassofvehiclesproducedinthesameplant
thesameclassofmotorvehiclesproducedinthesameplant
thesamemodellineofmotorvehiclesproducedor
specialaveragingrulesforCAMIAutomotive,Inc.
ThetreatmentofautomotiveproductsunderNAFTAisquitecomplexthosewishingadditionalinformationmaywishtoconsulttheNAFTARulesof
OriginRegulations.
Lesson5Summary:AutomotiveProducts
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ThislessonprovidedabriefoverviewonautomotiveproductsunderNAFTA.
underNAFTA,originatingautomotivegoodstradedbetweentheNAFTAcountriesbecamedutyfree
rulesoforiginareusedtodeterminetheoriginofautomotivegoods
whencalculatingtheRVC,onlythenetcostmethodmaybeused
theRVCrequirementforautomobilesandlightvehiclesandtheirenginesandtransmissionsis62.5%
theRVCrequirementforothervehicles(e.g.,tractors,vehiclesforthetransportof16ormorepersons,trucks),andtheirenginesand
transmissionsis60%
tracedmaterialsarethoseproducedoutsidetheterritoriesoftheNAFTAcountriesandlistedinScheduleIVoftheAgreementand
producersofautomotivegoodscanelecttoaveragetheircostswhencalculatingtheregionalvaluecontent.
Takeafewminutesandanswerthefollowingquestionsaboutautomotiveproducts.
Questions:
Attemptsallowed:
Available:
Passrate:
3
Unlimited
Always
60%
Allowed
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Startquiz
Lesson6:AdvanceRulings
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InthislessonyouwilllearnaboutadvancerulingsunderNAFTAandotherfreetradeagreements.
Rationale
Atsomepointyoumayrecommendtoaclientthatanadvancerulingbeobtained.
LessonObjective
AttheendofLesson6youwillbeabletodescribewhenanadvancerulingisrequiredandhowtorequestone.
Topic1:AdvanceRulings
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AnadvancerulingisawrittenstatementissuedbyCBSAanddesignatedasanadvancerulingbythem.
UnderSection43.1oftheCustomsAct,anadvancerulingmaybeissuedwithrespecttoanymatterinthecaseofgoodsexportedfromaNAFTA
country,fromChileorfromCostaRica,fromanEFTAstate,fromPeruorfromColombiaanyothermatterconcerningthosegoodsthatissetoutin
paragraph1ofArticle509ofNAFTA,inparagraph1ofArticleE09ofCCFTAorinparagraph1ofArticleV.9orparagraph10ofArticleIX.2of
CCRFTA,inArticle28(2)ofAnnexCofCEFTA,inparagraph1ofArticle419ofCPFTAorinparagraph1ofArticle419ofCCOFTA.
Forexample,anadvancerulingmayberequestedtodeterminewhether:
materialsimportedfromanonPartyusedintheproductionofagoodsundergoanapplicablechangeintariffclassification
agoodsatisfiesaregionalvaluecontentrequirement
goodsqualifyasoriginating
theproposedoractualmarkingofgoodssatisfiescountryoforiginmarkingrequirements
anoriginatinggoodqualifiesasgoodsofaPartyunderAnnex300B(textileandapparel)Annex302.2(tariffelimination)orChapterSeven
(AgricultureandSanitaryPhytosanitaryMeasures)or
anadvancerulingdoesnoteliminatetherequirementforanimportertohaveaCertificateofOriginintheimporter'spossessionatthetimegoods
areimportediftheyareclaimingapreferentialrateofduty.
AnapplicationforanadvancerulingongoodstobeimportedintoCanadamaybemadebythefollowingclassesofpersons:
importersofthosegoodsinCanada
personswhoareauthorizedtoaccountforthosegoodsunderparagraph32(6)(a)orsubsection32(7)oftheAct
exportersandproducersofthosegoodsinafreetradepartnerotherthanCanada
wherethegoodsareproducedinaNAFTAcountryotherthanCanada,inChileorinCostaRica,producersinaNAFTAcountryotherthan
Canada,inChileorinCostaRica,ofamaterialthatisusedintheproductionofthosegoodsand
wherethegoodsareproducedinIsraeloranotherCIFTAbeneficiary,producersinIsraeloranotherCIFTAbeneficiaryorintheUnitedStatesofa
materialthatisusedintheproductionofthosegoods.
Topic1:AdvanceRulings(cont.2)
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Arequestforanadvancerulingisdoneinwriting,andissenttotheCBSAregioninwhichthebulkoftheimportationsisexpectedtooccur.Ifthis
cannotbedetermined,therequestshouldbesenttotheregioninwhichthemajorityoftheimporters,orpotentialimporters,oftheproductislocated.
Wheretherequestinvolvesgoodswhicharesubjecttoaregionalvaluecontentrequirement,therequestissentdirectlytotheOriginandValuation
DivisionatCBSAHeadquarters.TheaddressesfortheCBSARegionalandHeadquartersofficesareavailableinAppendixCofD11416.
Anadvancerulingmaybeappealedbeforethegoodsareimported.
However,ifthegoodsareimported,andtheadvancerulinghasnotbeenrescindedorchanged,thegoodsmustbeimportedinaccordancewiththe
advanceruling.Forexample,ifCBSAissuesanadvancerulingstatingthataparticulartariffclassificationnumbermustbeused,penaltiesmaybe
assessedifthisnumberisnotusedwhenthesegoodsareimported.
Anappealcanbefiledoncethegoodshavebeenimported.
Lesson6Summary:AdvanceRulings
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Thislessonprovidedinformationonadvancerulings.
Keypointsare:
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anadvancerulingisissuedbyCBSA
anadvancerulingmaybeissuedwithrespecttoanymatterinthecaseofgoodsexportedfromaNAFTAcountry,Chile,orCostaRica,anEFTA
state,orfromPeruorColombia
anadvancerulingmayberequestedtodeterminewhether:
materialsimportedfromanonPartyusedintheproductionofgoodsundergoanapplicablechangeintariffclassification
agoodsatisfiesaregionalvaluecontentrequirement
goodsqualifyasoriginating
theproposedoractualmarkingofgoodssatisfiescountryoforiginmarkingrequirementsor
anoriginatinggoodqualifiesasgoodsofaPartyunderAnnex300B(textileandapparel)
Annex302.2(tariffelimination)orChapterSeven(AgricultureandSanitaryPhytosanitaryMeasures)
anadvancerulingdoesnotnegatetherequirementforanimportertohaveaCertificateofOriginonhandatthetimegoodsareimportedifthey
areclaimingaNAFTArateofduty
arequestforanadvancerulingisdoneinwritingand
informationprovidedinanadvancerulingmustbefollowed.
Takeafewminutesnowandanswerthefollowingquestionsaboutadvancerulings.
Questions:
Attemptsallowed:
Available:
Passrate:
3
Unlimited
Always
60%
Allowed
Startquiz
Module11Summary:TheNorthAmericanFreeTradeAgreement
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NAFTA
isatrilateralagreement
hasprovidedfordutyreductionsongoodstradedbetweenCanada,Mexico,andtheUnitedStates.
providesformorethanreducedratesofdutyonoriginatinggoodsand
includesthreetarifftreatments:UST,MT,andMUST.
DeMinimisRule
allowsgoodstoqualifyasoriginatingaslongasthenonoriginatingpartsandmaterialsthatdonotundergotherequiredtariffchangearenot
morethanacertainpercentageand
cannotbeusedforallHSchapters.
FungibleGoods
aregoodsthatareinterchangeableforcommercialpurposesandhaveessentiallyidenticalproperties.
Accessories,SparePartsorTools
thataredeliveredwithgoodsandformpartofthegood'sstandardaccessories,spareparts,ortools,areconsideredoriginatingifthegood
originates,undercertainconditions.
OriginatingGoods
mustbecorrectlyclassified
mustmeetoneofsixorigincriteria
cannothaveundergoneafinalphaseofproductionoutsidetheterritoriesofanyoftheNAFTAcountriesand
thatincludeU.S.andMexicopartsandmaterialsmustundergoasecondcalculationtodetermineifUST,MT,orMUSTapplies.
CasualGoods
aregoodsotherthangoodsimportedforsaleorforanyindustrial,occupational,commercialorinstitutionalorotherlikeuse
arenotrequiredtobelistedonaCertificateofOriginand
maybeconsideredoriginatingonthebasisoftheirmarking.
CommercialGoods
aregoodsimportedintoCanadaforsaleorforanycommercial,industrial,occupational,institutional,orothersimilaruseand
mustbelistedonaformalCertificateofOriginifthebenefitsofNAFTAarebeingclaimed.
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(cont.2)
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CertificateofOrigin
isuniformamongCanada,theUnitedStates,andMexico
iscompletedinEnglish,French,orSpanishforgoodsimportedintoCanada
iscompletedinEnglishorFrenchforgoodsexportedfromCanadaand
mustbeprovidedtoCBSAuponrequest(failuretodosomayresultinapenalty).
TextilesandApparel
willqualifyasoriginatingiftheymeetoneoftheNAFTArulesoforiginor
whenaspecifiedquantityofcertainyarns,fabrics,apparel,andtextilearticlesmeetTariffPreferenceLevels(TPLs).
TariffPreferenceLevel(TPL)
isaNAFTAmechanismthatprovidesfordutyattheNAFTArateforparticulargoodsuptoaspecifiedquantity,andatahigherrateofdutyafter
thatquantityisexceeded
toidentifygoodsthatarebeingimportedunderaTPL,theimportermusthaveacompletedExporter'sCertificationofNonOriginatingTextile
Goodsonhandattimeofimportationand
TPLgoodsdonotrequireaCertificateofOrigin.
TPLsalsoapplyundertheCanadaChileFreeTradeAgreement(CCFTA)andtheCanadaCostaRicaFreeTradeAgreement(CCRFTA).
(cont.3)
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AutomotiveGoods
rulesoforiginareusedtodeterminetheoriginofautomotivegoods
whencalculatingtheRVC,onlythenetcostmaybeused
RVCrequirementforautomobilesandlightvehiclesandtheirenginesandtransmissionsis62.5%
RVCrequirementforothervehicles(e.g.,tractors,vehiclesforthetransportof16ormorepersons,trucks),andtheirenginesandtransmissionsis
60%
producersofautomotivegoodscanelecttoaveragetheircostswhencalculatingtheregionalvaluecontent.
AdvanceRulings
areissuedbyCBSA
maybeissuedwithrespecttoanymatterinthecaseofgoodsexportedfromaNAFTAcountry,Chile,orCostaRica,anEFTAstate,orfromPeru
mayberequestedtodeterminewhether:materialsimportedfromanonPartyusedintheproductionofagoodsundergoanapplicablechangein
tariffclassificationagoodsatisfiesaregionalvaluecontentrequirementgoodsqualifyasoriginatingtheproposedoractualmarkingofgoods
satisfiescountryoforiginmarkingrequirementsoranoriginatinggoodqualifiesasgoodsofaPartyunderAnnex300B(textileandapparel)
Annex302.2(tariffelimination)orChapterSeven(AgricultureandSanitaryPhytosanitaryMeasures)
donoteliminatetherequirementforanimportertohaveaCertificateofOriginintheimporter'spossessionatthetimegoodsareimportedifthey
areclaimingaNAFTArateofduty
applicationsforadvancerulingsmaybemadeby:importerswhoareCanadiansimportinggoodsproducersinMexicoortheUnitedStateswho
arethepersonswhoproducethegoodsormaterialsthatareincorporatedintothegoodsexportersinMexicoortheUnitedStateswhoarethe
personexportingthegoodsCanadaorauthorizedagentsofimporters,producers,orexporters
requestsaremadeinwritingand,
mustbefollowed,evenifappealed.
Module11:Quiz
Questions:
Attemptsallowed:
Available:
Passrate:
11
Unlimited
Always
60%
Allowed
Startquiz
Module12:ValuationandCalculationofDuty
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Inthismoduleyouwilllearnaboutthevariousvaluationmethods,howtodeterminethevalueuponwhichdutyiscalculated,howtocalculatetheduty,
andhowtoapplythevaluationcodes.
ModuleObjective
AsaCCS,youmayberequiredtosubmitimportdatatoCBSA.Todoso,youmustbefamiliarwiththemethodsusedtodeterminethevalueforduty,
howtocalculatetheduty,andyoumustapplythecorrectvaluefordutycode.Valuefordutyisparticularlyimportantbecauseitisthevalueuponwhich
dutiesand/ortaxesarecalculated.
Lesson1:DeterminingValueforDuty
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Inthislesson,youwillbeintroducedtothesixmethodsofvaluation,learnhowtodeterminethevalueforduty,andbecomefamiliarwiththevaluation
codes.
Rationale
AvaluefordutyisrequiredforallgoodsimportedintoCanada.Youshouldunderstandthemethodbywhichthevaluefordutyisestablished.Because
thevaluefordutyofaproducthasanimpactonhowmuchdutyand/ortaxispaid,youneedtoknowwhatcostsmaybeaddedtoordeductedfromthe
pricepaidforthegoods.
LessonObjective
Attheendofthislesson,youshouldbefamiliarwiththevariousmethodsofvaluation,knowhowtodeterminethevalueforduty,andunderstandthe
valuationcodesusedtoidentifythemethodofvaluationused.Youmustbeabletoensurethatthelegitimateamountofdutyandtaxesarepaidonany
shipment.
Topic1:ValuationMethodsandCodes
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AttheendoftheTokyoRoundofGATTinthelate1970s,CanadaagreedtoadopttheGeneralAgreementonTariffsandTrade(GATT)valuationcode,
undercertainconditions.Thoughothercountriesadoptingthecodeagreedtoaoneyearimplementationschedule,Canadaaskedforandwasgranted
anadditionalfouryearstostudyandevaluatetheimpactofsuchchangesonCanada'seconomy.
Afterstudyingtheimpact,andensuringthatCanadasproposedlegislationwasinaccordancewithGATT,theMinisterofFinanceintroducedthenew
codeinNovemberof1984.
TheGATTvaluationcodeisintendedtoprovideafair,uniform,andneutralsystemofvaluationthatconformstocommercialrealitiesandprohibitsthe
applicationofarbitraryorfictitiouscustomsvalues.ItisgenerallyreferredtoastheTransactionValueSystemofCustomsValuationandfocusesonthe
priceactuallypaidforgoodswhensoldforexporttoCanada,toapurchaserinCanada.
DeterminingtheValueforDuty
Therearesixmethodsthatmaybeusedtodeterminethevaluefordutyofimportedgoods.Listedintheorderinwhichtheymustbeapplied,these
methodsare:
1.TransactionValueoftheGoods(Section48oftheCustomsAct,D1341)
2.TransactionValueofIdenticalGoods(Section49oftheCustomsAct,D1351)
3.TransactionValueofSimilarGoods(Section50oftheCustomsAct,D1351)
4.DeductiveValue(Section51oftheCustomsAct,D1371)
5.ComputedValue(Section52oftheCustomsAct,D1381)
6.ResidualMethod(Section53oftheCustomsAct,D1391).
Ifthetransactionvalueofthegoodscannotbeused,thevaluefordutyisdeterminedbyoneofthefiveremainingmethods.Theymustbeconsideredin
sequentialorderwiththeexceptionofthedeductiveandcomputedvalue.Animportermaychoosetoapplythesetwomethodsinreverseorderaslong
astheyhaveadvisedaCanadaBorderServicesAgency(CBSA)ClientServicesOfficeinwriting.
Topic1:ValuationMethodsandCodes(cont.2)
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Thevaluefordutycodeisatwodigitcode.ItisusedwhensubmittingimportdatatoCBSAandindicatesthemethodofvaluationusedtodeterminethe
valueforduty.Thefirstdigitsignifiestherelationshipbetweenthevendorandtheimporter,andthesecondindicatesthemethodofvaluationused.
FirstDigit
1thevendorandimporterarenotrelated
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2thevendorandimporterarerelated
SecondDigit
3thepricepaid,orpayable,forthegoodswithoutadjustments
4thepricepaid,orpayable,forthegoodswithadjustments
5thetransactionvalueofidenticalgoods
6thetransactionvalueofsimilargoods
7thedeductivevalue
8thecomputedvalue
9theresidualmethod
Theaboveinformationisgenerallyknownbytheimporter.Ifyoudonothavethisinformationonfile,anditisnotevidentonthedocumentsthat
accompanythegoods,youmustcontacttheimporter.
Itistheresponsibilityoftheimportertoreviewallthetermsofsaleanddeterminehowthevaluefordutyisdetermined.CBSAwill,inthecourseofa
normalreview,selecttransactionsonarandombasisandrequestthatimportersprovideevidencetosupporttheirvaluationdeclaration.IfCBSA
decidestoreappraisethevaluefordutyandissuesarequestforadditionaldutybasedonahighervalue,theimporterisentitledtoappealthis
decision.
Topic2:TransactionValueoftheGoods
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Thetransactionvalueofthegoodsistheonethatismostoftenusedasthevalueforduty.
SetoutinSection48oftheCustomsAct,thetransactionvaluemaybeusedforsalesbetweennonrelatedparties.Relatedpartiesmayalsouseitas
longastherelationshiphasnotinfluencedtheprice.Atestvaluemaybeusedtodeterminewhethertherelationshiphasinfluencedtheprice.
Therearefourrequirementsthatmustbemetbeforethetransactionvaluemaybeused:
theimportedgoodsweresold
thesalewasforexporttoCanada
thepurchaserinthesaleforexportisthepurchaserinCanadaand
thepricepaidorpayableforthegoodscanbedetermined.
Thepricepaidorpayablecanonlybeusedasthevaluefordutywhencertainconditionshavebeenmet:
withsomeexceptions,theremustbenorestrictionsrespectingthedispositionoruseofthegoodsbythepurchaser
thesaleofthegoodsbythevendortothepurchaserorthepricepaidorpayableforthegoodsisnotsubjecttosomeconditionorconsiderationfor
whichavaluecannotbedetermined
whereanypartoftheproceedsoftheresale,disposal,oruseofthegoodsaccruestothevendor,thepricepaidorpayablemustincludethevalue
ofthoseproceedsand
wherethepurchaserandvendorarerelated,therelationshipdidnotinfluencethepricepaidorpayableforthegoods.
Topic2:TransactionValueoftheGoods(cont.2)
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AdditionstothePricePaidorPayable
Certaincosts,ifnotalreadyincluded,mustbeaddedtothepricepaidorpayableinordertoarriveatthetransactionvalue.Thefollowingadditionsapply
toallsixmethodsofvaluation.Thefollowingcostsareallitemsthatmustbeincludedin,oraddedto,thepricepaidorpayable:
commissions
brokerage
packingcostsandcharges
assists
royaltiesandlicencefees
subsequentproceeds
transportationcosts
Commissions
Indeterminingwhetherpaymentsofcommissionstoanagentshouldorshouldnotbeaddedtothepricepaidorpayable,itisnecessarytodetermine
whethertheagentisasellingagent,abuyingagent,orabroker.
Asellingagentisapersonwhoactsforthevendor.Theylookforcustomers,takeorders,and,insomecases,arrangeforthedeliveryandstorageof
goods.Theirearningsareusuallycalledsellingcommissions.Goodspurchasedthroughasellingagentgenerallycannotbeboughtunlesstheselling
commissionispaid.Thesellingcommissionisusuallypaidtotheagentbythevendor.Inthiscase,thecostofthegoodswillincludetheselling
commission,andthesellingcommissiondoesnothavetobeadded.
IfthetermsofthesalerequiretheCanadianpurchasertopaythesellingagentseparately,thiscommissionisusuallynotincludedinthepricepaidor
payableandthereforemustbeadded.
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Abuyingagentactsonbehalfofthepurchaser.Abuyingagentmayfindsuppliers,placeorders,inspectgoods,andmayensurethedeliveryofthe
goods.Theirpayment,orbuyingcommission,ispaidbythepurchaserandisusuallyseparatefromthepaymentmadeforthegoods.
Buyingcommissionsarenotincludedinthetransactionvalueofthegoods.
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Brokerage
Abrokerisanagentwhocanactforeitherthevendorandpurchaser,orboth,andgenerallyhasnoroleotherthantoputthepartiesintouchwitheach
other.Thebroker'sremunerationiscalledbrokerage,andisusuallycalculatedasapercentageofthebusinessconcludedasaresultoftheiractivities.
Thepercentagereceivedbybrokersusuallyreflectstheirlimitedrisksandresponsibilities.
Brokeragemeanspaymentsmadetointermediariesfortheirparticipationinconcludingacontractofsale.Ifthevendorpaysthebroker,thebrokerage
willusuallybeincludedintheinvoiceprice.Insuchcases,itistreatedlikeasellingcommission,thatis,itiseitherincludedinoraddedtothe
transactionvalue.
BrokeragedoesnotmeanchargesbyacustomsbrokerforservicesrenderedtocleargoodsthroughCustoms.
Wherethebrokerageispaidbythevendorandchargedseparatelytothepurchaser,itmustbeaddedtothepricepaidorpayable.Itisalsopossible
thatthebrokermaybepaidbyeitherthepurchaseralone,oreachofthepartiestothetransactionmaypaypartofthetotalbrokerage.Inthesecases,
thebrokeragemustbeaddedtothepricepaidorpayabletotheextentthatitispaidbythepurchaserandnotalreadyincludedinthepriceofthegoods.
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PackingCostsandCharges
InModule5youfirstencounteredtheterm"packing"undertheGeneralInterpretiveRules(GIRs).Allcostsandchargesincurredbythepurchaser
relatingtopacking,includinglabourandmaterials,aredutiableandmustbeincludedinthevalueforduty.Thepackingmaybeenteredunderthesame
tariffclassificationofthegoods,ifitisofthekindnormallyusedforpackingsuchgoods,accordingtoGIR5(b).However,ifthepackingmaterialsor
packingcontainersaresuitableforrepetitiveuse,theyareclassifiedundertheirowntariffitem.
Assists
Thetermassistsincludesitemssuchasmaterials,tools,dies,artwork,developmentworkandanymaterialsthatareconsumedintheproductionofthe
importedgoods,andthathavebeensuppliedbythepurchaserofthegoodsatareducedcost,oratnocost,foruseinthemanufactureoftheimported
goods.Theseitemsaredutiableandmusthavetheirtruevaluedeterminedbeforeincludingitinthetransactionvalueoftheimportedgoods.
RoyaltiesandLicenceFees
Royaltiesandlicencefeesareregardedforcustomspurposesaspaymentsmade,ortobemade,foracquiringorusingaprotectedright.Examplesof
suchpaymentsinclude(butarenotlimitedto):
paymentsmadetoanauthor(copyrightholder)toacquiretherighttoselltheauthor'sbookwithinageographicregion
paymentsmadetoaninventor(patentholder)ofaproductionprocessfortheuseofthatprocessduringaspecifiedperiodoftimeand
paymentsmadetoalicenseholderofatrademarkednameorbrandfortherighttosellgoodsthataresomarked.
Placeofdirectshipment
TheplaceofdirectshipmentistheplacefromwhichgoodsbegintheirdirectanduninterruptedjourneytoCanada.Thiscontinuousjourneymayonlybe
brokenforreasonsoftranshipment(seeD1334).
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SubsequentProceeds
Ifanypartoftheproceedsfromanysubsequentresale,disposaloruseofthegoodsbythepurchaseraccrues,orwillaccrue,tothevendor,theymust
beaddedtothepricepaidorpayable.Ifthevalueofthesubsequentproceedscannotbedetermined,thenthetransactionmethodofvaluationcannot
beused.AnexampleofsubsequentproceedsisafeepaidbytheCanadianpurchasertotheforeignvendorbasedonapercentageofsalesofthe
goodsinCanada.
TransportationCosts
TheCustomsActprovidesfortwodistincttreatmentsoftransportationandassociatedcostsincurredinshippinggoodstoCanada.
TransportationcoststhatrelatetothetransportationofgoodsTOtheplaceofdirectshipmentinthecountryofexportaretobeincludedinthevaluefor
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duty.Iftheyarenotincluded,thentheymustbeadded.
Theshippersbillofladingistheprimarydocumentusedtoestablishtheplacewithinthecountryofexportfromwhichthegoodsareshippeddirectlyto
Canada.Ifthevendorincurstransportationrelatedexpensessuchaslocalcartagefeesorstoragechargesonthegoodspriortobeingladenforexport
directlytoCanada,thosecostsmustbeaddedtoorincludedinthevalueforduty.
Thefollowingisanexample.
ACanadianimporterhasanagreementtobuyfurniturefromamanufacturerinChina.ThegoodsaremanufacturedandsenttoawarehouseinHong
KongwheretheywillbestoreduntiltheimporterdecidestohavethemshippeddirectlytoCanada.Becausethewarehouseisconsideredtheplaceof
directshipment,thetransportationcostsbetweenthemanufacturerslocationinChinaandthewarehouseinHongKongareincludedinthevaluefor
dutysincetheyaretransportationcoststhatrelatetothetransportationofthegoodsTOtheplaceofdirectshipmenttoCanada.
Important!
Transportationcostsusedforvaluationpurposescannotbeestimates.
Youmaybeaskedtosubmitproofoftheactualtransportationcostsyoudeduct.
DeductionsfromthePricePaidorPayable
Certaincosts,iftheyhavebeenincluded,maybedeductedfromthepricepaidorpayableinordertoarriveatthetransactionvalue.Thefollowing
deductionsapplytoallsixmethodsofvaluation.Thefollowingcostsmaybedeductedfromthepricepaidorpayable:
transportationcosts
costsincurredinCanada
dutyandtaxes
discounts
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TransportationCosts
ThecostoftransportationandassociatedcostsrelatingtothetransportationofthegoodsFROMtheplacewithinthecountryofexportfromwhichthe
goodsareshippeddirectlytoCanadaarenotdutiable.Iftheyareincludedinthesellingprice,theymaybededucted.
IfwelookagainatourexampleoftheCanadianimporterwhopurchasedfurniturefromamanufacturerinChina,iftransportationchargesforshipping
thegoodsfromHongKongtoCanadawereincludedinthesellingprice,theymaybededucted.
CostsIncurredinCanada
Anyreasonablecostorexpenseidentifiedseparatelyfromthepricepaidorpayablethatisincurredfortheconstruction,erection,assemblyor
maintenanceof,ortechnicalassistanceprovidedinrespectofthegoodsaftertheyareimported,maybededucted.
DutiesandTaxes
AnyCanadiandutiesandtaxes,paidorpayablebyreasonoftheimportationofthegoodsorsaleofthegoodsinCanada,arenotincludedinthevalue
forduty.Dutiesandtaxesmaybedeductedifincludedandidentifiedseparately.
Discounts
CertaindiscountsgiventotheCanadianpurchaserbytheforeignvendorareallowabledeductionsfromthetransactionvalue.
Iftheconditionnecessaryforthediscountisfulfilledormetpriortoimportation,thediscountisanallowabledeductionwhencalculatingthevaluefor
duty.Iftheconditionismetafterimportation,thediscountisnotallowed.Thecruxoftakingthedeductioniswhentheconditionis"effected".Students
shouldreviewD13andensurethemostcurrentlegislationisconsultedwhenadeductionisagreedtoopriortoimportationbutaffectedafterimportation
occurs.
OrderofAdjustments
Thetransactionvalueiscalculatedbyaddinganyapplicableadditiontothepricepaidorpayable.Fromthatsubtotal,anyapplicabledeductionsare
subtractedfromthesubtotal.
(SeealsoAppendixAofD1331).
PricePaidorPayable+Additions=Subtotal
SubtotalDeductions=ValueforDuty
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DirectShipmentandTreatmentofTransportationCosts
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ACanadianimporterbuysgoodsfromanAmericanmanufacturerinOhio.ThegoodsaremadeinOhiobutstoredinawarehouseinNewYorkuntil
theyarepurchased.
WhentheCanadianimporterrequiresthegoods,shesendsareleaseordertoNewYork,andthewarehouseshipsthegoodstoCanada.
Theimportersmostrecentshipmentwasvaluedat$1,000.00Canadiandollars(CAD),whichdidnotincludethe$50.00shippingcostfromOhiotoNew
York,orthe$200.00shippingcostfromNewYorktoMontreal.
ClickonthePlaybuttontoseehowthetransportationcostsaretreated.
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CalculatingTransportationCosts
Transportationcosts,whethertheyareadditionsordeductions,canbeapportionedamongthevalueoftheimportedgoods.
Forexample,supposethatononeshipmenttherearetwotypesofgoodsbeingimported,oneatacostof$500.00andtheotheratacostof$1,000.00.
Thetotalcostis$1,500.00andthereisalsoadeductibletransportationcostof$100.00.
$100.00(thetransportationcost)dividedby$1,500.00(thecostofthegoods)is.0666.
$100$1,500=.0666
Youcanmultiplythecostofeachitemby.0666toobtaintheamountoftransportationthatcanbedeductedfromeach.
$500.00X.0666=$33.33
$500.00$33.33=$466.67
$1,000.00X.0666=$66.67
$1,000.00$66.67=$933.33
Agreateramountoffreightcanbedeductedfromthehighercostingitem,aslongastheratioremainsthesame.
Aswell,CBSAwillalsoallowtransportationcoststobeadded,ordeducted,accordingtoweightorvolume,ratherthanvalue.
Forexample,considerthesamegoodsasintheaboveexamplewithaweightof200tonsfortheitemvaluedat$500.00andaweightof700tonsfor
theitemvaluedat$1,000.00.Thetotalweightofthegoodsis900tonsandthetransportationcostremains$100.00.
$100.00(thetransportationcost)dividedby900(theweight)is.11111.
200X.11111=$22.22
$500.00$22.22=$477.78
700X.11111=$77.78
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$1,000.00$77.78=$922.22
Agreateramountoffreightcanbedeductedfromtheitemthatweighsthemost,aslongastheratioremainsthesame.
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ValuationMethodsandCodesExercise1
AcompanyinCanadapurchasesgoodsfromafirminCalifornia.ThefirminCaliforniaordersthegoodsfromamanufacturerinMexico.
Pricepaidorpayable:$14,000.00CAD
TransportationcostbetweenMexicoandCalifornia:$40.00CAD(includedinthepricepaid)
TransportationcostbetweenCaliforniaandthecompanyinCanada:$80.00CAD(includedinthepricepaid)
Packingcost:$50.00CAD(includedinthepricepaid)
Nowdeterminetheallowabledeductionsfromthepricepaidorpricepayable.
ClickonthePlaybuttontoseeshortvideodemonstratingthisprocess.
Clickheretoseehowwearrivedatthevalueforduty
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ValuationMethodsandCodesExercise2
AcompanyinGermanysellsmachinerytoacompanyinCanada.ThemachinetravelsdirectlytoCanadafromGermany.
Pricepaidorpayable:$120,000.00CAD
OceanfreightfromGermanytoCanada:$6,000.00CAD(includedintheprice).
Subsequentproceeds:$10,000CAD(notincludedintheprice)
CostforaCanadiancompanytoinstallthemachineryinCanada:$12,000.00CAD(includedintheprice).
Reviewthecostsanddetermineiftheymustbeaddedtothepricepaidorpayable,ornot.
ClickonthePlaybuttontoseeashortvideodemonstratingthisprocess.
.
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Clickheretoseehowwearrivedatthevalueforduty
Topic3:TransactionValueofIdenticalGoods
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Whenthetransactionvalueofthegoodscannotbeusedtodeterminethevalueforduty,youmaybeabletousethetransactionvalueofidentical
goods.Withthetransactionvalueofidenticalgoods,thevaluefordutyisbasedonthevalueofidenticalgoodsthathavebeen:
exportedtoCanadaatthesametimeasthosenowbeingappraised
soldtoapurchaseratthesameorsubstantiallythesametradelevelasthepurchaserofthegoodsnowbeingappraisedand
soldinthesameorsubstantiallythesamequantityasthegoodsnowbeingappraised.
Forthepurposeofdeterminingthevaluefordutyofgoodsbeingappraised,thetransactionvalueofidenticalgoodsisadjustedtoaccountfor
differencesattributabletotransportationcosts,tradelevelsandquantities.Wherethereismorethanonetransactionvalueofidenticalgoods,thenthe
lowesttransactionvalueofidenticalgoodsshouldbeusedasabasisforappraisalofthevalueforduty.
Topic4:TransactionValueofSimilarGoods
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Thetransactionvalueofsimilargoodsisessentiallythesameasthetransactionvalueofidenticalgoods,exceptthatthevalueisbasedongoodsthat
closelyresemblethegoodsbeingappraised,thatis,onsimilargoods.Thegoodsmustbe:
capableofperformingthesamefunctions
commerciallyinterchangeable
producedinthesamecountryasthegoodsbeingappraised
producedbythesameperson/manufacturerasthegoodsnowbeingappraisedand
consideredforthequality,reputation,andexistenceofatrademark.
Thesameconditions,allowancesandadjustmentsasprovidedforundertheidenticalgoodsmethodareusedbysimplysubstitutingtheexpression
similargoodswhereapplicable.
Thetransactionvalueofsimilargoodsandthetransactionvalueofidenticalgoodsaremostoftenusedwhengoodsareimportedtemporarilyinto
Canadaandnotsold.
Topic5:DeductiveValue
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Useofthedeductivevalueandthecomputedvaluemayattheimporter'srequest,bereversedintheirorderofapplicationaslongastheimporterhas
advisedCBSAinwritingbeforesubmittingimportdata.
ThedeductivevalueisbasedontheCanadianimporter'smostcommonsellingpriceofthegoodstoCanadiancustomers.Fromthisresalefigure,or
priceperunit,certainamountsarethendeducted.
Thefirststepthatmustbetakenbeforemakinguseofthedeductivevalueistodeterminethepriceperunitofthegoodsbeingappraised.Thesales
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usedtodeterminethepriceperunitmustbemadetopersonsatthefirstleveloftradeafterimportationwho:
arenotrelatedtothepersonsfromwhomtheybuysuchgoodsand,
havenotsupplied,directlyorindirectly,freeofchargeoratareducedcostanyofthegoodsorservices(assists)referredtoinsubparagraph48(5)
(a)(iii)oftheCustomsAct.
Theremustalsohavebeen,intheopinionoftheMinisteroranypersonauthorizedbyhim,asufficientnumberofsalestopermitadeterminationofthe
priceperunit.
Withthedeductivevalue,generalexpensesthatmaybedeductedwhichthereforeadjustthepriceperunitare:
Canadiandutyandtaxes
commissions,profitsandgeneralexpensesincurredinCanada
transportation,insuranceandothercostsrelatedtothesaleofthegoodsinCanadaand
transportation,insuranceandrelatedcostsincurredfromtheplaceofdirectshipmenttoCanada,and/orcostsofassembly,packaging,orfurther
processingafterimportation.
Whilethedeductivevalueisnotfrequentlyused,itismostoftenusedforgoodsbeingsoldonconsignment.
Topic6:ComputedValue
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Thecomputedvalueisbasedonthecostoftheimportedgoodsplusanamountfornormalprofitandgeneralexpensesexperiencedbyvendorsinthe
exportingcountrywhensellingthesametypeofgoodstoCanadiancustomers.
Thecomputedvalueofthegoodsbeingappraisedistheaggregateofamountsequalto:
a)thecosts,chargesandexpensesincurredinrespectof,orthevalueof:
materialsemployedintheproductionofthegoodsand
theproduction(includinganamountforprofitandgeneralexpenses)orotherprocessingofthegoodsbeingappraised
b)theamountforprofitandgeneralexpenses,consideredtogetherasawhole.Generally,theamountaddedisreflectedinsalesforexporttoCanada
ofgoodsofthesameclassorkindasthegoodsbeingappraisedmadebyproducersinthecountryofexport.
Thecosts,charges,expensesandvaluereferredtoin(a)include:
thecosts,chargesandexpensesreferredtoinsubparagraph48(5)(a)(ii)
thevalueofanyofthegoodsandservicesreferredtoinsubparagraph48(5)(a)(iii),determinedandapportionedtothegoodsbeingappraisedas
referredtointhatsubparagraph,whetherornotsuchgoodsandserviceshavebeensuppliedfreeofchargeoratareducedcostand
thecosts,chargesandexpensesincurredbytheproducerinrespectofengineering,developmentwork,artwork,designwork,plansorsketches
undertakeninCanadathatweresupplieddirectlyorindirectly,bythepurchaserofthegoodsbeingappraisedforuseinconnectionwiththe
productionandsaleforexportofthosegoods.
Sincethismethodofvaluationdependsonindepthknowledgeofthecostsofproducingtheactualimportedgoods,itisgenerallylimitedtothose
importerswhoarerelatedtothevendorandwherethevendoristhemanufacturerofthegoodsinquestion.
Topic7:ResidualMethod
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Ifallfivepreviousmethodsdonotapplytothegoodsbeingappraised,theresidualmethodisapplied.
Theresidualmethoddoesnotprovidespecificrulesfordeterminingavaluefordutybutadvisesthatthevaluefordutyshallbeappraisedonthebasis
of:
1.thevaluederivedfromthemethod,fromamongthemethodsintheordersetout,whenappliedinaflexiblemannerconformsclosertothatmethod
thananyothermethod,and
2.informationavailableinCanada.
DMemo1391providesexamplesofwhentheresidualmethodmightbeapplied.
Forexample:
iftherewerenosalesofsimilargoodsproducedinthesamecountryasthecountryinwhichthegoodsbeingappraisedwereproduced,butthere
aresalesofsimilargoodsproducedinanothercountry,itmaybepossibletousethetransactionvalueofsimilargoodsasthebasisfor
determiningtheresidualvalueprovidedtherequirementsofsection50areotherwisemetor
iftherearenosalesthatmeetthe90dayrequirementundersection51(seesubparagraph51(2)(b)),buttherearesaleswhichoccurred100days
aftertheimportationofthegoodsbeingappraised,itmightbepossibletousethedeductivevalueasthebasisfordeterminingtheresidualvalue
providedtherequirementsofsection51areotherwisemet.
Inapplyingtheprovisionsofsections48to53oftheCustomsAct,Customswillbeguidedtothegreatestextentpossiblebytheprinciplesandspiritof
GATTandtheInternationalAgreementonCustomsValuation.Undertheprovisionsofsection53oftheCustomsAct,thefollowingcannotbeusedto
determinethevalueforduty:
thesellingpriceinCanadaofgoodsproducedinCanada
asystemwhichprovidesfortheacceptanceforcustomspurposesofthehigheroftwoalternativevalues
thepriceofgoodsonthedomesticmarketofthecountryofexportation
thecostofproductionotherthancomputedvalueswhichhavebeendeterminedforidenticalorsimilargoodsinaccordancewiththeprovisionsof
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section52
thepriceofthegoodsforexporttoacountryotherthanCanada
minimumcustomsvaluesor
arbitraryorfictitiousvalues
Lesson1Summary:DeterminingValueforDuty
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Younowhaveanunderstandingofvaluation,thevariousmethodsavailabletodeterminevaluefordutyandthevaluefordutycodesusedonimport
documents.
CanadassystemofvaluationisbasedontheGATTvaluationcode
Thevaluationcodeisintendedtoprovideafair,uniformandneutralsystemofvaluation
Therearesixmethodsusedtodeterminethevaluefordutyofimportedgoods,outlinedinsections48to53oftheCustomsAct
Themethodsmustbeusedinsequentialorderwiththeexceptionofthe"deductive"or"computed"value,whichmaybereversedand
Additionsanddeductionstothepricepaidorpayablemustbeconsidered.
Takeafewminutesnowandanswerthefollowingquestionsaboutdeterminingvalueforduty.
Questions:
Attemptsallowed:
Available:
Passrate:
7
Unlimited
Always
60%
Allowed
Startquiz
Lesson2:CalculateCustomsDutyPayable
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Inthislesson,youwilllearnhowtocalculatecustomsduty.
Rationale
Itisimportanttoknowhowtocalculatetheamountofdutythatispaidorpayablesothatyourclientpaystheminimumbutcorrectamountofduty.In
thecaseofanunderpayment,apenaltycanbeassessedbyCBSA.
LessonObjective
Tolearnhowtocalculateduty.
Topic1:CurrencyConversion
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Step1:CurrencyConversion
AccordingtoSection55oftheCustomsAct,thevaluefordutyofgoodsenteringCanadaisalwayscalculatedinCanadiandollars.However,goods
purchasedoutsideCanadaarenotalwayspricedat,orsoldin,Canadiandollars.
ThecurrencyusedforaparticularsaleisgenerallyindicatedontheCanadaCustomsInvoiceorcommercialinvoicethataccompaniesthegoods.
Someexamplesofcurrencythatyoumightseeare:
U.S.Dollars(USD)
Euros(EUR)
PoundsSterling(GBP)
MexicanPesos(MXN)
IndianRupees(INR)
AllcurrencycodesarelistedinAppendixHtoMemorandumD17110inList2.
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Important!
RemembertoconvertforeigncurrencytoCanadiandollars.
DateofDirectShipment
ThedatethegoodsbegintheiruninterruptedjourneytoCanada.The"dateofdirectshipment"istheonlydatethatcanbeusedtoestablishthe
prevailingrateofexchange.
ToconvertforeigncurrencytoCanadiandollars,multiplythevalue(thisiscalledthevalueforcurrencyconversion)bytheexchangerateineffectonthe
dateofdirectshipment.Ifyoudonthaveaccesstodailycurrencyexchangeupdates,theyareavailablebycontactingtheBorderInformationService
(BIS)officeattheCBSAat18004619999.
ThefollowingexamplesshowhowtoconvertthreetypesofcurrencyusingthedirectshipmentdateofDecember7,2012:
$2000.00USDx0.9910(theexchangerateforUSdollars)=$1,982.00CAD
5,000,000x0.01204(theexchangerateforJapaneseYen)=$60,200.00CAD
24500.42CHFx1.0622(theexchangerateforSwissFrancs)=$26,024.35CAD
Herearesomeexamplesforyoutotry.
AshipmentfromGermanyisinvoicedfor1000.00EUR.IfthedirectdateofshipmentontheinvoiceisDecember7,2012,whatisthevalueofthe
shipmentinCanadiandollars?
AshipmentfromBrazilhasbeeninvoicedinU.S.dollars.Thetotalvalueoftheshipmentis$4,500.00USD.Atransportationchargeof$500.00USD,
fromtheplaceofdirectshipmenttoCanada,isincluded.ThegoodswereshippeddirectlytoCanadaonDecember6th,2012.Whatisthevaluefor
duty?
Topic2:CalculatingDuty
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Step2:Calculatetheamountofdutypayable
Therearethreewaystocalculatecustomsduty:AdValorem,specificandacombinationofthetwo.
AdValoremdutyisbasedonapercentageofthevalueofthegoods.Forexample,6%,7%,or10%.
Specificdutyisbasedonaspecifiedamountperunitofmeasure.Forexample,.08centsperlitre$2.00perboardfootor$4.59perkilogram.
Acombinationofthetwolookslikethis:9.5%and.08centsperkilogramorthis5.42/kgplus4%.
InModule10,youlearnedaboutthevarioustarifftreatments.ByreturningtotheCustomsTariffandreviewingtheListofCountriesandApplicable
TariffTreatments,determiningthecorrecttariffclassificationandrateofduty,youwillbeabletocalculatethecustomsduty.
AdValoremDutyRates
Wewillgothroughsomeexamplestopracticecalculatingtheamountofdutypayable.
LetssupposeashipmentfromGermanycontainswatches,classifiedunder9101.29.00.00.WeknowthatshipmentsfromGermanyonlyqualifyunder
theMostFavouredNationTarifftreatmentafterhavingreviewedtheListofCountriesandApplicableTariffTreatments.TheMFNdutyrateforthis
classificationnumberis5%,anAdValoremrate.
AsourshipmentfromGermanywasworth1000.00euros,weconvertedittoCanadiandollarsbymultiplying1000.00eurosbytheexchangerateof
1.5000.
1000x1.5000=$1,500.00CAD
Thevaluefordutyis$1,500.00.Tocalculatetheduty,multiplethevaluefordutybythedutyrateof5%.Ouransweris$75.00thisisamountofduty
payable.DutyisalwayspayableinCanadiandollars.
$1,500.00CADx5%=$75.00CAD
Topic2:CalculatingDuty(cont.2)
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SpecificDutyRates
Nowletslookataspecificdutyratecalculationandcalculatethedutyonaproductwherethedutyisbasedontheunitofmeasure.
Brownsugar,forretailsale,isshippedtoCanadafromBrazil.FromourstudiesinModule9,weknowthetariffclassificationforsugarisinChapter17.
Afterestablishingtheclassificationof1701.91.90.11wethenturntotheListofCountriesandApplicableTariffTreatments.Brazilisentitledtoboththe
GPTandMFNTreatments.
SinceGPTisnotmentionedundertheapplicableTarifftreatmentsfortariffclassificationnumber1701.91.90.11,wemustusetheMFNdutyrateof
$30.86pertonne(metricton/TNE).Iftheimportersshipmentweighs2.5TNE,thedutyis$77.15.
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Thedutyrateisnotbasedonthevaluebutaunitofmeasure,inthiscasetonnes.Whenaspecificrateofcustomsdutyapplies,customsdutyis
obtainedbymultiplyingthequantitybytherate.
2.5TNEx$30.86=$77.15CAD
CombinationDutyRate
Thereisoneotherwayofcalculatingthedutyongoods,acombinationoftheAdValoremandspecificrates.
Anexampleofacombinationtypeofcalculationisbiscuitsratedunder1905.31.93.00.ForMFNwesee5.42/kgplus4%.Iftheshipmentweighs50kg
andhasavalueof$200.00CAD,wecancalculateaportionofthedutybymultiplyingthedutyrateof5.42by50kg.Thisequals$271.00
Nextwemultiply$200.00CADby4%andgetthesecondportionofduty,$8.00.Tocalculatethetotalamountofduty,weadd$271.00and$8.00toget
theanswer$10.71CAD
5.42x50kg=$2.71CAD
$200.00CADx4%=$8.00CAD
$2.71+$8.00=$10.71
Lesson2Summary:CalculateCustomsDutyPayable
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InthislessonyoulearnedhowtoconvertforeigncurrencytoCanadiandollarsandthreewaysofcalculatingduty.
whiletransactionscantakeplaceinanycurrency,thevaluefordutyisalwayscalculatedinCanadiandollars
thethreewaystocalculatedutyareAdValorem,specificoracombinationofthetwo
AdValoremdutyiscalculatedbymultiplyingthevaluefordutybythepercentagerateofcustomsdutyapplicableand
Specificdutyiscalculatedbymultiplyingtherateofdutybythequantityspecifiedforthatrate.
Nowtakeafewminutesandanswerthefollowingquestionstoseehowmuchyouhavelearned.
Questions:
Attemptsallowed:
Available:
Passrate:
7
Unlimited
Always
60%
Allowed
Startquiz
Module12Summary:ValuationandCalculationofDuty
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Inthismoduleyoustudiedthewaytodeterminethevalueforduty,thelegislativeauthoritiesfromtheCustomsAct,andtheorderinwhichthemethods
ofvaluationareapplied.
Youwereintroducedtotheadditionsanddeductionsthatmustbeconsideredwhenestablishingthevalueforduty.Youlearnedhowtoconvertany
currencytoCanadiandollarsandcalculatecustomsduties.Youwerealsoshownthevaluefordutycodesthatidentifytherelationshipbetweenthe
vendorandpurchaserandthemethodofvaluationused.
Module12:Quiz
Questions:
Attemptsallowed:
Available:
Passrate:
11
Unlimited
Always
60%
Allowed
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Startquiz
Module13:CalculatingTaxesPayable
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Thismoduleprovidesinformationonthevarioustypesoftaxesthatareapplicabletoimportedgoods.
ModuleObjective
Youwillbeabletodeterminethetypeoftaxthatappliestoimportedgoodsandknowhowtocalculatetheamountoftaxpayable.
Lesson1:TheGoodsandServicesTaxandtheHarmonizedSalesTax
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InthislessonyouwilllearnabouttheGoodsandServicesTax(GST)andtheHarmonizedSalesTax(HST)andhowtheyareappliedtoimported
goods.
Rationale
InyourjobasaCCS,youmustbeabletodeterminewhetherornotGSTorHSTappliestoimportedgoodsandhowtocalculatetheamountofGSTor
HSTthatmustbepaid.Youwillalsoneedtoknowhowtoidentifywhichgoodsarenotsubjecttothesetaxes.
LessonObjective
AttheendofLesson1youshouldbeabletodetermineifGSTorHSTispayableornot,andhowtocalculatethetaxpayable.
Topic1:GoodsandServicesTax
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TheGoodsandServicesTax(GST)isa5%taxwhich,unlessspecificallyexempted,appliestoallgoodssoldinCanadaorimportedintoCanada.It
alsoappliestoservicesprovidedinCanada.TheGSTisstructuredsothattheultimatepurchaserofthegoodspaysthetax.
TheGSTisamultistagetaxthatiscollectedbyvendorsandbusinesses,includingcustomsbrokers,ateachlevelintheproductionanddistribution
chain.BusinessesandvendorswhocollecttheGSTmustregistertodoso.Theregistrant,ineffect,becomesanagentofthefederalgovernmentin
collectingtheGSTonthevalueofeachsaletheymakeorservicetheyprovide.
ThelegislationthatgovernstheGSTistheExciseTaxAct.
ApartymustregisterfortheGSTif:
itprovidestaxablesuppliesinCanadaand
itisnotasmallsupplier.
Suppliesaregoodsandservices.TaxablesuppliesaregoodsandservicesthataresubjecttoGST.
Apersoncanbedefinedasasmallsupplier,duringaparticularcalendarquarterandthefollowingmonth,whentheirannualgrossrevenuesareless
than$30,000.00overthepreviousfourconsecutivecalendarquarters.
Apublicservicebodysuchasacollege,nonprofitorganization,charityorhospital,canbedefinedasasmallsupplierunderthesameconditionsiftheir
annualgrossrevenuesarelessthan$50,000.00.
ApartydoesnothavetoregisterfortheGSTif:
itsonlycommercialactivityisthesaleofrealproperty,otherwisethaninthecourseofabusinessor
ifitisanonresidentthatdoesnotcarryonbusinessinCanada.
WhenapartyregistersfortheGST,theyarealsoregisteredfortheHarmonizedSalesTax(HST).
Topic2:InputTaxCredits
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Businesses,likeotherconsumers,arechargedGSTwhentheypurchasegoodsandservices.However,whenabusinessisregisteredfortheGST,itis
entitledtosubtractthetaxthatithaspaid(aninputtaxcredit,orITC)fromthetaxthatithascollected.
Thedifferencebetweenthetwoiseitheranegativeamount(refund)oranadditionalamountoftaxthatmustberemittedtothefederalgovernmentafter
eachreportingperiod.ThismethodensuresthattheGSTappliesonlyonthevalueofsalestothefinalconsumer.
Topic3:GSTExemptorZerorated
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Thegeneralruleisthatallsupplies,includingallgoodsandservices,aretaxable.However,therearecertainexceptionstothegeneralrule.Supplies
thatdonotattractGSTareexempt,zerorated,ornontaxable.
ExemptsuppliesarethoseonwhichthereisnoGSTpaidbythepurchaser,andtheregistrantdoesnotcollectorchargetax.Withexemptsupplies,
inputtaxcreditsarenotclaimed.ExemptsuppliesarelistedinScheduleVoftheExciseTaxAct.Someexamplesofexemptsuppliesarerealproperty,
healthcareservices,educationalservices,andchildandpersonalcareservices.
ZeroratedsuppliesarethoseonwhichthereisnoGSTpaidbythepurchaser,however,theregistrantsupplierofthegoodsmayclaimaninputtax
creditfortaxpaidonpurchaseswhichwereusedtocreatethezeroratedsupply.ZeroratedsuppliesarelistedinScheduleVIoftheExciseTaxAct
andincludeprescriptiondrugsandbiologicals,basicgroceries,medicalandassistivedevices,exports,andfinancialservices.
Topic4:GSTNonTaxableImportations
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GSTisnotpayableonimportationsofgoodsthataredescribedinScheduleVIItotheExciseTaxAct.Someofthesegoodsare:
goodsthatareclassifiedunderspecifictariffitems
medals,trophiesandotherprizes,notincludingusualmerchantablegoodsthatarewonoutsideCanadaincompetitionsthatarebestowed,
receivedoracceptedoutsideCanadaorthataredonatedbypersonsoutsideCanada,forheroicdeeds,valourordistinction
goodsthatareimportedbyacharityorbyapublicinstitutioninCanadaandthathavebeendonatedtothatcharityorinstitution
goodsthatareimportedsolelyforthepurposeoffulfillinganobligationunderawarrantytorepairorreplacethegoodsifdefective,where
replacementgoodsaresuppliedfornoadditionalconsideration,otherthanshippingandhandlingcharges,andexportedwithoutbeingconsumed
orusedinCanadaexcepttotheextentreasonablynecessaryorincidentaltothetransportationofthegoodsand
prescribedgoodsimportedinprescribedcircumstancesandunderprescribedtermsandconditions.
PrescribedgoodsimportedinprescribedcircumstancesandunderprescribedtermsandconditionsarelistedintheNonTaxableImportedGoods
(GST/HST)Regulations.
Note:changesaremadefromtimetotimetotheCustomsTariffandtootherActsandregulations.Thesechangesmaynothavebeenincorporatedinto
theNonTaxableImportedGoods(GST/HST)Regulations,and,asaresult,thereferencestotariffitemsandheadingsmaynotreflectthecurrenttariff.
However,thegoodslistedremainnontaxable.
Topic5:HarmonizedSalesTax(HST)
Bookmarkthis
Thefederalgovernmentandthegovernmentsofthreeprovinces,NovaScotia,NewBrunswick,andNewfoundlandandLabrador,agreedtocombine
theGSTandprovincialsalestaxtocreatetheHarmonizedSalesTax(HST).TheHSTwasimplementedonApril1,1997.OnJuly1st,2010,Ontario
implementedasinglesalestaxinthatprovince,andonApril1st,2013,PrinceEdwardIslandimplementedasinglesalestax.
AsofApril1,2013,theHSTattherateof12%(5%federalpartand7%provincialpart)nolongerappliesinBritishColumbia(asitdidfromJuly1,2010
totheendofMarch2013).TheHSTattherateof12%hasbeenreplacedbytheGSTattherateof5%andaprovincialsalestax.
InNewBrunswick,Ontario,andNewfoundlandandLabrador,theHSTisappliedatarateof13%(5%GST+8%provincialtax)onthesamegoodsand
servicesthataretaxableundertheGST.InPriceEdwardIsland,theHSTisappliedatarateof14%(5%GST+9%provincialtax).InNovaScotia,the
HSTisappliedatarateof15%(5%GST+10%provincialtax).ItisimportanttonotethatgoodsaresubjecttoeithertheGSTortheHST,neverboth.
IfacompanyhasregisteredfortheGST,theyarealsoregisteredfortheHST.
TheHSTappliestoallimportedcasualgoodsthataredestinedtotheparticipatingprovincesregardlessoftheirpointofentryorreleaseintoCanada.
Importedcommercialgoodsdestinedforoneoftheparticipatingprovincesareonlysubjecttothe5%GSTportionoftheHSTatthetimeofimportation.
Theremaining8%,9%or10%provincialcomponentispaidthroughselfassessment.
Topic6:CalculatingGSTandHST
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InModule12youlearnedhowtodeterminethevaluefordutyofimportedgoods.Oncethedutyhasbeencalculated,itisaddedtothevalueforduty
andthesumofthedutyplusthevaluefordutybecomesthedutypaidvalue(DPV).
TheGSTorHSTiscalculatedontheDPV.
WhenyouindicatetoCBSAhowmuchdutyandtaxyouarepaying,thisinformationistransmittedelectronicallyandcertainfieldsintheelectronic
transmissionindicatetheamountofdutyandtaxthatisbeingpaidorwillbepaidatalaterdate.
ThefieldfortherateofGSTorHSTmustindicateeither5(forGST),or13,14or15(forHST).IfgoodsareexemptfromthepaymentofGST,an
exemptioncodeisshown.ThesecodesarefoundinD17110.
Ifthegoodsarenontaxable,thisfieldisleftblank.
Keepinmindthatimportedcommercialgoodsdestinedforoneoftheparticipatingprovincesareonlysubjecttothe5%GSTportionoftheHST.
WhenconsideringHSTonservicessuchascustomsbrokerageorfreighttransportationservicesonemustconsultthePlaceofSupplyRules.
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Topic6:CalculatingGSTandHST(cont.2)
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PlaceofSupplyRules
ThePlaceofSupplyRulesclarifywhetherasupplyofagoodoraserviceismadeinaprovinceforthepurposeofdeterminingwhetherthegoodor
serviceissubjecttotheprovincialcomponentoftheHSTinadditiontothefederalcomponentoftheHST.
TheDepartmentofFinancehascreatedthePlaceofSupplyRules,andtheCanadaRevenueAgencyhaswrittenGST/HSTTechnicalInformation
BulletinB103,toassistindeterminingtheplaceofsupply.
TheamountofGSTapplicableis5%ofthedutypaidvalueofthegoodsorservice.
Forexample,ifthedutypaidvalueofimportedgoodsis$1,000.00,theGSTis$50.00.
WhatistheGSTifthedutyvalueofimportedgoodsis$5,000.00?$1,250.00?$35,999.00?
Inparticipatingprovinces,theamountofHSTapplicableis13%,14%or15%ofthedutypaidvalueofthegoodsorservice.
Ifthedutypaidvalueofimportedgoodsis$1,000.00,theHSTrateforNewBrunswick,NewfoundlandandLabrador,andOntariois$130.00.
Ifthedutypaidvalueofimportedgoodsis$1,000.00,theHSTforPrinceEdwardIslandis$140.00.
Ifthedutypaidvalueofimportedgoodsis$1,000.00,theHSTrateforNovaScotiais$150.00.
WhatistheHSTifthedutypaidvalueofimportedgoodsis:
$5,000.00forgoodssuppliedinNewBrunswick?$35,999.00forgoodssuppliedNovaScotia?
Remember:onlyGSTorHSTappliesneverboth.
Lesson1Summary:TheGoodsandServicesTaxandtheHarmonized
SalesTax
Bookmarkthis
InthislessonyoulearnedabouttheGSTandtheHST.
Keypointsofthislessonare:
theGSTisa5%taxonmostgoodssoldinCanada
inNewBrunswick,Ontario,andNewfoundlandandLabradortheHSTisa13%taxthatincludes5%GSTand8%provincialsalestax
asofApril1,2013,theHSTattherateof12%(5%federalpartand7%provincialpart)nolongerappliesinBritishColumbia.TheHSTattherate
of12%hasbeenreplacedbytheGSTattherateof5%andaprovincialsalestax
inPEI,theHSTisa14%taxthatincludes5%GSTand9%provincialsalestax
inNovaScotia,theHSTisa15%taxthatincludes5%GSTand10%provincialsalestax
HSTappliesinNovaScotia,NewBrunswick,NewfoundlandandLabrador,Ontario,andPEI
goodsandservicesnotsubjecttotheGSTorHSTarezerorated,taxexempt,ornontaxable
theExciseTaxActisthelegislationthatprovidesfortheGSTandHST
inordertoclaiminputtaxcreditsforGST,abusinessmustberegisteredfortheGST
registeringfortheGSTregistersabusinessfortheHSTaswell
apartymustregisterfortheGSTifitprovidestaxablesuppliesinCanadaanditisnotasmallsupplier
apartydoesnothavetoregisterfortheGSTifitsonlycommercialactivityisthesaleofrealproperty,otherwisethaninthecourseofabusiness
orifitisanonresidentwhodoesnotcarryonbusinessinCanada
HSTappliestoallimportedcasualgoodsthataredestinedtotheparticipatingprovincesregardlessoftheirpointofentryorreleaseintoCanada
and
GSTandHSTarecalculatedonthedutypaidvalueofimportedgoods.
Takeafewminutestoseewhatyoulearned.
Questions:
Attemptsallowed:
Available:
Passrate:
11
Unlimited
Always
60%
Allowed
Startquiz
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Lesson2:GST,HST,andtheNonResidentImporter
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InthislessonyouwilllearnaboutnonresidentimportersandhowthepaymentandcollectionofGST/HSTaffectsthem.
Rationale
Inmanycases,suppliersoutsideofCanadawishtobearthecostofimportinggoodsthattheyselltopurchasersinCanada.Whenyoucomeacross
suchasupplier,youwillneedtoknowhowtohandletheimportationwithrespecttothecollectionofCanadiantaxes.
LessonObjective
Youwillbeabletoadviseanonresidentimporteroftheregulationsconcerningthepaymentoftaxesimposedongoodsthattheyimportandtheysellto
buyersinCanada.
Topic1:RequirementforRegistration
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TherearemanyexporterslocatedoutsideofCanadawhoregularlyshipgoodstocustomersinCanadaandchoosetoberesponsibleforanyapplicable
dutiesandtaxes.Theseexportersarereferredtoasnonresidentimporters.
Inthesecases,theCanadiandutyandtaxisoftenincludedinthesellingprice,and,asnotedinModule12,theyaredeductedinordertoarriveatthe
valueforduty.
ItisonlybyregisteringfortheGST/HSTthatanonresidentimportercanclaiminputtaxcreditsonGST/HSTthattheyhavepaidonimportedgoods.
NonresidentsmustregisterfortheGST/HSTwhen:
theyprovidetaxable,includingzerorated,goodsorservicesinCanadainthecourseofcarryingoncommercialactivityinCanadaandtheyare
notasmallsupplier
theymaketaxablesuppliesofadmissionsinCanadaforaplaceofamusement,aseminar,anactivity,oraneventheldinCanada,evenifthey
areasmallsupplier
theyhostaconventioninCanada,andmorethan25%ofthedelegatesareresidentsofCanadaor
theyarenotasmallsupplierandtheysolicitsalesforbooks,newspapers,magazines,periodicals,orsimilarprintedpublicationsinCanadaor
theyoffersuchgoodsforsaleinCanada,eitherthroughanemployeeoragent,orbymeansofadvertisingdirectedattheCanadianmarket,and
sendthepublicationsbymailorcouriertotherecipientatanaddressinCanada.
NonresidentsarenotrequiredtoregisterfortheGST/HSTif:
theydonotcarryonbusinessinCanada
theycarryonbusinessinCanadabutqualifyasasmallsupplier(exceptifmakingtaxablesuppliesofadmissioninCanadaforaplaceof
amusement,aseminar,anactivity,oraneventheldinCanada)or
theyselltaxablerealpropertylocatedinCanadaotherthanintheusualcourseofbusiness.
Topic2:RecoveringGST/HSTPaid
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AlthoughanonresidentimportermaynotbeobligatedtoregisterfortheGST/HST,heisstillobligated,likeanyotherimporter,topayanyapplicable
dutyandGST/HSTonimportedgoods.Sinceanonregistrantcannottakeadvantageofinputtaxcredits,amethodfornonregistered,nonresident
importerstorecovertheGST/HSTthattheyhavepaidisavailable.Thismethodisknownasthe"flowthroughmethodoftaxrecovery".
Undertheflowthroughmethod,thenonregistered,nonresidentimporterchargeshisCanadiancustomeranamountthatisequaltotheGST/HSTpaid
bythenonregistered,nonresidentimporteratthetimeofimportation.Ineffect,theCanadianpartyissimplyrepayingtheGST/HSTthathasbeenpaid
onhisbehalf.
TheCanadiancustomerisnoweligibletousetheGST/HSTamountpaidtothenonregistered,nonresidentimporterasaninputtaxcredit.Inorderto
claimtheinputtaxcredit,theCanadianpurchaser,whenfilinghistaxreturn,mustprovideacopyoftheimportdocumentthatshowsthetaxwaspaid.
Lesson2Summary:GST,HST,andtheNonResidentImporter
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InthislessonyoulearnedaboutnonresidentimportersandhowthepaymentandcollectionofGST/HSTaffectsthem.
Keypointsofthislessonare:
nonresidentimportersaresuppliersoutsideofCanadawhochoosetoberesponsibleforanyapplicabledutiesandtaxesongoodstheysellto
Canadianpurchasers
nonresidentimportersmustregisterfortheGST/HSTinordertoclaiminputtaxcreditsand
anonresident,nonregistrantmayusetheflowthroughmethodtorecovertaxpaidonimportedgoods.
TakeafewminutesandanswerthefollowingquestionsaboutGST,HSTandthenonresidentimporter.
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Questions:
Attemptsallowed:
Available:
Passrate:
3
Unlimited
Always
60%
Allowed
Startquiz
Lesson3:ProvincialTaxes
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InLesson3youwilllearnaboutthepaymentandcollectionofprovincialtaxes.
Rationale
Youmayberequiredtoremitprovincialsalestaxforimportedcasualgoods.
LessonObjective
Attheendofthislessonyouwillknowwhenthepaymentofprovincialtaxesisrequired.
Topic1:ProvincialTaxes
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Unlessotherwisenoted,provincialtaxesinclude:
provincialsalestax(PST)
provincialtobaccotax
alcoholmarkupsorfeesand,
inQubeconly,alcoholspecifictax.
ProvincialtaxesareonlycollectedongoodsthataresubjecttoGSTorotherfederalduties,unlesstheprovincehasspecificallyexemptedthegood
fromtheprovincialtax.
Applicableprovincialtaxesarepayableatthetimeofimportationoncasualgoodsthatare:
destinedforindividualuseand
notimportedintoCanadaforsaleorforanycommercial,industrial,occupational,institutionalorotherlikeuse.
PST,provincialtobaccotaxandalcoholmarkupsorfeesareassessedandcollectedoncasualgoodswhenanagreementexistsbetweentheprovince
andCBSAtocollectthetaxonbehalfoftheprovince.
Provincialtaxesarenotcollectedoncommercialgoodsatthetimeofimportation.
ResidentsofSaskatchewan,Manitoba,BritishColombiaorQubec,whoimportcasualgoodsintoCanada,aresubjecttothePSTwhenthegoodsare
importedintotheirprovinceofresidence.
Thefiveprovincesthathaveaharmonizedsalestax(HST)inplaceNovaScotia,NewBrunswick,NewfoundlandandLabrador,OntarioandPrince
EdwardIslandincludetheirprovincialsalestaxintheHST.ResidentsofparticipatingprovincesareassessedHSTonalltaxablecasualimportations.
In2013,BritishColumbiarevertedbacktoGSTandPSTattheendofMarch2013.
Albertaisuniqueinthatitdoesnothaveaprovincialsalestax.
D17122containsinstructionsforthecollectionoftheharmonizedsalestax,aswellasforthecollectionofprovincialsalestax,provincial
tobaccotaxes,andalcoholmarkups/feesonallcasualgoods.
Topic1:ProvincialTaxes(cont.2)
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Thefollowingchartishelpfulindeterminingtheprovincialtaxesoncasualgoods,collectedbyCBSAatthetimeofimportation,onbehalfofthevarious
provinces.
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Province
PST/HST
Newfoundland 13%HST
andLabrador (5%GST+8%provincialtax)
Tobacco Alcohol Exemptionsfrom

Tax
Markup PST/HST
Fee
No
No
SeeD236
NovaScotia
15%HST
(5%GST+10%provincialtax)
No
No
SeeD236
New
Brunswick
13%HST
Yes
Yes
SeeD236
PrinceEdward 14%HST
Island
No
No
Seehttp://www.peihst.ca/index.php3?number=1043686&lang=E
Qubec
9,975%QST
Yes
No
SeeD236
Manitoba
8%PST
Yes
Yes
SeeD236
Ontario
13%HST
No
No
SeeD236
British
Columbia
7%PSTSeealso:
http://www2.gov.bc.ca/gov/topic.page?
Yes
id=589542DDDB6347F7A7C80C1783F4BA6D
No
Seehttp://www2.gov.bc.ca/gov/topic.page?
id=78521DE3BD5D46C9A3B17631207A0AD7&title=Tax%20Exemptions
Saskatchewan 5%PST
No
No
SeeD236
Alberta
Yes
No
N/A
NoPST
Topic1:ProvincialTaxes(cont.3)
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QubecSalesTax(QST)
UnderanagreementreachedbetweenthefederalandQubecgovernments,RevenuQubecadministerstheGST/QSTinQubec.Thisincludesthe
processingofapplicationsforregistrationforthosecarryingoncommercialactivitiesinQubec.
QSTispayableonlyonimportedcasualgoodsimportedcommercialgoodsarenotsubjecttoQST.GoodssubjecttoGSTarealsosubjecttoQST.
First,theGSTat5%iscalculatedonthedutypaidvalueofthegoods.TheGSTisthenaddedtothedutypaidvalueandthe9.975%QSTiscalculated
onthatamount.
Inotherwords,theQSTalsoappliestotheGST.
Lesson3Summary:ProvincialTaxes
Bookmarkthis
Inthislessonyoulearnedaboutprovincialtaxes,someofwhicharepaidattimeofimportation.
ThefollowingarekeypointsfromLesson3:
Provincialtaxesgenerallyinclude:
provincialsalestax
provincialtobaccotax
alcoholmarkupsorfeesand
inQubec,alcoholspecifictax
applicableprovincialtaxesarepayableatthetimeofimportationoncasualgoodsthataredestinedforindividualuse
provincialtaxesarenotcollectedattimeofimportationofcommercialgoodsand
RevenuQubecadministerstheGST/QSTinQubec.
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Takeafewminutestoseewhatyoulearnedaboutprovincialtaxes.
Questions:
Attemptsallowed:
Available:
Passrate:
3
Unlimited
Always
60%
Allowed
Startquiz
Lesson4:ExciseTax
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Inthislessonyouwilllearnaboutexcisetax.Certaingoods,bothimportedanddomestic,aresubjecttoexcisetax.
Rationale
InyourjobasaCCS,youwillberequiredtoknowhowtodeterminewhetherornotexcisetaxappliestogoodsthatarebeingimported.
LessonObjective
AttheendofLesson4youshouldbeabletodetermineifexcisetaxispayableornot,andhowtocalculatethetaxpayable.
Topic1:AboutExciseTax
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TheExciseTaxActistheauthorityfortheimpositionofexcisetaxonspecifiedgoodsatvariousrates.GST,HSTandexcisetaxarechargedinaddition
toallotherdutiesandtaxes.BothGSTorHST,andexcisetax,mayapplytothesamegoods.
GoodssubjecttoexcisetaxarelistedinScheduleIoftheExciseTaxAct.Excisetaxcurrentlyappliestocertainpetroleumproducts,fuelinefficient
vehiclesandairconditionersdesignedforautomobiles.
WhencertaingoodsaremanufacturedinCanada,excisetaxispayableatthetimethegoodsaredeliveredtothepurchaser.Whenthesegoodsare
imported,excisetaxispayablebytheimporter,atthetimethegoodsareimported.
Manufacturersofgoodssubjecttoexcisetaxmusthaveanexcisetaxlicence("E"licence)unlesstheyareasmallmanufacturer.Asmallmanufacturer
isonewhosetotalannualsalesdonotexceed$50,000.00.
Awholesaler'slicence("W"licence)allowsthepurchaseofgoods(subjecttoexcisetax)forresalewithoutpayingexcisetaxatthetimeofpurchaseor
importation.Inthiscase,theexcisetaxiscollectedandremittedwhenthegoodsaresold.
Topic2:CalculatingExciseTax
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Whereapercentagerateofexcisetaxapplies,theamountoftaxpayableiscalculatedbymultiplyingtheexcisetaxratebythedutypaidvalue(DPV).If
GSTorHSTapplies,theexcisetaxisaddedtotheDPVbeforecalculatingtheGSTorHST.
Considerimportedgoodsthathaveadutypaidvalueof$700.00,anexcisetaxrateof10%andarealsosubjecttoGSTof5%.
Theexcisetaxis$70.00(10%of$700.00)andtheGSTis$38.50(5%of$770.00).
Lesson4Summary:ExciseTax
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Inthislessonyoulearnedaboutexcisetax.
bothdomesticandimportedgoodscanbesubjecttoexcisetax
theExciseTaxActisthelegislationfortheimpositionandcollectionofexcisetax,GST,andHST
excisetaxiscalculatedontheDPV
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ifexcisetaxapplies,itisaddedtotheDPVbeforecalculatingtheGSTorHST
GSTorHST,andexcisetax,mayapplytothesamegoods
amanufacturerofgoodssubjecttoexcisetaxwhosetotalannualsalesexceed$50,000.00musthaveanElicenceand
aWlicenceallowsanimporterofgoodssubjecttoexcisetaxtopaythetaxwhenthegoodsaresold,ratherthanatthetimeofimportation.
Takeafewminutestoanswerthefollowingquestionsaboutexcisetax.
Questions:
Attemptsallowed:
Available:
Passrate:
4
Unlimited
Always
60%
Allowed
Startquiz
Lesson5:ExciseDuty
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Inthislessonyouwilllearnaboutexciseduty.Excisedutycanapplytobothimportedanddomesticgoods.
Rationale
InyourjobasaCCS,youwillberequiredtoknowhowtodeterminewhichgoodsaresubjecttoexcisedutyandhowtocalculatetheamountpayable.
LessonObjective
AttheendofLesson5youshouldbeabletodetermineifexcisedutyispayableandhowtocalculatetheexcisedutypayable.
Topic1:AboutExciseDuty
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ExcisedutyisimposedundertheExciseAct,2001onspirits,wine,andtobaccoproductsmadeinCanada.ExcisedutyisimposedundertheExcise
ActonbeerthatismadeinCanada.
Notethatthesearetwoseparateactsandbothprovidefortheimpositionofexciseduty.
TheExciseAct,2001alsocontainsrequirementsforitemssuchaslicensing,recordkeeping,accounting,andpaymentofexciseduty.
WhenthesegoodsaremanufacturedinCanada,dutyispayableonthegoodsatthepointofpackagingratherthanthepointofsale.Whenspirits,wine,
tobaccoandbeerareimportedintoCanada,sections21.1(1),21.2(1)and21.3oftheCustomsTariffimposeanadditionaldutyonthemthatisequalto
theamountofexcisedutythatwouldbepayableifthegoodshadbeenmanufacturedinCanada.
OnMarch21,2013,theMinisterofFinancetabledaNoticeofWaysandMeansMotionthatproposedamendmentstotheExciseAct,2001toincrease
theratesofexcisedutyonmanufacturedtobaccootherthancigarettesandtobaccosticks.ThechangeswereoutlinedinExciseDutyNoticeEDN33
availablehere:http://www.craarc.gc.ca/E/pub/em/edn33/edn33e.html.
Topic2:CalculatingExciseDuty
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Excisedutyonimportedgoodsispaidatthesametimeasordinarydutyispaidorpayable.
Excisedutyiscalculatedonthesamefigureasregulardutyandisincludedinthedutypaidvalue.
Forexample,forgoodsthathavea$700.00valueforduty,a15%dutyrate,a10%rateofexciseduty,andGSTof5%applies,thecalculationisas
follows:
$700.00(valueforduty)X15%(rateofduty)=$105.00(customsduty)
$700.00(valueforduty)X10%(exciseduty)=$70.00(exciseduty)
$700.00(valueforduty)+$105.00(customsduty)+$70.00(exciseduty)=$875.00(dutypaidvalue)
$875.00(dutypaidvalue)X5%(GST)=$43.75.
Thetotalamountpayableis:
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$105.00(duty)
$70.00(exciseduty)
$43.75(GST)
$218.75
Lesson5Summary:ExciseDuty
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Inthislessonyoulearnedaboutexciseduty.
Thefollowingarekeypointsfromthislesson:
excisedutyisimposedundertheExciseAct,2001onspirits,wine,andtobaccoproductsmadeinCanada
excisedutyisimposedundertheExciseActonbeerthatismadeinCanada
whengoodssubjecttoexcisedutyareimported,anadditionaldutyonthem,equaltotheamountofexcisedutythatwouldbepayableifthegoods
hadbeenmanufacturedinCanada,isassessed
excisedutyonimportedgoodsispaidatthesametimeasordinarydutyispaidorpayableand
excisedutyonimportedgoodsiscalculatedonthevalueforduty.
Nowtakeafewminutestoanswerthefollowingquestionsaboutexciseduty.
Questions:
Attemptsallowed:
Available:
Passrate:
3
Unlimited
Always
60%
Allowed
Startquiz
Module13Summary:CalculatingTaxesPayable
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GSTandHST
arelegislatedbytheExciseTaxAct
GSTisappliedatarateof5%
HSTisappliedatarateof13%inNewBrunswick,Ontario,andNewfoundlandandLabrador
HSTisappliedatarateof14%inPEI
HSTisappliedatarateof15%inNovaScotia
donotapplytogetherthatis,onlyoneortheotheriscollected
arecalculatedonthedutypaidvalueofimportedgoods
applytogoodsandservicesunlesstheyare:exempt,zerorated,ornontaxable
registrationisrequiredinordertocollectandremittheGSTandHST,andclaiminputtaxcredits
thatispaidbyregistrantsmaybeusedasaninputtaxcredit(ITC)and
mayberecoveredbynonresidentimportersbyuseoftheflowthroughmethodoftaxrecovery.
ProvincialTaxes
includeprovincialsalestax(PST),provincialtobaccotax,alcoholmarkupsorfees,and,inQubeconly,alcoholspecifictax
arepayableatthetimeofimportationoncasualgoodsthataredestinedforindividualuseandnotimportedintoCanadaforsaleorforany
commercial,industrial,occupational,institutionalorotherlikeuse
areonlycollectedongoodsthataresubjecttoGSTorotherfederalduties,unlesstheprovincehasspecificallyexemptedthegoodfromthe
provincialtax
Provincialtaxesarenotcollectedatthetimeofimportationoncommercialgoodsand
PST,provincialtobaccotaxandalcoholmarkupsorfeesareassessedandcollectedoncasualgoodswhenanagreementexistsbetweenthe
provinceandCBSAtocollectthetaxonbehalfoftheprovince.
Module13Summary:CalculatingTaxesPayable(Cont.2)
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ExciseTax
islegislatedbytheExciseTaxAct
appliestocertainautomobiles,airconditionersforautomobiles,andcertainpetroleumproducts
mayapplyaswellasGSTorHST.Butremember:GSTandHSTneverapplyatthesametime
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iscalculatedonthedutypaidvalueofimportedgoods
manufacturersofgoodssubjecttoexcisetaxwhosetotalannualsalesexceed$50,000.00musthaveanElicenceand
aWlicenceallowsanimporterofgoodssubjecttoexcisetaxtopaythetaxwhenthegoodsaresold,ratherthanatthetimeofimportation.
ExciseDuty
islegislatedbytheExciseAct,2001forspirits,wine,andtobaccoproductsmadeinCanada
islegislatedbytheExciseActforbeermadeinCanada
onimportedgoods,anadditionaldutyiscollectedonanamountequaltotheamountofexcisedutythatwouldbepayableifthegoodshadbeen
madeinCanada
ispaidonimportedgoodsatthesametimeasordinarydutyispaidand
iscalculatedonthevaluefordutyofimportedgoods.
FollowingisashortquizonwhatyouhavelearnedinModule12.
Module13:Quiz
Questions:
Attemptsallowed:
Available:
Passrate:
13
Unlimited
Always
60%
Allowed
Startquiz
SourceURL(modifiedon2015071516:09):http://cscb.ca/repository/201516ccscoursepart2
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Home>Part3
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IntroductiontoPart3
Part3oftheCCScourseincludesthefollowing8modules:
14.OtherGovernmentDepartments&Agencies
15.SIMA
16.ImportPermits
17.MarkingofImportedGoods
18.ReleaseofGoods
19.TemporaryImportations
20.Accounting
21.PaymentofDuties
Thesemodulesprovidedetailedinformationonrequirementsforcertainimportedgoods,andtheprocessesfor
reporting,release,accounting,andpaymentofdutyonimportedgoods.
OnJune2,2016,youwillbeprovidedwithinformationonhowtoaccessthefinaltestonthecontentsofPart3,
whichmustbecompletedbyJune16,2016.Responsesmustbesubmittedby2p.m.EDT(forexample,11a.m.
PDTinVancouverand3p.m.ADTinHalifax).
Onceyouaccessthetest,pleaseprintacopyforyourrecords.Youwillneedacopywhenitcomestimetostudyfor
thefinalexaminationandthetestwillnotbeavailableafterthedeadlinedateforsubmission.
Module14:OtherGovernmentDepartments&
Agencies
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InModule3youlearnedthattheCanadaBorderServicesAgency(CBSA)managesCanadasbordersbyenforcing
Canadianlawsgoverningtradeandtravel.InModule4youlearnedtheprincipalActsinvolvedintheimportation
andexportationofgoods.ThismodulewilldescribetheauthoritytheCBSAhastocontrolanddetaingoodson
behalfofothergovernmentdepartments.Aswell,itwilldescribeothergovernmentdepartmentsandassociated
regulations.Workingthroughthismodulewillenableyoutorecognizeregulatedgoods.
ModuleObjective
Uponcompletionofthismodule,youshouldbeabletodescribehowtheCBSAadministerslegislationonbehalfof
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othergovernmentdepartmentsandagenciesandrecognizetherequirementsofothergovernmentdepartments.
Lesson1:CBSAAuthorityandtheCustomsAct
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Aspartofitsrole,theCBSAhasthelegislativemandatetocontrolanddetaingoodsonbehalfofOther
GovernmentDepartments(OGDs).Inthisfirstlessonyouwilllearnaboutwherethisauthorityisvested,theother
governmentdepartmentsthatareinvolved,andhowtofindalistofregulatedgoods.
Rationale
Youneedtoknowtheregulationsofothergovernmentdepartmentsthataffecttheimportationandexportationof
goods,sincemanyoftheserequirementsmustbemetbeforegoodscanbeimportedorexported.
LessonObjective
YouwillbeabletoidentifythelegislationthatpermitsCBSAtoregulategoodsonbehalfofothergovernment
departments,andwheretofindalistofregulatedgoods.
Topic1:CBSAAuthorityandtheCustomsAct
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TheCBSAadministersseveralpiecesoflegislationaspartofitslegalmandate.YouwillrecallfromModule4that
theCustomsActprovidesforcontroloverthemovementofgoodsandpersonsintoandoutofCanada.
Therearevariousregulationsinplaceregardingimportedandexportedgoods.Theseregulationshavebeenput
intoplaceinordertoprotectCanadiansagainstpotentialthreatstohealth,securityandtheeconomy.
Iftheeligibilityofimportedgoodsisinquestion,thegoodscanbedetainedattheborderbyCBSA.ItisSection101
oftheCustomsActthatgivestheCBSAtheauthoritytodetaingoodsonbehalfofOtherGovernmentDepartments
(OGDs).
SomeoftheOGDsandagenciesforwhichCBSAofteninspectsordetainsgoodsare:
CanadianFoodInspectionAgency(CFIA)
IndustryCanada(IC)
ForeignAffairs,TradeandDevelopmentCanada(DFATD)
EnvironmentCanada(EC)
HealthCanada(HC)
TransportCanada(TC)and
PublicSafetyCanada(PS)
Thedocumentinwhichyouwillfindthemostcomprehensivelistofgoodsregulatedbytheseothergovernment
departmentsisOperationalGroup19oftheCustomsDMemoranda.TheCustomsDMemorandaareissuedbythe
CBSAandcontainpoliciesregardingimportedandexportedgoods.
ThisDMemorandumlists:
thecommoditiesthatarecontrolledbyothergovernmentdepartmentsoragencies,and
alldocumentsrequiredtoimportorexportthesecommodities,suchaspermits,licencesandcertificates.
Lesson1Summary:CBSAAuthorityandthe
CustomsAct
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ThislessondemonstratedthattheCBSAhasthepowertoregulategoodsonbehalfofothergovernment
departments.ItalsointroducedyoutotheuseoftheCustomsDMemorandatoobtaininformationonthe
requirementsforgoodsregulatedbyothergovernmentdepartmentsandagencies.
theCBSAhasthepowertodetaingoodsonbehalfofothergovernmentdepartmentsandagencies
thispowerisvestedintheCustomsActand
operationalgroup19oftheCustomsDMemorandalistsgoodsthatareregulatedbyothergovernment
departmentsandagencies.
Questions:
Attemptsallowed:
Available:
Passrate:
0
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Always
60%
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ClickontheStartquizbuttontostart.YoumaymovebetweenquestionsbyusingtheNextandBackbuttonsbut
youmustprovideananswerbeforeyoucanmoveontothenextquestion.Onceyoucompletetheselfcheck,you'll
havetheopportunitytoreviewyouranswersandviewthecorrectanswersaswell.Youmayredotheselfcheckas
manytimesasyouwish.
Startquiz
Lesson2:CanadianFoodInspectionAgency
Bookmarkthis
InthislessonyouwilllearnabouttheCanadianFoodInspectionAgency(CFIA)andtherolethatitplaysinthe
importationoffoodandagriculturalgoods.YouwillalsolearnhowtheCBSAcarriesoutsomeoftherequirements
oftheCFIAandthetoolthatanimporterorcustomsbrokercanusetodeterminethedocumentationrequirements
forgoodsregulatedbytheCFIA.
Rationale
YouneedtoknowwhatfoodsandagriculturalgoodsarenotallowedentryintoCanada.Youalsoneedtoknowif
anyfoodsandagriculturalgoodsmustmeetcertaindocumentationrequirementsbeforetheycanbeimported.
LessonObjective
YouwillbeabletoidentifytheActsforwhichtheCFIAisresponsible.Youwillalsobeabletoidentifythegoodsthat
areregulatedbytheCFIAandusetheAutomatedImportReferenceSystem(AIRS)tooltodeterminetheirimport
requirements.
Topic1:CanadianFoodInspectionAgency
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TheCanadianFoodInspectionAgency(CFIA)iscommittedto:
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protectingCanadiansfrompreventablehealthrisks
protectingconsumersthroughafairandeffectivefood,animalandplantregulatoryregimethatsupports
competitivedomesticandinternationalmarkets
sustainingtheplantandanimalresourcebase
contributingtothesecurityofCanada'sfoodsupplyandagriculturalresourcebaseand
providingsoundagencymanagement.
TheCFIA'sactivitiesrangefromtheinspectionoffederallyregisteredmeatprocessingfacilitiestoborder
inspectionsforforeignpestsanddiseases,totheenforcementofpracticesrelatedtofraudulentlabelling.In
addition,theCFIAverifiesthehumanetransportationofanimals,conductsfoodinvestigationsandrecalls,and
performslaboratorytestingandenvironmentalassessmentsofseeds,plants,feeds,andfertilizers.
TheCFIAalsohasresponsibilityfortheadministrationofallimportrelatedlegislationrelatingtofood,animalsand
plants.
TheCFIAisresponsiblefortheadministrationandenforcementofthefollowingActs:
AgricultureandAgriFoodAdministrativeMonetaryPenaltiesAct
CanadaAgriculturalProductsAct
CanadianFoodInspectionAgencyAct
ConsumerPackagingandLabellingAct(asitrelatestofood)
FeedsAct
FertilizersAct
FishInspectionAct
FoodandDrugsAct(asitrelatestofood)
HealthofAnimalsAct
MeatInspectionAct
PlantBreeders'RightsAct
PlantProtectionActand
SeedsAct
TheseActshaveenabledvariousregulations.
OnbehalfoftheCFIA,theCBSAperformspassengerandimportinspectionservicesatairportsandother
Canadianborderpoints,otherthantheImportServiceCentre.
Forgoodsthatrequirespecificdocumentation,suchasanimportpermit,aCFIAofficeratanImportServiceCentre
willreviewthedocumentationandthenadviseCBSAifthegoodsmaybereleased.
AnimportanttoolthatisusedtodetermineCFIArequirementsforimportedgoodsistheAutomatedImport
ReferenceSystem(AIRS).
Topic2:AutomatedImportReferenceSystem(AIRS)
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TheAutomatedImportReferenceSystem(AIRS)toolisaCFIAautomatedimportreferencesystem.
Usingaseriesofquestionsandanswer,AIRSwilleventuallyconfirmtheregulations,policies,andimport
requirementsforCFIAregulatedcommodities.
AIRSprovidesrecommendationstoCBSA.CBSAofficersareauthorizedtoreleasesomeregulatedcommodities
uponpresentationofspecificdocumentationtherecommendationstoCBSAliststhespecificdocumentation.
Aswell,AIRSprovidesdetailedinformationtotheimporter/customsbrokerregardingthespecificdocumentation.
YoucanclickheretoaccessAIRSonline,butwewillshowyouhowitworksinthissection.
ThevideoonthefollowingpagedemonstrateshowAIRSworks.
Topic2:ShowMeAIRSExample1
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Topic2:ShowMeAIRSExample2
Bookmarkthis
Heresonemoreexample:letsfindoutwhatisrequiredtoimportcheddarcheese,fromthestateofWisconsin,for
humanconsumption.
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Topic2:TryAIRSExample#1
Bookmarkthis
HereisanexamplethatyoucantryusingtheAIRStoolonline.
FindtheCFIArecommendationstoCBSAwiththefollowingcriteria:
FindCommodity:Tuna
Type:Albacoretuna(freshorchilled)(Thunnusalalunga)
Enduse:Furtherprocessingforhumanconsumption
Ifyouworkedthroughthiscorrectly,therecommendationstoCBSAare:
"Approved,(mustbeaccompaniedbythefollowingdocuments/registrations)."
Thevariousdocumentsandregistrationsarelisted.
Aswell,theimporter/brokerinstructionsstatethat:
"TheimportermusthaveavalidFishImportLicenceoraQualifyManagementProgramImportLicence.
FishandfishproductsimportedwithoutavalidimportlicencewillberefusedentryintoCanada.Contact
theRegionalFishInspectionOfficetoobtainaFishImportLicenceoraQualityManagementProgram
ImportLicence."
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HereisanotherexamplethatyoucantryusingtheAIRStoolonline.
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FindtheCFIArecommendationstoCBSAforimportationsoflivechicks:
FindCommodity:Chicks
Origin:NewYorkstate(U.S.)
Age:Over3daysold
Enduse:Breeding
Ifyouworkedthroughthiscorrectly,therecommendationstoCBSAare:
"RefertoCFIAveterinaryinspection(mustbeaccompaniedbythefollowingdocuments/registrations):
ZoosanitaryExportCertificateforPoultry."
Theimporter/brokerinstructionsgoontoprovideadditionaldetailsregardingtheZoosanitaryExportCertificatefor
Poultry,suchasthenumberoftheformusedandwhomayissuethecertificate.
Bookmarkthis
HereisonemoreexamplethatyoucantryusingtheAIRStoolonline.
FindtheCFIArecommendationstoCBSAwiththefollowingcriteria:
FindCommodity:Apples
Type:Fresh
Origin:Asia(China)
Enduse:HumanConsumption
Weight:Over200kg(otherChineseprovinces)
Ifyouworkthroughitcorrectly,therecommendationtoCBSAisto"RefuseEntry".
(cont.2)
Bookmarkthis
ConfirmationofSale(COS)
TheConfirmationofSaleformmustbecompletedforimportsoffreshfruitandvegetables.Itisusedtoconfirmthat
asaleactuallytookplace.
Thisformisrequiredatthetimeofentryforallcommercialshipmentsoffruitsandvegetablesandmust:
beobtainedfromCFIApriortoimportation
includevendorandpurchaserinformation
includeadescriptionofcommodity,includingquantityandpriceand
becompletedandsignedeitherbythepurchaser,vendor,theimporterortheirrespectiverepresentativeprior
totheimportationofthefreshproduceandmustaccompanytheloadattheportofentry.
ImportersmustkeepacopyoftheCOS.
HavealookataCOS.
MinisterialExemptionApplication
AMinisterialExemptionisarequestforanexemptionfromtheFreshFruitandVegetableRegulations.Amongother
things,theseregulationsprescribestandardsforcontainers,labelling,andgrade.
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Section5.(2)oftheseregulationsstates:
(2)Noproduceforwhichagradeisestablishedshallbemarketedinimportorinterprovincialtradeinacontainer
thathasacapacityexceeding
(a)25kgnetweight,inthecaseofapplesor
(b)50kgnetweight,inthecaseofanyotherproduce.
SincethepeachesintheAIRSexampleareinacontainerthatexceeds50kg,anexemptionisrequired.
AministerialexemptionmaybeissuedifthegoodsareinshortsupplyinCanadainordertoprovidefoodpackers
andprocessorswithasupplynecessarytomeettheirneeds.
AMinisterialExemptionApplication:
requiresanoriginalsignature
isrequiredforbulk(freshfruitsandvegetables)shipments(containersexceeding50kg)
isobtainedfromCFIAandmustbesubmittedpriortoimportation
isissuedbyCFIAoffices
mustaccompanythegoodsand
isvaliduntilthestatedexpirydate.
Havealookattheapplication.
(cont.3)
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ImportDeclaration
Insomecases,theAIRStoolmayindicatethatanimportdeclarationisrequired.
Animportdeclarationmustaccompanythegoods.
Theimportdeclarationmustcontainthefollowinginformation:
nameoftheexporter
nameoftheconsignee
adescriptionoftheproductandanyidentificationmarks
thenumber,kind,andnetweightofcontainers
whereapplicable,astatementthatthegoodsweremanufacturedfromsoundrawmaterialsandwere
preparedundersanitaryconditions
astatementverifyingthatthegoods,atthetimeofshipment,weresoundandfitforhumanconsumptionand
anaccurateidentificationofthemanufacturerorauthorizedagent.
Lesson2Summary:CanadianFoodInspection
Agency
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InthislessonyoulearnedabouttheresponsibilitiesoftheCanadianFoodInspectionAgency,therelationship
betweentheCFIAandtheCBSA,andhowtousetheAIRStool.
CFIA
mandateistoenforcestandardsrelatingtofoodsafetyandnutritionalquality
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isresponsiblefortheadministrationofallimportrelatedlegislationrelatingtofood,animals,andplants
providestheAutomatedImportReferenceSystem(AIRS)tool
requirestheConfirmationofSale(COS)form
mayrequireaMinisterialExemptionApplicationand
importServiceCentresprocessimportdocumentationforgoodsregulatedbytheCFIA.
CBSA
administersanumberofActsandregulationsonbehalfoftheCFIA
performspassengerandimportinspectionservicesatairportsandotherCanadianborderpoints,otherthanat
ImportServiceCentresand
willreleasegoodsAFTERgoodsregulatedbytheCFIAhavebeenreleasedbytheCFIA.
Lesson3:IndustryCanada
Bookmarkthis
InthislessonyouwilllearnabouttheActsandregulationsofIndustryCanadaandhowtheyaffecttheimportation
ofgoods.
Rationale
Onbehalfofyourclient,youwillwanttoensurethatgoodsbeingimportedareincompliancewithIndustryCanada
regulations,sincethecostofensuringcomplianceafterimportationmaybeprohibitive.
LessonObjective
YouwillbeabletodescribethepurposeandobjectivesoftheActsandregulationsadministeredbyIndustry
Canadaastheyrelatetotheimportationofgoods.
Topic1:IndustryCanadaMandate
Bookmarkthis
IndustryCanadasmandateistohelpmakeCanadianindustrymoreproductiveandcompetitiveintheglobal
economy,thusimprovingtheeconomicandsocialwellbeingofCanadians.Toaccomplishthis,IC:
...fosterscompetitivenessbydevelopingandadministeringeconomicframeworkpoliciesthatpromote
competitionandinnovationsupportinvestmentandentrepreneurialactivityandinstillconsumer,investorand
businessconfidence
...investsinscienceandtechnologytogenerateknowledgeandequipCanadianswiththeskillsandtraining
theyneedtocompeteandprosperintheglobal,knowledgebasedeconomy.Theseinvestmentshelpensure
thatdiscoveriesandbreakthroughstakeplacehereinCanadaandthatCanadiansrealizethesocialand
economicbenefitsand
...encouragesbusinessinnovationandproductivitybecausebusinessesgeneratejobsandwealthcreation.
Promotingeconomicdevelopmentincommunitiesencouragesthedevelopmentofskills,ideasand
opportunitiesacrossthecountry.
IndustryCanadafocusesonabroadrangeofmattersincluding:industryandtechnology,tradeandcommerce,
science,consumeraffairs,competitionoftrade,weightsandmeasures,bankruptcy,intellectualproperty,
investment,smallbusiness,andtourism,butforthepurposesofthiscourse,wewillfocusontwopiecesof
legislationgoverningimportedgoods:theConsumerPackagingandLabellingActandtheTextileLabellingAct.
HereisafulllistofActsforwhichIndustryCanadaisresponsible.
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Topic2:ConsumerPackagingandLabellingAct
Bookmarkthis
AccordingtotheActitself,theConsumerPackagingandLabellingAct(CPLA)is:
"AnActrespectingthepackaging,labelling,sale,importationandadvertisingofprepackagedandcertainother
products."
TheActappliestoanypersonwhoisaretailer,manufacturer,processororproducerofaproduct,orapersonwho
isengagedinthebusinessofimporting,packingorsellinganyproduct.
Forimportedgoods,theActappliestogoodsthataresoldinprepackagedcontainers.TheCPLAdefines
prepackagedproductsasanyproductthatispackagedinacontainerinsuchamannerthatitisordinarilysoldto,
used,orpurchasedbytheconsumerwithoutbeingrepackaged.Forexample,bottlesofshampoowillneedtobe
labelledsincetheshampooisinacontainerthatispurchasedbytheconsumer.
TheActspecifiesthatthefollowinginformationmustappearontheproductlabel:
thecommonorgenericnameoftheproduct
adeclarationofnetquantity,generallyinnumericalcountormetricunitsofmeasurement(although
supplementarynonmetricmeasurementsmayalsobeused)and
theidentityandaddressofthepersonbyorforwhomtheproductwasmanufactured,soldorimported(i.e.the
dealeridentification).
Ifthegoodsareimported,oneofthefollowingformatsmustbeusedtomeetthedealeridentificationrequirement:
thenameandaddressoftheCanadiandealer,precededbythewordsimportedbyorimportedfor,or
thecountryoforiginadjacenttothenameandaddressoftheCanadiandealer,or
thenameandaddressofthedealerlocatedoutsideofCanada.
ThecountryoforiginmarkingisnotarequirementoftheConsumerPackagingandLabellingAct,BUTthe
CBSArequirescountryoforiginmarkingonspecificgoods.Countryoforiginmarkingwillbediscussedin
laterofthiscourse.
Topic2:ConsumerPackagingandLabellingAct
(cont.2)
Bookmarkthis
AlongwiththeConsumerPackagingandLabellingActaretheConsumerPackagingandLabellingRegulations.
ThefollowinggoodsareexemptedfromtherequirementsoftheCPLAorregulations:
drugsandmedicaldevices
productsforcommercial,industrial,orinstitutionaluse
productsforexportonly
productssoldonlytoadutyfreestore
prepackagedtextilearticles
replacementpartsforconsumerdurables(cars,appliances)ifnotdisplayedtotheconsumerand
certainartists'supplies.
BilingualLabellingRequirements
AllinformationrequiredbytheActandtheseregulationstobeshownonthelabelofaprepackagedproductmust
beshowninbothofficiallanguages,EnglishandFrench.
However,thereisanexception:thedealer'snameandaddresscanappearineitherlanguage.
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Thereareafewotherexceptionstothebilinguallabellingrequirementsthesecanbeseeninparagraph6ofthe
regulations.
Dealersand/orpersonswhocontravenethisActaresubjecttopenaltiesandevenimprisonment.
Topic3:TextileLabellingAct
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TheTextileLabellingAct(TLA)regulatesthelabelling,sale,importationandadvertisingofconsumertextilearticles.
Aconsumertextilearticlemeans:
(a)anytextilefibre,yarnorfabric,or
(b)anyproductmadeinwholeorinpartfromatextilefibre,yarnorfabricthatisintheforminwhichitisoristo
besoldtoanypersonforconsumptionoruse,otherthanconsumptionoruseinthemanufacturing,processingor
finishingofanyproductforsale.
Dealersmaynotsell,importintoCanada,oradvertise:
aprescribedconsumertextilearticleunlessthearticlehasappliedtoitalabelcontainingarepresentationwith
respecttothetextilefibrecontentofthearticleor
anyconsumertextilearticlethathasappliedtoitalabelcontainingarepresentationwithrespecttothetextile
fibrecontentofthearticleunlessthelabelisappliedtoitinaccordancewithandcomplieswithallapplicable
provisionsofthisAct.
Notonlymustthetextilearticlesbelabeledwiththefibrecontent,theymustbelabelledinaparticularmanner.
Dealersand/orpersonswhocontravenethisActaresubjecttopenaltiesandevenimprisonment.
Lesson3Summary:IndustryCanada
Bookmarkthis
InthislessonyoulearnedabouttheresponsibilitiesofIndustryCanadaandtherequirementsoftheConsumer
PackagingandLabellingAct(CPLA)andtheTextileLabellingAct(TLA).
theCPLAregulatesthepackaging,labelling,sale,importationandadvertisingofprepackagedandcertain
otherproducts
theCPLAappliestodomesticandimportedgoods
forimportedgoods,theCPLAappliestogoodslatersoldinprepackagedcontainers
therearesomeexceptionstothebilinguallabellingrequirements
theTextileLabellingActregulatesthelabelling,sale,importationandadvertisingofconsumertextilearticles
textilearticlesmustbelabeledwiththefibrecontentandinaparticularmanner,and
dealersand/orpersonswhocontraveneeitheroftheseActsaresubjecttopenaltiesandevenimprisonment.
Questions:
Attemptsallowed:
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manytimesasyouwish.
Startquiz
Lesson4:ForeignAffairs,TradeandDevelopment
Canada
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InthislessonyouwilllearnabouttheActsandregulationsofForeignAffairs,TradeandDevelopmentCanadaand
howtheyaffecttheimportationandexportationofgoods.
Rationale
Inorderthatgoodsmoveacrossthebordereasily,youwillneedtoknowtherequirementsofForeignAffairs,Trade
andDevelopmentCanadaforimportedandexportedgoods.
LessonObjective
YouwillbeabletodescribethepurposeandobjectivesoftheactsandregulationsadministeredbyForeignAffairs,
TradeandDevelopmentCanada.
Topic1:ForeignAffairs,TradeandDevelopment
CanadaMandate
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ThemandateofForeignAffairs,TradeandDevelopmentCanadais:
ensuringthatCanada'sforeignpolicyreflectstrueCanadianvaluesandadvancesCanada'snationalinterests
strengtheningrulesbasedtradingarrangementsandexpandingfreeandfairmarketaccessatbilateral,
regionalandgloballevels
workingwitharangeofpartnersinsideandoutsidegovernmenttoachieveincreasedeconomicopportunity
andenhancedsecurityforCanadaandforCanadiansathomeandabroad
managingCanada'ssupportandresourceseffectivelyandaccountablytoachievemeaningful,sustainable
internationaldevelopmentandhumanitarianresultsand
engaginginpolicydevelopmentinCanadaandinternationally,enablingCanada'sefforttorealizeits
internationaldevelopmentandhumanitarianobjectives.
ThisgovernmentdepartmenthasfiveMinisters.Thiscourseisfocusedontheinternationaltradeareaofthe
department.EdFastisthecurrentMinisterofInternationalTrade.
Topic2:TheTradeControlsBureau(formerlythe
EICB)
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TheTradeControlsBureau(formerlytheEICB)ispartofForeignAffairs,TradeandDevelopmentCanada.The
TradeControlsBureauauthorizestheimportandexportofgoodsthatarerestrictedbyquotasand/ortariffs.Italso
monitorstradeincertaingoodsandensuresthepersonalsecurityofCanadiansandcitizensofothercountriesby
restrictingtradeindangerousgoodsandothermaterials.
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Goodsthatarerestrictedbyquotasand/ortariffsaremanagedbyasystemofimportandexportpermits.
TheTradeControlsBureauisresponsibleforadministeringtheExportandImportPermitsAct(EIPA).
Topic3:ExportandImportPermitsAct(EIPA)
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TheExportandImportPermitsAct(EIPA)isanActrespectingtheexportandtransferofgoodsandtechnologyand
theimportofgoods.
TheExportandImportPermitsAct(EIPA)containsfourliststhatareusedtoidentifygoodswhosetradeis
restricted.
Thelistsarethe:
ImportControlList(ICL)
ExportControlList(ECL)
AutomaticFirearmsCountryControlList(AFCCL)and
AreaControlList(ACL).
TheImportControlListisalistofgoodswhoseimporthasbeendeemednecessarytocontrol.Goodsonthislist
generallyneedanimportpermitinorderforthemtobeimported.However,insomecases,thegoodswillbe
allowedentryintoCanadawithoutanimportpermitbutatadutyratethatisveryhigh.
TheExportControlListisalistofgoodswhoseexporthasbeendeemednecessarytocontrol.TheExportControl
Listconsistsofsevengroupsofgoods.
AnexportpermitisrequiredforgoodslistedontheExportControlList,withtheexceptionofcertaingoodsdestined
totheUnitedStates.
TheAreaControlListisalistofcountriestowhichtheexportofgoodsiscontrolled.Permitsarerequiredforall
goodsexportedtocountriesontheAreaControlList,evenifthegoodsarenotlistedontheExportControlList.
Atthistime,onlyBelarusandNorthKoreaareonthislist.
TheAutomaticFirearmsCountryControlList(AFCCL)isalistofcountries.Certainprohibitedfirearms,weapons,
devices,orcomponentsthereofthatareincludedontheExportControlListmaybeexportedonlytodestinationsin
theAutomaticFirearmsCountryControlList(AFCCL)undertheauthorityofanexportpermitissuedbytheMinister
ofForeignAffairsundertheauthorityoftheExportandImportPermitsAct.
Pleasenotethattheselistsaresubjecttochangeanditisimperativethattheselistsbeconsultedona
regularbasis.
Lesson4Summary:ForeignAffairs,Tradeand
DevelopmentCanada
Bookmarkthis
InthislessonyoulearnedabouttheresponsibilitiesofForeignAffairs,TradeandDevelopmentCanadaandthe
TradeControlsBureau.YoualsolearnedabouttheExportandImportPermitsAct.
TradeControlsBureau
ispartofForeignAffairs,TradeandDevelopmentCanada
authorizestheimportandexportofgoodsthatarerestrictedbyquotasand/ortariffs
restrictstradeindangerousgoodsandothermaterials
usesasystemofimportandexportpermitstomanagegoodsthatarerestrictedbyquotasand/ortariffs
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isresponsibleforadministeringtheExportandImportPermitsAct(EIPA)and
theTradeControlsBureauisresponsibleforadministeringtheExportandImportPermitsAct(EIPA).
EIPA
containsfourliststhatareusedtoidentifygoodswhosetradeisrestrictedand
theselistsaretheImportControlList,theExportControlList,theAutomaticFirearmsCountryControlListand
theAreaControlList.
Lesson5:EnvironmentCanada
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ThislessonwillexplaintheroleofEnvironmentCanada(EC)andtheActsandregulationsforwhichitis
responsible.
Rationale
EnvironmentCanadahasrequirementsthatmustbemetbeforegoodsmaybebroughtintoCanada.
LessonObjective
Youwillbeabletodescribethepurpose,objectives,andapplicationoftheactsandregulationsadministeredby
EnvironmentCanadaandidentifygoodsthatmayrequirecertificatesinordertobeimported,orbeprohibitedfrom
import.
Topic1:EnvironmentCanadaMandate
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EnvironmentCanadas(EC)mandateisto:
preserveandenhancethequalityofthenaturalenvironment
conserveCanada'srenewableresources
conserveandprotectCanada'swaterresources
forecastweatherandenvironmentalchange
enforcerulesrelatingtoboundarywatersand
coordinateenvironmentalpoliciesandprogramsforthefederalgovernment.
SomeoftheactsandregulationsthatareunderthemandateofECinclude:
ConventiononInternationalTradeinEndangeredSpeciesofWildFloraandFauna(CITES)
OzonedepletingSubstancesRegulations
CanadianEnvironmentalProtectionAct,1999
MigratoryBirdsConventionAct
FisheriesAct
CanadaShippingActand
WildAnimalandPlantTradeRegulations
Theresponsibilitiesfortheadministrationoftheseactsmaybesharedwithothergovernmentdepartmentsand
agenciesandmaynotbethesoleresponsibilityofEnvironmentCanada
Topic2:ConventiononInternationalTradein
EndangeredSpeciesofWildFloraandFauna(CITES)
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CITESisaninternationalagreementbetweengovernmentswhoseaimistoensurethatinternationaltradein
specimensofwildanimalsandplantsdoesnotthreatentheirsurvival.Becausethetradeinwildanimalsandplants
crossesbordersbetweencountries,theefforttoregulateitrequiresinternationalcooperationtosafeguardcertain
speciesfromoverexploitation.CITESoffersvaryingdegreesofprotectiontomorethan30,000speciesofanimals
andplants,whethertheyaretradedaslivespecimens,furcoatsordriedherbs.
ParticipationinCITESisvoluntary.CountriesthatarepartofCITESareknownas"parties'Canadaisapartyto
CITES.CITESdoesnotreplacethelawsofaspecificcountry,but"parties"mustimplementtheConvention.
ThespeciescoveredbyCITESarelistedinthreeAppendices,accordingtothedegreeofprotectionrequired.
AppendixI
AppendixII
AppendixIII
Partieshaveagreedthatallimport,export,andreexportofaspeciescoveredbytheConventionmustbe
authorizedthroughalicensingsystem.TypicallythisinvolvesaCITESpermitbeingissuedfortheimportationas
wellasaCITESpermitfromtheexportingcountryauthorizingtheexportofthegoods.
Topic3:OzonedepletingSubstancesRegulations
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TheOzonedepletingSubstancesRegulationscontroltheimport,manufacture,use(insomecases),sale,and
exportofozonedepletingsubstances(ODS)thatarenotcontainedinproducts.Thatis,theydonotapplyifthe
substanceisproducedincidentallyinthemanufactureofsubstances(otherthancontrolledsubstances)orthe
controlledsubstanceisincidentallypresentinamixture,aproduct,orequipment.
Ozonedepletingsubstances(ODS)breakdownandreleasechlorineorbromine,whichdestroythestratospheric
ozonelayer.MostODSarealsogreenhousegases.
ThemostwellknownODSareChlorofluorocarbons(CFCs).CFCsweredevelopedasasubstituteforammoniain
refrigeratorsandairconditionersandhavealsobeenusedascleaningsolventsforelectricalcomponents,in
aerosolsprays,andinhospitalsterilizationprocedures.
TheregulationsprohibitimportingandexportingcontrolledsubstancesfromortoaplacethatisnotaParty.
Partyreferstoasignatoryofthe1987MontrealProtocolonSubstancesthatDepletetheOzoneLayer,orany
statewhichisnotpartytotheProtocolbutmeetscertainconditionsoftheProtocol.Theseconditionsallowimports
andexportsofspecificgoodsaslongasthestateisincompliancewiththeProtocol.TheProtocolrequiresgradual
reductionsoftheproductionandimportofthesesubstancesaccordingtoafixedschedule.
Topic3:OzonedepletingSubstancesRegulations
(cont.2)
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Themanufacture,importandexportofODSareregulatedthroughasystemofpermits,transfers,andallowances.
APartymaynotimportorexportanamountgreaterthantheirallowance,andunusedallowancesfromoneyear
cannotbecarriedforwardtothefollowingyear.
Partiesmusthaveapermitinordertoimportacontrolledsubstancethatisrecovered,recycled,reclaimed,used,
orfordestruction.
Partiesarealsorequiredtohaveapermitinordertoexportcontrolledsubstances.
Anypersonorbusinessthathasaconsumptionallowanceorhasbeenissuedapermitmustsubmitanannual
reporttotheMinister.
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Aswell,anyindividualorbusinesswhoimportsorexportsacontrolledsubstanceinanyyearmustmaintainrecords
fortheyearandkeeptherecordsataplaceinCanadaforaperiodoffiveyearsaftertherecordsaremade.
Lesson5Summary:EnvironmentCanada
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InthislessonyoulearnedabouttheresponsibilitiesofEnvironmentCanadaandyoualsolearnedaboutCITESand
theOzonedepletingSubstancesRegulations.
EnvironmentCanada
isconcernedwiththepreservationandenhancementofthenaturalenvironment
coordinatesenvironmentalpoliciesandprogramsforthefederalgovernment
administerstheConventiononInternationalTradeinEndangeredSpeciesofWildFloraandFauna(CITES)
and
administerstheOzonedepletingSubstancesRegulations.
Questions:
Attemptsallowed:
Available:
Passrate:
5
Unlimited
Always
60%
Allowed
manytimesasyouwish.
Startquiz
Lesson6:OtherGovernmentDepartmentsand
Agencies
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Thislessonwillexplaintheroleofseveralothergovernmentdepartmentsandthelegislationforwhichtheyare
responsible.
Rationale
Ifyouareworkingwithimportersorexporters,orifyouareanimporterorexporteryourself,youwillbeableto
determineifyourgoodsaresubjecttotheregulationsofanyothergovernmentdepartmentspriortoorafter
importationorexportation.
LessonObjective
ThislessonwilldiscussHealthCanada,TransportCanada,andPublicSafetyCanada(otherthanCBSA),andhow
theirregulationsaffecttheimportationandexportationofgoods.
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Topic1:HealthCanada
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SomeoftheactsforwhichHealthCanadahastotalorpartialresponsibilityinclude:
CanadianEnvironmentalProtectionAct,1999
ControlledDrugsandSubstancesAct
FoodandDrugsAct
HazardousProductsAct
PestControlProductsAct
QuarantineAct
RadiationEmittingDevicesActand
TobaccoAct
ControlledDrugsandSubstancesAct
TheControlledDrugsandSubstancesActisanActrespectingthecontrolofcertaindrugs,theirprecursorsand
othersubstancesandtoamendcertainotherActsandrepealtheNarcoticControlActinconsequencethereof.
HealthCanadadevelopsregulationsfortheimport,export,production,distribution,possessionandsaleof
controlledsubstancesandprecursorchemicals.
Importpermitsarerequiredbeforethesegoodsmaybeimported.
Topic2:TransportCanada
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TransportCanadaadministersmanyActsrelatingtotransportation.Hereareafewexamples:
InternationalBridgesandTunnelsAct
MotorVehicleSafetyAct
RailwaySafetyActand
TransportationofDangerousGoodsAct.
MotorVehicleSafetyAct
TheMotorVehicleSafetyActisthelegislationusedtoregulatethemanufactureandimportationofmotorvehicles
andmotorvehicleequipment.
VehiclesthatareimportedinCanadamustmeetthestandardsofCanadianmanufacturedvehicles.Ifnot,they
mustbebroughtuptothatstandard.
UndertheauthorityofTransportCanada,theRegistrarofImportedVehicles,(RIV),operatesanationalprogramof
vehicleinspectionandcertification.ThisprogramensuresthatmotorvehiclesmanufacturedintheUnitedStates
andimportedintoCanadameetCanadiansafetystandards.
Itshouldbenotedthat,duetotheirdesign,somevehicleswillneverbeabletocomplywithCanadiansafety
standards,andvehiclesthatcannotbemodifiedmustbeexported.It'sagoodideatocheckforcompliancebefore
enteringintonegotiationstopurchaseavehiclefromoutsideCanada.
Designatedcustomsoffices,orports,arethoseatwhichthereisanagentoftheRegistrarofImportedVehicles
availabletoprocessimportationsofvehiclesfromtheUnitedStates.
ThereareafewexceptionstotheRIVprogram.YoumayimportavehiclefromtheUnitedStateswithoutenteringit
intotheRIVProgramifitis:
atleast15yearsold
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abusbuiltbeforeJanuary1,1971
enteringCanadatemporarilyor
manufacturedtomeetCanadiansafetystandards.
Topic2:TransportCanada(cont.2)
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ForvehiclesacquiredinforeigncountriesotherthantheU.S.:
IF
thevehiclesaredesigned,built,testedandcertifiedtomeeteitherallapplicableCanadaMotorVehicleSafety
StandardsORallapplicableUnitedStatesFederalMotorVehicleSafetyStandards
AND
bearastatementofcompliancelabelaffixedbytheoriginalmanufacturer,asrequiredbytheregulations,
MAY
beeligibleforimportationintoCanada
PROVIDED
thevehiclehasnotbeenalteredandthecertificationfromtheoriginalmanufacturerismaintained.Thismaybe
subjecttoverificationatthetimeofimportation.
AvehicleimportedundertheseconditionsremainssubjecttotheRegistrarofImportedVehiclesprogram.
Topic2:TransportCanada(cont.3)
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TransportationofDangerousGoodsAct
TheTransportationofDangerousGoodsActisthelegislationforpublicsafetyinthetransportationofdangerous
goods.
DangerousgoodsarethoselistedinthescheduletotheActandregulationsandincludesthingssuchas:
explosives
gases
flammableandcombustibleliquidsand
poisonousandinfectioussubstances.
Dangerousgoodscannotbehandled,offeredfortransport,transportedorimportedunless:
thepersoncomplieswithallapplicableprescribedsafetyrequirements
thegoodsareaccompaniedbyallapplicableprescribeddocumentsand
themeansofcontainmentandtransportcomplywithallapplicableprescribedsafetystandardsanddisplayall
applicableprescribedsafetymarks.
Topic3:PublicSafetyCanada
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PublicSafetyCanadaisresponsiblefortheCanadianFirearmsProgram.
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Firearmscanberestricted,nonrestricted,orprohibited.IndividualswhoholdvalidPossessionandAcquisition
Licences(PALs)mayimporteitherrestrictedornonrestrictedfirearms,dependingonthePAL.Prohibitedfirearms
cannotbeimported.
However,theexportoffirearmsfromtheU.S.iscloselycontrolledbytheU.S.government,andtheU.S.mustissue
anexportlicencetotheU.S.exporter.Priortotheexportlicencebeingissued,theU.S.governmentrequiresthe
CanadianimportertopresentadocumentfromCanadathatallowsthistransactiontotakeplace.Thisrequirement
issatisfiediftheCanadianimporterhasanInternationalImportCertificate(IIC).
AllfirearmsbroughtintoCanadamustbedeclared.Intheeventtheyarenotdeclared,theywillbeseizedand
forfeitedandcriminalchargesmaybelaid.
TheFirearmsActisafederallawandappliesallacrossthecountry.Provincesmayhaveadditionalrequirements,
especiallywithrespecttohunting,althoughthesearenotappliedattheborder.
Lesson6Summary:OtherGovernmentDepartments
andAgencies
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Thislessonexplainedtheroleofthreeothergovernmentdepartmentsandthelegislationforwhichtheyare
responsible.
HealthCanadaisresponsiblefortheadministrationoftheControlledDrugsandSubstancesAct
Importpermitsarerequiredforcontrolleddrugsandsubstancestobeimported
TransportCanadaadministerstheMotorVehicleSafetyAct
TheMotorVehicleSafetyActisthelegislationusedtoregulatethemanufactureandimportationofmotor
vehiclesandmotorvehicleequipment
VehiclesthatareimportedintoCanadamustmeetthesamestandardsasvehiclesmanufacturedinCanada
TheRegistrarofImportedVehiclesoperatesanationalprogramofvehicleinspectionandcertification
TheTransportationofDangerousGoodsActisthelegislationforpublicsafetyinthetransportationof
dangerousgoodsand
PublicSafetyCanadaisresponsiblefortheCanadianFirearmsProgram.
Questions:
Attemptsallowed:
Available:
Passrate:
5
Unlimited
Always
60%
Allowed
manytimesasyouwish.
Startquiz
Module14Summary:OtherGovernmentDepartments
&Agencies
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CBSA
hasthelegislativemandatetocontrolanddetaingoodsonbehalfofothergovernmentdepartmentsand
D19listsgoodsregulatedbyothergovernmentdepartments.
CFIA
playsaroleintheimportationoffoods,animals,andplants
officersatImportServiceCentresreviewimportdocumentationforgoodsregulatedbyCFIA
mustapproveCFIAregulatedgoodsforreleasebeforetheycanbereleasedbyCBSA
providestheAIRStooland
AIRStoolisusedtodetermineimportrequirementsforgoodsregulatedbyCFIA.
IndustryCanada
responsiblefortheConsumerPackagingandLabellingActandtheTextileLabellingAct.
ForeignAffairs,TradeandDevelopmentCanada
responsiblefortheTradeControlsBureauand
theImportandExportPermitsActestablishestheImportControlList,theExportControlList,theAutomatic
FirearmsCountryControlList,andtheAreaControlList.
Module14Summary:OtherGovernmentDepartments
&Agencies
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EnvironmentCanada
mandateincludesadministrationofCITESandtheOzonedepletingSubstancesRegulations,1999
CITESisaninternationalagreementwhoseaimistoensurethatinternationaltradeincertainwildanimals
andplantsdoesnotthreatentheirspeciesand
theOzonedepletingSubstancesRegulations,1999controltheimportofozonedepletingsubstancesthatare
notcontainedinproducts.
HealthCanada
developsregulationsfortheimportandexportofcontrolledsubstancesandprecursorchemicals.
TransportCanada
responsiblefortheMotorVehicleSafetyActandtheTransportationofDangerousGoodsAct.
PublicSafetyCanada
responsiblefortheCanadianFirearmsProgram.
Followingisashortquizonwhatyouhavelearnedinthismodule.
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Module14:Quiz
Questions:
Attemptsallowed:
Available:
Passrate:
0
Unlimited
Always
60%
Allowed
Toconcludethismodule,seeifyoucananswerthefollowingquestions.Indicateyouranswerbyclicking
onthecorrectresponse.
Startquiz
Module15:SIMA
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addcontent
ModuleObjective
Lesson1:TheSIMAInvestigationProcess
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Inthislesson,youwillbeshownhowtheinvestigationprocessdeterminesifthereisinjuryandhowinjuryis
remedied.Youwilllearnhowgoodsbecomethesubjectofaninvestigation,howtherolesoftheCBSAandthe
CITTinthatprocessdifferandhowinvestigationsarecarriedout.
Rationale
AsaCCS,youcouldbeaskedtohandleanimportationofgoodssubjecttoprovisional,antidumpingor
countervailingduties.UnderstandingthebackgroundinformationisimportantwhendiscussingSIMAissueswith
yourclientsandforyourdaytodaywork.
LessonObjective
Attheendofthislesson,youshouldbeabletoexplainthedifferentrolesoftheCBSAandtheCITT.Youshould
knowhowinvestigationsareinitiatedandbefamiliarwithhowinvestigationsarecarriedout.
Topic1:InitiationofInvestigations
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Tobeginaninvestigationintodumping,theCanadianindustrythatbelievestheirbusinessissufferingasaresultof
dumpedorsubsidizedgoodsmustmakeaformalcomplainttotheCBSAAntidumpingandCountervailing
Directorate.
Tohelptheproducerfileacomplaint,theCBSAhascreatedaninformationpackagecalleda"ComplainantsKit".It
containsthedetailsaproducerneedstoknowbeforemakingacomplaintandtheguidelinesforpreparingone.One
ofthemostimportantthingstoknowbeforefilingthecomplaintistounderstandthatithastorepresentmorethan
25percentofproductionofthegoodsandthenumberofproducerssupportingtheclaimmustbegreaterthanthe
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numberofproducersopposed.
ThecomplaintcanbesubmittedtotheCBSAbymanufacturers'orproducers'associationsonbehalfoftheir
members.Itmustbepersuasiveinitsargument.Theinjurysufferedbyanindustrymustbecausedbydumpingor
subsidizingandmustnotbetheresultofotherunrelatedfactors.Iftheimporterhasevidenceofinjuryinvolvinglost
salesand/oradeclineinprofitorothereconomicdifficultiesfromdumpedgoods,itmustelaborateanddemonstrate
theadverseeffectsexperiencedbythecompanyorindustry.
Topic2:Roles
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BoththeCBSAandtheCanadianInternationalTradeTribunal(CITT)havearoleintheSIMAprocess.TheCBSA
determineswhetherthereisevidenceofdumpingorsubsidizing.ItistheCITTsresponsibilitytodeterminewhether
dumpedorsubsidizedimportshavecausedmaterialinjury,orarethreateningtocausematerialinjury,toCanadian
producersoflikegoods.
TheRoleofCBSA
Onceacomplaintisreceived,CBSAhas21businessdaystodecideifthecomplaintisproperlydocumented.Ifitis
not,theCBSAasksformissingdetailsinwriting.
Oncethecomplaintisproperlycompleted,CBSAhas30daystomakeadecisionwhetheraninvestigationshould
bestartedornot.Ifaninvestigationiswarranted,anoticeannouncingtheinitiationofaninvestigationmustbe
publishedintheCanadaGazette,Part1.
Within90daysoftheopeningofaninvestigation,CBSAisusuallyinapositiontoeitherendtheinvestigationorto
issueapreliminarydetermination(anearlydecision)ofdumpingorsubsidizing.Thoughrarelyused,extenuating
circumstancesmaycauseadelay,inwhichcaseCBSAmaytakeuptoanadditional45daystorendera
preliminarydetermination.Aflowchartillustratestheprocessinvolvedinanantidumpingandcountervailingduty
investigation.
Apreliminarydeterminationusuallyindicatesthepreliminarymarginofdumping(theamountbywhichthenormal
valueexceedstheexportersexportprice)ortheamountofthesubsidy,thepercentageofimportsthataredumped
orsubsidizedandwhethertherecontinuestobeareasonableindicationofinjury.Ifapreliminarydeterminationis
issued,CBSAbeginstocollectprovisionaldutiesonthedumpedorsubsidizedimports.
Topic2:Roles(cont.2)
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TheRoleofCITT
Uponreceiptofanoticeofpreliminarydeterminationofdumping,theCanadianInternationalTradeTribunal(CITT)
beginsitsinquiryintoinjury.
Aspartoftheinquiry,theCITTobtainsinformationthroughquestionnairesandinterviewswithmanufacturers,
importersofthegoodsandpurchasers.Thisdataformsthebasisofareportthatsetsoutinformationtobe
examinedbytheCITTinarrivingatitsdecision.Thisreportbecomespartofthecaserecordandismadeavailable
tocounselandparticipantsintheinquiry.
TheCITTisrequiredtomakeafinding(averdict)within120daysfromthedateofreceiptofthepreliminary
determination,andhasanother15daystoissueastatementofreasonsexplainingitsfinding.Thefindingandthe
statementofreasonsaresenttoallinterestedparties,andthefindingispublishedinPart1oftheCanadaGazette.
ThetypesofinquiriesandordersorfindingstobemadebytheCITTarecontainedinSections42and43ofthe
SpecialImportMeasuresAct.EverydecisionoftheCITTisfinal,subjectonlytoreviewbytheCITTitself.Whenthe
CITTfindsthatthereisnoinjury,theinvestigationisterminatedandallprovisionaldutiesarereturnedtothe
importer.Iftheprovisionaldutywaspaidbycashorcertifiedcheque,therefundwillincludeinterest.
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ShouldtheCITTmakeafindingofpastinjury,theCBSAmay,within6monthsofthefinding,demandaretroactive
antidumpingassessmentofdutiesagainstimportspriortothedateofpreliminarydetermination.Thisactionwould
notnormallybeundertakenunlessmassivedumpingcausedsevereinjuryoranundertakinghadbeenviolated.
Lesson1Summary:TheSIMAInvestigationProcess
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ThislessondescribedtheSIMAinvestigativeprocess.
Keypointsinthislessoninclude:
theSIMAprocessstartswithaletterofcomplaint
theCanadaBorderServicesAgency(CBSA)andtheCanadianInternationalTradeTribunal(CITT)arejointly
responsibleforadministeringSIMA
CBSAdetermineswhetherthereisevidenceofdumpingorsubsidizing
theCanadianInternationalTradeTribunalsresponsibilityistodecidewhetherdumpedorsubsidizedimports
havecausedmaterialinjury,orarethreateningtocausematerialinjurytoCanadianproducersoflikegoods
theinvestigationcarriedoutbyCBSAintothematterofdumpingprecedestheinjuryinquirybytheCITTand
theCITTinitiatesitsinquiryafterCBSAhasmadeapreliminarydeterminationofdumping.
Nowitstimetotestwhatyouvelearned.
Questions:
Attemptsallowed:
Available:
Passrate:
4
Unlimited
Always
60%
Allowed
manytimesasyouwish.
Startquiz
Lesson2:AssessmentofDutyUnderSIMA
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NowthatyouhavebeenintroducedtotheprocessofaninvestigationunderSIMAandhavebecomefamiliarwith
antidumping,countervailingandprovisionalduty,thislessonwilldiscusstheapplicationofSIMAandhowanti
dumpingandcountervailingdutiesareassessed.Youwillalsolearnaboutnormalvalue,exportpriceandmarginof
dumping.
Rationale
Countervailingdutyissimplybasedonthesubsidyofthegoods,butbecausetheassessmentofantidumpingis
basedonnormalvalue,exportprice,andmarginofdumping,itisimportanttounderstandtheseterms.Toproperly
assessdutiesunderSIMAandavoidpenalties,itwillbecrucialtoknowhowtoidentifywhichgoodsaresubjectto
SIMAandhowtoassessdutyunderSIMA.
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LessonObjective
Youwillbeabletoassessantidumpingandcountervailingduty.
Topic1:AssessmentofAntidumpingand
CountervailingDuty
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Thereiscomprehensiveinformationontheassessmentofantidumpingandcountervailingduty.Inordertobecome
familiarwithgoodsthataresubjecttodumpingduties,thefollowingshouldbeconsulted.
ReviewMemorandaD15series:SpecialImportMeasuresAct/Investigations.
ThisDMemoprovidesdetailssuchasproductdescriptionandtariffclassificationofgoodssubjecttodutiesunder
SIMA.
SubscribetoCBSAsSIMAEmailAlertService.
Bydoingso,youwillbealertedeachtimetheAntidumpingandCountervailingDirectorateofCBSApublishesnew
information.
ConsulttheMeasuresinForceofgoodssubjecttoSIMA,issuedbyCBSA.
ThisisalistoftheAntidumpingandCountervailingMeasuresinforceatthebeginningofeachmonth.
ReviewMemorandumD1412:DisclosureofNormalValue,ExportPrice,andAmountofSubsidyEstablished
undertheSpecialImportsMeasuresActtoImporters.
ThisDMemoprovidesdetailsofdepartmentalpolicyconcerningdisclosureofnormalvaluesandexportprice
informationsothatimporters/customsbrokerscancalculatetheSIMAdutiesandtaxes.
Youshouldalsotakeintoaccountanyspecialinstructionsinletterstoexporters,importersandbrokers
issuedbyCBSAatvariousstagesintheSIMAprocess.Theseinstructionsoutlinehowsubjectgoodsare
tobedescribedandadvisetheimporterofhisresponsibilitytoproperlycalculateandpaySIMAdutiesand
taxes.
CountervailingDuty(cont.2)
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NormalValue
Thenormalvalueisgenerallythenetpriceatwhichthegoodsinquestionaresoldinthecountryofexportto
unrelatedpurchasers,solongasthesalesareprofitable.Whenthismethodcannotbeused,normalvaluecanbe
estimatedusingconstructedvaluesorthesellingpricetoathirdcountry.Indeterminingnormalvalues,
considerationisgiventodifferencesbetweenthepriceatwhichtheexportersellsdomesticallyandthatwhichis
chargedonexportstoCanada.Termsandconditionsofsale,tradelevels,quantity,construction,design,and
materialcanallinfluencevalue.
Whentheexportersellsgoodssolelyorprimarilyfortheexportmarket,domesticsalesoflikegoodsbyother
vendorsinthecountryofexportareusedindeterminingnormalvalues.Wherethereisnotasufficientnumberof
domesticsalestopermitapropercomparison,normalvaluesarebasedontheexporter'ssellingpriceoflikegoods
toimportersinothercountries,oronthebasisofthecostofproductionplusanamountforadministrative,selling
andotherrelatedcosts,aswellasamarginofprofit.
ExportPrice
TheexportpriceisthepricethattheCanadianimporterpaystotheforeignexporterforthegoods.Theexportprice
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maybeadjustedbydeductingthosecosts,charges,andexpensesthatareoverandaboveexpensesincurredon
salesfordomesticconsumption.
Thesecostsmightincludespecialexportpacking,exportriskinsurance,andchargesandexpensesincurredbythe
exportersimplybyshippingthegoodstoCanada.
CountervailingDuty(cont.3)
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MarginofDumping
Themarginofdumpingistheamountbywhichthenormalvalueexceedstheexporter'sexportpriceforthegoods.
Theantidumpingdutyassessedisequaltothemarginofdumping.
TimeLimit
Antidumpingandcountervailingmeasuresordinarilylapseattheendofthefiveyears,unlessafindingororderis
reviewedandcontinued,inwhichcasethedutieswillbecollectedforanotherfiveyears.
Lesson2Summary:AssessmentofDutyUnderSIMA
Bookmarkthis
InLesson2youlearnedabouttheassessmentofantidumpingandcountervailingduty.
therearepublicationsavailablethatlistgoodssubjecttoantidumpingorcountervailingduty
thenormalvalueisgenerallythenetpriceatwhichthegoodsinquestionaresoldinthecountryofexportto
unrelatedpurchasers
theexportpriceisthepricethattheCanadianimporterpaystotheforeignexporterforthegoods
themarginofdumpingistheamountbywhichthenormalvalueexceedstheexporter'sexportpriceforthe
goods
theassessmentofantidumpingdutyisbasedonthemarginofdumpingand
theassessmentofcountervailingdutyisbasedonthesubsidyofthegoods.
Nowitstimetotestwhatyouvelearned.Seehowyoudoonthefollowingquestions.
Questions:
Attemptsallowed:
Available:
Passrate:
2
Unlimited
Always
60%
Allowed
manytimesasyouwish.
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Startquiz
Lesson3:SIMACodes
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InthislessonyouwillbecomefamiliarwithSIMAcodes.
Rationale
AsaCCS,youmaybeaskedtosubmitimportdatatoCBSAwhendutyunderSIMAapplies.Neglectingtoapply
antidumping,countervailing,provisionaldutiesand/orsurtaxcanresultinapenalty.
LessonObjective
TobecomefamiliarwithSIMAcodesforimportedgoodssubjecttodutyunderSIMA.
Topic1:SIMACodes
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Ifimportedgoodsaresubjecttoadditionaldutyantidumping,countervailing,provisionaland/orsurtaxorthey
shareaclassificationofgoodsthataresubjecttoadditionaldutyitmustbenotedwhensubmittingimportdata.
Thisisdonebyuseofatwodigitcode.Thiscodeistobeincludedontheaccountingdocument.OnaB3Canada
CustomsCodingFormitappearsinfield32.OnaB2CanadaCustomsAdjustmentRequestitappearsinfield26.
ThefirstdigitistheSIMAassessmenttype:
1Goods,thatarespecificallyexemptedfromaCITTinjuryfindingorfromaSurtaxOrderundertheCustoms
Tariff.
2Goodsaresubjecttoanundertaking.
3Goodsaresubjecttoprovisionalduty.
4GoodsaresubjecttoaCITTfindingandnoSIMAdutyispayable.
5GoodsaresubjecttoaCITTfindingand/orsurtaxorderandSIMAdutiesand/orsurtaxispayable.
Theseconddigitisthemethodofpayment,thatis,howtheadditionaldutyunderSIMAwillberemitted:
0noliablility(nomoneyisowed).
1cash,(thisincludescreditcard,ordebitetc.)or
2securitybond.
Topic1:SIMACodes(cont.2)
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Thefollowingarethepossiblecodesthatcanbeused:
10toidentifygoodsonasingleshipmentthatarenotsubjecttoantidumpingorcountervailingdutybutare
classifiedinthesametariffclassificationasgoodsthataresubjecttoantidumpingorcountervailingduty
20forgoodscoveredbyapriceundertaking.
30forgoodswheretheprovisionaldutyassessmentisnil.
31forgoodswheretheprovisionaldutyassessmentiscoveredbycash.
32forgoodswheretheprovisionaldutyassessmentiscoveredbyaSIMAbond.
40forsubjectgoodswheretheSIMAdutyassessmentisnil.
50forsubjectgoodswheretheSIMAdutyassessmentiscoveredbyavalidOrderinCouncilnumber.
51forgoodswheretheSIMAdutyassessmentand/orthesurtaxamountiscoveredbycash.
52forsubjectgoodsunderanexpeditedreviewwheretheSIMAdutyassessmentiscoveredbyaSIMAbond.
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Neglectingtoapplyantidumping,countervailing,provisionaldutiesand/orsurtaxcanresultinapenalty.
Lesson3Summary:SIMACodes
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InthislessonyoulearnedaboutSIMAcodesandtherequirementtoprovidethecodetoCBSA.
Keypointsinthislessoninclude:and
TheSIMAcodeisatwodigitcode
TheSIMAcodeindicatesthetypeofassessmentandthemethodofpaymentusedand
SIMAcodescanberequiredongoodsthatarenotsubjecttoantidumpingorcountervailingduties.
Module15Summary:SpecialImportMeasuresAct
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Inthismodule,youstudiedtheSpecialImportMeasuresAct.YoucannowdescribethedifferentrolesoftheCBSA
andCITTunderSIMA.Youalsolearnedthatprovisional,antidumpingand/orcountervailingdutiesareappliedto
importedgoodsiftheyaresubjecttoafindingofinjury.ThisisidentifiedbyapplicationofaSIMAcode.
Mostimportantly,byknowinghowandwheretofindinformationongoodsthataresubjecttoSIMA,youwillbeable
toensurecompliancewithSIMArequirements,savingyourclientstimeandmoney.
Module15:Quiz
Questions:
Attemptsallowed:
Available:
Passrate:
8
Unlimited
Always
60%
Allowed
youmustprovideananswerbeforeyoucanmoveontothenextquestion.Onceyoucompletethequiz,you'llhave
theopportunitytoreviewyouranswersandviewthecorrectanswersaswell.Youmayredothequizasmanytimes
asyouwish.
Startquiz
Module16:ImportPermits
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Inthismoduleyouwilllearnaboutimportpermitsandhowtheyareusedtocontroltheimportationofcertaintypes
ofgoodsundertheExportandImportPermitsAct.Youwilllearnthedifferencebetweengeneralandindividual
importpermits,andthemodulewillendwithdescriptionsofTariffPreferenceLevels,EXCAPS(Foreign
Affairs/CustomsAutomatedPermitSystem)andTariffRateQuotas.
ModuleObjective
Whenyouhavecompletedthismodule,youwillbefamiliarwiththepurposeofimportpermits,theneedforimport
controls,andthedifferencebetweengeneralandindividualimportpermits.
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Lesson1:ImportControls
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Inthislesson,youwillbeintroducedtoimportpermitsundertheExportandImportPermitsAct.
Rationale
Importpermitsarerequiredononlyalimitednumberofgoods.AsaCCS,youneedtoknowwhichgoods,and
underwhatcircumstances,animportpermitisrequired.
LessonObjective
Attheendofthislesson,youshouldbeabletoexplainwhatanimportpermitisandwhyitisnecessary.
Topic1:TheNeedforImportPermits
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Therearemanyreasonswhycountriesapplystrictcontrolsongoodsthatareimported.Forexample,the
importationofgoodssuchasmilitarygoods,nonrenewableresources,endangeredspecies,andgoodsthat
competewithvulnerableCanadianindustriesmustbecontrolledforeconomic,ecological,andsecurityreasons.
Oneoftheeasiestwaystocontroltheimportofgoodsisbytheuseofimportpermits.
GoodsthatrequireimportpermitsarefoundinspecificlistscontainedintheExportandImportPermitsAct(EIPA).
TheTradeControls&TechnicalBarriersBureau(TCTBB)(formerlytheEICB)isresponsibleforadministeringthe
ExportandImportPermitsAct(EIPA)andtheMinisterofInternationalTradeCanada(ITCan),hasthepowerto
issueimportpermits,and,undercertainconditions,toalter,suspend,cancel,andreinstateanypermitissuedunder
theAct.
Aswell,theEIPA:
providesthelegislationfortheGovernorinCounciltoestablishvariouslistsofgoodswhoseimportationor
exportationmayberestrictedorprohibited
listsoffencesandpenaltiesforcontraventionsoftheActand,
givestheGovernorinCounciltheauthoritytoestablishregulationspertainingtotheadministrationoftheAct.
Topic2:ImportPermitsRegulations
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AswithanyAct,thereareassociatedregulations.TheImportPermitsRegulationsareonesetofregulations
relatingtotheExportandImportPermitsAct.
TheImportPermitsRegulations:
definethetermsusedintheregulations
indicatewhomayapplyforanimportpermit
statewhatmustbeincludedonanimportpermitapplication
indicatetheresponsibilityofthepersontowhomthepermithasbeenissuedand,
indicatewhattodointhecaseofalostpermit.
Topic3:ImportControlList
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TheGovernorinCouncilisempoweredundersection5.(1)oftheExportandImportPermitsAct,toestablishalist
ofgoods,calledanImportControlList,whichwillincludeanyarticlestheimportationofwhichtheGovernorin
Councildeemsitnecessarytocontrol.Theimportcontrollistisnotalistofeverysingleitemthatmayrequirean
importpermit.Theimportcontrollistisnationalinscope,whilepermitsissuedunderCITESandtheOzone
depletingSubstancesRegulations,forexample,areglobalconcernsandinternationalcommitments.CITESandthe
OzonedepletingSubstancesRegulationsaredescribedinModule14.
Thefollowingistakendirectlyfromsection5.(1)oftheActandlistsreasonswhygoodsmaybeincludedonthe
ImportControlList:
a)toensure,inaccordancewiththeneedsofCanada,thebestpossiblesupplyanddistributionofanarticlethatis
scarceinworldmarketsorinCanadaorissubjecttogovernmentalcontrolsinthecountriesoforiginortoallocation
byintergovernmentalarrangement
b)torestrict,forthepurposesofsupportinganyactiontakenundertheFarmProductsAgenciesAct,the
importationinanyformofalikearticletooneproducedormarketedinCanadathequantitiesofwhicharefixedor
determinedunderthatAct
c)REPEALED
c.1)torestricttheimportationofarms,ammunition,implementsormunitionsofwar,army,navalorairstores,or
anyarticlesdeemedcapableofbeingconvertedthereintoormadeusefulintheproductionthereof
d)toimplementanyactiontakenundertheAgriculturalMarketingProgramsActortheCanadianDairyCommission
Act,withtheobjectoreffectofsupportingthepriceofthearticle
e)toimplementanintergovernmentalarrangementorcommitmentor
f)topreventthefrustrationorcircumventionoftheAgreementonTextilesandClothinginAnnex1AoftheWorld
TradeOrganizationAgreementbytheimportationofgoodsthatarelikeordirectlycompetitivewithgoodstowhich
theAgreementonTextilesandClothingapplies.
Lesson1Summary:ImportControls
Bookmarkthis
Inthislessonyoulearnedaboutimportcontrolsandtheneedforimportpermits.
importpermitsareusedtocontroltheimportationofcertaingoods
goodsthatrequireimportpermitsarefoundinspecificlistscontainedintheExportandImportPermitsAct
(EIPA)
theTradeControls&TechnicalBarriersBureau(TCTBB,formerlytheEICB)isresponsibleforadministering
theEIPA
theImportPermitRegulationsprovidespecificdetailsabouttheEIPAand,
section5.(1)oftheEIPAlistsreasonswhygoodsmaybeincludedontheImportControlList.
FollowingisashortquizonwhatyouhavelearnedinLesson1.
Lesson2:GeneralandIndividualImportPermits
Bookmarkthis
Inthislessonyouwillbeintroducedtogeneralandindividualimportpermits.
Rationale
Usingageneralimportpermitismuchlesscomplicatedthanapplyingforanindividualimportpermit.AsaCCS,you
canreduceyourownworkloadandeliminatethecostofacquiringanindividualimportpermitbyknowingwhena
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generalimportpermitcanbeused.
LessonObjective
Attheendofthislesson,youshouldbeabletoexplainwhentouseanindividualimportpermitandwhentousea
generalimportpermit.
Topic1:GeneralImportPermits
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AnimportpermitisrequiredforanygoodmentionedontheImportControlList(ICL).TheICLincludesmany
products:firearms,weapons,ChemicalWeaponsConventionitems,certaincarbonsteelproducts,specialtysteel
products,textilesandapparelitemsandawiderangeofagriculturalproducts.
Goodsrequiringanindividualimportpermitusuallyfallintooneofthefollowingcategories:
agriculturalproducts,and
firearms,relatedgoods,andammunition.
Until2005,apparelandtextileproductsrequiredimportpermits.TheyarenolongerrequiredduetoCanadasigning
in1995theAgreementonTextilesandClothing(ATC)withtheWorldTradeOrganization(WTO).Textileand
apparelquotarestrictionswerephasedoutoveratenyearperiodinanefforttoliberalizetrade.Onceallquotas
wereremoved,ForeignAffairsandInternationalTradeCanadawithdrewtheimportpermitrequirement.
Note:Thereisonecircumstancewhereimportpermitsarerequiredforapparelandtextileproducts.Theexception
isTariffPreferenceLevels(TPL)whichwillbereviewedlaterinthismodule.
In2012,ForeignAffairsandInternationalTradeCanada(DFAIT)advisedthattheynolongerrequiredindividual
importpermitsforsteel.CriticaltradedatawillcontinuetobemonitoredandpostedbyDFAITusingdataalready
collectedbyCBSAonimportedgoods.
Section8(1.1)oftheExportandImportPermitsActstates:
theMinistermay,byorder,issuegenerallytoallresidentsofCanadaageneralpermittoimportanygoods
includedontheImportControlListthatarespecifiedinthepermit
InordertodeterminewhetherageneralorindividualimportpermitisrequiredyoumustconsulttheHandbookof
ExportandImportCommodityCodes.Thehandbookcontainsalistofthegeneralimportpermits.
Topic1:GeneralImportPermits(cont.2)
Bookmarkthis
Hereareafewexamplesofgoodsrequiringgeneralimportpermitsandthecorrespondinggeneralimportpermit
number.
GeneralImportPermitNo.1DairyProductsforPersonalUse
GeneralImportPermitNo.3WheatandWheatProductsandBarleyandBarleyProductsforpersonaluse
GeneralImportPermitNo.6RosesforPersonalUse
GeneralImportPermitNo.100EligibleAgricultureGoods
WhenpresentingimportdocumentationtoCBSA,generalimportpermitnumbersmustbequotedonthecargo
controldocumentorreleasedocumentation.
TouseaGeneralImportPermit(GIP),theimportmustmeetthetermsofthegeneralimportpermit.Eachgeneral
importpermithasitsownspecifications.Forexample,chickeneggsmaybeimportedunderGIPNo.8aslongas
theimportationdoesn'tcontainmorethantwodozeneggsandtheyarefortheimporter'spersonaluse.Dairy
productsmaybeimportedunderGIPNo.1aslongasthevalueoftheimportationdoesn'texceed$20.00andthey
arefortheimporter'sownuse.Itisimportanttoknowthelimitationsofeachofthegeneralimportpermits.When
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handlingthedocumentationofgoodsfromtheImportControlList,onemustreviewthespecificcriterialistedunder
thatGIPbeforetakingadvantageofageneralimportpermit.
Topic2:IndividualImportPermits
Bookmarkthis
OnceyouhaveconsultedtheImportControlListanddeterminedwhetherornotthegoodsyouareimporting
requireanimportpermit,goodsnotcoveredunderageneralimportpermit,requireanindividualimportpermit.If
youhavedeterminedthatyouwillrequireanindividualimportpermit,youmustthenconsulttheHandbookofExport
andImportCommodityCodes.
Importpermitapplicationsmustcontainacommoditycode.Thefirstsixdigitsofthecommoditycodearethesame
asthefirstsixdigitsofthetariffclassificationnumber,thesamenumberusedtoclassifygoodsenteringCanadafor
thepurposesofdeterminingtherateofduty.Thereisnolistthatcrossreferencesthecommoditycodesinthe
HandbookwiththetariffclassificationnumbersfoundintheCustomsTariff.
Thefollowingisanexampleofcommoditycodesthatwouldbeusedonanimportpermit:
HatchingEggs,forbroilersoffowlsofthespeciesGallusdomesticusthatareclassifiedundertariffitemNo.
0407.11.11or0407.11.12intheListofTariffProvisionssetoutinthescheduletotheCustomsTariff.
04.07Birds'eggs,inshell,fresh,preservedorcooked.
Fertilizedeggsforincubation:
0407.11OffowlsofthespeciesGallusdomesticus
Hatching,forbroilers:
0407.11.1100WithinaccesscommitmentDZN1.51/dozenCCCT,LDCT,UST,CT,
CRT,PT,JT:Free
COLT:0.43/dozen
PAT:0.6/dozen
0407.11.1200OveraccesscommitmentDZN238%butnot
lessthan
$2.91/dozen
Topic2:IndividualImportPermits(cont.2)
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Note:TheItem,hatchingeggsaresubjecttoaTariffRateQuota.
AnapplicationforanimportpermitismadeonformEXT1466.Thepermitapplicationmaybesenttoacustoms
brokerwhoisonlineandwhoisauthorizedtoissuepermitsonbehalfofTradeControls&TechnicalBarriers
Bureau(TCTBB,formerlytheExportImportControlsBureau(EICB).TheapplicationcanalsobesenttotheExport
ImportControlsSystem(EICS)bymailorfax.Currentlythereisnoonlinemechanismforimporterstosubmit
permitapplications.
PermitapplicantsmusthaveanEIPAfilenumber(formerlyEICBfilenumber).Toobtainanumber,applicantsare
requestedtosubmitanapplicationwhichincludestheircompanysname,emailaddress,address,postalcode,the
nameofthecontactperson,telephonenumber,facsimilenumber,GSTnumberandbusinessnumber.Once
completed,theapplicationisfaxedtothedepartmentofForeignAffairsandInternationalTradeCanada.
Notethatapermitissuedinoneperson'snamemaynotbetransferredtoanotherperson.Givingafalsedeclaration
ormisleadinginformationconstitutesaviolationoftheEIPA.
Lesson2Summary:GeneralandIndividualImport
Permits
Bookmarkthis
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Inthislessonyoulearnedaboutgeneralandindividualimportpermits.
apermitisrequiredforgoodslistedontheImportControlList
theHandbookofExportandImportCommodityCodescontainsthelistofgeneralimportpermitnumbersand
theproductstowhichtheyrelate
goodsontheImportControlListthatdonotmeettherequirementsforageneralimportpermitrequirean
individualimportpermit
importpermitapplicationsmustcontainacommoditycode
thefirstsixdigitsofITCanscommoditycodearethesameasthefirstsixdigitsoftheHStariffclassification
numberand,
anapplicationforanimportpermitismadeonformEXT1466.
Takeafewminutesandseehowyouhavelearnedaboutgeneralandindividualimportpermits.
Questions:
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Lesson3:TariffPreferenceLevels,TariffRateQuotas
andEXCAPS
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Inthislesson,youwillbeintroducedtoTariffPreferenceLevels(TPL)andTariffRateQuotas(TRQ).EXCAPS
(ForeignAffairs/CustomsAutomatedPermitSystem)isalsoexplained.
Rationale
AsaCCS,youmaybeaskedtoapplyforimportpermitsforavarietyofgoods.Knowingthattheimport
requirementsforgoodssuchasclothing,textilesandagriculturalproductsmaybedifferentthantherequirements
forothergoodswillhelpkeeptheimportationofsuchgoodsflowingsmoothly.
LessonObjective
Attheendofthislesson,youshouldbeabletodefinethetermsTariffPreferenceLevelandTariffRateQuotasand
haveanunderstandingofEXCAPS.
Topic1:TariffPreferenceLevel
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TheTariffPreferenceLevel(TPL)isamechanismundertheNorthAmericanFreeTradeAgreement(NAFTA),the
CanadaChileFreeTradeAgreement(CCFTA)andtheCanadaCostaRicaFreeTradeAgreement(CCRFTA).
Thesepartieshaveagreedtoextendthepreferentialdutyratestoacertainquantityofyarns,fabrics,andnon
originatingclothingandtextileproductstradedbetweentheparties.Sinceaquotaisineffect,importpermitsare
requiredforthesegoods.
TPLgoodsareallowedtheNAFTA,CCFTAandCCRFTAratesofdutybyvirtueofanOrderinCouncil(OIC).No
NAFTACertificateofOriginorotherCertificateofOriginisrequiredsinceitisnotnecessaryforthegoodstoqualify
undertherulesoforigin.However,aNAFTA,CCFTA,orCCRFTAExporter'sCertificationofNonOriginating
TextileGoodsisrequired.
ClothingandTextileProducts
SinceApril1,2005,onlythoseclothingandtextileproductsthatareeligibleforaTariffPreferenceLevel(TPL)
benefit(establishedunderNAFTA,CCFTAandCCRFTA)aresubjecttoimportpermitrequirements.Otherthanfor
TPLimports,importpermitsforclothingandtextilesarenotrequired.
Topic2:TariffRateQuotas
Bookmarkthis
AsasignatorytotheWorldTradeOrganization(WTO)Agreement,Canadahascommitteditselftoreducingthe
MostFavouredNationratesofdutyonagriculturalproducts.Somereductionstookplacein1995whenCanada
madethiscommitment,whileotherreductionswilloccuronanongoingannualbasis.
MeasurespreviouslyusedbyCanadatocontroltheimportationofspecificagriculturalproductshavebeenreplaced
withasystemofTariffRateQuotas(TRQ).
Atariffratequotaisamechanismwhichprovidesfortheapplicationofcustomsdutyatacertainratetoimportsofa
particulargooduptoaspecifiedquantity.Thisisreferredtoasbeing"withinaccesscommitment".Adifferent,and
higher,dutyrateappliestogoodsthatexceedthespecificquantity.Thisisconsidered"overaccesscommitment".
TheappendixtoD10181containsalistofagriculturalproductsthataresubjecttoTariffRateQuotas.Importsof
thesegoodswithinthequotaamountaresubjecttothelowerrateofdutyunderthewithinaccesscommitmenttariff
itemsandimportsoverthequotaamountareclassifiedunderthehigherratesofdutyundertheoveraccess
commitmenttariffitems.
TheMinisterofForeignAffairs,TradeandDevelopmentCanada(DFATD)isresponsibleforallocatingquotasfor
goodsunderaTRQ.Controlofwithinaccessgoodsismaintainedinoneoftwoways:
a)throughpermitsissuedbyDFATDandbasedonquotaallocationstoimportersorpermitapplicationsreceived,or
b)onafirstcome,firstservebasisadministeredbyCBSA.
AnyimportermayimportgoodsontheTRQlisthowever,iftheyhavenopreviousquotaallocation,ordonothave
animportpermit,thegoodsareassessedtheoveraccessdutyrate.
Inordertobeentitledtothewithinaccesstariffclassification,importpermitsmustbeintheimporter'spossessionat
thetimethatgoodsarereleasedandmustbemadeavailabletoCBSAuponrequest.
Important!
DFATDwillnotissuepermitsforanygoodsafterimportationhasoccurred.
Topic3:ExportImportControlsSystem(EICS)
Bookmarkthis
TheTradeControls&TechnicalBarriersBureau(TCTBB,formerlytheExportandImportControlsBureau,EICB)
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providesanelectroniccommercebusinesssolutiontolicensedCanadiancustomsbrokerstofacilitatetheprocess
ofacquiringanindividualimportpermit.ThesystemiscommonlyknownastheExportImportControlsSystem
(EICS).Thisprocessmayalsobeusedtoapplyforexportpermits.ExportpermitswillbediscussedinPart4ofthe
course.
EICSsupportstwodistinctmethodsforcustomsbrokerstoaccessthesystem.
Brokerswhodealwithlowvolumes(lessthan50100permitsperday)mayprefertouseasecurewebbased
interfacethatallowsthemtoapplyforandreceiveimportandexportpermitsonatransactionbytransactionbasis.
Thesecondmethodwasdevelopedtosupportthehighervolumebrokersandisbasedontransactionexchangevia
anelectronicdatainterchange(EDI)(systemtosystem).
TheEICSreceivesapplicationsanddeliverspermitstoonlinebrokersovertheinternet.Permitsaredeliveredin
theformofaPDF(PortableDocumentFormat)documentinthecaseoftheWebinterfaceandasemail
attachmentsinthecaseofEDI.
TheEICSapplicationisPKIenabled:asasecuritymeasure,userscanonlygainaccesstotheEICSwebinterface
bylogginginusingtheirPKICertificate.TheissuanceofaPKICertificatetoanenduserrequiresafacetoface
meetingbetweentheBureausRegistrarandtheCertificateOwnerforidentificationandauthentication.
BrokersinterestedinaccessingthesystemareencouragedtoreadtheParticipant'sRequirementsDocumentand
contactForeignAffairsandInternationalTrade.
Topic4:EXCAPS
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AnautomatedsystemcalledEXCAPS(ForeignAffairs/CustomsAutomatedPermitSystem)isinplacetoallowthe
transmissionofpermitinformationdirectlyfromDFATDtoCBSA.Thiseliminatestheneedforimportersorbrokers
topresenthardcopypermitstoCBSAwhenrequestingreleaseofgoodsrequiringapermit.
Atransactionrecordisissuedtotheimporterorbrokertoserveasareceiptshowingthatthepermithasbeen
issued.
AnimportpermitbecomesvalidwhenDFATDhastransmittedthepermitinformationelectronicallytoCBSA.
IntheeventthatEXCAPSisnotavailabletotransmitpermitdatatoCBSA'sAcceleratedCommercialRelease
OperationsSupportSystem(ACROSS),importersandbrokersmaysubmitapapercopyofthetransactionrecord
toCBSAtoobtainreleaseofthegoods.
Topic5:Penalties
Bookmarkthis
UndertheAdministrativeMonetaryPenaltySystem(AMPS),apenaltycanbeappliedforfailingtoprovideapermit
beforegoodsarereleased.ThecontraventionisC071.
Inthecaseofimportpermits,thepenaltyisonaperdocumentbasisagainsttheimporter.Thatis,apenaltyis
assessedforeachmissingimportpermit.
Lesson3Summary:TariffPreferenceLevels,Tariff
RateQuotasandEXCAPS
Bookmarkthis
InthislessonyoulearnedaboutTariffPreferenceLevels,TariffRateQuotasandEXCAPS.
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theTariffPreferenceLevelisamechanismunderNAFTA,CCFTAandCCRFTAwherebythepreferentialduty
ratesareextendedtospecificquantitiesofapparelandtextileproductstradedbetweentheparties
TPLgoodsareallowedtheNAFTA,CCFTAandCCRFTAratesofdutybyvirtueofanOIC
sincegoodsunderaTPLdonothavetooriginateunderNAFTA,CCFTAorCCRFTA,aCertificateofOriginis
notrequired
aTariffRateQuotaprovidesfortheapplicationofdutyatacertainratetocertaingoodsuptoaspecified
quantity,andadifferentratetoimportsofthatgoodthatexceedthatquantity,duringaspecifictimeperiod
and,
EXCAPSisinplacetoallowthetransmissionofpermitinformationdirectlyfromDFAITtoCBSA.
Nowtakeafewminutestoseewhatyouhavelearnedinthislesson.
Questions:
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Startquiz
Module16Summary:ImportPermits
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Inthismodule,youwereintroducedtogeneralandindividualimportpermitsundertheExportandImportPermits
Act,thegoodsthatrequirepermits,andtheprocesstoapplyforapermit.Youlearnedthatimportationsofclothing
andtextilesrequireextraattentionsinceaTariffPreferenceLevelmayapplyandthatTariffRateQuotasarein
placeforimportationsofagriculturalgoods.
Byreviewingthematerialinthismodule,yourknowledgeofimportpermitswillhelppreventunnecessarydelaysin
theimportationofcontrolledgoods.
Module16:Quiz
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asyouwish.
Startquiz
Module17:MarkingofImportedGoods
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IfyouoryourclienthaseverhadashipmentheldbyCBSAbecauseofmissinglabelsorimpropermarking,youwill
knowhowmuchextraworkisinvolvedingettingtheshipmentcleared.Thismodulewillexplainthepurposeof
markinggoods,therequirementsunderthemarkingregulations,andthepenaltiesthatcanbeassessedagainstthe
importerforincorrectmarking.SpecialmarkingrulesforNAFTAgoodswillalsodiscussed.
ModuleObjective
Whenyouhavecompletedthismoduleyouwillknowwhyandhowgoodsaremarked.Youwillunderstandthe
differencebetweenthemarkingrulesforNAFTAandnonNAFTAgoods,andthepenaltiesassociatedwithnon
compliance.
Lesson1:MarkingofImportedGoods
Bookmarkthis
Inthislesson,youwillbeintroducedtothemarkingrequirementsforimportedgoods.Youwillbecomefamiliarwith
countryoforiginmarkingandthetypesofgoodsthatneedtobemarked.
Rationale
Becausegoodsmaynotbereleaseduntiltheyareproperlymarked,itisimportantforyouasaCCS,tounderstand
Canadasmarkingrequirements.
LessonObjective
Attheendofthislesson,youshouldbeabletoexplainwhyandhowgoodsaremarked.
Topic1:ThePurposeofMarking
Bookmarkthis
Section35.01oftheCustomsActstates:
Nopersonshallimportgoodsthatarerequiredtobemarkedbyanyregulationsmadeundersection19ofthe
CustomsTariffunlessthegoodsaremarkedinaccordancewiththoseregulations.
Section19oftheCustomsTariffrequiresthatgoodsbemarkedwiththeircountryoforigin.
AlthoughSection35.01oftheCustomsActandthismodulerelatetotherequirementforcountryoforiginmarking
andshouldnotbeconfusedwiththelabellingrequirementsofothergovernmentdepartments,importersand
brokersmustalsobeawareofthelabellingrequirementsofotherdepartments.
ImportersareencouragedtocontactotherdepartmentssuchtheCanadianFoodInspectionAgency,Health
Canada,orIndustryCanadatodeterminelabellingrequirementsbeforepurchasinggoodsoutsideofCanada.
Knowingtherequirementsofothergovernmentdepartmentswillmakeiteasiertoimportgoods.
BymarkinggoodswiththeircountryoforiginasspecifiedintheregulationsofSection19oftheCustomsTariff,the
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consumerandCBSAareawareoftheoriginofthegoods.
Topic2:Regulations
Bookmarkthis
DependingonwhetherthegoodsareimportedfromaNAFTAornonNAFTAcountry,therearedifferentmarking
requirements.
Requirementsforthedeterminationofthecountryoforigin,formarkingpurposes,ofgoodsfromnonNAFTA
countriesarefoundintheDeterminationofCountryofOriginforthePurposeofMarkingGoods(NonNAFTA
countries)Regulations.
Requirementsforthedeterminationofthecountryoforigin,formarkingpurposes,ofgoodsfromNAFTAcountries
arefoundintheDeterminationofCountryofOriginforthePurposesofMarkingGoods(NAFTACountries)
Regulations.
ThesespecificrequirementswillbecoveredingreaterdetailinLesson2ofthismodule.
Important!
ItisimportanttorememberthatthemarkingregulationsforgoodsimportedfromaNAFTAcountryapplyto
allgoodsimportedfromaNAFTAcountryandthereisnorequirementforthegoodsto"originate"within
themeaningoftheNAFTARulesofOriginRegulations.(i.e.NAFTARulesofOriginneednotapply).
Topic3:HowGoodsareMarked
Bookmarkthis
Thecountryoforiginmarkingofallgoodsmustbe:
legible
permanent,insofarasthenatureofthegoodswillallowand,
capableofbeingseeneasilyduringnormalhandlingofthegoodsortheircontainer.
Inmostcases,thecountryoforiginmarkingmustappearonthepointofsalepackaging,thatis,themarkingmust
beshownontheitemthatissoldtothepurchaser.Forexample,ifyouhaveaboxofpensandeachpenissold
separately,eachpenmustbemarked.However,ifthepensaresoldasabox,onlytheboxmustshowthecountry
oforiginofthepens.
Section19.(1)oftheCustomsTariffgrantstheGovernorinCounciltheauthoritytomakeregulationsrequiring
importedgoodstobemarked,aswellasregulationsgoverningwhichgoodshavetobemarked.Theregulations
alsoincludeguidelinesfordeterminingtheappropriatecountryorgeographicalareaoforiginofimportedgoodsfor
markingpurposes.Section19.(2)oftheCustomsTariffallowstheMinistertomakeregulationsregardingthe
markingofimportedgoodsandthemannerinwhichtheymustbemarked,aswellasregulationsprescribingwhen
theimportedgoodsmustbemarked.
Inmanyinstances,noncompliancewiththemarkingregulationsisdiscoveredafterthegoodsarriveinCanadaand
theyhavebeenexaminedbyCBSA.Whenitisfoundthatgoodsareincorrectlymarkedorarenotmarked,the
importermay:
exportthegoods
abandonthegoodstotheCrownor
markthegoodsinCanadaaslongasconditionslistedunderAuthorizationtoMarkGoodsinCanadafoundin
D1131aremet.
Topic4:NonComplianceandPenalties
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IftheimporterelectstomarkthegoodsinCanada(afterimportationbutbeforerelease),theconditionsareas
follows:
thegoodscannotbeimportedasmail
anoticeofnoncompliancepursuanttosubsection35.02(2)oftheCustomsActmustnothavebeenissuedto
theimporteronsimilaroridenticalgoodsmorethan30daysbeforetheimportationofthegoodsorlessthan
twoyearsbeforeimportationofthegoods
ifauthorizationisrequiredpriortoimportation,theimportergiveswrittennoticetoCBSAthatthegoodswillbe
markedinCanada
ifauthorizationisnotrequestedpriortoimportation,theimportergiveswrittennotificationatthetimeof
importationtoCBSAthatthegoodswillbemarkedinCanadaanddemonstratesthatitwasnotpossibleto
givepriornoticeand
transferofownershipofthegoodscannottakeplaceuntilthegoodsaremarkedproperly.
Inotherwords,iftheimporterdecidestomarkthegoods(insteadofexportingorabandoningthem),theymayonly
dosoifthegoodshavenotbeenshippedthroughthemail,theimporterhasnotreceivedpriornoticeforfailingto
marksimilargoods(withinacertaintimeframe),theimportergivesCBSAwrittennotice(again,withinacertaintime
frame)andthegoodsarenotsoldbeforetheyaremarked.
OncewrittennoticeisgivenfromtheimportertoCBSAsayingthattheywillmarkthegoodsinCanada,CBSAwill
respondwithwritteninstructionsindicating:
theplacewherethemarkingistobedone
thetimeinwhichthemarkingmustbecompletedand
theplacewherethemarkedgoodsaretobemadeavailableforexaminationbyanofficer.
Topic4:NonComplianceandPenalties(cont.2)
Bookmarkthis
Inmostcases,anofficerwillissuethewrittennotificationtotheimporterand/ortheircustomsbrokerindicatingthat
thegoodsmustbemarkedinaccordancewiththemarkingregulations,foundinD1131.Theusualresponseisfor
theimportertohavethegoodsmarkedinCanada,eitherattheirpremises,apublicorprivatebondedwarehouse,a
CBSAofficeoratanestablishedcustomsbondedwarehouse.
Inordertohavethegoodsmarkedattheirpremisesand,ifthepremisesarenotalreadyanexistingwarehouse,the
importermustfilloutformE401,anApplicationforaLicencetoOperateaCustomsBondedWarehouse.The
completedapplicationisthensubmittedtotheCBSAofficewherethegoodsarebeingheld.Afeeof$100.00must
accompanytheapplication.Theimporteristhenissuedatemporarybondedwarehousenumber,andhispremises
aretreatedasiftheyareacustomsbondedwarehouse.
Inordertoplacethegoodsinabondedwarehouse,acompletedformB3,type10iscreated.
ThegoodsmaynotbesoldordisposedofuntilthemarkingiscompletedandCBSAhasreexaminedthegoodsto
ensurethattheynowcomplywiththemarkingregulations.OnceCBSAissatisfiedthatthegoodsaremarked
properly,aB3,type20iscreatedtorequestthereleaseofthegoodsfromthebondedwarehouse.
GiventhecostinvolvedinmarkinggoodsoncetheyareinCanada,andthethreatofpenaltiesfornoncompliance,
itisimportanttoensurethatgoodscomplywiththemarkingregulationsbeforetheyareshippedtoCanada.
Incaseswheretheimporterknowsthatseveralshipmentsareontheirwayandthattheydonotcomplywiththe
markingregulations,theimportermayrequestablanketpreauthorizationtomarkthegoodsinCanada.
TheAdministrativeMonetaryPenaltySystem(AMPS)includesinfractionsagainstthemarkingregulations.
AMPScontraventionC377appliestomarkinginfractions.PleasenotethatintheAMPSMasterPenaltyDocument
additionaltextisprovidedforthisitem.
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C377
ItisconsideredacontraventionunderAMPSifapersonfailed:
1.tomarkthegoods,ormarkthegoodswiththecorrectcountryoforigin,or
2.tomarkthegoodsintheappropriatemethodandmanner,priortoimportingthegoods,ifarrangementswerenot
madetomarkthegoodsinCanadapriortorequestingrelease.
ThepenaltiesunderAMPSaregraduated,andthefollowingreflectsthefirst,second,third,andfourthinstance:
1st$150.00
2nd$225.00
3rdandsubsequent$450.00
RetentionPeriod:12months
GoodsthatmustbemarkedarelistedinScheduleIofDeterminationofCountryofOriginforthePurposeof
MarkingGoods(NonNAFTACountries)RegulationsandScheduleIofDeterminationofCountryofOriginforthe
PurposesofMarkingGoods(NAFTACountries)Regulations.
TheAMPSmarkingpenaltiesareappliedagainsttheimporterandareissuedbyacomplianceverificationofficeror
CBSAregionalmarkingexpert(RME).
Whenreviewingthemarkingofgoods,therearethreeconsiderations:
1.Isthegoodrequiredtobemarkedwithitscountryoforigin?
2.Whatcountryoforiginmustbemarkedonthegood?
3.Whatistheacceptablemethodandmannerofmarkingthegood?
Complianceverificationofficersareresponsibleformakingdecisionswithrespecttothefirstandsecond
considerations.TheRMEisresponsibleforthethirdandwillprovideguidanceonthefirstandsecond.
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Ifashipmentarrivesunmarkedorimproperlymarkedandthecountryoforigintobemarkedonthegoodsisknown,
theofficermustrejecttheimporttransactionandensurethattheshipmentmeetsmarkingrequirementspriorto
release.
Atthistimetheofficerwilllikelyissueapenaltyatthefirstlevel.Thepenaltynoticemuststatethatthepenaltyisa
resultoftheshipmentnotbeingmarkedand/orbeingmarkedimproperly.
Iftheimporterchoosestoexportthegoods,normalexportproceduresapply.
Ifthereisuncertaintyordisagreementastowhatcountryoforiginshouldbemarkedonthegoods,theofficermust
contacttheRMEforaruling.TheRMEsrulingisconsideredtobeadecision,andmustbefollowedforfuture
importationsofidenticalorsimilargoods.Afirstlevelpenaltywillbeissued.
Theofficerwillapplysecondlevelandsubsequentpenaltiesforcontraventionsconcerningidenticalandsimilar
goods.
Incaseswherefraudissuspected,suchassituationswheregoodsaremarkedinadeceptiveway,apenaltywillbe
issuedandtheremayalsobecriminalprosecution.
Topic5:CategoriesofGoods
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AppendixAofD1131listsgoodsthatarerequiredtobemarked,regardlessoftheircountryoforigin.This
appendixlistsbothNAFTAandnonNAFTAgoodsandisdividedintosixcategories.Thesecategories,withafew
examplesfromeach,follow.
1.GoodsforPersonalorHouseholdUse
Examples:Bakewareandcookwaremadeofaluminumbatteries,drycellcutlery,chromeplatedorstainlesssteel
2.Hardware
Examples:Coppertubingfilesandraspstubes,electronic
3.NoveltiesandSportinggoods
Examples:Bicyclestoys,gamesandathleticandsportinggoods
4.PaperProducts
Examples:Papermatterandproducts,lithographedorprinted
5.Apparel
Examples:Boots,shoes,andslippersglovesmadepartiallyorwhollyofleatherknittedgarments
6.HorticulturalProducts
Examples:Bulbs,dormantoringrowth,excepttulipbulbsChristmastrees,rootedorunrooted,wheninausual
container
AppendixBofD1131providesadditionalexamplesandclarificationofthegoodsthatareinAppendixA.
WhenreferringtoAppendicesAandB,itisimportanttokeepinmindthat:
ifanarticledoesnotfallunderaspecificclassofgood,itmayfallunderamoregeneralone.Forexample,
cottonglovesarenotspecificallymentionedbutwouldfallunderwearingappareland,
thereareexceptionsaccordingtoenduse,forexample,blanketsarerequiredtobemarked,butiftheyare
goingtobeusedinahospital,theydonotneedtobemarked.
Lesson1Summary:MarkingofImportGoods
Bookmarkthis
InthislessonyoulearnedaboutthemarkingrequirementsundertheCustomsActandtheCustomsTariff.
certaingoodsmustbemarkedwithacountryoforigin
markingregulationsforgoodsimportedfromaNAFTAcountryapplytoallgoodsimportedfromaNAFTA
countryandthereisnorequirementforthegoodsto"originate"withinthemeaningoftheNAFTARulesof
OriginRegulations
section19.(1)oftheCustomsTariffgrantstheGovernorinCounciltheauthoritytomakeregulationsrequiring
importedgoodstobemarked,aswellasregulationsgoverningwhichgoodshavetobemarked
markingregulationsarefoundinD1131
appendixAofD1131listsgoodsthatarerequiredtobemarked,regardlessoftheircountryoforiginand,
AMPScontraventionC377appliestomarkinginfractions.
Takeafewminutestoanswertheonlinequestionstoseehowmuchyouhavelearnedaboutthemarkingof
importedgoods.
Questions:
Attemptsallowed:
Available:
Passrate:
6
Unlimited
Always
60%
Allowed
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manytimesasyouwish.
Startquiz
Lesson2:MarkingRules
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Inthislesson,youwillbeintroducedtothemarkingrulesforbothnonNAFTAandNAFTAgoodsandyouwilllearn
aboutthetariffshiftrules,thetariffpreferenceoverrideandhowNAFTAgoodsaremarkediftheircountryoforigin
cannotbedetermined.
Rationale
AsaCCSyoumaybeaskedtoexplainthemarkingrulestoyourclients,orifyouareanimporter,toyourvendors.
Knowledgeofthemarkingruleswillhelpkeeptheimportationofgoodsflowingsmoothly.
LessonObjective
Attheendofthislesson,youshouldbeabletodistinguishbetweenthemarkingrulesfornonNAFTAgoodsand
NAFTAgoodsandknowwhattodoifthecountryoforiginformarkingpurposescannotbedetermined.
Topic1:MarkingofNonNAFTAGoods
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UndertheDeterminationofCountryofOriginforthePurposeofMarkingGoods(NonNAFTACountries)
Regulations,thecountryoforigintobemarkedonnonNAFTAgoodsisthecountryinwhichthegoodswere
substantiallymanufactured.Thismeansthecountrywherethemajorpartofproductionormanufacturingtookplace,
andincludesaccumulatedcostsofmaterial,laborandoverhead.
GoodsfromnonNAFTAcountriesmaybemarkedinEnglishorFrench.
D1131listsgoodsthatareexemptfrommarking.
ThefollowinggoodsfromnonNAFTAcountriesdonotneedtobemarked:
1.Donationsforcharitablepurposesandnotforthepurposeofsale.
2.Giftsorbequests.
3.Antiques.
4.Usedgoods,withtheexceptionofironorsteelpipesandtubes.
5.Goodsfortheexclusiveuseoftheimporterorthatimporter'semployeesandnotforresaletothegeneralpublic,
withtheexceptionofironorsteelpipesandtubes.
6.GoodsthatareimportedundertariffitemsNos.9808.00.00,9809.00.00,or9810.00.00oftheListofTariff
ProvisionssetoutinthescheduletotheCustomsTariff.
7.GoodsimportedforsubsequentexportationfromCanada,withtheexceptionofironorsteelpipesandtubes.
Whenconsideringanexemptionfromthemarkingrequirements,importers,exportersandproducersare
encouragedtocontactamarkingexpertintheregionwherethegoodswillbeimportedtofindoutmoreinformation
abouttheuseofexemptions.Dependingonthecircumstances,theymaybeaskedtoprovideproofthatthegoods
qualifyforanexemption.
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Topic2:MarkingofNAFTAGoods
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Annex311oftheNorthAmericanFreeTradeAgreement(NAFTA)requiresthatCanada,Mexico,andtheUnited
StateseachestablishmarkingrulestodeterminethecountryoforiginofgoodsfromaNAFTAcountryformarking
purposes.
Section4oftheDeterminationofCountryofOriginforthePurposeofMarkingGoods(NAFTACountries)
Regulationsindicatesthatthecountryoforiginofgoodsisthecountryinwhich:
a)thegoodsarewhollyobtainedorproduced
b)thegoodsareproducedexclusivelyfromdomesticmaterials
c)eachoftheforeignmaterialsincorporatedintothegoodsundergoesanapplicablechangeintariffclassification
andsatisfiesanyotherapplicablerequirementsoftheseregulationsor
d)agoodisconsideredtooriginateunderaChapterNotesetoutinScheduleIII[oftheDeterminationofCountryof
OriginforthePurposesofMarkingGoods(NAFTACountries)Regulations].
Inotherwords,thisisasequentialchecklistonecanusewhendeterminingthecountryorcountriesoforigintobe
markedonthegoods.
Topic2:MarkingofNAFTAGoods(cont.2)
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WhendeterminingthecountryoforiginforthemarkingofgoodsimportedfromaNAFTAcountryandonehas
establishedthatthegoodscannotbemarkedaccordingtoSection4items(a)and(b),theymustask,"Doeseach
foreignmaterialundergoanapplicablechangeintariffclassificationoranyotherapplicableprovisionoftheNAFTA
MarkingRegulations?"Inotherwordsisthe"tariffshift"ruleused?
Thetariffshiftrulesaretechnicalrulesthatareappliedsystematicallytodeterminethecountryorcountriesoforigin
tobemarkedonNAFTAgoods.TheserulesarefoundinScheduleIIIoftheDeterminationofCountryofOriginfor
thePurposesofMarkingGoods(NAFTACountries)Regulations.
Whenapplyingthetariffshiftrules,somematerialsaredisregardedwhendeterminingwhethergoodsundergoan
applicablechangeintariffclassificationorsatisfyanyotherapplicablerequirementsoftheregulations.These
materialsare:
packagingmaterialsandcontainersinwhichthegoodsarepackagedforretailsaleandthatareclassifiedwith
thegoods
accessories,sparepartsortoolsthataredelivered,classifiedandshippedwiththegoods
packingmaterialsandcontainersinwhichthegoodsarepackedforshipmentand
indirectmaterials.
Bookmarkthis
InsituationswhenthecountryoforiginofNAFTAgoodscannotbedeterminedunderSection4ofthe
DeterminationofCountryofOriginforthePurposesofMarkingGoods(NAFTACountries)Regulations,the
followingapplies:
section5oftheregulationsstatesthatwherethecountryoforigincannotbedeterminedundersection4,the
countryorcountriesoforiginshallbethecountryorcountriesoforiginofthesinglematerialthatimpartsthe
essentialcharacterofthegoods
section6oftheregulationsstatesthatwherethecountryorcountriesoforiginofgoodscannotbedetermined
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undersection4or5andthegoodsaredescribedasasetormixture,orareclassifiedasasetormixture,the
countryorcountriesoforiginofthegoodsshallbethecountryorcountriesoforiginofallthematerialsthat
meritequalconsiderationasimpartingtheessentialcharacterofthegoodsand
WherethecountryorcountriesoforiginofgoodscannotbedeterminedunderanyofSections4,5or6,the
countryorcountriesoforiginshallbe:
a)ifthegoodsareproducedbyonlyminorprocessing,thecountryorcountriesoforiginofallthe
materialsthatmeritequalconsiderationasimpartingtheessentialcharacterofthegoods
b)iftheproductionofthegoodsisbysimpleassemblyandthepartsthatmeritequalconsiderationas
impartingtheessentialcharacterofthegoodshavethesamecountryoforigin,thecountryoforiginof
thosepartsor
c)inanyothercasethelastcountryinwhichgoodsunderwentproduction(section7).
TheTariffPreferenceOverridefoundinSection8oftheDeterminationofCountryofOriginforthePurposesof
MarkingGoods(NAFTACountries)Regulations,statesthat:
WhereanygoodsareoriginatinggoodsundertheNAFTARulesofOriginRegulationsandthecountryoforigin
ofthegoodsisnotdeterminedtobeasingleNAFTAcountryundersection4or5,thecountryoforiginofthose
goodsshallbethelastNAFTAcountryinwhichthegoodsunderwentproductionotherthanbyminorprocessing,if
aCertificateofOriginundertheProofofOriginofImportedGoodsRegulationshasbeencompletedandsignedfor
thegoods.
Inotherwords,wheregoodsareoriginatingundertheNAFTARulesofOriginANDaCertificateofOriginis
availableANDwhereasinglecountryoforiginformarkingpurposescannotbedetermined,thecountryoforigin,for
markingpurposes,isthecountryinwhichthegoodslastunderwentproduction.
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ProductionOutsideCanada
Section9oftheDeterminationofCountryofOriginforthePurposesofMarkingGoods(NAFTACountries)
Regulationsstatesthat,afterreviewingsections4to7oftheregulationsanddeterminingthatthecountryoforigin
oftheimportedgoodsisCanadaandthegoodshaveundergoneproductionthatinvolvesmorethanminor
processinginanotherNAFTAcountrypriortotheirimportation,thecountryoforiginofthegoodsshallbethelast
NAFTAcountryinwhichthegoodsunderwentthatproduction.
Aforeignmaterialincorporatedintogoodsshallnotbeconsideredtohaveundergoneanapplicablechangeintariff
classificationortosatisfyanyotherapplicablerequirementsoftheregulationsbyreasonof:
thechangefromonetariffclassificationtoanyothermerelyastheresultofachangeintheenduseofthe
goods
thechangefromonetariffclassificationtoanyothermerelyastheresultofthedismantlingordisassemblyof
thegood
themerepacking,repacking,packagingorrepackagingofthegoods
themeredilutionwithwateroranyothersubstancethatdoesnotmateriallyalterthecharacteristicsofthe
materialor
themerecollectionofpartssothatthecollectionofpartsisclassifiedasifitwereanassembledgood
pursuanttoRule2(a)oftheGeneralInterpertiveRules.
Inotherwordsanyoftheaboveoperationscandisqualifyforeignmaterialsfromhavingundergonethenecessary
tariffclassificationchangeorotherrequirement.
AppendixCofD1131containsalistofgoodsfromNAFTAcountriesthatdonotneedtobemarked.
GoodsfromNAFTAcountriesmaybemarkedinEnglish,FrenchorSpanish.
Lesson2Summary:MarkingofImportedGoods
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Bookmarkthis
InthislessonyoulearnedaboutthemarkingofgoodsfromNAFTAcountriesandgoodsfromnonNAFTA
countries.
WhiletheoriginofnonNAFTAgoodsissimplydecidedbythecountryoforigininwhichthegoodswere
substantiallymanufactured,theoriginofNAFTAgoodsformarkingpurposes,isdecidedbyaprocessof
eliminationbasedonSections4to7oftheNAFTAMarkingRegulations.
appendixCofD1131listsgoodsthatareexemptfrommarking
goodsfromnonNAFTAcountriesmaybemarkedinEnglishorFrench
goodsfromNAFTAcountriesmaybemarkedinEnglish,FrenchorSpanish
thetariffshiftrulesarequiteseparateanddistinctfromtheNAFTARulesofOriginand
thetariffpreferenceoverridesaysthatwhenacountryoforigincannotbedetermined(forgoodsfroma
NAFTAcountry)byanyothermeans,thenthecountryoforiginisthelastNAFTAcountryinwhichthegoods
underwentproduction,otherthanbyminorprocessing,aslongastheyqualifyundertheNAFTArulesoforigin
andacertificateisavailable.
Havealookatthefollowingquestionstoseetoseehowmuchyouhavelearnedaboutthemarkingrules
forNAFTAandnonNAFTAgoods.
Questions:
Attemptsallowed:
Available:
Passrate:
0
Unlimited
Always
60%
Allowed
Startquiz
Module17Summary:MarkingofImportedGoods
Bookmarkthis
InthismoduleyoulearnedaboutthemarkingofgoodsinrelationtotheCustomsActandtheCustomsTariff.
Keypointsare:
certaingoodsmustbemarkedwithacountryoforigin
markingregulationsforgoodsimportedfromaNAFTAcountryapplytoallgoodsimportedfromaNAFTA
countryandthereisnorequirementforthegoodsto"originate"withinthemeaningoftheNAFTARulesof
OriginRegulations.
section19.(1)oftheCustomsTariffgrantstheGovernorinCounciltheauthoritytomakeregulationsrequiring
importedgoodstobemarked,aswellasregulationsgoverningwhichgoodshavetobemarked
markingregulationsarefoundinD1131
appendixAofD1131listsgoodsthatarerequiredtobemarked,regardlessoftheircountryoforigin
goodsfromnonNAFTAcountriesmaybemarkedinEnglishorFrench
thecountryoforigin,forgoodsfromnonNAFTAcountries,isthecountryinwhichthegoodswere
substantiallymanufactured
goodsfromNAFTAcountriesmaybemarkedinEnglish,FrenchorSpanish
thecountryoforigintobemarkedonthegoodsfromNAFTAcountriesisdefinedinSection4,5,6and7of
theDeterminationofCountryofOriginforthePurposesofMarkingGoods(NAFTACountries)Regulations
and
ThetariffshiftrulesarequiteseparateanddistinctfromtheNAFTARulesofOrigin.
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Youshouldnowbeabletodescribewhattypesofgoodsmustbemarkedwiththecountryoforiginandexplainthe
differencesbetweenthemarkingrulesforgoodsfromNAFTAandnonNAFTAcountries.Ifyouarefacedwith
goodsthathavenotbeenmarkedproperlyyouwillbeabletoinstructothersaboutthechoicesindealingwith
unmarkedgoods.YourknowledgewillhelpavoidAMPSpenaltiesandkeepshipmentsmoving.
Module17:Quiz
Questions:
Attemptsallowed:
Available:
Passrate:
11
Unlimited
Always
60%
Allowed
asyouwish.
Startquiz
Module18:ReleaseofGoods
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Thismoduleprovidesinformationononeofthemostimportantstepsinimportingcommercialgoodstherelease
process.OnceCBSAreleasesthegoods,theymaycontinuetotheirfinaldestinationinCanada.
ModuleObjective
Youwillbeabletodescribethevariouswaysinwhicharequestforreleasemaybemade.
Lesson1:PostingofSecurity
Bookmarkthis
MostcommercialgoodsarereleasedbeforeanydutiesandtaxesarepaidtoCBSA.Inordertodothis,security
mustbepostedbythecustomsbrokerortheimporterwhichactsasaguaranteetoCBSAthatdutiesandtaxeswill
bepaidatalaterdate.
Rationale
AsaCCSworkingforacustomsbroker,youmayneedtoadviseclientsoftheirsecurityoptions.Ifyouarean
importer,youwillhavetodetermineyourownsecurityrequirementsandoptions.
LessonObjective
AttheendofLesson1youshouldbeabletodescribethesecurityrequirementsforreleaseofgoodspriortothe
paymentofdutiesandtaxes.
Topic1:FormsofSecurity
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Bookmarkthis
Section35oftheCustomsActstatesthatgoodswillnotbereleasedbeforedutiesandtaxeshavebeenpaidunless
securityhasbeenposted.
TheAccountingforImportedGoodsandPaymentofDutiesRegulationssetsoutthesecurityrequirementfor
releaseofcommercialgoodspriortothepaymentofduties.
CommercialGoods
Forcommercialgoods,eithertheimporterorhiscustomsbrokermustpostsecuritytoallowthereleaseofgoods
priortothepaymentofduties.
Securitycanbeintheformof:
(a)cash
(b)acertifiedcheque
(c)atransferablebondissuedbytheGovernmentofCanada
(d)abondissuedby
(i)acompanythatisregisteredandholdsacertificateofregistrytocarryonthefidelityorsuretyclassof
insurancebusinessandthatisapprovedbythePresidentoftheTreasuryBoardasacompanywhose
bondsmaybeacceptedbytheGovernmentofCanada,
(ii)amemberoftheCanadianPaymentsAssociationreferredtoinsection4oftheCanadianPayments
AssociationAct,
(iii)acorporationthatacceptsdepositsinsuredbytheCanadaDepositInsuranceCorporationortheRgiede
lassurancedptsduQubectothemaximumamountspermittedbythestatutesunderwhichthoseinstitutions
wereestablished,
(iv)acreditunionasdefinedinsubsection137(6)oftheIncomeTaxAct,or
(v)acorporationthatacceptsdepositsfromthepublic,ifrepaymentofthedepositsisguaranteedbyHerMajesty
inrightofaprovince,or
(e)acreditcard.
CasualGoods
Casualgoodsmaybereleasedpriortothepaymentofdutiesiftheimporterorownerofthegoodsprovides,as
conditionalpaymentofanamountequaltotheamountoftheseduties:
aremittancebycreditcardinrespectofwhichtheimporterorownerofthegoodsisthecardholderor
authorizeduser,wheretheissuerofthecreditcardhasenteredintoanagreementwiththeGovernmentof
Canadaestablishingtheconditionsofitsacceptanceanduseor
atraveller'scheque,amoneyorderoracertifiedcheque.
Topic2:AmountofSecurity
Bookmarkthis
Themannerinwhichsecurityiscalculatedforimportersisdifferentthanthecalculationusedforcustomsbrokers.
ForimporterswhoareresidentinCanada,securityisbasedontheiraveragemonthlydutiesandtaxeslessthe
GST,uptoamaximumof$10million.
Forimporterswhoarenonresident,securityisbasedontheiraveragemonthlydutiesandtaxesincludingGST,up
toamaximumof$10million.
Itshouldalsobenotedthat:
theminimumsecurityrequirementforanimportertotransactbusinessatallcustomsofficesinCanadais
$5,000
theminimumsecurityrequirementforanimportertotransactbusinessatonecustomsofficeis$250and
Animporterofunconditionallydutyfreeandtaxfreegoods(includingGST)isnotrequiredtopostsecurity.
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Forcustomsbrokers,securityforthereleaseofgoodspriortothepaymentofdutiesandtaxesisbasedonaverage
monthlydutiesandtaxes(includingGST)uptoamaximumof$10million.
Itshouldalsobenotedthat:
theminimumsecurityrequiredforreleaseofgoodspriortothepaymentofdutiesandtaxes,byacustoms
brokertransactingbusinessatallofficesinCanadais$25,000.00and
theminimumsecurityrequiredforreleaseofgoodspriortothepaymentofdutiesandtaxes,byacustoms
brokertransactingbusinessatonecustomsofficeis$5,000.00.
Oncesecurityhasbeenissued,afivedigitsecurityidentificationnumberisassignedbyCBSAtothesecurity
holder.Thesedigitsarethefirstfivedigitsofthetransactionnumberthatisquotedwhenthereleaseofgoodsis
requested.
Topic3:ReducingSecurityRequired
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SecurityholdersmustensurethattheirlevelsofsecurityareadequatetocovertheirdebttotheCrown.
Inordertoreducetheamountofsecurityrequired,customsbrokersmaychooseto:
makeinterimpaymentsthroughoutthemonthtoreducetheiroutstandingmonthlybalance
arrangeforsomeclientstoobtaintheirownsecurityandmaketheirpaymentsfordutiesandtaxesdirectlyto
theReceiverGeneralor
arrangeforsomeclientstoassumetheresponsibilityofpayingtheGST,withthebrokerprovidingsecurity
andpaymentforthebalanceoftheclients'dutiesandtaxes.
Topic4:GSTLetter
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ImporterswhopaytheirGSTdirectlymusthaveaGSTletteronfilewiththeircustomsbroker.Theletterindicates
thattheimporter(thebroker'sclient)andthebrokerhaveanagreementinplacethatindicatesthattheimporteris
responsibleforthepaymentofGST.
WithaGSTletterinplace,theimportercanwriteachequedirectlytotheReceiverGeneralormaketheGST
paymenttothecustomsbroker.
Thebroker'ssecuritywillcontinuetobeusedforanydutiespayable.
Topic5:NonCompliance
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Importersorcustomsbrokerswhodonotpaydutiesandtaxesowingbythedatetheyareduearesubjecttoa
penaltyundertheAdministrativeMonetaryPenaltySystem(AMPS),contraventionnumberC336.FormK23is
issuedbyCBSAtoindicateanyoutstandingdutiesandtaxes.
WhenacustomsbrokerisnotpaidbyhisclientforwhomhehasaGSTletter,thecustomsbrokermayshortpay
thetaxesthatareowed.Insuchcases,thebrokermustprovideCBSAwithacopyoftheGSTlettertosupporthis
shortpayment.
Lesson1Summary:PostingofSecurity
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Lesson1providedyouwithinformationregardingsecuritythatmustbepostedinorderforgoodstobereleased
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priortothepaymentofdutiesandtaxes.
section35oftheCustomsActstatesthatgoodswillnotbereleasedbeforedutiesandtaxeshavebeenpaid
unlesssecurityhasbeenposted
mostcommercialgoodsarereleasedbeforeanydutiesandtaxesarepaidtoCBSA
securitycantaketheformofcash,certifiedcheque,bond,or,insomecases,creditcard
forimporterswhoareresidentinCanada,securityisbasedontheiraveragemonthlydutiesandtaxes(less
theGST),uptoamaximumof$10million
forimporterswhoarenonresident,securityisbasedontheiraveragemonthlydutiesandtaxes(including
GST),uptoamaximumof$10million
animporterofunconditionallydutyfreeandtaxfreegoods(includingGST)isnotrequiredtopostsecurity
forcustomsbrokers,securityisbasedonaveragemonthlydutiesandtaxes(includingGST)uptoamaximum
of$10million
theminimumsecurityrequirementforabrokertotransactbusinessatallcustomsofficesinCanadais
$25,000
theminimumsecurityrequirementforabrokertotransactbusinessatonecustomsofficeis$5,000
oncesecurityhasbeenissued,afivedigitsecurityidentificationnumberisassigned
securityholdershaveoptionsavailabletoreducetheamountofsecurityrequiredand
importersorcustomsbrokerswhodonotpaythedutyandtaxesowingbythedatetheyareduearesubjectto
apenaltyunderAMPS.
Nowtakesometimeandanswerafewquestionsaboutsecurity.
Questions:
Attemptsallowed:
Available:
Passrate:
3
Unlimited
Always
60%
Allowed
manytimesasyouwish.
Startquiz
Lesson2:Release
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GoodsmustbereleasedbyCBSAinorderforthemtocontinuetotheirdestinationinCanadaitiscrucialstepin
theimportationofgoods.
Rationale
Onlylicensedcustomsbrokerscanreleasegoodsonbehalfofmorethanoneimporter.Asanemployeeofa
customsbroker,youmaybeaskedtoperformthistask.And,ifyouareemployedbyanimporter,youmaybeasked
toobtainthereleaseofgoodsforyouremployer.
LessonObjective
Youwillbeabletorequestthereleaseofgoods.
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Topic1:DefinitionofRelease
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OncegoodshavearrivedinCanadaandbeenreportedtoCustomsbythecarrier,theymustbe"released".Aword
thatisoftenusedinsteadofreleasedis"cleared".
Releasedoesnotnecessarilymeanthatanyapplicableimportdutiesandtaxeshavebeenpaid,infact,itisquite
commontohavegoodsdeliveredandinusebeforeanydutiesandtaxesarepaid.Thisoccursbecausethe
CustomsActandRegulationsallowfor"interimaccounting"thepracticeofreleasinggoodspriortothepaymentof
dutiesandtaxesaslongassecurityhasbeenposted.
Paragraph2.(1)oftheCustomsActdefinesreleaseas:
(a)inrespectofgoods,toauthorizetheremovalofthegoodsfromacustomsoffice,sufferancewarehouse,bonded
warehouseordutyfreeshopforuseinCanada,and
(b)inrespectofgoodstowhichparagraph32(2)(b)applies,toreceivethegoodsattheplaceofbusinessofthe
importer,ownerorconsignee.
Paragraph2.(1)(a)isselfexplanatory.Paragraph(b)referstogoodsthatareauthorizedbyCBSAtobedeliveredto
thepremisesoftheimporter,ownerorconsignee.Includedareitemssuchastraveller'sbaggageandgiftsofsmall
value.
Topic2:ReleaseRequests
Bookmarkthis
Mostcommercialshipmentsarereleasedbeforedutyandtaxesarepaid.Arequestforthereleaseofcommercial
goodsismostoftenmadebypresentingoneofthefollowing"releasepackages":
ReleaseonMinimumDocumentation(RMD)or
PreArrivalReviewSystem(PARS).
ReleaseonFullDocumentation(RFD)isanotheroption,butnotascommonasRMDorPARS.
Insomecases,goodscanbereleasedanddutyandtaxespaidatthesametime.Thistypeofreleaserequestis
madeonFormB3,typeCortypeD.
Adescriptionofeachreleaseoptionfollows.
Important!
Withveryspecificexceptions,releaserequestdatamustbesubmittedtoCBSAelectronically.
Topic2:ReleaseonMinimumDocumentation(RMD)
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ReleaseonMinimumDocumentation(RMD)
UsingtheRMDprocessenablesgoodstobereleaseduponpresentationofaminimumnumberofdataelements.
Withveryfewexceptions,RMDrequestsmustbemadeelectronically.ExceptionstoanelectronicRMDarelisted
onaleadsheetwhichmustbecompletedandsubmittedwiththepaperreleaserequest.
Sincegoodsarebeingreleasedpriortoaccountingandpriortothepaymentofdutiesandtaxes,anRMDrelease
packageisconsideredinterimaccounting.
RMDrequestsaremadewhenthegoodshavealreadyarrived,asopposedtoPARSrequests(describedlaterin
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thislesson),whicharemadepriortothearrivalofthegoods.
Topic2:PARS(PreArrivalReviewSystem)
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PreArrivalReviewSystem(PARS)
ThePARSprocessrequiresplanningandcooperationonthepartoftheexporter,carrier,importer,customsbroker
andCBSA.Eachpartyhasspecificresponsibilitiesthatmustbecarriedoutinatimelysequenceinorderforthe
systemtowork.
ImportersandcustomsbrokerscanprovidereleaseinformationforPARSprocessingforgoodssentbyvarious
methodsoftransport.Thetermsusedformodesotherthanhighwayare:
RAILPARS(forgoodsarrivingbyrail)
MARINEPARS(formarinefreight)
AIRPARS(forairfreight)and
INPARS(forgoodstravelinginbondforreleaseinland).
ThekeytoPARSisthePARScargocontrolnumberbarcodelabel,orPARSbarcode.Carrierswiththeirown
carriercodemayprinttheirownPARSbarcodelabels,incorporatingtheircarriercodeandcompanynameifthey
wish.ThebarcodemustalsoindicatePARS.
InthefollowingPARSbarcodeillustration,thefourXsrepresentthecarriercodeassignedtoJoe'sTrucking.
Topic2:PARS(cont.2)
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InordertobeginthePARSprocess,theexporterpreparestheusualcustomsinvoicesandanyotherrequired
documents.Whentheexportingcarrierarrivestopickupthegoodsattheexporter'spremises,theexporteror
carrieraffixesaPARSbarcodetothetoprighthandcorneroftheoriginalinvoice.Thedriverwilltaketheoriginal
barcodedinvoicewithhim,plusonecopyforuseasadeliveryreceipt.
Informationconcerningtheshipmentissentbytheexporterorthecarriertotheimporterorcustomsbroker.This
informationcanbesentelectronicallyorbyfax,andmustincludeacopyofthebarcodedcustomsinvoice.
ThecustomsbrokerorimporterpreparesthePARSreleasepackagefromtheinformationreceivedfromthe
exporterorcarrierandtransmitsittoCBSA.Unlessthereisaspecificexception,thePARSreleasedatamustbe
sentelectronically.
PARSreleaserequestsmustidentifyanyinvoices,permits,licensesorcertificatesthatarerequiredandonhand.
SomegovernmentdepartmentsareabletocommunicateelectronicallywithCBSAandifapermitisrequiredfrom
oneofthesedepartments,thereleaserequestmustbemadeelectronically.Whentheothergovernment
departmentisunabletocommunicateelectronicallywithCBSA,apaperPARSrequestcanbemade.
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TheelectronicversionofthePARSreleasepackagemustbesubmittedaminimumofonehourandamaximumof
30calendardaysbeforethegoodsarriveinCanada,andanestimateddateandtimeofarrival(ETA)mustbe
provided.Apaperversionmustbesubmittedaminimumofatleasttwohoursbeforearrival.
ItshouldbenotedthataCustomsCargoControlDocument,FormA8A,isnotrequiredforhighwayEDIPARS.
Important!
ThecustomsofficerreviewsthePARSreleaseinformationandmakesadecisionwhethertoreleasethe
goodsorhavethemexaminedwhentheyarriveinCanada.Thedecisionisenteredintocustomsautomated
systemandisnotavailabletoanyoneoutsideofCBSA.
Topic2:PARS(cont.3)
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AtthepointwherethecarrierentersCanada,thedriverpresentstheoriginalPARSbarcodedcustomsinvoiceto
theofficeratthePrimaryInspectionLine(PIL).
TheofficerwandsthebarcodeandACROSSwilldisplaythepreviouslydeterminedstatusoftheshipment:tobe
released,tobereferred,ornotonfile.
Ifthestatusis"tobereleased"theofficerupdatesthesystem,datestampsandretainstheoriginalinvoice,and
datestampsandreturnstheinvoicecopytothedriver.Theshipmenthasbeenreleasedandthedrivermay
proceedtodeliverthegoods.NotethattheofficeratthePILmaymakeadecisionnottoreleasethegoodsifheis
suspiciousandfeelsthatthegoodsshouldbeexaminedorthedrivershouldbequestionedfurther.
Ifthegoodsarereleased,aReleaseNotificationMessage(RNS)issenttotheimporter,carrier,and/orcustoms
broker,iftheyareRNSparticipants.
Ifthestatusisnotonfileorreferred,thedriverisinstructedtoreporttothecustomsoffice.
.
Topic2:EDI
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EDI
Forreleaseinformationprovidedelectronically,theimporterorbrokermustfollowtherequirementslistedinthe
ACROSSParticipants'RequirementsDocument(PRD),providedbyCBSA.
ACROSSstandsfortheAcceleratedCommercialReleaseOperationsSupportSystem.Thissystemallowsbrokers
andimporterstotransmitreleaseandinvoicedatatoCBSA.
ThefollowingarethestepsinvolvedintheEDIreleaseprocess.
1.Theshipperorexporterpreparesdocumentationfortheshipmentandforwardsthisinformationtotheimporteror
customsbroker.
2.Theimporterorcustomsbrokerpreparesreleaseinformationelectronically.Thereleaseinformationincludes
dataabouttheshipment,includinganyrequiredtariffclassificationnumbers.
Withrespecttothetariffclassificationnumber,forbothRMDandPARSreleaserequests,the10digitclassification
numbermustbetransmittedalongwiththeinvoicepageandlinenumber.AsofJanuary1,2013,classification
numbersarerequiredforalllines.
Topic2:EDI(cont.2)
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ReleaserequestsareeitherAQ(AppraisalQuality)ornonAQ(AQtofollow).AQmeansthatalldataisincluded
withthereleaserequest,andnonAQindicatestoCBSAthatadditionaldatawillfollow.Thisadditionaldatafornon
AQreleaserequestsmustbesubmittedtoCBSAwithin5daysofthereleaserequest.Pleasenotethatifthereare
goodsregulatedbyothergovernmentdepartments,AQtofollowisnotpermitted.
BothAQandnonAQreleaserequestsrequireallgoodstobedeclared.WithAQ,thismeansthatallgoodshave
theirfulltariffclassificationnumbernoted.FornonAQ,arecapofthedatacanbemade.
Thegoodsthatarerecappedaresortedinorderby:
a)vendor,
b)countryoforigin,and
c)HSclassifiction.
Topic2:EDI(cont.3)
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3.InformationisthentransmittedtoCBSA.
4.ThedataiseditedbyCBSAforsyntaxerrors.Ifsyntaxerrorsaredetected,thetransactionwillberejected,anda
rejectmessagewillbetransmittedbacktothesender.Theentirecorrectedtransaction(usingthesametransaction
number)mustberesentoncethesyntaxerrorhasbeencorrected.
5.Ifthedatapassesthesyntaxediting,itispostedintheACROSSdatabasewhereitisfurthereditedforitems
suchascountrycodevalidation,HSclassificationnumber(s),quantitiesandunitsofmeasure.Iferrorsaredetected,
thetransactionwillberejectedandamessagewillbegeneratedbythesystem.Rejectmessagesaretransmitted
backtothesender.
6.Afterthedatahaspassedallitsvalidations,itispostedforACROSSreleaseprocessing.TheACROSS
applicationwillperformanedittodetermineifmachinereleaseisapplicabletothetransaction.Machinereleaseisa
CBSAautomatedreleaseprocess.Ifmachinereleaseappliesandalleditsarepassed,areleaseor
acknowledgementmessagewillbegeneratedandreturnedtothesender.
7.Transactionsthatarenotmachinereleasedarereviewedbyanofficer.TheofficerselectsEDIrelease
transactionsindividuallyandreviewsthedataelementstransmitted.
8.Iftheofficerdeterminesthatinsufficientdatahasbeenpresentedorthatthedatarequiresanamendment,an
automatedrejectY50willbecompletedandtransmittedbacktothesender.ThereleasetransactionandtheY50
willbestoredintheACROSSdatabasependingreceiptofacorrectedtransmission.Note:Theentiretransaction
mustberesentusingthesametransactionnumber.ThecorrectedtransactionandtheY50messagewillbe
reviewedagainbyanofficer.
9.Inthecaseofgoodsforwhichprearrivaldatahasnotbeensent,areleasereqestcanbemadeoncethegoods
havearrived.TheofficerwillmakeareleasedecisionandanReleaseNotificationMessage(RNS)willbesentto
thesender.Ifthedecisionbytheofficeristoreferthegoodsforexamination,amessagewillbesenttothesender
advisingthemofthestatusofthegoods.
Topic2:PaperReleaseRequests
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Forpaperreleaserequests,thefollowingmustbesubmittedaswellasacompletedleadsheetindicatingwhyEDI
isnotbeingused:
(a)twocopiesofthecargocontroldocument(theCustomsdeliveryauthoritycopyandthelongroomcopy)
(b)aninvoicethatcontainsallrequiredinformation,plustheHStariffclassificationnumber,ornumbers.Thesame
requirementsfortheclassificationnumberinanEDIformatapplyinthepaperenvironmentand
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(c)anypermits,licenses,certificatesandauthorizationsrequiredbyothergovernmentdepartmentsoragencies.
Theleadsheetcontains:
theimportersbusinessnumber
thenumberofinvoicepagesand
thetransactionnumber(assignedbythecustomsbrokerorimporter,thetransactionnumberincludes
confirmationofsecurity)inbarcodedformat.
Ifthegoodsarecontainerized,thecontainernumbermustbeshown.
Topic2:ReleaseonFullDocumentation
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ReleaseonFullDocumentation(RFD)
ReleaseonFullDocumentation(RFD),oronestepprocess,isaserviceoptionthatallowsthereleaseofgoodsby
submittingbothreleaseandaccountinginformationinasingleEDItransmission.Ifsecurityhasbeenposted,the
paymentofdutiesandtaxesisdeferreduntilalaterdate,andusuallypaidonamonthlybasis.Releaseand
accountinginformationissenttoCBSAatthesametime,andcanbesenteitherbeforeorwhenthegoodsarrive.
Thebenefitoftheonestepprocessisthatdatadoesnothavetobeenteredmorethanonce.
TheRFDprocesscanbeusedforthefollowingshipments:
transborder(highway,air,orrail)andoverseas(airormarine)
highvalueandlowvalue
SpecialImportMeasuresActgoods
specialauthoritygoods
tariffratequota(TRQ)
Canadiangoodsreturnedand
goodsrequiringanInternationalTradeCanadaimportpermit(EXCAPS).
TheRFDprocesscannotbeusedforthefollowingtypesofshipments:
goodsthatrequireprocessingbyothergovernmentdepartments,withtheexceptionofanInternationalTrade
Canadaimportpermit(EXCAPS)
casualimportationofpersonalgoods
usedgoods
goodsimportedtemporarily
goodsshippedusingthepostalsystem
goodsenteringabondedwarehouse
goodsrequiringpaymentoftheharmonizedsalestaxand
goodsrequiringpaymentoftheprovincialsalestax.
InordertouseRFD,youmustregisterwithCBSA.RegistrationisdonebycompletingFormE686.Aswell,anEDI
MemorandumofUnderstandingforRFDmustbecompleted.
WithRFD,fullAQdatamustbeprovided,includingallapplicabletariffclassificationnumbers.
Topic2:B3,TypesCandD
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FormB3,TypesCandD
TheB3indicates,amongotherthings,thenameoftheimporter,adescriptionofthegoodsthatarebeingimported,
thetariffclassificationnumber(s),andtheamountofdutiesandtaxestobepaid.FortypesCandD,securitydoes
notneedtobepostedsincethegoodsarebeingreleasedatthesametimethatdutiesandtaxesarebeingpaid.
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Thisisthemethodmostoftenusedforcasualimportations.
TypeC
TypeCisusedtorequestrelease,accountforgoods,andpayduty,allatthesametime.Itispresentedinhard
copy,andoncecompleted,thefollowingissubmittedtoCBSA:
onecopyoftheB3
anadditionalcopyoftheB3ifitisbeingsubmittedatanonautomatedCBSAoffice
commercialinvoices
cargocontroldocument(notethataCCDisnotrequiredifthegoodsarebeingcarriedbytheimporter)and
anyrequiredpermits,certificates,licensesorauthorizations.
TypeD
AtypeDispreparedifalltherequiredinformationtoprepareacompleteB3isnotavailable.However,enough
informationmustbeprovidedsothatanofficercanverifythetariffclassificationandvaluefordutyofthegoods.
Asecuritydepositisrequired,inadditiontotheestimateddutiesowingonthegoods.Thedepositmustbeequalto
10%ofthevaluefordutyofthegoodsandatleast$100.00CDN,butnotmorethan$1,000.00CDN,regardlessof
thevalueofthegoods.ThesupportingdocumentsarethesameasfortypeC.
Topic3:AcceleratedCommercialReleaseOperations
SupportSystem(ACROSS)
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ACROSSstandsfortheAcceleratedCommercialReleaseOperationsSupportSystem.UnderACROSS,importers
andcustomsbrokersexchangeinformationelectronicallywithCBSA.ItisthesystemusedbyCBSAtoprocess
releaserequests,includingRMDandPARS.
ThebenefitsofACROSSinclude:
theabilitytoexchangeinformation24hoursaday
theabilitytoexchangedatawithouthavingtorekeyinformation
theabilitytoexchangepermitdataelectronicallyand
adecreaseinpaperandrelatedhandlingcosts.
Topic4:FormC6PermissionforSpecialPurposes
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Insomecases,theimporterorbrokermayneedtoopenapackageinordertoaccessdocumentsthatarerequired
toprepareareleaserequest.ArequestforpermissiontoopenthepackageismadeonaFormC6.
However,inthecaseofreleaseofgoodspriortopaymentofduties,unlesssecurityhasbeenposted,aC6canonly
beusedunderthefollowingcircumstances:
toallowrawleaftobaccotobedelivereddirectlytoalicensedpackerorlicensedmanufacturertodetermine
thestandardweightpriortopreparationofthefinalaccounting
toallowimportedspiritstobedelivereddirectlytoadistillerytodeterminethequantityandstrengthpriorto
preparationofthefinalaccountingand
toallowreleaseofimportedbulkcargoeswhichhavetobeweighedorgaugedpriortopreparationofthefinal
accountingdocumentation
ItmustbestatedontheC6whypermissionisbeingrequested.
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Lesson2Summary:Release
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KeypointsinLesson2include:
mostcommercialshipmentsarereleasedbeforedutyandtaxesarepaid
releaserequestsaremostoftenmadebypresentinganRMDorPARSpackage
insomecases,thereleaserequestandpaymentofdutyandtaxescanbemadeatthesametime
withPARS,areleasepackageispreparedbytheimporterorcustomsbrokerandpresentedtoCBSAin
advanceofthearrivalofthegoods
CBSAwillmakeareleaserecommendation,butwillnotdisclosetheirrecommendationinadvanceofthe
arrivalofthegoods
PARSmaybeusedforanymodeoftransportation
exceptionstoanelectronicreleaserequestarelistedonaleadsheetthatmustbecompletedandsubmitted
withthepaperreleaserequest
RMDrequestsaremadewhenthegoodshavealreadyarrived,asopposedtoaPARSreleaserequest
ACROSSisaCBSAsystemthatallowsimportersandcustomsbrokertopresentreleaseandinvoicedatato
CBSAelectronicallyand
permissiontoopenpackagesbeforetheyarereleasedisrequestedbycompletingFormC6.
Nowlet'stakeafewminutestotestwhatyouhavelearnedaboutthereleaseofgoods.
Questions:
Attemptsallowed:
Available:
Passrate:
6
Unlimited
Always
60%
Allowed
manytimesasyouwish.
Startquiz
Lesson3:FAST(FreeandSecureTrade)
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Importers,carriers,anddriverswhomeetcertainrequirementscanbenefitfromanotherreleaseoption,FAST.
Rationale
YouwillneedtoidentifypartieseligibleforthebenefitsofFAST,thereforeexpeditingthereleaseprocessforthem.
LessonObjective
AttheendofLesson3youshouldbeabletoexplaintherequirementsfor,andbenefitsof,FAST.
Topic1:FAST
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TheFreeandSecureTrade(FAST)programisajointCanadaUnitedStatesinitiativeinvolvingtheCanadaBorder
ServicesAgencyandtheUnitedStatesCustomsandBorderProtection(CBP).
InCanada,FASToffersanexpeditedclearanceprocess,foreligiblegoods,toapreauthorizedimporter,carrier,
anddriver.ItbuildsonCustomsSelfAssessment(CSA),aCanadianprogramthatisdescribedindetailinModule
26,Compliance.
ComprehensiveriskassessmentsareundertakenbyCBSAtoensurethatdrivers,carriers,andimportersarelow
riskbeforeallowingthemtoparticipateinFAST.
Byprovidingastreamlinedclearanceforpreapprovedimporters,carriers,anddriversmovingeligiblegoodsfrom
theUnitedStatesintoCanada,CBSAisabletofocusitseffortsonshipmentsofhighorunknownrisk.
WhenallrequirementsforFASThavebeenmet,goodstravellingbyhighwaymayenterCanadathrough
designatedFASTlanes.
Topic1:FAST(cont.2)
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Process
ForFASTclearancethatinvolvestheuseoftheFASTlanewhereavailable,thefollowingmustapply:
1.GoodsmustbeCSAeligiblegoods.
2.TheimportermustbeFASTapprovedthatis,bothCSAandPIP.
3.ThecarriermustbeaFASTauthorizedcarrierthatis,bothCSAandPIP.
4.ThedrivermustbeauthorizedundertheFASTdriverprogramortheCommercialDriverRegistrationProgram
(CDRP).
ForCSAclearancewhichdoesnotinvolvetheuseoftheFASTlane,thefollowingmustapply:
1.GoodsmustbeCSAeligiblegoods.
2.TheimportermustbeaCSAimporter.[NotethatparticipationinPIPisnotarequirement]
3.ThecarriermustbeaCSAcarrier.[NotethatparticipationinPIPisnotarequirement]
4.ThedrivermustbeauthorizedundertheFASTdriverprogramortheCommercialDriverRegistrationProgram
(CDRP).
Topic1:FAST(cont.3)
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ThefollowingchartishelpfulinexplainingFASTandCSAclearanceoptionsforgoodsenteringCanada.All
requirementsineachcolumnmustbemet.
FASTClearanceEligibleforFASTLanes
CSAClearanceNotEligibleforFASTLanes
Importer:CSAandPIPApproved
Importer:CSAApproved
Carrier:CSAandPIPApproved
Carrier:CSAApproved
Driver:FASTApprovedorApprovedunderCDRP Driver:FASTApprovedorApprovedunderCDRP
Goods:CSAEligible
Goods:CSAEligible
However,whethertheFASTlaneorthenonFASTlaneisused,andCSAeligiblegoodsarebeingimported,the
driverpresentsthefollowingdataelementstoCBSAatthePrimaryInspectionLine(PIL):
1.identificationoftheapprovedimporter,
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2.identificationoftheapprovedcarrier,and
3.identificationoftheapproveddriver.
ThisinformationiselectronicallyverifiedatthePILandthedriveris"authorizedtodeliver".Forcustomspurposes,
thetimeofreleaseiswhentheimporter,ownerorconsigneereceivestheshipmentandthecarrierhasasigned
proofofdelivery.
AdvancenotificationofthearrivalofthegoodsdoesnothavetobeprovidedtoCBSA.However,inthecaseofa
mixedload,AdvanceCommercialInformationmustbesentforthenonCSAportion.
Topic1:FAST(cont.4)
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Importers
ImporterswhowishtouseFASTclearancemust:
beaCustomsSelfAssessment(CSA)approvedimporter
bePartnersinProtection(PIP)approved
usecarrierswhoareFASTapprovedandPIPparticipantsand
usedriversthatareFASTapproved,orapprovedunderCDRP.
Carriers
InordertouseFASTclearance,highwaycarriersmust:
beCSAapproved
bePIPapprovedand
usedriversthatareFASTapproved,orCDRPapproved.
Topic1:FAST(cont.5)
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Drivers
DriverswhowishtousetheFASTclearanceoptionmustbeFASTapprovedorauthorizedundertheCDRP.
Onceapproved,theywillreceiveacardthatallowsthemto:
useFASTdedicatedlanesinCanadaandtheUnitedStates(whereavailable)
crosstheborderwithacceleratedcustomsandimmigrationprocessingand,
transporteligiblegoodsforFASTapprovedcarriersandimporters.
DriversusingtheFASTclearanceoptionmust:
becitizensorpermanentresidentsoftheUnitedStatesorCanada
be18orover
possessavaliddriverslicenseand
beadmissibletoCanadaandtheUnitedStatesunderapplicableimmigrationlaws.
DriverswillnotqualifyforFASTifthey:
providefalseorincompleteinformationontheFASTapplication
havebeenconvictedofacriminaloffence
havebeenfoundinviolationofcustomsorimmigrationlawor
failtomeetotherrequirementsoftheFASTCommercialDriverprogram.
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BothCanadaandtheUnitedStatesmustapprovethedriversFASTapplication.Ifadriverdoesnotmeetthe
requirementsofbothcountries,theapplicationwillbedenied.
Lesson3Summary:FAST(FreeandSecureTrade)
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FASTisajointCanadaUnitedStatesinitiativeinvolvingtheCanadaBorderServicesAgency(CBSA)andthe
UnitedStatesCustomsandBorderProtection(CBP)
FASTallowsthemovementofapprovedeligiblegoodsacrosstheborderquicklyandallowsverificationof
tradecomplianceawayfromtheborder
CSAisaCanadianprogramthatincludesastreamlinedaccountingandclearanceoptionforCSAeligible
goods
inordertousetheFASTlanes,theimportermustbeCSAandPIPapproved,thecarriermustbeCSAand
PIPapproved,andthedrivermustberegistered
CSAeligiblegoodsarecommercialgoodsthathavebeenshippeddirectlyfromtheUnitedStatesOR
commercialgoodsthathavebeenshippeddirectlyfromMexicotoanimporterwhoisavehiclemanufacturer
intheautomotiveindustryand
goodsthatrequire,underanyactofParliamentorofthelegislatureofaprovince,apermit,licenceorother
similardocumenttobeprovidedtotheCBSAbeforethegoodsarereleased,arenoteligibleforFAST.
NowtakeafewminutestotestwhatyouhavelearnedaboutFASTbyansweringthefollowingquestions.
Questions:
Attemptsallowed:
Available:
Passrate:
5
Unlimited
Always
60%
Allowed
manytimesasyouwish.
Startquiz
Lesson4:CourierandMailShipments
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Thereleaseprocessforgoodsshippedandcarriedbyacourierorsentbymaildiffersfromthereleaseprocessfor
goodscarriedbyothermodes.
Rationale
Youshouldbeawareofthereleaseoptionsforgoodsshippedandcarriedbyacourierorsentasmailasyoumay
havetorequestthereleaseofgoodscarriedbycourierorsentbymail.
LessonObjective
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Attheendofthislessonyouwillbeabletodescribereleaseprocessesforgoodsthatareshippedandcarriedbya
courierorsentbymail.
Topic1:Courier
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GoodscarriedbyacouriermaybeidentifiedaseitherhighvalueorlowvalueforCustomspurposes.
TheCourier/LVS(LowValueShipment)Programstreamlinesthereporting,release,andaccountingproceduresfor
certaingoodsimportedbyapprovedcouriers.Courierswishingtoparticipateintheprogrammusthave
authorizationfromCBSAtodoso.Aswell,theymustbebondedcarrierswhohavepostedsecurityfortherelease
ofgoodspriortothepaymentofdutiesandtaxes.
Asummarycargo/releaselistforparticipantsoftheCourier/LVSProgramisusedinplaceofacargocontrol
document.Thislistisoftencalledaconsistsheetandwillbecalledaconsistsheetthroughoutthislesson.The
consistsheetsummarizesforCBSAwhatisincludedinthatparticularshipment.Keepinmindthatagreatnumber
ofparcelscarriedbyacourierareforindividuals,manyofwhomdonothaveacustomsbroker.Aswell,thereis
usuallyavarietyofgoods,frommanydifferentexporters,carriedbycouriers.
TheconsistsheetmustbepresentedtoCustomsbythecourierpriorto,orimmediatelyupon,arrivalofthecourier
inCanada.Atransactionnumberdoesnothavetoappearontheconsistsheet.
Topic1:Courier(cont.2)
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Theheadingoftheconsistsheetmustcontainthefollowing:
carriercode
carriername
auniquereferenceidentifier,whichincorporatestheapprovedcouriersfourdigitcarriercode
foreigncountryofficeofexit
vehicleidentificationnumber(forshipmentsarrivingbyhighway,usethelicenceplatedetailsandthetrailer
number,orshipmentsbyair,theaircraftregistrationnumberortheflightnumber)
officeofreleaseand
dateofreport.
Foreachshipmentontheconsistsheet,thefollowingmustbeshown:
auniqueidentifiernumbergeneratedbythecourier
consigneenameandaddress
importernameandaddress,ifdifferentfromconsignee
nameofshipper/exporter/vendor
numberofpackages
weight
estimatedvalueforduty
descriptionand
countryoforigin.
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Goodsthatarevaluedatgreaterthan$2,500.00CDNorsubjecttoimportcontrol(e.g.,importpermits,agriculture
certificates,etc.),andshipmentsthatarebeingheldpendingtheimporter'sauthorizationforrelease,cannotbe
includedontheconsistsheetandareremovedfromtheconsistsheetbythecourier.
TheconsistsheetisprescreenedbyCBSA.Ifallisinorder,theconsistsheetisstamped"released"andallgoods
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listedontheconsistsheetcanbedelivered.If,however,anofficerhasconcernsaboutoneormoreshipments
listedontheconsistsheet,hewillhighlightanyshipmentsthatrequireexaminationandthoseshipmentswillbe
removedfromtheconsistsheetandreferredforexamination.WhengoodsareremovedbyCBSAfromtheconsist
sheet,formY50,RejectDocumentControl,isissuedtothecourier,andthecouriermustnowprepareacargo
controldocumentforthosegoods.
ForgoodsthathavenotbeenremovedfromtheconsistsheetbyeitherthecourierorCBSAthecourierprepares
separateconsistsheetsaccordingtothecustomsbrokerwhowillhandlethereleaseforgoodsidentifiedasbeing
forthatcustomsbroker'sclients.Thecourierwillalsoforwardanysupportingdocumentation,suchasinvoicesor
packingliststhatareaffixedtothepackage,tothecustomsbrokerthatwillallowthecustomsbrokertoclassifyand
determinethevaluefordutyforeachshipmentbeforerequestingreleaseofthegoods.
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CourierImportsRemissionOrder
TheCourierImportsRemissionOrder(CIRO)statesthat,withcertainexceptions,goodsthatareimportedby
courierandhaveavaluethatdoesnotexceed$20.00CDNareexemptfromthepaymentofdutiesandtax.
GoodsthatarenoteligibleundertheCIROinclude:
alcoholicbeverages,cigars,cigarettesandothertobaccoproducts,regardlessofvalueor
books,newspapers,periodicalsandmagazinesshippedfromsuppliersabroadwhoshouldberegisteredwith
theCRA,butarenot.
Thisordercannotbeusedinconnectionwithtariffitem9816.00.00whichprovidesforanexemptionfromduties
andtaxesongiftsvaluedat$60.00Canadianorlessnordoesthisorderapplytocommercialtransactionsinwhich
goodsareorderedbyaCanadianconsumerfromaCanadianintermediarywho,inturn,causesthegoodstobe
shippeddirectlyfromtheforeignsuppliertotheCanadianpurchaser.
InorderforcouriershipmentstoreceivethebenefitsoftheCIRO,thetotalshipmentmustbethesubjectofasingle
transaction.Thatis,ashipmentcannotbedividedintoseveralpackagessothateachportionhasavalueof$20.00
CDNorless.
GoodsqualifyingfortheCIROareincludedontheconsistsheetandreleasedbyCBSA.
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FollowingisastepbystepprocessofatypicalchainofeventsforacouriershipmentfromtheU.S.toCanada.
Day1:GoodsarepreparedforshippingtoCanada.Thisincludesthepreparationofdocumentationandpackingof
thegoodsbytheexporter.Acalltoacouriercompanyismadeandthepackageisassignedabarcodedtracking
number.Thisnumberisenteredintothecourier'strackingsystem,andeachtimethepackagechangeshands,the
barcodeiswandedsothatthecourierisawareatalltimesofthelocationofthegoods.
AllpackagesthathavebeenpickeduparesenttoahubintheUnitedStateswheretheyaresortedaccordingto
deliverylocation.
Day2:Ifthepaperworkappearstobeinorder,andaCanadiancustomsbrokerisindicated,thepackagesaresent
toaCanadianhubthatisclosesttoitsfinaldestination.WhentheyarriveattheCanadianhub,thosethatqualifyfor
theCourier/LVSsystemarereleasedandthepackagesareputondeliverytrucks.Ifthegoodsarenotreleased,
theywillremaininthecourierswarehouseuntiltheCCDisprinted.ThisCCDandconsistsheetsareturnedoverto
theappropriatecustomsbroker.
AslongasthegoodsarenotheldforexaminationbyCBSA,theentireprocesscantakeaslittleas24hours.
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Topic2:MailShipments
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TheCustomsInternationalMailProcessingSystemallowsCanadaPosttodeliverandcollectdutiesandtaxesfor
goodssentbymail.
InternationalmailisreceivedatCanadaPostprocessingfacilities.Itmayenterthedomesticstreamfordeliveryor
bedirectedforcustomsreview.
Ifthemailisdirectedforreview,CBSAwillexamthemailtoverifythecountryoforigin,quantity,value,type,and
admissibilityofthegoodsandtodetermineifthereareanyothergovernmentrequirements,suchaspermitsor
certificates.
Anofficeralsoscreensthemailitemstodetermineiftheyaredutyfreeandnontaxableandthereforedonot
requirefurtheraction.TheseitemsarestampedClearedCustomsandreleasedtoCanadaPostfordelivery.Goods
thatwouldbeimmediatelyreleasedincludethosethatareeligibleunderthePostalImportsRemissionOrder(PIRO)
andgifts,whichqualifyundertariffitem9816.00.00.
Goodswhicharenotimmediatelyreleasedareseparated,barcoded,andhavedataconcerningtheitementered
intothePostalImportControlSystem(PICS).
Anofficerreviewstheseitems,and,insomecases,thepackagemaybeopened.Wheredutiesandtaxesarefound
tobeapplicable,theofficerdeterminesthetariffclassificationandvalue,basedonacustomsdeclarationor
invoicesattachedtotheitembytheshipper.
Topic2:MailShipments(cont.2)
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Anassessmentofthedutiesandtaxes,plusa$9.95CDNhandlingfee,areprintedonFormE14,CustomsPostal
ImportForm.ThisformisattachedtotheitembyCanadaPostfordelivery.CanadaPostisresponsibleforthe
deliveryoftheitemandthecollectionofdutiesandtaxes.
Forgoodswithavaluegreaterthan$2,500.00CAD,propercustomsdocumentationmustbeprovided.Ifthe
importerhaspostedsecurityforreleaseofgoodspriortothepaymentofdutiesandtaxes,theymaysubmitan
RMDpackagetoobtainreleaseofthegoods.Iftheyhavenotpostedsecurity,aB3accountingdocument,typeM,
maybesubmittedalongwiththepaymentfordutiesandtaxes.
TheRMDpackagemaybepresentedtoalocalcustomsofficeforprocessing.Onceprocessed,thelocalcustoms
officewillnotifythemailcentreandthemailitemwillbereleasedtoCanadaPostfordelivery.
Insomecases,goodsshippedbymailwillbereleasedwithoutFormE14beingissuedandnodutyandtaxbeing
paid.Whenthishappens,theimportermustprepareFormB3,typeV[forvoluntary],or,inthecaseofcasual
goods,FormB15,CasualGoodsAccountingDocument,inordertoaccountforthegoodsandpaydutiesandtaxes
owing.FormB151mayalsousedtoaccountfor,andpaydutiesandtaxeson,casualgoods.TheB151isan
automatedformandgeneratedbyCBSA.
Lesson4Summary:CourierandMailShipments
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highvaluegoodsarethosethatarevaluedat$2,500.00CAD*ormore
lowvaluegoodsarethosethatarevaluedatlessthan$2,500.00CAD
theCourier/LVS(LowValueShipment)Programisdesignedtostreamlinethereporting,release,and
accountingproceduresforeligiblegoodsimportedbyapprovedcouriers
summarycargo/releaselists(consistsheets)forparticipantsoftheCourier/LVSProgramareusedinplaceof
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cargocontroldocuments
goodsthatarevaluedatgreaterthan$2,500.00CADorsubjecttoimportcontrolwillberemovedfromthe
consistsheet
paperworkforgoodsremovedfromtheconsistsheetisprovidedtotheappropriatecustomsbrokeror
importer
FormY50,RejectDocumentControl,isissuedtothecourierbyCBSAwhenCBSAhasremovedgoodsfrom
theconsistsheet
theCourierImportsRemissionOrderallowscertaingoodsthatareimportedbycourierwithavaluethatdoes
notexceed$20.00CDNanexemptionfromthepaymentofdutiesandtaxes
goodssentbymailtoCanadamaybedirectedtoCBSAforreviewortheymaybedeliveredwithoutCBSA
review
goodssentbymailthatarereviewedandfoundtobedutyfreeandnontaxablewillbedeliveredbyCanada
Post
thePostalImportsRemissionOrderallowscertaingoodsthatareofavaluenotexceeding$20.00CDNper
item,andnotsubjecttothepaymentofdutiesandtaxes,tobedelivered
whendutiesandtaxesarefoundtobeapplicabletogoodssentbymail,anofficerdeterminesthetariff
classificationandvalue,basedonacustomsdeclarationorinvoicesattachedtotheitembytheshipper
thegoodswillbedeliveredbyCanadaPostCanadaPostwillcollectanydutiesandtaxesanda$9.95CDN
handlingfeeand
forgoodssentbymailwithavaluegreaterthan$2,500.00CAD,anRMD(ifsecurityhasbeenposted)orB3
typeMisused.
Nowit'stimetotestwhatyouhavelearned.Seehowyoudoonthefollowingquestions.
Module18Summary:ReleaseofGoods
Bookmarkthis
Security
securitymustbepostedinordertohavegoodsreleasedpriortothepaymentofdutiesandtaxes
bothimportersandcustomsbrokerscanpostsecurity
forimporterswhoareresidentinCanada,securityisbasedontheiraveragemonthlydutiesandtaxes(less
theGST),uptoamaximumof$10million
forimporterswhoarenonresident,securityisbasedontheiraveragemonthlydutiesandtaxes(including
GST),uptoamaximumof$10million
theminimumsecurityrequirementforanimportertotransactbusinessatallcustomsofficesinCanadais
$5,000
theminimumsecurityrequirementforanimportertotransactbusinessatonecustomsofficeis$250
animporterofunconditionallydutyfreeandtaxfreegoods(includingGST)onlyisnotrequiredtopost
security
forcustomsbrokers,securityisbasedontheiraveragemonthlydutiesandtaxes(includingGST)uptoa
maximumof$10million
theminimumsecurityrequirementforabrokertotransactbusinessatallcustomsofficesinCanadais
$25,000
theminimumsecurityrequirementforabrokertotransactbusinessatonecustomsofficeis$5,000
thefivedigitaccountsecuritynumberiscontainedinthetransactionnumber
therearevariouswaysinwhichcustomsbrokerscanreducetheamountofsecurityrequiredforreleaseprior
topaymentand
importersorcustomsbrokerswhodonotpaydutiesandtaxesowingbythedatetheyareduearesubjecttoa
penalty.
ReleaseofGoods
goodsmustbereleasedbyCBSAbeforetheycancontinuetotheirdestinationinCanada
mostcommercialshipmentsarereleasedbeforedutyandtaxesarepaid
goodscanbereleasedusingRMD,PARS,RFD,B3typesCandD,CSA,andFAST
withveryfewexceptions,releaserequestsmustbemadeelectronically
RMDrequestsaremadewhenthegoodshavealreadyarrived
PARSrequestsaremadepriortothearrivalofthegoods
ACROSSallowsbrokersandimporterstotransmitreleaseandinvoicedatatoCBSA
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AQreleaserequestsincludealldata
NonAQreleaserequestsdonotcontainfulldataandfulldatamustbeprovidedwithin5daysoftherelease
ofthegoods
whetherthereleaserequestisAQornonAQ,allgoodsmustbedeclared
forgoodswhosereleasehasbeenrequestedusingPARS,goodscanbereleasedbyCBSAatthePIL
therearespecifictimeframesinwhichthereleaseofgoodscanberequested
forPARSpurposes,therearespecifictimeframesinwhichCBSAcanbeadvisedthatgoodsareonhand
and
formC6isusedtorequestthatapackagebeopenedbeforeitisreleased.
Module18Summary:ReleaseofGoods(cont.2)
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FAST
FASTsupportsmovingpreapprovedeligiblegoodsacrosstheborderquicklyandverifyingtradecompliance
awayfromtheborder
FASTisanexpeditedreleaseprocessthatisavailablewhencertainrequirementshavebeenmet
Carriers,drivers,andimportersmustmeetspecificrequirementsinordertoparticipateinFAST
CSAeligiblegoodsarecommercialgoodsthathavebeenshippeddirectlyfromtheUnitedStatesORMexico
and
goodsthatrequire,underanyactofParliamentorofthelegislatureofaprovince,apermit,licenceorother
similardocumenttobeprovidedtotheCBSAbeforethegoodsarereleased,arenoteligibleforFAST.
GoodsShippedbyCourierandMail
courierscanapplytoparticipateintheCourier/LVSProgramwhichstreamlinesthereporting,release,and
accountingproceduresforeligiblegoods
asummarycargo/releaselist(consistsheet)forparticipantsoftheCourier/LVSProgramisusedinplaceofa
cargocontroldocument
goodsthatarevaluedatgreaterthan$2,500.00CAD*,subjecttoimportcontrol,orheldpendingthe
importer'sauthorizationforrelease,cannotbeincludedontheconsistsheet
CBSAscreenstheconsistsheetandeitherreleasesthegoodsorremovesthemfromthelistforfurther
review
thecourierwilladvisecustomsbrokersofgoodsontheconsistsheetforwhichthecustomsbrokerwilllater
account
theCourierImportsRemissionOrder(CIRO)allowseligiblegoodswithavaluethatisnotmorethan$20.00
CDNandimportedbycourieranexemptionfromthepaymentofdutiesandtax
goodsimportedbymailmaybedirectedtoCBSAforreview
theofficerwillreviewthepaperworkforthesegoodsandreleasethemiftheyaredutyandtaxfreethese
goodswillbedeliveredbyCanadaPost
ifdutiesandtaxesareapplicable,anofficerwilldeterminetheamountowingand
CanadaPostwilldeliverthegoodsandcollectthedutiesand/ortaxfromtherecipientaswellascollectinga
feeof$9.95CDN.
Ashortquizonwhatyouhavelearnedinthismodulefollows.
Module18:Quiz
Questions:
Attemptsallowed:
Available:
Passrate:
12
Unlimited
Always
60%
Allowed
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asyouwish.
Startquiz
Module19:TemporaryImportations
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Fromtimetotime,importersbringgoodsintoCanadatemporarily.Sometimesthegoodsareneededfor
emergencies,sometimestheyaregoodsthatneedrepair,theycouldbegoodsfordisplay,ortheymaybegoods
thatacustomerjustwantstotryout.Thismodulewillexplainhowtohandlethetemporaryimportationofgoodsand
thedocumentsrequired.Inthismodule,youwilllearnhowtorequestthereleaseofgoodsthatarebeing
temporarilyimported.Youwillcontinuetodevelopyourratingexpertisebylearninghowtoclassifythesegoods,
andyouwillbemadeawareofdocumentationandsecurityrequirements.Themodulewillfinishwithanexplanation
ofcommercialsamplesanddisplaygoods.
ModuleObjective
Whenyouhavecompletedthismodule,youwillbefamiliarwiththerequirementsforgoodsconsideredtemporary
imports,aswellastherequirementsforcommercialsamplesanddisplaygoods.
Lesson1Overview:TemporaryImportations
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Inthislesson,youwillbeintroducedtotemporaryimportations.Youwillseehowgoodstemporarilyimportedare
classified,whatkindofsecurityisrequiredforthesegoods,andwhetherornotthepaymentofGST/HSTis
required.
Rationale
AsaCCS,youneedtoknowthatgoodstemporarilyimportedaretreateddifferentlythangoodsconsumedor
expendedinCanada.Becomingfamiliarwiththistypeofimportationwilleliminatedutiesandtaxesbeingpaid
unnecessarilyandhavingtocorrectdocumentationforgoodsthatshouldhavebeenimportedonatemporarybasis.
LessonObjective
Attheendofthislesson,youshouldbeabletoexplainhowtoclassifygoodsthataretemporarilyimportedinto
Canada.YouwillalsohaveanunderstandingofthesecurityrequirementsforsuchgoodsandrecognizeifGSTis
applicable.
Topic1:ClassificationofGoodsImported
Temporarily
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Ingeneral,allgoodsbeingtemporarilyimported,aslongastheyarenotbeingimportedforsale,lease,further
manufacturingorprocessing,willqualifyfordutyfreeentryundertariffitem9993.00.00.
Thistariffitemreadsasfollows:
Goods,notincludingconveyances,containersorbaggageofTariffitemNo.9801.10.00or9801.20.00,9801.10.30
oraccredited9801.20.00,orofChapter89(exceptwhenimportedforthepurposeofrepair,overhaul,alteration,
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adjustment,storage,displayatanexhibitionofsimilarmanufacturers,racing,testing,certificationbyanaccredited
organization,ortobeemployedintheproductionoffilmsorcommercials,orinresponsetoanemergencyor
emergencyresponsetrainingexercise,orforintransitmovementthroughCanada,orasacommercialsample,or
whenimportedbynonresidentteamsorathletes,ortheirsupportpersonnel,fortheiruseinprofessionalor
organizedamateursportsactivities,orwhenimportedbynonresidentsfortheiruseinprovidingliveentertainment
suchasaquaticdisplays),whenimportedonatemporarybasis,onconditionthat
(a)thegoodsarenotsoldorfurthermanufacturedorprocessedinCanada
(a.1)thegoodsarenotleasedexceptwhereimportedforuse
(i)inanemergencyoremergencyresponsetrainingexercise,
(ii)onloanpendingdeliveryofnewmachineryorequipmentonorder,or
(iii)astemporaryreplacementsformachinesorotherequipmentpreviouslyaccountedforandundergoingrepairs
Temporarily(cont.2)
Bookmarkthis
b)theuseofthegoodsisspecifiedbytheimporteratthetimeofreportingofthegoodsundertheCustomsAct,that
useisnotlimitedorrestrictedbyregulation,andthegoodsarereleasedforthatspecifieduse
c)thegoodsareimportedinnogreaterquantitythanisreasonable,intheviewoftheMinisterofPublicSafetyand
EmergencyPreparednessoradesignatedcustomsofficer,fortheusespecifiedunderparagraph(b)
d)thegoodsareaccompanied,inprescribedcircumstances,byprescribeddocumentsandbysecurityofanature
andinanamountsatisfactorytotheMinisterofPublicSafetyandEmergencyPreparednessoradesignated
customsofficer,unlessotherwiseprovidedbyregulation
e)thegoodsarenotdivertedtoausethatislimitedorrestrictedbyregulation,ortoausethatwouldprecludethe
goodsfrombeingclassifiedunderthistariffitemand,
f)withineighteenmonthsofthedateofthereportingofthegoodsundertheCustomsActorwithinanyotherperiod
prescribedforthosegoods,thegoodsare:
(i)exportedfromCanadaandevidence,satisfactorytotheMinisterofPublicSafetyandEmergencyPreparedness
oradesignatedcustomsofficer,oftheexportationisprovidedtotheMinisterofPublicSafetyandEmergency
Preparednessorthedesignatedcustomsofficer,
(ii)destroyedandthedestructioniscertifiedbyacustomsofficerorbyanotherpersondesignatedbytheMinisterof
PublicSafetyandEmergencyPreparedness,or
(iii)consumedorexpendedunderprescribedcircumstances.
Temporarily(cont.3)
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GoodsthataretemporarilyimportedandsubjecttoOtherGovernmentDepartment(OGD)requirementscannotbe
releasedbyCBSAuntilallnecessaryinspectionsarecompletedandanyrequireddocuments,permits,or
certificatesareproduced.
TheTemporaryImportation(TariffItemNo.9993.00.00)Regulationsconsolidateintoonedocumentall
requirementsforthetemporaryimportationofgoods,includingsecurityrequirements,theperiodoftimethat
temporarilyimportedgoodsmayremaininCanada,andthewaiverofdocumentationrequirements.
Termporarilyimportedgoodsmustfirstbeclassifiedunderaniteminchapters1to97beforeChapter99canbe
considered.ThedutyrateofthegoodswhenclassifiedinaniteminChapters1to97,andtheamountofGSTthat
mayhavetobepaid,willinfluencethetypeofdocumentationused.
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Topic2:SecurityRequirements
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Toensurethatgoodstemporarilyimportedaresubsequentlyexported,CBSAusuallyrequiresadepositinan
amountthatdoesnotexceedthedutyandtheGSTthatwouldotherwisebepayable.Thesecuritymaybeinthe
formofcash,certifiedcheque,orbondacceptabletoCBSA.Certifiedchequestenderedassecuritydepositsmust
beinCanadianfunds,andmadepayabletotheReceiverGeneralforCanada.Themaximumamountofsecurity
thatisrequiredisequaltotheamountofdutiesandtaxesthatwouldbepayableifthegoodsremaininCanada.
Securityisnotrequiredinthefollowinginstances:
wherethegoodsare"originating"underthetermsoftheNAFTA,theCCFTA,ortheCCRFTA,anda
CertificateofOriginispresented
wherethegoodswillbedisplayedordemonstratedataconventionorexhibitionheldinCanadabyanylevel
ofgovernmentofCanadaorofaforeignstate
wherethereisevidencethatthegoodswillbeexported
wheretheapplicablecustomsdutiesareequaltoorlessthan$100CDNor
wherethegoodsarecommercialsamplesoradvertisingfilmsimportedfromtheUnitedStates,Mexico,Chile
orCostaRica.
Topic3:GST/HST
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Onceithasbeendeterminedthatgoodsareindeedeligibleforimportationunder9993.00.00,thenextstepisto
decidewhetherornottaxispayable.
Goodstemporarilyimportedmaybe:
subjecttofullGST/HST
entitledtopartialreliefoftheGST/HSTata1/60thrateor
entitledtoreliefoftheGST/HSTinfull.
AppendixAofD811providesatabletoassistindeterminingwhetherornotthegoodsbeingtemporarilyimported
areeligibleforanyGST/HSTrelief.Forexample,academicregaliaareallowed1/60thGST/HSTreliefandanimals
areentitledtofullGST/HSTrelief.Ifthegoodsarenotlistedonthetable,theyarelikelysubjecttofullGSTorHST.
The"maximumperiodofimportation"referredtoinAppendixAisthemaximumperiodoftimeforGSTrelief.Ifthis
perioddiffersfromtheperiodoftemporaryimportation,theshortertimeframewilltakeprecedence.
Lesson1Summary:TemporaryImportations
Bookmarkthis
Inthislessonyoulearnedabouttheclassificationoftemporaryimportsusingtariffitem9993.00.00.
ingeneral,allgoodsbeingtemporarilyimported,aslongastheyarenotbeingimportedforsale,lease,further
manufacturingorprocessing,willqualifyfordutyfreeentryundertariffitem9993.00.00
goodstemporarilyimportedaresubjecttothesameOGDrequirementsasgoodsconsumedorexpendedin
Canada,andwillnotbereleaseduntilallnecessaryinspectionsarecompletedandanyrequireddocuments,
permits,orcertificatesareproduced
goodseligibleforentryunderanyofthechapter99classifications,includingtariffitem9993.00.00,are
actuallysubjecttotwotariffdeterminations
goodsmustfirstbeclassifiedunderatariffiteminchapters1to97beforechapter99canbeconsidered
toensurethatgoodstemporarilyimportedaresubsequentlyexported,CBSAmayrequireadepositinan
amountnotexceedingtheduties,includingtheGST,otherwisepayableand
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goodstemporarilyimportedmaybesubjecttoGST/HST,entitledtopartialreliefofGST/HSTata1/60thrate,
orentitledtofullGST/HSTrelief.
Nowtakeafewminutesandanswerthefollowingquestionstoseehowmuchyouhavelearnedabout
temporaryimports.
Questions:
Attemptsallowed:
Available:
Passrate:
8
Unlimited
Always
60%
Allowed
manytimesasyouwish.
Startquiz
Lesson2:DocumentationRequirements
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Inthislesson,youwillbeintroducedtoformE29BandanA.T.A.Carnet.Youwillalsobeprovidedwithan
explanationoftheproceduresinvolvedwhenexportinggoodsthathavebeentemporarilyimported.
Rationale
AsaCCS,youwillneedtodetermineifgoodsarebeingtemporarilyimportedandyoumustbeawareofthe
processesrequiredtoensurethegoodsareproperlyreleasedandcontinuetotheirdestination.Youmayalsohave
toadviseyourclientofthecorrectexportproceduresorpresentdocumentationtoCBSAsothattheyareawarethat
thegoodshaveleftCanada.
LessonObjective
Attheendofthislesson,youwillbefamiliarwiththenecessaryformsusedtodocumentgoodstemporarily
imported,inparticulartheE29BandtheA.T.A.Carnet.Youwillalsounderstandwhatisrequiredtoexportgoods
thathavebeenimportedtemporarily.
Topic1:Forms
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GoodstemporarilyimportedmaybedocumentedonanE29B,aB3,bothaB3andanE29B,oranA.T.A.Carnet.
ThefollowingtableoutlinestheusualdocumentationrequirementsbasedonGST/HSTtreatmentandwhetherthe
goodsaredutyfreeornot,whenclassifiedinChapters1to97oftheCustomsTariff.Tariffcode9993isusedon
theB3toindicatedutyrelief.IfCBSAhasnotrequestedasecuritydeposit,theirautomatedsystemwillensurethat
dutiesarecollectedifthegoodsarenotexported.
Goods
GST/HSTFully
Relieved
GST/HSTPartially
GST/HSTFully
Payable
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Relieved
Dutyfreewhenclassifiedinchapters197of
theCustomsTariff
E29BorCarnet
B3
B3
Dutiablewhenclassifiedinchapters197ofthe
E29BorCarnet
CustomsTariff
B3
E29BorCarnet,
andB3
GoodsenteringtemporarilywillnotbereleaseduntilCBSAdeterminesthatthegoodsareeligiblefortemporary
importation,thatarrangementsforsecurityhavebeenmade,andthatformE29B,whenrequired,hasbeenproperly
completed.TheE29BnumberisassignedbyCBSA.
Topic2:TemporaryImportationPermitFormE29B
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AlthoughtheformE29Bcanbecompletedonline,anE29BcannotbesubmittedtoCBSAelectronically.The
followingisastepbystepguidetocompletingthedocument.Iftheformiscompletedbyhand,itmustbesubmitted
onlegalsizepaper.Iftheformiscompletedelectronically,itmaybesubmittedonlettersizedpaper.
Field1
Indicatethename,fulladdress,andtelephonenumberoftheimporter.
Field2
Ifacustomsbrokerorotherindividualisactingonbehalfoftheimporter,indicatethename,fulladdress,and
telephonenumberofthebrokerortherepresentative.
Field3
IndicatethefulladdressoftheplacetowhichthegoodsarebeingshippedinCanada.
Field4
NottobecompletedbyCBSA.Brokersuseonly.Thisisusedbythecustomsbrokerfortheirowninternal
referencenumber.
Field5
IndicatehowthegoodswillbeusedwhileinCanada.
Field6
Thisfieldisusedtoindicatethespecificheading(e.g.,9831)orDMemorandum(e.g.,D322)thatprovides
authorityforthetemporaryimportation.Whereapplicable,indicatetheremissionorderorregulationthatprovides
GST/HSTreliefforthetemporaryimportation(e.g.853606or32089Z1663).Thesenumbersarefoundunder
SpecialAuthorityCodeintheGoodsandServicesTaxRelieftableinAppendixAofD811.
(cont.2)
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Field7a
Indicatethequantityofeacharticleimported.
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Field7b
Indicatethegrossandnetweightofeachtypeofarticleimported.
Field8
Describeindetailthegoodsbeingimported,includingalltradenames,modelnumbers,andserialnumbers.
Field9
Indicatetheclassificationnumber,accordingtotheCustomsTariff(chapters197),underwhicheachofthegoods
arebeingimportedintoCanada.
Field10
Indicatethevalueofthegoods,inCanadianfunds,towhichtherateofdutyspecifiedintheCustomsTariffwillbe
applied.
Field11
Indicatetheapplicabletarifftreatmentcode.
Field12
Indicatetheapplicablerateofdutyforthegoodsbeingimported.
Field13
Indicatetheamountofdutypayable.
Field14
Ifapplicable,indicatetheamountofexcisetaxpayable.
Field15
Indicatethetotalvalueforduty(field10),customsduties(field13),andexcisetax(field14).GSTorHSTis
calculatedonthisamount.
(cont.3)
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Field16
Dependingontheauthorityusedinfield6oftheE29Btotemporarilyimportthegoods,GSTorHSTwillbeeither:
a)fullyremittedandindicatedinfield16oftheE29Bonlytocalculatethedepositrequiredor
b)payableandaccountedforandcollectedonformB3(thetransactionnumberwillberecordedinfield23ofthe
E29Bforauditpurposes).Forthoseimporters/brokerswhohavepostedsecurityforthereleaseofgoodspriorto
paymentofduties,areleaseonminimumdocumentation(RMD)packagemaybepresentedwiththeE29B.When
fullGSTorGSTonaproportionatebasis(i.e.1/60th)iscollected,field16oftheE29Bshouldbeleftblank.The
depositrequiredinthiscaseshouldbecalculatedbasedonthecustomsduties(field13)andexcisetax(field14)
only.
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Field17
Enterthetotalamountsofcustomsduties(field13),excisetax(field14),andGST/HST(field16)payableonall
goodslistedontheE29B.
Field18
Signatureblockfortheimporterorbroker.MarkanXintheappropriateboxtoindicateifthesignatureisthatofthe
importerorbroker.
Field19
EachE29BisassignedapermitnumberbytheCBSA.EachCBSAofficehastwosetsoftheirownnumbers.One
setindicatescashwasusedassecurityandtheotherindicatessuretywasused.Showthehandwrittennumber
assignedbyCBSAtotheE29B.
Field20
Indicatethelastdayoftheintendedperiodoftemporaryimportationofthegoods.
Field21
Ifthetimelimitshowninfield20hasbeenextended,indicatethenewexpirydate.Thissupersedesthedateshown
infield20.
Field22
Indicatethecargocontrolnumberasshownonthecargocontroldocumentrelatingtothegoodsimportedinto
Canada.
Field23
IndicatethetransactionnumberoftheB3usedtocollectGST/HST,ifapplicable.
Field24
Indicatethefullnameandaddressofthepartytowhichanyrefundofthesecuritydepositistobemade.
(cont.4)
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Field25
Ifsecurityhasbeendeposited,indicate:
a)thedollarvalueofthedeposit,inCanadianfunds.Ifrequired,theamountshouldbedeterminedbymultiplying
theU.S.fundsthathavebeentenderedbytheexchangerateforthatday
b)anXintheappropriateboxtoindicatethetypeofsecuritydepositedand
c)thebondnumber,ifabondhasbeendepositedassecurity.
Field26
Spaceisprovidedhereforacustomsofficestampindicatingthedateonwhichthegoodswereimportedinto
Canada.
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Field27
SignatureofborderservicesofficerallowingreleaseofthegoodsintoCanada.Eachofthefivecopiesmustbe
signed.
Fields2834
CBSAuseonly.
Field3537
Notusedatthistime.
Field38
Spaceisprovidedhereforacustomsofficestampindicatingthedateonwhichthegoodswereexported,dutypaid,
destroyed,orabandoned.
Field39
SignatureofborderservicesofficerconfirmingcancellationoftheE29B.
Field40
Spaceisprovidedhereforanyremarkstheborderservicesofficermaywishtomakewithrespecttothe
cancellationoftheE29B.
FurtherdetailsonE29BscanbefoundinD814.
Topic3:ExportProcedures
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AnE29Biscancelledandanyapplicablemoniesrefundedwhenthegoodshavebeenexportedwithintheproper
timeframe.Thegoods,togetherwiththeimporter'scopyandimporter'sreceiptcopyoftheE29B,mustbe
presentedtoCBSAforverificationandcancellationattheCBSAofficeateithertheportofexitorataninlandCBSA
officeforgoodsthataretravelinginbond.
AttheCBSAofficewherethegoodsarereportedforexport,thegoodswillbeexaminedandcomparedwiththe
goodslistedontheE29B.IftheofficerissatisfiedthatthegoodsbeingexportedarethosecoveredbytheE29B,
theofficercancelstheE29Bbycompletingtheappropriatefieldsoftheimporter'scopyandimporter'sreceiptcopy,
andsignsanddatestampstheE29B.Thecancelledimporter'sreceiptcopyisreturnedtotheimporterorcustoms
broker,andtheimporter'scopyisforwardedtotheCBSAofficethatinitiallyacceptedandprocessedtheE29B.
IfallthegoodscoveredbyanE29Barenotexportedatthesametime,detailsofeachpartialexportationaretobe
notedattheCBSAofficeofexitontheimporter'sandimporter'sreceiptcopiesoftheE29B.Aphotocopyorcertified
truecopyofthedulynotedimporter'scopyisforwardedtotheCBSAofficethatinitiallyacceptedandprocessedthe
E29B.Theoriginalimporter'scopyandimporter'sreceiptcopyarereturnedtotheimporterorcustomsbroker.
Topic4:DutyPaidGoods
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IfgoodsthathavebeentemporarilyimportedaretoremaininCanada,forexample,iftheyhavebeensoldor
leased,oriftheynolongerqualifyforGST/HSTrelief,aproperlycompletedaccountingdocumentshouldbe
presentedtoCBSAimmediately.Theaccountingdocument,mostoftenaB3,cancelstheE29Bandallowsthe
goodstoremaininCanada.
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TheN3,andanysupportingdocumentation,mustbeaccompaniedbyallcopiesoftheE29B.Thedatefor
determiningthevalueforduty,theclassificationnumberandtherateofdutyforgoodsremaininginCanadaisthe
datethegoodsenteredCanada.
BecausetheE29BandtheB3arecompared,itiscriticalthatbothdocumentsbepresentedtogether.CBSAmust
beconvincedtheB3agreeswiththeE29B,matchingvalues,pieces,descriptionsetc.IftheB3andE29Bare
comparable,theE29Bwillbeclosed.
Wherecashorcertifiedchequewasusedassecurity,andthedepositisequaltoorexceedstheamountofduties
payable,anymoneyinexcessoftheamountpayableisreturnedtothepartyindicatedinfield24oftheE29B.
Wherethedepositislessthanthedutiespayable,thedifferencemustbepaidtoCBSA.Onceithasbeenpaid,
CBSAwillissueaK21CashReceiptandthepermitwillbecancelled.However,therequirementtopayduties
immediatelyiswaivediftheimporterorcustomsbrokerhaspostedreleasepriortopaymentsecurityandis
authorizedformonthlypayment.
Topic5:A.T.A.Carnet
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AnA.T.A.(AdmissionTemporaireTemporaryAdmission)Carnetisaninternationalcustomsdocumentdesigned
tosimplifyandstreamlinetemporaryimportationprocedures.Carnetsareparticularlyusefulforgoodsthatwillbe
temporarilyimportedintomorethanonecountryduringtheperiodofvalidityofthecarnet.
Mostarticlesqualifyingforatemporaryimportationmaybedocumentedonacarnet.Someexceptionsareleased
goods,productsimportedforadditionalprocessingorrepair,andgoodssuchasplants,food,andother
consumableitemsthatmaybegivenaway,disposedof,orconsumed.Aswell,sinceacarnet,itself,isaguarantee
thatdutywillbepaidshouldthegoodsnotbeexported,securityisnotrequired.
Thecarnetservestwopurposes:
itactsasthedocumentationforgoodsbeingimportedtemporarily,and
itprovidesaguaranteeforduties,shouldthegoodsnotbeexported.
CarnetsarenotissuedbytheCBSAorcustomsintheexportingcountrytheCanadianChamberofCommerceor
theChamberofCommerceinthecountryofexportgenerallyissuesthem.Carnetsarevalidforoneyearfromthe
dateofissue.Acarnetwillnotbeacceptedafteritsexpirydate.Ifthegoodsarenotexportedbeforetheexpiry
date,dutyandtaxeswillapply.ForfurtherinformationonA.T.A.Carnets,seeD817.
Lesson2Summary:TemporaryImportations
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Inthislessonyoulearnedabouttheformsusedtodocumentgoodstemporarilyimported.
thetaxstatusofthegoodsatthetimeoftemporaryimportationGST/HSTnotpayable,partlypayable,or
fullypayablewilldetermineifanE29B,aB3,orboth,isused
goodstemporarilyimportedmaybedocumentedonanE29B,aB3,bothaB3andanE29B,oranA.T.A.
Carnet
goodsenteringtemporarilywillnotbereleaseduntilCBSAdeterminesthatthegoodsareeligiblefor
temporaryimportation
onceanE29Biscancelledinthepropertimeframe,anyapplicablemonieswillberefunded
goodsoriginallytemporarilyimportedthatarenotexportedmustbeaccountedforanddutypaidimmediately
A.T.A.Carnetsareinternationalcustomsdocumentsusedtosimplifyandstreamlinecustomstemporaryentry
procedures
A.T.A.Carnetscanreplacetemporaryentrydocuments
A.T.A.Carnetsareusedforgoodstravellingtomorethanonecountryand
A.T.A.Carnetsprovideaguaranteeforduties,shouldthegoodsnotbeexported.
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Nowtakeafewminutestoseewhatyouhavelearnedaboutthedocumentationrequirementsfortemporary
importations.
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Lesson3:CommercialSamples
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Inthislesson,commercialsampleswillbediscussed.Hereyouwillseethatcertainimportersareentitledtoduty
andGSTreliefoncommercialsamples,thatundersomecircumstancessecuritymustbeposted,andthatspecial
treatmentisaccordedtocommercialsamplesthatareimportedfromaNAFTAcountry,Chile,Colombia,Costa
Rica,Honduras,Korea,PanamaorPeru.
Rationale
AsaCCS,youmayhavetoanswerquestionsfromaclientwantingtoknowiftheyhavetopaydutyandGSTon
commercialsamples.
LessonObjective
Attheendofthislesson,youwillhavelearnedaboutthetemporaryimportationofcommercialsamples.Youwill
knowhowdutyandGSTaretreatedandanysecuritythatisrequired.Youwillalsounderstandhowcommercial
samplesfromaNAFTAcountry,Chile,Colombia,CostaRica,Honduras,Korea,PanamaorPeruaretreated.
Topic1:CommercialSamples
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Commercialsamplesare:
anygoodsthatarerepresentativeofaparticularcategoryofgoodsproducedoutsideCanadaandthatare
importedsolelyforthepurposeofbeingexhibitedordemonstratedtosolicitordersforsimilargoodstobe
suppliedfromoutsideCanada,and
anyfilms,charts,projectorsandscalemodels,andsimilaritems,importedsolelyforthepurposeofillustrating
aparticularcategoryofgoodsproducedoutsideCanadatosolicitordersforsimilargoodstobesuppliedfrom
outsideCanada.
Topic2:ReliefofDutyandGST/HST
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GoodsthatqualifyascommercialsamplesmaybeimportedtemporarilywithfullreliefofdutyandGST/HST.Tariff
item9993.00.00isusedtorelievetheduty.
ReliefofdutyandGST/HSTisgranted:
a)whentheimporter:
isanonresidentofCanada,oraresidentofCanadawhoisanemployeeoragentofaforeignsupplier,acting
onbehalfoftheforeignsupplierandnegotiatessalescontractsonlyinthenameoftheforeignsupplier
maintainsownershipofthegoodswhiletheyareinCanadaand
b)whenthevalueexceeds$1,000.00CDNandtheimporter:
stateswhereheintendstoexhibitordemonstratethesample
canprovethegoodsareatthestatedlocation
maintainsrecordsofthecommercialsamples
ensuresthecommercialsamplewillnotbeexhibitedordemonstratedinCanadabyanyoneotherthan
himself
ensuresthesampleswillnotbesuppliedfromwithinCanadaand
ensuresthesampleswillbeexportedfromCanadawithinoneyearofthedateofimportation.
Topic3:SecurityforCommercialSamples
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IfthecommercialsamplesarenotdocumentedonanA.T.A.Carnet,CBSAmayrequestsecurityfordutyand/or
GST/HST.Securitymaybepostedintheformofcash,certifiedcheque,atransferablebondissuedbythe
GovernmentofCanada,orabondinaformthatissatisfactorytotheMinisterofNationalRevenue.
Topic4:CommercialSamplesImportedfroma
NAFTACountry,Chile,Colombia,CostaRica,
Honduras,Korea,Panama,orPeru
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CommercialsamplesimportedfromaNAFTAcountry,Chile,Colombia,CostaRica,Honduras,Korea,Panamaor
Perumaybeenteredundertariffitem9990.00.00,afterfirstbeingclassifiedunderatariffitembetweenchapters1
and97.
Tariffitem9990.00.00isreproducedbelow:
Commercialsamplesimportedfromoneofthecountrieslistedbelow,regardlessofthecountryoforiginortariff
treatment,solelyforthesolicitationofordersforgoodsorservicesprovidedfromacountryotherthanCanada,and
(i)havingavalue,individuallyorintheaggregateasshipped,ofnotmorethanoneUnitedStatesdollarorthe
equivalentamountinCanadiancurrencyorthecurrencyofthecountryfromwhichitwasimported,or
(ii)thataresomarked,torn,perforatedorotherwisetreatedthattheyareunsuitableforsaleorforuseexceptas
commercialsamples,onconditionthatanypersonauthorizedtoaccountforthecommercialsamplesinaccordance
withtheCustomsActshallsubmit:
(a)aninvoice,billofladingorwrittenstatementfromtheforeignsupplierofthesamplesindicatingtheirvalueand
(b)anydocumentationestablishingthattheimporterisarepresentativeoftheforeignsupplier,orisactingonbehalf
ofsucharepresentative.
Countries:
Chile
Colombia
CostaRica
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Honduras
Korea
Mexico
Panama
Peru
UnitedStates
Notethatneitherthecountryoforiginnortarifftreatmentofthegoodsistakenintoaccountwhenusingthis
classification.
FormB3isusedtodocumentthesecommercialsamples.Boththetendigitclassificationnumberfromchapters1
97and"9990"willbenotedontheB3.OrderinCouncil762984isalsonotedontheB3ifthegoodsareentitledto
reliefofGST/HST,oranyothertax.
Lesson3Summary:CommercialSamples
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Inthislessonyoulearnedaboutcommercialsamples.YoureadaboutdutyandGST/HSTreliefandthesecurity
thatmayhavetobepostedforcommercialsamples,andlearnedthatcommercialsamplesfromChile,CostaRica,
Colombia,Honduras,Korea,Panama,PeruandNAFTAcountriesaretreateddifferentlythancommercialsamples
fromothercountries.
commercialsamplesaregoodsimportedsolelyforthepurposeofbeingexhibitedordemonstratedtosolicit
ordersforsimilargoodstobesuppliedfromoutsideCanada
tariffitem9993.00.00appliestocommercialsamples
reliefofdutyandGST/HSTisgrantedwhentheimporterofcommercialsamplesisanonresidentofCanada
reliefofdutyandGST/HSTisgrantedtoaresidentofCanadawho:isanemployeeoragentofaforeign
supplier,actsonbehalfoftheforeignsupplierandnegotiatessalescontractsonlyinthenameoftheforeign
supplier
securitymaybepostedintheformofcash,certifiedcheque,atransferablebondissuedbytheGovernmentof
Canada,orabondinaformthatissatisfactorytotheMinisterofNationalRevenueand
tariffitem9990.00.00appliestocommercialsamplesimportedfromaNAFTAcountry,Chile,Colombia,Costa
Rica,Honduras,Korea,PanamaorPeru.
Takeafewminutestoseewhatyouhavelearnedaboutcommercialsamples.
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Lesson4:DisplayGoodsataPublicExhibitionor
Convention
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Inthislesson,youwilllearnabouttheproceduresforgoodsbeingimportedtemporarilyforpublicexhibitions,
meetings,tradeshows,orconventions.
Rationale
WhilegoodsbroughtintoCanadafordisplayareoftenhandledbyasinglecustomsbrokertheshowbrokeryou
maybeaskedtohandletheimportationofgoodsfordisplayatanexhibitionoraconvention.AsaCCS,youwill
needtoknowwhattheproceduresareforimportingthesegoods,howlongtheycanstayinCanada,andwhether
ornotGST/HSTispaid.
LessonObjective
Attheendofthislesson,youwillbeawareofthedefinitionofdisplaygoods,howlongdisplaygoodsmayremainin
Canada,andhowCBSAhasstreamlinedborderproceduresfordisplaygoods.
Topic1:DisplayGoods
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Displaygoodsareproductsbeingimportedtemporarilytobeshownatconventions,tradeshowsorpublic
exhibitions.Theseitemsareimportedfordisplayateventswherethegoodsofvariousmanufacturerswillbe
displayed.Includedaretheproductsondisplay,aswellasitemsthatformpartofthedisplaysuchasbooths,
tables,carpeting,andotherdecorativeitems.Allareclassifiedundertariffitem9993.00.00.
Displaygoodsmaybetemporarilyimportedforamaximumperiodof18consecutivemonthshowever,theyare
onlygrantedsixmonthsofGST/HSTrelief(withnopossibilityofextension).Displaygoodsarenontaxablewhen
importedtemporarilyaspersection1ofScheduleVIItotheExciseTaxAct.FormE29BoranA.T.A.Carnetmay
beusedtodocumenttheirentry.
Althoughashowbrokermaybedesignatedtohandletheentryofalldisplaygoods,eachexhibitormayusehisown
brokerifhewishes.
Topic2:StreamlinedBorderProcedures
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CBSAhasstreamlinedborderproceduresinordertomakeiteasyforthoseoutsideCanadatoholdconventions,
meetings,tradeshows,andexhibitionsinCanada.Oncethesitehasbeenestablished,thefirststepistoprovide
CBSAwiththelocationoftheevent.Thefollowingdetailsshouldbeprovided:
whenandwherethemeetingwilltakeplace
howmanyparticipants,bothCanadianandforeign,areexpected
whowillbeonsiteandresponsibleforprocessingthenecessaryCBSAdocumentswhenthegoodsarrive
thiscouldbeanemployee,acustomsbroker,oradelegated(unpaid)representative
alistofgoodsthatwilllikelybebroughtintoCanada,theiroriginandintendeduse,aswellasdetailsonwhen,
whereandhowtheywillbearriving
ifanyprohibitedorcontrolledgoodswillbepartoftheshipment
arequestforthegoodstobeconsideredfortheForeignOrganizationsRemissionOrderoranyother
remissionprovisions(iftheyapply)and
arequestthattheeventbeconsideredforonsite/bordertoshowclearanceprivileges,thatis,thatthegoods
beallowedtotravelinbondforcustomsclearanceattheirdestination.
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CBSAinturnwilladvise:
thetariffclassificationofthegoodslistedthataredestinedforCanada
ifanysecuritydepositsarerequired
iftheeventwillbegrantedonsitecustomsclearanceprivilegesand
anyfederalgovernmentrequirementsfortheevent.
CBSAwillprovidealetterofrecognitiontotheeventorganizer.Thislettershould:
accompanyeachshipmentofgoodstotheevent
beprovidedtotheeventscustomsbrokerand
becarriedacrosstheborderbyeachexhibitor,delegate,andspeakercomingtotheevent.
Theletterofrecognitiondoesnotwaiverequirementsforotherdocumentsthatmaybenecessaryatthetimeof
entry.
Topic2:StreamlinedBorderProcedures(cont.2)
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IftheforeignorganizationholdingtheeventinCanadaqualifiesasaforeignorganization,certaingoodsmaybe
allowedentryonadutyfreebasisundertariffitem9830.00.00.Aforeignorganizationisacorporationwhosehead
officeisoutsideCanada(butnotaCanadianbranchofthatcorporation)oranunincorporatedassociationwhose
membershipistotallyforeign.Althoughallgoodsmustbereportedattimeofimport,apartiallistofgoodsthatmay
beimporteddutyfreefollows:
bannersandflags
papers
stationery,paperclips,pens,pencils,andsimilaritems
identificationbadges
lapelbuttons,Tshirts,mugs,jewelryandothersouvenirsand
officialparaphernalia.
Generally,mostgoodsbeingimportedtemporarilybyaforeignornonforeignorganizationwillqualifyfordutyand
taxfreeentryaslongasthegoodsarenotbeingimportedforsale,lease,furthermanufacturing,orprocessing.
AcceptabledocumentationforthetemporaryimportationofgoodscanincludeaB3,anE29B,anA.T.A.Carnetora
TaiwanCarnet.ATaiwanCarnetissimplyacarnetthatisdesignedtosimplifyandstreamlinecustomstemporary
importationproceduresbetweenCanadaandTaiwan.
Topic2:StreamlinedBorderProcedures(cont.3)
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GoodsbroughtintoCanadatobesoldatanyeventmustbedutyandtaxpaidatthetimeofimportation.Dutypaid
onunsoldgoodsthatareexportedareeligibleforarefund.
ShouldCBSArequireasecuritydeposit,thecustomsbroker'ssecuritycanbeusedorsecuritycanbepostedbythe
importer.Ifnotpostedbyacustomsbroker,securitycanbepostedusingcash,acertifiedcheque,asuretybond,or
atransferablebondissuedbytheGovernmentofCanada.
Unlesstheeventhasbeenauthorizedforonsiteclearance,thegoodsmustclearattheborderorinlandata
sufferancewarehouse.Ifthegoodsareapprovedforonsiteclearanceeitherattheshoworatacustomsbonded
warehousethegoodscanbeshippeddirectlytotheeventsite.CBSAwillhaveanofficeronsitetoreview
documentationandperformanynecessaryexaminations.
Goodscanalsobereleasedatacustomsbondedwarehouse.Byusingabondedwarehouse,thepaymentof
customsduties,countervailingduties,antidumpingduties,andexcisedutiesandtaxesincludingtheGST/HSTcan
bedeferreduntilthegoodsareremovedfromthewarehouseandenteredintotheCanadianmarkettobe
consumedorexpended.Whenusingthisoption,theeventmustbeheldatasitethathasbeenlicensedasa
bondedwarehouse.
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Lesson4Summary:DisplayGoodsataPublic
ExhibitionorConvention
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Inthislessonyoulearnedabouthowdisplaygoodsaretreatedwhentheyareimportedtemporarilyforapublic
exhibitionorconvention.Youalsostudiedtheproceduresforgoodsbeingimportedbyforeignorganizationsfor
conventions,meetingsandtradeshows.
displaygoodsarethosethatareimportedtemporarilytobeshownataconventionorpublicexhibitionat
whichthegoodsofvariousmanufacturerswillbedisplayed
displaygoodsincludeitemsthatformpartofthedisplaysuchasbooths,tables,carpeting,andother
decorativeitems
displaygoodsmaybetemporarilyimportedforamaximumperiodofeighteenmonths
displaygoods,importedtemporarily,aregrantedsixmonthsofGST/HSTrelief
displaygoodsareclassifiedundertariffitem9993.00.00
formE29Boracarnetmaybeusedtodocumenttheentryofdisplaygoods
CBSAhasstreamlinedborderprocedurestomakeiteasierforthoseoutsideCanadatoholdconventionsand
tradeshowsinCanada
onceCBSAhasalleventdetails,theywillprovideinformationonthetariffclassificationnumberofthedisplay
goods,anysecuritydepositsthatwillberequiredandwhetherornottheeventwillhaveonsitecustoms
clearanceprivileges
CBSAwillissuealetterofrecognitionforqualifyinggoodstotheeventorganizer
goodsbroughtintoCanadatobesoldataneventmustbedutyandtaxpaidatthetimeofimportationand
CBSAmayrequireasecuritydepositfordisplaygoods.
Takeafewminutestoseewhatyouhavelearnedaboutdisplaygoods.
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Module19Summary:TemporaryImportations
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Inthismodule,youstudiedtemporaryimportations.YouhavebeenintroducedtotheE29BandtheA.T.A.Carnet.
Youlearnedthatmosttemporaryimportationsincludingcommercialsamplesanddisplaygoodscanbeclassified
undertariffitem9993.00.00andthattaxstatusdetermineswhichdocumentmustbeused.Younowrealizethat
cancellingtemporaryimportdocumentsisjustasimportantasreleasingthegoods.
Thismodulealsocoveredthesecurityrequiredforeachtypeoftemporaryimportation.Havingthisknowledgeat
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yourfingertipswillimproveyourcustomerserviceskills,preventdutiesandtaxesfrombeingpaidunnecessarily,
andavoidhavingtocorrectdocumentationforgoodsthatshouldhavebeenimportedonatemporarybasis.
Byreviewingthismaterial,youwillbeabletoclearshipmentsoftemporarygoodsinanefficientmanner.
Nowit'stimetotestwhatyou'velearned.
Module19:Quiz
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Module20:Accounting
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Oncegoodshavebeenreportedandreleased,theymustbeaccountedfor.Accountingforimportedgoodsinvolves
submittingortransmittingtoCBSAcompleteinformationrelatingtotheimportedgoods,includingtheamountof
dutiesandtaxespayable.
ModuleObjective
Thismodulewillshowyouhowtoaccountforimportedgoods.
Lesson1:Background
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Inthislessonyouwilllearnaboutthelegislationfortheaccountingofimportedgoods,interimaccounting,andthe
differencebetweenhighvalueandlowvalueshipmentsforaccountingpurposes.
Rationale
Aftergoodshavebeenreportedandreleased,thethirdstepaccountingisperformed.AsaCCS,youmayhave
toaccountforgoodsonbehalfofaclientoryouremployer.
LessonObjective
AttheendofLesson1,youwillbeawareoftherequirementsandregulationsfortheaccountingofimportedgoods.
Topic1:Legislation
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Section32.(1)oftheCustomsActstates:
Subjecttosubsections(2)and(4)andanyregulationsmadeundersubsection(6),andtosection33,nogoods
shallbereleaseduntil
(a)theyhavebeenaccountedforbytheimporterorownerthereofintheprescribedmannerand,
wheretheyaretobeaccountedforinwriting,intheprescribedformcontainingtheprescribedinformationand
(b)alldutiesthereonhavebeenpaid.
Thissectionmeansthatunlessthereareexceptions,goodscannotbereleaseduntiltheyhavebeenaccountedfor
ANDdutieshavebeenpaid.
However,theCustomsActgoesontostatehowgoodscanbereleasedpriortothepaymentofdutiesandtaxes
theusualpracticeforcommercialgoods.
Section32.(2)states:
Inprescribedcircumstancesandunderprescribedconditions,goodsmaybereleasedpriortotheaccounting
requiredundersubsection(1)if
(a)theimporterorownerofthegoodsmakesaninterimaccountingintheprescribedmannerandformand
containingtheprescribedinformation,orintheformandcontainingtheinformationthatissatisfactorytothe
Ministeror
(b)thegoodshavebeenauthorizedbyanofficerorbyanyprescribedmeansfordeliveryto,andhavebeen
receivedat,theplaceofbusinessoftheimporter,ownerorconsigneeofthegoods.
Section32.(2)(a)indicatesthataninterimaccounting,thatis,anRMDorPARS,allowsgoodstobereleasedprior
toaccounting.TheusualconditionsforRMDandPARS,suchasthepostingofsecurity,mustbemet.
Section32.(2)(b)meansthatreleasepriortoaccountingcantakeplaceifthegoodshavebeenauthorizedfor
deliverypriortoaccounting.
Topic1:Legislation(cont.2)
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Section32.(3)states:
Ifgoodsarereleasedundersubsection(2),theyshallbeaccountedforwithintheprescribedtimeandinthe
mannerdescribedinparagraph(1)(a)by,inthecaseofgoodstowhichparagraph(2)(a)applies,thepersonwho
madetheinterimaccountingunderthatparagraphinrespectofthegoodsand,inthecaseofgoodstowhich
paragraph(2)(b)applies,bytheimporterorownerofthegoods.
Thissectionmeansthatwhengoodsarereleasedpriortoaccounting,thereisaspecifictimeframeinwhichthe
accountingmusttakeplace.Italsostatesthatinthecaseofgoodsthathavebeenreleasedusinginterim
accounting,theaccountingmustbemadebythepartythatsubmittedtheinterimaccounting.Inthecaseofgoods
thatdonotrequireaninterimaccounting,theimporterorownerofthegoodswillsubmittheaccountinginformation
toCBSA.
Section32(4)states:
Insuchcircumstances,andundersuchconditions,asmaybeprescribed,goodsimportedbycourierorasmailmay
bereleasedpriortotheaccountingrequiredundersubsection(1)andpriortothepaymentofdutiesthereon.
Thissectionallowsgoodsthatareshippedbycourierorimportedbymailtobereleasedpriortoaccountingand
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Topic1:Legislation(cont.3)
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Section32(5)states:
Wheregoodsarereleasedundersubsection(4),
(a)thepersonwhoisauthorizedunderparagraph(6)(a)orsubsection(7)toaccountforthegoodsshall,withinthe
prescribedtime,accountforthegoodsinthemannerdescribedinparagraph(1)(a)andthatpersonortheimporter
orownerofthegoodsshall,withintheprescribedtime,paydutiesonthegoods,or
(b)wherethereisnopersonauthorizedunderparagraph(6)(a)orsubsection(7)toaccountforthegoods,the
importerorownerofthegoodsshall,withintheprescribedtime,accountforthegoodsinthemannerdescribedin
paragraph(1)(a)andshall,withintheprescribedtime,paydutiesonthegoods.
Thissectionmeansthat,whengoodsshippedbycourierormailhavebeenreleasedpriortoaccountingandpriorto
thepaymentofdutiesandtaxes,thepersonauthorizedunder(6)(a)or(7)toaccountforthegoodswillaccountfor
thegoodsandpaydutiesandtaxeswithinacertaintimeframe.And,wherethereisnopersonauthorizedunder(6)
(a)or(7)toaccountforthegoods,theimporterorownerofthegoodsmustaccountforthegoodsandpayduties
andtaxeswithinacertaintimeframe.
TheAccountingforImportedGoodsandPaymentofDutiesRegulationsincludesdefinitionsthetimeframesin
whichaccountingdocumentsmustbesubmittedortransmittedtoCBSAandotherrequirements.Theseregulations
willbereferredtothroughoutthismodule.
Topic2:TimeFrames
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Forhighvalueshipments,accountingdatamustbepresentedinhardcopyortransmittedelectronically,and
acceptedbyCBSA,withinfivebusinessdaysofthedatethegoodswerereleased.Theaccountingperiodstartson
thefirstbusinessdayafterreleaseanddoesnotincludeSaturdays,Sundays,andfederalandprovincialholidays.
Accountingdataforlowvalueshipmentsmustbepresentedinhardcopyortransmittedelectronically,andaccepted
byCBSA,bythe24thdayofeachmonthfollowingthemonthinwhichthegoodswerereleased.
Inordertodeterminewhichshipmentshavebeenreleasedandwhen,ReleaseNotificationSystem(RNS)reports
shouldbereviewed.
Lesson1Summary:Background
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Lesson1outlinedthelegislationforaccountingofimportedgoods.Italsoexplainedinterimaccountingandthe
differencebetweenhighvalueandlowvalueshipmentsforaccountingpurposes.
KeypointsfromLesson1include:
accountingforimportedgoodsmeansprovidingtoCBSAcompleteinformationrelatingtotheimportedgoods,
includingtheamountofdutiesandtaxespayable
section32oftheCustomsActprovidesthelegislativerequirementtoaccountforimportedgoods.RMDand
PARSreleaserequestsareconsidered"interimaccounting"
interimaccountingallowsgoodstobereleasedpriortoaccounting
insomecases,releaseandaccountingdataareprovidedatthesametime,forexample,B3typeCorone
stepprocess
oncereleased,goodsmustbeaccountedforwithinaspecifictimeframe
forhighvalueshipments(valuedat$2,500.000CDNandover),accountingdatamustbepresentedinhard
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copyortransmittedelectronically,andacceptedbyCBSA,withinfivebusinessdaysfromthedatethegoods
werereleasedand
forlowvalueshipmentsreleasedundertheCourier/LowValueShipmentProgram(valuedat$2,499.99CDN
andless),accountingdatamustbepresentedinhardcopyortransmittedelectronically,andacceptedby
CBSA,bythe24thdayofeachmonthfollowingthemonthinwhichthegoodswerereleased.
Takeafewminutesnowtoanswerthequestionsonthefollowingscreenstoseehowmuchyouhave
learned.
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Lesson2:B3,CanadaCustomsCodingForm
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Lesson2describestheB3,CanadaCustomsCodingForm.ThisistheformthatissubmittedtoCBSAwhena
paperentryisrequired.WhenEDIisused,dataaspertheB3fieldsistransmitted.Iftheimporterwishes,boththe
releaserequestandaccountinginformationcanbesubmittedortransmittedatthesametime,usingthesameB3
format.
Rationale
AsaCCS,youshouldbeabletoidentifytheinformationthatisrequiredbyCBSAtoaccountforgoods.
LessonObjective
YouwillbeabletocompleteahardcopyB3,orsubmitB3datatoCBSA,toaccountforgoods.
Topic1:B3,CanadaCustomsCodingForm
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GoodsmaybeaccountedforbysendinganelectronictransmissionoftheaccountingdatatoCBSAover
telecommunicationlinesorbysubmittingahardcopyB3,CanadaCustomsCodingForm.TheCustomsAutomated
DataExchange(CADEX)systemisaCBSAsystemthatcanbeusedtotransmitaccountingdatatoCBSA.
Inmorethan95%ofcommercialtransactions,B3dataisprovidedtoCBSAusingEDI.
Ifaccountingdatawillbesent(transmitted)usingEDI,anypaperreleasepackagesmustnote"CADEX"sothat
CBSAknowsaccountingdatawillbetransmitted.TheCADEXnotationisplacedonthetopcopyoftheCBSA
invoicesetofahardcopyRMDpackageoronthereleaseinformationsheet(leadsheet).
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ThesameinformationthatisrequiredonthehardcopyB3isalsorequiredwhensendingdatausingEDI.
WewilldiscusseachfieldoftheB3,soyoumaywanttoprintaB3beforewestart.Youmayalsowanttoprint
AppendixHfromD17110.
Topic1:B3(cont.2)
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ThefollowingincludesadescriptionofeachfieldontheB3.Rollovereachfieldtoseeadescription.
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Topic1:B3(cont.3)
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Field1:ImporterNameandAddress
Indicatethenameandaddressoftheimporter.
Theimporteristhepartyresponsibleforthepaymentofdutiesandtaxes.Incaseswheretheforeignvendoristhe
nonresidentimporter,theimporterandvendornameswillbethesame.
No.
ThebusinessnumberisindicatedinthesmallerboxlabelledNo.containedwithinfield1.
Field2:TransactionNo.
Atransactionnumberisfourteendigitsinlengthandinbarcodedformat.Thefirstfivedigitsrepresenttheaccount
securitynumberofthepartythatrequestedthereleaseofthegoodsthenexteightdigitsrepresentanumber
assignedbyeithercustomsorthebroker/importerandfinallyacheckdigit.
Thisnumberisthesametransactionnumberthatwasusedonthereleaserequest.
Topic1:B3(cont.4)
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Field3:Type
ThereareseveraltypesofB3accountingdocumentsacompletelistisavailableinAppendixBofD17110.The
mostcommontypesaretheABandtheC.
TypeAB
Finalaccountingforgoodsthathavebeenreleased.
TypeC
Finalaccountingfor:
(a)releaseofgoodspriortothepaymentofdutiesandtaxes(ifsecurityhasbeenposted)or
(b)releaseofgoodsandpaymentofdutiesandtaxes.
TypeF
ConsolidatedentryforgoodsthatwerereleasedundertheCourier/LVSProgram.
TypeH
SupplementaryB3.Usedtovoluntarilyaccountforgoodsthathavebeenreleasedandreported,butnotaccounted
forattimeoffinalaccounting.Forexample,alinemayhavebeeninadvertentlyomittedfromtheoriginalB3
accountingdocument.
TypeV
VoluntaryB3.Usedtovoluntarilyaccountforgoodsthatweredeliveredwithouthavingbeenreleased.
Field4:OfficeNo.
Identifiesthecustomsofficewherethegoodswerereleased.Alistofthecodesforeachcustomsofficeisfoundin
AppendixHofD17110.
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Field5:GSTRegistrationNo.
Thisfieldiscompletedwhenthereisnobusinessnumbershowninfield1.
Topic1:B3(cont.5)
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Field6:PaymentCode
Ifanimporterhaspostedsecurityandthegoodshavebeenreleasedundertheaccountsecuritynumberofa
customsbroker,"I"(forimporter)isindicatedinthisfield.Inallothercasesincludingwhenanimporterhasposted
securityandusedtheirownaccountsecuritynumber,itisleftblank.
Field7:ModeofTransport
Ifgoodsarevaluedatgreaterthan$2,500.00CDNandexportedfromtheU.S.,thisfieldmustbecompleted.
ExceptionsareB3typesH,M,andV.Validcodesareasfollows:
Air1
Highway2
Rail6
Pipeline7
Air/MarineNoCarrierCode8
Marine9
Field8:PortofUnlading
Ifgoodsarevaluedatgreaterthan$2,500.00CDNandshippedbyvessel,thisfieldiscompletedwiththe
applicableportcodethatindicateswherethegoodswereunloaded.PortcodesarefoundinAppendixHofD171
10.ExceptionsareB3typesF,H,M,andV.
Field9:TotalValueforDuty
ThevalueofallgoodsinCanadiandollars.Thisfigureisroundedofftothenearestdollaranddecimalpointsare
notindicated.IftheB3hastwoormorepages,thisfieldiscompletedonlyonthefirstpage.
Field10:SubheaderNo.
ThefirstpageoftheB3willalwaysindicate"1"inthesubheadernumberfield.Ifanyoffields11,12,13,14,16,17
or18changewhilestillaccountingforgoodsreleasedunderonetransactionnumber,anewpagemustbestarted
thatwillindicatesubheader"2".Whensecond,orsubsequent,subheadersarenecessary,allfields11,12,13,14,
16,17,and18mustbecompleted.
Topic1:B3(cont.6)
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Field11:VendorName
Thenameoftheactualvendorofthegoodsisshownandthismaynotalwaysbethesamenameastheparty
shippingthegoods.Eachnewvendormustbeshownonanewsubheader.
Showthenameofthevendorortheconsignorofthegoodsasitappearsonthesupportinginvoice(s).Donot
abbreviatethename.
IfthegoodsaresoldfromtheUnitedStates,thename,threedigitstatecode,andfivedigitzipcodeofthevendor
mustbeindicated.ThesecodesarefoundinAppendixHofD17110.
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IfgoodsaresoldfromacountryotherthantheUnitedStates,butexportedfromtheUnitedStates,thenameofthe
foreignvendorisindicatedfollowedbythestatecodeandzipcodeoftheU.S.exporter.
Forexample:
GoodssoldbyNewYorkTextiles,123MainStreet,Brooklyn,NewYork,87654,andshippedfromNewYork
TextilesinBrooklyn,NewYorkwouldindicate:
NewYorkTextiles
UNY87654
GoodsaresoldbyDusseldorffMachineWorks,Dusseldorff,Germany,butshippedbytheirU.S.affiliate,
PennsylvaniaBoilers,Pittsburgh,PA,12345wouldindicate:
DusseldorfMachineWorks
UPA12345
Thevendornumberfieldcontainedwithinfield11isleftblank.
Field12:CountryofOrigin
IfthecountryoforiginofthegoodsistheUnitedStates,thethreedigitstatecodeisshown.Ifthegoodsoriginatein
acountryotherthantheUnitedStates,thetwodigitcountrycode,asperAppendixHtoD17110,isindicated.
Field13:PlaceofExport
IfthegoodsareexportedfromtheUnitedStates,thethreedigitstatecodeisshown.Ifthegoodsareexportedfrom
acountryotherthantheUnitedStates,thetwodigitcountrycode,asperAppendixHtoD17110,isindicated.
Topic1:B3(cont.7)
Bookmarkthis
Field14:TariffTreatment
AsnotedinModule8,Canadahasenteredintotradeagreementswithmanycountries.Thetarifftreatmentcode
thatreflectsthetarifftreatmentusedisnotedinthisfield,forexample:2,9,10,11,or12.Ifthetarifftreatment
changes,anewpageandnewsubheadermustbecreated.
Field15:U.S.PortofExit
ThisfieldiscompletedonthefirstpageofeachsubheaderfortypesAB,AD,C,andD,forshipmentsvaluedat
greaterthan$2,500.00CDNandexportedfromtheU.S.TheU.S.portofexitisdefinedastheU.S.Customsportat
whichornearesttowhichthelandsurfacecarriertransportingthemerchandisecrossestheborderoftheUnited
StatesintoCanada,orinthecaseofexportationbyvesselorair,theU.S.Customsportwherethemerchandiseis
loadedonthevesseloraircraftwhichistocarrythemerchandisetoCanada.Thefourdigitportofexitcodesare
listedinAppendixHofD17110.
Field16:DirectShipmentDate
ThisisthedatewhenthegoodsbegantheirjourneytoCanada.Thisdatedeterminestherateofexchangeapplied
tothegoods.IfthecurrencyshownisinCanadiandollars,thisfieldmaybeleftblank.Thedateisshownastwo
numeralsforthemonthandtwonumeralsfortheday.Forexample,August23wouldlooklikethis:2308.Ifthe
datechanges,anewsubheadermustbecreated.
Field17:CurrencyCode
Thecurrencycodeforthetypeofcurrencyshownontheinvoicemustbeindicatedinthisfield.Currencycodescan
befoundinAppendixHtoMemorandumD17110.Eachnewcurrencymustbeshownonanewsubheader.
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Field18:TimeLimit
InthecaseofgoodsthatareenteringCanadatemporarily,thelengthoftimethatthegoodswillstayinCanadais
indicatedinthisfield.ThisfieldisalsocompletedinthecaseofB3typesDandsometimes10.Type10isforgoods
enteringawarehouse.Examplesofhowthetimelimitmustbeshownare:
TimeLimit Shown
1week
1W
1month
1M
1year
1Yor12M
30days
30D
Topic1:B3(cont.8)
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Field19:Freight
Ifgoodsarevaluedatgreaterthan$2,500.00CDNandshippedfromtheU.S.,thisfieldindicates,tothenearest
dollarandinCanadianfunds,thecosttotransportthegoodsfromtheplaceofdirectshipmentintheU.S.totheir
finaldestinationinCanada.
Ifmorethanonesubheaderisinvolved,thetotalamountofthefreightmaybeshownonthefirstsubheaderpageor
eachsubheadermayshowitsownportionofthefreightcost.
Ifanindividualistransportingtheirowngoodsandnotusingacommercialcarrier,theymustindicateanestimated
freightcost.
Field20:ReleaseDate
Leftblank,exceptfortypeF.TypeFisusedtoaccountforgoodsreleasedundertheCourier/LVSsystemandis
discussedlaterinthismodule.
Field21:Line
Fields21through42arecompletedforeachlineoftariffclassificationontheB3.EachpageoftheB3canreflect
fivelinesoftariffclassification.Ifgoodswillbeaccountedforwitheightlinesofclassification,thenthelineswould
benumbered01,02,03,04,05onpage1oftheB3,and06,07,and08onthesecondpage.Linenumbersremain
consecutive,evenifthesubheaderchanges.
Field22:Description
Adescriptionofthegoodsmustbeindicatedinthisfield,aswellasanypermitnumbersorrulings.
Field23:Weight/KGM
ForallgoodsexportedfromtheU.S.byairormarineandvaluedat$2,500.00CDNormore,theweightofthe
goods,inkilograms,mustbeshown.ThisfieldcanbeleftblankforB3typesH,M,andV.
Field24:PreviousTransactionNo.
ThisfieldisonlytobecompletedontypeHentries.Htypeentriesarethosethataccountforgoodsthathavebeen
releasedandreported,butinadvertentlyomittedfromtheoriginalB3accountingdocument.Thetransactionnumber
oftheoriginalB3accountingdocumentisindicatedinthisfield.
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Topic1:B3(cont.9)
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Field25:PreviousTransactionLine
Leftblank.
Field26:SpecialAuthority
Thisfieldindicatesanyspecialauthoritynumber,suchasanOrderinCouncilthatreducesorremitstheamountof
dutyordinarilypayable.
Field27:ClassificationNo.
Indicatethetariffclassificationnumber(10digits),fromtheCustomsTariff,foreachoftheitemsincludedonthe
shipment.Decimalpointsmustbeincluded.
Field28:TariffCode
Thefirstfourdigitsofthetariffitemfromchapter99arequotedinthisfieldwhentheimportedgoodsareusedfor
thespecificpurposeoutlinedinthechapter99tariffitem.
Field29:Quantity
IfthetariffclassificationnumberthatyouareusingindicatesaunitofmeasureintheUnitofMeasurescolumnof
theCustomsTariff,thisfieldmustbecompleted.Thequantityisshownasanumeralonly.
Field30:UM(UnitofMeasure)
Theunitofmeasure,asitappearsintheCustomsTariff,isindicatedinthisfield.Metricmeasuresmustbeused.
Field31:VFDCode
Thevaluefordutycodeisatwodigitcode.ThecodeswerediscussedinModule10andarereproducedbelow:
FirstDigit
1thevendorandimporterarenotrelated
2thevendorandimporterarerelated
SecondDigit
3thepricepaid,orpayable,forthegoodswithoutadjustments
4thepricepaid,orpayable,forthegoodswithadjustments
5transactionvalueofidenticalgoods
6transactionvalueofsimilargoods
7deductivevalueofthegoods
8computedvalueofthegoods
9residualmethodofvaluation
Topic1:B3(cont.10)
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Field32:SIMACode
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TheSpecialImportMeasuresActwasdiscussedinModule11.IfthegoodsbeingimportedaresubjecttodutiesimposedundertheSpecial
ImportMeasuresAct,thisfieldmustbecompleted.ThefirstdigitofpaymentrepresentsthetypeofSIMAassessmentandtheseconddigit
isanilassessmentoramethodofpayment.
Field33:RateofCustomsDuty
TherateofdutyapplicabletotheHSclassificationnumberisindicatedinthisfield.
Wherebothpercentageandspecificdutiesapply,thepercentagerateofdutyisshownononelineandthespecific
rateofdutyisshownonthenextline.Thelinenumberisnotcompletedforthelinethatindicatesthespecificrateof
duty.
Ifanadditionalrateofdutyequivalenttotheexcisedutyapplies,thisrateofdutyisshownonthelinefollowingthe
linethatindicatestheregulardutyrate.Thelinenumberisnotcompletedforthelinethatindicatestheexciseduty.
Theformatusedtoindicatethedutyrateisshownbelow:
DutyRate Shown
DutyFree "free","0"orleaveblank
20%
20or20.00
9.2%
9.2
Field34:E.T.Rate
Unlessexcisetaxappliestotheproductbeingimported,thisfieldisnotcompleted.Ifthegoodsaresubjectto
excisetax,thentheexcisetaxrateisshownifthegoodsareexemptfromthepaymentofexcisetax,thenan
exemptioncodemustbeshown.ExciseexemptioncodesarefoundinAppendixHofD17110.
Theformatusedtoindicatetheexcisetaxisshownbelow:
ExciseTaxRate Shown
4perhundred
.04
10each
.10
44.72perlitre
.4472
$.0205/L
.0205
10%
10or10.0
Field35:RateofGST
EithertherateofGST,currently5%,oraGSTexemptioncodemustbeindicatedinthisfield.WhenGSTis
applicable,itisindicatedaseither5or5.0.GSTexemptioncodesarefoundinAppendixHofD17110.
Topic1:B3(cont.11)
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Field36:ValueforCurrencyConversion
Thevalueofthegoods,inthecurrencyindicatedontheaccompanyinginvoice,isindicatedinthisfield.Thevalue
forcurrencyconversionisshowntoamaximumoftwodecimalplaces,forexample,505.00or12876.98.
Anexamplethatwewilluseandfollowthroughwillbeformachinerythathasadutyrateof9.2%.Thevalueofthe
machineryis660,000Japaneseyen.Asaresult,field36indicates660000.00.Field17willindicateJPY.
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Field37:ValueforDuty
ThisfieldindicatesthevalueofthegoodsinCanadiandollars.Thisiscalculatedbymultiplyingthefigureinfield36
bytheexchangerateapplicabletothecurrencycodeshowninfield17.Dollarsignsandcommasarenotshownin
thisfield.
Usingourexample,theexchangerateforJapaneseyenis.01014.Since660000Japaneseyenmultipliedby
.01014equals$6,692.40Canadiandollars,field37willindicate6692.40.
Field38:CustomsDuties
Ifcustomsdutyisapplicable,thisfieldmustbecompleted.Tocalculatetheamountofdutypayable,thevaluefor
dutyfromfield37ismultipliedbytherateofduty.
Since$6,692.40multipliedby9.2%equals$615.70,field38willindicate615.70.
Field39:SIMAAssessment
Completefield39byindicatingtheamountofsurtax,provisional,antidumping,orcountervailingdutypayable.
Field40:ExciseTax
Ifexcisetaxispayable,thisfieldmustbecompleted.Wheretheexcisetaxiscalculatedasapercentage,the
amountisdeterminedbyaddingtogetherthevaluefordutyinfield37thecustomsdutyinfield38andanySIMA
assessmentinfield39.Thetotalofthesethreefiguresismultipliedbytherateofexcisetaxtodeterminethe
amountofexcisetaxpayable.
Topic1:B3(cont.12)
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Field41:ValueforTax
ThisfieldshowsthetotalofthevaluefordutyanycustomsdutiesanySIMAassessment,andexcisetax.Thisis
thefigureuponwhichGSTiscalculated.
Usingourexample,weadd6692.40(VFD)and615.70(duty)toarriveatavaluefortaxof7308.10.
Field42:GST
TheactualamountofGSTpayableisshowninthisfield.
Usingourexample,multiply7308.10(thevaluefortaxfromfield41)by5%(therateofGST)toarriveatGSTof
365.41.
Field43:Deposit
ThisfieldisonlycompletedonB3typesDandADandindicatesthedepositrequired.
Field44:WarehouseNo.
Thisfieldiscompletedwhenthegoodshavebeenenteredintoacustomsbondedwarehouse.Thelasttwodigitsof
thewarehousenumber,whichisassignedbyCBSA,areshown.
Field45:CargoControlNo.
ThisfieldiscompletedonB3typesC,D,M,AB,andADandleftblankfortypesHandV.
Thecargocontrolnumber,includingthecarriercodeasitappearsonthecargocontroldocument,isindicatedin
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thisfield.ForamultipageB3,thisfieldiscompletedonthelastpageonly.Onlyonecargocontrolnumbercanbe
shown.IfyouareincludinggoodsfrommorethanonecargocontroldocumentonasingleB3,indicateB3Binthis
field.FormB3Bisusedtoindicateallcargocontrolnumbersincludedonasingleaccountingdocument.
Topic1:B3(cont.13)
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Field46:CarrierCodeatImportation
Completedonallshipmentsvaluedatmorethan$2,500.00CDNandexportedfromtheU.S.byairormarineonly.
Onlythefourdigitcarriercodeofthecarrieronwhichthegoodswereladenatthetimeoftheirimportationinto
Canadaisrequired.Wherethereareonlythreecharactersinthecode,asinthecaseofsomeaircarriers,showthe
threecharactercodeplusahyphen.
Thetotalamountofcustomsdutiespayablefromfield38,plusanyexciseduties,isindicatedinfield47.Ifnodutyis
payable,thisfieldmayindicatezerosorbeleftblank.OnamultipageB3,thisfieldiscompletedonthelastpage
only.
Usingourexample,field47willshow615.70.
IfaSIMAassessmentispayable,thenthetotalfromallcompletedfield39sisindicated.OnamultipageB3,this
fieldiscompletedonthelastpageonly.
Field49:ExciseTax
Thisfieldiscompletedifexcisetaxispayable,otherwiseitisleftblankorshowszeros.Thetotalfromallcompleted
field40swillbeindicated.OnamultipageB3,thisfieldiscompletedonthelastpageonly.
Field50:GST
ThisfieldshowsthetotalamountofGSTpayable.Ifnoneispayable,thefieldisleftblankorreflectszeros.The
totalfromallcompletedfield42sisshown.OnamultipageB3,thisfieldiscompletedonthelastpageonly.
Usingourexample,field50willindicate365.41.
Field51:Total
Thetotalofalldutiesandtaxespayablefromfields47,48,49,and50.OnamultipageB3,thisfieldiscompleted
onthelastpageonly.
Usingourexample,thisfieldwillindicate981.11.
DeclarationField
ThenameoftheindividualpreparingtheB3isshown.Iftheindividualmakingthedeclarationisdoingsoonbehalf
ofanimporter,oronbehalfofalicensedcustomsbroker,theimporterorcustomsbroker'snamemustbeindicated.
Thisfieldmustincludeadateandsignature.
Lesson2Summary:B3,CanadaCustomsCoding
Form
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Lesson2describedthefieldsoftheB3.
Followingisashortsummaryofkeypointsfromthislesson.
theimportershownontheB3isthepartyresponsibleforthepaymentofdutiesandtaxes
thefirstfivedigitsofthetransactionnumberrepresentthesecuritynumberofthepartythatreleasedthe
goodsthenexteightdigitsrepresentanumberassignedbyeithercustomsorthebroker/importerandfinally
acheckdigit
thetransactionnumberusedontheB3accountingdocumentisthesametransactionnumberthatwasused
onthereleaserequest
B3typeHisusedtovoluntarilyaccountforgoodsthathavebeenreleasedandreported,butnotaccounted
forattimeoffinalaccounting
B3typeVisusedtovoluntarilyaccountforgoodsthatweredeliveredwithouthavingbeenreleased
thecurrencycodeshownontheB3isthecurrencycodeforthetypeofcurrencyshownontheinvoice
thetwodigitvaluefordutycodeisnotedastheVFDcodeontheB3
wherebothapercentageandspecificdutyapplies,thepercentagerateofdutyisshownononelineandthe
specificrateofdutyisshownonthenextline.Thelinenumberisnotcompletedforthelinethatindicatesthe
specificrateofduty
ifanadditionalrateofdutyequivalenttotheexcisedutyapplies,thisrateofdutyisshownonthelinefollowing
thelinethatindicatestheregulardutyrate.Thelinenumberisnotcompletedforthelinethatindicatesthe
exciseduty
eithertherateofGST,currently5%,oraGSTexemptioncodemustbeindicatedinfield35
thevaluefordutyfieldindicatesthevalueofthegoodsinCanadiandollarsand
thetotalinfield51isthetotalofalldutiesandtaxes.
TakesometimenowandanswerthefollowingquestionsabouttheB3.
Questions:
Attemptsallowed:
Available:
Passrate:
6
Unlimited
Always
60%
Allowed
manytimesasyouwish.
Startquiz
Lesson3:Courier/LowValueShipmentProgram
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InthislessonyouwilllearnhowtoaccountforgoodsthatwerereleasedundertheCourier/LowValueShipment
(LVS)Program.
Rationale
YoumayberequiredtoaccountforgoodsthatwerereleasedundertheCourier/LVSProgram.
LessonObjective
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AttheendofLesson3,youshouldbeabletodescribehowtoaccountforgoodsthatwerereleasedunderthe
Courier/LVSProgram.
Topic1:Courier/LowValueShipmentProgram
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Youwillrecallthatitemsmayberemovedfromthecourier'sconsistsheetifthegoodsdonotqualifyforrelease
undertheCourier/LVSProgramorifanofficerdeterminesthatfurtherreviewisrequired.
Onceitemsthatarelistedontheconsistsheethavebeenreleased,accountingdatamustbeprovided.The
accountingdatacanbeprovidedbytheimporter,theimporterscustomsbrokerorbythecourier,iftheyare
licensedasacustomsbrokerandanothercustomsbrokerhasnotbeendesignatedbytheimporter.
ForgoodslistedontheconsistsheetandreleasedundertheCourier/LVSProgram,accountingdatamustbe
providedtoCBSAbythe24thdayofeachmonthfollowingthemonthinwhichthegoodswerereleased.For
example,goodsreleasedonFebruary10thmustbeaccountedforbyMarch24th.
However,ifgoodsvaluedatanamountgreaterthan$2,500.00CADarereleasedinerrorundertheCourier/LVS
Program,formB3,typeV,mustbesubmittedwithinfivedaysofrelease.And,ifcontrolled,prohibited,orregulated
goodsarereleasedinerrorundertheCourier/LVSProgram,regardlessofvalue,theimporterorbrokermust
immediatelynotifyCBSAofthereleaseerrorbysubmittingformB3typeV.
GoodsthatarereleasedundertheCourier/LVSProgrammaybeaccountedforonaB3typeF.TypeFmaybe
completedinoneofthreeways:
totalconsolidation,
consolidationaccordingtoimporter,or
inagroupofspecialauthorityshipments.
Anexplanationofeachfollows.
Topic2:TotalConsolidation
Bookmarkthis
Withatotalconsolidation,thecustomsbrokerorcourierpreparesamonthlyconsolidationtoaccountforallgoods
releasedinaspecificperiodoftime.AB3typeFisprepared,withonlythefirstlineoftheB3completed.TheB3
typeFiscompletedverymuchliketheB3previouslydescribed.Onlythosefieldsthatarecompleteddifferentlywill
bedescribed.
Indicate"various"fortheimporter'sname.IfabrokerispreparingtheB3,thebroker'sbusinessnumberand
import/export(RM)accountareshowninthespaceprovidedinthesmallboxlabelled"No."infield1.
Field3:Type
IndicateF.
Leaveblank.
Field6:PaymentCode
Leaveblank.
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Indicate2.
Leaveblank.
Field11:VendorNameandNo.
Indicate"various"inthenamefieldandUNY12345onasecondlineinthenamefield,andleavethe"No."field
blank.
IndicateUNYforgoodsentitledtotarifftreatments2(MostFavouredNationTariff)10(UnitedStatesTariff)12
(MexicoUnitedStatesTariff)and13(CanadaIsraelAgreementTariff).Forallothertarifftreatments,indicatethe
countryoforigin.ShowthethreedigitalphabeticstatecodeifthecountryoforiginistheUnitedStates.Showthe
twodigitalphabeticcodeforothercountries.
(MexicoUnitedStatesTariff)and13(CanadaIsraelAgreementTariff).Forallothercountries,indicatethecountry
ofexport.ShowthethreedigitalphabeticstatecodeifthecountryofexportistheUnitedStates.Showthetwodigit
alphabeticcodeifthecountryofexportisotherthantheUnitedStates.
Topic2:TotalConsolidation(cont.2)
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Indicatethetarifftreatmentcodeforthegoods(dutiesandtaxesmustbecalculatedusingtheappropriatetariff
treatment).Eachnewtarifftreatmentmustbeshownonanewsubheader.
Indicate1001.
Leaveblank.
IndicateCAD.However,anycurrencyconversionswillhavetobecalculated.
Field18:TimeLimit
Leaveblank.
Field19:Freight
Indicate1.
Field20:ReleaseDate
Indicatethefirstdayofthecurrentmonth.
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Field21:Line
Indicate1.
Field22:Description
IndicateLVS.
Field23:WeightinKilograms
Indicate1.
Leaveblank.
Bookmarkthis
Leaveblank.
Usethedummyclassificationnumber0000.99.99.00.
Field28:TariffCode
Leaveblank.
Field29:Quantity
Showthenumberofconsolidatedshipmentsonthisline.
Field30:UnitofMeasure
Leaveblank.
Field31:ValueforDutyCode
Indicate13.
Field32:SIMACode
Indicate51iftheSIMAisapplicableotherwise,leaveblank.
Indicate1.0.However,dutiesandtaxesmustbecalculatedusingtheappropriaterate.
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Field34:ExciseTaxRate
Indicate44.0.However,excisetaxmustbecalculatedusingtheappropriaterate.
Field35:RateofGST
Indicate39.0.However,GSTmustbecalculated.
UseCAD.However,anycurrencyconversionmustbecalculated.
UseCAD.
Indicatetheamountofcustomsduty.
Field42:GST
EnterthetotalGSTpayable.
Field43:Deposit
Leaveblank.
Leaveblank.
Leaveblank.
Leaveblank.
Topic3:ConsolidationbyImporter
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Withconsolidationbyimporter,thecourierorbrokerpreparesamonthlyaccountingsummarizingthedutiesand
taxespayableforasingleimporter.OnlythosefieldsthatdifferfromastandardB3aredescribed.
Useactualbusinessnumberoftheimporter.IfacustomsbrokerispreparingtheB3,hisbusinessnumberand
import/export(RMaccount)isshowninthesmallboxlabelled"No."infield1.
Field3:Type
IndicateF.
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Leaveblank.
Field6:PaymentCode
Leaveblank.
Indicate2.
Leaveblank.
Field10:Subheadernumber
Indicate1.
Field11:VendorNameandNo.
Indicate"various"andUNY12345onasecondlineinthenamefieldandleavethe"No."fieldblank.
(MexicoUnitedStatesTariff)and13(CanadaIsraelAgreementTariff).Forallothertarifftreatments,indicatethe
countryoforigin.ShowthethreedigitalphabeticstatecodeifthecountryoforiginistheUnitedStates.Showthe
twodigitalphabeticcodeforothercountries.
Topic3:ConsolidationbyImporter(cont.2)
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(MexicoUnitedStatesTariff)and13(CanadaIsraelAgreementTariff).Forallothercountries,indicatethecountry
ofexport.ShowthethreedigitalphabeticstatecodeifthecountryofexportistheUnitedStates.Showthetwodigit
alphabeticcodeifthecountryofexportisotherthantheUnitedStates.
Indicate1001.
Leaveblank.
Field18:TimeLimit
Leaveblank.
Field19:Freight
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Indicate1.
Field20:ReleaseDate
Indicatethefirstdayofthecurrentmonth.
Field22:Description
IndicateLVS.
Field23:WeightinKilograms
Indicate1.
Leaveblank.
Leaveblank.
Bookmarkthis
Usethedummyclassificationnumber0000.99.99.00.
Field28:TariffCode
Leaveblank.
Field29:Quantity
Showthenumberofconsolidatedshipmentsonthisline.
Field30:UnitofMeasure
Leaveblank.
Indicate13.
Field32:SIMACode
Indicate51ifSIMAisapplicableotherwise,leaveblank.
Indicate1.0.However,dutymustbecalculatedusingtheappropriaterate.
Field34:ExciseTaxRate
Indicate44.0.However,excisetaxmustbecalculatedusingtheappropriaterate.
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Field35:RateofGST
Indicate39.0.However,GSTmustbecalculatedusingtheappropriaterate.
UseCAD.
Field41:ValueforTax
UseCAD.
Field42:GST
EnterthetotalGSTpayable.
Field43:Deposit
Leaveblank.
Leaveblank.
Leaveblank.
Leaveblank.
Topic4:SpecialAuthorityShipments
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ShipmentsreleasedundertheCourier/LVSProgramthatareaccountedforusingaspecialauthoritynumber,such
asanOrderinCouncil,mustbeaccountedforseparately,eitherindividuallyonatransactionbytransactionbasis
orconsolidatedbyimporter.
Multipletransactionsusingthesamespecialauthorityforanimportercanbecombinedintoonelineifthefollowing
informationisthesameforeachtransaction:
BusinessNumber(import/exportaccount),
specialauthority(OIC),
classificationnumber,
tarifftreatment,
customsdutyrate,
excisetaxrate,and
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rateofGST.
AdditionalinformationforthistypeofaccountingdocumentisavailableinAppendixJofD17110.
Lesson3Summary:Courier/LowValueShipment
Program
Bookmarkthis
Lesson3explainedhowtoaccountforgoodsthatwerereleasedundertheCourier/LVSProgram.
accountingforgoodsreleasedundertheCourier/LVSProgramcanbesubmittedbytheimporter,the
importerscustomsbrokerorbythecourier,iftheyarelicensedasacustomsbrokerandanothercustoms
brokerhasnotbeenappointedbytheimporter
forgoodsontheconsistsheetreleasedundertheCourier/LVSProgram,accountingdatamustbeprovidedto
CBSAbythe24thdayofeachmonthfollowingthemonthinwhichthegoodswerereleased
ifgoodsvaluedatanamountgreaterthan$2,500.00CDNarereleasedinerrorundertheCourier/LVS
Program,formB3,typeV,mustbesubmittedwithinfivedaysofrelease
ifcontrolled,prohibited,orregulatedgoodsarereleasedinerrorundertheCourier/LVSProgram,regardless
ofvalue,theimporterorbrokermustimmediatelynotifyCBSAofthereleaseerrorbysubmittingformB3type
V
goodsthatarereleasedundertheCourier/LVSProgrammaybeaccountedforonaB3typeFand
B3typeFmaybecompletedinoneofthreeways:
totalconsolidation
consolidationaccordingtoimporteror
inagroupofspecialauthorityshipments.
Nowtakeafewminutestoseehowmuchyouhavelearnedaboutaccountingforgoodsthatwerereleased
undertheCourier/LVSProgram.
Questions:
Attemptsallowed:
Available:
Passrate:
3
Unlimited
Always
60%
Allowed
manytimesasyouwish.
Startquiz
Lesson4:ProvidingB3Data
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InthislessonyouwillbeshownhowaccountingdataistransmittedorsubmittedtoCBSA.
Rationale
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AsaCCS,itmaybeyourresponsibilitytoensurethataccountingdataissenttoCSBA,bothaccuratelyandwithin
thelegislatedtimeframes.Failuretodosocanresultinpenalties.
LessonObjective
Attheendofthislesson,youwillbeawareofhowaccountingdataisprovidedtoCBSA.
Topic1:ProvidingB3Data
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CADEXcanbeusedtotransmitB3datatoCBSAelectronically,however,duetothelimitationsandageofthe
system,CADEXisbeingphasedout.CADEXusersarebeingcontactedbyCBSAtodiscussalternatives,which
includeValueAddedNetworks(VAN)ThirdPartyServiceProvidersCustomsInternetGatewayorDirectConnect
totheCBSA.
OnlyaccountingdocumentsforB3typesAB,F,S,13,20,21,22and30canbetransmittedallothersmustbe
presentedinhardcopy.IfgoodshavebeenreleasedusingahardcopyRMD,accountingdatamaybetransmitted
electronicallyaslongastheRMDpackageclearlystated"CADEX"andtheB3typeisonethatcanbetransmitted.
ThosewhouseCADEXmustfollowtheEDIformatnotedintheCADEXParticipants'RequirementsDocument
(PRD).
UsingaB3format,theimporterorcustomsbrokertransmitsthedataforgoodsreleasedsincethelasttransmission
ofaccountingdata.Correctionstopreviouslysubmitteddatacanalsobesubmitted.
Customswillalsotransmitdatabacktothesender.ThiscanincludetheK84DailyNoticeandMonthlyStatement,
errormessages,andconfirmationofreceiptmessagesrelatingtoprevioustransactions.
Topic1:ProvidingB3Data(cont.2)
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CrossReferencingInvoiceData
ThoseusingEDImusttransmitcorrespondinginvoicecrossreferencedataforeachB3lineonamultilineB3.
Theinvoicecrossreferenceshowstherelationshipbetweeneachoftheinvoicepage(s)andlines,andthe
appropriateB3line.Theinvoicecrossreferenceincludes:
theB3linenumber
theinvoicepageandlinenumbers,inthesameorderastheywerepresentedtoobtainreleaseand
theinvoicevalueforeachinvoicelineasitappearsontheinvoice,i.e.,withoutanydeductionsmadefor
transportationorinsurance.
Customsbrokersorimporterswhopresentaccountingdocumentsinhardcopymustpresentaccountingpackages
thatincludethefollowing:
twocopiesofthecompletedhardcopyB3
anysupportingdocumentsthatwereusedtoobtainreleaseofthegoods
theCanadaCustomsInvoice,ifapplicable,orcommercialinvoiceand
anyotherdocumentorcertificaterequiredbyCBSAorothergovernmentdepartment.
WhentheB3ispresentedinhardcopy,CBSAwillinputalldataexceptforthosefieldsthatshowanydutiesand
taxes.
Ifallofthedataenteredintothesystemisvalid,andthecalculateddutiesandtaxesagreewiththeamounts
declaredontheaccountingdocument,theaccountingdocumentisacceptedandthetransactionwillappearonthe
importer/broker'snextdailyK84.
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IftheB3containserrors,aDetailedCodingStatement(DCS)identifyingtheerrorsisgenerated.Theaccounting
documentandacopyoftheDCSarereturnedtotheimporter/brokerforcorrection.TheDCSmustbereviewed
carefullyand,ifnecessary,correctionsmadebeforeattachingtheDCSbehindthecustomscopy(firstcopy)ofthe
B3andresubmittingtheaccountingdocument,identifyingthecorrectedfield(s),ifany.
Lesson4Summary:ProvidingB3Data
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Lesson4providedinformationonhowtosubmitaccountingdatausingEDIorahardcopyB3.
KeypointsfromLesson4include:
accountingdatamustbesenttoCBSAwithinalegislatedtimeframe
ifgoodsarereleasedusingahardcopyreleaserequest,theymaybeaccountedforusingEDIaslongasthe
RMDpackageclearlystatedCADEX
datathatCBSAwilltransmitdatabacktothesenderincludesK84notices,errormessagesandconfirmation
ofreceiptmessagesrelatingtoprevioustransactions
thoseusingEDImusttransmitcorrespondinginvoicecrossreferencedataforeachB3lineonamultilineB3
and
ifahardcopyB3containserrors,CBSAwillissueaDetailedCodingStatement(DCS)identifyingtheerrors.
NowtakesometimeandanswerafewquestionsaboutprovidingaccountinginformationtoCBSA.
Questions:
Attemptsallowed:
Available:
Passrate:
4
Unlimited
Always
60%
Allowed
manytimesasyouwish.
Startquiz
Lesson5:Corrections
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Insomecases,accountinginformationthatissenttoCBSAisnotcorrect.Thislessonwillexplainhowcorrections
toaccountinginformationaremade.
Rationale
YoumayberequiredtocorrectaccountinginformationthathasbeenprovidedtoCBSA.Incorrectinformationthat
hasbeenprovidedtoCBSAmustbecorrected.Ifnot,anincorrectamountofdutiesandtaxesmaybepaidaswell,
CBSAcanissuepenaltiesifincorrectinformationisprovided.
LessonObjective
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Youwillbeawareoftheprocesstocorrectaccountinginformation.
Topic1:Corrections
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YouareobligatedtousethecorrectaccountinginformationevenifyouawarethatinformationprovidedtoCBSAat
thetimeofreleaseisincorrect.
ItisoftenpossibletomakecorrectionstoanRMDafterreleasebutpriortoaccounting.
RequestsforachangetoRMDinformationismadeonformA48,RMDCorrection.NotethattheRMDmustbe
presentedwithinthetimeframeforpresentationoffinalaccountingdocuments.
ChangesthatcanberequestedonanRMDincludechangestothe:
BusinessNumber
transactionnumber
cargocontrolnumber(s)
containernumber(s)
sublocationcodeor
customsoffice.
Topic1:Corrections(cont.2)
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IfchangesotherthanthoselistedontheRMDarerequired,thefollowingapplies:
forinvoicechangestoRMDinformationthatwastransmittedelectronically,changescanbemadethrough
ACROSS,and
forinvoiceschangestoRMDinformationthatwassubmittedinhardcopy,theimporterorcustomsbrokercan
submittherequestinwriting,withsupportingdocumentation,totheCBSAofficewherethegoodswere
released.
AfterB3accountingdataissubmittedandbeforethemonthlyK84isissued,errorscanbecorrectedthroughthe
CustomsCommercialSystem(CCS)K84overrideprocedures,priortothepaymentofdutiesandtaxes.
TheoverridemayonlybeusedwhenacalculationortranspositionerrorhasoccurredorwhereCBSAhaskeyed
theB3incorrectly.
DailyK84sshouldbereviewedcarefullysothatcorrectionscanbemadeassoonaspossible.Requestsfor
correctionswillusuallybeacceptedbyCBSAupuntilthethirdlastbusinessdayofthemonthsothatthe
correctionsarereflectedonthemonthlyK84.
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CBSArequiresawrittenexplanationoftheclerical,typographical,orcustomskeyingerrortobesubmittedwiththe
requestforchange.Otherconditionsmustalsobemet.
AtautomatedCBSAofficesandwhereacorrectionisrequiredtocorrectacustomskeyingerror,the
importer/brokermustpresentacopyofthedailyK84andthecorrespondingB3.
Forerrorsmadebyimportersorbrokers,theimporter/brokermustpresent:
acopyofthedailyK84
anexplanationoftheerror,includingaletterofauthorizationtochangeanimporternameorbusinessnumber
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acorrectedB3withthesametransactionnumberastheoriginalincorrectB3and
acopyoftheoriginalB3accountingpackage,includingthereleasestampedcopyofthereleaseonminimum
documentation(RMD)package.
Eveniftheoriginalaccountinginformationwassentelectronically,ahardcopyB3isrequiredwhenrequestinga
correction.
Ifthechangeisapprovedbycustoms,CBSAwillperformanaccountingoverride.Theoverridewillupdatethe
monthlyK84withthenewcorrectedtotals.Acopyoftheoverridescreenwillbegiventotheimporter/brokeras
confirmationofthecorrection.Whentheimporter/broker'smonthlyK84isgenerated,asectionwillappearlisting
eachapprovedoverridetransactionandreflectingthecorrecteddutiesandtaxespayable.
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AtnonautomatedCBSAofficestheimporter/brokermustpresentthefollowingdocumentationtothecustomsoffice
wheredutiesandtaxesarepaid:
acopyofthedailyK84
anexplanationoftheerror,includingaletterofauthorizationtochangeanimporternameorbusinessnumber
twocopiesofthecorrectedB3withthesametransactionnumberastheincorrectB3and
acopyoftheoriginalB3accountingpackage,includingthereleasestampedcopyoftheRMDpackage.
IfthechangeisapprovedbyCBSA,theB3lineontheimporter/broker'scopyofthedailyK84willbechanged,
stampedwiththecustomsofficestamp,signedbythecashsupervisor,andreturnedtotheimporter/broker.
BecauseitisanonautomatedCBSAoffice,correctionsmadebythisofficetotheB3andtoK84dailynotices
cannotbereflectedonthemonthlyK84.Therefore,copiesofthecorrecteddailyK84sandB3smustbepartofthe
importer/broker'sreconciliationprocess.
Topic2:ShortShippedGoods
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Shortagesoccurwhen:
a.thetotalnumberofpackagesreporteddoesnotmatchthenumberofpackagesreceivedbytheconsigneeor
importer.ThesearecalledEnteredtoArrive(ETA)Shortagesand
b.thenumberofarticlesreportedascontainedinapackagedoesnotmatchwhatisactuallyinside.These
shortagesarecalledValueIncluded(VI).
Bothareconsideredshortagesexceptinthefollowingsituations:
(a)thecustomsbrokerand/orimporterisawarethattheentirequantityofthegoodsreportedontheinvoicewillnot
beintheshipmentwhenitarrivesinCanada
(b)theBorderServicesOfficerfindsthatthequantityreportedtobeinsidethepackagedoesnotmatchthequantity
foundduringexaminationofthegoods
(c)thegoodsarereportedtobeonbackorderor
(d)thegoodsarebondedwarehouseshortages.
Intheabovefourinstances,onlythosegoodsthatareactuallyshippedaredocumentedontheRMDpackageand
anyshortshippedgoodswillbeprocessedseparatelywhentheyarrive.
Topic2:ShortshippedGoods(cont.2)
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Ifashortageisfoundafterreleasebutbeforefinalaccounting,therearetwooptions:
(a)accountforthetotalquantityandhavethebalanceofthegoodsreleasedasanETAorVIwhentheyarriveor
(b)providecustomswithevidenceoftheshortagewiththefinalaccountingdocumentandaccountforonlythose
goodsonhand.Whentheremaininggoodsarrive,theyshouldnotbereportedasashortageandtheusualrelease
procedureswillapply.
Ifashortageisfoundafterfinalaccounting,eitherthebalanceoftheshortshippedgoodsmaybereleasedasan
ETAorVI,oraclaimmaybemadeforarefundifthegoodsarenotexpectedtobeshippedatalaterdate.
Topic2:ShortShippedGoods(cont.3)
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ThefollowingarerequiredsothatshortshippedgoodscanbereleasedasEnteredtoArrive(ETA):
(a)onecopyofthedocumentationsupportingtheclaimfortheshortage
(b)onecopyofanewcargocontroldocumentshowingthenumberofpiecesshortshippedandareferencetothe
cargocontrolnumberoftheoriginalshipmentinthedescriptionfield
(c)whenmorethanonecarrierisinvolved,aloadingsheetfromtheoriginalcarrierisrequiredtosubstantiatethe
shortage
(d)twocopiesoftheinvoicescoveringtheoriginalshipment.Thisinvoiceshouldcontainthefollowinginformation:
(1)importer/exporteraccountnumberorbusinessnumberoftheimporter
(2)transactionnumberoftheoriginalshipment
(3)notationETAShortageanddetailwhichgoodswereshortshipped
(4)originalcustomsreleaseofficeand
(e)documentsmustbepresentedinagoldwrapperiffinalaccountingwillbedoneusingCADEX.
ETAandVIreleaserequestsmustbepresentedinhardcopytheycannotbetransmitted.
Topic2:ShortshippedGoods(cont.4)
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ThefollowingarerequiredsothatshortshippedgoodscanbereleasedasaValueIncluded(VI)transaction:
(a)twocopiesoftheoriginaldocumentationtosupporttheclaimfortheshortage
(b)onecopyofanewcargocontroldocumentand
(c)twocopiesofaninvoicecontaininganaccuratedescriptionoftheshortshippedgoods.Thisinvoiceshould
containthefollowinginformation:
(1)importer/exporteraccountnumberorBNoftheimporter
(2)transactionnumberoftheoriginalshipment(anewtransactionnumberisnotacceptable)
(3)anotationVIShortage
(4)customsofficewherethegoodswerereleasedand
(5)invoicepageandlinenumberfortheoriginaltransactionrelatingtotheshortshippedgoods.
Lesson5Summary:Corrections
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Lesson5explainedhowcorrectionscanbemadetoinformationprovidedtoCBSAonanRMDrequest,andbefore
thedailyormonthlyK84isissued.
FollowingisasummaryofLesson5.
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incorrectinformationthathasbeenprovidedtoCBSAmustbecorrected
CBSAmayissuepenaltiesifincorrectinformationisprovided
ifinformationprovidedtoCBSAatthetimeofreleaseisincorrect,youmustprovidethecorrectinformation
whenaccountingforthegoods
requestsforchangestoRMDinformationismadeonformA48
requirementsdifferwhenrequestingcorrectionsatautomatedandnonautomatedCBSAoffices
shortagesoccurwhen:
thetotalnumberofpackagesreporteddoesnotmatchthenumberofpackagesreceivedbythe
consigneeorimporter.ThesearecalledEnteredtoArrive(ETA)Shortagesand
thenumberofarticlesreportedascontainedinapackagedoesnotmatchwhatisactuallyinside.These
shortagesarecalledValueIncluded(VI).
thefollowingarenotconsideredshortages:
thecustomsbrokerand/orimporter/customsbrokerisawarethattheentirequantityofthegoods
reportedontheinvoicewillnotbeintheshipmentwhenitarrivesinCanada
thecustomsinspectorfindsthatthequantityreportedtobeinsidethepackagedoesnotmatchthe
quantityfoundduringexaminationofthegoods
thegoodsarereportedtobeonbackorderor
thegoodsarebondedwarehouseshortages.
ifashortageisfoundafterfinalaccounting,eitherthebalanceoftheshortshippedgoodsmaybereleasedas
anETAorVI,oraclaimmaybemadeforarefundifthegoodsarenotexpectedtobeshippedatalaterdate
documentationisrequiredsothatshortshippedgoodscanbereleasedasEnteredtoArrive(ETA)andValue
Included(VI)and
ETAandVIreleaserequestsmustbepresentedinhardcopytheycannotbetransmitted.
Nowtakesometimeandanswerafewquestionsaboutlesson5.
Questions:
Attemptsallowed:
Available:
Passrate:
6
Unlimited
Always
60%
Allowed
manytimesasyouwish.
Startquiz
Lesson6:Penalties
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Lesson6willexplainthepenaltiesissuedbyCBSAwhenaccountinginformationissubmittedafteritslegislated
timeframe.
Rationale
Ifyouareawarethattherearepenaltiesforsubmittingaccountinginformationafteritslegislatedtimeframe,youwill
ensurethataccountinginformationissubmittedintimeinordertoavoidthesepenalties.
LessonObjective
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Youwillbeawareofthepenaltiesforsubmittinglateaccountinginformation.
Topic1:Penalties
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IntheAdministrativeMonetaryPenaltySystem(AMPS)MasterPenaltyDocument(MPD),thefollowingpenalties
applytolateaccounting:C244,C246,C288,C292,C330,andC331.
Thedifferencesinthesepenaltiesarebasedonthetypeofaccountingdocument,thevalueofthegoods,andthe
statusoftheimporter.
Let'shavealookatC288andC331.
Topic1:Penalties(cont.2)
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C288Thispenaltyisassessedagainsttheimporterwhengoodsarevaluedatgreaterthan$2,500CADandthe
accountinginformationhasnotbeensubmittedwithinthelegislated5daytimeframe.
Theinformationintheguidelinesportionofthischartincludesadditionalinformationfortheofficer.Notalltexthas
beenincluded.
Notethatthispenalty,andothers,isassessedagainsttheimporter,regardlessofthepartythatwasresponsiblefor
theerrorthatcausedthepenaltytobeissued.
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C331Thispenaltycanbeassessedagainsttheimporterorthecourierwhenthegoodsarevaluedatlessthan
$2.500CADandareincludedonaconsolidatedB3,andtheaccountinginformationhasnotbeensubmittedbythe
24thdayofthemonthfollowingtheirmonthofrelease.
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Insomecases,lateaccountingpenaltiesmaybecancelled.Reasonsforwhichapenaltycanbecancelledinclude:
documentswererejectedinerrorbycustoms
documentswerenotprocessedbycustomsinatimelymanneror
CBSA'sautomatedsystemwasnotoperationalortransmissionlinefailureswereexperienced.
Eitheraletter,orformE571,LateAccountingPenaltiesApplicationforWaiver,Cancellation,orExtension,maybe
usedtorequestacancellationofapenalty.TheletterortheformispresentedattheCBSAofficewherethegoods
werereleased.Therequestshouldbesubmittedimmediatelyafteritappearsonthedailystatementandbeforethe
K84monthlystatementisissuedtoensurethat,ifthepenaltyiscancelled,itdoesnotappearonthestatement.
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IftheK84monthlystatementhasalreadybeengenerated,theimporterorbrokermay:
paythepenaltyamountontheduedateandthesubmittherequestforcancellation.Iftherequestis
approved,achequewillbeissuedor
shortpaybytheamountofthepenaltyinquestionthensubmittherequestforcancellation.
Iftherequestforcancellationisapproved,astampedandsignedcopyoftheletterorformwillbereturnedasa
receipt.Iftherequestisnotapproved,FormK23willbeissued.FormK23isaninvoiceissuedbyCBSA.Itincludes
interestatthespecifiedratefromthefirstbusinessdayaftertheduedate,uptoandincludingthedaypaymentis
made.
Lateaccountingpenaltiesissuedasaresultofanationalcustomssystemoutagelastingmorethanfourhourswill
becancelledbycustomswithoutarequest.
Allcancellationrequeststhatareapprovedbycustomsareassignedabarcode.Thisbarcodewillbeshownon
formE571whenitisreturnedtothesubmitter.Thebarcodenumberwillappearonthechequestubwhenthe
cancellationhasbeenapproved.
Lesson6Summary:Penalties
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Lesson6describedpenaltiesthatcanbeissuedwhenaccountinginformationissubmittedafterthelegislatedtime
frame.
FollowingarekeypointsfromLesson6:
penaltiesforlateaccountingcandifferaccordingtothetypeofaccountingdocument,thevalueofthegoods,
andthestatusoftheimporter
thepenaltyassessedagainsttheimporterforlateaccountingforgoodsvaluedat$2,500.00CADormoreis
$100.00peroverdueB3
foraconsolidatedB3forgoodsvaluedatlessthan$2,500.00CADthepenaltyforlateaccountingis$100.00
CDNpershipmenttoamaximumof$2,000.00CAD
insomecases,lateaccountingpenaltiesmaybecancelled.Reasonsforwhichapenaltycanbecancelled
include:
documentswererejectedinerrorbycustoms
documentswerenotprocessedbycustomsinatimelymanneror
CBSA'sautomatedsystemwasnotoperationalortransmissionlinefailureswereexperienced.
eitheraletterorformE571canbeusedtorequestacancellationofapenalty
theletterortheformispresentedatthecustomsofficewherethegoodswerereleased
lateaccountingpenaltiesissuedasaresultofanationalcustomssystemoutagelastingmorethanfourhours
willbecancelledbyCBSAand
thespecifiedrateofinterestistherateofinterest,expressedasapercentageperyear,equalto6%peryear
plustheprescribedrate.
Nowtakesometimeandanswerthefollowingquestionsaboutpenaltiesforlateaccounting.
Questions:
Attemptsallowed:
Available:
Passrate:
3
Unlimited
Always
60%
Allowed
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manytimesasyouwish.
Startquiz
Module20Summary:Accounting
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Inthismoduleyoulearnedaboutthethirdstepintheprocessofimportingcommercialgoodsaccounting.
AccountingforimportedgoodsinvolvessubmittingortransmittingtoCBSAcompleteinformationrelatingtothe
importedgoods,includingtheamountofdutiesandtaxespayable.
Youlearned:
aboutthelegislativerequirementstoaccountforgoods
howtocompleteformB3
howtoaccountforgoodsthatwerereleasedundertheCourier/LVSProgram
howtoprovideCBSAwithaccountinginformation
howtocorrectaccountingdocumentsand,finally,
thatpenaltiescanbeassessedforaccountingforgoodspastthelegislatedtimeframetodoso.
Followingisashortquizonwhatyouhavelearnedaboutaccountingforimportedgoods.
Module20:Quiz
Questions:
Attemptsallowed:
Available:
Passrate:
10
Unlimited
Always
60%
Allowed
asyouwish.
Startquiz
Module21:PaymentofDuties
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Thismodulewillexplainthefinalpartintheprocessofimportingcommercialgoodsthepaymentofdutiesand
taxes.
ModuleObjective
Inthismodule,youwillbeshownhowtoremitdutiesandtaxesthatarepayableonimportedgoods.
Lesson1:LegislativeRequirements
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InLesson1,youwilllearnaboutthelegislativerequirementsforthepaymentofdutiesandtaxesonimported
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goods.
Rationale
Aftergoodshavebeenreported,released,andaccountedfor,dutiesandtaxesmustbepaid.AsaCCS,youmay
havetoremitdutiesandtaxesonimportedgoodsonbehalfofaclientoryouremployer.
LessonObjective
Lesson1outlinesthelegislativerequirementsforthepaymentofdutiesandtaxes.
Topic1:LegislativeRequirements
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Section33oftheCustomsActallowsforgoodstobereleasedpriortothepaymentofdutiesandtaxes,when
certainconditionshavebeenmet.Oncethegoodshavebeenreleased,dutyandtaxesmustbepaid.
Section10.1oftheAccountingforImportedGoodsandPaymentofDutiesRegulationsstatesthat:
10.1Wherecommercialgoodsarereleasedundersection33oftheActinaccordancewithsection9,theperson
requiredtopaydutiesonthosegoodsshalldosonolaterthanthelastbusinessdayofthemonthinwhichthe
billingperiodends.
Thebillingperiod,inrespectofcommercialgoods,istheperiodthatbeginsonthe25thdayofamonthandendson
the24thdayofthefollowingmonth.Itincludesthedayonwhichthegoodsareaccountedfor,andthelastdaythat
theyarerequiredtobeaccountedfor.
Thetimeperiodbetweenthereleaseofgoodsandthepaymentofdutiesandtaxescanbequitelong.Forexample,
goodsthatarereleasedonthe10thofthemonthmustbedutypaidbythelastbusinessdayofthatmonth.
However,goodsthatarereleasedonthe28thofthemonthmustbedutypaidbythelastbusinessdayofthe
followingmonth.
Topic1:LegislativeRequirements(cont.2)
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YouwillrememberthatgoodsthathavebeenreleasedunderCourier/LowValueShipmentProgramareaccounted
fornolaterthanthe24thdayofthemonthfollowingthemonthinwhichgoodsarereleased.
Thesegoodsmusthavedutiesandtaxespaiduponthemnolaterthanthelastbusinessdayofthemonthfollowing
themonthinwhichthegoodswerereleased.
Forexample,ifgoodswerereleasedinFebruary,dutymustbepaidbythelastbusinessdayinMarch.
ForgoodsimportedbymailanddeliveredbyCanadaPost,CanadaPostwillremitdutiesandtaxesthattheyhave
collectedfromtheimporterupondeliveryofthegoods,nolaterthanthelastbusinessdayofthemonthfollowing
themonthinwhichthereleaseperiodended.
Topic1:LegislativeRequirements(cont.3)
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Section33oftheCustomsActstatesthefollowing:
33.(1)Inprescribedcircumstances,goodsmaybereleasedpriortothepaymentofdutiesleviedonthem.
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(2)Ifgoodsarereleasedunderthissection,thepersonwhoaccountedforthegoodsundersubsection32(2)or(3)
shallpaythedutiesleviedonthemwithintheprescribedtime.
(3)Insubsection(2),"duties"doesnotincludethedutiesleviedunder
(a)subsection21.1(1)oftheCustomsTariff,iftheyarepaidandcollectedinaccordancewithsubsection21.1(2)of
thatActor
(b)subsections21.2(1)and(2)oftheCustomsTariff,iftheyarepaidandcollectedinaccordancewithsubsection
21.2(3)ofthatAct.
Lesson1Summary:LegislativeRequirements
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InLesson1youlearnedaboutthelegislativerequirementstopaydutiesandtaxes.
Somekeypointsare:
theAccountingforImportedGoodsandPaymentofDutiesRegulationsprovidethetimeframeinwhichduties
andtaxesmustbepaid
forcommercialgoodsthatarereleasedunderSection33oftheCustomsAct,dutymustbepaidnolaterthan
thelastbusinessdayofthemonthinwhichthebillingperiodends
thebillingperiodbeginsonthe25thdayofamonthandendsonthe24thdayofthefollowingmonth
paymentperiodsvaryforcertaingoodssuchasbulkspirits,packagedspiritsandpackagedwineand
dutyandtaxesforbulkspirits,packagedspiritsandpackagedwinearegenerallypaidwhengoodsare
packagedorremovedfromtheexcisewarehouse.
Takeafewminutesnowandanswerthefollowingquestionstoseehowmuchyouhavelearnedaboutthe
legislativerequirementstopaydutiesandtaxes.
Questions:
Attemptsallowed:
Available:
Passrate:
2
Unlimited
Always
60%
Allowed
manytimesasyouwish.
Startquiz
Lesson2:PaymentProcedures
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InLesson2,youwilllearnaboutthemannerinwhichimportersandcustomsbrokersdeterminetheamountof
dutiesandtaxesowingandhowpaymentismade.
Rationale
Ifyouareresponsibleforfacilitatingthepaymentofdutiesandtaxesonbehalfofaclientoryouremployer,youwill
needtoknowhowtointerpretthestatementsofaccountissuedbyCBSAandhowtoremitanydutiesandtaxes
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thatareowing.
LessonObjective
Lesson2willprovideinformationonstatementsofaccountandpaymentprocedures.
Topic1:DailyK84
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DailyK84
FormK84isissuedbyCBSAonadailyandmonthlybasistothosewhohavepostedsecurityforreleaseofgoods
BothdailyandmonthlyK84sareissuedinhardcopyateitheracentralpaymentofficeoratthecustomsoffice
wheretheB3wasreceived.
ThedailyK84summarizestheaccountingtransactionsthatwereacceptedbyCBSAonthepreviousday.The
transactionnumberisshownaswellastheofficeofrelease.Forcustomsbrokers,theK84informationisalso
sortedbyimportername.
Earlieryoulearnedaboutthewaysthatacustomsbrokercanreducetheamountofsecurityrequiredfortherelease
ofgoodspriortothepaymentofdutiesandtaxes.Oneofthewaysistohaveclientsobtaintheirownsecurityand
maketheirpaymentsfordutiesandtaxesdirectlytotheReceiverGeneralforCanada.
Forclientswhohaveobtainedtheirownsecurity,aseparateK84pageisgeneratedforthecustomsbroker.Inorder
toidentifytheseclients,"I"(for"importer")mustbeindicatedinfield5oftheB3.
CustomsbrokershaveautomatedsystemsinplacethatkeeptrackofdailyK84s.
Topic2:MonthlyK84
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Onthesecondlastbusinessdayofthemonth,CBSAissuesamonthlyK84.ThisK84providesasummaryofall
dailyK84sprocessedduringthepaymentperiod,thatis,fromthe25thdayofthepreviousmonthtothe24thdayof
thecurrentmonth,inclusive.
ThemonthlyK84includesthetotalamountofdutiesandtaxesowing,anylateaccountingpenalties,late
transactioninterestpayments,andanyinterimpaymentsofdutiesandtaxesmadeduringthatperiod.
Themonthlystatementisprovidedtotheimporterorcustomsbrokerwhoseaccountsecuritynumberwasused
whenaccountingforthegoods.
ImportersandbrokerswhopresentaccountingdocumentsusingEDIreceivebothahardcopyandEDIversionof
theK84.IftherearediscrepanciesintheinformationontheK84,thehardcopywilltakeprecedence.
Topic3:Payment
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Forthosewhodonothavereleasepriortopaymentsecurity,dutiesandtaxescanbepaidusinganyofthe
following:
U.S.orCanadiancash,certifiedcheque(upto$25million),moneyorder,ortraveller'scheque
debitcards,insomelocations
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Visa,MasterCardorAmericanExpress(AMEX)creditcardsforamountsupto$500
uncertifiedcheques,includingU.S.uncertifiedcheques,upto$2,500.00,payabletotheReceiverGeneralfor
Canadaforpaymentofdutiesandtaxesifthefollowingconditionsaremet:
thecompany'sbusinessnumberoramajorcreditcardnumberappearsonthecheque.Ifacreditcard
numberisprovided,theCBSAmaychargetheamounttothecardifthefinancialinstitutiondoesnot
honourthecheque.Ifthecompany'sbusinessnumberisonthecheque,CBSAmaycollectpaymentby
offsettingarefundpendingforaGST,SourceDeduction,orCorporateTaxclaim,ifthechequeisnot
honoured
aclienthasnothadmorethanonechequereturnedduetononsufficientfunds(NSF)(overaoneyear
period).IfachequehasbeenreturnedNSF,andtheCBSARegionalAccountsReceivableUnithas
confirmedthattheamountowinghasbeenpaidorthatnoliensareoutstanding
thepaymentisnotforapenaltyormadeunderthetermsofreleaseforseizedgoodshowever,
uncertifiedchequeswillbeacceptedforthereleaseofaseizedconveyanceand
thechequeisnotwrittenbyorpayabletoathirdparty.
Ifanyoftheuncertifiedchequeconditionsarenotmet,CBSAmayacceptuncertifiedchequesforupto$500.00.
Topic3:Payment(cont.2)
Bookmarkthis
Forthosewhohavereleasepriortopaymentsecurity,dutiesandtaxescanbepaidusing:
U.S.orCanadiancash
certifiedchequeormoneyorder,payabletotheReceiverGeneralforCanada
uncertifiedchequeand
debitcardsinsomelocations.
PaymentsofmonthlyK84smustbereceivedbyCBSAby4:30localtimeonthelastbusinessdayofthemonth.
Importerswhohaveobtainedtheirownsecurityandaretransactingbusinessusingtheaccountsecuritynumberof
acustomsbrokermaypaydutiesandtaxeswith:
achequemadepayabletotheReceiverGeneralforCanadaatanyCBSAoffice
achequemadepayabletotheReceiverGeneralforCanadaandgiventotheircustomsbrokerforsubmission
totheCBSAor
achequemadepayabletothecustomsbroker,whowillremitfundstoCBSA.
NotethatifthebrokerdoesnotremitfundstoCBSA,theimporterremainsliableforthepaymentofdutiesand
taxes.
Topic3:Payment(cont.3)
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Important!
Accountsecurityholdersmaynotpaydutiesandtaxeswithcreditcards.
Anotherwayinwhichacustomsbrokercanreducetheamountofsecurityrequiredforreleaseofgoodspriorto
paymentistohaveaGSTletterinplacewithhisclient.TheGSTletterindicatesthattheclientisresponsibleforthe
paymentofGSTonimportedgoods.
ImporterswithaGSTlettercanprovideachequeforGSTpayabletotheReceiverGeneralforCanadaeitherto
theircustomsbrokerordirectlytoCBSA.
ThecustomsbrokermayshortremittheamountowingonthemonthlyK84bytheamountsofGSTpayablebyhis
clientsusingtheGSToption.
Thismeansthatcustomsmaydetaingoodsuntilmoniesowingtothemarepaid.
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InterimPayments
Customsbrokersandimportersmayalsomakepaymentsatanytimeduringthebillingperiod,beforethemonthly
K84isissued.Thiswillreducetheamountofsecurityrequiredforreleasepriortopaymentprivileges.
Lesson2Summary:PaymentProcedures
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Lesson2explainedhowimportersandcustomsbrokersdeterminetheamountofdutiesandtaxesowingandhow
paymentismade.
Keypointsofthelessoninclude:
CBSAissuesdailyandmonthlyK84s
DailyK84ssummarizetheaccountingdocumentsthatwereacceptedbyCBSAonthepreviousday
MonthlyK84sareissuedonthesecondlastbusinessdayofthemonth
AmonthlyK84includesthetotalamountofdutiesandtaxesowed,anylateaccountingpenalties,late
transactioninterestpayments,andanyinterimpaymentsofdutiesandtaxesmadeduringthatperiod
Inallcases,dutyandtaxescanbepaidwithU.S.orCanadiancash,certifiedcheque,moneyorder,or
travellerscheque
Insomecases,debitcardsmaybeusedtopaydutiesandtaxes
Visa,MasterCardandAmericanExpress(AMEX)creditcardscanbeusedinsomelocationshowever,
accountsecurityholderscannotpaybycreditcardand
Ifcertainconditionsaremet,uncertifiedchequescanbeused.
Nowtakesometimetoanswersomequestionsaboutthepaymentofdutiesandtaxes.
Questions:
Attemptsallowed:
Available:
Passrate:
3
Unlimited
Always
60%
Allowed
manytimesasyouwish.
Startquiz
Lesson3:Penalties
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InthislessonyouwilllearnaboutpenaltiesassessedbyCBSAwhendutiesandtaxesarenotpaidbythelegislated
timeframe.
Rationale
Youshouldbeawareofpenaltiesassessedforlatepaymentsothatyoucanadviseclientsoryouremployershould
delaysoccurinpaying.
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LessonObjective
Lesson3willexplainthepenaltiesthatareinplaceforlateaccounting.
Topic1:Penalties
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ForK84sthatarepaidaftertheirduedate,interestwillapplytotheoutstandingbalance.Interestisappliedatthe
specifiedrate.
Intereststartstobecalculatedonthecalendardayimmediatelyfollowingtheduedateforthestatement,and
continuesuptoandincludingthedatethebalanceispaidinfull.
ContraventionC336isissuedwhentheK84paymentislate.Thiscontraventionisreproducedonthenextscreen.
Bookmarkthis
No.
C336
Contravention
Personfailedtopaydutiesongoodsaccountedforundersubsections32(2)and32(3)ofthe
CustomsAct.
Penalty
$100
PenaltyBasis Perinstance
Regulation
CustomsAct,subsection33(2)
Memoradum
D
D1715,Registration,AccountingandPaymentforCommercialGoods
Other
References
D1165,InterestandPenaltyProvisionsDeterminationsandReDeterminations,Appraisals
andReAppraisals,andDutyRelief
AccountingforImportedGoodsandPaymentofDutiesRegulations
Noncomplianceoccursandapenaltyisassessedagainstanimporterwhen:
theimporterhastheirownaccountsecurityandfailstopaytheirK84infullbythedate
specifiedontheK84
theirbrokershortremitstheirK84whentheimporterusestheImporterDirectSecurityor
GSTDirectPaymentOptions.Inthesesituations,brokersmusthaveprovidedtheircentral
paymentofficewiththeOptionAgreementandHQacknowledgment.Thepenaltyisapplied
againsttheimporterindicatedonthecustomsbroker'sreconciliationsheet.
Noncomplianceoccursandapenaltyisassessedagainstabrokerwhen:
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thebrokerdoesnotpaytheirK84infullbythedatespecifiedontheK84
thebrokeronlypartiallypaystheirK84(i.e.shortpays,notshortremits).
Penaltyisappliedagainstthebroker'sbusinessnumber.
Inadditiontothepenalty,aK23isstillissuedasaresultofalatepaymentonaK84.Therewill
notbeanadditionalpenaltyforthelatepaymentoftheK23.
Guidelines
NoncomplianceoccursandapenaltyisassessedbyCSAcompliancemanageragainstaCSA
importerwhen:
thetotalRevenueSummaryForm(RSF)amounthasnotbeenremittedtoafinancial
institutionwithintheprescribedtimelimits.
IfRSFreceived,butnopaymentreceivedatfinancialinstitution,theCSAcompliancemanager
willcontactimportertodetermineifpaymenthasbeenmadeataCBSAoffice.
Nopenaltyshouldbeassessedincaseswhere:
nointerimpayment(subjecttolatepaymentinterestonly)or
paymentmadetoCBSAofficebylastbusinessdayofmonth.
ThefollowingshouldbeconsideredpriortoissuingC336:
verifyiftherewasanoticeissuedbytheAssessmentUnit(HQ)toallowforlatepaymentof
theK84withouttheinterestorpenaltiesincertainmonthsoftheyear,anddetermine
whetherornottheproceduresinthenoticewerefollowedproperly
verifyifapaymentwasmadeatanotherCBSAoffice.
Failuretoremitduties,taxes,interestcharges,andpenaltiesowingtocustomsdirectlyto
financialinstitution,seeC251.
FailuretoprovidetheRSFtocustomsintheprescribedmannerorwithintheprescribedtime,see
C250.
Lesson3Summary:Penalties
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Lesson3showedyouthatpenaltiesandinterestareappliedwhendutiesandtaxesarenotpaidwithinthe
legislatedtimeframe.
interestappliestotheoutstandingbalancewhendutiesandtaxesarenotpaidinfull
interestisappliedatthespecificrate
intereststartstobecalculatedonthecalendardayimmediatelyfollowingtheduedateforthestatement,and
continuesuptoandincludingthedatethebalanceispaidinfulland
thepenaltyforlatepaymentis$100.00perinstance.
Nowtakeafewminutestoanswersomequestionsaboutpenaltiesforlatepayment.
Questions:
Attemptsallowed:
Available:
Passrate:
2
Unlimited
Always
60%
Allowed
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manytimesasyouwish.
Startquiz
Module21Summary:PaymentofDuties
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InModule21youlearnedaboutthefinalpartintheprocessofimportingcommercialgoodsthepaymentofduties
andtaxes.Youlearnedaboutthelegislativerequirementstopaydutiesandtaxes,howtoremitdutiesandtaxesto
CBSA,andtheconsequencesoflatepayment.
FollowingisashortquizonModule21.
Module21:Quiz
Questions:
Attemptsallowed:
Available:
Passrate:
8
Unlimited
Always
60%
Allowed
asyouwish.
Startquiz
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Home>Part4
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IntroductiontoPart4
Part4oftheCCScourseincludesthefollowing6modules:
22.DutyRelief
23.DutyDeferralProgram
24.AdjustmentsAfterPayment
25.ExportingFromCanada
26.Compliance
27.SupplyChainSecurityandTradeFacilitation
Thesemodulesprovideinformationrelatedtoprogramsthatrelieveorreducetheamountofdutypayable,showyouhow
tocorrectaccountingdocumentsandexplaintheexportprocess.Last,theissuesofsecurityandcomplianceare
introduced.
OnJuly28,2016,youwillbeprovidedwithinformationonhowtoaccessthefinaltestonthecontentsofPart4,which
mustbecompletedbyAugust11,2016.Responsesmustbesubmittedby2p.m.EDT(forexample,11a.m.PDTin
Vancouverand3p.m.ADTinHalifax).
Onceyouaccessthetest,pleaseprintacopyforyourrecords.Youwillneedacopywhenitcomestimetostudyforthe
finalexaminationandthetestwillnotbeavailableafterthedeadlinedateforsubmission.
ThefinalexaminationwillbeheldonSaturday,September24,2016andisworth80%ofyourfinalmark.Youwillbe
contactedatleasttwoweekspriortoSeptember24withdetailsonwhereyouwillwritethefinalexamination.Ifwehave
notcontactedyoubySeptember10,pleasesendanemailtostudents@cscb.ca
Module22:DutyRelief
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ManygoodsimportedintoCanada,eventhoseimportedtemporarily,aresubjecttodutiesandtaxes.Whenwetalkabout
dutyrelief,wearereferringtothenonpaymentofdutythatisordinarilypayableonimportedgoods.Inthismodule,youwill
learnaboutspecificcircumstancesunderwhichtheimporterisnotobligatedtopaythedutythatwouldnormallyapply.We
willexamineCanadiangoodsthatarereturnedtoCanadaafterhavingbeenexported,goodsthatwereexportedfrom
Canadaforrepairsandarereturned,andalterationsandworkdoneonexportedgoodswhileoutsideofCanada.Wewill
studyhowgoodsaretreatedwhentheyarereturningfromcountrieswithwhichCanadahasatradeagreementafter
havingbeenrepaired.Finally,wewilllookathowthesegoodsareaccountedfor.
ModuleObjective
AsaCCS,youneedtobeawarethatcertainconditionsallowfordutyrelief.Youneedtoknowhowtoaccountforgoods
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eligiblefordutyreliefandthedifferencesbetweendocumentationforgoodsimportedfromourtradingpartnersandthe
documentationrequiredforgoodscomingfromothercountries.
Lesson1:CanadianGoodsReturned
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Inthislesson,youwilllearnabouttheconditionsunderwhichimportedgoodsareeligiblefordutyreliefwhentheyreturnto
Canadaafterhavingbeenexported.Undercertainconditions,thesegoodsqualifyfordutyrelief.
Rationale
AsaCCS,youwillhavetorecognizewhengoodsmaybeclassifiedasCanadiangoodsreturned.Ifyouareabletoidentify
conditionsfordutyrelief,knowwhatdocumentsarerequired,andunderstandwhattariffclassificationtouse,yourclient
willbeabletoavoidpayingdutyneedlessly.
LessonObjective
AttheendofthislessonyoushouldbeabletonamethetariffitemsandtaxstatusthatapplytoCanadiangoodsreturned.
Youshouldalsobefamiliarwiththedocumentationrequired.
Topic1:CanadianGoodsReturned
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Theexpression"Canadiangoodsreturned"maybeinterpretedasmeaning"allgoodsgrown,producedorfabricatedin
Canada,exportedfromCanadaandsubsequentlyreturned".However,toenablethecorrectadministrationand
interpretationoftheCustomsTariff,manydeparturesaremadefromthisstrictinterpretation.
Inthislesson,wewilldealwiththereimportationofgoodsexportedfromCanadaandreturnedwithouthavingbeen
enhancedinvalueorimprovedincondition,orsubjectedtoanyothertypeofmodificationwhileabroad.
Therearetwotariffitemswhichprovideforthedutyfreeimportationofgoodsthathavepreviouslybeenexportedfrom
Canada:9813.00.00and9814.00.00.
Thelasttwodigitsofthetariffclassification,knownasthestatisticalsuffix,provideabitmoreinformationabouttheitem
beingimported.Thestatisticalsuffixdependsontheclassificationofthegoodsinchapters197.
Topic2:TariffItems9813.00.00and9814.00.00
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TariffItem9813.00.00
Tariffitem9813.00.00isreproducedbelow:
Goods,includingcontainersorcoveringsfilledorempty,originatinginCanada,afterhavingbeenexportedtherefrom,if
thegoodsarereturnedwithouthavingbeenadvancedinvalueorimprovedinconditionbyanyprocessofmanufactureor
othermeans,orcombinedwithanyotherarticleabroad.
Forthepurposeofthistariffitem:
a)goodsonwhicharefundofcustomsdutyordrawbackofcustomsdutyhasbeenmadeshallnotbeclassifiedunderthis
tariffitemexceptuponpaymentofthecustomsdutyequaltotherefundordrawbackallowedand
b)goodsmanufacturedinbondorunderexciseregulationsinCanadaandexportedshallnotbeclassifiedunderthistariff
itemexceptuponpaymentofthecustomsdutytowhichtheywouldhavebeenliablehadtheynotbeenexportedfrom
Canada.
Part(a)issimplysayingthatifdutyonthegoodshasalreadybeenrefundedorrepaid,thenthegoodscannotbeimported
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onadutyfreebasisasCanadiangoodsreturnedundertariffitem9813.00.00.Part(b)statesthatexportedgoodsthatare
subjecttoexcisedutybut,becausetheywereexporteddidnothaveexcisedutycollected,arenotsubjecttoreentryinto
Canadaunder9813.00.00.
Topic2:TariffItems9813.00.00and9814.00.00(cont.2)
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TariffItem9814.00.00
Tariff9814.00.00isreproducedbelow:
Goods,includingcontainersorcoveringsfilledorempty,whichhaveoncebeenreleasedandaccountedforunderSection
32oftheCustomsActandhavebeenexported,ifthegoodsarereturnedwithouthavingbeenadvancedinvalueor
improvedinconditionbyanyprocessofmanufactureorothermeans,orcombinedwithanyotherarticleabroad.
Forthepurposeofthistariffitem:
a)goodsonwhicharefundofcustomsdutyordrawbackofcustomsdutyhasbeenmadeshallnotbeclassifiedunderthis
tariffitemexceptuponpaymentofthecustomsdutyequaltotherefundordrawbackallowedand
b)goodsmanufacturedinbondorunderexciseregulationsinCanadaandexportedshallnotbeclassifiedunderthistariff
itemexceptuponpaymentofthecustomsdutytowhichtheywouldhavebeenliablehadtheynotbeenexportedfrom
Canada.
Theprovisionsoftariffitem9814.00.00arebasicallythesameastariffitem9813.00.00,exceptthatthegoodsoftariffitem
9814.00.00arenotofCanadianorigin.Rather,thegoodswereimportedintoCanada,accountedforinaccordancewith
Section32oftheCustomsAct,subsequentlyexportedfromCanadaandreimportedintoCanadaatalaterdate,not
havingbeenenhancedinvalueorimprovedinconditionwhileabroad.
Topic2:TariffItems9813.00.00and9814.00.00(cont.3)
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Containers
Section129oftheCustomsTariffstatesthattheMinisterofPublicSafetyandEmergencyPreparednessmaypermitthe
freeimportationofnonoriginatingcoveringsandcontainers,undertariffitem9813.00.00or9814.00.00,aslongasheis
satisfiedthatasimilarquantityofusablecontainershasbeenexported.
Theprocessdescribedaboveprovidesfortheoperationofthe"containerbank".
Containerbanksaredefinedas:
Aninventoryofcontainersorsimilarcontainersthatisbasedonthemaximumquantityorvalueofeachtypeofa
company'scontaineractuallyinCanadaduringaperiodoftimemutuallyagreeduponbetweenthecompanyandlocal
CBSAofficials,where,unlessexemptedundertheExciseTaxAct,thetaxpayableonthecontainerspursuanttothatAct
hasbeenpaidandwherethecontainers:
havebeenaccountedforundertheCustomsActandreleased,or
originatedinCanada.
Inordertooperateacontainerbank,acompanymustapplytoCBSAforauthorization.
Topic3:TaxStatus
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Goodsthatareclassifiedunderheadings98.13or98.14mayqualifyforanexemptionfromGSTattimeofimport.Code66
istheexemptioncodequotedontheimportdocumentforeligiblegoods.
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Goodsclassifiedunderheadings98.13or98.14aresubjecttoGST,if,priortoimportation,theyweresupplied:
i)outsideofCanadabywayofsale
ii)outsideofCanadabywayoflease,licenceorsimilararrangementor
iii)inCanadaincircumstancestowhichPartVofScheduleVI(Supplies/ZeroRatedExports)applies.
Let'sclarifyeachoftheprecedingsituations:
i)WhenaCanadiancompanysellsgoodstoanonresidentandthegoodsaredeliveredtothenonresidentoutsideof
Canada,thegoodsarenotsubjecttoGST.However,ifthegoodsreturntoCanada,theyaresubjecttoGSTattimeof
importation.
ii)IfthegoodsareexportedbytheownerforleaseoutsideofCanadaandreimportedbythesameownerattheendofthe
lease,thegoodsarenotsubjecttoGST.However,ifthegoodsareimportedintoCanadabysomeoneotherthantheir
owner,GSTapplies.Thesecircumstancesaresimilartothoseini),however,itcoversgoodsthatareleased,licensedor
partofasimilararrangement.
iii)Thethirdsituationreferstoexportedgoods,allofwhicharezerorated.IfaCanadiancompanyexportsgoodswhichare
laterreturnedtoCanada,GSTapplies.
Containersthatqualifyforentryunderheading98.13or98.14areexemptfromGSTasperitem9ofScheduleVIIofthe
ExciseTaxAct.
Topic4:ProofofExport
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Inadditiontotheusualcustomsdocumentsrequired,theimportershouldbeinpossessionofproofofexportfromCanada
whenusingtariffitems9813.00.00and9814.00.00.Suchproofmaybeintheformof:
Canadiancustomsdocumentsverifyingthegoodswereexported
transportationcompanydocuments,suchasabillofladingorfreightinvoice
customsaccountingdocumentsofaforeigncountryor
adeclarationbytheimporter/exportersupportedbycommercialdocumentationidentifyingthegoodsashaving
originatedinCanadaorashavingbeenpreviouslyimported.
Proofofexportdoesnothavetobeprovidedatthetimetherequestforreleaseismadehowever,itmustbeavailableto
CBSAuponrequest.
Lesson1Summary:CanadianGoodsReturned
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InthislessonyoulearnedaboutCanadiangoodsreturned.Younowhaveabetterunderstandingoftariffitems9813.00.00
and9814.00.00andthetaxstatusofCanadiangoodsreturned.Youalsounderstandthatproofofexportiscriticalto
receivethebenefitsofthesetariffitems.
Therearetwotariffitemswhichprovideforthedutyfreeimportationofgoodsthathavepreviouslybeenexported
fromCanada:9813.00.00and9814.00.00.
Tariffitem9813.00.00isforgoodsthathaveoriginatedinCanada.
Tariffitem9814.00.00isforgoodsthathavebeenimportedintoCanada(dutypaid)andexported.
Inordertousetariffitems9813.00.00and9814.00.00,thereturnedgoodsmustnothavebeenenhancedinvalueor
improvedincondition,orhadanyothertypeofmodificationwhileoutsideofCanada.
Thelasttwodigitsofthetariffclassificationnumberprovideadditionaldetailsabouttheimportedgoods.
Containersmaybeimportedundertariffitems9813.00.00and9814.00.00aslongasasimilarquantityofreuseable
containersareexported.
GSTisexemptoncertainqualifyinggoodsofheadings98.13and98.14.
Code66istheGSTcodeusedonaccountingdocumentsforgoodsofheadings98.13and98.14thatareeligiblefor
theGSTexemption.
Takefewminutestoanswerthequestionsonthefollowingscreenstoseehowmuchyouhavelearned.
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Questions:
Attemptsallowed:
Available:
Passrate:
6
Unlimited
Always
60%
Allowed
ClickontheStartquizbuttontostart.YoumaymovebetweenquestionsbyusingtheNextandBackbuttonsbutyoumust
provideananswerbeforeyoucanmoveontothenextquestion.Onceyoucompletetheselfcheck,you'llhavethe
opportunitytoreviewyouranswersandviewthecorrectanswersaswell.Youmayredotheselfcheckasmanytimesas
youwish.
Startquiz
Lesson2:CanadianGoodsAbroad
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Inthislessonyouwilllearnabouttheentryprocessforgoodsthathavebeenexportedforrepairormodificationand
returnedtoCanada.Thismodulewillalsodiscusstheremissionofaportionofthedutiesordinarilypayableonthese
goods.
Rationale
InyourjobasaCCS,youmayberesponsibleforcompletingthedocumentationforgoodsthatarereturningtoCanada
afterhavingbeenexportedforrepairormodificationandyouwillneedtoknowhowtoaccountforthesegoods.
LessonObjective
Attheendofthislesson,youwillbeawareofdutyreliefthatmayallowedongoodsthatareexportedforrepairsor
modificationandthedocumentationrequired.
Topic1:CanadianGoodsAbroad
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Forcustomspurposes,CanadiangoodsabroadreferstothepracticeofexportinggoodsfromCanadainorderthattheybe
repairedormodified,orhavepartsaddedtothem,whileoutsideofCanada.
Forsomegoods,itispossiblethatthereisnolocalexpertisethatcanperformthenecessaryrepairsormodifications.And,
inothersituations,therepairsormodificationscouldbeperformedinCanada,butforpracticalreasonsarenot.Perhaps
thesitewherethegoodscouldberepairedisnotwithinareasonabledistanceofthegoodsorthepartstobeaddedtothe
goodsarenotavailableinCanada.
Forthesereasons,goodsareoftenexportedfromCanadaforthepurposeofbeingrepairedormodified.
WhenthesegoodsarereturnedtoCanada,theyareobviouslynotinthesamestateaswhentheyleft,andtherefore,not
eligibleforentryundertariffitems9813.00.00or9814.00.00.
However,thegoodsmayqualifyfordutyrelief,usuallywiththeprovisionthattheadditionsorrepairscouldnothavebeen
doneinCanadaandotherspecificconditionsaremet.
Topic2:Remission
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InaccordancewithSection101(1)oftheCustomsTariff,aremissionofaportionofthedutiesordinarilypayablemaybe
grantedoncertaingoodsexportedandsubsequentlyimported.
Remissionmaybegrantedwhere:
i)thereturnedgoodswererepairedoutsideCanadaafterbeingexportedforthedeclaredpurposeofbeingrepaired,
(subparagraph101(1)(a))
ii)equipmentwasaddedtothegoodsoutsideofCanada,(subparagraph101(1)(b))or
iii)thegoodsweretheproductofCanadaandworkwasdoneoutsideCanadaonthegoods,(subparagraph101(1)(c)).
Lesson2Summary:CanadianGoodsAbroad
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InthislessonyoulearnedthatwhengoodsareexportedfromCanadaandimportedwiththeirvalueincreasedduetoan
additionorrepair,theymayqualifyforreliefiftheadditionsorrepairscouldnothavebeenpracticallydoneinCanada.
CanadiangoodsabroadreferstothepracticeofexportinggoodsfromCanadainorderthattheyberepairedor
modified,orhavepartsaddedtothem,whileoutsideofCanada.
TherearethreesituationswheredutyisrelievedundertheCanadiangoodsabroadprovisions.
Section101(1)oftheCustomsTariffliststhesesituations:
thegoodswereexportedforrepair
thegoodswereexportedsothatequipmentcouldbeaddedtothemor,
thegoodsweretheproductofCanadaandexportedsothatworkcouldbedonetothem.
Takefewminutestoanswerthequestionsonthefollowingscreenstoseehowmuchyouhavelearnedabout
Canadiangoodsabroad.
Questions:
Attemptsallowed:
Available:
Passrate:
4
Unlimited
Always
60%
Allowed
youwish.
Startquiz
Lesson3:GoodsExportedforRepair
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InLesson2youwereintroducedtotheCanadianGoodsAbroadProgram.Inthislessonwewillbeexaminingingreater
detailtheprocessforimportedgoodsthathavebeenexportedfromCanadaforrepair.
Rationale
InyourjobasaCCS,youneedtobeabletodecideifgoodsthatarereturnedtoCanadaafterhavingbeenexportedfor
repairqualifyfordutyrelief.And,iftheydoqualify,youwillhavetoknowtheamountofrelieftheyareentitledto.
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LessonObjective
AttheendofthislessonyouwillunderstandwhenCanadiangoodsshippedabroadforrepairqualifyfordutyreliefand
whatportionofthedutyiseligibleforrelief.
Topic1:RequirementsforQualifyingforRelief
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Thislessonprovidesmoredetailonsubparagraph101(1)(a)oftheCustomsTariff.Thissectioncoversgoodsthatare
exportedfromCanadaforthepurposeofbeingrepaired.
GoodsexportedforrepairmaybeentitledtorelieffromthepaymentofdutiesontheCanadianportionofgoodswherethe
goods:
wereexportedfromCanadaforthepurposeofbeingrepairedand,
arereturnedtoCanadawithinoneyear.
PermissionmustbegrantedinorderfordutytoberelievedontheCanadianportionofthegoodsthatarereturningafter
havingbeenrepaired.Notethatwherethegoodsaredutyfreetheremaynotbeneedtorequestpermissiontohave
repairsperformedoutsideofCanada.Situationswherepermissionisnotnecessaryareelsewhereinthiscourse.
InordertohavethedutyrelievedontheCanadianportionofrepairedgoods,CBSAmustbesatisfiedthattherepairscould
notbedoneinCanada.ThisevidencecouldincludeprovingtherepairfacilitiesinCanadathatarecapableofperforming
therepairarelocatedfarawayastrikehasoccurredandrepairspecialistsareunavailableortheforeignfacilityhas
proprietaryrightstoallrepairs.
Topic1:RequirementsforQualifyingforRelief(cont.2)
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IfCBSAhasreasontobelievethatrepairfacilitiesexistinCanada,theimporterisadvisedthatthegoodswillbesubjectto
dutyontheirfullvalue(Canadianportionpluscostofrepairs).UponthereturnoftherepairedgoodstoCanada,the
customsorcommercialinvoicemustindicatethefullvalueofthegoods,thatis,thevalueofthegoodsattimeofexport
valueplusanyvalueaddedwhileoutsideofCanada.Astatementontheinvoiceshouldshowthevalueoftherepair,
addition,orworkdoneabroadandincludeanyassociatedproductioncostssuchasmaterials,directlabour,direct
overhead,andprofitchargedbytheforeignrepairfacility.
Thesecostsmustbeindicatedwhetherornotthereisachargefortheservicesoriftheyareperformedunderwarranty.
Topic1:PortionEligibleforRelief(cont.3)
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Theamountoftaxreliefwilldependonwhetherornottherepairsweredoneunderwarranty.
WarrantyRepairsTaxStatus
GoodthatarereturnedtoCanadaaftertheyhavebeenrepairedunderwarrantyarenotsubjecttoGST.Thisisaccording
toparagraph3(j)oftheNonTaxableImportedGoods(GST/HST)Regulations.
NonWarrantyRepairsTaxStatus
WhenrepairsdoneoutsideofCanadahavenotbeenperformedunderwarranty,taxispayableonlyontherepaircostas
longasotherconditionsaremet.Theconditionsthatmustbemetarefoundinparagraph13oftheValueofImported
Goods(GSTT/HST)Regulations.EssentiallythisparagraphmeansthattaxisnotpayableontheCanadianportionofthe
goodsiffulltaxhasbeenpaidonthegoodsatonetimeandtherehavenotbeenanyrefundsordrawbackofthetaxpaid.
Ifthisconditionisnotmet,taxispayableonthefullcostthatis,thecostoftheCanadianportionofthegoodsplusthecost
ofrepair.
Topic2:Accounting
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FordutiablegoodseligiblefortheCanadianGoodsAbroadProgramunderwarranty,atwolineentryisprepared.Thefirst
lineshowsthevalueofthegoods,excludingthecostofrepair.Specialauthorizationcode98010101isindicatedinfield
26.Thiscoderelievesthepaymentofdutyandtax.
Thesecondlineshowsthesametariffclassificationandthevalueoftherepairsonly.Sincethegoodsareunderwarranty,
GSTcode66isindicated.Dutyispayableonthecostofrepairs.
FordutiablegoodseligiblefortheCanadianGoodsAbroadProgramandnotunderwarranty,atwolineentryisprepared.
Thefirstlineshowsthevalueofthegoods,excludingthecostofrepair.Specialauthorizationcode98010101isindicated
infield26.Thiscoderelievesthepaymentofdutyandtax.
Thesecondlineshowsthesametariffclassificationandthevalueoftherepairsonly.Sincethegoodsarenotunder
warranty,dutyandGSTarepayable.
Lesson3Summary:GoodsExportedforRepair
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InthislessonyoulearnedthatifgoodsareexportedfromCanadaforthepurposeofrepair,theymaybeeligibleforduty
reliefundercertaincircumstances.
goodsmaybeentitledtodutyreliefiftheywereexportedforrepairandreturnedtoCanadawithinoneyear
CBSAmustbesatisfiedthegoodscouldnotberepairedinCanada
ifCBSAisnotsatisfied,theymaydemandprooffromtheimporterthattherepairscouldnothavebeendonein
Canada
importerswhocannotprovideproofthatrepairscouldnothavebeendoneinCanadawillhavetopaydutyonthefull
valueofthegoods,includingthecostofrepairs,whenthegoodsreturntoCanada
afullycompletedinvoice,showingthecostofrepairs,isrequiredwhentherepairedgoodsarereturnedtoCanada
and
theinvoicemustalsoindicatewhetherornottherepairwasperformedunderwarranty.
Takefewminutestoanswerthequestionsonthefollowingscreenstoseehowmuchyouhavelearnedabout
goodsexportedfromCanadaforrepair.
Questions:
Attemptsallowed:
Available:
Passrate:
4
Unlimited
Always
60%
Allowed
Startquiz
Lesson4:AdditionsMadeOutsideofCanada
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Canadiangoodsorgoodsthathavehaddutypaiduponthemcanbeexportedinordertohaveadditionsmadetothem.
Theseadditionsincludeparts,materials,andequipment.Thislessonwilldiscusstheconditionsunderwhichthesegoods
qualifyfordutyreliefwhenreturningtoCanada,andtheextentoftherelief.
Rationale
InyourjobasaCCS,youmustbeabletodetermineifgoodsqualifyfordutyreliefwhentheyreturntoCanadaafterhaving
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additionsmadetothem.
LessonObjective
Attheendofthislesson,youwillunderstandtheconditionsunderwhichCanadiangoodsexportedforadditionsare
eligiblefordutyreliefandtowhatextent.
Topic1:RequirementsforQualifyingforRelief
Bookmarkthis
Pursuanttosubparagraph101(1)(b)oftheCustomsTariff,Canadiangoods,andgoodsthathavebeendutypaidinto
CanadaandsubsequentlyexportedforthepurposeofhavingadditionsmadetothemwhileoutsideCanada,maybe
entitledtoapartialreliefofdutyandtaxesupontheirreturntoCanada.
Approvalforuseofthissubsectionofthetariffmustbeobtainedpriortoimportation.Theapplicationmustbesubmitted
threemonthsbeforethegoodsaretobeexported.ThisisdonebywritingtotheclosestCBSAoffice,providing:
adetaileddescriptionoftheequipmentandtheproposedadditionsinorderthatCBSAmaysearchdomestic
producersandmanufacturerstoevaluateifitispracticaltoaddtheequipmentinCanadaand
names,addresses,andtelephonenumbersofCanadiancompaniescontactedtodotheadditionsandcopiesofthe
rejectedbidsreceivedfromCanadiancompanies
copiesofworkordersorcontactswiththeforeignsupplieroftheequipmentthatwillbeaddedand
authorizationtoshareinformationwithothergovernmentdepartments.
Dutiesandtaxesarepayableonthevalueofthearticleorequipmentaddedandthecostofhavingthearticleorequipment
addedtothegoods.ReliefwillnotbegrantedonarticlesthatcannotbeidentifiedasCanadiangoodsatthetimeof
importationorreimportation.
ProofofexportorpreviousdutypaymentmayberequestedbyCBSA.
Topic2:PortionEligibleforRelief
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Wheregoodsaredutiablewhenclassifiedinchapters1to97ofthetariff,theaccountingdocumentmustindicatetwolines.
ThefirstlineshowstheCanadianvalueofthegoodsattimeofexport.Specialauthorizationcode98030101isenteredin
field26and5isindicatedinfield35,astherateofGST.ThespecialauthorizationcodeprovidesrelieffromdutyandGST.
ThesecondlineshowsthevalueofthearticleorequipmentthatwasaddedwhileoutsideCanadadutyandtaxispayable
onthisamount.
Wherethegoodsaredutyfreewhenclassifiedinchapters1to97ofthetariff,theaccountingdocumentmustalsoindicate
twolines.ThefirstlineshowstheCanadianvalueofthegoodsattimeofexport.InordertoproviderelieffromtheGST,
code50isindicatedinfield35.
ThesecondlineshowsthevalueofthearticleorequipmentaddedtothegoodsonlyGSTispayable,sincethegoodsare
dutyfree.
Lesson4Summary:AdditionsMadeOutsideofCanada
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InthislessonyoulearnedthatifgoodsareexportedfromCanadaforthepurposeofhavingequipmentaddedtothem,duty
reliefmaybepermitted.
Goodsexportedforthepurposeofhavinganarticleorequipmentaddedtothemmaybeeligiblefordutyreliefupon
theirreturntoCanada.
Approvalfordutyreliefunderthesecircumstancesmustbeobtainedpriortoimportation.Thefollowingstepsapply:
theimportermustsupplyCBSAwithadescriptionofthegoodsandtheproposedadditions
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theimportermustsupplyCBSAwiththenames,addressesandtelephonenumbersoftheCanadiancompanies
contactedtodotheadditions
CBSAwilldetermineiftheadditioncouldhavebeendoneinCanadaand
CBSAwilladvisetheimporterofthedecision.
ProofofexportorpreviousdutypaymentmayberequestedbyCBSAatthetimeofimportation.
AcopyoftheremissionauthorizationmayberequestedbyCBSA.
Wherethegoodsaredutiablewhenclassifiedinchapters1to97ofthetariff,theaccountingdocumentindicatestwo
lines:
thefirstlineshowstheCanadianvalueofthegoodsatthetimeofexport
aspecialauthorizationcode98030101isusedontheaccountingdocumentandprovidesrelieffromtheduty
andfromtheGST
thesecondlineshowsthevalueofthearticleorequipmentthatwasaddedwhileoutsideCanadaanddutyand
taxispayableonthisamount.
Wherethegoodsaredutyfreewhenclassifiedinchapters1to97ofthetariff,theaccountingdocumentmustalso
indicatetwolines:
toprovideGSTrelief,GSTcode50isusedinfield35oftheB3and
thesecondlineshowsthevalueofthearticleorequipmentaddedtothegoods,onlyGSTispayableonthis
amount.
Takefewminutestoanswerthefollowingquestionstoseehowmuchyouhavelearnedaboutthedutyreliefof
goodsexportedtohaveequipmentaddedtothem.
Questions:
Attemptsallowed:
Available:
Passrate:
4
Unlimited
Always
60%
Allowed
youwish.
Startquiz
Lesson5:GoodsExportedfromCanadaforAdditional
Work
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Thislessonwilldiscussthefinalitemmentionedinsubparagraph101(1)oftheCustomsTariffworkdoneonCanadian
goodsoutsideofCanada.Thisworkdoesnotincluderepairsorgoodsthathavebeenexportedforthepurposeofhaving
additionsmadetothem.
Rationale
InyourjobasaCCS,youneedtoknowhowtodifferentiatebetweenrepairs,equipmentaddedand"workdone"outside
Canada.Youmustbeabletodetermineifimportedgoodsqualifyunderoneofthesecategories.
LessonObjective
AttheendofthislessonyouwillunderstandwhatismeantbygoodsexportedfromCanadaforadditionalwork.Youwillbe
familiarwiththerequirements,andtheconditionsofdutyreliefforthesegoodsupontheirreturntoCanada.
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Topic1:RequirementsforRelief
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Goodsreferredtoinsubparagraph101(1)(c)oftheCustomsTariffarethosethathavebeenexportedfromCanadain
ordertohaveadditionalworkdonetothem.Additionalworkdonetoaproductincludes,butisnotlimitedto,manufacturing,
assembling,coating,embossing,platingorprinting.Inordertoqualifyunder101(1)(c),theimportermustprovethatitis
impracticabletodotheworkinCanadaandthattheexportedgoodsaretheproductofCanada.
Beforeusingthisremission,anapplication,includingacompletedquestionnaire,mustbeforwardedtoCBSAthreemonths
beforetheexportationofthegoods.AcopyofthequestionnaireisavailableinD821,AppendixB.Theapplicationmust
includesatisfactoryevidencethatitwouldnotbepracticabletodotheworkinCanadaandthatthereareplanstoconstruct
orexpandfacilitiesinCanadatoperformthiswork.TheapplicantmustalsoincludealistofCanadiancompaniesthatthey
havecontactedwithrespecttoperformingtheadditionalwork.
InorderfortheexportedgoodstoqualifyasCanadiangoods,theymustmeettherulesoforigin,asperSection16ofthe
CustomsTariff.
Topic2:PortionEligibleforRelief
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Wherethegoodsaredutiablewhenclassifiedinchapters1to97ofthetariff,theaccountingdocumentmustindicatetwo
lines.ThefirstlineshowstheCanadianvalueofthegoodsattimeofexport.Specialauthorizationcode98040101is
enteredinfield26and5isenteredinfield35,astherateofGST.Thespecialauthorizationcodeprovidesrelieffromthe
dutiesowingaswellastheGSTonthisvalue.
ThesecondlineshowsthevalueofworkthatwasdonetothegoodswhileoutsideCanadadutyandtaxispayableonthis
amount.
Wherethegoodsaredutyfreewhenclassifiedinchapters1to97ofthetariff,theaccountingdocumentmustalsoindicate
twolines.ThefirstlineshowstheCanadianvalueofthegoodsattimeofexport.InordertoproviderelieffromtheGST,
code50isindicatedinfield35.
ThesecondlineshowsthevalueofworkdonetothegoodsGSTispayableonthisamount.
Topic2:PortionEligibleforRelief(cont.2)
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Thedifferencesbetweensubparagraphs101(1)(a),(b)and(c)are:
101(1)(a)ThegoodswererepairedoutsideCanadaafterbeingexportedforthedeclaredpurposeofbeingrepaired.The
originofthegoodsisimmaterial.
101(1)(b)EquipmentwasaddedtothegoodsoutsideCanada.Theoriginofthegoodsisimmaterial.
101(1)(c)ThegoodsaretheproductofCanadaandworkwasdoneoutsideCanadaonthegoods.
Thefollowingchartshouldbehelpful.
Subparagraph Special
Authority
Code
Origin
Purposefor
Export
GSTStatus
101(1)(a)
98010101
Immaterial
Repair
Payableonvalueofrepair
101(1)(b)
98030101
Immaterial
Equipment
added
Payableonvalueofarticleof
equipmentadded
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101(1)(c)
98040101
Canada Workdone
Payableonvalueofworkdone
togoods
Topic3:GoodsThatHaveBeenTested
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Goodsexportedfortestingonlyandwhicharenotadjusted,alteredorenhancedinvalueinanyway,regardlessof
whetherachargeismadeforthetest,maybeimportedundertheprovisionsoftariffitems9813.00.00or9814.00.00,
provideddrawbackhasnotbeenclaimed.
Sincethesegoodsaregoodsimportedinprescribedcircumstancesandunderprescribedtermsandconditionsas
providedforinSection8ofScheduleVIIoftheExciseTaxAct,code66canbeusedtoexemptthemfromthepaymentof
GST.PrescribedgoodsarethoseincludedintheNonTaxableImportedGoods(GST/HST)Regulations.
Lesson5Summary:GoodsExportedfromCanadafor
AdditionalWork
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Inthislessonyoulearnedthatifgoodsareshippedabroadtohaveworkdoneonthem,theymaybeeligiblefordutyrelief
upontheirreturntoCanada.
GoodsexportedfromCanadaforthepurposeofhavingworkdoneoutsideCanadamaybeeligibleforaremissionof
dutyupontheirreturntoCanada.
Inordertousethisremission,permissionmustbegrantedbyCBSA.
ImportersmustcompleteaCBSAquestionnairetorequestpermission.
TheexportedgoodsmustbetheproductofCanada.
TheimportermustproveitisimpracticabletohavetheworkdoneinCanada.
Subparagraph101(1)(c)differsfrom101(1)(a)and101(1)(b)inthattheoriginofthegoodsisimmaterialfor101(1)
(a)and101(1)(b).Inaddition,under101(1)(c),thegoodsmustbetheproductofCanada.
WorkdoneoutsideCanadaunder101(1)(c)doesnotincluderepairsortheaddingofequipment.
Wherethegoodsaredutiablewhenclassifiedinchapters1to97ofthetariff:
theaccountingdocumentmustindicatetwolines
aspecialauthorizationcode98040101isshownonthefirstlineoftheB3itremitsboththedutyandGST
thesecondlineshowsthevalueoftheworkthatwasdonetothegoodswhileoutsideCanadadutyandtaxis
payableonthisamount.
Wherethegoodsaredutyfreewhenclassifiedinchapters1to97ofthetariff,theaccountingdocumentmust
indicatetwolines
toprovideGSTrelief,GSTcode50isusedinfield35oftheB3and
thesecondlineshowsthevalueofworkdonetothegoodsdutyandGSTispayableonthisamount.
Goodsthathavebeentestedbutnotadjustedorenhancedmaybeimportedunder9813.00.00or9814.00.00aslong
asadrawbackhasnotalreadybeenclaimed.
Takefewminutestoanswerthequestionsonthefollowingscreenstoseehowmuchyouhavelearnedaboutthe
dutyreliefforgoodsimportedafterhavingbeenexportedtohaveworkdoneonthem.
Questions:
Attemptsallowed:
Available:
Passrate:
4
Unlimited
Always
60%
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Backwardsnavigation: Allowed
youwish.
Startquiz
Lesson6:GoodsExportedtoTradingPartnersfor
RepairorAlteration
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InthislessonyouwilllearnaboutgoodsexportedtoChile,Colombia,CostaRica,Honduras,IsraeloranotherCIFTA
beneficiary,Jordan,Mexico,Panama,PeruortheUnitedStatesforrepairoralteration.
Rationale
InyourjobasaCCS,youneedtobefamiliarwithtariffitem9992.00.00.Youneedtoknowwhatisspecialaboutthistariff
itemandhowitonlyappliestogoodsthatwereexportedforrepairoralterationtocountrieswithwhichCanadahasatrade
agreement.
LessonObjective
Attheendofthislessonyouwillhavelearnedabouttariffitem9992.00.00,andhowitappliestogoodsenteringCanada
fromChile,Colombia,CostaRica,Honduras,IsraeloranotherCIFTAbeneficiary,Jordan,Mexico,Panama,Peruorthe
UnitedStatesorafterhavingbeenrepairedoraltered.
Topic1:GoodsExportedtoTradingPartnersforRepair
orAlternation
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GoodsthathavebeenexportedfromCanadatoChile,Colombia,CostaRica,Honduras,IsraeloranotherCIFTA
beneficiary,Jordan,Mexico,Panama,PeruortheUnitedStatesforrepairoralterationmaybeimportedundertariffitem
9992.00.00.Thistariffitemapplieswhetherornottherepairisperformedunderawarrantyandwhetherornottherepairor
alterationcouldhavebeenperformedinCanada.Thereturnedgoodsaresubjecttofullcustomsdutyrelief.Thistariffitem
readsasfollows:
Goods,regardlessofthecountryoforiginortarifftreatment,otherthanthegoodsoftariffitemNo.9971.00.00,returnedto
Canadaafterhavingbeenexportedtooneofthecountrieslistedbelowforrepairoralterationinthatcountry:
Countries:
Chile
Colombia
CostaRica
Honduras
IsraeloranotherCIFTAbeneficiary
Jordan
Mexico
Panama
Peru
UnitedStates
Important!
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Notethatneitherthecountryoforiginnorthetarifftreatmentofthegoodsisrelevant.
Thetarifftreatmentquotedinfield14oftheaccountingdocumentistheoneusedforthecountryinwhichtherepairsor
alterationswereperformed.
Forexample,aSwissmadewatchexportedfromCanadaforrepairintheUnitedStateswouldbeaccountedforunder
tarifftreatment10andnot2whenitreturnstoCanada.Thecountryoforigininfield12willshowtheapplicableU.S.state
codewheretherepairtookplace.
Thetariffclassificationnotedontheaccountingdocumentistherelevantitemfromchapters197,and9992isindicated
infield28.Thevaluefordutyisthecostofrepairsoralterationsonly,andGSTiscalculatedonthisamount.However,if
therepairsaremadeunderwarranty,thegoodsarenontaxableunderparagraph3(j)oftheNontaxableImportedGoods
(GST/HST)Regulationsandcode66isquotedinfield35oftheB3.
Lesson6Summary:GoodsExportedtoTradingPartners
forRepairorAlteration
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InthislessonyoulearnedthatifgoodsareimportedfromChile,Colombia,CostaRica,Honduras,Israel,orotherCIFTA
beneficiary,Jordan,Mexico,Panama,PeruortheUnitedStatesafterhavingbeenrepairedoraltered,theyaresubjectto
fullcustomsdutyrelief.
Tariffitem9992.00.00appliestogoodsimportedfromChile,Colombia,CostaRica,Honduras,Israel,orotherCIFTA
beneficiary,Jordan,Mexico,Panama,PeruortheUnitedStatesafterhavingbeenrepairedoraltered.
Undertariffitem9992.00.00,thetarifftreatmentisirrelevant.
Thetarifftreatmentquotedontheaccountingdocumentistheoneusedforthecountryinwhichtherepairsor
alterationswereperformed.
Undertariffitem9992.00.00thecountryoforiginisirrelevant.
ThecountryoforiginontheaccountingdocumentisthecountryortheapplicableU.S.statewheretherepairtook
place.
Thetariffclassificationnotedontheaccountingdocumentistherelevantitemfromchapters197.
"9992"isindicatedinfield28,underTariffCodeontheaccountingdocument.
Thevaluefordutyisthecostofrepairsoralterationsonly,andGSTiscalculatedonthisamount.
Iftherepairsoralterationwereperformedunderwarranty,GSTcode66appearsinfield35,underRateofGSTon
theaccountingdocument.
Takefewminutestoanswerthequestionsonthefollowingscreenstoseehowmuchyouhavelearnedinthis
lesson.
Questions:
Attemptsallowed:
Available:
Passrate:
4
Unlimited
Always
60%
Allowed
Startquiz
Module22Summary:DutyRelief
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InthismoduleyoustudiedthedutyreliefonCanadiangoodsthatarereturnedtoCanada.Knowingwhenanimporteris
entitledtodutyreliefisasimportantascalculatingthecorrectamountofduty.YoucontinuedyourstudiesoftheCustoms
Tariffbyexaminingtariffitems9813.00.00,9814.00.00and9992.00.00.
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Section101oftheCustomsTariffwasintroduced.Youwillbereferringtothissectionwhenaccountingforgoodsthathave
beenexportedforrepair,alterationortohaveequipmentaddedtothem.
Followingisshorttestonwhatyouhavelearnedaboutdutyrelief.
Module22:Quiz
Questions:
Attemptsallowed:
Available:
Passrate:
8
Unlimited
Always
60%
Allowed
provideananswerbeforeyoucanmoveontothenextquestion.Onceyoucompletethequiz,you'llhavetheopportunityto
reviewyouranswersandviewthecorrectanswersaswell.Youmayredothequizasmanytimesasyouwish.
Startquiz
Module23:DutyDeferralProgram
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Undercertaincircumstances,importers,producersandexporterscandelayordeferthepaymentofdutiesonimported
goods.ThiscanbedonebystoringgoodsinawarehousebeforeenteringtheCanadianmarketforconsumption,itcould
involvegoodsbeingexportedinsameconditionastheywereimportedorconsumedintheprocessingofothergoods,or
goodsthatarefurthermanufacturedinbondforforeignmarkets.
TheDutyDeferralProgramwascreatedtohelpCanadianbusinessesbemorecompetitivebyofferingrelieffrommost
dutiesandtaxes,whetherornottheirgoodsweremanufacturedinCanada.Companiesorindividualsmaydeferthe
paymentofdutiesbyparticipatingintheDutyDeferralProgramwhichincludestheDutiesReliefProgramandtheBonded
WarehouseProgram.Wewillbediscussingwhycompaniesmightbenefitfromtheseprogramsandtherequirementsof
each.
ModuleObjective
AsaCCS,youmayberequiredtoadviseaclientoryouremployerabouttheadvantagesoftheDutiesRelieforBonded
WarehousePrograms.Forthisreasonitisimportanttostudytherequirementsofeachprogram.
Lesson1:DutiesReliefProgram
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Inthislesson,youwillbeintroducedtotheDutiesReliefProgramanditspurposeandrequirements.
Rationale
AsaCCS,knowingthatsuchaprogramisavailablecanbeanadvantagetoyourclientsoryourcompany.
LessonObjective
Attheendofthislesson,youshouldbefamiliarwiththerationalefortheDutiesReliefProgramandwhattherequirements
areforparticipatinginthisprogram.
Topic1:PurposeofDutiesReliefProgram
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TheDutiesReliefProgramalleviatestheobligationtopaydutiesonimportedgoodsthatwilleventuallybeexportedeither
inthesameconditionorafterbeingused,consumed,orexpendedintheprocessingofothergoods.Whyarecompanies
allowedtodeferthepaymentofduties?TheintentionoftheprogramistogiveCanadianbusinessesanopportunityto
reducecosts,andhavethesameadvantageascompaniesoperatinginforeigntradezonesaroundtheworld.Companies
arefreedfromtheobligationtopaydutyongoodsthatwillbeexportedorongoodsenteringCanadathatwillbeprocessed
andexported.Thisallows"manufacturinginbond"fortheexportmarket.Furthermore,sincethegoodscanbeprocessed,
repairedordisplayedlocallywithoutpaymentofduty,CanadianbusinessesmaybeabletoremaininCanadaratherthan
moveoffshore.
Whetheracompanyneedstomanufacture,repair,displayordemonstrateimportedgoods,orthegoodsareneededfor
developmentorproductioninCanada,participationinthisprogrammeansthattherearenopaymentsofcustomsduties,
antidumpingandcountervailingduties,andexcisetaxes,otherthantheGoodsandServicesTax(GST).
Section89oftheCustomsTariffallowsfordutytobedeferredattimeofimportationforimportedgoodsthatare:
a)releasedandsubsequentlyexportedinthesameconditioninwhichtheywereimported
b)released,processedinCanada,andsubsequentlyexported
c)releasedanddirectlyconsumedorexpendedintheprocessinginCanadaofgoodsthataresubsequentlyexported
d)released,ifthesamequantityofdomesticorimportedgoodsofthesameclassisprocessedinCanadaand
subsequentlyexportedor
e)released,ifthesamequantityofdomesticorimportedgoodsofthesameclassisdirectlyconsumedorexpendedinthe
processinginCanadaofgoodsthataresubsequentlyexported.
Topic2:Requirements
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TorequestparticipationintheDutiesReliefProgram,aK90applicationmustbecompleted.Whencompleted,the
applicationissubmittedtoCBSA.Theinformationcontainedintheapplicationistreatedconfidentiallyandisrequiredfor
theapprovalprocess.
OnceauthorizedbyCBSA,auniquelicencenumberisissued.WhenimportinggoodsundertheDutiesReliefProgram,the
licencenumberhastobeplacedinfieldno.26,"SpecialAuthority"oftheB3.Thisnumberalsoidentifiestheimporteras
aneligibleparticipantshouldtheypurchasegoodsdomesticallyfromanotherparticipant.
Thisprogramwillbeofbenefittopersonswhopresently,orwill:
a)importgoodsintoCanada,
b)receivegoodsimportedintoCanada,or
c)exportimportedgoodsfromCanada,
andwanttodeferthepaymentofdutiesatthetimeofimportation.
ThegoodsmustbeexportedfromCanadawithinfouryearsofthedateofreleaseofthegoods.Inthecaseofimported
spiritsusedtomanufacturedistilledspirits,thegoodsmustbeexportedwithinfiveyears.
Topic3:ExportersofProcessingServicesProgram
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WhileGSTisnotrelievedundertheDutiesReliefProgram,itcanberelievedundertheExporterofProcessingServices
(EOPS)program.TheEOPSprogramrelievesGSTatthetimeofimportationifthegoodswillbeprocessedandexported.
Thegoodsmustbeexportedwithinfouryears.Toqualifyforthisprogram,theimportermustbeaGST/HSTregistered
company,heorshecannotownapropertyinterestinthegoodsandcannotbecloselyrelatedtothenonresidenton
whosebehalftheworkisbeingdone.IfyoubelievethatyourclientoremployerqualifiesforEOPS,thenyouortheymay
wishtocontacttheCanadaRevenueAgencytoapplyforGST/HSTreliefofnondutiablegoodsorcontactCBSAforrelief
ofdutiesandGST/HSTbycompletingaFormK90,DutiesReliefApplication.
AllauthorizationsforrelieffromthepaymentoftheGST/HSTundertheEOPSProgramarevalidforthreeyears.
Lesson1Summary:DutiesReliefProgram
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InthislessonyoulearnedabouttheDutiesReliefProgram.Youlearneditspurposeandtherequirementsforparticipating
intheprogram.
TheDutiesReliefProgramrelievesthepaymentofdutiesonimportedgoodsthatwilleventuallybeexportedeitherin
thesameconditionorafterbeingused,consumedorexpendedintheprocessingofothergoods.
Inmostcases,undertheDutiesReliefProgram,thereisnopaymentofcustomsduties,antidumpingand
countervailingduties,orexcisetaxes.
GSTisnotrelievedundertheDutiesReliefProgram.
Torequestparticipationintheprogram,onemustcompleteaK90application.
CBSAassignsauniquecertificatenumberforthoseacceptedintheprogram.
Whenimportinggoods,thecertificatenumberisplacedinfieldno.26,"SpecialAuthority"oftheB3.
Thecertificatenumberidentifiesparticipantsoftheprogramshouldtheypurchasegoodsdomesticallyfromanother
participant.
Ingeneral,goodsmustbeexportedfromCanadawithinfouryearsofthedateofreleaseofthegoods.
TheEOPSprogramrelievesGSTatthetimeofimportationongoodsthatwillbeprocessedandexported.
YoushouldnowbefamiliarwiththeDutiesReliefProgram.Takefewminutestoanswerthequestionsonthe
followingscreenstoseehowmuchyouhavelearned.
Questions:
Attemptsallowed:
Available:
Passrate:
4
Unlimited
Always
60%
Allowed
youwish.
Startquiz
Lesson2:CustomsBondedWarehouseProgram
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Inthislesson,youwillbeintroducedtothesecondoptionundertheDutyDeferralProgram:theCustomsBonded
WarehouseProgram.
Rationale
AsaCCS,familiaritywiththeCustomsBondedWarehouseProgramwillputyouinabetterpositiontoadviseyour
employer,importersorexportersonhowtodeferthepaymentofduty.
LessonObjective
AttheendofthislessonyoushouldbefamiliarwiththepurposeoftheCustomsBondedWarehouseProgramandthe
requirementstoparticipateintheprogram.
Topic1:PurposeoftheCustomsBondedWarehouse
Program
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CustomsbondedwarehousesarelicensedbyCBSAandoperatedbytheprivatesector.Goodsinabondedwarehouse
areconsideredtobeimportedintoCanadabutnotreleased.Importedanddomesticgoodsdestinedforexportmaybe
placedinabondedwarehousebeforetheyareexported.
Bondedwarehousefacilitiesprovideforthecompletedeferralofcustomsduties,antidumpingandcountervailingduties,
andexcisedutiesandtaxes,includingtheGST/HST.Thedeferralcontinuesuntilthegoodsareremovedfromthebonded
warehouseandeitherreleasedforCanadiandomesticconsumptionorexported.
Ingeneral,goodsmustberemovedfromthebondedwarehousewithinfouryearsofthedatetheywereenteredintothe
warehouse.Othergoods,suchasintoxicatingliquorandtobaccoproducts,haveafiveyeartimelimit.Theselimitscanbe
extendedifdeemednecessary.
Allpermitsorcertificatesarerequiredtobepresentedwhenthegoodsenterthewarehouse.Prohibitedgoods,orrestricted
goodswithoutpermits,maynotbeenteredintoabondedwarehouse.
Anannuallicensingfeeapplies.IftheCBSAidentifiesaneedforsecurityduringtheprocessingofanapplication,security
mayalsohavetobepostedbasedonthetypesofgoodsimportedandthefinancialcomplianceprofileoftheimporter.
Topic2:Benefits
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TheCustomsBondedWarehouseProgrambenefitspersonswho:
importgoodsintoCanadaandwishtodefer,foruptofouryears,thepaymentofdutiesuntilthegoodsarereleased
forCanadianconsumption
consolidateimportedanddomesticgoodsforexport
performcertainoperationsonthegoodswhileinthebondedwarehouseor
importgoodstemporarilyfordisplayatconventions,exhibitionsortradeshows.
Bothresidentsandnonresidentsmayoperateabondedwarehouse.Toapplytobecomeanoperator,onemustcomplete
FormE401,ApplicationforLicencetoOperateaCustomsBondedWarehouseandpresentittotheCBSAofficeclosestto
thewarehouse.Afterreviewingtheapplication,CBSAmayrequestadditionalinformationandmayvisitthepremisesto
reviewtherecordkeepingandsecuritysystems.Thisisdonetoensurethegoodsaresecureandreadilyidentifiable
throughtherecords.
Topic3:GoodsEnteredforDisplayandMarking
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Goodsenteredfordisplay
TheBondedWarehouseProgramprovidesfortheimportationofgoodsfordisplay,inspection,andexhibitionthathave
beenreportedanddocumentedtoenterthebondedwarehouse.Thiscannotincludeprohibitedorrestrictedgoods.These
goodsincludeproductsondisplayinthebondedwarehouse,aswellasgoodswhichformpartofthedisplaysuchas
stands,tables,backdrops,decorations,displaybooths,tents,andotherhousingsorcoverings.
Goodsenteredformarking
Thereisa90daytimelimitforgoodsfordisplayatconventionsandexhibitionsandformarkingpurposes.Thisisavailable
fortheonetimeeventorganizerandfortheimporterwhohasimportedgoodsthatarenotmarkedaccordingtothe
MarkingofImportedGoodsRegulations.
ThereareprovisionsundertheCustomsActforextensionsofthistimelimitifitisdeemednecessary.
Lesson2Summary:CustomsBondedWarehouse
Program
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InthislessonyoulearnedabouttheCustomsBondedWarehouseProgram.Youlearneditspurposeandthebenefitsof
theprogram.
CustomsbondedwarehousesarelicensedbyCBSAandoperatedbytheprivatesector.
GoodsinabondedwarehouseareconsideredtobeimportedintoCanadabuthavenotbeenreleased.
Bondedwarehousefacilitiesprovideforthecompletedeferralofcustomsduties,antidumpingandcountervailing
duties,excisedutiesandtaxes,includingtheGST.
TheCustomsBondedWarehouseProgramprovidesfortheimportationofgoodsfordisplay,inspection,and
exhibitionthathavebeenreportedanddocumentedtoenterthefacility,otherthanprohibitedorrestrictedgoods.
Bothresidentsandnonresidentsmayoperateabondedwarehouse.
Toapplytobecomeanoperator,onemustcompleteFormE401,ApplicationforLicencetoOperateaCustoms
BondedWarehouse.
Ingeneral,goodsmustberemovedfromthebondedwarehousewithinfouryearsofthedatetheywereenteredinto
thewarehouse.
Allpermitsorcertificatesarerequiredtobepresentedwhenthegoodsenterthewarehouse.
YoushouldnowbefamiliarwiththesecondoptionoftheDutyDeferralProgram:theCustomsBonded
WarehouseProgram.Takefewminutestoanswerthequestionsonthefollowingscreenstoseehowmuchyou
havelearned.
Questions:
Attemptsallowed:
Available:
Passrate:
5
Unlimited
Always
60%
Allowed
youwish.
Startquiz
Module23Summary:DutyDeferralProgram
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InthismoduleyoustudiedtheDutyDeferralProgram.YouwereintroducedtotheDutiesReliefProgramandtheCustoms
BondedWarehouseProgramandtheadvantagesofboth.Youlearnedthecircumstancesunderwhichimporters,
producers,andexportersareallowedtoeitherrelieveordeferthepaymentofdutiesonimportedgoods.Youbecame
familiarwiththerequirementsandtimelimitsofeachprogram.YoualsostudiedGSTreliefundertheExporterof
ProcessingServicesprogram.
FollowingisshorttestonwhatyouhavelearnedabouttheDutyDeferralProgram.
Module23:Quiz
Questions:
Attemptsallowed:
Available:
Passrate:
6
Unlimited
Always
60%
Allowed
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Startquiz
Module24:AdjustmentsAfterPayment
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Inmanycases,adjustmentsmustbemadetoaccountingdocumentsafterdutiesandtaxeshavebeenpaid.Forexample,
youmayfindoutthatthegoodsreceivedwerenotthegoodsthatwereorderedorthatatariffclassificationnumberused
onanaccountingdocumentisincorrect.Insomecases,theadjustmentwillresultinarefundofduty,insomecasesitwill
resultinthepaymentofadditionalduty,andinsomecasestheresultwillbenochangeatallintheamountofduty.This
modulewillalsoexplaininwhichcasesafailuretocorrectwillresultinapenalty.
ModuleObjective
Whenyouhavecompletedthismoduleyouwillbeabletodeterminewhetherornotanaccountingdocumentmustbe
adjusted,andifso,how.
Lesson1:SelfAdjustmentsandRefunds
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Inthislessonyouwilllearnabouttherequirementtomakeadjustmentstoaccountingdocumentsafterdutiesandtaxes
havebeenpaid.Youwilllearnwhenandwhyanadjustmentisrequired,thelegislativerequirementsandtimelimitsfor
makingadjustments,andthesupportingdocumentationrequired.
Rationale
AsaCCS,yourclientoremployermayadviseyou,oryoumayfindoutforyourselfduringareview,thatanaccounting
documentisnotcorrectandrequiresadjusting.
LessonObjective
Youwillunderstandhowtomakeadjustmentstoaccountingdocumentsafterdutiesandtaxeshavebeenpaid.
Topic1:SelfAdjustmentsCorrections
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SelfAdjustments
Theselfadjustmentprocessappliestoerrorsmadeinoneofthefollowingareas:
origin,
tariffclassification,
valueforduty,or
diversion,eitheroftheenduseorenduser,oftheimportedgoods.
Selfadjustmentsmayresultineitherapaymentofadditionaldutiesorarefundofduties,orneitherapaymentnorrefund
ofduties.Wherethereisneitherapaymentnorarefund,theselfadjustmentistermedarevenueneutralcorrection.
Legislation
Whenselfadjusting,formB2isused.LaterinthismoduleyouwillseehowtocompleteaB2.TheB2mustincludethe
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legislativereferencethatallowstheselfadjustmenttobefiled.Legislationregardingselfadjustmentsandrefundsisfound
intheCustomsActandtheRefundofDutiesRegulations.
IncaseswheremoneyisowingtoCBSAortheendresultisrevenueneutral,selfadjustmentsarefiledunder
subsections32.2(1)32.2(2)or32.2(6)oftheCustomsAct.Thistypeofselfadjustmentiscalledacorrection.
Incaseswhereaselfadjustmentresultsinarefund,theselfadjustmentisfiledundersubsections74(1)(c.1)74(1)(c.11)
74(1)(e)74(1)(f)andsometimes74(1)(g)oftheCustomsAct.
RefundsmayalsoberequestedunderothersubsectionsoftheCustomsAct,including74(1)(a)74(1)(b)74(1)(c)74(1)
(d)sometimes74(1)(g)and76.However,thesearenotconsideredselfadjustmentssincetheydonotdealwithissuesof
origin,tariff,value,orenduse.
Topic1:SelfAdjustmentsCorrections(cont.2)
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SelfAdjustments(Corrections)UnderSubsections32.2(1)32.2(2)or32.2(6)
Subsection32.2(1)
Animporterorownerofgoodsforwhichpreferentialtarifftreatmentunderafreetradeagreementhasbeenclaimedorany
personauthorizedtoaccountforthosegoodsunderparagraph32(6)(a)orsubsection32(7)shall,withinninetydaysafter
theimporter,ownerorpersonhasreasontobelievethatadeclarationoforiginforthosegoodsmadeunderthisActis
incorrect,
(a)makeacorrectiontothedeclarationoforiginintheprescribedmannerandintheprescribedformcontainingthe
prescribedinformationand
(b)payanyamountowingasdutiesasaresultofthecorrectiontothedeclarationoforiginandanyinterestowingorthat
maybecomeowingonthatamount.
ThissectionoftheCustomsActmeansthatifyouhaveaccountedforgoodsunderatarifftreatmentrelatedtoafreetrade
agreement,andlaterfindthatthetarifftreatmentusedisnotcorrect,youmustcorrectthetarifftreatmentwithin90daysof
having"reasontobelieve"thattheoriginaldeclarationoforiginisincorrect.Thetermreasontobelievewillbediscussed
laterinthislesson.
Thisisaselfadjustment(becauseitdealswithorigin)andacorrection(sincetheendresultiseitherapaymentofdutyor
revenueneutral).
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Subsection32.2(2)
(2)Subjecttoregulationsmadeundersubsection(7),animporterorownerofgoodsorapersonwhoiswithinaprescribed
classofpersonsinrelationtogoodsorisauthorizedunderparagraph32(6)(a)orsubsection32(7)toaccountforgoods
shall,withinninetydaysaftertheimporter,ownerorpersonhasreasontobelievethatthedeclarationoforigin(otherthan
adeclarationoforiginreferredtoinsubsection(1)),declarationoftariffclassificationordeclarationofvaluefordutymade
underthisActforanyofthosegoodsisincorrect,
(a)makeacorrectiontothedeclarationintheprescribedformandmanner,withtheprescribedinformationand
(b)payanyamountowingasdutiesasaresultofthecorrectiontothedeclarationandanyinterestowingorthatmay
becomeowingonthatamount.
ThissectionoftheCustomsActmeansthatifyouhaveaccountedforgoodsunderanytarifftreatmentotherthanafree
tradetarifftreatment,andlaterfindthatthetarifftreatmentusedisnotcorrect,youmustcorrectthetarifftreatmentwithin
90daysofhavingreasontobelievethattheoriginaldeclarationoforiginisincorrect.
Thissubsectionalsoprovidesthelegislativeauthoritytocorrecttheaccountingdocumentforgoodsthathavebeen
accountedforusingtheincorrecttariffclassificationorvalue,regardlessofthetarifftreatment,aslongastheoutcomeisa
paymentofdutyorisrevenueneutral.
Thisisaselfadjustment(becauseitdealswithorigin,tariffclassification,orvalue)andacorrection(sincetheendresultis
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eitherapaymentofdutyorrevenueneutral).
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Subsection32.2(6)
(6)Theobligationunderthissectiontomakeacorrectiontoadeclarationoftariffclassificationincludesanobligationto
correctadeclarationoftariffclassificationthatisrenderedincorrectbyafailure,afterthegoodsareaccountedforunder
subsection32(1),(3)or(5)or,inthecaseofprescribedgoods,afterthegoodsarereleasedwithoutaccounting,tocomply
withaconditionimposedunderatariffitemintheListofTariffProvisionssetoutinthescheduletotheCustomsTariffor
underanyregulationsmadeunderthatActinrespectofatariffiteminthatList.
Thissubsectioniscitedwhenimportedgoodshavebeendivertedtoanonqualifyinguseoruserasspecifiedunderatariff
item.
Forexample,letssaythatgoodswereimportedusingthebenefitsoftariffcode9973.Tariffitem9973.00.00reads:
Articlesandmaterials,excludingantifreezingpreparationsofheading38.20,foruseinthemanufactureofthreewheeled
motorcycles.Ifitturnsoutthatthegoodswerenotusedinthemanufactureofthreewheeledmotorcycles,theaccounting
documentmustbeadjusted.
Thisisaselfadjustment(becauseitdealswiththediversionofgoods)andacorrection(sincetheendresultiseithera
paymentofdutyorrevenueneutral).
Topic2:ReasontoBelieve
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WithrespecttoSection32.2oftheCustomsAct,reasontobelieveoccurswhentheimporterhasspecificinformation
regardingtheorigin,tariffclassification,valueforduty,ordiversionofimportedgoodsthatgiveshimreasontobelievethat
adeclarationisincorrect.
Onceanimporterhasreasontobelieve,theyareobligatedtoselfadjust.And,inordertoavoidpenalties,correctionsmust
befiledwithin90daysofhavingreasontobelieve.
CBSAhasprovidedthefollowinglistofwhatitconsidersreasontobelieveasitrelatestoSection32.2.Reasontobelieve
isnotnecessarilylimitedtothislist.
(a)legislativeprovisionssuchasspecificorigin,tariffclassification,orvaluefordutyprovisionsthatareprimafacie(i.e.,at
firstsight),evident(i.e.,obvious,apparent),andtransparent(i.e.,clear,selfexplanatory).Fordetailedexamplesofprima
facie,evident,andtransparentlegislativeprovisions,refertoAppendix
(b)formalassessmentdocumentsissuedbytheCBSAtotheimporter,relatingtotheimportedgoods,suchas
determinations(otherthandeemeddeterminations),redeterminations,furtherredeterminations,etc.
(c)finaltribunalorcourtdecisionsinwhichtheimporterwaseithertheappellant,respondentorintervenor
(d)informationreceivedfromexporters,suppliers,etc.(e.g.,cancellationofcertificatesoforiginvendorsinvoiceindicating
retroactivepriceincreaseforgoodsalreadypurchased)
(e)writtencommunication,addresseddirectlytotheimporterfromtheCBSA,suchasaruling(e.g.,nationalcustoms
ruling,advancerulingissuedundersection43.1oftheAct),atradecomplianceverificationfinalreport,oranofficial
notificationasaresultofanexporteroriginverification
(f)afinalreportfromanimporterinitiatedinternalauditorreview,or,fromanexternalcompanyconductinganauditor
reviewofanimporterscompanyor
(g)knowledgethatthegoodsnolongerqualifyorcomplywithaconditionofrelieforarestrictionimposedbythe
concessionarytariffitemdeclared(e.g.,goodsdivertedtoanonqualifiedconditionaluseorconditionaluser).
Topic3:Penalties
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ItisimportanttonotethatpenaltieswillapplyonlyincaseswherethereisreasontobelieveANDtheselfadjustmentis
revenueneutralorresultsinapaymentofduty.Penaltiesarenotissuedforfailingtorequestarefund.
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Wheretheendresultisrevenueneutral,oneofthefollowingpenaltieswillapply:C080,C081,C082orC083.
Wheretheendresultisapaymentofduty,oneofthefollowingpenaltieswillapply:C350,C351,C352orC353.
Followingisarecapofthesepenalties.
PenaltiesIssuedWhenResultofaSelfAdjustmentisRevenueNeutral
Contra
vention Reason
Number
Amount
Subsectionofthe
CustomsActfor
SubmittingaSelf
adjustment
1st:$150*
C080
Authorizedpersonfailedtomaketherequiredcorrectionstoadeclaration
oforiginofimportedgoodssubjecttoafreetradeagreementwithin90
daysafterhavingreasontobelievethatthedeclarationwasincorrect.
2nd:$225**
3rdand
Subsequent:
$450***
32.2(1)
1st:$150*
C081
oforiginofimportedgoodswithin90daysafterhavingreasontobelieve
thatthedeclarationwasincorrect.
2nd:$225**
32.2(2)
3rdand
Subsequent:
$450
1st:$150*
C082
oftariffclassificationwithin90daysafterhavingreasontobelievethatthe
declarationwasincorrect.
2nd:$225**
3rdand
Subsequent:
$450***
32.2(2)
1st:$150*
C083
ofvaluefordutywithin90daysafterhavingreasontobelievethatthe
declarationwasincorrect.
2nd:$225**
32.2(2)
3rdand
Subsequent:
$450***
*toamaximumof$5,000(perissue)or$25,000(peroccurrence)
**toamaximumof$200,000(peroccurrence)
***toamaximumof$400,000(peroccurrence)
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PenaltiesIssuedWhenResultofaSelfAdjustmentisaPaymentofDuty
Contra
vention Reason
Number
Amount
Subsectionofthe
CustomsActfor
SubmittingaSelf
adjustment
1st:$150*
C350
Authorizedpersonfailedtopaydutiesasaresultofrequiredcorrectionstoa
2nd:$225**
declarationoforiginofimportedgoodssubjecttoafreetradeagreement
32.2(1)
within90daysafterhavingreasontobelievethatthedeclarationwas
3rdand
incorrect.
Subsequent:
$450***
1st:$150*
C351
Authorizedpersonfailedtopaydutiesasaresultofrequiredcorrectionstoa 2nd:$225**
declarationoforiginofimportedgoodswithin90daysafterhavingreasonto
32.2(2)
3rdand
believethatthedeclarationwasincorrect.
Subsequent:
$450***
1st:$150*
C352
declarationoftariffclassificationwithin90daysafterhavingreasonto
32.2(2)
3rdand
believethatthedeclarationwasincorrect.
Subsequent:
$450***
1st:$150*
C353
declarationofvaluefordutywithin90daysafterhavingreasontobelieve
32.2(2)
3rdand
thatthedeclarationwasincorrect.
Subsequent:
$450***
*toamaximumof$5,000perissueor$25,000peroccurrence
**toamaximumof$200,000peroccurrence
***toamaximumof$400,000peroccurrence
Topic4:SelfAdjustmentsRefunds
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Selfadjustmentscanresultinarefundofduty.Althoughconsideredrefunds,theyarealsoselfadjustmentsiftheydeal
withorigin,tariffclassification,valueforduty,anddiversion.
Thelegislativeauthorityandtimeframeinwhichtofilearefunddependsonthereasontheclaimismade.Itisvery
importanttobeawareofthetimeframesforfilingrefundclaims.Ifyoufilearefundclaimbeyondthelegislatedtimeframe,
theclaimwillberejectedbyCBSAandyouwillhavenoopportunitytoclaimbackdutythatwaspaidinerror.
TherelevantsubsectionandtypeofrefundthatcanbefiledunderSection74oftheCustomsActare:
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Paragraph74(1)(c.1)
LegislativeauthorityforarefundofdutyongoodsoriginatinginaNAFTAcountryorChile,buttheNAFTAorChiletariff
treatmentwasnotusedatthetimeofaccounting.ACertificateofOriginmustbeincludedwiththerefundrequest.
Paragraph74(1)(c.11)
LegislativeauthorityforarefundofdutyongoodsoriginatinginIsraeloranotherCIFTAbeneficiary,orColombia,Costa
Rica,anEFTAstate,Honduras,Jordan,PanamaorPerubutCIFTA,CCOFTA,CCRFTA,CEFTA,CHFTA,CJFTA,
CPAFTA,CPFTAtarifftreatmentwasnotusedatthetimeofaccounting.Therequiredproofoforiginisastatement,ora
CertificateofOriginandisreferredtointheCEFTAastheOriginDeclaration.Thisproofoforiginmustbesubmittedwith
therefundrequest.
Topic4:SelfAdjustmentsRefunds(cont.2)
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Paragraph74(1)(e)
Legislativeauthorityforarefundofdutypaidoroverpaidasaresultofanerrorintheorigin(otherthanNAFTA,Chile,
CostaRica,anEFTAstate,IsraeloranotherCIFTAbeneficiary,Peru,Colombia,Honduras,Jordan,orPanamatariff
classificationorvalueforduty.Documentstosupportthisclaimincludeevidencetosupportthechangeintarifftreatment,
tariffclassification,orvalueandcanincludebillsoflading,productcatalogues,orpricelists.
Paragraph74(1)(f)
Legislativeauthorityforarefundofdutypaidongoods,orgoodsintowhichimportedgoodshavebeenincorporated,which
areusedbyaqualifiedenduserorforaqualifiedenduse.Documentstosupportthistypeofrefundrequestshould
includeadeclarationsignedbytheenduserofthegoodsandacopyofthepurchaseorder,salesinvoice,contractor
otherdocumentthatrelatestothesaleordisposalofthegoodsinCanada,ifapplicable.
Paragraph74(1)(g)
Legislativeauthorityforarefundofdutyoverpaidorpaidinerrorforanyofthefollowingreasons:
(i)thedutieswerereducedorremovedbyaretroactiveorderorregulationmadeundertheCustomsTariff
(ii)thegoodsareprohibitedforuseorsalebyaprovinciallawor
(iii)thedutiesleviedundersection21.1oftheCustomsTariffinrespectofimportedbulkspiritswerepaidorcollected
undertheCustomsAct.
Supportingdocumentsmustbeprovided.
Topic5:TimeFrames
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Subsection74(3)oftheCustomsActprovidesthetimeframesinwhichthepreviousrefundrequestsmustbemade.This
sectionstates:
Norefundshallbegrantedundersubsection(1)inrespectofaclaimunless
(a)thepersonmakingtheclaimaffordsanofficerreasonableopportunitytoexaminethegoodsinrespectofwhichthe
claimismadeorotherwiseverifythereasonfortheclaimand
(b)anapplicationfortherefund,includingsuchevidenceinsupportoftheapplicationasmaybeprescribed,ismadetoan
officerintheprescribedmannerandintheprescribedformcontainingtheprescribedinformationwithin
(i)inthecaseofanapplicationforarefundunderparagraph(1)(a),(b),(c),(c.11),(d),(e),(f)or(g),fouryearsafterthe
goodswereaccountedforundersubsection32(1),(3)or(5),and
(ii)inthecaseofanapplicationforarefundunderparagraph(1)(c.1),oneyearafterthegoodswereaccountedfor
undersubsection32(1),(3)or(5)orsuchlongerperiodasmaybeprescribed.
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Important!
WhatthismeansisthatrefundrequeststorequestatarifftreatmentchangetoaNAFTAor*Chiletarifftreatment
(CCFTA),filedunderparagraph74(1)(c.1),mustbefiledwithinoneyearfromthedateofaccounting.Refundsfiledunder
paragraphs74(1)(a),(b),(c),(c.11),(d),(e),(f)or(g)mustbefiledwithinfouryearsfromthedateofaccounting.
*NOTE:Theapplicationforrefundofdutiesunder74(1)(c.1)forCCFTAeligiblegoodsimportedonorafterMarch1,2014
maybemadewithinfouryearsfromthedatethegoodswereaccountedforundersubsection32(1),(3),or(5)ofthe
CustomsAct.
Topic6:OtherRefunds
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Refundclaimsarenotconsideredselfadjustmentsiftheyarefiledforreasonsotherthantoadjusttheorigin,tariff,orvalue
ofimportedgoods.Suchclaimsarealsonotconsideredcorrections,sincetheyarenotfiledunderSection32ofthe
CustomsAct.
OtherrefundclaimsthatcanbefiledunderSections74and76are:
Paragraph74(1)a
Legislativeauthorityforarefundofdutyongoodsthathavesuffereddamage,deterioration,ordestructionfromthetime
ofshipmenttoCanadatothetimeoftheirrelease.Forexample,goodsmayhavesustainedwaterdamagewhilethey
wereonashipontheirwaytoCanada.Thissectionisnotusedforgoodsthathavebeendamaged,deteriorated,or
destroyedaftertheyhavebeenreleased.
Ifthegoodsinquestionareperishable,writtennoticemustbeprovidedtoCBSAwithinthreedaysoftheirrelease.
ThewrittennoticethatisoftenusedisformK11,CertificateofDamagedGoods.FormK11issubmittedat,orpriorto,the
timeofreleaseinorderforanofficertoexaminethegoodswhiletheyarestillonhand.IncaseswhereaK11isnot
completed,thewrittennoticerequirementcanbemetbyfilingaB2,CanadaCustomsAdjustmentRequest.Informationon
completingtheB2isincludedlaterinthismodule.
Forbothperishableandnonperishablegoods,therefundmustbefiledatanycustomsofficeintheregionwherethe
goodswerereleasedwithinfouryearsfromtheaccountingdate.
Theamountofrefundallowedforperishableorbrittlegoods,suchasglasswareorchina,is85%ofthedutiespaidonthe
lossinvalueofthegoods.Aswell,refundsarenotgrantedongoodsthathaveexceededtheirmanufacturer'sor
producer'srecommendedshelflife,oronironorsteelthathasrusted.
Topic6:OtherRefunds(cont.2)
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Paragraph74(1)(b)
Legislativeauthorityforarefundofdutyongoodswherethequantityofgoodsreleasedislessthanthequantityupon
whichdutywaspaid.Forexample,dutywaspaidon1000widgets,butonly100wereshipped.
Adistinctionismadebetweenacompletepackagebeinglostormissingandthepartialcontentsofapackagelost,
missing,ornotshipped.Whenthenumberofpackagesreporteddoesnotmatchthenumberofpackagesreceived,the
shortageiscalledanETA,orEnteredtoArrive.Whenthenumberofarticlesreportedtobeinsideapackagedoesnot
matchthenumberthatisactuallyinside,theshortageiscallVI,orValueIncluded.
Importersorcustomsbrokerswhobecomeawareofashortage,aftergoodshavebeenreleasedbutbeforetheyhave
beenaccountedfor,mayeither:
paytheapplicabledutiesandtaxesasifALLofthegoodshavearrivedand,whenthebalanceofgoodsshowsup,
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releasethemasanETAorVI,whicheverisapplicableor
providecustomswithevidenceoftheshortagewiththefinalaccountingdocumentandaccountforonlythegoods
thatwerereceived.Ifandwhenthebalanceofthegoodsarrive,theyaretreatedasaseparatetransactionand
releasedintheusualmanner.
Ifthegoodsfailtoappearafterfulldutieshavebeenpaid,arefundfor100%ofthedutiespaidmaybefiledwithinfour
yearsafterthereleaseoftheoriginalpackage.Thefactthattheoriginalaccountingdocumentwasnotedashavinggoods
"toarrive"or"valueincluded"willsatisfytherequirementofnotifyingcustomsoftheshortage.
TheportionoftheRefundofDutiesRegulationsthatdealswithgoodsthatarenotshippedintheirentirety(forexample,
100itemswereorderedandhaddutypaiduponthem,butonly10itemswereshipped)alsoappliestogoodsthathave
beenstolenfromasufferancewarehouse,abondedwarehouse,oradutyfreeshop,aftertheyhavebeenreportedand
whiletheywereinthecustodyofthecarrieroroperatorofthewarehouseordutyfreeshop.Inthelattercases,thecarrier
ofthegoods,ortheoperatorofthesufferancewarehouse,bondedwarehouse,ordutyfreeshopisliableforanyduties
andtaxes.
Therefundmustbefiledatanycustomsofficeintheregionwherethegoodswerereleasedwithinfouryearsfromthe
accountingdate.
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Paragraph74(1)(c)
Legislativeauthorityforarefundofaportionofthedutiespaidongoodsthatareofinferiorquality.Forexample,dutywas
paidongoodsthatwereorderedasNo.1grade,but,uponreceipt,werefoundtobealessergrade.Ifthegoodsin
questionareperishable,writtennoticemustbeprovidedtoCBSAwithinthreedaysafterthereleaseofthegoods.Form
K11maybeusedforthispurpose.
Forbothperishableandnonperishablegoods,therefundmustbefiledatanycustomsofficeintheregionwherethe
goodswerereleasedwithinfouryearsfromtheaccountingdate.
Paragraph74(d)
Legislativeauthorityforarefundofdutywherethecalculationofdutywasbasedonaclerical,typographicalorsimilar
error.Theseerrorscaninclude:
aclericalortypographicalerroronanaccountingdocument
aclericalerroronaninvoice,forexample,thequantityandunitpricewereincorrectlycalculated
anerrorinrateofexchangeor
aduplicatepaymentontwoaccountingdocuments.
Inmostcases,agoodexplanationissufficientevidencetosupporttheclaim.Aclear,concisedescriptionofthereasonfor
filingtheclaim,plusanydocumentaryevidencethatwouldsupporttheclaim,suchasacorrectedinvoiceshowingthe
correctextensionoracopyoftheduplicateaccountingdocumentmaybepresented.Therefundmustbefiledatany
customsofficeintheregionwherethegoodswerereleasedwithin4yearsfromtheaccountingdate.
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Paragraph74(1)(e)
Legislativeauthorityforarefundofdutypaidoroverpaidasaresultofanerrorinthedeterminationundersubsection58(2)
ofeither:
origin(otherthanprovidedforinparagraphs74(1)(c.1)or74(1)(c.11)oftheCustomsAct)
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anerrorintariffclassificationor
anerrorinthevalueforduty
andthedeterminationhasnotbeenthesubjectofadecisionunderanyofSections59to61.ThismeansthatifCBSAhas
madeapreviousdecisionundersections5961regardingtheorigin,tariffclassification,orvalueforduty,forthesame
goods,arefundrequestcannotbefiledunderparagraph74(1)(e).AppealsagainstCBSAdecisionsarediscussedlaterin
thislesson.
Paragraph74(1)(e)isusedtochangetheorigintoanytarifftreatmentotherthanUnitedStates,MexicoUnitedStates,
Mexico,Chile,IsraeloranotherCIFTAbeneficiary,CostaRica,anEFTAstate,Peru,ColombiaorJordan.
Forachangeintariffclassification,therefundclaimshouldbeaccompaniedbyinformationandsupportingdocuments
suchas:
descriptiveillustrations,literature,drawings,cataloguesand/orsamples
associateddocuments,including:
endusecertificates
specialauthorizationsand
anexplanationastothenatureand/orconditionofthegoods,whenapplicable.
Forachangeinvalue,allofthefollowingshouldaccompanytherefundrequest:
proofofsale,forexample,apurchaseorderorcommercialinvoice
creditnote
modifiedcommercialinvoicesoriginatingfromthevendor
correctcustomsinvoiceand
letterofcredit,ifapplicable.
Forachangeinorigin,aCertificateofOriginorotherproofoforiginmustbeincludedwiththerefundrequest.Abillof
ladingmayalsoberequired.
accountingdate.
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Paragraph74(1)(f)
Legislativeauthorityforarefundofdutypaidoroverpaidwheretheimportedgoods,orgoodsintowhichtheimported
goodshavebeenincorporated,aresoldorotherwisedisposedoftoaperson,orareusedincompliancewithacondition
imposedunderatariffitemintheListofTariffProvisionssetoutinthescheduletotheCustomsTariff,orunderany
regulationsmadeunderthatActinrespectofatariffiteminthatList,beforeanyotheruseismadeofthegoodsinCanada.
Inotherwords,arefundofdutiesmaybefiledif,beforetheimportedgoodsareusedinCanada,eithertheenduseorthe
enduseroftheimportedgoodschangestoauseoruserentitledtoafreeorreducedrateofduty.
accountingdate.
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Paragraph74(1)(g)
Legislativeauthoritytofilearefundclaimwhere:
a)thedutiesarereducedorremovedbyaretroactiveordermadeunderasection138oftheCustomsTariffor
b)thegoodsareprohibitedforuseorsalebyaprovinciallaw.
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Section138oftheCustomsTariffallowstheMinistertomakeretroactivechangestotheCustomsTariff.Ifretroactive
changesaremade,refundsmaybefiledfordutyongoodsaffectedbythechange.
Refundsfiledunderpart(a),above,mustbesupportedby:
acopyoftheprescribedformcontainingtheprescribedinformationrequiredbyparagraph32(1)(a)oftheActforthe
goodsaccountedforundersubsection32(1),(3)or(5)oftheActinrespectofwhichtheapplicationmadeand
acopyofthecommercialinvoiceorsimilardocumentsubstantiatingthatthegoodssubjecttotherefundofdutiesare
thegoodsforwhichthedutiesarepaid.
Refundsfiledunderpart(b)mustbesupportedby:
proofofexportor
proofofdestruction.
accountingdate.
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Paragraph76(1)
Legislativeauthorityforarefundofdutypaidoroverpaidongoodsfoundtobedefective,inferiorinqualityornotthegoods
orderedANDthegoodshavebeendisposedoforexportedfromCanada.Thissectioncanapplytobothperishableand
nonperishablegoods.
Ifthegoodsinquestionareperishable,writtennoticemustbeprovidedtoCBSAwithinthreedaysafterthereleaseofthe
goods.FormK11maybeused.
Underthisprovision,theamountoftherefundisanamountequaltothatproportionofthedutiespaidonthegoodsthatthe
amountoftherefundorcreditgivenbythevendorisofthevaluefordutyofthegoods.Inotherwords,iftheforeign
supplierdoesnotprovideafullcreditforthegoods,theamountofthedutyrefundisbasedonthepercentageofthecredit
actuallygiven.
Therefundmustbefiledatanycustomsofficeintheregionwherethegoodswerereleased.Section76(2)oftheCustoms
Actindicatesthattheprovisionsof74(2)and74(3)apply,meaningthatthetimelimitforfilingthistypeofclaimisfour
yearsfromthedateofaccounting.
Topic7:EffectofaDecision
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Uponreviewofarequestforarefund,anofficerwilleitherdenyorapprovetherefundrequest.Subsection74(4)ofthe
CustomsActstates:
EffectofdenialofrefundAdenialofanapplicationforarefundofdutiespaidongoodsistobetreatedforthepurposes
ofthisActasifitwerearedeterminationunderparagraph59(1)(a)if
(a)theapplicationisforarefundunderparagraph(1)(c.1)or(c.11)andtheapplicationisdeniedbecauseatthetimethe
goodswereaccountedforundersubsection32(1),(3)or(5),theywerenoteligibleforpreferentialtarifftreatmentundera
freetradeagreementor
(b)theapplicationisforarefundunderparagraph(1)(e),(f)or(g)andtheapplicationisdeniedbecausetheorigin,tariff
classificationorvaluefordutyofthegoodsasclaimedintheapplicationisincorrect.
Thismeansthatif:
therefundwasfiledunder74(1)(c.1)or74(1)(c.11)tochangethetarifftreatmentanditisfoundthatthegoodsare
noteligibleforthattarifftreatmentandtherefundclaimisdenied,or
theclaimwasfiledunder74(1)(e),74(1)(f),or74(1)(g),anditisfoundthattheorigin,tariffclassificationorvaluefor
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dutyclaimedontherefundrequestisincorrectandtherefundclaimisdenied,
thedecisionthatresultsistreatedasifitwasaCBSAredeterminationunderparagraph59(1)(a)oftheCustomsAct.
However,subsection74(5)goesontostatethatiftherefundrequestisdeniedduetoincompleteorinaccurate
documentationbeingprovidedwiththeclaim,itisNOTtreatedasaredetermination.Inotherwords,theclaimmaybere
submittedundertheoriginallegislativeauthorityifstillwithinthetimelimits.
Refundrequeststhatareapprovedandthathavebeenfiledunderparagraphs74(1)(c.1),74(1)(c.11),74(1)(e)or74(1)(f),
orunder74(1)(g)foranissueoforigin,tariff,orvalue,arealsotreatedasiftheyareredeterminationsunderparagraph
59(1)(a).
Topic7:EffectofaDecision(cont.2)
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DeemedDetermination
Beforeanyselfadjustmentscanberequested,adeterminationbyanofficer,oradeemeddetermination,mustbemade.
Section58oftheCustomsActstates:
58.(1)DeterminationbyofficerAnyofficer,oranyofficerwithinaclassofofficers,designatedbythePresidentforthe
purposesofthissection,maydeterminetheorigin,tariffclassificationandvaluefordutyofimportedgoodsatorbeforethe
timetheyareaccountedforundersubsection32(1),(3)or(5).
58.(2)DeemeddeterminationIftheorigin,tariffclassificationandvaluefordutyofimportedgoodsarenotdetermined
undersubsection(1),theorigin,tariffclassificationandvaluefordutyofthegoodsaredeemedtobedetermined,forthe
purposesofthisAct,tobeasdeclaredbythepersonaccountingforthegoodsintheformprescribedunderparagraph
32(1)(a).Thatdeterminationisdeemedtobemadeatthetimethegoodsareaccountedforundersubsection32(1),(3)or
(5).
Section58.(1)meansthatanyofficermaydeterminetheorigin,tariffclassification,andvalueofimportedgoodsbefore
theyareaccountedforundersubsections32(1),(3),or(5).Thisreferstointerimaccounting,thatis,thereleaseofgoods.
Thissectiongivesanofficertheauthoritytomakeadeterminationbeforegoodsarereleasedandusuallyappliesincases
ofindividualsimportingtheirowngoods.
Ifthereisnodeterminationmadeunder58.(1),whichisusuallythecaseforcommercialgoods,adeemeddeterminationis
consideredtobemade.
Theremustbeadetermination,oradeemeddetermination,beforeanimporteroracustomsbroker,onbehalfoftheir
client,canselfadjust.
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RedeterminationorFurtherRedetermination
Onceanofficerhasmadeadecisionregardingaselfadjustment,theimporterisadvisedbywayofaDetailedAdjustment
Statement(DAS).Iftheselfadjustmentwasfiledbyacustomsbrokeronbehalfoftheimporter,thecustomsbrokerwill
alsoreceiveacopyoftheDAS.
ItisSection59.(1)oftheCustomsActthatallowstheofficertomaketheredeterminationorfurtherredetermination.The
relevantsectionoftheActisnotedontheDAS.
Section59.(1)oftheCustomsActstates:
RedeterminationorfurtherredeterminationAnofficer,oranyofficerwithinaclassofofficers,designatedbythe
Presidentforthepurposesofthissectionmay
(a)inthecaseofadeterminationundersection57.01or58,redeterminetheorigin,tariffclassification,valuefordutyor
markingdeterminationofanyimportedgoodsatanytimewithin
(i)fouryearsafterthedateofthedetermination,onthebasisofanauditorexaminationundersection42,averification
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undersection42.01oraverificationoforiginundersection42.1,or
(ii)fouryearsafterthedateofthedetermination,iftheMinisterconsidersitadvisabletomaketheredeterminationand
(b)furtherredeterminetheorigin,tariffclassificationorvaluefordutyofimportedgoods,withinfouryearsafterthedateof
thedeterminationor,iftheMinisterdeemsitadvisable,withinsuchfurthertimeasmaybeprescribed,onthebasisofan
auditorexaminationundersection42,averificationundersection42.01oraverificationoforiginundersection42.1thatis
conductedafterthegrantingofarefundunderparagraphs74(1)(c.1),(c.11),(e),(f)or(g)thatistreatedbysubsection
74(1.1)asaredeterminationunderparagraph(a)orthemakingofacorrectionundersection32.2thatistreatedby
subsection32.2(3)asaredeterminationunderparagraph(a).
Section59.(1)(a)givesanofficertheauthoritytoredeterminetheorigin,tariffclassification,value,ormarking
determinationfouryearsafterthedeemeddeterminationhasbeenmade.
ThiscanbedoneonthebasisofaCBSAaudit,orwithoutanauditiftheMinisterwishestodoso.Rememberthatrefund
requeststhatareapprovedandrefundrequeststhataredeniedaretreatedasiftheyareredeterminationsundersection
59.(1),eventhoughtheyarenot.
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Section59(1)(b)decisionsarefurtherredeterminations.ThesearedecisionsthatcanbemadebyCBSAafterthey
havegrantedarefundoraftertheyhaveacceptedacorrection.
TheresultofaSection58determination,oraSection59(1)redeterminationorfurtherredetermination,mightbea
requirementtopayadditionaldutythatisowing,plusinterest,ortheremaybearefundofdutiesissued,plusinterest.Any
amountsowingmustbepaidimmediately.
Section59(2)oftheActrequiresanofficerwhohasmadeadetermination,redetermination,orfurtherredeterminationto
givenoticeofthedecision.NoticeisgivenbywayofaDAS.
PersonstowhomanoticeisgivenunderSection59(2)may,within90daysofthenotice,requestaredeterminationor
furtherredetermination.TheserequestsaremadetothePresidentoftheCBSAunderSection60oftheCustomsAct.
Section60(4)(a)oftheActstatesthat,oncearequestunderSection60isreceivedbythePresident,thePresidentshall,
withoutdelay:
(a)redetermineorfurtherredeterminetheorigin,tariffclassificationorvalueforduty
(b)affirm,reviseorreversetheadvancerulingor
(c)redetermineorfurtherredeterminethemarkingdetermination.
Topic8:FormB2
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SelfadjustmentsandrefundclaimsarefiledonformB2,CanadaCustomsAdjustmentRequest.YoushouldprintaB2so
thatyoucanfollowalongaswediscusseachofthefieldsonthisform.
Inallcases,monetaryamountsareshownindollarsandcentsseparatedbyadecimalpoint.
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Topic8:FormB2(cont.2)
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Indicatethenameandaddress,includingcorrectpostalcodethismustbethesameinformationasthatindicatedonthe
originalaccountingdocument.Thebusinessnumbermustalsobeincluded.
Field2:TransactionNo.
Thisisanewtransactionnumberandnotthetransactionnumberusedontheaccountingdocument.Thefirstfivedigits,
theaccountsecuritynumber,maybedifferentthanthatusedontheaccountingdocument,ifsomeoneotherthantheparty
thatsubmittedtheaccountingdocumentisfilingtherefundrequest.
IndicatestheimportersGSTregistrationnumber,ifregisteredfortheGST.
Field4:Page
IndicatethepagenumberoftheB2,startingwith1.Iftherewillbemorethanonepage,thenyoumustshow1of2,1of3,
1of4,etc.
Field5:OfficeNo.
Onthefirstpageonly,indicatethecustomsofficecodenumberusedontheoriginalaccountingdocument.Forblanket
requests,indicateVARunlessallaccountingdocumentsarefromthesameCustomsoffice.WhenshowingVAR,
providethespecificCBSAofficecodenumbersonaworksheet(s)attachedtotheblanketB2.ACustomsofficecode
numbermustbeshownforeachoriginalB3transactionnumber.
Field6:OriginalTransactionNumber
Showthetransactionnumberassignedtotheoriginalaccountingdocumentforwhichtherefundrequestisbeingmadeon
thefirstpage.Iftheadjustmentisablanketrequest,showVARandprovidespecifictransactionnumbersinchronological
orderbydateoffinalaccountingontheattachedworksheet(s).
Field7:Date
ShowthedatethatappearsintheaccountingdatefieldoftheK84noticeorstatement,or,inthecaseofcash
transactions,showthedateofdutypayment.Thismustbeshowninthefollowingformat:year,month,day.IndicateVAR
ifadjustmentisablanketrequest.WhenshowingVAR,providethedateoffinalaccountingforeachB3onthe
worksheet(s).
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Field8:DateReceived
Thisfieldisdatestampedbycustomsandisthedatetherefundrequestwasreceivedbythem.
Field9:SubheaderNo.
Thisfieldiscompletedwhenanewsubheaderisbeingrequestedorwhenthenumberofthecurrentsubheaderisbeing
changed.Thesubheaderincludesfields12,13,14,15,16,and17oftheB2.
Field9willshow:
"NS"whenanewsubheaderisbeingrequested(e.g.,movingclassificationline1fromsubheader1toanew
subheaderinordertochangethetarifftreatmentfromMFNtoUST)or
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thenumberofthecurrentsubheaderwhenrequestingachangeintheinformationshowninfieldNos.1217forthe
mostrecenttransaction,formB3orpreviousDAS(e.g.,tochangethecountryoforiginfromGermanytotheUnited
StatesinfieldNo.12)or
thenumberofthesubheadertowhichaclassificationlineorportionofoneisbeingmoved(e.g.,movingaportionof
classificationline1fromsubheader1tosubheader2inordertochangethetarifftreatmentfromMFNtoUST).
Field10:MailTo
ThisfieldshowsthenameandaddressoftheindividualtowhomtheDetailedAdjustmentStatement(DAS),orrefund
cheque,ifapplicable,istobemailed.Thiscanbetheimporter,orthecustomsbrokeriftheimporter'sGeneralAgency
AgreementwithhisbrokerallowshisbrokertoreceivetheDASand/orrefundcheque.
Field11:SecurityNo.
Onlycompletedifsecurityisbeingposted.Securitymaybepostedforanamountthatisindisputeandshouldnotbe
confusedwithsecuritypostedforthereleaseofgoodspriortopayment.
Completeonlyifanewsubheaderisbeingrequested,orthecountryoforiginisbeingchangedfromthemostrecent
transaction,thatis,theoriginalaccountingdocument,DAS,orpreviousrefundclaim.
AthreedigitstatecodeisshownforgoodsexportedfromtheUnitedStates,orifthegoodsoriginateinacountryother
thantheUnitedStates,thetwodigitcountrycode.
Completeonlyifanewsubheaderisbeingrequested,orthecountryofexportisbeingchangedfromthemostrecent
transaction,thatis,theoriginalaccountingdocument,DAS,orpreviousrefundclaimed.
ForgoodsexportedfromtheUnitedStates,showthethreedigitalphabeticstatecodeofthenewstatewhenthestateof
exportisbeingchanged.
Thisfieldistobeleftblankwhentheforeigntradezonecodeischanged.
ShowatwodigitalphabeticStatecodeprefixedbyUifthecountryofexportistheUnitedStates.Showthetwodigit
alphabeticISOcountrycodeifthecountryofexportisotherthantheUnitedStates.
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Completeonlyifanewsubheaderisbeingrequested,orthetarifftreatmentisbeingchangedfromthemostrecent
Completeonlyifanewsubheaderisbeingrequested,orthedirectshipmentdateisbeingchangedfromthemostrecent
Completeonlyifanewsubheaderisbeingrequested,orthecurrencycodeisbeingchangedfromthemostrecent
Field17:TimeLimit
Completeonlyifanewsubheaderisbeingrequested,orthetimelimitisbeingchangedfromthemostrecenttransaction,
thatis,theoriginalaccountingdocument,DAS,orpreviousrefundclaim.
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Fields1836:first3linesoftheB2.
Important!Field19reads:DESCRIPTIONASACCOUNTEDFOR
AllfieldsofthefirstthreelinesoftheB2arereproducedexactlyastheyappearonthemostrecenttransaction,thatis,the
originalaccountingdocument,DAS,orpreviousrefundclaim,foreachlinebeingadjusted.
Fields1836:next3linesoftheB2.
Important!Field19reads:DESCRIPTIONASCLAIMED
Thesefieldswillreflectthemannerinwhichtheaccountingdocumentshouldhavebeencompleted.
CompletetheASCLAIMEDfieldsasdescribedbelow.
Field18:Line
Thismustbecompletedoneachclassificationline.ThelinenumberfromtheoriginalB3transactionorthelinenumber
assignedbycustomsforanewlineorsplitlineonapreviousadjustmenttothesametransactionmustbeused.
Splitlinesarecreatedwhenalinemustbesplitintotwoormorelines.Forexample,theASACCOUNTEDFORlineofthe
accountingdocumentmightsaynutswhenthegoodswereactuallynutsandanotheritem,suchasbolts.Inthiscase,
onlyaportionoftheASACCOUNTEDFORlinemustbeadjusted.
ThefirstlineoftheASCLAIMEDlinewouldsay"1andreflectthenuts.
ThesecondASCLAIMEDlinewouldsay1/SL"andreflectthebolts.
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Field19:DescriptionAsclaimed
Thismustbecompletedonallclassificationlines.Anaccuratedescriptionofthegoodsmustbeshown,aswellas
references,suchasDMemorandumnumbers,valueandclassificationrulingnumbers,orimportpermitnumbers.
Completeonallclassificationlines,ifapplicable.WhentheimporterisauthorizedbyanOrderinCounciltoimportgoods
underspecialconditions,theOrderinCouncilnumberistobeshowninthisfield.
Thismustbeshownonallclassificationlines.ShowthecorrectclassificationnumberasindicatedintheCustomsTarifffor
eachcommoditybeingadjusted.
Field22:TariffCode
Completeiftheconditionsspecifiedintariffareapplicable.Thesewouldbethefirst4digitsofatariffiteminchapter99.
Field23:Quantity
Completeifaquantityisassociatedwiththetariffitembeingused.
Field24:U/MUnitofMeasure
Completeifaunitofmeasureisassociatedwiththetariffitembeingused.
ThetwodigitVFDcodeisdeterminedinthesamemannerasfortheaccountingdocument.
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Field26:SIMACode
Ifapplicable,thecodesusedareidenticaltothosethatwouldbeusedwhencompletingaB3.
Field27:CustomsDutyRate
Completeifarateofcustomsdutyisapplicable.
Field28:E.T.Rate
Completeifarateofexcisetaxisapplicable.
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Field29:GSTRate
CompletewitheithertherateofGSToranexemptioncode.
Completeoneachclassificationline.Showthisamountinthecurrencyspecifiedontheinvoice.
Completeintheusualmannerbymultiplyingthevalueforcurrencyconversionbytheexchangerate.
Completeifcustomsdutyisapplicable.
Completeifanamountofsurtax,provisional,antidumpingorcountervailingdutyisbeingadjusted,orispayable.
Field34:ExciseTax
Completeifexcisetaxisapplicable.
Field35:ValueforTax
Completeonlyif:
GSTispayableor
GSTisbeingrebatedtoanonregistrantasaresultofcustomsrenderingarelatedadjustmentdecision.
Field36:GST
Completeonlyif:
GSTispayableor
GSTisbeingrebatedtoanonregistrantasaresultofcustomsrenderingarelatedadjustmentdecision.
Note:AlthoughinstructionsprovidedbyCBSAindicatethatfields35and36oftheASCLAIMEDportionoftheB2should
beleftblank,theclaimwillnotberejectedifthesefieldsarecompleted.Forimportersandcustomsbrokerswithautomated
processeswherebytheB2dataisretrievedfromtheB3accountingdata,thesefieldsareautomaticallyfilled.
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Field37:DocumentsAttached
Completethisfieldwithacheckmarkifsupportingdocumentationisattached.
Tocompletefield38,youmustcalculatethedifferencebetweenfield32intheASACCOUNTEDFORandASCLAIMED
lines.
Ifcustomsdutiesarepayable,thisfieldwillshowtheamountpayable,precededbyanegativesign.Ifthereisno
customsdutypayable,leavethisfieldblankorshowanycombinationofzeros.Ifthereisarefund,showtheamount.
IftheformB2hastwoormorepages,thisfieldiscompletedonthelastpageonly.
CompleteifaSIMAassessmentamountispayableorreceivable.IfaSIMAassessmentispayable,showanegativesign
infrontoftheamountshowninthisfield.
ToobtaintotalSIMAassessment,calculatethedifferencebetweentheASACCOUNTEDFORandASCLAIMEDamounts
showninfield33,unlesstheamountissecuredbyabond.ThisisindicatedbyuseofSIMAassessmentcode32infield
26.
Field40:ExciseTax
Completeifexcisetaxispayableorreceivable.Ifexcisetaxispayable,showanegativesigninfrontoftheamount
showninthisfield.Wherethereisnoexcisetaxpayableorreceivable,leaveblankorshowanycombinationofzeros.To
obtaintotalexcisetax,calculatethedifferencebetweentheASACCOUNTEDFORandASCLAIMEDamountsshownin
field34.
IftheformB2hastwoormorepages,showthetotalonthelastpageonly.
Field41:Subtotal
Showthetotaloftheamountsinfields3840.Ifanamountispayable,showanegativesigninfrontoftheamount
showninthisfield.
Field42:GST
CompletewhereGSTispayable,or,fornonregistrants,whereGSTmayberebated.IfGSTispayable,showanegative
signinfrontoftheamountshowninthisfield.IftheB2hastwoormorepages,completethisfieldonlyonthelast
page.
Field43:Interest
Itisnotmandatorythatthisfieldbecompleted.Wheninterestispayableorrefundable,customswillshowthedateinterest
beginsaswellastheprincipalonwhichinterestwillbeassessedinthe"remarkssection"oftheresultingDetailed
AdjustmentStatement.Iftheimporteroragentchoosestoshowtheamountofinterestpayableorreceivable,itistobe
completedonthelastpageoftheadjustmentrequest.
Field44:AmountDueReceiverGeneralforCanada
ThismustbecompletedonlywhenanamountispayabletotheReceiverGeneralforCanada,andisnotedonthelast
pageonly.
Field45:AmountDueClaimant
Thismustbecompletedonthelastpagewhenrequestingarefund,orwhenrequestingacompletereversalofa
departmentaldecisionthathasbeensecured,notpaid.IfanamountofGSTisshowninfield42,itisnotincludedinthe
amountshowninthisfield.
TheJustificationforRequestandExplanationfieldsontheB2arecriticalandmustbecompletedproperly.Boththe
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legislativeauthorityandaclearexplanationmustbeprovided.
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JustificationforRequest
Thisiscompletedonthelastpage.Indicatethetypeofrequest,forexample,correction,refund,redetermination,re
appraisal,andthesection,subsectionand/orparagraphnumberoftheapplicablelegislation.
Forexample:
Arefundunderparagraph74(1)(a)oftheCustomsAct
Acorrectionundersubsection32.2(1)oftheCustomsAct
Explanation
Eachrefundrequestmusthaveanexplanation,supportedbyappropriateinformationand/ordocumentation.Clearlystate
thereason(s)fortherequest,providingasmuchdetailasisrequiredtodefendit.Makereferencetoanyprevious
departmentalinstructionsorrelevantDMemos.Ifsufficientspaceisnotavailable,provideadditionalparticularsona
separatesheet.
Whereapplicable,thefilenumberanddateofthepreviouscustoms'decisionssupportingtherequestshouldbeindicated.
Declaration
Completeonalladjustmentrequests.Iftherequesthastwoormorepages,completethisonlyonthelastpage.Showthe
nameandtheemployerofthepersoncompletingtheclaim.
DateandsignthedeclarationontheB2.Bysigningthedeclaration,youareindicatingthattheinformationcontainedon
theB2isaccurateandcomplete.
NotethattheB2processisnotanEDIprocessandallrefundsmustbesubmittedinhardcopy.
Example
ClickheretoviewaB3accountingdocument.
ThegoodsonthisB3werefoundtomadeofplastic,notleather.HavealookherefortheB2filedtochangethetariff
classificationandpaytheadditionaldutyowing.
Anotherexamplecanbeseenhere.Inthiscase,aB2wasfiledbecause400chairswereupholsteredwiththeincorrect
fabricandreturnedtothevendor.
Topic9:TaxesOverpaid/PaidinError
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GST
ImporterswhoarenotGST/HSTregistrantsandwhohaveoverpaidGST/HSTonimportedgoodsmayrequestarefundof
GST/HST.
IftheyarealsoentitledtoarefundofdutyundertheCustomsAct,theymayfileaB2.Ifapprovedforadutyrefundby
CBSA,theCanadaRevenueAgency(CRA)willissuearefundofanyGST/HSTthatwasoverpaidasaresultofthe
changeintheamountofduty.
However,ifthereisnorefundrequestedundertheCustomsAct,arefundforGSTisfiledbyusingformGST189,General
ApplicationforRebateofGST/HST.
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ImporterswhoareregisteredfortheGSTmustclaimanyoverpaymentsofGSTasinputtaxcredits.
Aslongasacustomsbrokerhasproperwrittenauthorityfromhisclient,hemaycomplete,sign,andsubmitformGST189
onbehalfofhisclient,theimporter.Therebatecheque,madepayabletotheclaimant,willbemaileddirectlytothe
customsbroker.
Accordingtosubsections216(2)and216(3)oftheExciseTaxAct,anychangestotheGSTstatusofimportedgoods
underDivisionIII,TaxonImportationofGoods,aretreatedasiftheywereadetermination,redetermination,orfurtherre
determinationofthetariffclassification,oranappraisal,reappraisal,orfurtherreappraisalofthevaluefordutyofthe
goods.
Asaresult,correctionsaffectingonlytheGSTstatusofthegoodsmustbesubmittedundersection32.2oftheCustoms
Actwhereamountsareeitherowingorrevenueneutral.Forexample,correctionsmustbemadetochangeaGSTstatus
codetoanotherGSTstatuscode.
ExciseTax
Sections68and69oftheExciseTaxActprovideforarefundofexcisetaxespaidinerrororoverpaid.Thisincludes
excisetaxthatispaidongoodsthataresubsequentlyexported.
FormN15isusedtoclaimarefundofexcisetaxandmustbefiledwithintwoyearsafterthepaymentofexcisetax.
Topic10:CITTFederalCourtofAppeal
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CanadianInternationalTradeTribunal(CITT)
TheCanadianInternationalTradeTribunal(CITT)isanindependent,quasijudicialbodycomposedofsevenfulltime
permanentmembers.TheCITTislocatedinOttawaanditsmemberscomefromvariousbackgroundsandareasof
Canada.
TheTribunal'smandateisto:
inquireintowhetherdumpedorsubsidizedimportshavecaused,orarethreateningtocause,injurytoadomestic
industry
inquireintocomplaintsbypotentialsuppliersconcerningprocurementbythefederalgovernmentthatiscoveredby
theNorthAmericanFreeTradeAgreement(NAFTA),theAgreementonInternalTrade(AIT),theWorldTrade
Organization(WTO)AgreementonGovernmentProcurement(AGP)andtheCanadaChileFreeTradeAgreement
(CCFTA),oranyotherapplicabletradeagreement
hearappealsofdecisionsoftheCanadaBorderServicesAgency(CBSA)madeundertheCustomsActandthe
SpecialImportMeasuresAct(SIMA)andoftheMinisterofNationalRevenue(theMinister)undertheExciseTaxAct
inquireintoandprovideadviceonsucheconomic,tradeandtariffissuesasarereferredtotheTribunalbythe
GovernorinCouncilortheMinisterofFinance
investigaterequestsfromCanadianproducersfortariffreliefonimportedtextileinputsthattheyuseintheir
productionoperationsandtomakerecommendationstotheMinisterofFinanceontherequestsand
inquireintocomplaintsbydomesticproducersthatincreasedimportsarecausing,orthreateningtocause,injuryto
domesticproducersand,asdirected,makerecommendationstotheGovernmentonanappropriateremedy.
TheCITTalsoactsasanadministrativecourtfor:
AppealsofCBSADecisions
TheCITTactsasacourtofeasyaccess,offeringrecoursetothosewhowishtocontestdecisionsoftheMinister
and/orPresidentwithrespecttotariffclassificationorvaluation.Hearingsareinformalandaccessibletoindividuals
andsmallbusinesses.
InjuryFindingsinAntiDumpingandCountervailingDutyCases
TheCITTholdshearingsandinquiriesandmakesfindingsonwhetherornotimportedgoodsbeingdumpedor
subsidizedhascausedoriscausingmaterialinjuryorretardation.IftheTribunalfindsinjury,CBSAlevies
antidumpingorcountervailingdutiesequaltothemarginofdumpingorsubsidy.
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Topic10:CITTFederalCourtofAppeal(cont.2)
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AppealProcedures
AppearancebeforetheTribunalrequiresnotonlyknowledgeoftheCustomsActandtheCustomsTariff,butalsoagood
backgroundingeneralcourtprocedure.Manydecisionsrestoninterpretationofwordsorpointsoflawandreferralsto
previouscasesinvolvingsimilarinstancesarenotuncommon.Somepartiesmaychoosetoberepresentedbylegal
counsel.
AppealstotheCITTarefiledpursuanttosection67(1)oftheCustomsAct.
Anypartiestoanappealfiledundersection67(1)mayappealtotheFederalCourtofAppealonanyquestionoflaw.This
processisauthorizedundersection68(1)oftheCustomsAct.
TheCITTmay,undersection61.(1)oftheSpecialImportMeasuresAct,hearanappealfromapersonwhodisagreeswith
aredeterminationofthePresidentmadepursuanttosection59oftheCustomsAct.Anappealcanbemadetothe
TribunalbyfilinganoticeofappealinwritingwiththePresidentandtheSecretaryoftheTribunalwithinninetydaysafter
thedayonwhichtheredeterminationwasmade.
AdditionalinformationonappealstotheCITTisavailableonitswebsite.
Topic10:CITTFederalCourtofAppeal(cont.3)
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FederalCourtofAppeal
Section68(1)oftheCustomsActprovidesthat:
Anyofthepartiestoanappealundersection67,namely,
(a)thepersonwhoappealed,
(b)thePresident,or
(c)anypersonwhoenteredanappearanceinaccordancewithsubsection67(2),
may,withinninetydaysafterthedateadecisionismadeundersection67,appealtotheFederalCourtofAppealonany
questionoflaw.
Procedures
WhenanappealisfiledwiththeFederalCourtofAppeal,noticemustbegiventothePresidentoranyotherpartytothe
appeal,aswellastotheRegistraroftheCourt.AcopyoftheappealmustalsobefiledwiththeCITT.Thepersonfilingan
appealmustpreciselyidentifyandclearlyexplaintheissuesandfacts,thestatutoryprovisions,andthereasonsinsupport
oftheappeal.
OtherpartieswhointervenedduringthehearingbeforetheTribunalandwhowishtoparticipateatthisappealarealsoable
todoso.
DecisionoftheCourt
Subsection68(2)oftheCustomsActprovidesthat:
TheFederalCourtofAppealmaydisposeofanappealbymakingsuchorderorfindingasthenatureofthemattermay
requireorbyreferringthematterbacktotheCanadianInternationalTradeTribunalforrehearing.
Whenadecisioninacaseisunacceptabletoanypartiesinvolved,itmaybeappealedfurthertotheSupremeCourtof
Canada.TheproceduresandmethodoffilinganappealwiththeSupremeCourtofCanadaarethesameasthosebefore
theFederalCourtofAppeal.
Appealstothehighercourtsareoftenlonganddrawnoutwithsubstantiallegalfees.Anappealisonlypermittedtobe
heardwhenproperprocedureshavebeenfollowedandtheappellant,otherthanthePresident,hasdepositedwiththe
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RegistryoftheCourtsecurityforthecostsoftheappeal.
Lesson1Summary:SelfAdjustmentsandRefunds
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selfadjustmentsapplytoerrorsmadeinorigin,tariffclassification,valueforduty,ordiversion,eitheroftheenduse
orenduser,ofimportedgoods.
selfadjustmentsmayresultineitherapaymentofadditionalduties,arefundofduties,orneitherapaymentnor
refundofduties.
wherethereisneitherapaymentnorarefund,theselfadjustmentistermedrevenueneutral.
formB2isusedtomakeaselfadjustment.
wherethereisadditionalpaymentrequired,ortheB2isrevenueneutral,theselfadjustmentisconsidereda
correctionandisfiledundersubsections32.2(1)32.2(2)or32.2(6)oftheCustomsAct.
correctionsmustbemadewithin90daysofhavingreasontobelievethattheoriginaldeclarationoforiginisincorrect.
ifcorrectionsarenotmadewithin90days,penaltieswillbeissued.
inmostcases,refundsmaybefileduptofouryearsfromthedateofaccounting.
refundstomakeatarifftreatmentchangetoaNAFTAorChiletarifftreatmentmustbefiledwithinoneyearfromthe
dateofaccounting,however,theapplicationforrefundofdutiesunder74(1)(c.1)forCCFTAeligiblegoodsimported
onorafterMarch1,2014maybemadewithinfouryearsfromthedatethegoodswereaccountedforunder
subsection32(1),(3),or(5)oftheCustomsAct
officerswillmakedeterminationsordeemeddeterminationsundersection58oftheCustomsAct.
uponreviewofarefundrequest,officerswilleitherdenyorapprovetherequest.
refundclaimsfiledundersection74or76oftheCustomsActwillhavedecisionsrenderedbyCBSAasiftheyare
determinationsundersection59(1)(a).
onceadeterminationismadeunderSection59(1)(a),thedecisioncanbeappealedundersection60.
Lesson1Summary:SelfAdjustmentsandRefunds
(cont.2)
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noticesofdecisionareprovidedbyCBSAonaDetailedAdjustmentStatement(DAS).
supportingdocumentationmustaccompanyrefundrequests.
formK11isaCertificateofDamagedGoodsandisusedtosupportarefundrequestfordamagedgoods.
importerswhoarenotGST/HSTregistrantsmayrequestarefundofGST/HST.
aB2canbeusedbyaGST/HSTnonregistranttorequestarefundofGST/HSTwhenthereisalsoarefundofduty
requestedundertheCustomsAct.
form189EisusedtorequestarefundofGST/HSTfornonregistrantswhenthereisnoassociatedrefundrequest
undertheCustomsAct.
formN15isusedtoclaimarefundofexcisetax.
theCanadianInternationalTradeTribunalisanindependent,quasijudicialbodythat
conductsinquiriesintowhetherdumpedorsubsidizedimportshavecaused,orarethreateningtocause,material
injurytoadomesticindustry
hearsappealsofdecisionsoftheCanadaBorderServicesAgency
conductsinquiriesandprovidesadviceoneconomic,tradeandtariffissuesreferredtothemand
conductsinvestigationsintorequestsfromCanadianproducersfortariffreliefonimportedtextileinputsthat
theyuseintheirproductionoperations.
theFederalCourtofAppealhearscasesonquestionsoflaw.
FollowingisashorttestonwhatyouhavelearnedfromLesson1.
Questions:
Attemptsallowed:
Available:
Passrate:
6
Unlimited
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60%
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Backwardsnavigation: Allowed
youwish.
Startquiz
Lesson2:Drawback
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Undercertainconditions,goodsimportedintoCanadathataresubsequentlyexportedmaybeeligibleforarefundofduty.
Thistypeofrefundiscalledadrawback.
Rationale
Yourclientoremployermayadviseyouthatgoodstheyhaveimportedhavebeensubsequentlyexported,and,asaresult,
theywouldlikearefundofduty.
LessonObjective
Youwillbeabletodeterminewhenadrawbackofdutyappliesandhowtoobtainadrawback.
Topic1:Drawback
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Thedrawbackprogramisanincentivefordomesticmanufacturerswhoproducegoodsforexport.
Drawbackisarefundofcustomsduties,exciseduties,excisetax,andantidumpingandcountervailingduties(exceptin
certaincasesunderNAFTA)paidonimportedgoodsthathavebeen:
furtherprocessedandsubsequentlyexported,
displayedordemonstratedinCanadaandsubsequentlyexported,
usedforthedevelopmentorproductioninCanadaofgoodsforsubsequentexport,or
exportedwithouthavingbeenusedinCanadaforanypurposeotherthanforanyoftheabove.
DrawbackmayalsobeclaimedonimportedgoodsthataresurplusorobsoleteandhavebeendisposedofinCanada.
SinceanyGSTthatispaidcanbeusedbytheimporterasaninputtaxcredit,drawbackdoesnotallowforarefundof
GST.
Topic1:Drawback(cont.2)
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DifferenceBetweenDrawbackandDutyDeferral
Thedifferencebetweendrawbackanddutydeferralisthatadrawbackallowsforarefundofdutythathasbeenpaidand
dutydeferralallowstheimportertobeexemptedfrom,ordefer,thepaymentofduty.Ifanimporterisnoteligibleforthe
DutyDeferralProgram,drawbackallowsarefundofdutythatwouldhavebeendeferrediftheimporterhadparticipatedin
theDutyDeferralProgram.
EarlieryoulearnedaboutdutyreliefunderSection101oftheCustomsTariff.Thisisreliefofdutyforgoodsthathavebeen
exportedfromCanadaforthepurposesofrepair,havingequipmentaddedtothem,orhavinghadworkdoneongoodsthat
aretheproductofCanada.
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YoualsolearnedaboutdutydeferralundertheDutiesDeferralprogramunderSection89oftheCustomsTariff.
WhenthesegoodsareimportedintoCanadaafterhavingbeenexported,youmaybeunawarethattheyqualifyforduty
reliefandpayfulldutyonthegoods.
Inthiscase,adrawbackclaimcanbefiledpursuanttoSection113oftheCustomsTariff.
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LegislativeAuthority
Section113oftheCustomsTariffallowsforthedrawbackofdutypaidattimeofimportation.Section113states:
113.(1)RefundordrawbackSubjecttosubsection(2),section96andanyregulationsmadeundersubsection(4),a
refundordrawbackshallbegrantedofalloraportionofdutiesif
(a)relieforarefundofalloraportionofthedutiescouldhavebeen,butwasnot,grantedundersection89or101
(b)alloraportionofthedutieswaspaidand
(c)anapplicationismadeinaccordancewithsubsection(3)andsection119.
113.(1)(a)allowsforreliefofdutyongoodsthatwouldhavebeeneligiblefordutyreliefundersections89and101ofthe
CustomsTariff.
Theimporter,exporter,processor,owner,orproducer/manufacturerofgoodsthatwereexportedfromCanadaandfor
whichdutywasnotdeferredattimeofimportation,mayfileadrawbackclaim.Wheremorethanonepersoniseligibleto
fileaclaim,forexample,theimporterisnotthemanufacturer,awaivermustbesecuredfromallothereligibleclaimants
waivingtheirrightstoclaim.
FormK32Amustbecompletedtosupportadrawbackclaimwhenthepartyclaimingthedrawbackisnottheimporter.
FormK32Bmustbecompletedtosupportadrawbackclaimwhenthepartyclaimingthedrawbackisnottheexporter.
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Toapplyforadrawback,formK32,DrawbackClaim,mustbefiledwithCBSA.FormK32isafillableform.Supporting
documents,alistofwhichfollows,mustbesubmittedwiththeK32.Oneormoreofthefollowingmayneedtobeincluded.
copiesofanyexportsalesinvoices
copiesofbillsoflading,signedbythecarrier,orothershippingdocument
completedformK32A,CertificateofImportation,SaleorTransfer,whentheclaimantisnottheimporter
completedformK32B,DrawbackCertificateofSaleforExportation,whentheclaimantisnottheexporteror
satisfactoryevidenceiftheexportsareaffectedbyNAFTA.SatisfactoryevidenceisexplainedinD743,NAFTA
RequirementsforDrawbackandDutyDeferral.
TimeLimits
Thedrawbackclaimmustbefiledwithinfouryearsofthedateofreleaseofthegoods,or,whereanothertimeis
prescribed,withinthatothertime.Wheresupportingdocumentsarenotincluded,theclaimwillberejectedbycustomsand
anewK32mustbepresented.Ifaclaimisrejectedforanyreason,thestatutorytimelimitisnotprotected.
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ObsoleteorSurplusGoods
AdrawbackofdutymayalsobeclaimedongoodsthathavebecomesurplusorobsoletewhileinCanada.Anexampleis
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outdatedcalendars.
Obsoleteorsurplusgoodsaregoodsthatare:
(a)foundtobeobsoleteorsurplus
(i)inthecaseofimportedgoods,bytheirimporterorowner,or
(ii)inanyothercase,bytheirmanufacturer,producerorowner
(b)notusedinCanada
(c)destroyedinsuchmannerastheMinisterofPublicSafetymaydirectand
(d)notdamagedbeforetheirdestruction.
Thegoodsmustbedestroyedundercustomssupervision.
Thefollowingdocumentsmustaccompanytheclaim,filedonFormK32:
a)acertifiedcopyofFormE15,CertificateofDestruction/Exportation
b)theoriginalandonecopyofanyFormK32A,CertificationofImportation,SaleorTransfer,wheretheclaimantisnotthe
importer.
Adrawbackclaimforobsoleteorsurplusgoodsmustbemadewithinfiveyearsaftertheimportedgoodswerereleased.
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DutyDrawbackandtheNorthAmericanFreeTradeAgreement
Inallbutonesituation,thereisnochangeinthedrawbackrequirementsunderNAFTA.
Thissinglesituationiscalled"thelesserofthetwoduties"concept.
Underthisconcept,drawbackonimportednonNAFTAgoods,orgoodssubstitutedwithidenticalorsimilargoods,thatare
usedintheproductionofanothergoodthatisexportedtoaNAFTAcountryislimitedtoadrawbackamountequaltothe
lesserof:
thereliefnormallyallowedand
thedutiespaidorowedontheexportedproductwhenitenterstheotherNAFTAcountry.
Forexample,nonNAFTAgoodsareimportedintoCanadaanddutyof$100.00ispaid.Theimportedgoodsareusedto
producegoodsinCanadathatarethenexportedtotheUnitedStates.Theamountofdutythatispaidwhenthegoods
entertheUnitedStatesis$50.00.Underthelesseroftwodutiesconcept,theamountofdrawbackthatcanbeclaimedis
$50.00.
Lesson2Summary:DutyDrawback
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thedrawbackprogramisanincentivefordomesticmanufacturerswhoproducegoodsforexport
drawbackisarefundofcustomsduties,exciseduties,excisetax,andantidumpingandcountervailingduties(except
incertaincasesunderNAFTA)paidonimportedgoodsthathavebeen:
furtherprocessedandsubsequentlyexported
displayedordemonstratedinCanadaandsubsequentlyexported
usedforthedevelopmentorproductioninCanadaofgoodsforsubsequentexportor
exportedwithouthavingbeenusedinCanadaforanypurposeotherthanforanyoftheabove.
drawbackmaybeclaimedonimportedgoodsthataresurplusorobsoleteandhavebeendisposedofinCanada
drawbackdoesnotallowforarefundofGST
drawbackisallowedundersection113oftheCustomsTariff
adrawbackclaimmaybefiledbytheimporter,exporter,processor,owner,orproducer/manufacturerofgoodsthat
wereexportedfromCanada
wheremorethanonepersoniseligibletofileaclaim,awaivermustbeprovided
formK32orK321isusedtofileadrawbackclaim
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inmostcases,drawbackclaimsmustbefiledwithinfouryearsofthedateofrelease.dDrawbackmaybeclaimedon
goodsthathavebecomesurplusorobsoletewhileinCanadaand
the"lesseroftwoduties"drawbackconceptwascreatedunderNAFTA.
TakeafewminutesandanswerthefollowingquestionsaboutLesson2.
Questions:
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4
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Module24Summary:AdjustmentsAfterPayment
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Inthismoduleyoulearnedaboutadjustmentsthataremadetoaccountingdocumentsafterdutiesandtaxeshavebeen
paid.Youlearnedthatthereisspecificlegislationthatmustbecitedwhenmakingadjustmentsandthattherearetime
limitsinwhichadjustmentsmustberequested.
YoulearnedhowtocompletetheB2andalsowhatdecisionsCBSAmakesaftertheadjustmentrequesthasbeenreceived
andreviewed.
Youlearnedabouttheimportanceofreasontobelieveandpenaltiesthatcanbeissuedfornotfilingcorrectionsthat
requireadditionaldutytobepaidorthatarerevenueneutral.
AppealstotheCITTandtheFederalCourtofAppealwerediscussed.
Finally,youlearnedaboutanothertypeofrefundthedrawback.
Module24:Quiz
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Passrate:
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Module25:ExportingfromCanada
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SinceexportersmustcomplywithCanadianlawsregardingexportsaswellastheimportinglawsofthecountrytowhere
thegoodsareshipped,itisimportantthatexportdocumentationbeasclearandcompleteaspossible.
ThisalsohelpsensurethatgoodsenteringtheinternationalmarketfromCanadadonotposeasecuritythreattoother
countries.Theexportofdangerousgoodsiscontrolledandregulated,andaccurateinformationonCanadianexportsis
collected.CanadaalsocontrolstheoutboundmovementofgoodsintransitthroughCanada.
Thismodulewillexplaintheproceduresrequiredforexportinggoods,themaintenanceofexportrecords,andpenaltiesfor
failingtocomplywithexportrequirements.Itwillalsobrieflydiscusssomeofthedocumentationrequirementsofforeign
countriestowhichCanadiangoodsareexported.
ModuleObjective
Whenyouhavecompletedthismodule,youwillbefamiliarwiththerequirementsandregulationsforexportinggoodsfrom
Canada.
Lesson1:ExportReporting
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Inthislesson,youwillbeintroducedtoexportreporting.Wewilllookattherolesoftheexporter,thecarrierandthe
CustomsServiceProvider(CSP).Wewillexaminethevarioustypesofexportdeclarations,whereexportsmustbe
reported,thepenaltiesrelatedtoexporting,andhowcancellationsandamendmentsofexportdeclarationsarehandled.
Rationale
AsaCCS,youmaybeaskedtoprepareexportdocumentation.Knowingwhatisinvolvedwillexpeditetheseshipments
andavoidpenalties.
LessonObjective
Attheendofthislesson,youshouldknowwhatdocumentsarerequiredtoexportgoods,whereandwhenexportsare
reportedandhowtocanceloramendexportreports.
Topic1:PartiesInvolvedwithExporting
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AccordingtoSection2oftheReportingofExportedGoodsRegulations,therearethreedifferentgroupsofpeople
responsibleforexporting:exporters,carriers,andcustomsserviceproviders(CSPs).Wewillexplaintheroleofeach.
Exporters
Anexportercanbeeitheranindividual,orafirm.ThisindividualorfirmexportscommercialgoodsfromCanadaorcauses
themtobeexported.TheexporterisrequiredtohaveaBusinessNumber(BN).Anexporterdoesnotnecessarilymake
thetransportationarrangements.
Theexportermayauthorizeanotherpersonorcompanytocompleteand/orsubmitexportdocuments,butultimately,itis
theexporterwhoisresponsibleforreportingtheexportaccuratelyandwithintherequiredtimeframes.
Carriers
CarrierstransportgoodsfromCanada.Air,marine,railandhighwaycarriersmaysubmitexportdeclarationstoCBSAon
behalfofanexporter.Again,itmustbestressedthattheexporterisresponsibleforensuringthataccurateexport
documentshavebeendeliveredtoCBSAontime.
CustomsServiceProviders
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CSPscanincludecustomsbrokers,freightforwarders,NVOCCsoragents.AnexportermayuseaCSPtosubmitexport
documentationonhisbehalf.
CSPswhopreparetheexportdocumentationonbehalfofexporters,makethetransportationarrangementsforthe
exportationofthegoods,andreporttheexport,arerequiredtoprovidetheexportingcarrierwithproofthatthegoodswere
reportedtoCBSA.
Topic2:Penalties
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TheAdministrativeMonetaryPenaltySystemcontainsseveralcontraventionsforexportinfractions,includingfailureto
provideanexportdeclarationonnoncontrolledgoodspriortoexportfailuretoprovideanexportpermit,licenceor
certificatepriortoexportfailuretosubmitanexportsummaryreportandfailuretoreportgoodssubjecttoexportcontrol
priortoexport.AMPSwillbeappliedagainsttheholderoftheBNthatisrecordedontheexportdeclaration.
Theexporterwillreceiveanypenaltythatisissuediftheexportdocumentsarenotaccurateorarenotsubmittedinthe
regulatedtimeframe.
Topic3:Reporting
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UnderanagreementwiththeUnitedStates,theCanadiangovernmentgathersexportstatisticsfromU.S.importdata.
Therefore,regulargoods",thatis,goodsthatarenotcontrolled,prohibitedorregulated,andthatareshippedtotheUnited
Statesdonotrequireanexportdeclaration.GoodsthatareshippedintransitthroughtheUnitedStatesfromCanadatoa
thirdcountrymustbereported.
Thefollowing,whenshippedtoaplaceotherthantheUnitedStates,mustbereported:
commercialgoodsvaluedat$2,000CDNormore
restricted,controlled,regulated,orprohibitedgoods,regardlessoftheirvalue,includinggoodsexportedundera
generalexportpermit.Oneexceptionisgoodsvaluedatlessthan$2,000CDNandexportedunderGEP12(U.S.
origingoods)forconsumptionineligibledestinationsthesedonothavetobereportedtoCBSA.
goodsmovingintransitthroughtheU.S.toathirddestination
certaingoodsexportedfromabondedwarehousethathadenteredtheCanadianeconomyonaB3type10entry
goodsthathavebeenrepaired,addedto,orprocessedinCanadaandthevalueoftheworkdoneis$2,000CDNor
more.Onlytherepairsoradditionsmustbedeclaredasexports,unlesstherepairsweredoneunderthetermsofa
Canadianwarranty
Thefollowing,whenshippedtoaplaceotherthantheUnitedStates,mustbereported:
certainnoncommercialgoodsvaluedat$2,000CDNormore,suchasgiftsordonationsincludingarticlesoffood,
clothing,medicinesandothergoodsleavingCanadaunderanycharityprogram.Aswell,personalpossessionsand
householdeffectsofemigrantsvaluedat$2,000CDNormoremustbereportedonanexportdeclaration,aswellas
companytransfersvaluedat$2,000CDNormoreand
othergoodssuchas:
contractors'equipmentandtoolsthatarebeingexportedforoneyearormore,
currency,
itemsimportedintoCanadaandreturnedforcredit,
goodsthatareexportedunderaleaseforoneyearormore,
samples,iftheywillbeoutofCanadaforoneyearormore,and
ships'storesCanadiangoodsexpectedtobeconsumedduringavoyagebynonCanadiancarriers.
Topic3:Reporting(cont.2)
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Somegoodsdonothavetobereportedonanexportdeclarationsincethereportingandcontroloftheirmovementfalls
underotherCBSAregulations.Ifthegoodsarerestricted,theappropriatepermitmustbepresented.Goodsthatdonot
havetobereportedarelistedinD2011,paragraph23.
Theminimumtimeframesforreportinggoodsforexport,accordingtomodeoftransportation,areasfollows:
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Marine
Notlessthan48hoursbeforebeingloadedonthevessel.
Air
Notlessthantwohoursbeforebeingloadedontheaircraft.
Rail
Notlessthantwohoursbeforetherailcarcontainingthegoodsisassembledtoformpartofthetrainforexport.
Mail
Notlessthantwohoursbeforebeingdeliveredtothepostofficewherethegoodswillbemailed.
AllOtherModes
Immediatelypriortotheexportofthegoods.
Liveanimals,bulkgoods,homogeneousgoodsortimesensitivegoodsareexceptionstothereportingtimeframes,
regardlessofthemodeoftransportation,andcanbereportedimmediatelybeforetheyareexported.Note:Ifthesegoods
areconsideredrestrictedtheymustbereportedwithinthetimeframeslistedforeachmodeoftransport.
Topic4:TypesofExportDeclarations
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Therearefourtypesofexportdeclarations:CAED(CanadianAutomatedExportDeclaration),G7ElectronicData
Interchange(EDI)ExportReporting,B13A,andtheExportSummaryReportingprogram.
CAED(CanadianAutomatedExportDeclaration)
CAEDenablesexportersandagentstoreportexportselectronicallybyusingsoftwarethatcanbedownloadedfrom
StatisticsCanadaswebsiteatnocost.ThosereportingexportsviaCAEDmustregistertouseCAED.Aswell,CAEDusers
musthaveavalidbusinessnumberthathasbeenactivatedforexports.ThisisdonethroughtheCanadaRevenueAgency
(CRA).
ThosewhouseCAEDtoreportgoodsthatrequireapermitmustpresentapapercopyoftheCAED,alongwiththepermit,
toCBSAattheplaceofexit.
TheCAEDexportdeclarationisalmostidenticaltothepaperB13A,inthatitrequiresthesameinformationastheB13A.
G7ElectronicDataInterchange(EDI)ExportReporting
TheG7nationsagreedtosimplifycustomsprocessesbyharmonizingthetradedatausedbythem.
Datasetsandstandarddataelectronicmessagesforelectronicdatainterchange(EDI)weredevelopedsothattheexport
requirementsofoneG7countrycouldmeettheimportrequirementsofanotherG7country.
ThosewhowishtoparticipateintheG7exportreportingprocessmustapplytoStatisticsCanadatodoso.Iftheyare
representedbyaCSPtheymayonlyregisteroncetheCSPhasregistered.
Oncetheapplicationhasbeenaccepted,theregistrantmustsignaMemorandumofUnderstanding(MOU)forG7
electronicexportreportingthatconfirmstheyagreetomeetthestandardsandconditionsofanEDIparticipant.
Topic4:TypesofExportDeclarations(cont.2)
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FormB13A,ExportDeclaration
AlthoughallexportersareencouragedtosignupforanelectronicreportingmethodsuchasCAEDorG7EDIExport
Reporting,tofacilitatetheirreporting,formB13Aisusedwhensubmittingtheexportdeclarationinhardcopy.Exporters
whodonotusethemostrecentversionoftheB13AmaybesubjecttoapenaltyunderAMPS.
Amongotherthings,theB13Amustinclude:aproofofreportnumberwhichisthedateandtimetheB13Aisstampedupon
export,theexportreportingofficecode,andauniquesixdigitreferencecode.Thestampmachineassignsthesixdigit
referencecodesequentially.Anexampleofaproofofreportnumberis2015/01/0114:30497000321.
Exportersarerequiredtosubmittheirexportdocumentationwithinspecifictimeframes,dependingonthemodeof
transportationusedtomovethegoods.FormB13AcannotbefaxedtoCBSAhowever,theexportermayfaxtheB13Ato
aCSPwhointurnwillberesponsibleforstampingtheB13Aatanexportreportingoffice,submittingittoCBSA,and
returningastampedcopytotheexporterfortheirrecords.
OncetheB13Aisstamped,eitherbyuseofamachineattheexportreportingofficeormanuallybyCBSA,itisdistributed
asfollows:
copy1toCBSA,includingallotherdocumentationsuchaspermits,certificatesandlicences
copy2totheexporter'scarrierprovidingproofthattheexportswerereported
copy3totheexporterasproofthatthegoodswerereported.
Topic4:TypesofExportDeclarations(cont.3)
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ExportSummaryReportingProgram
TheExportSummaryReportingprogramwasdevelopedtoenableexporterswhomeetcertaincriteriatodeclareexport
datainasinglesummaryreport.Thisreportstreamlinesexportdataandprovidesinternationaltradestatistics.Exportersin
thisprogrammaysubmitamonthlysummaryoftheirgoodsaftertheyhavebeenexported.
Summaryreportingwascreatedforexportersoflowriskgoodsandwithoutspecialpermissioncannotbeusedforgoods
subjecttoexportcontrols.CompanieswantingtoenrolintheprogrammustcontacttheRegionalClientServicesofficein
theregionwherethecompanykeepsitsrecordsornearesttotheplacewheremostoftheexportersgoodswillbe
exported.TheapplicationshouldincludeacopyoftheproposedSummaryReporting.
SummaryreportersmustsubmitareportcoveringthepreviousmonthtoStatisticsCanadawithinfivebusinessdaysafter
theendofthemonthinwhichthegoodsareexported.Anilreportmustbesubmittedwhenthereisnothingtoreportfora
particularmonth.
Topic5:CancellingandAmendingExportDeclarations
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Exportersmayfindthattheyneedtocancelanexportthathasalreadybeenreported,orchangeinformationontheexport
declaration.Cancellationsandamendmentsshouldbedoneassoonaspossible,andthemethodofmakingthecorrection
willdependonthetypeofdeclarationthatwasfiled.
CAEDsoftwareallowsachangetobemade,electronically,inthesystem,asdoestheG7EDImethodofreporting.
B13AsarecancelledbysubmittingthecancelledtransportationdocumentandacopyoftheoriginalB13Atotheexport
reportingofficewheretheB13Awasoriginallysubmitted.CBSAwillnotifyStatisticsCanadaofthecancellation.
WhenanerrorisfoundonaB13A,thecorrectedB13AandacopyoftheoriginalB13Amustbesubmittedtotheexport
reportingofficewherethegoodswereoriginallyreported.
Ifanerrorisfoundonasummaryreportoracancellationisrequired,StatisticsCanadamustbenotified.Anamendment
mustbesubmittedwithin30daysofanerrorbeingfound.
Topic6:WheretoReportExports
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SomeCBSAofficesarealsocalledExportReportingOffices.AnexportreportingofficeisanyCBSAofficethatis
designatedunderSection5oftheCustomsActtoprocesstheexportationofgoodsfromCanada,toreceiveexport
reports,andtoexaminegoodsdestinedforexport,aswellasbeingopenforbusinessatthetimethegoodsarereported.
Becausegoodsdestinedforexportmaybeexamined,theymustbeavailableattheexportreportingofficewherethe
exportdocumentsarepresented.
ExporterswhoreporttheirexportselectronicallysendtheirexportdeclarationdirectlyfromtheirplaceofbusinesstoCBSA.
ThistypeofexportreportisconsideredtohavebeensubmittedtoaCBSAplaceofreportandtheplaceofexit.
B13Asaresubmittedtotheexportreportingofficewheretheexportsarereported.
SummaryreportsmustbesubmitteddirectlytoStatisticsCanada.
Topic7:MemorandumofUnderstanding(MOU)for
CarrierReporting
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Tomakesureallexportedgoodsarereported,CBSAhasenteredintoMemorandaofUnderstanding(MOUs)withcarriers
andCSPstoguaranteethattheyloadforexportonlythosegoodsthattheexporterhasreportedtoCBSA.
UndertheMOU,CBSAcommitstoensurethattheparticipantislivinguptotheMOUagreement,updatingtheMOU
participantwithinformationpertinenttoCBSAlegislationorprocedures,andprovidingCBSAwithcontactinformation.
TheparticipantagreestoprovidewrittenproofofexportandtoacceptonlythosegoodsthathavebeenreportedtoCBSA
bytheexporter,andforwhichtheparticipantcanprovidetoCBSAwrittenproofthatthegoodshavebeenreported.Ifthere
isnoproofofreport,theMOUparticipantisnottoloadthegoods.Theparticipantisnotrequiredtoverifytheaccuracyof
theproofofreportprovidedbytheexporterortoenforcethereportingtimeframesintheregulations.Ifnoexportreportis
required,theexportermustinformthecarrierandstatethereasonfortheexemption.
TheMOUparticipantmustalsoprovidetheexporterdirectlyorindirectlywithatransportationdocumentnumberforeach
exportshipment.Thisnumberisareferencenumberthatwillallowthecarriertotracktheshipment.
Topic8:OtherDocuments
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BillofLading
Abillofladingisacontractbetweenthecarrierandtheshippertotransportthegoods.Itisissuedbythecarriertothe
shipper.Itservesasevidenceoftheconditionsofcarriageagreeduponbetweentheshipperandthecarrier,anda
documentoftitletothegoods.Animportantfunctionofthebillofladingistoexpresstheconditionsunderwhichthecarrier
seekstolimitliability.
Thebillofladingtakesdifferentformsdependingonthemodeoftransportbeingused,forexample,whenshippingbyair,
anairwaybillwhenshippingbytruck,aninlandbillofladingandwhenshippingbysea,anoceanbilloflading.
CommercialInvoice
AcommercialinvoiceshouldaccompanyallgoodsexportedfromCanadaandshouldsatisfymostforeigncustomsimport
requirementsprovideditcontainsthefollowinginformation:
invoicenumberanddate,
dateofshipment,
termsofsaleandconditionsofpayment,
currencyofvalue,
countryoforigin,and
fulldescriptionofthegoodsincludingquantity,unitpriceandamount.
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Topic8:OtherDocuments(cont.2)
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CertificateofOrigin
Ascountriesenterintotradeagreementswithoneanother,certificatesoforiginbecomenecessaryinordertoensurethe
correctamountofdutyispaidonimportedgoods.Thoughtheytakedifferentforms,theirpurposeistocertifytheplaceof
originorthemanufacturerorproducerofthegoods.
Dependingonthecountryofdestination,somecertificatesmaybecertifiedbyasigningofficeroftheexportingcompany,
somerequirecertificationbyanauthorityvestedwithsuchpower,i.e.,ChamberofCommerce,whileothersmayrequire
certificationbytheconsulateoftheimportingcountry.InconsideringwhetherornotaCertificateofOriginisnecessary,
determinewhetherornotthegoodsmaybeentitledtoalowerrateofdutyifaccompaniedbyaCertificateofOrigin.
ToqualifyforNAFTAdutyratesongoodsexportedtotheUnitedStatesorMexico,theCanadianexportermustdetermine
whetherornotthegoodsmeettheNAFTArulesoforigin.TheymustalsoprepareaCertificateofOriginattestingthatthe
goodsmeettheoriginrequirements.
Lesson1Summary:ExportReporting
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Inthislessonyoulearnedaboutexportreporting.
therearethreeclassesofpersonsresponsibleforexporting:exporters,carriers,andCustomsServiceProviders
theexporteristhepersonorcompany,includinganonresident,whoholdsabusinessnumber(BN)andwhoexports
commercialgoodsorhasthelegalrighttocausethemtobeexported
theexporterwillreceivepenaltiesforexportdocumentsthatarenotaccurateorarenotsubmittedintheregulated
timeframe
therearefourtypesofexportdeclarations:CAED(CanadianAutomatedExportDeclaration),G7ElectronicData
Interchange(EDI)ExportReporting,B13A,andtheExportSummaryReportingprogram
certainCBSAofficeshavebeendesignatedtoprocesstheexportationofgoodsfromCanadaandarereferredtoas
exportreportingofficesand
inanefforttoensurethatallexportedgoodsarereported,CBSAhasenteredintoMemorandaofUnderstandingwith
carriersandserviceproviderstoensurethattheyloadforexportonlythosegoodsthattheexporterhasreportedto
CBSA.
Youshouldnowhaveaclearerunderstandingofexportreporting,whoisheldresponsibleforerrors,whattypesofexport
declarationsareavailable,andwhereandwhenexportsaretobereported.
Nowtakeafewminutesandanswerthefollowingquestionstoseehowmuchyouhavelearnedaboutexport
reporting.
Questions:
Attemptsallowed:
Available:
Passrate:
8
Unlimited
Always
60%
Allowed
youwish.
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Startquiz
Lesson2:RecordKeepingandDocumentation
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InthislessonyouwillstudythesectionoftheCustomsActthatgovernsthemaintenanceofrecordsinCanadaby
exporters.Youwillalsobebrieflyintroducedtothedocumentationrequirementsofforeigncountries.
Rationale
AsaCCS,youwillneedtobefamiliarwiththerequirementsofmaintainingrecordsinCanada.Youshouldalsobeaware
thatexportersmustconsidertherequirementsofothercountrieswhenexportinggoods.
LessonObjective
Attheendofthislesson,youwillbefamiliarwithrequirementsoftheCustomsActformaintainingexportrecordsin
Canada.Youwillalsobeawarethatexportingtoanothercountryrequiresonetobecomefamiliarwiththelawsand
regulationsgoverninggoodsimportedintothatcountry.
Topic1:MaintenanceofRecordsinCanadabyExporters
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Section97.2(1)oftheCustomsActrequiresthat:
97.2(1)Exporters'orproducers'recordsEverypersonwhoexportsgoodsorcausesthemtobeexportedforsaleorfor
anyindustrial,occupational,commercial,institutionalorotherlikeuseoranyotherusethatmaybeprescribed,andevery
otherpersonwhohascompletedandsignedacertificateinaccordancewithsubsection97.1(1),shallkeepattheperson's
placeofbusinessinCanadaoratanyotherplacethatmaybedesignatedbytheMinisteranyrecordsinrespectofthose
goodsinthemannerandfortheperiodthatmaybeprescribedandshall,ifanofficerrequests,makethemavailabletothe
officer,withinthetimespecifiedbytheofficer,andansweranyquestionsaskedbytheofficerinrespectoftherecords.
TheExporters'andProducers'RecordsRegulationsstipulatethatrecordsmustbekeptforaperiodofsixyearsafterthe
dateofexportation.Theserecordsincludeallinformationthatrelatestothe:
origin,purchase,importation,costandvalueofthegoods,
paymentforthegoods,
usetowhichthegoodsareputinCanada,
exportationofthegoods,and
sourceofallmaterialsusedintheproductionoftheexportedgoods.
MemorandumD2015containsguidelinesandgeneralinformationwithrespecttothemaintenanceofrecordsandbooks
inCanadabyexporters,andinparticular,therecordkeepingrequirementsfortheNorthAmericanFreeTradeAgreement.
Topic2:DocumentationRequirementsofForeign
PurchaserCountries
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InadditiontosatisfyingCanada'sexportrequirements,customsrequirementsoftheforeigncountrymustalsobesatisfied.
Thesedocumentsmayincludecertificatesoforigin,customsinvoices,specialdeclarations,orconsularinvoices.The
exportermustbediligentincomplyingwiththepurchaser'srequirements.
Forinstance,goodsthatareexportedtotheUnitedStatesmustcomplywiththeregulationsofotherU.S.government
departmentssuchastheEnvironmentalProtectionAgency(responsibleforprotectinghumanhealthandtheenvironment)
theFoodandDrugAdministration(responsibleforfood,cosmetics,medicineandmedicaldevices,radiationemitting
products,andfeedanddrugsforanimals)theFederalCommunicationsCommission(responsibleforradiofrequency
devices)andtheDepartmentofTransportation.
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Lesson2Summary:RecordKeepingandDocumentation
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InthislessonyouwereintroducedtothesectionoftheCustomsActthatrelatestothemaintenanceofrecordskeptin
Canadabyexporters.Youalsostudiedthedocumentationrequirementsofforeignpurchasercountries.
Section97.2(1)oftheCustomsActrequiresthatrecordsbemaintainedattheplaceofbusinessoftheexporteror
produceroratanyotherplacethatmaybedesignatedbytheMinister
recordsmustbekeptforaperiodofsixyearsafterthedateofexportation
theserecordsincludeallinformationthatrelatestothe:
origin,purchase,importation,costandvalueofthegoods,
paymentforthegoods,
usetowhichthegoodsareputinCanada,
exportationofthegoods,and
sourceofallmaterialsusedintheproductionoftheexportedgoods
whenexporting,thecustomsimportrequirementsoftheforeigncountrymustalsobesatisfiedand
therequirementsofothergovernmentdepartmentsoftheforeigncountrymustalsobemet.
Nowtakeafewminutestoseewhatyouhavelearnedaboutkeepingexportrecordsandthedocumentation
requirementsofothercountries.
Questions:
Attemptsallowed:
Available:
Passrate:
4
Unlimited
Always
60%
Allowed
youwish.
Startquiz
Lesson3:U.S.CustomsProcedures
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Inthislessonyouwilllearnaboutthedocumentation,rules,andregulationsfortheentryofgoodsintotheUnitedStates.
Rationale
SincetheUnitedStatesisCanadaslargesttradingpartner,youmaybeaskedbyclientsforbasicinformationonhowto
preparedocumentationforgoodsthatarebeingshippedintotheUnitedStates.
LessonObjective
Attheendofthislesson,youwillunderstandthedocumentationrequiredandtheprocessinvolvedinshippinggoodstothe
UnitedStates.
Topic1:PreArrivalRequirements
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AutomatedBrokerInterface
TheAutomatedCommercialSystem(ACS)isusedbyCBPtotrack,control,andprocessallgoodsimportedintothe
UnitedStates.AkeycomponentofACSistheAutomatedBrokerInterface(ABI).ABIallowsqualifiedparticipantsto
electronicallyfilerequiredimportdatawithCustoms.
Amongotherthings,ABIallowsparticipantsto:
Fileentryreleasedataelectronicallyforcargoreleaseprocessing.
Fileaconsolidatedentrysummary,combiningmultiplereleasetransactionsononeentrysummary.
Fileconsumptionentries,TIBentries,FTZentries,andwarehousewithdrawalsforconsumption.
TransmitU.S.CustomsDeclaration(invoiceandsummaryinonemessage)inEDIFACTsyntaxsummarydatain
CBPsyntaxinvoicedatainCBPsyntax.
Receivepaperlessdesignationforgeneralexamentrytransactions.
Updateentrydateselectronically.
Designateonebrokertoreceiveallofanimporter'sliquidationinformationthroughtheNationalImporterLiquidations
(NILS).
Receiveconditionalcargoreleaseresultsuptofivedaysbeforetheoceanconveyancearrives,onedayforair
transport,samedayfortrucktransportandrailtransport.
Filedrawbackclaimselectronically.
Choosefromseveralpaymentoptionssendonecheckforeachentrysummary,onecheckforsummariesona
statement,orpaystatementselectronicallythroughtheAutomatedClearinghouse(ACH).
Topic1:PreArrivalRequirements(cont.2)
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AdvanceCargoReportingRequirements
TheBureauofCustomsandBorderProtection(CBP)hasissuedregulationsthatrequireshipperstoelectronicallyfile
cargodataforgoodsenteringtheUnitedStates.
ThisdataissentelectronicallytoCBPthroughaservicecentreorportauthority,orthecarriermaydevelopadirect
interfacewithCBP.
AdvancecargoinformationmustbeprovidedtoCBPaccordingtothefollowingschedule:
Mode
TimeFrame
Truck
UsingAutomatedBrokerInterface(ABI):FAST30minutesbeforearrival
UsingAutomatedBrokerInterface(ABI):nonFAST1hourbeforearrival
Rail
UsingtheAutomatedManifestSystem:2hoursbeforearrivalatdesignatedU.S.portofentryorrailcrossing
Vessel UsingtheAutomatedManifestSystem:24hourspriortoladingatforeignport
Air
UsingtheAutomatedManifestSystem:4hoursbeforearrivalor,iffromanyforeignportorplaceinNorth
America,includinglocationsinMexico,CentralAmerica,SouthAmerica(fromnorthoftheEquatoronly),the
Caribbean,andBermuda:attimeofdeparture(wheelsup)
Carriers,whofailtosubmitaccuratedataelectronicallyinatimelymanner,maybesubjecttoapenaltyoranotherpunitive
measure.(Clickoneachmodeoftransporttoviewpenalty).
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10+2ImporterSecurityFiling
InJanuaryof2008,CBPpublishedanoticeofproposedrulemakingthatrequiresimportersandcarrierstoelectronically
submitadditionalinformationoncargobeforeitisbroughttotheU.S.byvessel.
Thisimportersecurityfilingisknownas10+2andisintendedtobetterassessandidentifyhighriskgoodsandtoprevent
terroristweaponsandmaterialsfromenteringtheU.S.
Thissecurityfilinghasbeengiventhename10+2because10piecesofinformationarerequiredfromtheimporter(or
agent)and2piecesarerequiredfromthecarrier.
The10dataelementsinclude:
manufacturer(orsupplier)nameandaddress,
seller(orowner)nameandaddress,
buyer(orowner)nameandaddress,
shiptonameandaddress,
containerstuffinglocation,
consolidator(stuffer)nameandaddress,
importerofrecordnumber/foreigntradezoneapplicantidentificationnumber,
consigneenumber(s),
countryoforigin,and
HarmonizedTariffSchedulenumber.
The2piecesofinformationfromthecarrierrelatetotheshipment'sstatusandvessellocation.Theyare:
avesselstowplanusedtotransmitinformationaboutthephysicallocationofcargoloadedaboardavesselboundfor
theU.S.and
ContainerStatusMessages(CSM),whichreportcontainermovementsandchangesinstatus,forexample,emptyor
full.
Withtheimplementationofinitiativessuchas10+2,the24hourruleandPriorNotice(PN),timeframesforproviding
cargoandconveyanceinformationtoCBPhavebeenestablished.
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FoodSafetyModernizationAct
OnJanuary4th,2011theFoodSafetyModernizationAct(FSMA)becamelawintheU.S.TheFSMAwascreatedto
protectpublichealthandpreventfoodsafetyproblemsbygivingFoodandDrugAdministration(FDA)officialswider
authority.
Amongothermeasures,AmericanFDAofficials(orthirdpartiesdesignatedbythem)willbeabletoinspectforeignfood
facilitiesthatcomeincontactwithfoodexportedtotheU.S.Officialswillalsobeabletorequirefoodtestingataccredited
laboratories,detainunsafefoodproducts,andordercompaniestorecallfood.
ToimportfoodintotheU.S.,acompanymustberegisteredwiththeFDA.CompanieslocatedoutsidetheU.S.must
appointaU.S.agentforFDAcommunications.UndertheFSMA,FDAofficialswillbeabletosuspendregistrationof
facilitiesinvolvedwithunsafefood.Suspendedcompaniescannotimportfood.
UndertheFSMA,companieswillalsohaveto:
becomeinvolvedwiththeForeignSupplierVerificationProgram
writeafoodsafetyplan(andkeepituptodate)
beabletotracewheretheirfoodcomesfrom
ensuretheirsuppliershavepreventioncontrolsinplace
havetheirfoodcertified(ifrequiredbytheFDA)and
permitFDAinspections.
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PriorNotice(PN)
Foodsandanimalproductsconsitituenearly20%ofallimportationsintotheUnitedStates.In2002,theBioterrorismAct
waspassed.Itwascreatedtocombatterrorismbyreducingtheabilityforinternationalterroriststocarryoutterrorist
attacksintheU.S.bycontaminatingimportedfoods.
UnderthisAct,theFoodandDrugAdministration(FDA)mustreceivePriorNotice(PN)forallfoodimportedorofferedfor
importintotheU.S.AdvancenoticeofimportshipmentsallowstheFDA,aidedbyCBP,totargetimportinspectionsmore
effectivelyandhelpprotecttheU.S.foodsupplyagainstterroristactsandotherpublichealthemergencies.
Foreignanddomesticfacilitiesthatmanufacture,process,packorholdfoodforhumanoranimalconsumptionintheU.S.
mustregisterwiththeFDA.
WithPriorNotice,specificdataissentelectronicallytotheFDApriortothearrivalofthegoodsatthefirstU.S.portof
arrival.
Topic2:DocumentationRequirements
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Generally,unlessgoodsaresubjecttoothergovernmentdepartmentregulations,theonlydocumentsrequiredforgoods
enteringtheUnitedStatesfromCanadaareacommercialinvoice,and,whereNAFTAbenefitsareclaimed,aproperly
completedNAFTACertificateofOrigin.Thesedocumentsmustbelegible,completeandsigned.
Thecommercialinvoicemustcontainthefollowinginformation:
theportofentry
ifthegoodsweresold,oragreedtobesold,thetime,place,andnamesofthepurchaserandvendor
ifonconsignment,thetimeandoriginofshipment,andnameoftheconsignee
theIRSnumberoftheconsigneeorbuyer
adescriptionofthegoods,includingthequalityofthegoods,andmarksandnumbersofthepackagesinwhichthe
goodsarepacked
theweight
thepurchasepriceofeachiteminthecurrencyofsale
ifthegoodsareshippedonconsignment,thevalueofeachitem,inthecurrencyinwhichsuchtransactionsare
usuallymadeor,thepriceinsuchcurrencythatthemanufacturer,seller,shipper,orownerwouldhavereceived,in
theordinarycourseoftradeandintheusualwholesalequantitiesinthecountryofexport
thecurrency,forexample,U.S.dollars,CanadiandollarsorEuros
allchargesapplicabletothegoods,identifiedbyname,suchasfreight,insurance,commissions,assists,duty,
containers,packingmaterialsandpackingcharges
ifnotmentionedintheforegoing,anycharges,costsandexpensesincurredintheprocessofshippingthegoodsto
thefirstU.S.portofentry.Packingandinlandfreightchargesneednotbeitemizedifclearlyshowntobeincludedin
theinvoicedprice
allrebates,drawbacksandbounties,separatelyitemized,allowedasaresultoftheexportationofthegoods
thecountryoforiginand
allgoodsorservicesfurnishedfortheproductionofthemerchandisenotincludedintheinvoiceprice.
Asarule,thevendorandtheimportermustfurnishCBPwithallpertinentinformationaboutthegoodssothattheproper
tariffclassificationandvaluefordutycanbedetermined.AlldocumentationprovidedtoCBPmustbeinEnglishor,ifnotin
English,accompaniedbyanEnglishtranslation.
Topic2:DocumentationRequirements(cont.2)
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NAFTACertificateofOrigin
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TheNorthAmericanFreeTradeAgreement(NAFTA)isatrilateraltradeagreemententeredintobythegovernmentsof
Canada,theUnitedStatesandMexico.ThemostvisibleaspectofNAFTAistheeliminationofdutyongoodsthatare
manufacturedorproducedwithintheNAFTAterritory.
TheNAFTARulesofOriginareusedtoidentifyqualifyinggoodsandtheCanadianexportermustdeterminewhetherornot
thegoodsmeettheserules.IfthegoodsmeettheNAFTARulesofOrigin,theCanadianexportershouldprovidetheU.S.
importerwithaproperlycompletedNAFTACertificateofOriginsothattheimportercantakeadvantageofthelowerduty
ratesallowedunderNAFTA.AllqualifyingNAFTAgoodsenteringtheUnitedStateswillbenefitfromdutyfreeentryunless
otherduties,suchasantidumping,apply.
IntheU.S.aNAFTACertificateofOriginisnotrequiredforgoodsvaluedatU.S.$2,500orless.Forcommercial
shipmentsvaluedatU.S.$2,500orless,theinvoiceaccompanyingthegoodsmustincludeastatementcertifyingthe
goodsasoriginatinggoods.
GoodsEnteringtheU.S.
ThestepsforgoodsenteringtheU.S.are:
advancenotification
reportingofgoods
enteringofgoods
preparationofentrysummaryand
liquidationofentry(performedbyCBP).
Someofthestepsmaybecombined.
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Reporting
Onceavessel,vehicle,aircraft,orrailcararrivesintheU.S.,itmustbereportedtoCBP.
Vesselsmustreporttothenearestcustomsfacilityimmediatelyuponarrival.
Uponarrivalofanaircraft,documentation,includingaGeneralDeclaration(CBPform7507)mustbepresentedtoCBP
immediatelyattheplaceofentry.Sincetheaircargomanifestdatahasbeentransmittedpriortoarrival,itdoesnothaveto
bepresentedagaintoCBP.
Approvedrailcarrierscanelectronicallyarrive(report)theirownconveyancesatthefirstU.S.portofentryandsubmit
timelyupdatestomanifestrecordswiththeactualarrivaldate.
Truckcarriersuseaninwardcargomanifest,formCF7533,toreportcargoattheportofentry.However,atsomeports,
ACEemanifesthasbeenimplemented.
TheAutomatedCommercialEnvironment(ACE)isacommercialtradeprocessingsystemdevelopedbyCBPtofacilitate
tradewhilestrengtheningbordersecurity.Itautomatesthemostcommonlyusedformsandfollowupcommunications.
PartofACEincludeselectronictruckmanifest(emanifest)capabilitiesthatarenowfullyoperationalatthenorthernand
southernborders.ThisallowsCBPtoprescreentrucksandshipmentstoensurethesafetyandsecurityofincoming
cargo.
TruckcarrierscanfileemanifeststhroughtheACEportalorviaaCBPapprovedelectronicdatainterchange,ortheycan
usethirdparties,suchascustomsbrokersorborderprocessingcentres.
Deployedinphases,ACEwillbeexpandedtoprovidecargoprocessingcapabilitiesacrossallmodesoftransportationand
willreplaceexistingsystemswithasingle,multimodalmanifestsystemforland,air,railandseacargo.
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PAPS(PreArrivalProcessingSystem)
IntheUnitedStates,PAPSisareleasemechanismthatutilizesbarcodetechnologytoexpeditethereleaseofcommercial
shipments.WithPAPS,thecarrierprovidestheU.S.customsbrokerwithrequiredreleaseinformationpriortodeparting
CanadafortheU.S.
EachPAPSshipmentrequiresauniquebarcode,whichthecarrierattachestotheinvoiceandthetruckmanifestwhilethe
merchandiseisstillinCanada.ThebarcodeconsistsoftheU.S.StandardCarrierAlphaCode(uniquetwotofourletter
codeusedtoidentifytransportationcompanies)andProBillnumber.Thisinformationisthenfaxedbythecarriertothe
customsbrokerintheU.S.whoinputsthisinformationintotheAutomatedCommercialSystem(ACS).
Uponthetruck'sarrivalattheborder,themanifestandinvoicewithbarcodesarepresentedtotheCBPofficeratthetime
ofprimaryprocessing.
Theofficerscansthebarcode,whichautomaticallyretrievestheentryinformation.Ifnoexaminationisrequired,the
inspectorthenreleasesthegoodswhilestillattheprimarybooth.
ItisimportanttonotethatforgoodsregulatedbytheFDA,releasebyCBPdoesnotmeanthattheFDAhasreleasedthe
goods.ItisimportanttoverifywiththecustomsbrokeriftheFDAhasissuedareleasepriortothedistributionand
consumptionoftheimportedgoods.
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BRASS(BorderReleaseAdvancedSelectivitySystem)
BRASSisaU.S.cargoprocessingsystemthatreplacedtheformerLineReleaseCargoProcessingSystem.Itrelieson
prescreeningofhighlycompliant,highvolume,repetitivecargoandusesbarcodetechnologytosavetimeandreduce
congestionattheports.
BRASSisestablishedonbehalfofaparticularimporter,usuallybytheircustomsbroker.Thebrokersubmitsspecific
informationtoCBPregardingtheimporter,consigneeandmerchandise.Oncetheapplicationisapproved,CBPissuesa
barcodetopermitreleaseofthegoodsattheprimaryline.Thedriverpresentsthereleasedocumentsandbarcodetothe
primaryofficer.Theofficerwandsthebarcode,verifiestheinformationandreleasestheshipment.
CargodataisthentransmittedtoACSandABIparticipantsareprovidedwithreleaseinformation.
Topic3:EntryProcess
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ImportedgoodsarenotlegallyenteredintotheU.S.untilafterthegoodshavearrived,deliveryofthemerchandisehas
beenauthorizedbyCBP,andestimateddutieshavebeenpaid.
WhengoodsreachtheUnitedStates,theimporterofrecord(i.e.,theowner,purchaser,orlicensedcustomsbroker
designatedbytheowner,purchaser,orconsignee)mustfileentrydocuments.
Therighttomakeanentryislimitedtotheownerorpurchaseroftheimportedgoodsortoacustomsbrokerwhohasbeen
appointedbytheowner,purchaserorconsignee.
Importedgoodscanbeenteredforconsumption,enteredintoawarehouse,admittedintoaforeigntradezone,or
transportedinbondtoanotherportofentryorcountry.Wewilldiscussconsumptionentries,thatis,entriesforgoodsthat
willbeenteredintoU.S.commerce.
Consumptionentriescanbeformalorinformal.Asageneralrule,formalentriesarerequiredforgoodsvaluedoverU.S.
$2,000.AlowerthresholdvalueofU.S.$250appliestocertaintradesensitivearticles,suchastextiles.Lesscomplex
informalentriescanbefiledforshipmentsvaluedatU.S.$2,000orless(orat$250orlessforshipmentscontainingthe
aforementionedtradesensitivearticles).
Theformalentryprocessusuallyinvolvestwosteps.
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Step1
Within15calendardaysofthedatethatgoodsarriveataU.S.port,entrydocumentsmustbefiledatalocationspecified
bytheportdirector.Thesedocumentsare:
InwardCargoManifest(CBPForm7533)ortheapplicationforEntry/ImmediateDelivery(CBPForm3461)orother
formofmerchandisereleaserequiredbytheportdirector
evidenceofrighttomakeentry
acommercialorproformainvoice
packinglistsand
anyotherdocumentsneededtoproveadmissibility.
OnceCBPreviewsthisinformation,theywillmakeadecisiontoexamineorreleasethegoods.
Topic3:EntryProcess(cont.2)
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Step1
Within15calendardaysofthedatethatgoodsarriveataU.S.port,entrydocumentsmustbefiledatalocationspecified
bytheportdirector.Thesedocumentsare:
InwardCargoManifest(CBPForm7533)ortheapplicationforEntry/ImmediateDelivery(CBPForm3461)orother
formofmerchandisereleaserequiredbytheportdirector
evidenceofrighttomakeentry
acommercialorproformainvoice
packinglistsand
anyotherdocumentsneededtoproveadmissibility.
OnceCBPreviewsthisinformation,theywillmakeadecisiontoexamineorreleasethegoods.
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Step2
Oncethegoodsarereleased,anEntrySummayFormCF7501mustbefiledandestimateddutiesdepositedattheport
within10workingdaysofthegoodsarriving.
Theentrypackageisreturnedtotheimporter,orcustomsbroker.Thepackageincludes:
theEntrySummary(CF7501)and
theinvoicesanddocumentsnecessarytoassessduties,ordeterminethatallimportrequirementshavebeenmet.
InformationprovidedinFormsCF3461andtheCF7501maybesubmittedelectronicallyusingEDI.
Aswell,CBPmustbeassuredabondhasbeenpostedtocoverduties,taxesoradditionalcharges.Acustomsbrokermay
allowtheuseofhisbondtoprovidethiscoverage.
Thebondholderisthepartyresponsibleforanydutiesandtaxesowingonthegoods.
Forthisreason,mostU.S.customsbrokerspreferthattheirclientspurchasetheirownannualbondorpayforaSingle
EntryBond.
Underthetermsandconditionsoftheagreementbetweentheclientandthebroker,thereisasharedresponsibilityfor
complianceandaccountability.However,itistheultimateresponsibilityoftheclienttopayanycustomsduties.
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Asanalternativetothetwostepprocess,theformalentryprocessmaybedoneinonestep.Thisisknownasalive
entry.AliveentryoccurswhenaCF7501EntrySummary,withestimateddutiesattached,isfiledpriortothereleaseof
merchandise.TheCF7501inthiscaseservesasboththeentryandtheentrysummary.
Theimporteralsomustproducemoredetailedinformationinadvance.
Animportermaychoosetofilealiveentry,oritmayberequiredbyCBP.
CBPrequiresliveentriesinanyoneofthefollowingcircumstances:
1)theimporterfailsrepeatedlytofiletimelyentrysummarieswithoutjustification
2)theimporterhasnottakenpromptactiontosettleaclaimforliquidateddamages
3)theimporterhasrepeatedlydeliveredentrysummarydocumentationwhichisincompleteorwhichcontainserroneous
information
4)theimporterissubstantiallyorhabituallydelinquentinthepaymentofCBPbillsor
5)themerchandiseisofaspecialclass,forexample,quota.
Abrokermaynotapplyforreleaseofmerchandiseinthebroker'snameandunderthebroker'sbondonbehalfofaclient
whoisrequiredtofileliveentries.
Undercertaincircumstances,CBPwillallowcertainimporterstofileanentrysummaryonamonthlybasisandpayall
applicabledutiesattheendofthemonth.
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ImmediateDelivery
Toapplyforimmediaterelease,aForm3461,Entry/ImmediateDeliveryissubmittedbeforethegoodsarrive.Ifapproved,
thegoodswillbereleasedimmediatelyuponarrival.Oncethegoodsarereleased,anentrysummaryissubmittedandthe
dutiesmustbepaidwithintenbusinessdays.
Immediatereleaseislimitedtothefollowingtypesofimportations:
shipmentsfromNAFTApartners,withtheportdirectorspermission
freshfruitandvegetablesarrivingfromCanadaorMexicoforimmediatedeliverytotheimporter
shipmentsconsignedtoorforusebytheU.S.Government
tradeshowgoods
goodssubjecttotariffquotarates
undercertainconditions,goodssubjecttospecificquotas
undercertainconditions,goodsreleasedfromawarehousefollowedwithintenworkingdaysbyaWarehouse
WithdrawalforConsumptionEntryand
shipmentsauthorizedbyCBPasimmediatedeliverygoods.
Liquidation
LiquidationiswhenCBP'sassessmentoftherateandamountofdutyiscomplete.
AnoticeofliquidationisprovidedbyCBPpostingonapublicbulletinboardattheportofentry.Ifanentryisnotliquidated,
CBPmayrequestthatachangebemade.Ifthechangeresultsinlessduty,arefundispermittedandtheentryis
consideredliquidated.Ifmoredutyapplies,theimporterwillbenotifiedoftheincreaseandgivenachancetoappeal.
Liquidationcantakeupto300days.
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WarehouseEntries
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Goodsmaybeplacedinacustomsbondedwarehouseforuptofiveyears.Duringthattime,thegoodsmaybereexported
withoutpayingduties,ortheycanbereleasedfromthewarehouse.Whileinthewarehouse,thegoodscanbemanipulated
bycleaning,sorting,repacking,orotherwisechangingtheirconditionbyprocessesthatmustnotamounttomanufacturing.
UnenteredGoods
Ifanentryhasnotbeenfiledforgoodsafter15calendardays,thegoodswillbestoredinaGeneralOrderWarehouseat
theimportersexpense.Ifanentryhasntbeenfiledaftersixmonths,thegoodsmaybesoldatpublicauction.
FAST
IntheU.S.,theFreeandSecureTrade(FAST)programisaninitiativebetweentheUnitedStates,CanadaandMexicoto
ensuresecurityandsafetywhileincreasingtheeconomicsuccessofallthreecountries.Indevelopingthisprogram,the
tradepartnershaveagreedtoharmonizecommercialprocessesforshipmentsarrivingattheborder.Theseprocesses
includeusingcommonriskmanagementprinciples,makingsupplychainsecurity,andindustrypartnershipapriority,and
makinguseofadvancedtechnologytoimprovetheefficiencyofscreeningcommercialtrafficattheborder.
UnderFASTthereare:
dedicatedlanes(whereavailable)forFASTshipments
fewerexaminations
partnershipsbetweenorganizationssuchasPIPandCTPAT
theknowledgethatcarriersarecarryingshipmentsforaCTPATapprovedimporterand
priornoticeofchangestoFASTthatwillexpandeligibleelectroniccargoreleasemethods.
TrucksusingFASTlanesmustbeCTPATapproved,carryingqualifyinggoodsfromaCTPATapprovedimporters,and
thedriversmustpossessavalidFASTCommercialDriverCard.FASTprocessingisbaseduponadvanceelectronic
transmissionofinformation.
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CTPAT
CustomsTradePartnershipAgainstTerrorism(CTPAT)isaninitiativetostrengthenpartnershipsbetweenbusinessand
government.Theprogramrecognizesahighlevelofsupplychainandbordersecuritycanonlycomefromaclose
relationshipbetweengovernmentandmembersofthesupplychainsuchasimporters,carriers,brokers,warehouse
operatorsandmanufacturers.Thisprogramasksbusinessestohaveahighstandardofsecuritypracticesand
communicatetheirsecurityguidelinestotheirbusinesspartnersinthesupplychain.
BenefitsofCTPATinclude:
areducednumberofinspections
anassignedaccountmanager
accesstootherCTPATmembersviatheStatusVerificationInterface(SVI)
eligibilityforaccountbasedprocesses,forexample,bimonthly/monthlypaymentsand
anemphasisonselfpolicing,notcustomsverifications.
Topic4:TemporaryImportations
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Certaingoodsthatarenotimportedforthepurposeofbeingsoldorareimportedforthepurposeofbeingsoldsubjectto
approvalmaybeeligiblefortemporaryentryintotheUnitedStates.Thereareonly13specificprovisionsforthis,sothe
numberofgoodsthatqualifyforatemporaryentryislimited.
Forexample,samplesofmerchandisemaybeimportedtemporarily,withoutthepaymentofduty,underaTemporary
ImportationBond(TIB).Thesamplesmaynotbesoldandmustbeexportedwithinoneyearfromthedateofimportation.
AnA.T.A.CarnetmaybeusedtodocumentgoodsenteringtheU.S.temporarily.Thecarnet,asitdoesinCanada,serves
asaguaranteeagainstthepaymentofdutieswhichmaybecomedueifthemerchandiseisnotexported.
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Inmostcases,goodsenteringtheU.S.temporarilymustbeexportedwithintwelvemonthsofthedateofimportation.Upon
applicationtotheDistrictDirectorofCustoms,anextensionmaybegrantedtothisdutyfreeperiod,toamaximumofthree
years.
Examplesofgoodsthatmaybeenteredtemporarilyinclude:
goodstoberepaired,alteredorprocessed
professionalequipment,toolsusedintrades,repaircomponents,andcampingequipmentalltheforegoing(imported
byorfornonresidentsvisitingtheUnitedStatesbriefly,andfortheirexclusiveuse)
goodsofspecialdesignforuse,temporarilyandexclusivelyintheproductionofgoodsforexport
worksofart,photographsandequipmentusedinintellectualandscientificprojectsbroughtintotheUnitedStatesby
professionalartists,lecturersorscientistsforuseinexhibitionsortopromoteart,scienceandindustry
automobiles,automobilechassisandbodies,completeorcutaways,tobeusedsolelyforthepurposeof
demonstrationand
samplesusedsolelyforthepurposeofsolicitingorders.
Topic5:GoodsImportedbyMail
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ItcanbeadvantageoustoshipgoodstotheUnitedStatesbymail.Thisisbecause:
customsclearanceislesscomplicatedsinceapostalworkermaycollectdutiesupondeliveryofaparcelwherethe
valueoftheparceldoesnotexceed$2,000U.S.
shippingchargesarelessexpensive
noformalentryisrequiredondutyfreemerchandisenotexceeding$2,000U.S.invalueand
personalshipmentsunder$2,000U.S.invaluedonotrequireformalclearance.
Thesedonotincludegoodssubjecttoothergovernmentdepartmentregulations,suchasfoodproductsthatareregulated
bytheFDAandshipmentsoftextiles,chemicals,andradiofrequencydevices.Thesameexceptionsapplytogoodsthat
areshippedbycourier.
UnderjointCBPandpostalregulations,eachparcelpostpackagemusthaveattachedacustomsdeclarationthatshows
theexactdescriptionandvalueofthecontents.Commercialinvoicesmustbeincludedwithallcommercialshipments.
Inthecaseofpostalshipmentsexceeding$2,000,orsubjecttoothergovernmentdepartmentreviews,notificationis
forwardedtotheconsigneeadvisingthataformalcustomsdeclarationmustbepreparedandsubmitted.
Topic6:ExaminationofGoods
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CBPmayexaminegoodstodetermine:
theirvalueandapplicableduty
properlymarking
iftheshipmentcontainsprohibitedorillegalgoodsand
ifthequantitiesarecorrect.
Certaintypesofgoodswillbecarefullyexaminedtodeterminewhethertheymeetallprescribedrequirements.For
example,foodordrinksunfitforhumanconsumptionwouldnotqualifyundertheFoodandDrugAdministrationor
shipmentsofseedswillbedetaineduntilsamplescanbetakenandanalyzed.
Topic7:U.S.GoodsReturned
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U.S.goodsreturningtotheU.S.withouthavingbeenadvancedinvalueorimprovedinconditionarealloweddutyfree
entry.Form3311isusedtodocumentthesegoods.Customswillacceptmanydifferenttypesofdocumentaryevidenceas
proofofU.S.origin,includingacopyoftheU.S.exporter'soriginalinvoice,acopyoftheU.S.Exporter'sCertificateof
Origin,acopyofanE29BissuedbyCBSA,oracopyoftheCanadaCustomsCodingForm,formB3.
GoodsexportedfromtheUnitedStatesforrepairoralterationmaybesubjecttodutyupontheirreturntotheU.S.based
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onthevalueoftherepairsoralterations.
InkeepingwiththetermsoftheNorthAmericanFreeTradeAgreement,goodsreturnedtotheU.S.afterhavingbeen
exportedtoCanadaforrepairunderwarrantyarealloweddutyfreeentryupontheirreturntotheU.S.
SpecialCBPproceduresgoverntheexportationandreentryofU.S.goods.Forexample,manufacturersstatementsor
affidavitsindicatingthatrepairscouldnothavebeendoneintheU.S.mayberequestedbyCBP.
Topic8:RequestforBindingRuling
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ItispossibletoobtainabindingrulingfromCBPconcerningthetariffclassificationorvalueofacommodity.Inorderto
obtainabindingrulingfortariffclassification,informationconcerningthegoodsshouldbesubmittedinwritingto:
Director,NationalCommoditySpecialistDivision
U.S.CustomsandBorderProtection
Attn:CIE/RulingRequest
OnePennPlaza10thFloor
NewYork,NY10119
Requestsforvaluationrulingsshouldbeforwardedto:
TheCommissionerofCustomsandBorderProtection
Attention:OfficeofRegulationsandRulings
Washington,DC20229.
(TheDivisionandBranchintheOfficeofRegulationsandRulingstowhichtherequestshouldbedirectedmayalsobe
indicated,ifknown.)
Torequestaruling,thefollowinginformationisrequired:
thenames,andaddressesinformationofinterestedpartiesandthemanufacturerIDcode
theport(s)inwhichthegoodswillbeentered
adescriptiontheofgoods
thecountryoforigin
confirmationthattheimporterisnoawareofanyissuesonthecommoditypendingbeforeCBPoranycourtand
confirmationofanpreviousclassificationadvicesoughtfromanofficer,andifso,fromwhom,andwhatopinionwas
rendered,ifany.
Torequestarulingontariffclassification,
valueofingredientsormaterials
enduseofthegoodsasintendedintheUnited
thecommercial,orscientificnameand
anyotherinformationthatmaybehelpfulforthepurposeoftariffclassification.
Forarulingonvaluation,thefollowinginformationshouldaccompanytherequest:
acopyoftheU.S.Customsinvoice
descriptionofthetransaction(FOBorCIF,ExFactory,oranyotherarrangement)
therelationshipbetweenthetransactingparties(i.e.betweenunrelatedparties),whether
anyinformationrelatingtocommercialaspectsofthetransaction(e.g.billingpractices,enduseofthegoods,
descriptions,modeoftransportandallotherpertinentfacts).Abindingrulingmayalsoberequestedonline.
Topic9:SuggestionstotheExporter
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Foranexpeditedcustomsclearance,CBPrecommendsthatexporters:
includelegiblecustomsinvoices,withdetaileddescriptions
packinglist
markandnumbereachpackagesothatitcanbeidentifiedwiththecorrespondingmarksandnumbersappearingon
theinvoice
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markthegoodswiththecountryoforigin
reviewandcomplyanyspeciallaws,forexample,lawsrelatingtofoods,drugs,cosmetics,alcoholicbeverages,and
radioactivematerials
reviewshippingandinvoiceinstructionsgivenbythepurchaserintheUnitedStates
workwithCBPtodeveloppackingstandardsfortheirgoods
followsecurityprocedures
consideracarrierusingtheAutomatedManifestSystemandCTPATcertified
consideracustomsbrokerwhoparticipatesintheAutomatedBrokerInterfaceand
considerbecomingCTPATcertified.
Lesson3Summary:U.S.CustomsProcedures
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InthislessonyoulearnedaboutU.S.Customsprocedures.
Generally,theonlydocumentsrequiredforCBPpurposes(forgoodsexportedfromCanada)areacommercial
invoice,and,whereNAFTAbenefitsareclaimed,aproperlycompletedNAFTACertificateofOrigin.
Theimportersecurityfiling10+2foroceanshipments,hasbeengivenitsnamebecause10piecesofinformation
arerequiredfromtheimporter(oragent)and2piecesarerequiredfromthecarrier.
Informalentrysummaries,thatis,thosevaluedat$2,000andlessarenotsubjecttoformalentryrequirementsby
CBP.
BRASSisaU.S.cargoprocessingsystem.Itreliesonprescreeningofhighlycompliant,highvolume,repetitive
cargoandusesbarcodetechnologytosavetimeandreducecongestionattheports.
ABIallowsqualifiedparticipantstofileimportdataelectronicallywithCBP.
Certaingoodsthatarenotimportedforthepurposeofbeingsoldorareimportedforthepurposeofbeingsold
subjecttoapprovalmaybeeligiblefortemporaryentryintotheUnitedStates.
TakeafewminutestoseewhatyouhavelearnedaboutU.S.Customsprocedures.
Questions:
Attemptsallowed:
Available:
Passrate:
5
Unlimited
Always
60%
Allowed
youwish.
Startquiz
Lesson4:ExportPermits
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Anexportpermitisanofficialdocumentthatgivesanexportertheauthoritytoshipspecificgoodstoanothercountryorto
shipgoodstoaspecificcountry,whichtheywouldnototherwisebepermittedtodo.TheCanadiangovernmentcontrols
themovementofexportedgoodsthroughvarioustypesofexportpermitsandcertificates.Thislessonwillfocusprimarily
onexportpermitsissuedbytheDepartmentofForeignAffairs,TradeandDevelopmentCanada(DFATD),buttheexport
permitsandcertificatesofOtherGovernmentDepartments(OGDs)willbebrieflydiscussed.
Rationale
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AsaCCS,youremployeroraclientmayaskyouforinformationaboutexportinggoods,ortheymayaskyoutoapplyfor
anexportpermitontheirbehalf.Knowingwhichtypesofexportedgoodsarecontrolled,wheretofindinformationrelating
toexportpermits,andwhenandhowtoapplyforanexportpermitwillhelpexpeditegoods,andpreventpenalties,
seizures,andotherseriouscomplications.
LessonObjective
Attheendofthislesson,youwillbeabletodescribethetypesofgoodsthatrequireexportpermits.Youshouldalsobe
abletoidentifyspecificcountriesforwhichexportpermitsarerequired.
Topic1:TheNeedforExportPermits
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ThegovernmentofCanadacontrolstheexportofcertaingoodsforvariousreasons.
Canadabelongstoaninternationalcommunity.TheCanadiangovernmenthasimplementedcontrolsandrestrictionsin
ordertopreventtheexportingcommunityfromviolatingintergovernmentalagreementsandcontraveningforeignpolicy.
Ourgovernmentalsorestrictsexportsthatmayposeathreattointernationalsecurity.
Whileenjoyingthebenefitsoffreeflowingtrade,Canadahasaresponsibilitytomaintaininternationalsecurity.Ifexporters
andothersinthetradecommunitypracticeresponsibletradingbyfollowinggovernmentguidelines,theywillhelpensure
noharmcomestoCanadaoranyothercountry.Controlshelppreventexportersfromcontributingtonationalorregional
conflictsorinstability.Exportcontrolsalsoobstructtheconditionsforthedevelopmentofweaponsandhumanrights
violations.
ControlsareplacedonexportssothatCanadianexportersavoidcontraveninganyintergovernmentalagreementorpolicy
thatCanadaispartyto.Forexample,Canadahaspoliciesinplacetoregulatetradeinroughdiamonds,thesaleof
weapons,andtheprotectionofendangeredplantsandspecies.
Last,exportstatisticsneedtobekeptandtheymustbeaccurate.ThegovernmentcollectsdataonCanadianexports,and,
byhavingaccesstoinformationontheeconomicconditionsofinternationaltradetheexportingcommunitycanmake
informeddecisionsonexistinganddevelopingexportmarkets.
Topic2:TheExportandImportPermitsAct
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TheExportandImportPermitsAct(EIPA)givestheGovernorinCounciltheauthoritytoestablishvariouscontrollists.The
ExportControlList(ECL)andtheAreaControlList(ACL)werecreatedunderSection3and4ofthisAct,respectively.The
ActalsoallowstheMinisterofForeignAffairstoissueexportpermits.
AreaControlList
TheAreaControlListisalistofcountries.Exportpermitsarerequiredforgoodsbeingshippedtothecountrieslistedon
theACL.
Currentlytwocountries,Belarus,andNorthKoreaareincludedontheAreaControlList.Goodscannotbeexportedtoany
ofthesecountrieswithoutanexportpermit.ThesecountrieshavebeenplacedontheACLbecausetheGovernmentof
Canadafeltthatabusestakingplaceinthosecountriesweretooserioustoignore.Arequestforanexportpermittoexport
goodstoBelarus,orNorthKoreaisevaluatedonacasebycasebasis.Requeststoexportgoodssuchasfood,
humanitariansupplies,andmedicalnecessitiesaregenerallyapproved.Mostothergoods,however,arenot.
ExportControlList
Somegoodsrequireanexportpermitregardlessoftheirdestination.AlistofthesegoodsisfoundintheExportControl
List.ItisdividedintosevenchaptersknownasGroups.TheExportControlListidentifiesspecificgoodsandtechnology
thatarecontrolled.
ThesevenGroupsare:
Group1:DualuseList
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Group2:MunitionsList
Group3:NuclearNonProliferationList
Group4:NuclearRelatedDualuseList
Group5:MiscellaneousGoodsandTechnology
Group6:MissileTechnologyControlRegimeListand
Group7:ChemicalandBiologicalWeaponsNonProliferationList.
DetailsofthegoodslistedontheExportControlListarefoundinadocumentcalled:AGuidetoCanada'sExportControls.
Particularattentionmustbepaidtoitems5400and5504inGroup5ontheExportControlList.
Topic3:HighlightsoftheExportControlList
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Item5400oftheExportControlList
UnderItem5400,UnitedStatesOriginGoodsandTechnology,goodsofU.S.origin,asdefinedinItem5400,requirean
exportpermitwhenexportedfromCanada.Item5400wasdesignedtosafeguardCanadafrombeingusedasan
alternativeroutetocircumventlawsrelatingtoU.S.goodsbeingshippedtoacountrywithwhichtheU.S.hasanembargo.
Ifthegoodsaredestinedforenduseincountrieswherenoembargoapplies,exportersmayquoteGeneralExportPermit
No.12.IfthegoodsaredestinedforenduseinIran,theSudan,Cuba,SyriaorNorthKoreaoranycountryonCanada's
AreaControlList,theexportermustapplytotheExportControlsDivisionofDFATDforanindividualexportpermit.General
andindividualexportpermitswillbefurtherdiscussedinTopic5.
Item5504oftheExportControlList
Underitem5504,StrategicGoodsandTechnology,somegoodsofU.S.originaresubjecttoreexportcontrolsimposedby
theGovernmentoftheUnitedStates.ExportersneedtobeawarethatgoodsofU.S.originthathavebeenincludedina
finishedproductwhileinCanadamaybeincludedinitem5504.Ifanexporterisunfamiliarwithreexportcontrolsthat
mightapplytohisgoods,heshouldcontacttheoriginalU.S.supplierortheExportControlsDivisionofDFATD.Exporters
mayberequiredtoprovideacopyofavalidU.S.ExportlicencepriortoissuanceofanIndividualExportPermit.Proofof
authorizationisrequiredforU.S.goodsthatfallintoECLGroup2,theMunitionsListGroup6,theMissileTechnology
ControlRegimeListoritem5504.
Topic4:ForestProducts
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TheExportControlListincludesForestProducts.
Items5101to5104ofGroup5,MiscellaneousGoodsandTechnology,includelogs,pulpwood,materialorproductofred
cedarthatissuitableinthemanufactureofshakes,shingles,andsoftwoodlumberproducts.
SoftwoodlumberisoneofCanadaslargestexportstotheUnitedStatesandCanadiansoftwoodlumberaccountsfora
thirdoftheU.S.demandconsumptionofthisproduct.
In2006,CanadaandtheUnitedStatessignedtheSoftwoodLumberAgreement.Theaimoftheagreementistopromotea
stabletradeenvironmentfortheindustry.
AccordingtoD2011,permitsforsoftwoodlumberbeingexportedtotheUnitedStatesdonothavetobepresentedtothe
CBSA.However,permitsarerequiredfortheexportofcertainsoftwoodlumberproducts.
Formoreinformationonexportpermitsforsoftwoodlumber,theexportingcommunityisencouragedtocontactthe
SoftwoodLumberDivisionofForeignAffairs,TradeandDevelopmentCanadaat:
SoftwoodLumberControlsDivision(TNC)
LesterB.PearsonBuilding
125SussexDrive
Ottawa,OntarioK1A0G2
Fax:6139448950
Email:softwood.boisdoeuvre@international.gc.ca
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Topic5:Firearms
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DFATDregulatestheexportoffirearms.Informationontheapplicationrequiredtoallowtheexportoffirearmsandrelated
goodsisfoundinSectionJoftheExportControlsHandbook.
AnexportpermitissuedbytheExportControlsDivisionofDFATDmustaccompanyallfirearmsexportedtocountriesother
thantheU.S.Currently,nonrestrictedorrestrictedfirearms,exportedfromCanadatotheUnitedStates,donotrequirean
exportpermit.However,theUnitedStatesrequiresanimportpermit.
Anexportpermitisrequiredtoexportprohibitedfirearms,prohibitedweapons,prohibiteddevices,components,parts,or
ammunitiontotheU.S.Acompanymayexportthesegoodsifithastheproperbusinesslicenceandexportpermit.Before
exportinganyoftheseitems,individualsandcompaniesshouldcheckwithcustomsofficialsinthecountrytowhichthe
goodsarebeingexportedtoensurethatthegoodsareadmissibleinthatcountry.
ApplicationsforexportpermitsareavailablethroughExportControlsOnlineorfromanycustomsofficeorfromthe
DepartmentofForeignAffairs,TradeandDevelopmentCanada.
Certainprohibitedfirearms,weapons,devices,orcomponentsthereofthatareincludedontheExportControlList(ECL),
maybeexportedonlytodestinationslistedintheAutomaticFirearmsCountryControlList(AFCCL).
ItemsthatarenotlegallypossessedinCanadamaynotbeexportedfromCanada.
Topic6:UnitedNationsSecurityCouncilEmbargoes
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InadditiontotheACLandtheECL,internationaltradeisalsocontrolledbyUnitedNationsSecurityCouncilembargoes.
TheUnitedNationsSecurityCouncilisresponsibleformaintaininginternationalpeaceandsecurity.Whencomplaintsof
threatstopeacearebroughttotheattentionofthecouncil,andanagreementforpeacedoesnotseempossible,the
councilwillsuggestmeanstoapeacefulsettlement.Ifadisputeleadstofighting,thecouncilcanissueceasefire
directives,sendUNpeacekeepingforces,ordecideuponeconomicsanctions.
Becauseeconomicsanctionscanhaveanimpactonvulnerablesegmentsofapopulation,UNeconomicsanctionsare
aimedatarmsembargoes,travelbans,orfinancialordiplomaticrestrictions.
InCanada,ifaparticularnationissubjecttoaUnitedNationsSecurityCouncilembargo,additionalapprovalforshipments
goingtothatcountryfromCanadaarerequiredundertheUnitedNationsActanditsassociatedregulations.
TheCBSAassistsDFATDwiththeadministrationandenforcementoftheUnitedNationsAct.
AnypersonwhocontravenesanorderorregulationmadeundertheUnitedNationsActisguiltyofanoffenceandliable
(a)onsummaryconviction,toafineornotmorethan$100,000ortoimprisonmentforatermofnotmorethanoneyear,or
tobothor
(b)onconvictiononindictment,toimprisonmentforatermofnotmorethan10years.
CountriesthataresubjecttoCanadianeconomictradesanctionsarelistedontheDepartmentofForeignAffairs,Trade
andDevelopmentCanada'swebsite.Specificsanctionsagainstacountryarealsolistedbycountryonthesite.
Topic7:GeneralExportPermitsandIndividualExport
Permits
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TheExportControlsDivisionofDFATDadministerstwotypesofexportpermits:GeneralExportPermits(GEPs)and
IndividualExportPermits(IEPs).
GEPsallowanexportertoshipcertaincontrolledgoodstospecificcountrieswithouttheneedforanIEP.GEPsarenot
issuedtoindividualexporters.Instead,theGEPnumberisquotedintheappropriatefieldontheExportDeclaration.No
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additionalpaperworkisrequired,andthereisnoDFATDinvolvement.Likegeneralimportpermits,GEPscontain
conditionsthatmustbemet.Forexample,aGEPmaybeconditionalonanexporterreportingontheactualvolumeof
exportsmadeunderaGEP.
IfanexportertakesadvantageofaGEPanddoesnotquotetheGeneralExportPermitnumberontheExportDeclaration,
CBSAmaybelievetheyareexportingacontrolledgoodwithoutapermitandissueapenalty.
TheRelatedRegulationssectionoftheTableofContentsfortheExportandImportPermitsActliststheGeneralExport
Permits.
WhenanexportpermitisrequiredandaGEPcannotbeused,anIndividualExportPermit(IEP)mustbeobtained.
IEPapplicationsmayrequirethecompletionoftwoforms.AnEXT1042,ApplicationforPermittoExportGoods(General
InformationForm)isrequiredandpossiblyasecondform,dependingonthetypeofproduct.Inmostcases,theadditional
formisanEXT10421,ControlledGoodsDetailForm.OtheradditionalformsmayincludeaFirearmsDetailForm,aLogs
DetailForm,andaBCLogsTransitionDetailForm.
ExportspermitapplicationsandallsupportingdocumentsaresenttotheExportControlsDivisionofDFATD.
InformationonhowtocompletetheexportpermitapplicationineitherEXCOLoronformsEXT1042andEXT10421is
foundinSectionE.3oftheExportControlHandbook.
Topic8:ExportControlsOnline(EXCOL)andExport
andImportControlsSystem(EICS)
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EXCOL,orExportControlsOnline,isasecureonlineprogramofferedbyDFATDthatallowsCanadianexportersto
submitexportpermitapplications,checkthestatusofanexportpermitapplicationandprintpermits.
PermitapplicationsmayalsobedownloadedfromDFATDswebsiteandmailedorfaxedtoDFATD.Exportersshould
ensurethatallnecessarytechnicalandsupportingdocumentationisincludedwiththeapplication.Incompleteapplications
maybereturnedtotheapplicant.
TheExportandImportControlsSystem(EICS)isalsoasecureonlineprogramofferedbyDFATD.Itallowscustoms
brokerstosubmitandprocessexportpermitapplications.
TheEICSapplicationisrestrictedtobrokers,whileEXCOLisavailabletoall.
Topic9:OtherGovernmentDepartmentsandAgencies
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Othergovernmentdepartmentsandagenciescanbeinvolvedintheadministrationofexportcontrols.
EnvironmentCanada
ExportingEndangeredSpecies
CanadaisasignatorytotheConventionofInternationalTradeinEndangeredSpecies(CITES).CITEScontrolstheimport,
exportandtransitofendangeredwildfloraandfauna.EnvironmentCanadaisresponsibleforimplementingCITESin
Canada.TheWildAnimalandPlantProtectionandRegulationofInternationalandInterprovincialTradeAct(WAPPRIITA)
istheenablinglegislationforCITES.WAPPRIITAprohibitstheexportofCITEScontrolledspecieswithouttheproper
permits.
CITEScontainsthreeappendices.Thespecieslistedineachappendixaregivendifferentlevelsofprotection:
AppendixIcontainsalistofspeciesthatarerareorendangeredbecauseofinternationaltrade.InternationalTradeis
generallyprohibitedforthesespecies.
AppendixIIlistsspeciesthatarenotcurrentlyrareorendangeredbutcouldbecomesoiftradeisnotregulated.
AppendixIIIincludesspeciesthatarenotnecessarilyendangeredbutaremanagedwithinanation.
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UnderAppendicesIIandIII,internationaltradeinthesespeciesispossible,butcontrolledbypermits.Ifspecimensfrom
AppendixI,IIorIIIareexported,theymustbeaccompaniedbyaCanadianCITESexportpermit.Theexportpermitis
retainedandforwardedtotheCanadianWildlifeService(CWS).Forpermitsissuedelectronically,oneofthetwooriginals
ofthepermitistobeforwardedtoCWS.Theotheroriginalmustbeleftwiththeexporterforpresentationtocustoms
officialsatthecountryofdestination.
Whenexportingplantsoranimalsortheirbyproducts:
1.SearchtheCITESControlListtoseeifthespeciesorderivedproductislisted.
2.ObtaintheCITESpermitbeforeexport.
3.MakesuretheCITESpermitisvalidatedandaccompaniedbyallCITESdocuments.
4.ComplywithCITESguidelinesforthetransportingandshipmentofliveanimalsandplants.
MoreinformationonCITESmaybefoundinD1971.
(cont.2)
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ExportingHazardousWasteandHazardousRecyclableMaterial
In1989,CanadasignedtheUnitedNations'BaselConventionontheControlofTransboundaryMovementsofHazardous
WastesandtheirDisposal.OneoftheobjectivesoftheBaselConventionwastominimizetheinternationalmovementof
hazardouswasteandhazardousrecyclablematerial.Becauseofthis,CanadahasimplementedtheExportandImportof
HazardousWasteRegulationsRecyclableMaterialRegulations.
Allrequestsforexportingorimportinghazardouswastesorhazardousrecyclablematerialmustbesubmittedto
EnvironmentCanada'sWasteReductionandManagementDivision.
ExportingOzoneDepletingSubstances
Ozonedepletingsubstancesarespecificchemicalsthatcausethebreakdowninthestratosphereandreleasechlorineor
bromine,whichdestroythestratosphericozonelayer.Mostofthesesubstancesarealsogreenhousegases.TheMontreal
ProtocolonSubstancesthatDepletetheOzoneLayerhasbeensignedby120countries.Thisagreementinitiatedcontrols
ontheworld'sconsumptionofozonedepletingsubstances.CanadahasadoptedregulationstomeetitsMontrealProtocol
commitments.
UnlessanexporterhasreceivedwrittenauthorizationfromtheMinisteroftheEnvironmentpriortoexportingacontrolled
substance,theexportationofcontrolledsubstancesisprohibited.ControlledsubstancesarelistedonAppendixAofD19
72.
Toobtainapermit,exportersmustcontacttheirlocalEnvironmentCanadaregionaloffice.
(cont.3)
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CanadianFoodInspectionAgency
ExportingFood,AnimalsandPlants
TheCanadianFoodInspectionAgencys(CFIAs)interestinexportcontrolsconcernstheexportoffood,animalsand
plants.
Regardinganimals,CFIAsprogramisdesignedtoensurethattheexportofanimals,animalproducts,andanimalby
productsmeetthehealthrequirementsoftheimportingcountry.CFIAalsoregulatesthetransportationoflivestock,andthe
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careandhandlingoffarmanimals.UndertheHealthofAnimalsActandRegulations,livestock,poultry,animalembryos,
andanimalsemenexportedfromCanadamustbeaccompaniedbyahealthcertificateissuedorendorsedbyaCFIA
veterinaryinspector.
TheCFIAisalsoresponsiblefortheissuanceofPhytosanitaryCertificatesforallagriculturalandforestryproducts
exportedtoforeigncountries.
UndertheCanadaAgriculturalProductsAct,CFIAensuresthatanyhoney,freshproduce,processedfruitsand
vegetables,fishandseafood,meatandpoultry,dairy,andeggproductsleavingtheCFIAinspectedestablishmentsissafe,
meetsspecificstandardsandisappropriatelylabeled.CFIAcertifiesthatexportedfoodmeetsforeigncountryrequirements
whentherearereciprocalagreementswithothercountries.
(cont.4)
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HeritageCanada
ExportingCulturalProperty
TheCulturalPropertyExportandImportActensuresthepreservationofCanadianheritagebyestablishingexport
restrictionsforobjectsofhistorical,scientificandculturalsignificance.Theexportofculturalpropertyisgovernedbythe
CanadianCulturalPropertyExportControlList.Itdescribesarangeofproductsforwhichanexportpermitisrequired.The
exportofanitemcoveredbytheControlListcanbepostponedifanexportpermithasbeenrefused.Thedelay,usually
betweentwoandsixmonths,allowsanopportunityforinstitutionsandpublicauthoritiesinCanadatopurchasethegoods
thathavebeendeniedanexportpermit.Ifthegoodsarenotpurchasedbytheendofthedelayperiod,thenanexport
permitmaybegranted.Thecontrollistdoesnotapplytoobjectsthatarelessthan50yearsold,ormadebyapersonstill
living.
TheCanadianNuclearSafetyCommission
ExportingNuclearItems
UndertheNuclearSafetyandControlAct,theCanadianNuclearSafetyCommission(CNSC)regulatesexports(and
imports)ofnuclearitemsandnuclearrelateddualuseitems.
(cont.5)
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NaturalResourcesCanada
ExportingRoughDiamonds
InMayof2000,representativesfromthediamondindustryandfromthegovernmentsofnearly50diamondproducing
countriesmetinKimberley,SouthAfricaasaresponsetothegrowingdiamondtradeinwarzones.Themeetingsresulted
intheKimberleyProcessCertificationscheme.Theaimoftheagreementwastostopmilitarygroupsfromusingthetrade
ofroughdiamondstofinancetheirmilitarysupplies.TheKimberleyProcessencouragesparticipatingcountriesto
exchangediamondsonlywithotherKimberleyProcessnations.WhendiamondsarriveattheborderofaKimberley
Processnation,governmentofficialsarebetterabletoapproveorrejecttheshipmentsbasedontheuseofwellsealed
containersaccompaniedbyKimberleyProcessCertificates(KPC).
OnJanuary1,2003,theExportandImportofRoughDiamondsActbecamelawinCanada.NaturalResourcesCanada
(NRCan)isresponsibleforthelegislation.ThepurposeofthelegislationwastoimplementtheKimberleyProcess
CertificationSchemeinCanada.Asaresultofthescheme,everypersonwhoexportsroughdiamondsfromCanadamust
useatamperresistantcontainerandthecontainermustbeaccompaniedbyaCanadianKimberleyProcessCertificate
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(KPC).CBSAassistsinitsenforcementbyensuringappropriatecontainersareused.
HealthCanada
ExportingNarcoticsandControlledDrugs
CBSAassistsHealthCanadainadministeringtheexportofnarcoticsandcontrolledsubstances.Anyoneinvolvedinthe
exportofanarcoticmustbealicenseddealerandmustobtainanexportpermit.Applicationsforanarcoticlicenceand
exportpermitscanbeobtainedbycontactingHealthCanada'sOfficeofControlledSubstances.
Lesson4Summary:ExportPermits
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Inthislesson,youstudiedexportpermits.Youwereintroducedtogoodsthatrequireexportpermitsandthecountrieswith
whichCanadahaslimitedtrade.YoualsostudiedwhyCanadahaslimitedtradewiththesecountries.
ThegovernmentofCanadacontrolsexportsforvariousreasons.Theseinclude:
preventingtheexportingcommunityinCanadafromviolatingintergovernmentalagreementsandcontravening
foreignpolicy
maintaininginternationalsecurity
ensuringnoharmcomestoCanadaoritsalliesand
maintainingaccurateexportstatistics
Whenconsideringanexport,manyquestionsmustbeasked:
IsthenameoftheimportingcountryontheAreaControlList?
ArethegoodslistedontheExportControlList?
ArethegoodssubjecttoaUNSecurityCouncilembargo?
ArethegoodsofU.S.origin?
Whatistheenduseofthegoods?
DoestheshipmentmeettheconditionsofaGeneralExportPermit?
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Module25Summary:ExportingfromCanada
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Inthismodule,youstudiedexportreporting.YoulearnedthatCanadahasaresponsibilitytoensurethatgoodsthatenter
theinternationalmarketfromCanadadonotposeasecuritythreattoothercountries.Whiletherearethreeclassesof
personsinvolvedinexports,itistheexporterwhoisultimatelyresponsibleforthedocumentsandthegoodshecausesto
beexported.Youstudiedthevarioustypesofdeclarationsthatareavailable,thetimelimitationsformakingreports,the
locationswherereportsaretobemadeandwhatmustbedonewhenanamendmentisrequired.
YoulearnedaboutthemaintenanceofrecordskeptinCanadabyexportersandtherequirementsofforeignpurchaser
countries.
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VariousU.S.programs,suchas10+2,PAPS,BRASS,FAST,andCTPATwerediscussedandyoustudiedthewaysin
whichU.S.programscontributetosupplychainsecurityandthefreeflowofgoodsintotheU.S.
Themoduleendedwiththestudyofexportpermits.TheACL,ECL,UNembargoesandtheinvolvementofDFAITand
otherdepartmentsandagencieswerediscussed.
Nowit'stimetotestwhatyouvelearned.
Module25:Quiz
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Module26:Compliance
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Inthismoduleyouwilllearnaboutcompliance.Beingcompliantmeansactinginaccordancewiththelaw.Fortravellers
andgoodsenteringCanada,theCBSAisjustoneofthegovernmentdepartmentsoragenciesresponsibleforensuring
compliancewithCanadianlawsandregulations.Theselawsandregulationsareineffecttoprotectthesafety,healthand
economicwellbeingofallCanadians.Althoughthelawsandregulationsapplytobothtravellersandgoods,thismodule
focusesoncommercialtransactions.
Throughoutthiscourse,youhavebeenprovidedwiththetoolsonhowtobecometradecompliant.Youlearnedhowto
determinethetariffclassificationandvaluefordutyofimportedgoods,andalsohowtodeterminethecountryoforiginso
thatthecorrecttarifftreatmentisused.Youhavealsolearnedhowtomakeanynecessarycorrectionstoaccounting
documentssothatCBSAhasaccurateandcompletetradedata.
ModuleObjective
Uponcompletionofthismodule,youwillbeabletodescribehowtheCBSApromotesandensurescompliancewithlaws
andregulationsforgoodsenteringCanada.
Lesson1:CustomsActionPlan(CAP)
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Inordertoensurecompliance,CBSAsapproachbeginswitheducatingandinformingthepublic.Thatstrategy,contained
intheCustomsActionPlan(CAP),isbasedonriskmanagement:afocusonexamininggoodsandtravellersthatposethe
greatestrisk.
Rationale
AsaCCS,youwillwanttoensurethatyourclientsandyourcompanyarecompliantwiththelaw.Importerswhoarenon
compliantfaceseriouspenalties,delaysattheborder,andmaynotbeeligibleforcertainCBSAprograms.
LessonObjective
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AttheendofthislessonyouwillhaveanunderstandingofCBSAscompliancestrategyundertheCustomsActionPlan
(CAP).
Topic1:Purpose
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ThefiveyearCustomsActionPlan(CAP)wasunveiledin2000.Thisplanwascreatedinordertoimproveandstreamline
thewaybusinessisdoneattheborderandtoredesignandmodernizecustomsprocesses.
Theobjectivesoftheplanweretomakelowrisktradeandtraveleasier,andtogivecustomsofficersthetoolsto
concentrateonactivitiesthatareimportanttocompliance.ToolsestablishedundertheCAPremaininplacetoday
however,withtheeventsofSeptember11,2001,thereisanaddedfocusonsecurity.
UndertheCAP,CBSAannouncedplanstouseariskmanagementsystem,supportedbyanexpandeduseoftechnology.
TheCAPconsistedof17initiatives,withproposedimplementationoverfiveyears.Theinitiativeswereintendedtoaddress
fourcommitments,whicharetheoverallobjectivesoftheCAP:
improvingservice
ensurethatbusinessandtravellersfollowthelawsandregulations
focusonillegalactivityandthreatstohealthandsafetyand
promoteconsistencyforexportersandforCanadianstravellingabroad.
Topic2:KeyInitiatives
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SomekeyinitiativesofCAPare:
preapproval(ofgoodsandtravellers)
advanceinformation(oftradedataandtravellers)and
selfassessment(afterimportation).
Tomeettheseandotherinitiatives,thefollowingprogramsweredeveloped:
1.CustomsSelfAssessment(CSA)
2.AdministrativeMonetaryPenaltySystem(AMPS)
3.AdvanceCommercialInformation(ACI)
Theseprogramsallowofficerstoconcentrateonareasofhighandunknownrisk.Aswell,havingasmuch
informationaspossiblebeforethearrivalofgoodsallowscustomstomakereleasedecisionsinadvance.Thisin
turnresultsinafasterreleasetimeforgoodsthatareoflowrisk.
CBSAalsoperformspostreleaseverificationsandaudits.Verificationscantaketheformofa:
questionnaire
verificationletter
verificationvisitor
areviewofanyotherinformationorarticlesreceivedfromanimporter,owner,orpersonwhoaccountedforthe
goodsundersubsection32(1),(3),or(5)oftheAct.
TheCBSApostreleaseverificationcanbeaMultiProgramVerificationoraSingleProgramVerification.
Topic2:KeyInitiatives(cont.2)
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MultiProgramVerification(MPV)is:
traditionallyreferredtoasComplianceAssessmentReview(CAR),and
involvestheonsite,multipleprogramverificationofaclientscompliance.
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MPVsassessanimportersoveralllevelofcomplianceofimportedgoodsoveranextendedperiodoftime.
SingleProgramVerification(SPV)is:
traditionallyreferredtoasNewVerificationProcess(NVP),
driventhroughprioritiesassignedthroughHQfromotherprogramlinesandregionallygeneratedcases,
primarilydonethroughdeskverification(referstonotbeingonsiteattheclientspremises),and
onsiteverification,ifdeemednecessary.
SPVslookatasingleissuewithinasampleoftransactions.
Lesson1Summary:CustomsActionPlan(CAP)
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InLesson1youlearnedaboutthepurposeoftheCustomsActionPlanandprogramsthatweredevelopedasaresultof
theCAP.
TakeafewminutesandanswerafewquestionstoseehowmuchyouhavelearnedinLesson1.
Questions:
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Available:
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Lesson2:CustomsSelfAssessment
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InthislessonyouwilllearnaboutCustomsSelfAssessment(CSA).TheCSAprogramprovidesapprovedimporterswith
streamlinedentry,accountingandpaymentprocessesforimportedeligiblegoodsfromtheUnitedStatesandMexico.
Theseprocessescanendtheneedforimporterstomaintainseparatestandalonesystemsforcustomsprocessesand
allowsthemtousetheirownbusinesssystemstomeetCBSArequirements.
Rationale
AsaCCS,youmayhavetoprovideyourclients,oryouremployer,withinformationonCSAwhytheymaywantto
participate,whethertheyareeligible,andhowtheycanapplyfortheprogram.
LessonObjective
AttheendofthislessonyouwillhaveanunderstandingofCustomsSelfAssessment(CSA).
Topic1:Importers
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ImporterseligibletoapplyfortheCSAprogramincludethosewho:
satisfytheresidencyrequirement,meaningtheimporterordinarilyresidesinCanadaoroneofthepartnersresidesin
Canada,oriftheimporterisacorporation,theheadofficeorabranchofficeislocatedinCanada
haveahistoryofimportingcommercialgoodsintoCanadaatleastoncepriortothe90daysbeforethedaythe
applicationwasreceivedbyCBSA
arewithoutcontrabandormajorcommercialinfractions
arepreparedtomakeaninvestmentinbusinesssystemsand
arewillingtoprovidetoCBSAproofthatcommercialbusinessprocesses,customsinterfaces,andtherequired
trigger,audittrails,andlinkagesexistorwillexistinthebusiness'sbooksandrecords.
IfanimporterwishestotakeadvantageofthestreamlinedentryprocessunderCSA,allcarriersmovingeligiblegoodsfor
thatimporter,andalldrivers,mustbeapproved.However,iftheimporteronlywishestotakeadvantageoftheCSA
streamlinedaccountingandpaymentsystem,thereisnoneedforthecarrieranddrivertobeapproved.
UnderCSA,animportermaytakeadvantageof:
astreamlinedentryprocess,
astreamlinedaccountingandpaymentsystem,or
bothastreamlinedentryprocessandastreamlinedaccountingandpaymentsystem.
Topic1:Importers(cont.2)
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TorequestCSAapproval,theimportermustfirstcompleteFormE646,CustomsSelfAssessmentImporterPartI
Application.
Whencompleted,theoriginalsignedapplicationissubmittedtotheCustomsSelfAssessmentoffice.Toapplyforthe
secondphaseoftheCSAapprovalprocess,theimportercompletesFormE655,CustomsSelfAssessmentProgram
ImporterPartIIApplication.ThisisalsosubmittedtotheCSAoffice.
Theapplicationsincludebasiccorporateinformationandkeybusinessactivitiesandproducts,aswellasinformationonall
itsCanadiandivisions.Thisinformationmustbecertifiedasbeingcorrect.
Importerswhosuccessfullycompletethisstepmustthendemonstratethattheirbooks,records,andbusinesssystems
haveinternalcontrols,audittrails,andnecessarylinkagesinplace.Thelastpartoftheapplicationprocessrequiresthe
importertosignanundertaking,oragreement,withCBSA.Thisundertakingmuststatethefollowing:
thestartdate,
theimportersobligations,
theaccountingoptionselected,
importerspecificoperationalconditions,includinganyconversionactivitiesforoutstanding(preCSA)releases,and
actionplanstoimprovecompliance.
Topic2:Carriers
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CarrierswhowishtoparticipateintheCSAprogrammustfirstcompleteFormE647,CustomsSelfAssessmentProgram
CarrierApplicationPart1.
ForPartIIoftheCSAapprovalprocess,thecarriercompletesFormE656,CustomsSelfAssessmentProgramCarrier
PartIIApplication,andforwardacopysignedbyanauthorizedofficerofthecompanytotheaddresslistedontheform.
CarrierseligibletoapplytotheCSAprogramincludethosewhoare:
bondedorpostaudit,
haveahistoryoftransportinggoodstoCanadaforatleast90days,
withoutcontrabandormajorcommercialinfractions,
willingtobeliablefor,andmaintaincontrolof,CSAshipmentsuntildelivered,and
willingtoprovideCBSAwithproofthatpropercommercialbusinessprocessesandaudittrailsexistorwillexist.
CSAcarriersarerequiredtomaintaincontrolofandliabilityforthegoodstheyarecarryinguntildelivery.Theymustalso
demonstratethattheyhavesystemsinplacethatensureallinternationalshipmentsenteringCanadaarereportedatthe
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borderanddeliveredtotheCSAimporter.
Topic3:Drivers
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DriverswhowishtocarrygoodsforCSAimportersandbeeligiblefortheCSAentryoptionmustbeapprovedunderFAST
orapprovedundertheCommercialDriverRegistrationProgram(CDRP),ajointinitiativebetweenCBSAandCitizenship
andImmigrationCanada.
InordertoapplyfortheCDRP,driversmust:
beacitizenorpermanentresidentofCanadaor
beacitizenorpermanentresidentoftheUnitedStateswhomeetsthenormalvisitorrequirements
providetrueandcompleteinformationontheirapplication
beadmissibletoCanadaundertheImmigrationAct
havenothadgoodsseizedbycustomswithinthelastfiveyears
havenocriminalrecordforwhichtheyhavenotreceivedapardon
havenotbeenfoundinviolationofcustomsorimmigrationlegislationand
bedeemedofgoodcharacter,meaningthattheCBSAisconfidenttheywillcomplywithprogramobligations.
FormE645,CommercialDriverRegistrationProgramApplicationisusedtoapplyfortheCDRP.
Topic4:EntryProcessandAccountingUnderCSA
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IfaCSAimporterandcarrierarealsoPIPapproved,andthedriverisapproved,thecarriercanenterCanadathroughthe
designatedFASTlanes.
IftheimporterandcarrierareCSAapproved,butnotPIPapproved,andthedriverisapproved,theCSAentryprocesscan
beusedbutthecarriercannotusetheFASTlanes.
TheCSAprocessattheborderinvolvestheregistereddriverpresentinghisCommercialDriverRegistrationCard,theCSA
approvedcarriercodeandtheCSAapprovedimporterbusinessnumber.Thesebarcodeddataelementsarecapturedby
theborderservicesofficerinCBSAsautomatedsystemtoverifythatthedriverisregistered,andthatthecarrierand
importerarebothCSAapproved.
Spotchecksareoccasionallyperformedhowever,sincetheCSAoptionislimitedtoknownclientswithwhomCBSAhas
establishedapartnership,theofficerwillusuallyauthorizetheshipmentfordelivery.
InanonCSAenvironment,anoticethatgoodshavebeenreleasedactsastheaccountingtriggerandgoodsmustbe
accountedforwithinaparticulartimefromthedateofrelease.
CSAclientsarenotnotifiedthattheirgoodshaveenteredCanada.Instead,CBSAreliesontheCSAimportersinternal
systemtotriggeraccounting.WithCSA,thedatethatgoodsarereceivedbytheCSAimporterisconsideredtobethedate
ofrelease.
(cont.2)
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AccountingforGoodsUnderCSA
TherearetwoaccountingoptionsforimportersusingCSA.
OptionOne
Requiresthatallgoodsreceivedinonecalendarmonthbeaccountedforbythe18thofthefollowingmonth.
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OptionTwo
Requiresthatallgoodsreceivedbetweenthe19thofonemonthtothe18thofthesecondmonthbeaccountedforbythe
lastbusinessdayofthesecondmonth.
(cont.3)
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RevenueSummaryForm
FornonCSAimporters,tradeinformationandtheamountofdutiesandtaxesowingthatis,finalaccountingmustbe
presentedtoCBSAwithin5daysfromthedatethatgoodswerereleased.Then,attheendofthemonth,aK84thatlists
thetotalamountofdutiesandtaxesowingisissued.
CSAimportersarenotissuedaK84.Instead,CSAimporterssummarizeandreporttoCBSAanyCBSAdebitsandcredits
onceamonthonanCSARevenueSummary(RSF),E648.Iftheimporterfindsthattheyareowedmoney,theymayapply
forarefund.ExamplesofdebitsthatmaybelistedontheRSFareduties,GST,interest,andpenalties.Creditsmight
includearefundofduty,drawback,orinterest.
TheimporterhastheoptionofeitherforwardingapapercopyoftheRSFtocustomsorprovidingtheinformation
electronically.AnRSFisrequiredevenwherethenetamountiszerooracreditamountisduetotheimporter,andfailure
tosubmittheRSFbythelastbusinessdayofthemonthwillresultinapenalty.
PaymentoftheRSFismadethroughafinancialinstitution,andmultiplepaymentsmaybemadeduringthemonthtoavoid
incurringinterest.
Topic5:Penalties
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UndertheAdministrativeMonetaryPenaltySystem(AMPS),CSAcarriersandimporterscanbeassessedpenalties.
FollowingaretwoexamplesofcontraventionsthatarespecificallyforCSAimporters.Onlytherelevantportionsofthe
contraventionsareshown.
CustomsSelfAssessment(CSA)importerfailedtoprovidethedetailedproductdescription
Contravention
withintheperiodspecifiedinrespecttogoodsliabletoaSpecialImportMeasuresAct(SIMA)
C224
action.Assessed21daysafterdetailedproductdescriptionrequested.
Penalty
1st:$150
2nd:$225
3rdandSubsequent:$450
PenaltyBasis
Perdocument
Legislation
CustomsAct,subsection40(1)
DMemo
D17110
NoncomplianceoccurswhenaCSAimporterfailstoprovideadetailedproductdescriptioninrespectof
goodsliableforreviewundertheSIMAaftertheimporterhasbeennotifiedinwriting.Officermustbean
authorizeduseroftheSIMAComplianceWebsitetobeabletoapplythispenalty.
AppliedagainstCSAimporters.
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Penaltycannotbeissuedunlesstheimporterhasbeennotifiedinwritingthatdetailedproduct
descriptionisrequired.
Theimporterwillhave21daysafterissuanceoftheletter,toprovidetherecords.
Moretimecanbenegotiated,dependingonthecircumstances.
Guidelines
Thepenaltywillbeappliediftheinformationisnotprovidedafterthisfirstrequest.
TypeandextentofinformationrequiredwillbeidentifiedbytheAntidumpingandCountervailing
Directorateinthenoticelettertotheimporter.
Ininstanceswhereanofficerfindsanimporterincontraventionforthefirsttime,theofficermustforward
thisinformationtoHQ.HQwillissuethenotificationtotheimporter.
Verifythattheimporterhasbeennotifiedregardingtheproductdescriptionrequirementsbyreferringto
thecaseinformationontheSIMAComplianceWebsite.
ForthefirstB3,applythefirstlevelpenaltyforthesecondB3,applythesecondlevelpenaltyforthe
thirdandsubsequentB3,applythethirdlevelpenalty.
Applyapenaltyperdocument,i.e.perB3orB2.
FornonCSAimporter,seeC223.
Retention
Period
36months
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Contravention Theimporterortransporterfailedtoprovidetrue,accurateandcompleteinformationwhen
C234
applyingtoparticipateintheCustomsSelfAssessment(CSA)program.
Penalty
Flatrate:$25,000
PenaltyBasis
PerInstance
Legislation
CustomsAct,section7.1
DMemo
D1717
Noncomplianceoccurswhenthediscoverederrorsoromissionsrelateto:
1.InformationrequiredonPartIoftheCSAApplicationfromimporterortransporterwhichwouldhave
resultedintheapplicationbeingdenied,namely:
applicantidentification
informationondivisionsofthecompany
additionalinformationprovidedfortheapplicationprocess,whenrequested
2.ImporterinformationrequiredforPartIIoftheCSAApplication,whichwouldhaveresultedinthe
applicationbeingdeniednamely:
businessdate(s)thatresultsinlateornonaccount
accountingtrigger(s)thatresultsinnonaccount
accountingoptionthatresultsinlateaccounting(theimporterisnotusingaccountingoptionattestedto
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intheCSAUndertaking)
descriptionsprovidedinsectionBBooksandRecords,thatresultinnoncompliance
3.TransporterinformationrequiredforPartIIoftheCSAApplicationwhichwouldhaveresultedinthe
descriptionsprovidedinsectionBBooksandRecords,thatresultinnoncompliance
NormallyappliedbyaCSAcompliancemanager.
Guidelines
Appliedagainsttheimporterortransporter,atthelegalentitylevel.
AppliedattimeofapplicationorsubsequenttoCSAapproval.
Applyapenaltyregardlessofnumberoferrorsonapplication.
AnyinformationpertainingtothiscontraventiondiscoveredbyaSeniorOfficerTradeComplianceshould
becommunicatedtotheCSAcompliancemanager.
Nopenaltyforobviousclericaloradministrativeerrors.
GuidelinesTransporterinformationrequiredforPartIIoftheCSAApplicationwhichwouldhaveresulted
intheapplicationbeingdeniednamely:
descriptionsprovidedinSectionBBooksandRecords,thatresultinnoncompliance
RetentionPeriod12months
Applyapenaltyregardlessofnumberoferrorsonapplication.
AnyinformationpertainingtothiscontraventiondiscoveredbyaSeniorOfficerTradeComplianceshould
becommunicatedtotheCSAcompliancemanager.
Nopenaltyforobviousclericaloradministrativeerrors.
Guidelines
TransporterinformationrequiredforPartIIoftheCSAApplicationwhichwouldhaveresultedinthe
descriptionsprovidedinSectionBBooksandRecords,thatresultinnoncompliance
Retention
Period
12months
Lesson2Summary:CustomsSelfAssessment
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UnderCustomsSelfAssessment,CSA,animportermaytakeadvantageof:
astreamlinedentryprocess
astreamlinedaccountingandpaymentsystemor
Tousethestreamlinedentryprocess:
goodsmustbeeligibleunderCSA
carriersmustbeCSAapprovedand
driversmustberegistered.
TheapplicationprocesstobecomeaCSAimporterisatwostepprocess.
IfaCSAimporterandcarrierarealsoPIPapproved,thecarriercanenterCanadathroughoneofthedesignated
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FASTlanes.
IftheimporterandcarrierareCSAapproved,butnotPIPapproved,theyarestilleligiblefortheCSAentryprocess
butcannotusetheFASTlanes.
TheCSAentryprocessattheborderinvolvespresentationofthreepiecesofdata:
thedriversCommercialDriverRegistrationCard
theCSAapprovedcarriercodeand
theCSAapprovedimporterbusinessnumber.
CBSAreliesontheCSAimportersaccountingsystemtotriggertheaccountingprocess.
ThedatethatimportedgoodsarereceivedbytheCSAimporterisconsideredtobethedateofrelease.
CSAimporterssummarizeandreporttoCBSAanyCBSAdebitsandcreditsonceamonthonanRSFCSA
RevenueSummary.
PaymentoftheRSFismadethroughafinancialinstitution,andmultiplepaymentsmaybemadeduringthemonthto
avoidincurringinterest.
CSAcarriersandimporterscanbeassessedpenaltiesunderAMPS.
NowtakeafewminutesandanswersomequestionsaboutCSA.
Questions:
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Lesson3:AdministrativeMonetaryPenaltySystem
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TheAdministrativeMonetaryPenaltySystem(AMPS)isasystemofpenaltiesforinfractionsundertheCustomsAct,the
CustomsTariffAct,andtheSpecialImportMeasuresAct,andanyoftheregulationsmadeundertheseActs.Foreach
possibleinfraction,thereisacorrespondingAMPSpenalty.
Rationale
Beingawarethatpenaltiescanbeassessedfornoncompliancewillhelpyouexplaintoyourclientsandemployerthe
importanceofbeingcompliant.
LessonObjective
Attheendofthislesson,youwillbeawareofthepenaltiesthatcanbeassessedfornoncompliance.Youwillalsobe
awareofhowCBSAadvisesofpenaltiesthattheyhaveassessed,andhowpenaltiescanbeappealed.
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Topic1:AMPS
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AMPSwasimplementedinDecember2001.However,inordertogiveimporters,customsbrokers,carriers,andexporters
anopportunitytobecomecompliant,penaltieswereassessedbutthepaymentofpenaltieswaswaiveduntilOctoberof
2002whenAMPSwasfullyenforced.
TheobjectiveofAMPSistocorrectnoncomplianceinthecommercialstreamandthereforeensurealevelplayingfieldfor
Canadianbusinesses.
PenaltiesunderAMPSvaryfromfairlysmallamountstoamaximumof$25,000persingleinfraction.Asopposedto
seizuresthatareappliedagainstgoods,AMPSareappliedagainstthepersonorbusinessinresponsetotheirnon
compliance.
AMPSreplacestheneedformostcommercialseizuresandascertainedforfeitures.Seizuresandascertainedforfeitures
willonlybeusedforthemostseriousoffences.
Seizuresandascertainedforfeituresarealsoappliedforcertaincontraventionswhentheyinvolvespecifiedgoods.In
addition,criminalprosecutionprocedurescontinuetobeavailablewherewarrantedduetotheseriousnessofanoffenceor
thepotentialforharmtosociety.
AMPSonlyappliestocontraventionsinvolvingcommercialtradersandserviceprovidersincludingimporters,exporters,
customsbrokers,warehouseanddutyfreeshopoperators,carriers,andfreightforwarders.Contraventionsinvolving
travellerswithcasualornoncommercialgoodswillcontinuetobesubjecttotravellersseizureandascertainedforfeiture
enforcementactions.
Topic1:AMPS(cont.2)
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Inthecaseofaseizure,inordertohavetheconveyance,andsometimesthegoods,returned,theimporterorthecarrier
canusuallypayafinetocustoms.Thefineisusuallycalculatedastwicetheamountofdutiesandtaxesordinarilypayable
onthegoods,hadtheybeendeclared.Onealsohastheoptionofabandoningseizedgoods,whichareusuallysoldata
laterdatebycustomsatauction.Ofcourseseizedgoodsthatareprohibitedgoodscannotbesoldandareusually
destroyed.
Attheimporter'soption,goodssubjecttoAMPSmaybeabandonedbutthepenaltymustbepaid.
Inmostcases,thepenaltiesunderAMPSaregraduatedandincreaseeachtimeapartyrepeatstheidenticalinfraction.
Mostpenaltiesremainontheclient'scompliancerecordforoneyear,althoughsomeremainforthree.
ContraventionsundertheAdministrativeMonetaryPenaltySystemarefoundintheAMPSMasterPenaltyDocument
(MPD).Foreachcontravention,theMPDlists:
thecontraventionnumberanddescriptionoftheinfraction,
themonetaryamountofthepenalty,
thebasisonwhichthepenaltyisassessed,forexample,perrecord,perline,orperinstance,
thelegislationthathasbeencontravened,
anyDMemothatisapplicable,
guidelinesforofficersassessingthepenalty,and
thepenaltyretentionperiod,thatis,howlongthepenaltywillstayontherecordofthepartywhoisissuedthe
penalty.
Topic1:AMPS(cont.3)
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Onceanofficerhasdecidedthatapenaltyiswarranted,aNoticeofPenaltyAssessment(NPA)isissued.TheNPAwill
includethepenaltyassessmentdate,thecontraventionandpenaltydetails,correctionandredress(appeal)information,
andpaymentandinterestinformation.
Ifthetransactionthatissubjecttothepenaltywassubmittedbyacustomsbrokeronbehalfofhisclient,andthecustoms
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brokerssecuritynumberwasusedonthereleaseoraccountingdocument,thecustomsbrokerwillalsoreceiveacopyof
theNPA.
AftertheNPAhasbeenissued,theimporter,orthecustomsbrokeronbehalfoftheimporter,maydooneofthefollowing:
paythepenalty(payablewithin30daysfromthedatetheNPAisissued)
requestacorrection,usuallyforissuessuchaserrorsincalculation,name,address,contraventiontype,oramount
assessed(hisisdonebycontacting,within90days,theCBSAofficethatissuedthepenalty
payandappealthepenalty.(Theappealmustbesubmittedinwritingtotheissuingcustomsofficewithin90daysof
theNPA)or
enterintoaPenaltyReinvestmentAgreement.
Sinceacorrectionmustberesolvedwithin90daysofthepenaltyassessmentdate,anyrequestsforcancellationsshould
bemadewellbeforethattimelimithaspassed.RequestsforcancellationsaremadeinwritingtotheCBSAattheaddress
notedontheNPAandoneshouldincludeasmuchinformationaspossibleandanysupportingdocumentation.
TheCBSAmayalsocancelapenaltywhentheyhaveissuedapenaltyincorrectly.
Ifapenaltyisassessedanddoesnotqualifyforthecorrection,itcanbeappealedundersubsection129(1)oftheCustoms
Act.Anappealmustbemadewithin90daysoftheNPAdate.RequestsaremadeinwritingtotheMinisterofPublicSafety
andarefiledattheofficethatissuedtheNPA.OncetheMinisterhasreviewedtheNPA,adecisionwillbemadetouphold,
reduce,orcancelthepenalty.
IfyouaresuccessfulandtheMinistercancelsthepenalty,thepenaltyamount,plusinterest,isreturned.
Topic1:AMPS(cont.4)
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AreviewofAMPSbeganin2003.ThepurposeofthisreviewwastoevaluatewhetherAMPSlevelstheplaying
fieldexaminewhetherAMPScontributestocomplianceandidentifyopportunitiesforimprovementstotheAMPS.
TheresultsofthereviewwerepublishedinNovember2003afterconsultationwithindustryandotherinterestedparties.
Areasidentifiedasbeingofconcernwere:
someofthepenaltyamountsintheAMPSprogramweretoohigh
theprogramneededtotakeintoconsiderationinnocentmistakesandclericalerrors
theprogramneededtotakeintoconsiderationvolumetrics
customsneededtorevisitthematerialityofanumberofpenaltieswithintheprogram
theprogramneededtodealdifferentlywithinfractionscausedbysuppliersandserviceproviders,consideredthird
parties
retentionperiodsforpenaltycalculationsweretoolongand
theCBSAneedstodoabetterjobofensuringconsistencyacrossCanadaintheapplicationofpenalties.
Therewerenosignificantchangesasaresultofthisreview.
Topic1:AMPS(cont.5)
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AnotherAMPSreviewstartedinSeptemberof2005.TheobjectiveofthisreviewwastocreateanAMPSprogramthatis
clearandconcise,appropriate,forwardlookingandriskbased.ConsultationswereheldwithvariousCBSAHeadquarters
policyareas,withCBSAregionalmanagementandstaff,andwiththeprivatesectorthroughaCBSAsubcommittee.
Asaresultofthesecondreview,CBSAplannedto:
simplifythesystembycollapsingthenumberofcontraventionstofewerthanhalf
determinetheriskofeachcontraventionanddeterminetheamountofthepenaltyaccordingly
updatetheAMPSautomatedsystem(thisisthetechnicalsystem,nottheadministrativesystem)
reconsidervolumetrics
reviewthirdpartyliability
streamlinetheappealsprocess
initiateCBSAregionalreviewcommittees
providestatistics,analyses,trends,andrecommendations
focusontrainingofofficersand
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increasecommunicationwithclients.
Thereviewresultedin:
changesinpenaltyamounts,andstructures
changestotheIntegratedCustomsSystem(ICS)tostartallpenaltyamountsatLevel1forthefirstinfraction
changestopenaltyamountsaccordingtoriskcriteria,andaplantodevelopfuturecontraventionsaccordingtothis
riskcriteria
theintroductionofa30daynonescalationperiodofpenaltylevelsfromthefirsttothesecondlevelforlowand
mediumriskcontraventions
uptodatelegislativereferences
severalcontraventionsdeleted,andtwonewonescreated
movingthecontraventionguidelinesfromtheAMPSautomatedsystemtotheMasterPenaltyDocument
relatedinformationbeingpostedonCBSAswebsite
improvedaccesstothecorrectionprocess
thereinstatementoftheregionalreviewcommitteesand
planstomakefurtherchanges.
Topic1:AMPS(cont.6)
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In2009,CBSAcompletedanotherreviewoftheAMPSprogram,and,beginningin2010,changesincluded:
(a)changingthepenaltyamountsandstructures,includingeliminatingmostofthepercentageofthevalueforduty
penalties,andreplacingthemwithgraduatedorflatpenaltyamounts
(b)resettingICStocalculateallpenaltyamountsatLevel1forthefirstinfraction,regardlessofthenumberofprevious
contraventionsremaininginthecontraventionretentionperiodagainstaclient
(c)resettingpenaltyamountsaccordingtoriskcriteria,anddevelopingfuturecontraventionsandtheirpenaltyamounts
accordingtothisriskcriteria
(d)introducinga30daynonescalationperiodofpenaltylevelsfromthefirsttothesecondlevelforlowandmediumrisk
contraventions
(e)updatingcontraventionlegislativereferencesandpenaltybasisintheMPD
(f)deletingcontraventionsC022,C236,C239,C245,C285,C289,C293,C344,C347,C361,C362andC367andcreating
newpenaltiesC371andC372butotherwisemaintainingcontraventionnumbersastheyaretoday
(g)removingcontraventionguidelinesfromtheAMPSautomatedsystemandmaintainingthemsolelyontheCBSAsWeb
siteintheMPDtofacilitatecurrentandfuturerevisionsand
(h)postinginformationontheAMPScorrectionprocessontheCBSAWebsite.
(i)improvingaccesstotheAMPScorrectionprocessbyaddingtheissuingofficesfaxnumberontheNoticeofPenalty
Assessmenttoallowclientstofaxintheircorrectionrequests.Untilasystemchangeiscompleteofficerswilladdthis
informationmanually
(j)reinstatingregionalreviewcommittees(RRC)toensurepenaltiesareissuedcorrectlyandconsistentlyand
(k)furtheramendmentstothepenaltysystemin20102011andin20112012,includingtheeventualcollapseof
contraventionsintolikegroupings.
Topic2:PenaltyReinvestmentAgreement
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ThePenaltyReinvestmentAgreement(PRA)isamechanismbywhichtheamountofapenaltyunderAMPScanbe
reduced.
APRAcanberequestedwhenaninfractionisfoundtobetheresultofafailureinthecompanysCustomsInformation
System(CIS).ThepurposeofaPRAistohelpthecompanybecomecompliant.
AcompanymayapplyforaPRAifthey:
(a)havebeenissuedaNoticeofPenaltyAssessment(NPA)
(b)havebeenissuedoneormorepenaltiescausedbyasystematicproblemintheircommercialinformationsystem
(c)havenotbeenissuedaMinistersdecisionundersection131oftheCustomsActinrespectoftheNPA(s)atissue
(d)haveidentifiedthecauseofthesystematicproblemintheirCISand
(e)arepreparedtoinvestincorrectivemeasurestoremedytheproblemanddemonstratethatthemeasuresareeffective.
UnderaPRA,thepenaltywillbereducedonadollarfordollarbasis.Thismeansthatforeverydollarspentincorrecting
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theproblemthatresultedinthepenalty,theamountofthepenaltywillbereducedbyonedollar.
AMPSpenaltiesissuedforcontraventionsrelatingtospecifiedorprohibitedgoodsarenoteligibleforaPRA.
Topic2:PenaltyReinvestmentAgreement(cont.2)
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TostartthePRAprocess,arequestforaMinistersdecisionforeachNoticeofPenaltyAssessmentisfiledwithin90days
fromthedatethattheNPAwasissued.Thisisinaccordancewithsection129.(1)oftheCustomsAct.Anapplicationfor
PRAissubmittedatthesametimeastherequestfortheMinistersdecisionandmustclearlydescribetheerrorsthat
resultedinthenoncompliance.
Alsorequiredare:
anoutlineoftheproposedchangestotheclientscommercialinformationprocessesandassociatedcosts,whichwill
resultin100%complianceassociatedwiththepenalty
specificinterimprocedurestoensurecomplianceduringthetimeneededforthecorrectiontobemadeintheclients
commercialinformationprocesses
thedatethattheclientssystemchangeswillbecompleted
substantiationofthesystemchange(s)andrelatedcoststhatwillresultin100%complianceand
provisionofthirdpartyattestation,whenrequestedbyCBSA,thatthecostswereappropriatelyexpendedtoimprove
complianceintheareaswherepenaltieswereimposed,includingtherequiredsystemchanges,thecostsinvolved
andtheimplementationofthosechanges.
Ajudicialreviewinaccordancewithsection18.1oftheFederalCourtsActcanberequestedifthePRAisnotapproved.
Lesson3Summary:AdministrativeMonetaryPenalty
System
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Lesson3concernedtheAdministrativeMonetaryPenaltySystem,thesystemusedbyCBSAtoissuepenaltiesincasesof
noncomplianceandthePenaltyReinvestmentAgreement,amethodbywhichpenaltiesunderAMPScanbereduced.
TheAdministrativeMonetaryPenaltySystem(AMPS)isagraduatedsystemofpenaltiesforinfractionsunderthe
CustomsAct,theCustomsTariff,andtheSpecialImportMeasuresAct,andanyoftheregulationsmadeunderthese
Acts.
ContraventionsunderAMPSarefoundintheAMPSMasterPenaltyDocument(MPD).
Inmostcases,thepenaltyamountincreasesforsubsequentidenticalinfractions.
AnoticeofapenaltyisissuedonaNoticeofPenaltyAssessment(NPA).
OnceanNPAhasbeenissued,animportercan:
paythepenalty
requestthatthepenaltybereviewed
appealthepenaltyor
ThePenaltyReinvestmentAgreement(PRA)isamechanismbywhichtheamountofapenaltyunderAMPScanbe
reduced.
APRAcanberequestedwhenaninfractionisfoundtobetheresultofafailureinthecompanysCustoms
InformationSystem(CIS).
UnderaPRA,thepenaltywillbereducedonadollarfordollarbasis.
ThePRArequestisfiledatthesametimeasarequestforaMinistersdecisionforeachNPA.
NowtakeafewminutestoanswersomequestionsaboutAMPSandthePRA.
Questions:
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Lesson4:VoluntaryDisclosureProgram(VDP)
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TheVoluntaryDisclosureProgram(VDP)allowscorrectionstobemade,undercertaincircumstances,withoutincurring
penalties.
Rationale
AsaCCS,youwillwanttoensurethatyourclientsoryouremployerareawareoftheVDPasamethodofpromoting
compliance.
LessonObjective
AttheendofthislessonyouwillhaveanunderstandingoftheVoluntaryDisclosureProgram.
Topic1:VoluntaryDisclosureProgram
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TheVoluntaryDisclosureProgram(VDP)isoneofthemechanismsusedtocontributetovoluntarycompliancewith
customslawsandregulations.
ThepurposeoftheVDPistopromotevoluntarycompliancewiththeaccountingandpaymentofdutyandtaxprovisions
undertheCustomsAct,CustomsTariffActandExciseTaxAct.Itsapplicationislimitedtopenaltyandinterestcharges
resultingfrominfractionsoftheprovisionsgoverningaccountingandpayment.
TheVDPdoesnotreducetheamountofdutiesowing,nordoesittotallyremovetheamountofinterestthataccumulates
onoutstandingdebts.
CBSAsclientsmayrequestaccesstotheVDPandmayreceiverelieffromthepenaltiesassociatedwithnoncompliance.
Toqualify,clientsmustcomeforwardingoodfaithtovoluntarilydisclosepastomissionsanderrors.Inqualifyingcases,
clientswillberequiredtopaythedutiesandtaxesowingplusinterest.
Importersareobligatedtocorrecttheirdeclarationsundersection32.2oftheCustomsActforchangestoorigin,tariff
classification,andvalueforduty,aswellasfordiversionsofgoodstoanotheruseoruser.
Section32.2oftheCustomsActstatesthatonceanimporterhasreasontobelievethattheorigin,tariffclassification,
valueforduty,ordiversionofgoodstoanotheruserorenduse,theymustmakeacorrectionwithin90daysofhaving
reasontobelieve.
Ifnotcorrectedwithinthe90dayframe,penaltiesunderAMPScanbeissued.
However,undersubsection32.2(4)oftheCustomsAct,thereisstillanobligationtomakeacorrection.Thatobligation
endsfouryearsafterthegoodsareaccountedfor.Anycorrectionsmadeafterthe90daytimeperiodandbeforethefour
yearsfromthedateofaccountingaresubjecttopenaltiesunderAMPS.
TheVDPprovidesawayofvoluntarilycomplyingwiththelegislationwithoutfearofpenalty.
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Topic1:VoluntaryDisclosureProgram(cont.2)
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Avalidvoluntarydisclosuremustmeetthefollowingconditions:
(a)itisvoluntary
(b)itinvolvesthepotentialimpositionofapenaltyand/orspecifiedinterestorthepotentialofanactionagainstthegoodsor
person
(c)itiscompletewhenallofthefollowingaredisclosed(ifapplicable):
(i)allincidencesoftradeprogram(s)noncomplianceforwhichtheclientcouldbesubjecttoatradecomplianceverification
andreassessment
(ii)allincidencesofnonreportorfailuretoaccountforthesameorsimilarimportedgoodsforthesixyearspriortothe
disclosureor
(iii)inthecaseofexportedgoods,allincidencesofnoncomplianceuptosixyearspriortothedisclosureinadditiontothe
currentyear.
(d)ittakesaccountofthespecialconsiderationsidentifiedinparagraphs19to24ofD1164,relatedtoregulatedor
restrictedimportsandexportsandprohibitedgoodsand
(e)withtheexceptionofdisclosurestocomplywithsection32.2oftheAct:
(i)itisnonrepetitiveAvoluntarydisclosuremaybedeniedwhenapreviousvoluntarydisclosurehasbeengrantedfor
thesamecomplianceissueand
(ii)theclientexplains,tothesatisfactionoftheCBSA,howthenoncomplianceoccurredandhowithasbeencorrectedor
whatmeasureshavebeenputinplacetoreducetheriskoffuturenoncompliance.
ThosewantingtomakeavoluntarydisclosureshouldcontactthenearestCBSAofficeintheregionwheretheirbooksand
recordsarekept,inpersonorinwriting,providethedetailsofthedisclosure,andshowthattheconditionshavebeenmet.
Aninterimsubmissionmaybemade.Thefinalandcompletesubmissionmustbefiledwithinaperiodoftimespecifiedby
theCBSA,normally90daysfromthedateoftheinitialdisclosure.
Eachvoluntarydisclosureshallincludeenoughdetailtoallowthefactstobeverified.Clientsareexpectedtomake
availableuponrequestallbooksofaccount,records,documents,andanyotherrequiredinformation.
Clientsareexpectedtopaythetotalofallamountsowing,includinginterest.Insomecases,itispossibleforclientsto
makespecialarrangementstopaytheseamounts.
Theidentityofanyonemakingavoluntarydisclosurewillbeprotectedaccordingtotheconfidentialityprovisionsofthe
abovementionedActs.
Clients,representatives,andagentswhoareunsurewhethertheywanttomakeavoluntarydisclosureareentitledto
discusstheirsituationonananonymousorhypotheticalbasiswithanofficerresponsibleforhandlingvoluntarydisclosures.
Lesson4Summary:VoluntaryDisclosureProgram(VDP)
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InLesson4,youlearnedabouttheVoluntaryDisclosureProgram(VDP).TheVDPisamechanismusedtosupport
voluntarycompliancewithcustomslawsandregulations.
theVDPislimitedtopenaltyandinterestchargesresultingfrominfractionsoftheprovisionsgoverningaccounting
andpayment
theVDPdoesnotreducetheamountofdutiesowing,nordoesittotallyremovetheamountofinterestthat
accumulatesonoutstandingdebts
theVDPisusedforcorrectionsfiledunder32.2oftheCustomsActafterthe90daytimeframeallowedfor
correctionsandbeforefouryearsfromthedateofaccountingand
conditionsmustbemetinordertosubmitavoluntarydisclosure.
NowtakeafewminutesandanswersomequestionsabouttheVDP.
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Module26Summary:Compliance
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InModule26youlearnedthatbeingcompliantmeansactinginaccordancewiththelaw.Fortravellersandgoodsentering
Canada,theCBSAisjustoneofthegovernmentdepartmentsoragenciesresponsibleforensuringcompliancewith
Canadianlawsandregulations.Theselawsandregulationsareineffecttoprotectthesafety,healthandeconomicwell
beingofallCanadians.
Inthismoduleyoulearnedthat:
TheCustomsActionPlan(CAP)wascreatedinordertoimproveandstreamlinethewaybusinessisdoneatthe
borderandtoredesignandmodernizecustomsprocesses.
preapproval(ofgoodsandtravellers)
advanceinformation(oftradedataandtravellers)and
selfassessment(afterimportation).
ProgramsdevelopedasaresultoftheCAPare:
CustomsSelfAssessment(CSA)
AdministrativeMonetaryPenaltySystem(AMPS)
AdvanceCommercialInformation(ACI)
TheCustomsSelfAssessment(CSA)programprovidesapprovedimporterswithstreamlinedentry,accountingand
paymentprocessesforimportedgoods.
UnderCSA,animportermaytakeadvantageof:
astreamlinedentryprocess
astreamlinedaccountingandpaymentsystemor
IfanimporterwishestotakeadvantageofthestreamlinedentryprocessunderCSA,allcarriersmovingeligible
goodsforthatimporter,andalldrivers,mustregisterandbeapprovedunderCSA.
IfaCSAimporterandcarrierarealsoPIPapproved,thecarriercanenterCanadathroughoneofthedesignated
FASTlanes.
IftheimporterandcarrierareCSAapproved,butnotPIPapproved,theyarestilleligiblefortheCSAentryprocess
butcannotusetheFASTlanes.
TheCSAentryprocessattheborderinvolvespresentationof:
theregistereddriverpresentinghisCommercialDriverRegistrationCard,
theCSAapprovedcarriercode,and
theCSAapprovedimporterbusinessnumber.
Module26Summary:Compliance(cont.2)
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ThedatethatthegoodsarereceivedbytheCSAimporterisconsideredtobethedateofrelease.
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TheAdministrativeMonetaryPenaltySystem(AMPS)isasystemofmonetarypenaltiesthatwasdevelopedtodeal
withissuesofnoncompliance.
PenaltiesunderAMPSareappliedforinfractionsundertheCustomsAct,theCustomsTariffAct,andtheSpecial
ImportMeasuresAct,andanyoftheregulationsmadeundertheseActs.
PenaltiesunderAMPSvaryfromfairlysmallamountstoamaximumof$25,000.00persingleinfraction.
AMPSreplacesmostseizuresandascertainedforfeitures.
NoticeofpenaltiesunderAMPSareprovidedonaNoticeofPenaltyAssessment(NPA).
AftertheNPAhasbeenissued,theimporter,orthecustomsbrokeronbehalfoftheimporter,maydooneofthe
following:
paythepenalty(payablewithin30daysfromthedatetheNPAisissued)
requestthatthepenaltybereviewedandcancelled(thisisdonebycontacting,within90days,theCBSAoffice
thatissuedthepenalty.IfCBSAagreesthatthepenaltyshouldnothavebeenissued,itcanbecancelled)
takeredressaction,thatis,appealthepenalty.(Theappealmustbesubmittedinwritingtotheissuingcustoms
officewithin90daysoftheNPA)or
APenaltyReinvestmentAgreement(PRA)isamechanismbywhichtheamountofapenaltyunderAMPScanbe
reduced.
APRAcanberequestedwhenaninfraction,relatedtocompliance,isfoundtobetheresultofafailureinthe
companysCustomsInformationSystem(CIS).
Foreverydollarspentincorrectingtheproblemthatresultedinthepenalty,theamountofthepenaltywillbereduced
byonedollar.
TheVoluntaryDisclosureProgram(VDP)encouragescompliancebyallowingcorrectionstobemadeoutsideofthe
allowedtimeframewithoutincurringpenalties.
TheVDPislimitedtopenaltyandinterestchargesresultingfrominfractionsoftheprovisionsgoverningaccounting
andpayment.
TheVDPdoesnotreducetheamountofdutiesowing,nordoesittotallyremovetheamountofinterestthat
accumulatesonoutstandingdebts.
TheVDPisusedforcorrectionsfiledunder32.2oftheCustomsActafterthe90daytimeframeallowedfor
correctionsandbeforefouryearsfromthedateofaccounting.
Conditionsmustbemetinordertosubmitavoluntarydisclosure.
NowtakesometimeandcompleteaquizaboutwhatyouhavelearnedinModule25.
Module26:Quiz
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Module27:SupplyChainSecurityandTradeFacilitation
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AsaresultoftheterroristactionsofSeptember11,2001,theCanadianandU.S.governmentsintroducedanddevelopeda
varietyofbordersecurityprogramsandinitiatives.Inthismoduleyouwillstudythesesecurityprogramsandinitiativesas
wellassomebroaderglobalinitiatives.
ModuleObjective
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Whenyouhavecompletedthismodule,youwillbeawareofCanadian,U.S.,andCanadianU.S.jointprogramsthatarein
placetoensuresafeandsecureglobaltrade.Youwillalsobeawareofwhatisbeingdoneatthegloballeveltoimplement
standardstosecuretheinternationalsupplychainandyouwilllearnaboutthevariousinternationalorganizationsthat
influenceinternationaltrade.
Lesson1:SupplyChainSecurityCanadaandtheU.S.
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Inthislesson,youwillbeintroducedtosupplychainsecurity.TheCanadaU.S.BeyondtheBorderActionPlanwillbe
discussedaswellasCanadianandU.S.programsthatareinplacetoprotecttradebetweenthetwocountriesandtheir
othertradingpartners.
Rationale
InyourroleasaCCS,thecareyoutakeinyourdailyworkcanhelpensurethesafetyandsecurityofothers.Whetherby
participatinginsecurityprogramsestablishedinthiscountryorbyencouragingyourclientsoremployertogetinvolvedin
programsavailabletothem,youcanhelpfacilitateandsecuretheflowofinternationaltrade.
LessonObjective
Attheendofthislesson,youshouldhaveanunderstandingofthevariousprogramsinCanadaandtheU.S.toensurethe
securityofinternationaltrade.
Topic1:TheCanadaU.S.SmartBorderDeclaration
andtheBeyondtheBorderActionPlan
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OnDecember12,2001,CanadaandtheUnitedStatessignedtheSmartBorderDeclarationanditscompanion30point
ActionPlantoenhancethesecurityofthesharedborderwhilefacilitatingthelegitimateflowofpeopleandgoods.The
ActionPlanhasfourpillars:
thesecureflowofpeople,
thesecureflowofgoods,
secureinfrastructure,and
coordinationandinformationsharingintheenforcementoftheseobjectives.
InSeptemberof2002,CanadianPrimeMinister,JeanChrtien,andU.S.President,GeorgeW.Bush,mettodiscuss
progressontheSmartBorderActionPlan.Asaresult,thefollowingtwopointswereaddedtopillarfourofthenow32
pointActionPlan:
Biosecurity,and
ScienceandTechnologyCooperation.
InDecember2011,thegovernmentofCanadaandtheUnitedStatesannouncedtheCanadaU.S.BeyondtheBorder
ActionPlan.Theintentofthisplanistocreateanewlongtermpartnershipbetweenthetwocountriesandtoexpedite
legitimatetradeandtravelacrosstheCanadaU.S.borderwhileenhancingsecurity.
CanadaandtheU.S.willdevelopacommonapproachinfourareas:
addressingthreatsearly
tradefacilitation,economicgrowthandjobs
crossborderenforcementand
criticalinfranstructionandcybersecurity.
(cont.2)
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Eachofthepillarsofthe32pointactionplanwillbeexaminedinmoredetail.
Pillar#1:TheSecureFlowofPeople
Thispillarisintendedto:
a)implementsystemstocollaborateinidentifyingsecurityriskswhileexpeditingtheflowoflowrisktrs
b)identifysecuritythreatsbeforetheyarriveinNorthAmericathroughcollaborativeapproachestoreviewingcrew
andpassengermanifests,managingrefugees,andvisapolicycoordinationand
c)establishasecuresystemtoallowlowriskfrequenttravelersbetweenourcountriestomoveefficientlyacrossthe
border.
Specificpointsofthe32pointActionplanpertainingtothispillarinclude:
BiometricIdentifiers
PermanentResidentCards
SingleAlternativeInspectionSystem
Refugee/AsylumProcessing
ManagingofRefugee/AsylumClaims
VisaPolicyCoordination
AirPreclearance
AdvancePassengerInformation/PassengerNameRecord
JointPassengerAnalysisUnits
FerryTerminals
CompatibleImmigrationDatabases
ImmigrationOfficersOverseas
InternationalCooperation
(cont.3)
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Pillar#2:TheSecureFlowofGoods
Thispillardevelopstheconceptofsecuringtheflowofgoodsacrossborders.Itfocuseson:
a)implementingasystemtocollaborateinidentifyinghighriskgoodswhileexpeditingtheflowoflowriskgoodsacross
borders
b)identifyingsecuritythreatsarrivingfromabroadbydevelopingcommonstandardsforscreeningcargobeforeitarrivesin
NorthAmerica,whileworkingtocleargoodsatthefirstportofentry
c)adoptingcompatiblesecuritystandardsatproductionanddistributionfacilitiestominimizesecuritythreats
d)expeditingtheflowoflowrisktrafficbetweenCanadaandtheUnitedStatesbyestablishingcompatiblecommercial
processesattheborderand
e)expeditingtheflowoflowriskgoodsbetweenCanadaandtheUnitedStatesbyestablishingsecureprocedurestoclear
goodsawayfromtheborder,includingatrailyardsandatmarineports.
Specificactionplanpointspertainingtothispillarinclude:
HarmonizedCommercialProcessing
ClearanceAwayfromtheBorder
JointFacilities
CustomsData
IntransitContainerTargetingatSeaports
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(cont.4)
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Pillar#3:SecureInfrastructure
Thispillarpertainstotheconceptofsecuringtheinfrastructureoftheborders.Itfocuseson:
a)relievingcongestionatkeycrossingpointsbyinvestingreciprocallyinborderinfrastructureandidentifyingtechnological
solutionsthatcanspeedmovementacrosstheborderand
b)identifyingandminimizingthreatstocriticalinfrastructureincludingtheairports,ports,bridges,tunnels,pipelinesand
powerlinesthatlinkCanadaandtheUnitedStates.
IntelligentTransportationSystems
CriticalInfrastructureProtection
AviationSecurity
(cont.5)
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Pillar#4:CoordinationandInformationSharingintheEnforcementofthese
Objectives
Thefinalpillarpertainstotheconceptofcoordinationandinformationsharing.Thispillarfocuseson:
a)developingthenecessarytoolsandlegislativeframeworktoensurethatinformationandintelligenceissharedinatimely
andcoherentwaywithinCanadaandtheUnitedStatesaswellasbetweenthemand
b)strengtheningthecoordinationbetweenenforcementagenciesforaddressingcommonthreats.
IntegratedBorderandMarineEnforcementTeams
JointEnforcementCoordination
IntegratedIntelligence
Fingerprints
RemovalofDeportees
CounterTerrorismLegislation
FreezingofTerroristAssets
JointTrainingandExercises
Biosecurity
ScienceandTechnologyCooperation
ThefollowinghavebeenidentifiedbyCBSAaspriorityinitiatives:
SingleAlternativeInspectionSystem
AirPreclearance
AdvancePassengerInformation/PassengerNameRecord
FerryTerminalsReview
ClearanceAwayfromtheBorder
CustomsDataExchange
IntransitContainerTargetingatSeaports
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Topic2:CanadianPrograms
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NEXUSandCANPASS
NEXUSisajointcustomsandimmigrationprogramforfrequenttravellers,whichboththeCanadianandU.S.governments
haveimplemented.TheNEXUSprogramisdesignedtosimplifybordercrossingsforpreapproved,lowrisktravellers.
ParticipantsofNEXUSmayenterCanadaortheU.S.usingtheNEXUSlaneiftravellingbyhighway,makeuseofthe
NEXUSTelephoneReportingCentreiftravellingbyboat,andusetheselfserveNEXUSkiosksforthosetravellingbyair,
whichhaveincorporatedbiometriccapabilities.Biometricreferstotheautomaticidentificationofapersonbasedonhis
physiologicalorbehaviouralcharacteristics.
OnceapprovedbybothCanadaandtheU.S.aslowrisktravellers,NEXUSmembersareabletotakeadvantageofa
simplifiedentryprocesswhiletravellingacrosstheCanadaU.S.border.
CitizensandpermanentresidentsofCanadaortheUnitedStatescanapplytouseNEXUS.Aswell,businessor
governmentofficialswhocandemonstrateaneedtousetheNEXUSlanesandhaveproperdocumentationunderthe
specialvisaclasscategoryareeligible.
CANPASSisaprogramthatstreamlinescustomsclearanceforfrequenttravellers.ThedifferencebetweenCANPASSand
NEXUSisthatCANPASSisforentryintoCanadaonly,whereasNEXUSisrecognizedforentryintobothCanadaandthe
UnitedStates.
Topic2:CanadianPrograms(cont.2)
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FreeandSecureTradeProgram(FAST)
FASTalignselementsofthecustomscommercialprogramsalongthesharedborder.
InCanada,FASTbuildsontheCustomsSelfAssessment(CSA)programanditsprinciplesofpreapprovalandself
assessment,aswellasincreasedsecuritymeasuresunderPartnersinProtection(PIP).
IntheUnitedStates,FASTisavailabletocarriers,manufacturers,andimporterswhohaveenrolledintheCTPAT
(CustomsTradePartnershipagainstTerrorism)program.CTPAT,likePIP,isbasedoncollaborationbetweengovernment
andprivatebusinesstoincreasecargosecuritywithouthamperingtrade.
InCanada,theFASTprogramfeaturesanexpeditedclearanceprocessforeligiblegoodsthatareimportedbyCSAand
PIPapprovedimportersusingaCSAandPIPapprovedcarrierwithaFASTorCDRPapproveddriver.
Whentheaboverequirementshavebeenmet,theauthorizedcarrierwillprovideCBSAwithanEDItransmissionofdata
priortotheirarrivalattheborder.Whenthegoodsarrive,thedrivermayuseadedicatedFASTlane.
Byofferinganexpeditedclearanceoptiontoeligibleparticipants,customsinCanadaandtheU.S.areabletofocuson
goodsand/orimportersthatareofhighorunknownrisk.
BothFASTandCSAareprogramsthatprovideexpeditedclearanceprocessestopreapprovedimporters,carriers,and
drivers.CSAisaCanadianprogramthatincludesastreamlinedaccountingandpaymentprocessforgoodsimportedinto
Canada.FASTisajointCanadaU.S.programthatstreamlinesthecommercialclearanceprocessesforentryintoboth
countries.
ThemaindifferencebetweenFASTandCSAliesintheeligibilityrequirements.ThedesignoftheFASTprograminto
CanadaisessentiallyanextensionoftheapplicationandimportingprocessesthatCanadahasalreadyimplementedas
partofCSA,withtheadditionofenhancedpartnershipsbetweengovernmentandbusinesstopromotelegitimatetrade
throughthesigningofaPartnersinProtection(PIP)MemorandumofUnderstandingforCanadianimportersandcarriers.
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PartnersinProtection(PIP)
Developedin1995,thePartnersinProtectionprogramhasbeenupdatedsinceSeptember11,2001andhasbeen
comparedtotheCTPATprogramcreatedin2002.CBSAupdatedPIPonJune30,2008byimplementingamodernized
PartnersinProtection.PIPfocusesonbordersecurity,combatingorganizedcrimeandterrorism,increasingawarenessof
customscomplianceissues,andhelpingtodetectandpreventcontrabandsmugglingbycombiningtheeffortsofCBSA
andprivateindustry.ThemodernizedPIPwillrequirememberstoadheretostricter,betterdefinedandmoretargeted
securitymeasures.ItisalsomorealignedwiththeWCOFrameworkofStandards(SAFE)andtheAuthorizedEconomic
Operator(AEO)discussedinLesson2,Topic2,andCTPATdiscussedinTopic3ofthislesson.
UnderPIP,CBSAhasdevelopedstrategicpartnershipswithprivateindustrytosecuretheflowoflowrisk,legitimate
goodsandtravellersacrossourborder.PIPisavailabletotheentiretradecommunity,includingcarriers,brokers,
warehouseoperatorsandassociations.BysigninganMOUwithCBSA,abusinessororganizationagreestodevelopa
jointplanofaction,conductsecurityassessments,participateinawarenesssessions,andconsultwithCBSA.TheMOU
(MemorandumofUnderstanding)aimstoenhancethesecurityofthepartnerbusinessororganization,facilitatethe
exchangeofinformationbetweenpartners,anddevelopjointawarenessandinformationinitiatives.
WhenanorganizationsignsaPIPMOU,demonstratingitscommitmenttotheprogram,itwillprovideCBSAwithaself
assessmentofitssecuritysystems.TheCBSAwillreviewthesecuritymeasuresandhelptoremedyanyweaknesses.
OrganizationsparticipatingintheModernizedPartnersinProtectionprogramcanbenefitby:
fastermovementoflowriskgoodsthroughcustoms
improvedsecuritylevels
enhancedreputationfortheirorganization
improvedunderstandingofcustomsrequirementsand
bettercommunicationbetweentheiremployeesandCBSA.
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ContainerSecurityInitiative(CSI)
Inanefforttoharmonizecommercialprocesses,theCBSAhaspartneredwithU.S.CustomsandBorderProtection(CBP)
intheContainerSecurityInitiative(CSI).CBSAandCBPsignedtheCSIPartnershipArrangementinOctober2005.
OriginatingintheUnitedStates,CSIisamultinationalprogramthatprotectstheprimarysystemofglobaltrade
containerizedshippingfrombeingexploitedordisruptedbyterrorists.Itisdesignedtosafeguardglobalmaritimetrade
whileallowingcargocontainerstomovefasterandmoreefficientlythroughthesupplychainatseaportsworldwide.
TheobjectiveofthisarrangementistoenhancemarinesecuritybydeployingCBSAofficerstoforeignportssothatthey
canprescreenandexaminecargocontainersbeforethecontainersarriveinCanada.
SupplementedbytheAdvanceCommercialInformation(ACI)initiative,CSIallowsCBSAtotargetandeliminatepotential
terrorismthreatsbeforetheyreachCanadianshores.IndustrymustreportmarinedataelectronicallytotheCBSA24hours
beforeloadingshippingcontainersatforeignseaportsforallCanadaboundvessels(24hourrule).
Topic3:U.S.Programs
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U.S.CustomsandBorderProtections(CBP)prioritymissioniskeepingterroristsandterroristweaponsfromenteringthe
UnitedStates.
AsAmericasunifiedborderagency,CBPhasstrategicallypositioneditselfatandbetweentheportsofentryinaneffortto
preventfurtherterroristattacks.CBPseffortstomeettheirmissionstatementcanbegroupedintothefollowingareas:
a)StrengtheningthecontroloftheUnitedStatesborders:
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ImprovedradiationdetectioncapabilitiesbydeployingPersonalRadiationDetectorstoCBPofficersandagents,
RadiationPortalMonitorstoportsofentry,andRadiationIsotopeIdentificationDetectionSystemtoBorderPatrol
fieldlocations.
Deployingnonintrusiveinspectionsystemstodetectpotentialterroristweaponsinvehiclesandcargo.
Increasingtheuseofremotelymonitoredcamerasandsensingsystems,aircraft,helicopters,andunmannedaerial
vehiclestobetterdetect,monitor,andrespondtoillegalcrossings.
b)Improvingselectivity,screening,andtargeting:
EstablishedtheNationalTargetingCenter(NTC)asthecentralizedcoordinationpointforallofCBPsantiterrorism
efforts.NTCalsocoordinateswithotherfederalagenciessuchasU.S.CoastGuard,FederalAirMarshals,Federal
BureauofInvestigation,TransportationSecurityAdministration,andtheDepartmentsofEnergyandAgriculture.
Utilizesadvanceinformationfromvarioussystemstoscreenandassessallcargo,passengers,andhighrisk
importedfoodshipmentsbeforearrivalintotheU.S.
Implementedthe24HourRule,effectiveDecember2002,requiringseacarriersandnonvesseloperatingcommon
carriers(NVOCCs)toprovideadetaileddescriptionofcontainercontentsboundfortheU.S.24hoursbeforea
containerisloadedonavessel.
Topic3:U.S.Programs(cont.2)
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c)Private,publicsector,andinternationalpartnerships:
EstablishedCustomsTradePartnershipAgainstTerrorism(CTPAT)toworkwithindustrytoemphasizeaseamless
securityconsciousenvironmentthroughouttheentirecommercialprocess.
CTPATisthelargestfederalgovernmentpublic/privatepartnershipinU.S.history.
EstablishedtheContainerSecurityInitiative(CSI)totarget,and,withcounterpartsinforeigncountries,screen
containers,priortothecontainerbeingloadedonshipsdestinedfortheUnitedStates.
d)OneFaceattheBorder:
SinceitscreationinNovemberof2002,theDHS(DepartmentofHomelandSecurity)hassuccessfullyintegratedfour
differentorganizationsfromthreedifferentdepartmentsofgovernmentintoCBPwithnointerruptioninoperations.
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AutomatedCommercialEnvironment(ACE)
Inearly2001,U.S.customsembarkedonamultiyearefforttomodernizecommercialprocessingwiththeAutomated
CommercialEnvironment(ACE).ACEwasdesignedtosupporttheglobalsupplychainandenhancedbordersecurity
efforts.AkeyfunctionofACEistoprovideCBPpersonnelwiththetoolsandinformationtheyneedtodecide,beforea
shipmentreachestheborder,whatshouldbetargetedbecauseitishighrisk,andwhatshouldbeexpeditedbecauseit
complieswithU.S.laws.
ACEsupportsCBPbyprovidinganintegrated,fullyautomatedinformationsystemtoenabletheefficientcollection,
processing,andanalysisofcommercialimportandexportdata.
ACEsimplifiesdealingsbetweenCBPandthetradecommunityby:
automatingtimeconsumingandlabourintensivetransactions
movinggoodsthroughtheportsandintomarketsfasterandatlowercost
providingnationalprocessingasCBPmovesawayfromportbyportprocessing
beingacriticalelementfortradecomplianceandenforcementand
preventingcargofrombecominganinstrumentofterrorism.
ACEisflexibleandadaptable,andcanchangeasbusinessneedschangeand/orasnewtechnologiesbecomeavailable.
TheACESecureDataPortal,theonlineaccesspointtoACE,isaccessibletomorethan1,000CBPandtradecommunity
users.
WiththeimplementationofACE,CBPwillmodernizeitsoperationalprocessesandtheinformationtechnologythat
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supportsthem.Eachmajormissionareawillbemodernized,includingtrade,enforcement,andadministration.Thefirst
phaseofmodernizationisfocusedontrade.
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ACEwillreplacecurrentCBPtradeprocessingsystemsincluding:
AutomatedCommercialSystem(ACS),
AutomatedExportSystem(AES),
BorderReleaseAdvanceScreeningandSelectivity(BRASS),and
PrearrivalProcessingSystem(PAPS).
ACEwillinterfacewith:
AdvancePassengerInformationSystem(APIS),
AutomatedTargetingSystem(ATS),
InteragencyBorderInspectionSystem(IBIS),and
NationalCrimeInformationCenter(NCIC)
MuchofthedesignanddevelopmentofACEcamefromtheTradeSupportNetwork(TSN).Createdin1994byCBP,TSN
isagroupoftraderepresentativeswhoseaimistoprovideaforumtodiscussthemodernizationoftrade.Itisa
collaborativeeffortamonggovernment,thetradecommunity,andsupportcontractors.ByworkingwithTSN,CBPwillhelp
ensureACEwillhavethecapabilitiesneededtofacilitateanefficient,userfriendlyinformationexchangebetween
governmentandthetradecommunity.
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Bioterrorism
ThePublicHealthSecurityActandBioterrorismPreparednessandResponseActof2002,commonlyknownasthe
BioterrorismAct(BTA),isintendedtoprotectthehealthandsafetyofthepeopleoftheUnitedStatesfromanintendedor
actualterroristattackonthenation'sfoodsupply.ItrequiresthatcertaininformationbeprovidedelectronicallytotheU.S.
FoodandDrugAdministration(FDA)priortothearrivalofashipmentoffoodintheUnitedStates.
CBPofficers,inconjunctionwiththeFoodandDrugAdministrationsauthorities,areresponsibleforenforcingthe
BioterrorismActatallUnitedStatesportsofentry.
FoodisdefinedintheBTAas:
articlesusedforfoodordrinkformanoranimals,
articlesusedforcomponentsofanysucharticle.
FoodimportedorofferedforimportintotheUnitedStatesforhumanoranimalconsumptioniscoveredbytheAct,andthe
FoodSafetyModernizationAct
TheBTAalsocovers:
FoodimportedorofferedforimportintotheUnitedStatesforhumanoranimalconsumptioniscoveredbytheAct
FoodstoredordistributedintheUnitedStates
Gifts,excludinghomemadeandnotaccompanyingatraveller,tradeandqualityassurance/controlsamples
TransshipmentsthroughUnitedStatestoanothercountry
Foodimportedforfutureexportand
FoodadmittedintoaU.S.ForeignTradeZone(FTZ).
UnderSection305oftheBioterrorismAct,alldomesticandforeignfacilitiesthatmanufacture,process,pack,orholdfoods
forhumanoranimalconsumptionintheUnitedStatesarerequiredtoregisterwithFDA,unlessexempted.
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ContainerSecurityInitiative(CSI)
Approximately90percentoftheworldstradeistransportedincargocontainers.Becausecontainerizedshippingisa
criticalcomponentofglobaltrade,theU.S.hasalsoimplementedtheContainerSecurityInitiative(CSI).
AsdiscussedinthesectiononCanadianprograms,thismultinationalprogramcreatedundertheCanadaUnitedStates
AccordonourSharedBorderisintendedtohelpincreasesecurityforcontainerizedcargoshippedtoNorthAmericafrom
aroundtheworld.CSIisbasedontheconceptthatextendsNorthAmericaszoneofsecurityoutwardsothatitsborders
arethelastlineofdefense,notthefirst.
WithCSI,maritimecontainersthatposeariskforterrorismareidentifiedandexaminedatforeignportsbeforetheyare
shippedtoNorthAmerica.
CSIconsistsoffourcoreelements:
usingintelligenceandautomatedinformationtoidentifyandtargetcontainersthatposeariskforterrorism
prescreeningthosecontainersthatposeariskattheportofdeparturebeforetheyarriveatU.S.andCanadianports
usingdetectiontechnologytoquicklyprescreencontainersthatposeariskand
usingsmarter,tamperevidentcontainers.
TheCSIprogramenablesteamsofcustomsofficialswhoaredeployedtoworkwiththeirhostnationcounterpartsto
screencontainersthatposeariskforterrorism.Currentlythereare58CSIports.
CSImayofferitsparticipantcountriestheopportunitytosendtheircustomsofficerstomajorU.S.portstotargetocean
going,containerizedcargotobeexportedtotheircountries.Likewise,CBPsharesinformationonabilateralbasiswithits
CSIpartners.AspartofreciprocalCSIagreementswithJapanandCanada,thosecountriescurrentlystationtheircustoms
personnelinU.S.portsaspartoftheCSIprogram.(InadditiontotheU.S.,CanadahasCSIpartnershipswithSouth
Africa,Panama,andJapan).
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24HourRule
EffectiveDecember2,2002,carriersand/orautomatedNonVesselOperatingCommonCarriers(NVOCC's)arerequired
tosubmitacargodeclarationtoCBP24hoursbeforecargoisladenaboardthevesselataforeignport.Thisruleissimilar
toCanadasACIprogram.ACIrequiresmarinecarrierstoelectronicallytransmitmarinecargodatatoCBSA24hoursprior
totheloadingofcargoataforeignport.
Themajorgoalofthe24hourruleinitiativeistosecuretheU.S.sbordersandensuretheflowoftrade.Bycontrolling
shipmentspriortotheirarrivalatU.S.borders,CBPwillbeabletoensuregreatersecurity.Theywillalsoknowwherethe
containerswerestuffedandbywhom.
CBPportswillberesponsibleforinitiating"DoNotLoad"messagesforcargowheneveran"invalid"cargodescriptionis
used.TheseselectednoncompliantcargotargetswillbereferredtotheNationalTargetingCenter(NTC)forcoordination
oftheissuanceoftheDoNotLoadmessagetothecarrierorNVOCC.
Seaportswillalsotakeenforcementactiononconsigneenameandaddressviolationsleadingtoissuanceofapproved"Do
NotLoad"messages.TheseselectednoncompliantcargotargetswillbereferredtotheNTCforcoordinationand
approvalpriortotheissuanceoftheDoNotLoadmessagetotheautomatedcarrierorNVOCC.
Whenselectingnoncompliantcargo,CBPrealizesthatForeignRemainingOnBoard(FROB)cargoandsomeinbond
movementswillnothaveaU.S.orstandardizedaddresses.Inaddition,CBPportswillbeauthorizedtoissuemonetary
penaltiesforFROBcargothathasaninvalidcargodescriptionandthathasbeenloadedonboardthevesselwithout
providingCBPa24hourtimeframetoplacea"DoNotLoad"messageonthecargo.
AutomatedTargetingSystem
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TheAutomatedTargetingSystem(ATS)isasystemthatwillassistcustomsofficersinidentifyingandinterceptingimports
thatposeahighriskofcontainingnarcoticsorothercontraband.ThisprogramisajointeffortbyCBPsOfficeofField
OperationsandtheOfficeofInformationandTechnology.
Thesystemstandardizesbilloflading,entry,andentrysummarydatareceivedfromtheAutomatedCommercialSystem
(ACS),whichwilleventuallybecompletelyreplacedbytheAutomatedCommercialEnvironment(ACE).ATScreates
integratedrecordscalled"shipments".TheseshipmentsarethenevaluatedandscoredbyATS,throughtheuseofover
300weightedrulesderivedfromtargetingmethodsusedbyexperiencedcustomspersonnel.
Thehigherthescore,themoretheshipmentwarrantsattention.Inspectorsandothercustomspersonnelresponsiblefor
targetingshipmentsfornarcoticsandothercontrabandusethissystem.
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USVISIT*
USVISITenhancessecurityforcitizensandvisitorswhilefacilitatinglegitimatetravelandtradeacrossAmericanborders.
USVISIThelpstosecureborders,facilitatetheentryandexitprocess,andenhancetheintegrityoftheimmigrationsystem
whilerespectingtheprivacyofvisitors.
USVISITispartofacontinuumofsecuritymeasuresthatbeginsoverseasandcontinuesthroughavisitorsarrivalinand
departurefromtheUnitedStates.ItincorporateseligibilitydeterminationsmadebyboththeDepartmentofHomeland
SecurityandtheStateDepartment.
Goalsoftheprogramareto:
enhancethesecurityofAmericancitizensandvisitors
facilitatelegitimatetravelandtrade
ensuretheintegrityoftheAmericanimmigrationsystemand
protecttheprivacyofAmericanvisitors.
USVISITcurrentlyappliestoallvisitors(withlimitedexemptions)holdingnonimmigrantvisas,regardlessofcountryof
origin.
OfficeofBiometricIdentityManagement*
InMarch2013theU.S.programUSVISITwasreplacedbytheOfficeofBiometricIdentityManagement(OBIM).
AspartoftheNationalProtectionandProgramsDirectorate,OBIMsgoalsareto:
EnsurethesecurityofbothcitizensandvisitorstotheU.S.
Easelegaltravelandtrade
protecttheprobityoftheimmigrationsystemand
Ensuretheprivacyofvisitors.
OBIMsuppliestheDHSwiththetechnologyforaccumulatingqualitybiometricdata,providesanalysis,andupdatesthe
watchlist.
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CTPAT
CustomsTradePartnershipAgainstTerrorism(CTPAT)isajointgovernmentbusinessinitiativetobuildcooperative
relationshipsthatstrengthentheoverallsupplychainandbordersecurity.ItrecognizesthatCBPcanprovidethehighest
levelofsecurityonlythroughclosecooperationwiththeultimateownersofthesupplychain,importers,carriers,brokers,
warehouseoperatorsandmanufacturers.Throughthisinitiative,CBPisaskingbusinessestoensuretheintegrityoftheir
securitypractices,andcommunicatetheirsecurityguidelinestotheirbusinesspartnerswithinthesupplychain.
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CTPATparticipantssignanagreementthatcommitsthemtoconductingacomprehensiveselfassessmentofsupply
chainsecurityusingtheCTPATsecurityguidelinesjointlydevelopedbyCBPandthetradecommunity.
BenefitsofCTPATinclude:
areducednumberofinspections(reducedbordertimes)
anassignedaccountmanager(ifoneisnotalreadyassigned)
accesstootherCTPATmembersviatheStatusVerificationInterface(SVI)
eligibilityforaccountbasedprocesses(suchasbimonthly/monthlypayments)and
anemphasisonselfpolicing,notCBPverifications.
MoreinformationonCTPATisfoundinModule26.
CTPATmembershipiscurrentlyopentoallimporters,customsbrokers,carriers,marineterminaloperatorsandfreight
forwarders.
Inaddition,CTPATiscurrentlyavailableto:
U.S.importersofrecord,
U.S/Canadahighwaycarriers,
U.S./Mexicohighwaycarriers,
railcarriers,
seacarriers,
aircarriers,
U.SMarinePortAuthority/terminaloperators,
U.S.freightconsolidators,oceantransportationintermediariesandNonVesselOperatingCommonCarriers
(NVOCC),
CanadianandMexicanmanufacturers,
Mexicanlonghaulcarriers
certaininvitedforeignmanufacturers,and
licensedU.S.customsbrokers.
Lesson1Summary:SupplyChainSecurityCanadaand
theU.S.
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Inthislessonyoustudiedsupplychainsecurity.YoualsoreviewedtheactionplanoftheCanadaU.S.SmartBorder
Declaration,aswellasCanadianandU.S.programs.
UndertheCanadaU.S.SmartBorderDeclaration
TheCanadaU.S.SmartBorderDeclarationisanactionplanconsistingoffourpillars.
Thefourpillarsare:
thesecureflowofpeople,
thesecureflowofgoods,
secureinfrastructure,and
coordinationandinformationsharingintheenforcementoftheseobjectives.
In2002,twopointswereaddedtotheforthpillar:biosecurityandscienceandtechnologycooperation.
NEXUSisajointcustomsandimmigrationprogramforfrequenttravellers.
BoththeCanadianandU.S.governmentshaveimplementedNEXUS.
NEXUSisdesignedtosimplifybordercrossingsforpreapproved,lowrisktravellers.
CanadianPrograms
CANPASSisaprogramthatstreamlinescustomsclearanceforfrequenttravellers.
ThedifferencebetweenCANPASSandNEXUSisthatCANPASSisforentryintoCanadaonly,whereasNEXUSis
recognizedforentryintobothCanadaandtheUnitedStates.
CanadaandtheU.S.haveestablishedajointprogramknownastheFreeandSecureTradeProgram(FAST).
FASTallows:
lowriskclearanceprocessesforeligibleparticipants,and
customsofficerstofocusonimportersand/orgoodsofhighorunknownrisk.
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InCanada,FASTisbasedontheCustomsSelfAssessment(CSA)programanditsprinciplesofpreapprovaland
selfassessment,aswellasincreasedsecuritymeasuresunderPartnersinProtection(PIP).
TheFASTclearanceprocessisavailableonlytothoseimporterswhoareCSAapproved.
BothFASTandCSAareprogramsthatprovideexpeditedclearanceprocessestopreapprovedimporters,carriers,
anddrivers.
UnderPIP,CBSAandprivateindustryhavecombinedeffortstoenhancebordersecurity,combatorganizedcrime
andterrorism,increaseawarenessofcustomscomplianceissues,andhelpdetectandpreventcontraband
smuggling.
Inanefforttoharmonizecommercialprocesses,theCBSAhaspartneredwithU.S.CustomsandBorderProtection
(CBP)intheContainerSecurityInitiative(CSI).CBSAandCBPsignedtheCSIPartnershipArrangementinOctober
2005.
CSIisamultinationalprogramthatprotectstheprimarysystemofglobaltradecontainerizedshipping.
Lesson1Summary:SupplyChainSecurityCanadaand
theU.S.(Cont.)
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U.S.Programs
U.S.CustomsandBorderProtections(CBP)prioritymissioniskeepingterroristsandterroristweaponsfromentering
theUnitedStates.
ACEprovidesCBPpersonnelwiththetoolsandinformationtheyneedtodecide,beforeashipmentreachesthe
border,whatshouldbetargetedbecauseitishighrisk,andwhatshouldbeexpeditedbecauseitcomplieswithU.S.
laws.
TheBioterrorismActisintendedtoprotectthehealthandsafetyofthepeopleoftheUnitedStatesfromanintended
oractualterroristattackonthenation'sfoodsupply.
TheBioterrorismActrequiresthatcertaininformationbeprovidedelectronicallytotheU.S.FoodandDrug
Administration(FDA)priortothearrivalofashipmentoffoodintheUnitedStates.
EffectiveDecember2,2002,carriersand/orautomatedNonVesselOperatingCommonCarriers(NVOCC's)are
requiredtosubmitacargodeclaration24hoursbeforecargoisladenaboardthevesselataforeignport.
TheU.S.hasimplementedCSI.
TheAutomatedTargetingSystem(ATS)isasystemthatwillassistcustomsofficersinidentifyingimports,which
poseahighriskofcontainingnarcoticsorothercontraband.
USVISITenhancessecurityforcitizensandvisitorswhilefacilitatinglegitimatetravelandtradeacrossAmerican
borders.
CTPATisajointU.S.governmentbusinessinitiativetobuildcooperativerelationshipsthatstrengthenoverallsupply
chainandbordersecurity.
TakeafewminutesandanswerafewquestionstoseehowmuchyouhavelearnedinLesson1.
Questions:
Attemptsallowed:
Available:
Passrate:
8
Unlimited
Always
60%
Allowed
youwish.
Startquiz
Lesson2:TheInternationalView
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Inthislesson,youwillstudytheWorldTradeOrganization,theWorldCustomsOrganizationandtheInternational
FederationofCustomsBrokersAssociations.Youwillexaminethemandateofeachorganizationandtheircontributionsto
internationaltrade.
Rationale
UnderstandingthelargerpictureofglobaltradewillhelpyouinyourdailyroleasaCCStocomprehendandexplainwhen
andwhychangesoccurincommoncustomspracticessuchdutyrates,importpermits,exports,tradeagreementsand
securityprocedures.
LessonObjective
Attheendofthislesson,youwillbefamiliarwiththevariousinternationalorganizationsgoverningglobaltrade.Youwill
alsobeawareofwhatisbeingdoneatthegloballeveltoimplementstandardstosecuretheinternationalsupplychainand
youwilllearnhowtheinternationalorganizationsinfluenceinternationaltrade.
Topic1:WorldTradeOrganization(WTO)
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InJanuaryof1995,theWorldTradeOrganization(WTO)wasestablished.TheWTOisthesuccessortotheGeneral
AgreementonTariffsandTrade(GATT),andhasevolvedintoaninternationalorganizationthatincludesaSecretariat,and
aDirectorGeneral.OneoftheWTOsresponsibilitiesistoensurethattradeagreementsestablishedundertheGATT
remaininplace.
TheWTOistheonlyinternationalbodydealingwiththerulesoftradebetweennations.Atitsheartaretheagreements,
negotiatedandsignedbymostoftheworldstradingnationsandratifiedintheirParliaments.
Theagreementshavethreemainobjectives:
tohelptradeflowasfreelyaspossible,
toachievefurtherliberalizationgraduallythroughnegotiation,and
tosetupanimpartialmeansofsettlingdisputes.
GATTwasfirstsignedin1947,butnotenteredintoforceuntilJanuary1,1948.ItsoriginalsignatoriesincludedCanada,
theUnitedStates,and21othercountries.Between1948and1995GATThelpedestablishastrongandprosperous
multilateraltradingsystemthatbecamemoreandmoreliberalthroughroundsoftradenegotiations.Butbythe1980sthe
systemneededathoroughoverhaul.ThisledtotheUruguayRound,andultimatelytotheWTO.
TheMostFavouredNationtarifftreatment(seeModule8,Lesson3,Topic1)andNationalTreatmentweretwoofthe
underlyingprinciplesofGATT.MostFavouredNationtarifftreatment(MFN)ensuresthatgoodsproducedbyonecountry
willbetreatedatthebordernolessfavourablythanthoseofanothercountry.Itisaprincipleextendedunconditionallyin
thatitsbenefitswereavailabletoanymemberofGATT.
AllsignatoriestoGATTareentitledtoMostFavouredNationratesofduty.AresultofGATThasbeentheloweringofthe
averageindustrialtariffsofdevelopedcountriesfromover50percentin1947tocloseto5percentin1990.
NationalTreatmentistheprinciplethataddressestheissueofinternationaldiscriminationbetweenforeignersand
domesticinterestsoncetheborderhasbeencrossed.Itensuresthatoncegoodshaveentered,theywillbetreatednoless
favourablythangoodsofdomesticorigin.Itdoesnotimplythatonemusttreatincominggoodsthesamewaytheyare
treatedintheexportingcountry.
Topic1:WorldTradeOrganization(WTO)(cont.2)
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TheWTO'soverridingobjectiveistohelptradeflowsmoothly,freely,fairlyandpredictably.Itdoesthisby:
administeringtradeagreements
actingasaforumfortradenegotiations
settlingtradedisputes
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reviewingnationaltradepolicies
assistingdevelopingcountriesintradepolicyissues,throughtechnicalassistanceandtrainingprogramsand
cooperatingwithotherinternationalorganizations.
WithintheWorldTradeOrganization,countriesmaycreatefreetradeareasorcustomsunionsamongthemselves.
ExamplesaretheformationoftheEuropeanEconomicCommunityin1957andtheNorthAmericanFreeTradeAgreement
in1994.
UnderGATT,thefollowingtraderoundstookplace:
1947,Geneva,Switzerland,
1949,Annecy,France,
1951,Torquay,England,
1956,Geneva,
196061,Geneva("TheDillonRound"),
196467,Geneva("TheKennedyRound"),
197379,Geneva("TheTokyoRound"),
198694,Uruguay("TheUruguayRound"),and
themostrecenttalks,in2008,havestalled.
InNovemberof2001,atDoha(Qatar),theWTOembarkedonanewroundofnegotiationsaimingtointegratethe
concernsofdevelopingcountriesintoitswork.CanadaisaleaderinwhatisbeingcalledtheDohaDevelopmentAgenda.
InSeptember2003,negotiationsceasedduetodisagreementsonagriculturalissues.DiscussionsresumedinAugustof
2004butnegotiationdeadlineswerenotmet.TheDirectorGeneraloftheWTOsuspendednegotiationsinJuly2006.
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TheTokyoRound
Morethan100countriesparticipatedintheTokyoRound.InAprilof1979,thebasicTariffandNonTariffBarrier
AgreementsresultingfromtheTokyoRoundofGATTweresigned.
SubjectsonthetableattheTokyoRoundincludedsubsidiesandcountervailingmeasures,antidumpingduties,technical
barrierstotrade,governmentprocurement,importlicensingandquotas,customsvaluation,tradeincivilaircraft,
internationaldairyarrangements,andagreementsonbovinemeat.
TheTokyoRoundofGATTadoptedandincorporatedintoGATTanumberofpreviouslysignedagreements,includingthe
AntiDumpingCode.ACodeisatermusedtodescribeanagreementcreatedoutsideofGATTandbindingonlyonthe
countriesthathaveratifiedthem.CodescontaintheirowndisputemechanismsthatcloselyfollowGATTprocedures.
AswellastheAntiDumpingCode,theTokyoRoundofGATTratifiedtheGATTValuationCode.TheGATTValuation
Codegreatlysimplifiedthemannerofdeterminingvaluefordutyofimportedgoods.Canadaadoptedthismethodof
valuationin1984(seeModule10formoreinformationonvaluation)previouslythemethodofdeterminingvalueforduty
wasbasedonwhatwastermedFairMarketValue.
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TheUruguayRound
TheUruguayRoundnegotiationsoftheGATTbeganin1986andconcludedinDecemberof1993.Itwastheeighthround
ofGATT,withmorethan120governmentsparticipating.Todate,theUruguayRoundhasbeenthelargestandmost
complextradenegotiationthathastakenplace.
NewissuestabledattheUruguayRoundincludedtheexchangeofintellectualproperty,traderelatedinvestment,andthe
exchangeofservices.Aswell,acommonsetofrulesgoverningagricultureandagriculturalproducewasinitiated.
OneofthemostimportantachievementsoftheUruguayRoundisthereductionoreliminationoftradebarriers(tariffand
nontariff)betweencountries.
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Canadahasagreedtobroadbasedtariffreductionsaveraging40percentormoreonawiderangeofitems.Tariffswill
eventuallybeeliminatedonthefollowinggroupsofgoods:paperandpaperproducts,pharmaceuticals,beer,brandies,
whiskies,constructionequipment,agriculturalequipment,medicalequipment,officefurnitureandtoys.Somegoods
becamedutyfreeimmediatelyotherswillbecomedutyfreeoveraperiodof5or10years.
Althoughnotallsectorshavebeenincluded,thefollowingisabriefrecapofobjectivesoragreementswhichresultedfrom
theUruguayRound.
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Agriculture
Objectivesintheagriculturalsectorincluded:improvedaccesstomarkets,increaseddisciplinesonsubsidies,more
predictableandsecureborderarrangementstopreserveCanada'sfarmsupplymanagementprograms,andassurance
thathealthandsanitaryregulationswouldnotbeusedasdisguisedbarrierstotrade.
TheUruguayRoundensuredthatmembersopenedtheirmarketstoimportsbyaspecifiedstartingdate.Itwasagreedthat
overalltariffsonagriculturalgoodswouldbereducedby36percentbetween1995and2001,insixequalannualsteps.
ThiswouldprovidebetteraccesstoglobalmarketsforCanada'sexportssuchasgrain,oilseedproducts,redmeatsand
whisky,aswellascompellingcountriestoreducetheirinternalsupportoftheirdomesticagriculturalindustries.
TheUruguayRoundalsoincludedanagreementonhealthandsanitarymeasures,andtheeliminationofcountryspecific
ruleexceptions.
Services
Forthefirsttime,internationalrulesontheconductofinternationaltradeinserviceswereestablishedaspartofGATT.
TheUruguayRoundincludedanobligationforcountriesnottograntspecialtradingadvantagestoonecountryover
another,ortodiscriminateagainstanyothercountry.Inordertodothis,theUruguayRoundestablishedaServices
Council.
TextilesandApparel
Overa10yearperiodendingin2005,thetextilesandapparelsectorswerebroughtundertheGATTrules.Duringthe
transitionperiod,eachcountrywasabletoretainexistingquotas.However,thesequotasmayweresubjecttochange
duringthetransitionperiod.UndertheWorldTradeOrganization(WTO)AgreementonTextilesandClothing(ATC)the
limitationsontheimportsoftextilesandapparelweretobeeliminatedbyJanuary1,2005.Canada,however,maintained
itssystemofimportpermitsuntilApril1,2005.MoreinformationonimportpermitscanbefoundinModule13.
GovernmentProcurement
Governmentpurchasesatthefederallevelwillbeopentointernationalcompetitions.
SubsidiesandCountervailingDuties
TheUruguayRoundestablishedacleardefinitionofasubsidy,andestablishedasetofrulesconcerningsubsidiesand
resultingcountervailingduties(penaltiesimposedinretaliationforsubsidiesfoundtobeunfair).Moreinformationon
countervailingdutiescanbefoundinModule11.
AntiDumping
Dumpingisthesaleofimportedgoodsatalowerpricethanwhensoldintheexportingcountry.TheUruguayRound
containsaseriesofmodificationstoexistingantidumpingpractices.Moreinformationonantidumpingcanbefoundin
Module11.
TheUruguayRoundincludedanagreementthat,onJanuary1,1995,establishedtheWorldTradeOrganization.The
WorldTradeOrganizationisresponsibleforallagreementssignedattheUruguayRound.TheWTOisoverseenbya
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ministerialconferenceatleasteverytwoyears.
Topic2:WorldCustomsOrganization(WCO)
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TheWorldCustomsOrganization(WCO),whichwasestablishedin1952astheCustomsCooperationCouncil,isan
independentintergovernmentalbodymadeupof179memberswhosemissionistoenhancetheeffectivenessand
efficiencyofCustomsadministrations.TheCustomsCooperationCouncilhasbeenknownastheWorldCustoms
Organizationsince1994andCanadahasbeenamembersince1971.UnliketheWTOwhosedecisionsbecomelawfor
theinternationalcommunity,theWCOonlymakesrecommendations.
WCOmembers,whoarenationalcustomsadministrations,controlandadministertheinternationalmovementofgoods
and,asaresult,areinauniquepositiontoprovideincreasedsecuritytotheglobalsupplychain.Membersalsocontribute
tosocioeconomicdevelopmentthroughrevenuecollectionandtradefacilitation.
Customsadministrationshaveimportantpowersthatexistnowhereelseingovernment,suchas:
theauthoritytoinspectcargoandgoodsshippedinto,throughandoutofacountry
theauthoritytorefuseentryorexitand
theauthoritytoexpediteentry.
Customsadministrationsrequireinformationaboutgoodsbeingimported,andoftenrequireinformationaboutgoods
exported.Theycan,withappropriatelegislation,requirethatinformationbeprovidedinadvanceandelectronically.
OneoftherolesoftheWCOistocreatevariousconventionsandcommittees.Someoftheseconventionsincludethe
KyotoConvention(enteredintoforcein1974andaddressedtheissueofthesimplificationandharmonizationofcustoms
procedures)theNairobiConvention(enteredintoforcein1980andconcernedtheadministrativeassistanceforthe
prevention,investigationandrepressionofcustomsoffences)theIstanbulConvention(enteredintoforcein1993and
concernedthetemporaryimportationofgoods),andtheRevisedKyotoConvention(enteredintoforcein1999astheplan
formodernandefficientcustomsprocedures).RecentprioritieshavebeenElectronicDataInterchange(EDI),compliance
andenforcementandsupplychainsecurity.TheWCOwasalsoresponsibleforthedevelopmentoftheHarmonized
CommodityDescriptionandCodingSystemandtheHarmonizedSystemCommittee.Thiscommitteeusuallymeetsat
leasttwiceayeartoseeifanyamendmentstothetariffclassificationsystemshouldberecommended.Thecommitteealso
triestoclarifyclassificationdisputesthatcannotbesolvedthroughbilateralnegotiations.
Topic2:WorldCustomsOrganization(WCO)(cont.2)
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WorldCustomsOrganization(WCO)WCOFrameworkofStandardsto
SecureandFacilitateGlobalTrade
In2004consultationsinvolvingtheWCO,itsmembers,andbusinessrepresentatives,wereheldtodiscusssecurityand
borderchallengesfacingtheinternationalcustomsenvironment.
Asaresult,theWCOSAFEFrameworkofStandardswasdeveloped.SAFEFrameworkrepresentstheWCOscollective
effortstosecuretheglobaltradesupplychaininresponsetogrowingthreatsbyinternationalterrorists,organized
criminals,commercialfraudsters,andothersofsimilarilk.WhiletheSAFEFrameworkisintendedtoprovideastructured
platformfortheimplementationoftradesecuritymeasures,italsooffersthebusinesscommunitythechancetocommitto
itsprinciplesandinturnreapanumberoftradefacilitationbenefits.TheCBSAcontinuestoconsultCanadiantradein
ordertosupportthesuccessfulimplementationoftheSAFEFramework.
WCOSAFEFrameworkofStandards
Internationaltradeisanessentialdriverforeconomicprosperity.Theglobaltradingsystemisvulnerabletoterrorist
exploitationthatwouldseverelydamagetheentireglobaleconomy.Asthegovernmentorganizationsthatcontroland
administertheinternationalmovementofgoods,customsadministrationsareinauniquepositiontoprovideincreased
securitytotheglobalsupplychainandtocontributetosocioeconomicdevelopmentthroughrevenuecollectionandtrade
facilitation.
TheWCOSAFEFrameworktosecureandfacilitateglobaltradesetsforththeprinciplesandthestandardsandpresents
themforadoptionasaminimalthresholdofwhatmustbedonebyWCOMembers.TheWCOhasmembershipof173
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customsadministrations,representing98percentofglobaltrade.
ObjectivesandprinciplesoftheSAFEFramework
TheSAFEFrameworkaimsto:
establishstandardsthatprovidesupplychainsecurityandfacilitationatagloballeveltopromotecertaintyand
predictability
enableintegratedsupplychainmanagementforallmodesoftransport
enhancetherole,functionsandcapabilitiesofcustomstomeetthechallengesandopportunitiesofthe21stcentury
strengthencooperationbetweencustomsadministrationstoimprovetheircapabilitytodetecthighrisk
consignments
strengthencustoms/businesscooperationand
promotetheseamlessmovementofgoodsthroughsecureinternationaltradesupplychains.
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FourCoreElementsoftheWCOSAFEFramework
TheWCOSAFEFrameworkconsistsoffourcoreelements.
1.TheSAFEFrameworkharmonizestheadvanceelectroniccargoinformationrequirementsoninbound,outboundand
transitshipments.
2.EachcountrythatjoinstheSAFEFrameworkcommitstoemployingaconsistentriskmanagementapproachtoaddress
securitythreats.
3.TheSAFEFrameworkrequiresthatatthereasonablerequestofthereceivingnation,baseduponacomparablerisk
targetingmethodology,thesendingnation'scustomsadministrationwillperformanoutboundinspectionofhighrisk
containersandcargo,preferablyusingnonintrusivedetectionequipmentsuchaslargescaleXraymachinesand
radiationdetectors.
4.TheSAFEFrameworkdefinesbenefitsthatcustomswillprovidetobusinessesthatmeetminimalsupplychainsecurity
standardsandbestpractices.
TheWCOSAFEFramework,basedonthepreviouslydescribedfourcoreelements,restsonthetwinpillarsofcustomsto
customsarrangementsandcustomstobusinesspartnerships.Thepillarsinvolveasetofstandardsthatareconsolidated
toguaranteeeaseofunderstandingandrapidinternationalimplementation.Moreover,theSAFEFrameworkdrawsdirectly
fromexistingWCOsecurityandfacilitationmeasuresincludingtheRevisedKyotoConvention(whichincorporatedbest
practicesofmemberadministrationsresultinginbettercontrolsandefficientcrossbordermovementofgoodsand
persons)andprogramsdevelopedbymemberadministrations.
Pillar#1:CustomstoCustoms
OneofthemainobjectivesoftheSAFEFrameworkistoestablishcustomstocustomsarrangementstopromotethe
seamlessmovementofgoodsthroughsecureinternationaltradesupplychains.Thesenetworkarrangementswillresultin
theexchangeoftimelyandaccurateinformationthatwillplacecustomsadministrationsinthepositionofmanagingriskon
amoreeffectivebasis.
Theexpectationisthatthiswillimprovetheabilityofcustomstodetecthighriskconsignments,enablecustoms
administrationstoimprovetheircontrolsalongtheinternationaltradesupplychainandmakemoreefficientallocationof
customsresources.
Thecustomstocustomsnetworkisdesignedtostrengthencooperationbetweencustomsadministrationsandenable
administrationstocarryoutcontrolsearlierinthesupplychain,forexample,wheretheadministrationofanimporting
countryrequeststheadministrationoftheexportingcountrytoundertakeanexaminationonitsbehalf.
TheSAFEFrameworkalsoprovidesforthemutualrecognitionofcontrolsundercertaincircumstances.Theapplicationof
theFrameworkwillenablecustomsadministrationstoadoptabroaderandmorecomprehensiveviewoftheglobalsupply
chainandcreatetheopportunitytoeliminateduplicationandmultiplereportingrequirements.
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Pillar#2:CustomstoBusiness
TheSAFEFrameworkcreatestheconditionsforsecuringinternationaltradebutalsofacilitatesandpromotesinternational
trade.Thisencouragesandmakesiteasierforbuyersandsellerstomovegoodsbetweencountries.TheSAFE
Frameworktakesaccountof,andisbasedon,moderninternationalproductionanddistributionmodels.
ConceptofAuthorizedEconomicOperator(AEO)
TheAuthorizedEconomicOperator(AEO)conceptisabenefittothebusinesscommunity.Businessesthatofferahigh
degreeofsecurityinrespectoftheirplaceinthesupplychaincan,bymeetingthecriteriawithintheSAFEFramework,
benefitbythequickermovementoflowriskcargothroughcustoms.
AuthorizedEconomicOperators(AEOs)willreapbenefits,suchasfasterprocessingofgoodsbycustoms,e.g.through
reducedexaminationrates.AnAEOisapartyinvolvedintheinternationalmovementofgoodsinwhateverfunctionthat
hasbeenapprovedby,oronbehalfof,anationalcustomsadministrationandcomplyingwithWCOorequivalentsupply
chainsecuritystandards.AuthorizedEconomicOperatorsincludemanufacturers,importers,exporters,customsbrokers,
carriers,consolidators,intermediaries,ports,airports,terminaloperators,integratedoperators,warehouses,and
distributors.
OneofthemaintenetsoftheSAFEFrameworkistocreateonesetofinternationalstandardsestablishinguniformityand
predictability.Italsoisintendedtoreducemultipleandcomplexreportingrequirements.However,itisimportanttonote
thattherequirementsoftheSAFEFrameworkaresubjecttotheinterpretationandimplementationbynationalcustoms
administrations.
Eachcustomsadministrationwillestablishapartnershipwiththeprivatesectorinordertoinvolveitinensuringthesafety
andsecurityoftheinternationaltradesupplychain.Themainfocusisthecreationofaninternationalsystemforidentifying
privatebusinessesthatofferahighdegreeofsecurityguaranteesinrespectoftheirroleinthesupplychain.These
businesspartnersshouldreceivetangiblebenefitsintheformofexpeditedprocessingandothermeasures.
TheSAFEFrameworksetsforththecriteriabywhichbusinessesinthesupplychaincanobtainauthorizedstatusasa
securitypartner.Thesecriteriaaddressissuessuchasthreatassessment,asecurityplanadaptedtotheassessedthreats,
acommunicationplan,proceduralmeasurestopreventirregularorundocumentedgoodsenteringtheinternationalsupply
chain,physicalsecurityofbuildingsandpremisesusedasloadingorwarehousingsites,securityofcontainersandcargo,
meansoftransport,personnelvetting,andprotectionofinformationsystems.
Theprioritiesofvalidatingorauthorizingparticipantscanbedeterminedbyanumberoffactors,includingimportvolume,
securityrelatedanomalies,thestrategicthreatposedbycertaingeographicregions,orotherriskrelatedinformation.
Decidingwhichfactorstoemphasizewillinevitablychangebasedonevolvingcircumstances.
Lesson2Summary:TheInternationalView
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Inthislessonyoulearnedaboutvariousglobalorganizationsrelatingtointernationaltrade.
WTO
InJanuaryof1995,theWorldTradeOrganization(WTO)wasestablished.
TheWTOisthesuccessortotheGeneralAgreementonTariffsandTrade(GATT).
TheWTOistheonlyinternationalbodydealingwiththerulesoftradebetweennations.
TheMostFavouredNationTarifftreatmentandNationalTreatmentweretwooftheunderlyingprinciplesofGATT.
Morethan100countriesparticipatedintheTokyoRound.
Inadditiontootherachievements,theTokyoRoundincluded:
thebasicTariffandNonTariffBarrierAgreements,
theadoptionandincorporationoftheAntiDumpingCode,and
theratificationoftheGATTValuationCode.
Todate,theUruguayRoundhasbeenthelargestandmostcomplextradenegotiationthathastakenplace.
Inadditiontootherachievements,theUruguayRoundincluded:
theexchangeofintellectualproperty,
traderelatedinvestment,
exchangeofservices,
acommonsetofrulesgoverningagricultureandagriculturalproducewereinitiated,and
thereductionoreliminationoftradebarriers(tariffandnontariff)betweencountries.
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TheconcernsofdevelopingcountriesarebeingnegotiatedwithintheDohaDevelopmentAgendaattheWTO.
WCO
TheCustomsCooperationCouncilwasestablishedin1952.
In1994theCustomsCooperationCouncilbecameknownastheWorldCustomsOrganization(WCO).
TheWorldCustomsOrganization(WCO)isanindependentintergovernmentalbodyfocusedonCustomsmatters.
OneoftherolesoftheWCOistocreatevariousconventionsandcommittees.Theseinclude:
theKyotoConvention,whichaddressedthesimplificationandharmonizationofcustomsprocedures
theNairobiConvention,whichaddressedtheissueofadministrativeassistancefortheprevention,investigation
andrepressionofcustomsoffences
theIstanbulConvention,whichaddressedtheissueoftemporaryimportationofgoodsand
theRevisedKyotoConvention,whichaddressedthemodernizationofcustomsprocedures.
RecentprioritiesoftheWCOhavebeenElectronicDataInterchange(EDI),complianceandenforcementandsupply
chainsecurity.
TheWCOwasresponsibleforthedevelopmentoftheHarmonizedSystemofTariffClassificationandthe
HarmonizedSystemCommittee.
Lesson2Summary:TheInternationalView(cont.2)
Bookmarkthis
WCOInitiatives
TheWCOSAFEFrameworkofStandardswasestablishedinrecognitionthatcustomsadministrationsareina
uniquepositiontoprovideincreasedsecuritytotheglobalsupplychain.
TheSAFEFrameworksetsforththestandardsandpresentsthemforadoptionasaminimalthresholdofwhatmust
bedonebyWCOmembers.
TheSAFEFrameworkconsistsoffourcoreelementsthat:
harmonizetheadvanceelectroniccargoinformationrequirementsoninbound,outboundandtransitshipments
eachcountrythatjoinscommitstoemployingaconsistentriskmanagementapproachtoaddresssecurity
threats
atthereasonablerequestofthereceivingnation,baseduponacomparablerisktargetingmethodology,the
sendingnation'scustomsadministrationwillperformanoutboundinspectionofhighriskcontainersandcargo,
preferablyusingnonintrusivedetectionequipmentsuchaslargescaleXraymachinesandradiationdetectors
and
customswillprovidebenefitstobusinessesthatmeetminimalsupplychainsecuritystandardsandbest
practices.
Thefourcoreelementsrestonthetwinpillarsofcustomstocustomsarrangementsandcustomstobusiness
partnerships.
Thepillarsinvolveasetofstandardsthatareconsolidatedtoguaranteeeaseofunderstandingandrapid
internationalimplementation.
TheIFCBA
wasestablishedin1990,
createdapermanentinternationalforumforcustomsbrokers,
enablescustomsbrokerstodiscusscommonchallengesandinterests,
hasreceivedobserverstatusattheWCO,and
hasaSecretariat.Canada(CSCB)hasheldthispositionsince1996.
Nowtakeafewminutestoseewhatyouhavelearnedabouttheglobalorganizationsrelatingtointernational
trade.
Questions:
Attemptsallowed:
Available:
Passrate:
8
Unlimited
Always
60%
Allowed
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Startquiz
Module27Summary:SupplyChainSecurityandTrade
Facilitation
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Overthelastseveralyears,theattentionoftheinternationaltradingcommunityshiftedfromtradefacilitationtosupply
chainsecurityandregulatorycompliance.Inthismodule,youstudiedprogramsthathavebeenimplementedinCanada
andtheUnitedStates,aswellasglobalinitiativestakenasaresultofthechangeinfocus.Youhaveexaminedthevarious
organizations,programsandinitiativesimplementedtoensurethefreeflowofgoodsandpeople.
YoualsostudiedtheWorldTradeOrganization,theWorldCustomsOrganizationandtheIFCBAandtheircontributionsto
internationaltrade.
Module27:Quiz
Questions:
Attemptsallowed:
Available:
Passrate:
8
Unlimited
Always
60%
Allowed
Startquiz
TheEnd(almost)
Bookmarkthis
Congratulations,youhavenowfinishedtheCCSonlinecourse!
Pleasemakesuretoprintacopyofyourreceiptsbeforetheendofthecourseyear.WhenyouareloggedontotheCSCB
website,youwillbeabletoaccessalinktothereceipts.
ThenextsteptoobtainyourCCSdesignationisthefinalexam.
YouwillbenotifiedoftheaddressatwhichyouwillwritetheSeptember24,2016finalexamination.Ifyouhavenotbeen
advisedofthelocationbythesecondweekofSeptember,pleasesendanemailtostudents@cscb.ca.
Theexaminationwilltakeplacebetween9:30and12noonpleaseensurethatyouarriveattheexaminationsiteby8:45
a.m.sothattheexaminationmaybeginpromptly.
Theexaminationwillbeinthesameformatastheparttests,thatis,allquestionswillbemultiplechoice.
Youarerequiredtobringidentification,acalculatorwithbasicfunctionsonly,pencilsanderaserwithyoutothe
examination.Allothermaterialwillbeprovidedandyouwillnotbeallowedaccesstoanyothermaterials.
Pleasecontactusatstudents@cscb.caifyouhaveanyquestionsbestoflucktoyouonSeptember24th!
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