USAV Customs Brokers
Do it right, save you time.
You, the importer of record, and your responsibility?
When you bring goods into Canada from a foreign country, you become the importer of record. As the importer of record, you are entirely responsible for payment of duties and taxes levied by the Government of Canada. In addition, you are entirely responsible for Customs compliance with all the rules and regulations enforced by CBSA and their partnership OGDs such as CFIA, NRCan and TC. For instance, you must correctly declare the origin, valuation and classification of the goods. If you have any reason to believe any error made in those declaration, you must correct it subsequently even when there is no money involved.
Who can clear the goods?
Besides yourself - the importer of record, a CBSA Licensed Customs Broker is the only person who is authorized to customs-clear the goods on your behalf provided that a Power of Attorney is duly signed.
Should you do it yourself or hire a Licensed Customs Broker?
Like anything else in Canada, you can customs-clear the goods by yourself. But the questions are, do you have the required expertise in customs rules and regulations? Do you have the extensive time to travel to the CBSA office in which the goods is to be released? Do you have the extra time to spare when the goods is regulated by OGDs such as CFIA, NRCan and TC? Often, it is more profitable to hire a Licensed Customs Broker than to do it by yourself. But this is our opinions and should be entertained as such.
Duty-free or dutiable?
Goods can be imported into Canada either duty-free or dutiable. In most cases, duties means only the Customs duty levied under part 2 of the Customs Tariff. Customs duty is determined by applying a HS classification and one or more tariff treatments to each product listed on the commercial invoice. In other cases, duties include anti-dumping and/or countervailing duties, excise duties, excise taxes, etc.
Goods originating from all countries, except North Korea, are entitled to MFN rate of duty. When a product is entitled to MFN rate of duty and one or more preferential rates of duty, the lowest rate is applicable in your favor. The following table is a list of tariff treatments currently in force in Canada.
|2||Most Favored Nation Tariff (MFN)|
|3||General Tariff (GT)|
|4||Australia Tariff (AUT)|
|5||New Zealand Tariff (NZT)|
|7||Commonwealth Caribbean Countries Tariff (CCCT)|
|8||Least Developed Country Tariff (LDCT)|
|9||General Preferential Tariff (GPT)|
|10||United States Tariff (UST)|
|11||Mexico Tariff (MT)|
|12||Mexico - United States Tariff (MUST)|
|13||Canada - Israel Agreement Tariff (CIAT)|
|14||Chile Tariff (CT)|
|21||Costa Rica Tariff (CRT)|
|22||Iceland Tariff (IT)|
|23||Norway Tariff (NT)|
|24||Switzerland - Liechtenstein Tariff (SLT)|
|25||Peru Tariff (PT)|
|26||Colombia Tariff (COLT)||27||Jordan Tariff (JT)||28||Panama Tariff (PAT)||29||Honduras Tariff (HNT)||30||Korea Tariff (KRT)||31||Canada–European Union Tariff (CEUT)||32||Ukraine Tariff (UAT)|
Conditions for your imported goods to benefit from duty-free or a preferential rate of duty are i) the goods must be eligible (i.e. sufficient manufacturing performed in the country of origin), ii) the exporting country must be a beneficiary country of that preferential tariff treatment, iii) you must possess a Certificate of Origin or Exporter's Statement of Origin in the format prescribed by CBSA for that preferential tariff treatment, and iv) the goods must be shipped directly from that beneficiary country to Canada.
For certain textile goods originating in North America under the NAFTA tariff treatment codes 10 and 11, Chile code 14, and Costa Rica code 21, even if they do not meet the rules of origin, those goods may become duty-free under TPL.
Tariff classification of the goods?
Tariff classification of goods is governed by 6 GRIs and 3 Canadian Rules. The 10 digit HS number can be determined by:
consulting yourself on part 2 of the Customs Tariff published by CBSA, the HS Explanatory Notes by WCO and any decisions by CITT and the Supreme Court of Canada;
retaining a CBSA Licensed Customs Broker for professional advice; or
seeking guidance from CBSA.
Origin of the goods, proof of origin, date and place of direct shipment, transshipment and through bill of lading?
Goods originate in a country if they are wholly obtained or entirely produced in that country. If this is not the case, the rules of origin apply. The rules of origin differ for different tariff treatments.
The Certificate of Origin or Exporter's Statement of Origin, as proof of origin, must be in the format prescribed by CBSA for that tariff treatment, fully completed and duly signed by the producer, manufacturer or exporter in the beneficiary country. Format of the Certificate of Origin or Exporter's Statement of Origin also differs for different tariff treatments.
To claim duty-free or a preferential rate of duty for your imported goods imported, the goods must be shipped directly to Canada from the beneficiary country on a through bill of lading. If they have been transshipped in an intermediate country, the goods may no longer be eligible for duty-free or a preferential rate of duty unless certain criteria prescribed by CBSA are met.
A through bill of lading, as proof of direct shipment to Canada from the beneficiary country, differs from a standard bill of lading in that it clearly states the transportation route from a shipper in the beneficiary country to a consignee in Canada and at least involves 2 modes of transport from road, rail, air and sea.
Price paid or payable; addition and deduction?
Your imported goods are primarily valuated based on their transaction values. The transaction values of goods are determined by ascertaining the price paid or payable for the goods when they are sold for export to Canada to a purchaser in Canada and adjusting the price paid or payable in accordance with subsection 48(5) of the Customs Act.
If the followings are not included in the price paid or payable, they have to be:
added to the price paid or payable:
certain commissions and brokerage;
all packing costs and charges;
the value of certain goods and services provided free or at a reduced charge by the purchaser for use in the production of the goods (assists);
certain royalties and licence fees;
the value of any proceeds from the subsequent resale, disposal, or use of the goods which accrue to the vendor; and
the costs of transportation and associated costs relating to the movement of the goods to and at the place from which the goods were shipped directly to Canada.
deducted from the price paid or payable:
the costs of transportation and associated costs relating to the movement of the goods from the place from which the goods were shipped directly to Canada;
certain costs, charges, or expenses incurred or arising after importation in respect of the goods being appraised; and
Canadian duties and taxes.
Shortage and overage?
As a carrier's report to CBSA is proof of goods being on board the carrier's conveyance, therefore, the goods reported are deemed to have landed in Canada. Duties and taxes will be assessed on the goods reported to CBSA by the carrier unless acceptable evidence of a shortage is presented to CBSA. Since the importer of record is responsible for the payment of duties and taxes, you are also responsible for the presentation of evidence of shortage.
As an overage represents goods that have not been reported to CBSA, such goods must be reported to CBSA by the carrier on a new cargo control document. The new cargo control document must bear a reference to the original cargo control number in the description of goods section. The importer of record will be responsible for the payment of duties and taxes assessed on the overage.
Anti-dumping and countervailing duties?
The following table is a list of goods that are currently subject to anti-dumping and countervailing duties.
|Goods Subject to Anti-dumping Duty||Country of Origin or Country of Export - Dumping||Goods Subject to Countervailing Duty||Country of Origin or Country of Export - Subsidy|
|Whole potatoes||√||United States|
|Greenhouse bell peppers||√||Netherlands|
|Refined sugar in granulated, liquid and powdered form||√||United States|
|Flat hot-rolled carbon and alloy steel sheet and strip||√||Brazil,China, Chinese Taipei, India, Ukraine||√||India|
|Hot-rolled carbon and high-strength low alloy steel plate||√||China, Bulgaria, Czech Republic, Romania and Ukraine|
|Casing, seamless carbon steel or alloy oil and gas well||√||China||√||China|
|Oil country tubular goods||√||China||√||China|
|Carbon steel welded pipe||√||China||√||China|
|Structural tubing known as hollow structural sections (HSS)||√||Korea, South Africa, Turkey|
|Carbon steel pipe nipples and adaptor fittings||√||China|
|Carbon steel fasteners (i.e.: Carbon steel screws)||√||China, Chinese Taipei||√||China|
|Mattress innerspring units||√||China|
|Stainless steel sinks||N/A||China||N/A||China|
|Copper pipe fittings||√||China, Korea, United States||√||China|
|Bicycles||√||China, Chinese Taipei|
HS classification OF GOODS can be very complex for certain products. Advance ruling provides certainty to you, the importer of record, as to how goods are deemed to be correctly classified by CBSA. The ruling is binding until it is revoked or amended. It thereby facilitates the documentation requirements for clearing goods at the border and may sometimes save you from overpaying/underpaying duty as a result of incorrect HS classification. For instance, a polyester blanket measures approximately 11 x 11 inches, with satin trim around the edges and a stuffed animal's head in the center. It is used to provide comfort and amusement to a baby. It is prima facie classifiable under two headings; heading 63.01 as a blanket (17% duty) and heading 95.03 as a toy representing a stuffed animal. Since neither heading provides a more specific description or the essential character, CBSA determined that it should be classified as a toy representing animals or nonhuman creatures, under 9503.00.90.51 (duty-free) as per GIR 3(c).
Enforcement and penalties?
Besides the examination of goods at the first port of arrival, CBSA also enforces trade compliance through post-release verification using these two processes:
Random verifications; or
Targeted priorities are determined through a risk-based, evergreen process. The 2013 targeted priorities consist of:
|Tariff Treatment||HS Number(s)|
|3||Fresh Cut Flowers||0603.19.00|
|5||Wheel Rims and Spokes||8714.92.00|
|6||Other Food Preparations||2106.90.95|
|7||Dextrins and Other Modified Starches||3505.10.90|
|8||Tariff Item 9948.00.00 (Televisions and Other Consumer Goods)||9948.00.00|
|9||Coconut Milk||1106.30.00; 2008.19.90 and 2188.8.131.52|
|11||Golf Club Covers||9506.39.90.90|
|13||Aluminum Foil||Various goods of Heading 76.07|
|14||Disposable and Protective Gloves||3926.20.10 and 4015.19.10|
|15||Spectacle Lenses||9001.40.10 and 9001.50.10|
|16||Tariff Item 9908.00.00 (Mining Industry)||9908.00.00|
|17||Fresh Cut Flowers||0603.19.00|
|18||Apparel||Various goods of Chapters 61 and 62|
|19||Footwear||Various goods of Chapter 64|
|20||Yachts for Pleasure or Sport||Various goods of Heading 89.03|
|21||Preparations and Pastrycooks’ Products||Various goods of Chapter 19|
|22||Bedding and Drapery||Various goods under Headings 63.01, 63.02 and 63.03|
|23||Cocoa Powder||1805.00.00 and 1806.10.90|
|24||Mattress Upholstery||Various goods of Chapters 54, 55 and 60|
CBSA also uses post-release verification to measure revenue loss, provide compliance rates, and identify non-compliance issues that merit attention as national priorities. Once non-compliance issues are found, AMPS penalties will be issued against the offenders. The following table is a summary of APMS penalties issued by CBSA between July 2008 and June 2011.
AMPS top 10 trade contraventions are as follows:
C082 – Importer failed to make required corrections to a declaration of tariff classification within 90 days after having reason to believe that the declaration was incorrect;
C353 – Importer failed to pay duties as a results of required corrections to a declaration of value for duty within 90 days after having reason to believe that the declaration was incorrect;
C352 – Importer failed to pay duties as a results of required corrections to a declaration of tariff classification within 90 days after having reason to believe that the declaration was incorrect;
C083 – Importer failed to make required corrections to a declaration of value for duty within 90 days after having reason to believe that the declaration was incorrect;
C070 – Importer failed to account for goods in prescribed time and manner;
C350 – Importer failed to pay duties as a results of required corrections to a declaration of origin of goods subject to a free trade agreement within 90 days after having reason to believe that the declaration was incorrect;
C152 – Importer failed to furnish proof of origin upon request;
C080 – Importer failed to make required corrections to a declaration of origin of goods subject to a free trade agreement within 90 days after having reason to believe that the declaration was incorrect;
C214 – Importer failed within 90 days or such other period as may be prescribed to report a failure to comply with conditions of a duty relief provision or remission order; and
C081 – Importer failed to make required corrections to a declaration of origin of goods within 90 days after having reason to believe that the declaration was incorrect.