This notice is for the attention of importers and custom brokers who are involved in the importation of steel and steel products. As you may know, through the Canada Border Services Agency’s (CBSA) Pathfinder Solution, Foreign Affairs and International Trade Canada (FAITC) has been able to implement a new import permit process for steel and [...]
This notice is for the attention of importers and custom brokers who are involved in the importation of steel and steel products.
As you may know, through the Canada Border Services Agency’s (CBSA) Pathfinder Solution, Foreign Affairs and International Trade Canada (FAITC) has been able to implement a new import permit process for steel and steel products that came into effect on April 1, 2012. The Pathfinder Solution provides Participating Government Agencies with relevant commercial trade data currently collected by the CBSA and is the forerunner to the Single Window Initiative. The quality of the B3 data provided by importers/brokers to the CBSA and shared through the Pathfinder Solution allowed FAITC to apply this data against permit requirements and thereby eliminate FAITC’s separate reporting requirements for steel and steel products.
Modernizing the steel import permit process has resulted in a significant reduction of paper permits as well as the elimination of the steel permit fee, resulting in savings to trade. The success and continuation of the Pathfinder Steel Import Reporting process is dependent upon the accurate reporting of B3 data.
The purpose of this notice is to remind importers and customs brokers of the importance of reporting accurate B3 data to the CBSA for the importation of steel and steel products. In particular, importers and custom brokers are requested to pay particular attention to the reporting of value, quantity, origin, and tariff classification.
Errors in data submission result in an inability to effectively monitor steel import volumes and pricing, thereby inhibiting the CBSA’s mandate to promote and protect Canadian business and international trade obligations. This data is also critically important to the FAITC Steel Monitoring program; poor data quality results in an inability for FAITC to effectively monitor the importation of steel and steel products as per its mandate under the Export and Import Permits Act.
In addition, inaccurate reporting of B3 data places importers and customs brokers at risk of increased scrutiny whether through examinations at the border, post border importer audits or possible penalties applicable under the Administrative Monetary Penalties System.
We strongly encourage importers and custom brokers to examine their current data entry practices and implement improved processes for ensuring the quality of the data that is being reported on the B3.
For additional information regarding the Steel Monitoring Program, please refer to the Foreign Affairs and International Trade Canada website here.
Source: Canada Border Services Agency
The US Government is requesting that the World Customs Organization (WCO) establish an international BASE CODE set of intended use codes. Governments often need to understand the intended use of an imported product to effectively review products for admission at borders. Although there is the Harmonized Commodity Description and Coding System can be used to [...]
The US Government is requesting that the World Customs Organization (WCO) establish an international BASE CODE set of intended use codes. Governments often need to understand the intended use of an imported product to effectively review products for admission at borders. Although there is the Harmonized Commodity Description and Coding System can be used to denote the static characteristics of a product, there is no standardized global set of intended use codes.
The US has proposed just such a system based on a standardized list of codes developed by the ITDS Product Information Committee (PIC). These codes were developed for adoption in the US, and is coordinating with the Canadian Border Services Agencies on behalf of the Canadian Other Government Departments under the auspices of the US Beyond the Border Single Window Initiative the adoption of these intended use codes as a regional standard. This code set is offered as the starting point for the development of an international standard by WCO.
Description of code set
A standardized intended use code set must meet two objectives: 1) ensure that each consignment can be codified with a high-level intended use code that is globally applicable; and 2) allow relevant specific use cases to be identified in accordance with national regulations. To accomplish both purposes, a two-part intended use code value is proposed, similar in concept to the Harmonized Tariff Schedule. The first part of the intended use code would be a globally managed base code that denotes the high-level intended use for that imported product. The second part of the code would be a nationally managed sub code that uses a three-digit ISO country code prefix to identify the nation that defined the sub code. The use of sub codes by national governments would be optional.
Read the full article on the Harmonized System for Intended Use Codes.
Bryce Hanson is a Search Engine Marketing Administrator for CUSTOMS Info | Global Data Mining and is a frequent blogger on their International Trade Industry Blog. Please feel free to reach out to him on Twitter, Google+, or Linkedin.
I.E.Canada’s Food Forum brings together an elite panel of Canadian and U.S. regulators and food safety experts covering the issues most relevant to Canadian food manufacturers, exporters and importers. Some of the topics that will be covered at this year’s Food Forum include: details of the new licensing requirements under CFIA’s mandatory importer licensing regulation; [...]
I.E.Canada’s Food Forum brings together an elite panel of Canadian and U.S. regulators and food safety experts covering the issues most relevant to Canadian food manufacturers, exporters and importers.
Some of the topics that will be covered at this year’s Food Forum include: details of the new licensing requirements under CFIA’s mandatory importer licensing regulation; new CFIA food regulations resulting from passing of Safe Food for Canadians Act; draft regulations for U.S. Food Safety Modernization Act – released in 2013; and the CFIA/CBSA single window initiative. Click here for the conference agenda.
Save the date and be sure to attend. Meet the policy makers, learn about the latest compliance requirements and changes to Canadian and U.S. food policy and regulations and network with your colleagues.
Date: Tuesday March 26, 2013
Time: 8:00 AM – 5:00 PM
Location: Courtyard by Marriot | Brampton, ON
Price: $395 (IE Canada Members) | $595 (Non-Members)
The CBSA manages compliance with the Tariff Classification, Tariff Treatment, Valuation, and Origin programs using the following two post-release verification processes: 1) Random Verifications; and 2) Targeted Priorities. Random Verifications Random verifications are designed to measure compliance rates and revenue loss and the results may be used for many purposes, including: • Risk assessment; • [...]
The CBSA manages compliance with the Tariff Classification, Tariff Treatment, Valuation, and Origin programs using the following two post-release verification processes: 1) Random Verifications; and 2) Targeted Priorities.
Random Verifications
Random verifications are designed to measure compliance rates and revenue loss and the results may be used for many purposes, including:
• Risk assessment;
• Establishing client service activities;
• Revenue assessment; and
• Promoting voluntary compliance.
Targeted Priorities
Targeted priorities are determined through a risk-based, evergreen process, meaning that new targets are added throughout the fiscal year. Targeted priorities may also be carried over from previous years. The current targeted priorities are:
Tariff Classification HS Number(s)
1.Pet Toys | 9503.00.90
2.Steel T-Posts | 7308.40.00.90
3.Fresh Cut Flowers | 0603.19.00
4.Safety Headgear | 6506.10.10.90
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 2106.90.10.20 Continue reading »
In response to CSCB efforts to confirm whether Canada will be implementing the LVS threshold increase on the same date planned for U.S. implementation, the following response was received. The CSCB National Office, of course, will continue to monitor this issue closely and will advise members immediately upon our learning of a confirmed implementation date. [...]
In response to CSCB efforts to confirm whether Canada will be implementing the LVS threshold increase on the same date planned for U.S. implementation, the following response was received. The CSCB National Office, of course, will continue to monitor this issue closely and will advise members immediately upon our learning of a confirmed implementation date.
Under the Canada-U.S. Border Action Plan (BAP), it is the Government of Canada’s intention to increase and harmonize the low value shipment (LVS) threshold to $2,500.00 from the current level of $1,600.00 for expedited customs clearance. The CBSA is on track to meet its commitment under the BAP and it is Canada’s intention to implement the threshold change at the same time as the U.S.
Although we are not in a position to confirm the official effective date at this time, it is expected that, effective January 7, 2013, the LVS threshold will increase to CDN $2,500 from the current levels of CDN $1,600. In addition, it is expected that Canada will increase the LVS threshold to CDN $2,500 for exemption from North American Free Trade Agreement (NAFTA) Certificate of Origin requirements, thereby aligning it with the current threshold of the U.S. These changes are also scheduled to take effect on January 7, 2013.
The Canada Border Services Agency announced Dec. 7 the launch of a pilot program at the Blue Water Bridge in Sarnia, Ontario, that aims to further speed the clearance of cargo at the U.S.-Canada border for trusted traders. Under this six-month test companies will be able to use the Free and Secure Trade (FAST) lanes [...]
The Canada Border Services Agency announced Dec. 7 the launch of a pilot program at the Blue Water Bridge in Sarnia, Ontario, that aims to further speed the clearance of cargo at the U.S.-Canada border for trusted traders. Under this six-month test companies will be able to use the Free and Secure Trade (FAST) lanes and booths at this bridge if they are members of either the Partners in Protection or Customs Self-Assessment program, not both as previously required. The CBSA states that if this pilot is successful the change may be permanently implemented at all three ports where FAST is currently available.
Source: STR Trade Report
Click here to read the complete press release from the Canadian Government.
At a recent meeting of the Border Commercial Consultative Committee (BCCC) Trusted Traders Programs Subcommittee at which the Canada Border Services Agency explained their involvement in the Authorized Economic Operator (AEO) Regional Strategy in the Americas and Caribbean Region. For details refer to the CBSA’s strategy document. Background: At the XV Regional Conference of Customs [...]
At a recent meeting of the Border Commercial Consultative Committee (BCCC) Trusted Traders Programs Subcommittee at which the Canada Border Services Agency explained their involvement in the Authorized Economic Operator (AEO) Regional Strategy in the Americas and Caribbean Region. For details refer to the CBSA’s strategy document.
Background:
At the XV Regional Conference of Customs Directors General (RCCDG) meeting held in April, 2012, the CBSA committed to participate in the AEO Regional Strategy Steering Committee Workshops via the Uruguay Resolution is an effort by the Americas and Caribbean region to develop a strategy, with the private sector, for the implementation of AEO programs based on the WCO SAFE Framework with a goal to pave the way to achieve Mutual Recognition Arrangements.
The Strategy seeks to:
• Encourage the implementation of AEO programs in the Region.
• Strengthen AEO programs already established in the Region.
• Increase the number of certified AEO operators in the Region.
• Establish and/or strengthen partnerships with the private sector and other government agencies and international organizations in the development of AEO programs.
• Promote MRA negotiations.
The AEO Regional Strategy is a step towards establishing a broader network of secure trade partners and managing risk away from the border.
As a member of the Steering Committee, Canada has committed to consulting with industry on the text and concepts outlined in the AEO Regional Strategy. Although Canada already has a well-established AEO program, countries in the region are looking to Canada as leader in AEO development to help guide the way for those wishing to improve upon or develop AEO programs. It is the responsibility of the CBSA to ensure that Canada’s public and private sector interests are represented and that the strategy aligns with the CBSA’s Trusted Traders program objectives and requirements for entering into MRAs.
The requirements for imports of aquatic animals (finfish, molluscs, and crustaceans) into Canada are changing. Beginning December 10, 2012, aquatic animals listed on Schedule III of the Health of Animals Regulations will require an import permit to enter the country. This measure is aimed at protecting Canada’s aquatic animal resources. The enforcement of these new [...]
The requirements for imports of aquatic animals (finfish, molluscs, and crustaceans) into Canada are changing.
Beginning December 10, 2012, aquatic animals listed on Schedule III of the Health of Animals Regulations will require an import permit to enter the country. This measure is aimed at protecting Canada’s aquatic animal resources.
The enforcement of these new requirements will be phased in and will come into effect either on December 10, 2012, February 4, 2013 or April 8, 2013 depending on the specific end uses and the applicable codes.
A first for a Canadian trade tribunal could mark a turning point in the wave of anti-dumping cases lodged against the world’s most populous country. As the manufacturing power they are, Chinese companies often find themselves in anti-dumping and countervailing (illegal subsidy) cases around the world – with some estimates suggesting the Chinese are involved [...]
A first for a Canadian trade tribunal could mark a turning point in the wave of anti-dumping cases lodged against the world’s most populous country.
As the manufacturing power they are, Chinese companies often find themselves in anti-dumping and countervailing (illegal subsidy) cases around the world – with some estimates suggesting the Chinese are involved in four of every five.
While many of these cases are justified, some are little more than calculated moves by domestic manufacturers who’ve noticed a declining market share and need to turn the tide.
In Canada’s bifurcated trade remedy process, which involves both the Canadian Border Services Agency and the Canadian International Trade Tribunal, questionable claims are supposedly weeded out; by the time a final determination is made, most would agree they are.
The problem, however, is that these cases usually take about seven months from start to finish.
And while that’s getting sorted out, foreign companies – many of which are SMEs – find themselves priced out of the market by the imposition of temporary duties, regardless of whether claims turn out to be unsubstantiated in the end.
But that might be changing. Click here to read more.
Source: iPolitics
In today’s global economy, the transportation of goods could have significant customs implications. Moreover, customs duties can have a direct impact on the bottom line. Unfortunately, importers often overlook or mismanage duties and customs compliance, which can result in significant and unnecessary duty costs. Below, we’ve outlined the top 10 customs-related issues facing Canadian importers. [...]
In today’s global economy, the transportation of goods could have significant customs implications. Moreover, customs duties can have a direct impact on the bottom line. Unfortunately, importers often overlook or mismanage duties and customs compliance, which can result in significant and unnecessary duty costs.
Below, we’ve outlined the top 10 customs-related issues facing Canadian importers.
1. Origin preferences Although imported goods can be subject to customs duties, preferential origin treatments such as the North American Free Trade Agreement (NAFTA) can provide significant duty relief to importers.
Canada has numerous multilateral, bilateral and unilateral origin-based relief mechanisms in place. Importers should be aware of and take advantage of any applicable origin-based duty relief opportunities. Otherwise, they can face significant unnecessary duty outlays that have a clear impact on the bottom line.
Importers who do take advantage of origin-based duty relief opportunities need to ensure that they manage them appropriately. This includes having valid and complete documentation and the respective rules of origin need to be followed. Failure to properly apply and document preferential origin-based duty treatments could result in significant duty costs and, in some cases, duty relief could be revoked.
Importers can leave significant duties on the table and be subject to significant compliance-related costs if they do not manage matters appropriately.
Read the complete article here.
Source: Ernst & Young | Financial Post
A number of significant AMPS changes took effect in the MPD and ICS effective July 4th, 2012. The changes are: 1. Expiration of nine Customs Self Assessment (CSA) contraventions: C235, C237, C238, C241, C242, C256, C257, C258 and C259. 2. Amendment to the wording of the following contraventions: C008, C037, C194, C246 and C360. 3. Addition of a new document [...]
A number of significant AMPS changes took effect in the MPD and ICS effective July 4th, 2012. The changes are:
1. Expiration of nine Customs Self Assessment (CSA) contraventions: C235, C237, C238, C241, C242, C256, C257, C258 and C259.
2. Amendment to the wording of the following contraventions: C008, C037, C194, C246 and C360.
3. Addition of a new document type - “Case” - to the document type drop-down list.
In addition to the above, the guidelines, found on the MPD, for the contraventions C005, C008, C037, C170, C244, C246, C315, C317, C346, C368, and C369, have been revised to increase clarity in order to avoid any misinterpretation by the trade community or CBSA officers whenever these contraventions are applied. The Generic Principles provided on the first page of the MPD have also been updated to further elaborate how AMPS penalties are applied.
While it might not seem urgent to a company just entering the import business, incorrectly classifying goods brought into Canada can compound as the stream of imports grows and, if not spotted in time, end up costing them in overpaid duty they can’t recover or penalties for underpaid duty. Even seasoned importers don’t always pay [...]
While it might not seem urgent to a company just entering the import business, incorrectly classifying goods brought into Canada can compound as the stream of imports grows and, if not spotted in time, end up costing them in overpaid duty they can’t recover or penalties for underpaid duty.
Even seasoned importers don’t always pay enough attention to their imports’ classifications. For example, a poor translation into English cost one company that was importing gears when it incorrectly identified them as grease dispensers on the customs documents. The mistake went unnoticed for several years and resulted in a retroactive assessment of more than $50,000 in duty plus interest. Continue reading »
Department of Homeland Security (DHS) Secretary Janet Napolitano announced earlier this week the release of the DHS Northern Border Strategy (NBS). The NBS is the first unified DHS strategy to guide the Department’s policies and operations along the U.S.-Canada border - providing a framework for enhancing security and resiliency while expediting lawful travel and trade throughout the Northern border [...]
Department of Homeland Security (DHS) Secretary Janet Napolitano announced earlier this week the release of the DHS Northern Border Strategy (NBS). The NBS is the first unified DHS strategy to guide the Department’s policies and operations along the U.S.-Canada border - providing a framework for enhancing security and resiliency while expediting lawful travel and trade throughout the Northern border region.
“The U.S.-Canada border is the world’s longest common border. With communities and businesses that reach both sides of the border, the economies and security of the United States and Canada are inextricably linked,” said Secretary Napolitano. “The Northern Border Strategy provides a unifying framework for the Department’s work focused on enhancing the security and resiliency along our northern border while expediting legitimate travel and trade with Canada.”
Reynold Martens, Executive VP of GHY International and author of a white paper series on Integrated Trade Compliance Strategies discusses the changes at Customs and Border Protection (CBP) in the United States and the Canada Border Services Agency (CBSA) that international traders need to be aware of and highlight the need for an Integrated Trade [...]
Reynold Martens, Executive VP of GHY International and author of a white paper series on Integrated Trade Compliance Strategies discusses the changes at Customs and Border Protection (CBP) in the United States and the Canada Border Services Agency (CBSA) that international traders need to be aware of and highlight the need for an Integrated Trade Compliance Strategy.
“It’s always been about collecting revenue, but in recent years and especially after 9/11, national security and regulatory interests have been morphed together to create a new approach to managing imports and exports. Not that this wasn’t in place to some extent before 9/11, but that event really pushed this concept forward and accelerated the growth of all the various programs U.S. and Canadian Customs now have in place to detect non-compliance.
There are two major tracks our cross-border customs agencies take to look at compliance verification: one is a transactional review and that takes places as the shipments are entering or exiting the country; the second one is the audit stream where they’re coming in and doing regular audits looking for tariff, value, origin, other government department compliance and business systems linkages.
What it’s really done is shifted the onus for compliance onto the importer and the trader to be diligent and take measures to ensure that all the practices that they have in place for their imports and exports are compliant with all the global regulations which are now much more intensive and have fairly severe consequences attached to them in terms of fines and penalties. Additionally, there are all kinds of other commercial repercussions involved such as lost profitability of a particular shipment or even loss of reputation because this is a legal requirement as well, so companies tend to look at compliance as something that can be a benefit to their brand.”
Importers in the retail and consumer products sectors should be carefully reviewing their trade compliance policies and procedures as Canada Border Services Agency (CBSA) is scrutinizing customs compliance in a number of areas — including declarations of origin, tariff classification and customs valuation. Failure to meet these requirements under the Customs Act (Act) can result in [...]
Importers in the retail and consumer products sectors should be carefully reviewing their trade compliance policies and procedures as Canada Border Services Agency (CBSA) is scrutinizing customs compliance in a number of areas — including declarations of origin, tariff classification and customs valuation.
Failure to meet these requirements under the Customs Act (Act) can result in the imposition of administrative monetary penalties, seizures and ascertained forfeitures, the assessment of duties, taxes and penalizing interest, and the denial of duty-free access to the Canadian market. Of particular concern for retailers with just-in-time business models, non-compliance significantly disrupts cross-border product flow and can cause lengthy and costly delays in getting your product into the hands of Canadian consumers.
Getting the Price Right: Customs Valuation Vulnerabilities
In particular, we are observing increased CBSA audit and enforcement activity regarding customs valuation i.e., the value of goods declared for purposes of calculating customs duties and taxes owing on importation. In this context, common areas of compliance vulnerability include:
- related party transactions — in order to use the price paid to a related vendor importers must be able to demonstrate that the price was not influence by the relationship; in certain circumstances, and provided they have properly documented and supported their methodology, importers may be able to use as a “base” the price established in accordance with income tax transfer pricing principles, subject to a number of adjustments;
- transfer pricing adjustments — adjustments or “true-ups” to related party transaction pricing may also trigger specific customs obligations to correct past entries and remit additional customs duties, taxes and interest;
- post-importation payments (subsequent proceeds) — CBSA is aggressively reviewing payments made by importers that at first instance may appear unrelated to the price of the goods; as highlighted in further detail in Importer Alert: New CBSA Guidelines on Post-Importation Payments and Management and Administration Fees, unless certain conditions are satisfied, CBSA will determine that management and administrative fees paid by the importer should be included in the customs valuation of imported goods;
- other adjustments to the price paid — in addition to subsequent proceeds, the Act requires the addition of a number of other amounts to the price paid or payable by the importer to the extent that they are not already included in the price when determining value for duty; these include commissions and brokerage paid by the purchaser of the goods (excluding buying commissions), packing costs, assists such as tools and dies and engineering and art and design work, certain royalties and license fees and transportation and insurance costs relating to the transportation of the goods to place from which they are shipped directly to Canada; and
- proper use of other customs valuation methods — in some circumstances, the price paid or payable by the importer cannot be used and other methods under the Act must be considered in sequence; these include the transaction value of identical or similar goods, the computed value (cost-plus), the deductive value (resale value-minus), and, if those cannot be applied, the residual method; using these other valuation methods can be complex and time-consuming and, in cases of uncertainty, importers may wish to seek CBSA rulings to confirm their approach.
CBSA detects compliance failures in these areas through a number of monitoring mechanisms, including desk audits and the more comprehensive compliance verifications. These are carried out by CBSA on a random basis as well as by targeting priority areas — further detail can be found in CBSA’s Trade Compliance Post-Release Verifications — January 2012. A number of retail and consumer products are currently on CBSA’s priority target list.
Mitigating Risk Exposure
There are a number of actions that retail and consumer product importers can take to address the significant risks in this area, including:
- conducting an assessment of your current trade compliance status, include past contraventions, current procedures, testing and sampling of transactions;
- developing and implementing clearly articulated and readily accessible trade compliance manual and procedures that are regularly reviewed and updated;
- appointing senior officer(s) responsible for the implementation and enforcement of trade compliance policies and procedures;
- educating and training appropriate officials on trade and customs requirements;
- internal procedures for reporting potential trade compliance violations;
- using, as appropriate, CBSA’s voluntary disclosure process for relief from monetary penalties, penalizing interest and other enforcement action;
- using, as appropriate, CBSA’s ruling process to obtain additional comfort; and
- regular reviewing, testing and enhancement of processes and procedures to ensure continued full compliance.
In light of CBSA’s increased enforcement in this area and the highly competitive and just-in-time nature of the Canadian retail and consumer products sector, a robust trade and customs compliance program is now viewed as a competitive advantage in the Canadian marketplace — it ensures the smooth and timely flow of product across the border and protects against costly penalties and other CBSA enforcement action.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Specific questions relating to this article should be addressed directly to the author.
Contact: John W. Boscariol | McCarthy Tétrault LLP
As noted last week, changes recently implemented by Foreign Affairs and International Trade Canada (FAITC) eliminated the requirement for importers of steel and steel products to obtain individual permits. Aside from expediting the import process, this change also provides steel importers with the opportunity to participate in the CBSA’s Customs Self Assessment (CSA) program. The [...]
As noted last week, changes recently implemented by Foreign Affairs and International Trade Canada (FAITC) eliminated the requirement for importers of steel and steel products to obtain individual permits.
Aside from expediting the import process, this change also provides steel importers with the opportunity to participate in the CBSA’s Customs Self Ass
essment (CSA) program. The CSA program gives approved importers that have invested in compliance the benefits of a streamlined accounting and payment process for all imported goods. The streamlined accounting and payment process ends the need for importers to maintain separate and costly customs processes, allowing them to use their own business systems to fully self assess and meet their customs obligations.
The CSA program also gives approved importers, approved carriers, and registered drivers the benefits of a streamlined clearance option for CSA eligible goods. CSA-eligible goods include commercial goods that are shipped directly from the United States or Mexico and delivered to an authorized importer, owner or consignee. Goods that are subject to other government department or provincial regulations and therefore require a permit, licence or other similar document to be provided to the CBSA before the goods can be released are not eligible under the CSA program. Because of this stipulation, until the FAITC change to the import permit regime, steel and steel products were not considered CSA eligible goods.
Currently, almost 70 percent of steel imports into Canada valued at more than $5.6 billion originate in the United States.
Earlier this month, Foreign Affairs and International Trade Canada (FAITC) announced the implementation of a new import system for steel and steel products. As a result of these changes Canadian manufacturers, producers, distributors and purchasers of imported steel and steel products are no longer be required to obtain individual permits. Instead, general import permits (GIP) [...]
Earlier this month, Foreign Affairs and International Trade Canada (FAITC) announced the implementation of a new import system for steel and steel products.
As a result of these changes Canadian manufacturers, producers, distributors and purchasers of imported steel and steel products are no longer be required to obtain individual permits. Instead, general import permits (GIP) will be used for all steel imports covered by the Federal Import Control List.
The government estimates the new the new border measure will eliminate the need for some 270,000 permits annually and save Canadian steel companies $10 million a year.
“These new measures to streamline regulations and reduce the cost of import permits help improve the efficiency of North American supply chains and enhance manufacturing competitiveness in Canada,” said Ron Watkins, President of the Canadian Steel Producers Association (CSPA). “We have advocated for such measures through the North American Steel Trade Committee and we welcome this change.”
According to the CSPA, Canada’s $14-billion steel industry generates 25,000 jobs in Canada directly and supports a further 100,000 jobs indirectly. Exports account for over one half of shipments, with imports of steel and steel products totalling $8.5 billion in 2010. An estimated three quarters of all manufactured goods contain steel, the most widely used metal and the most recycled material on earth. In 2011, Canada’s steel industry recycled seven million tonnes of steel.
While controls on commercial imports at the border are generally working, they need to be better monitored, says Michael Ferguson, the Auditor General of Canada, in his 2012 Spring Report. The Canada Border Services Agency (CBSA) works with other federal organizations to ensure that consumer goods entering Canada conform with Canadian laws and regulations. “We [...]
While controls on commercial imports at the border are generally working, they need to be better monitored, says Michael Ferguson, the Auditor General of Canada, in his 2012 Spring Report. The Canada Border Services Agency (CBSA) works with other federal organizations to ensure that consumer goods entering Canada conform with Canadian laws and regulations.
“We know the controls are generally working because we tested them, not because the responsible departments were able to tell us so,” said Mr. Ferguson. “The Canada Border Services Agency and other departments need to be better at monitoring of their controls at the border.”
According to the Agency, it processed 13 million shipments of commercial products in 2010–11, about 4 million of which were subject to federal import controls.
Some goods examined in the audit were allowed to enter the country even though they did not meet their import requirements. These were most often goods for which Health Canada is responsible, but for which there is no agreement with the CBSA explaining how border services officers should identify and deal with the goods.
The audit also found that border lookouts and examinations—controls reserved for shipments that are considered higher risk—need to be better managed. In 40 percent of cases reviewed by the audit, the results of examinations were incorrectly or incompletely recorded. The CBSA does not keep a record of how many shipments are stopped as a result of border lookouts. These gaps in monitoring make it difficult to determine whether the controls are working as intended.
“We looked at a sample of import transactions over a limited period. Knowing whether border controls continue to work as intended will require better monitoring on an ongoing basis,” said Mr. Ferguson.
Canada has established a self-reporting and self-assessing customs scheme. To some extent, self-reporting and self-assessing schemes rely upon the honesty and integrity of the declarations provided by importers and exporters. However, officers conduct verifications and audits to: (a) audit or verify compliance; (b) correct non-compliance; (c) assess or re-assess duties, taxes and charges; and (d) [...]
Canada has established a self-reporting and self-assessing customs scheme. To some extent, self-reporting and self-assessing schemes rely upon the honesty and integrity of the declarations provided by importers and exporters. However, officers conduct verifications and audits to:
(a) audit or verify compliance;
(b) correct non-compliance;
(c) assess or re-assess duties, taxes and charges; and
(d) assess interest, penalties and other consequences for non-compliance.
A customs verification or audit can be a confusing, difficult and time-consuming experience in the absence of compliance planning. Disorganized, incomplete or inaccurate responses to customs authorities may lead to findings of non-compliance and assessments of duty, penalties and interest. With compliance planning, an importer or exporter may stand a better chance of obtaining a successful verification or audit result. Some steps that importers or exporters can take in order to plan for verification and audit compliance include the following:
(a) Ensure that a business representative is responsible for receiving and responding to correspondence, verification letters, Detailed Adjustment Statements and other similar customs related documents in a timely way. Many audits result in the assessment of Administrative Monetary Penalties for failure to respond to the requests issued by CBSA officers.
(b) If a CBSA verification officer conducts a verification or an auditor conducts an audit, ensure that only one person is responsible for communicating with the verification officer or auditor. Also ensure that all other relevant personnel are advised of the purpose of the verification or audit and the identity of the business point person.
(c) Ensure that the business leaders understand the consequences for failing to respond to CBSA correspondence, verification questionnaires, Detailed Adjustment Statements and the like.
(d) Obtain the resources (internal staff, customs brokers, consultants, legal counsel) necessary to deal with requests that are issued by the CBSA. For example, the CBSA may issue a verification questionnaire relating to 25 sample transactions.
The CBSA officer may request relevant supply documents including the purchase orders and B3 Canada Customs Coding Forms. The CBSA officer may also request related documents such as royalty agreements in order to verify whether or not royalty payments should be included in the value for duty. It may be necessary to obtain assistance from persons within the verification team in order to comply with the request.
The foregoing is an extract from a series of articles outlining the elements necessary in planning an effective customs compliance program, written by Daniel Kiselbach that appeared in the I.E. Now trade publication.
Daniel Kiselbach is a partner in the International Trade, Customs and Commodity Tax Group of Miller Thomson LLP in Vancouver. He can be reached by phone at (604) 643-1263 or by email at dkiselbach@millerthomson.com.
Last week, U.S. Customs and Border Protection and Canada Border Services Agency hosted a Bi-National Commercial Town Hall with stakeholders to discuss the joint U.S.-Canada declaration of a shared approach to security, the Beyond the Border Action Plan. Officials from both sides of the border were present alongside Customs and Border Protection’s (CBP) Deputy Commissioner [...]
Last week, U.S. Customs and Border Protection and Canada Border Services Agency hosted a Bi-National Commercial Town Hall with stakeholders to discuss the joint U.S.-Canada declaration of a shared approach to security, the Beyond the Border Action Plan. Officials from both sides of the border were present alongside Customs and Border Protection’s (CBP) Deputy Commissioner Winkowski and Canada Border Services Agency President Luc Portelance.
The stakeholder meetings on Feb. 28 and 29 in Niagara Falls gathered input regarding trade and commercial cross-border activity. Topics covered included the Integrated Cargo Security Strategy (ICCS); Advanced Data Requirement and Perimeter Screening of Cargo; the Single Window Initiative; Harmonizing Low Value Shipment processes; and the Advance Trade Data (eManifest) initiatives.
“The Beyond the Border agreement forged by President Obama and Prime Minister Harper is about strengthening and expediting trade and travel between our countries,” said U.S. Customs and Border Protection Acting Deputy Commissioner, Thomas Winkowski. “It’s about finding common-sense solutions to our most complicated problems. And it’s about extending national security for both of our nations, well away from the border.”
“As these joint meetings with stakeholders indicate, we are committed to working with our U.S. partners to bring about greater consistency, efficiency and predictability in the management of our shared border,” said CBSA President Portelance. “We understand that business operates in a world where time is money, and where deadlines are vital to integrated, cross-border supply chains. That is why we continue to involve our stakeholders in the implementation of the Beyond the Border Action Plan initiatives to keep the border open to lawful travel and trade.”
As a key player in discussions on any border-related changes, the Canadian Trucking Alliance (CTA) participated in the Border Commercial Consultative Committee (BCCC) along with members of Canada’s trade community. “I am encouraged by the discussions held this week on the implementation of the Border Action Plan,” said Jennifer Fox, CTA’s vice-president of Customs and compliance.
The Beyond the Border Action Plan consists of 32 separate initiatives. It calls for enhancements to the benefits of programs that help trusted businesses and travelers move efficiently across the border; introduces new measures to facilitate movement and trade across the border while reducing the administrative burden for business; and invests in improvements to our shared border infrastructure and technology. By expediting lawful trade and commerce into and across our shared border, the U.S. and Canada seek to enhance their economic competitiveness, create jobs and support economic growth.
