Introduction To Customs Administration and Procedures - 2E - EBOK

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INTRODUCTION
TO CUSTOMS
ADMINISTRATION
AND PROCEDURES
SECOND EDITION
THE CANADIAN SOCIETY OF CUSTOMS BROKERS
e 0 n d • Toronto, Canada • 2020

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Library and Archives Canada Cataloguing in Publication
Title: Introduction to customs administration and procedures I The Canadian Society of Customs Brokers.
Names: Canadian Society of Customs Brokers, author.
Description: Second edition. I Includes index.
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BRIEF CONTENTS
Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi
Changes to the Second Ed it ion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi
CHAPTER 1 Introduct ion .. . ..... .. ... . . ......... . . ...... .. ..... . ... .. ..... .. . .
CHAPTER 2 Arrival and Reporting of Imported Commercial Goods . . . . . . . . . . . . 21
CHAPTER 3 The Canad ian Harmonized System ofTariff Class ification . . . . . . . . . . 51
CHAPTER 4 Va luation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
CHAPTER s Tariff Treatm ent s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
CHAPTER6 Documentation: Other Government Departments
and Agencies . . .. . .. . .... . .. . .. . .. . . . .. . . . . .. . .. . .. .. . .. . .. . .. . . . . 101
CHAPTER 7 Release and Accounting of Imported Com mercial Goods . ... . ... . 119
CHAPTER s Returned Goods, Tem porary Entries, and Other Special
Circumstances . .. . .. . .... . .. . ....... . .. . .. ...... . . ........ .. . .. . . . 153
CHAPTER 9 After Fina l Accounting .. . . . ....... . .. . ....... . ......... .. ......... 171
CHAPTER 1 o Exporting Commercial Goods and US Customs Procedures ..... . . . 191
Glossary ....... . . ......... . . ..... .. . . .. ..... .. . .. ...... . . . .. ......... .. ....... ... . 209
Index .. . . ... .. . . .. . . .. . .. . . .. . . . . . .. . . .. . . . . . .. ..... . . . . ..... . . .. . ....... . .. . .. .. . 219
Cred its .. ...... . . ......... . . ......... . . ....... . .. ......... .. ......... .. .......... . 223
111

CONTENTS
BRIEF CONTENTS .. ........................ . . iii CHAPTER 2 Arrival and Reporting
PREFACE ...................................... . xi of Imported Commercial Goods
Changes to the Second Ed ition ...... . ........ . xi Learning Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
CHAPTER 1 Introduction Bills of Lading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Learning Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Canada Customs Invoice . . . . . . . . . . . . . . . . . . . . . . . . . . 22
The Roles of the Players in International Trade ...... 2 Field 1: Vendor... . ....... . ... .. .. .. ........... . 23
Canada Border Services Agency...... . ......... 2 Field 2: Date of Direct Shipment to Canada ..... 23
Canada Revenue Agency ..... .. ... . ... . ... . ... 4
Field 3: Other References. . . . . . . . . . . . . . . . . . . . . . . 23
Canadian Customs Brokers........... . ......... 4 Field 4: Consignee ... ........... . ... .. . . .... ... 23
Sub-Agents..... . .... . ............... . ........ . 7 Field 5: Purchaser's Name and Address . . . . . . . . . 23
Canadian Importers . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Field 6: Country ofTranshipment. .............. 23
Carrie rs.............. ... ........ . .... . ......... 9 Field 7: Co untry of Origin of Goods.. .. .. .. .. . .. 23
Vendors . .... . ....... . ....... . ....... . .... . ... . 10 Field 8:Transportation . . . . . . . . . . . . . . . . . . . . . . . . . 24
Freig ht Forwarders............................. 1o Field 9: Conditions of Sale and Terms
of Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Foreign Customs Brokers............. . ........ . 11
Field 10: Currency of Settlement . . . . . . . . . . . . . . . 24
Overview of the Legislation ........................ 11
Field 11: Number of Packages ... . .. ... .. .. ..... 24
Customs Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Field 12: Specification of Commodities . .. . . . ... 24
Customs Tariff ................................. 11
Field 13: Quantity . . ..... . ...... .. .. ... .. .. ..... 24
Excise Act, 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Field 14: Un it Price ..... . .. ..... ... . ..... .... ... 24
Excise Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Field 15: Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Excise Tax Act... . . .. . ..... ...... . ... .. ... .. .... 12
Field 16: Total Weight . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Special Import Measures Act. .................. 14
Field 17: Invoice Total ... .... .... . ... .. .. ... . . .. 25
Code of Conduct .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Field 18...... . ... . ............ . ................ 25
Eth ics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Field 19: Exporter's Name and Add ress . . . . . . . . . 25
Confidential ity of Information .. .. .. .. . ......... 15
Field 20: Originato r . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Conflicts of Inte rest . . ............ . ............. 15
Field 21: Agency Ru ling ................. . ...... 25
Smuggling by an Employee.......... . ........ . 16
Field 22......... . ....... ... ..... . ... .. .. ... . . .. 25
Relationships Among Customs Brokers, CBSA,
Ca rriers, Clients, and Colleagues . . . . . . . . . . . . . 16 Field 23........................................ 25
Respo nsibilities to Employers, CBSA, Clients, Field 24......... . ....... ... ..... . ... .. .. ... . . .. 26
and Colleagues... .. .. . ... .... . . .. . ........ . . 16 Field 25.................... .. . .. .. .......... .. . 26
Key Terms .......... . .... . . . ............. . .... . ... . 19 Things to Watch for on the CCI ..... . .. .. ..... . . 27
Review Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Commercial Invoice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
v
VI CONTENTS
Steps in Importation............. . .............. .. . 28 Transaction Value of Similar Goods ....... . .... . 75

Advance Commercial Information . . . . . . . . . . . . . 28 Deductive Value ..................... . ....... .. 75
Marine ACI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Computed Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Highway ACI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Residual Method .. . .. .. .. .. .. .. .. .. .. .. .. .. .. . 76
Rail ACI........................ . ............... 33 Key Terms ...... ... .. .... . .... . .. . .... .. .. .. ...... . 78
Cargo Control Document.......... .. .............. 34 Review Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Form A8A(B), In Bond-Cargo Control
Document Completion Instructions . . . . . . . . . 34
CHAPTER 5 Tariff Treatments
Diversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Learning Outcomes . . . . .. . . . . . .. .. . . . .. . . . . . . . . . . . 79
Cargo Control Abstract . . . . . . . . . . . . . . . . . . . . . . . . 37
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Courier Shipments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Codes for Tariff Treatments. . . . . . . . . . . . . . . . . . . . . . . . . 80
Courier Imports Remission Order.. ... . ... . . . ... 39
List of Countries and Applicable Tariff
Mail Shipments.......... . .......... .. . . . . . ........ 39
Treatments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Sufferance Warehouses ............ . . ........... . .. 40
Direct Shipment and Transhipment ......... ... 82
Bonded Wa rehouses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Cost of Production ..... . ... . . . . ......... . ... . .. 83
Consolidations and Deconsol idations .............. 41
Rules of Origi n......... . .... . . . .. . ... .. ... .. . . . 84
Key Terms . .............................. . ......... 48
Regional Value Content ........ . ............... 85
Review Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
De Minimis Rule ... . ..... . ...... .. . . . . . ........ 86
Specific TariffTreatments and the General Tariff..... 86
CHAPTER 3 The Canadian Most-Favoured-Nation TariffTreatment. .. . ..... 86
Harmonized System of Tariff New Zealand and Australia TariffTreatments.... 87
Classification
Commonwealth Caribbean Countries Tariff
Learning Outcomes . . .. .. . .. .. . . . . . . . . . . . . . .. .. . . . 51 Treatment............................... .... 88
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Least Developed Country Ta riff Treatment. ..... 88
Classification Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 General Preferentia l TariffTreatment. . . . . . ... . . . 89
General Interpretive Rules .. .. .. .. . .. . .. .. .. .. .. .. . 54 US TariffTreat ment, Mexico Tariff Treatment,
Canadian General Interpretive Rules . . . . . . . . . . . . . . . 60 and Mexico-US Free TariffTreatment . . . . . . . . 89
Section and Chapter Notes . . ... .. ........ ......... 60 Canada-Israel Agreement Tariff ................ 91
Punctuation . . .. . .................. . ....... .. ...... 61 Chile TariffTreatment . . . . . . . . . . . . . . . . . . . . . . . . . . 92
The Classification Process . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Costa Rica TariffTreatment . . . . . . . . . . . . . . . . . . . . . 92
Subheadings and Tariff Items . . . . . . . . . . . . . . . . . . 62 European Free Trade Association . . . . . . . . . . . . . . . 92
Key Terms ..... . .... . . . ....... ........... .......... 64 Peru Tariff. ................................. . . . . 93
Review Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Colombia Tariff ........ . ..... .. .... . .. ..... .... 93
Jordan Tariff ....................... .. .......... 93
CHAPTER 4 Valuation Panama Tariff . ............ .. ....... . .. . ..... . .. 93
Learn ing Outcomes .. . . . ... . .. . ....... . ........... 67 Honduras Tariff ............ . ....... . .. .. ... ... . 94
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Korea Tariff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
The Six Methods of Customs Valuation . .. . . ........ 68 Canadian European Union Tariff. .. . ...... . . .. .. 94
The Value for Duty Codes . . . . . . . . . . . . . . . . . . . . . . 69 Ukraine Tariff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Transaction Value of the Goods . . . . . . . . . . . . . . . . 70 Comprehensive and Progressive Trans-Pacific
Transaction Value of Identical Goods .... . ...... 75 Partnership Tariff . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Copyright © 2020 Emond Montgomery Publications. A ll Rig hts Reserved.

CONT ENTS Vll
Canada-US-Mexico Agreement ..... . .... . ... . 95 Machine Release System . ... . .. . .... . .. . ....... . .. 120
General Tariff . . ...... . . . ....... . ..... . .. . . . ... . 95 Release of Goods . . . . ... . ..... . . . .. ... ....... . . .. . . 121
Key Terms .. . .... . ....... . .......... . .... . ... .. ... . 98 Release Procedures . .................... . ...... 121
Review Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 Release Options .... .. ... . .. . ............... . .. 122
Sub-Agency Clearances..... . .... . .......... . .. 126
CHAPTER 6 Documentation: Examinations and Rejects ........... . ... . ...... 126
Other Government Departments Hours of Operation . .. ... . .. . ... . ... . .. . .... . . . 128
and Agencies Accounting for Goods .. .. ... . .. . .. . . . . .. .... . .. . .. 129
Learning Outcomes .. . . .. ....... . .. . ... .. .... . .... 101 Customs Automated Data Exch ange . ....... .. . 129
Int roduct ion .......... . . .. ...... . ....... . .... . ... . 102 Form 83 Accounting Document .. ..... . . . . .. . . 129
Import Permits ... . ... . .. . ....... . . .. ... .. .... . .. . . 102 Form 83 Accounting DocumentType C
Globa l Affa irs Canada/Customs Automated (Paying All Duties and Taxes) ................. 142
Permit System . .... . ......... .. .... . .... . ... . 103 Ex-Warehouse Form 83 Accounting
Fo rm A-Certificate of Origin . . ... . ... .. ... . ... . ... 104 Document . ............ . .. .. .......... . .. .. . 142
North American Free Trade Agreement Detailed Coding Statements . .... . . .. .... . .. . .. 142
Certificate of Origin ... . ............... . .... . ... . 1OS Correcting Errors ... . ....... . .... . .......... . .. 143
End-Use Certificate ....... . ....... . .... . ... . ... . ... 106 Qu ee n's Warehouse . . . ... .. .. .. ... . ....... .. .. . 144
Canad ian Food Inspection Agency .. . ... .. ... .. .... 106 Key Terms ......................................... 151
The Automated Import Reference System . . ... . 107 Review Questions . .. ... . ....... . ... .. .......... . . . 151
Global Affai rs Canada ... . ....................... . .. 109
Ag riculture and Agri-Food Canada ................. 109 CHAPTER 8 Returned Goods,
Innovation, Science and Economic Development Temporary Entries, and Other
Canada .. . ..... . ... . . .. ..... . . . . .. ... .. ... .. .. . . 110 Special Circumstances
Consumer Packagi ng and Label ling Act and Learning Outcomes .... .. ...... . .... . .. . .... . .. . .. 153
Regulations .. . .. . ... . ........ . .... . .... . ... . 110 Introduction ...................................... 154
Textile Label ling Act ...... . ...... .. ......... . .. 110 Tempora ry Entries .. . ... . ....... . ... .. .......... . . . 154
Precious Metals Marking Act .... . .... . .... . .... 111 GST/ HST... . ... .. . .... . ... .. . .. ... . ... .. .. .. . . . 156
Transport Canada .. . .. . . . . . ............. . .... . ... . 111
Form E298, Tempora ry Adm iss ion Permit . . .. . .. 158
Reg istrar of Imported Veh icles . . . . . .. ... .. ... .. .. .. 111 ATA Carnet . ... ...... . .... . .. .. ........... .. .. . 159
Environment and Cl imate Change Canada ......... 112
Canad ian Goods Abroad .......... . ... .. .. . ........ 160
Convention on International Trad e in
Tariff Item 9992.00.00 ..... . .. .. ... . ....... .. .. . 160
Endangered Species of Wild Fauna
Emergency Repai rs .... ... .. . .... . . .. .... . .. .. . 161
and Flora . . .. .. .. ........ . .. .. .. .. .. . ..... . .. 113
Addit ion ... . .. . . . ... . ....... . .. ... .......... .. . 161
Key Terms . ... . ....... . ... . ............ . ... . ....... 116
Work Done .. .. ..... . .......... . ....... . ... . ... 161
Review Questions . ... . . ... . ........ ... ... . ........ 116
Canadian Goods and Duty Paid Good s Returned ..... 162
Warehousing and Ex-Wa reho using . ....... .. .. . 164
CHAPTER 7 Release and Accounting
of Imported Commercial Goods Maintaining Warehouse Record s . . ...... . . ... . . 164
Learning Outcomes .. ... .. .. .... .. ...... . .. .. ... .. 119 Proh ibited Goods... . ... . ....... . .... . .......... . .. 165
Introduction . .. . .. .. .. ......... . .. . . ... .. . ..... . .. 120 Shortages and Entered-to-Arrive Shipm ents ... . ... 165
Accelerat ed Commercial Release Operat ions Key Terms .. .. . ... . .. . . . .... . ...... . .. . ... . .. . ... . . 169
Support Syst em . .... ... . ... . .... ...... . .. ....... 120 Review Questions . . .... . ....... . . . ........... . . . . . 169

Vlll CON TENTS
CHAPTER 9 After Final Accounting Field 27: Customs Duty Rate ......... . ... .. .... 179
Learn ing Outcomes ... ... .. ... .. ... . ...... .. .. ... . 171 Field 28: Excise Tax (ET) Rate ...... .. ....... .... 179
Review ... . .................. . .... . ........... . .... 172 Field 29: GST Rate .... . ............... .. .. .. .... 179
Payment of Duti es and Taxes . ........ . ... . ... . .... 172 Field 30: Value for Cu rrency Conversion ........ 179
Volu ntary Entries .................................. 173 Field 31: Value for Duty.. . .. ....... . . . . ... . ..... 179
Voluntary Entry: Fo rm B3 Type H .... . . . .. ... ... 173 Field 32: Customs Duties ............. . ......... 179
Voluntary Entry: Fo rm B3 Type V........... . .... 173 Field 33: SIMA Assessment ..................... 179
Reason to Believe ........... . ..... . .. . . ... .. ... .. . 174 Field 34: Excise Tax ... . ............... . ... .. .... 180
Detailed Adj ustment Stat ements ..... . ....... . .... 175 Field 35:ValueforTax . . ... ........... .. .. .. .... 180
Refunds and Payment s ... .. ... .. ... .. . . ... .. ... . .. 175 Field 36: GST ................................... 180
Field 1: Importer Name and Address ...... . .... 175 Field 37: Documents Attached ................. 180
Field 2: Transaction Number ................... 176 Field 38: Customs Duties . .... . ....... . ... . ..... 180
Field 3: GST Registration Number .............. 176 Field 39: SIMA Assessment .... .. .. .. ... . ....... 180
Field 4: Page ................................... 176 Field 40: Excise Tax .. .. .. . ........... ... .. .. .... 181
Field 5: Office Number ......................... 176 Field 41: Subtota l .... . .. . ... ... ...... . ... . ..... 181
Field 6: Original Transaction Number .. . . . . . .... 176 Field 42: GST . . .. . .... . ............... .. .. .. .... 181
Field 7: Date ............. .. ... . ... .. .. .. .. .. ... 176 Field 43: Interest. .. . ........................... 181
Field 8: Date Received .. .. ... .. ....... . . . . . .... 176 Field 44: Amount Due Receiver General
Field 9: Subheader Number .. .......... .. ... .. . 176 for Canada . .. . .... . ......................... 181
Field 10: Mai l To..... . ... .. .... . ....... . . . . . .... 176 Field 45: Amount Due Claimant . ... .. .. .. .... .. 182
Field 11: Security Number .. .. .......... .. ... ... 177 Justification for Req uest . ........... ... .. .. .... 182
Field 12: Country of Origin ..................... 177 Explanation ....... . ........................... 182
Field 13: Place of Export . ... . ................ .. . 177 Declaration .. . .. .. ...... . ............ . ... .. .... 184
Field 14: Ta riffTreatment ....................... 177 Time Frames .... . ... .. .. .. ........... .. .. .. .... 184
Field 15: Direct Sh ipment Date . .. .. ....... . .... 177 Key Terms ......................................... 188
Field 16: Currency Code .. . .... . ....... . ... . .. . . 177 Review Questions .. . .... . ............... . ... . . .... 188
Field 17: Time Li mit ....................... . .... 177
Fields 18 to 36: As Accounted For .............. 177 CHAPTER 10 Exporting
Fields 18 to 36: As Claimed ................ . .... 178 Commercial Goods and
Field 18: Line ............ . ........ . ... . ... . .... 178 US Customs Procedures
Field 19: Description . . .............. . .......... 178 Learn ing Outcomes . ........ ... ..... . ... .. ... ... .. 191
Field 20: Sp ecial Authority ........ . ... . ... . .... 178 Exporting Goods . .. . .... . .............. ... .. .. .... 192
Field 21: Classification Number ............ ..... 178 Canadian Automated Export Declaration ....... 193
Field 22: Ta riff Code ...... . ........ .. ...... . .... 178 G7 Electronic Data Interchange Export
Field 23: Quantity ............. ... .............. 178 Reporting . ....... . . .......... .. ........... . . 193
Field 24: Un it of Measure . .... . . ... . ....... . .... 178 Form B13A, Expo rt Declaratio n .. ... . ........... 193
Field 25: Value for Duty Code ... ..... .. . ... . . ... 179 Export Summary Reporting Program . . ......... 194
Field 26: SIMA Code...... . ........ .. ...... . .... 179 Where to Report Exports... ... . .. . ... . .... .. ... 194

CONTENTS IX
Time Frame for Reporting ....... . .... . .... . ... . 194 US Customs Procedures . .... . .. . .... . .. . ....... . .. 201
Carrie r Repo rting . . .. . .......... . .... . ... .. .... 196 Key Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206
Export Controls and Permit s ........ . .... . .... . ... . 196 Review Questions . .. ... .. ... . .. . .... . .......... . .. 206
Exports to the US . ...... .. . . . . ...... . ... .. .... . ... . 197
GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209
General Export Perm it No 12 .... . ... .. .... . .. . . 198
Exports to Non-US Locations ............ . .... . ... . 199 INDEX ....... . ... .. ........... . ....... . ... . .... . 219
Export Documentation ............................ 200 CREDITS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223

PREFACE
Since 1920, the Canadian Society of Customs Brokers (CSCB) has represented the
interests of customs brokers and their clients to government departments and
agencies involved in regulating international trade and managing borders. For
more than 35 years, the education and ongoing professional development of those
employed in international trade have been CSCB focuses.
As one of the most reliable and respected organizations in Canada's interna-
tional trade community, the CSCB provides training annually to more than 1,300
individuals, including those who pursue the Certified Customs Specialist (CCS)
and Certified Trade Compliance Specialist (CTCS) designations. Currently, there are
about 5,000 designates who meet the ongoing requirements of these programs,
which are designed for those who seek an in-depth understanding of interna-
tional trade regulation and procedure as practised in Canada.
With the publication of this revised textbook, the CSCB offers unique support
to the instructors and students of Canadian customs practice. Written by those
who have firsthand operational knowledge of the trade process, the book provides
readers with a detailed overview of the requirements for importation and expor-
tation of goods in Canada. For those who are curious about Canada's customs
policies and procedures or who wish to pursue a career in the field of border regu-
lation and international trade, reading this book is a logical first step. For those
who are committed to compliance as international trade professionals, it is an
invaluable resource.
Numerous and ever-changing government regulations make this a fluid, inter-
esting, and challenging course of study and area of practice. We hope you enjoy it.
For more information about the CSCB and the services it provides, please visit
our website at <http://cscb.ca>.
Carol West
President & CEO
Changes to the Second Edition

In this second edition of Introduction to Customs Administration and Procedures,
all chapters have been thoroughly revised to reflect current legislation, regula-
tions, and processes. This includes discussion and commentary about recent
treaty developments, such as the Canada- United States- Mexico Agreement, the
Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and
the Canada-European Union Comprehensive Economic and Trade Agreement.
Additional topics covered in this edition include the Accounts Receivable Ledger,
the CBSA Assessment and Revenue Management project, the Single Window
Initiative, and Integrated Import Declaration.
Xl

Xll PREFACE
The authors have reorganized the chapter sequence for improved conceptual
flow between topics. New pedagogical features include Did You Know? boxes,
which spotlight interesting tidbits of information related to the chapter topic, and
You Decide boxes, which put the students in the shoes of a Canada Customs officer
with a decision to make. At the end of each chapter, a mixture of true or false,
multiple choice, and short answer questions give students an opportunity to
gauge their understanding.
Also new to the second edition is a vibrant design, including full-colour
chapter-opening photos and a margin glossary to help ensure student engage-
ment and assist in understanding.

I>
IMPORT~ I>
I>
~EXPORT ~
LEARNING OUTCOMES
After reading this chapter, you should be able to:
• Identify the players and their roles in international trade.
• Identify the legislation governing international trade.
• Understand a customs broker's code of ethics.
• Identify the information contained in a client profile and know why such a profile is necessary.
1
>~ 2 ~NTRODUCTION TO CUSTOMS ADM INI STRATION AND PROCEDURES
THE ROLES OF THE PLAYERS IN

INTERNATIONAL TRADE
The importation of goods into Canada involves many players from both govern-
ment and business. Each player has their own unique responsibilities and roles,
and it's important to be aware of what these are.
CANADA BORDER SERVICES AGENCY

Canada Border The Canada Border Services Agency (CBSA) is part of a larger ministry called Public
Services Agency Safety and Emergency Preparedness Canada (PSEPC), often called Public Safety
(CBSA) Canada. CBSA is one of five agencies that report to the Minister of Public Safety.
The federal agency respon-
sible for customs programs,
The other agencies that are part of Public Safety Canada are:
intelligence, interdiction and
enforcement functions, • Canadian Security Intelligence Service (CSIS),
and passenger and inspec-
• Correctional Service of Canada (CSC),
tion services. CBSA manages
Canada's borders by • National Parole Board (NPB), and
enforcing the laws govern-
ing trade and travel, as well • Royal Canadian Mounted Police (RCMP).
as international agreements
and conventions.
CBSA has nine branches and each is led by a vice-president who reports direct-
ly to the president and executive vice-president (see Figure 1.1). CBSA is respon-
sible for customs programs, intelligence, interdiction and enforcement functions,
and passenger and inspection services.
CBSA manages Canada's borders by enforcing the laws governing trade and
travel, as well as international agreements and conventions.
Many customs officers are called border services officers (BSOs), and these are
the individuals you report to when you enter Canada. BSOs and other customs
Administrative
officers work in areas such as management, intelligence, investigations, detector
Monetary Penalty
System (AM PS)
dog services, compliance, and client services.
The CBSA's penalty regime With respect to commercial goods, BSOs examine paperwork, or data sent
that encourages compliance electronically, for accuracy. They release imported goods-that is, they allow goods
by issuing monetary
to enter Canada and be delivered- and they review accounting documents to ensure
penalties when specific
contraventions have that the correct amount of duties and taxes is paid.
occurred. Penalties may be BSOs can assess penalties under the Administrative Monetary Penalty
issued to importers, System (AMPS) against those who do not comply with the legislation adminis-
exporters, customs brokers,
tered by CBSA. This legislation includes the Customs Act, 1 the Customs Tariff,2
warehouse and duty free
shop operators, carriers, and and any associated regulations. BSOs also enforce Canadian laws and regulations
freight forwarders. of other government departments (OGDs), such as the Safe Foods for Canadians
1 RSC 1985, c 1 s 32 (2nd Supp).

2 SC 1997, c 36 is also referred to as the Customs Tariff Act. The Act includes the Customs Tariff
Schedule that can be found as a separate document on the CBSA's website: <https://www cbsa-
asfc.gc.ca/trade-commerce/tariff- tarif /2019/ 01-99/ 01-99-t2019-1-eng.pdf>.

FIGURE 1.1 CBSA Organizational Structure
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Regional Director
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4
>I INTRODUCTION TO CUSTOMS ADMINIST RATION AND PROCEDURES
Regulations3 on behalf of the Canadian Food Inspection Agency (CFIA), and the
Trademarks Act4 on behalf of Industry Canada.
CANADA REVENUE AGENCY

Canada Revenue The Canada Revenue Agency (CRA) administers tax laws for the government
Agency (CRA) of Canada and for most provinces and territories. It also administers social and
The federal agency t hat
economic benefits and incentive programs delivered through the tax system. These
administers tax laws for the
government of Canada and include the Canada Pension Plan (CPP), Quebec Pension Plan (QPP), employment
for most provinces and insurance (EI), and old age security (OAS) .
territories; also administers The minister of national revenue is responsible for the CRA and is accountable
social and economic
benefits and incentive
to Parliament for its activities, which include the administration and enforce-
programs delivered through ment of program legislation such as the Income Tax Act5 and the Excise Tax Act. 6
t he tax system. The minister has the authority to ensure that the CRA operates within its mandate
and consistently treats its clients with fairness and integrity.
•• DID YOU KNOW?
Until World War I. when income and sales taxes were first imposed in
Canada. customs and excise revenue made up about 75 percent of
the federal government's revenue.
CANADIAN CUSTOMS BROKERS

Canadian customs Canadian customs brokers are companies, not individuals, and they act as inter-
brokers mediaries between importers and the government on about 80 percent of import
Customs brokers act as
transactions. With authority to act as agents, they make it easier for individuals
intermediaries between
importers and the govern- and firms to comply with complex government legislation.
ment on most import A customs broker provides expertise to its clients and ensures that:
transactions and make it
easier for individuals and • imported goods meet all requirements at the border and are released
firms to comply with
according to regulations;
complex government
legislation. • goods are delivered as quickly as possible; and
• payment of the proper amount of duties and taxes is made, within
legislated time frames.
3 SOR/ 2018- 108.

4 RSC 1985, c T-13.
5 RSC 1985, c 1 (5th Supp).
6 RSC 1985, c E-15.

I
CHAPTER 1 INTRODUCTION 5 t
Customs brokers make their clients aware of programs that can save them duty duty
or taxes, or that allow for a refund of duties and taxes that have been paid. They An amount levied on
imported goods. Duty rates
also keep clients informed about all relevant changes to CBSA policies that might are established by the
affect the goods they import. Government of Canada and
A customs brokerage firm may be a sole proprietorship, a partnership of can vary significantly.
individuals or corporations, or a corporation, all of which must be licensed by
CBSA in accordance with the Customs Act and its regulations.
As a condition of being licensed, a customs brokerage firm must employ at least
one individual who has passed the Customs Brokers Professional Examination
(CPBE) and who is subsequently named on the licence. Once the individual is
named on the licence, they become the qualified officer for that firm. The CBPE
is prepared and administered by CBSA and is offered once a year. There are no
educational prerequisites for writing this examination; however, not all who are
successful at the examination may be eligible for a licence. For example, to be
eligible for a customs broker licence, age and citizenship requirements must
be met, and proof of financial stability must be provided.
The qualified officer is ultimately responsible for the conduct of the business.
Failure to comply with government regulations may result in the revocation of
the firm's licence to operate.
Every customs brokerage company must employ at least one individual

who has passed the CBPE. This person is the qualified officer and
is named on the customs broker's licence. The qualified officer is ulti-
mately responsible for the conduct of the business.
Remember, customs broker licences are issued to companies, not individuals.

The majority of customs brokerages are operated by corporations. Below are the
requirements for each category of business:
3(1) An individual is qualified under these Regulations if the individual
(a) is a citizen or permanent resident of Canada;
(b) is of good character;
(c) is at least 18 years of age;
(d) has sufficient financial resources to conduct his business in a respon-
sible manner; and
(e) has a sufficient knowledge of the laws and procedures relating to im-
portations and exportations determined in accordance with section 4.
(2) A partnership is qualified under these Regulations if the partnership
(a) in the case of a partnership composed of individuals,
(i) is composed of individuals each of whom meets the qualifica-
tions prescribed in paragraphs (l)(a) to (c),

I I
6
>I INTRODUCTION TO CUSTOMS ADMINISTRATION AND PROCEDURES
(ii) has sufficient financial resources to conduct its business in a

responsible manner, and
(iii) has at least one partner who has a sufficient knowledge of the
laws and procedures relating to importations and exportations,
determined in accordance with section 4; and
(b) in the case of a partnership composed of corporations,
(i) is composed of corporations each of which meets the qualifica-
tions prescribed in paragraphs (3)(a) to (c),
(ii) has sufficient financial resources to conduct its business in a
responsible manner, and
(iii) has at least one partner that meets the qualification prescribed
in paragraph (3)(d).
(3) A corporation is qualified under these Regulations if
(a) the corporation
(i) is incorporated in Canada,
(ii) is of good reputation, and
(iii) has sufficient financial resources to conduct its business in a re-
sponsible manner;
(b) all of the directors of the corporation are of good character;
(c) a majority of the directors of the corporation are citizens or perma-
nent residents of Canada; and
(d) at least one officer of the corporation has a sufficient knowledge of
the laws and procedures relating to importations and exportations,
determined in accordance with section 4.7
The phrase "[having] a sufficient knowledge . . . determined in accordance with

section 4" in the regulations above means that the individual in question has
passed the CBPE.
As well as employing an individual who has passed the CBPE, a customs broker-
age firm may also employ individuals who have the Certified Customs Specialist
Certified Customs (CCS), the Certified Trade Compliance Specialist (CTCS) designation, or both.
Specialist (CCS) Both the CCS and CTCS designations are granted by the Canadian Society of
An individual who has Customs Brokers, the association that represents Canadian customs brokers.
achieved a level of profi-
ciency in customs matters With the CCS and CTCS designations comes a requirement for continuing
and been accredited by the professional development. This ensures that designates keep up to date on the
Canadian Society of continually changing laws, regulations, policies, and procedures that govern
Customs Brokers.
trade.
Certified Trade Some of the other positions in a customs brokerage company include:
Compliance Specialist
(CTCS)
• release technicians,
An individual who has
achieved a level of profi- • directors and managers,
ciency in customs compli-
ance and been accredited by • regulatory affairs specialists,
the Canadian Society of • raters, and
Customs Brokers.
• support staff.
7 Customs Brokers Licensing Regulations, SOR/ 86-1067, s 3.

CHAPTER! INTRODUCTION 7 <)
The release technician is responsible for all aspects of the release of imported
goods.
An employer may prefer that a CCS/CTCS designate be responsible for making
requests to release goods because the employer can be assured of that employee's
technical knowledge.
The term "rater" is commonly used to describe the person responsible for
determining the correct tariff classification of imported goods. The Canadian
Oxford Dictionary, second edition, defines a tariff as a "duty on a particular class tariff
of imports or exports:' The tariff classification is a ten-digit number that properly An amount levied on
imported goods; the term is
describes the goods being imported.
interchangeable with "duty:'
As a result of increased electronic transmission of import and export data, and Also, the term used to
CBSA's requirement for additional cargo information earlier in the process, the describe the schedule that
line between a release technician and a rater is often blurred. In other words, for includes the ten-digit
classification number for
a release technician to be effective, they must have tariff classification knowledge identifying goods.
and competency.
The support staff comprise all other employees who provide additional ser-
vices. They too require at least a basic understanding of the import and export
processes in order to perform their tasks efficiently, compliantly, and cost-
effectively. Their job titles may reflect such tasks as accounts receivable, accounts
payable, billing, credit checking, data entry, and customer service.
SUB-AGENTS
A sub-agent is a licensed customs broker. The sub-agent is appointed by one cus-
toms broker to act on its behalf at a CBSA port where the prime customs broker
does not have an office.
Since almost all release requests are transmitted electronically, and a customs
broker can send data for release of goods at nearly all customs offices, there are few
instances where customs brokers require the assistance of a sub-agent. A sub-agent
is used when paper documentation, rather than electronic data, must be presented
or where there is a problem to be resolved locally.
GENERAL AGENCY AGREEMENTS

Each client of a customs broker must complete a General Agency Agreement General Agency
(GAA). This agreement authorizes a customs broker to act as an agent on behalf of Agreement (GAA)
An agreement that autho-
a particular person or firm.
rizes a customs broker to act
Customs brokers and importers may develop their own GAAs, tailored to their on behalf of a particular
individual needs, which outline their respective responsibilities. person or firm.
A GAA must always indicate:
1. the names of the client and agent, including their business numbers and
addresses;
2. a description of the type of business transactions being authorized, for
example, accounting and payment of duties under section 32 of the
Customs Act;

I \ I
> 8 INTRODUCTION TO CUSTOMS ADMINISTRATION AND PROCEDURES
I
3. whether the authority is continuous or for a specified period;
4. whether the agent is authorized to appoint a sub-agent;
5 the name, title, and signature of the agent;
6. the name, title, and signature of the person on whose behalf the agent is
acting; and
7. the date that the agreement takes effect.
As well, clients should be provided with a copy of their broker's Standard
Trading Conditions (STCs), and this may be supplemented by their Standard Operat-
ing Procedures (SOPs). STCs are detailed and of critical importance; clients must
be aware of the conditions and obligations that apply and the responsibilities and
expectations of each party. SOPs may include such tasks as making arrangements
for the delivery of goods, providing consulting services, and giving advice on the
payment of provincial tax on imported goods.
CANADIAN IMPORTERS
Canadian importer The Canadian importer is the party responsible for the payment of duties and
The party responsible for the taxes on imported goods. The importer is not necessarily the party to whom
payment of duties and taxes
on imported goods. The
goods are being delivered; in some cases, goods are shipped directly to the
importer is not necessarily importer's customer.
the party to whom the When an importer uses a customs broker, the customs broker is qualified to
goods are being delivered perform all the steps required to properly document the entry of the goods into
since in some cases goods
are delivered directly to the Canada. The customs broker can also remit duty, taxes, and any other fees that
importer's customer. might be involved in arranging the release of the goods, on behalf of the importer.
However, the importer is ultimately responsible for the payment of any duties and
taxes on the goods it is importing.
The importer is responsible for informing its foreign supplier of any paperwork
that must be provided or criteria that must be met so that goods enter Canada
with little or no difficulty and are not held at the border. If the paperwork that is
provided by the foreign supplier is either incorrect or incomplete, CESA may hold
the goods at the border until the proper documentation is provided.
Note that in some cases the foreign supplier of goods may offer to pay any
duties and taxes. This enables the supplier to sell goods to Canadian parties at
a cost that is all inclusive. In this situation, the foreign supplier is known as the
importer of record or non-resident importer.
All Canadian importers must comply with regulations and keep records prov-
ing compliance. The importer must maintain documents relating to any goods that
are imported or exported. These records include certificates, invoices, receipts,
certificates of origin, and other documents that relate to import or export activity.
CESA has the right to examine these records for a period of six years from the
date of the import or export. The customs broker, by regulation, is also required
to keep these same records.

I
CHAPTER 1 INTRODUCTION 9
The importer must also voluntarily inform CBSA, usually by way of its customs
broker, of any discrepancy between the goods received and the goods that were
declared. These discrepancies might include a difference in quantity, value, or qual-
ity, or a change in the end use of the goods. For example, the goods may be entering
Canada for use in a particular industry that benefits from reduced duty rates. If
the ultimate use of the goods changes, then the difference in duty must be paid.
CARRIERS
Airlines, railways, postal services, steamship lines, couriers, and trucking lines are
all carriers. Drivers of passenger vehicles are considered carriers when they drive carriers
their own vehicle with purchases or gifts across an international border. Regardless Airlines, railways, posta l
services, steamship lines,
of how goods arrive at an international border, the carrier must declare or report couriers, and trucking lines
the goods to CBSA at the first point of arrival. are all carriers. Regardless of
how goods arrive at the
Canadian border, the carrier
••
must declare or report the
DID YOU KNOW? goods to CBSA at the first
point of arrival.
The Canada - US border is the longest international border between

two countries.
Although the regulations for each mode of transport vary, it is mandatory

that the carrier report all goods to CBSA. A carrier who fails to do this prop-
erly may face fines and penalties. As well, the goods being carried, and/or their
means of conveyance, may be confiscated, or seized, by CBSA. Penalties under
the Administrative Monetary Penalty System (AMPS) may also be assessed.
AMPS is a civil penalty regime designed to encourage compliance with cus-
toms legislation through the application of monetary penalties. It is a system of
graduated penalties that are issued when there is contravention of the Customs
Act, the Customs Tariff, or any associated regulations. Penalties can be issued
against the carrier, importer, warehouse operator, or customs broker. Regardless
of the mode of transport, the carrier is also responsible for the security of the
goods it carries.
An understanding of the chain of events for goods entering Canada is impor-
tant. Very specific exceptions for paper exist; however, most importations are pro-
cessed electronically. The following is a simplified description of the electronic
process at a highway point of arrival:
1. Pre-arrival information is provided to CBSA electronically about the

cargo, the carrier, and the goods.
2. CBSA reviews the data and makes a determination whether to release
the goods or refer them for examination.

>>
I
>I lQ INTRODUCTION TO CUSTOMS ADMINISTRATION AND PROCEDURES
3. The driver reports to CESA at the border.

4. The driver then presents a form, called a lead sheet, to the ESO at the
Primary Inspection Line (PIL).
5. The ESO stamps the lead sheet and the conveyance and goods are noted
as arrived.
6. The ESO reviews any documents and refers to the earlier decision to
release or refer the goods (step 2, above).
If the decision is to release, the driver is advised that they may deliver the
goods.
If the decision is to refer, the goods are presented (or "referred") to CESA for
examination. After they are examined, the goods may or may not be released. If
they are not released, CESA will tell the customs broker why and state what action
should be taken.
The Pre-Arrival Review System (PARS) is a system used by a broker or an
importer to request the release of goods. It involves providing information to
CESA before the goods arrive. In all but a few cases, PARS data are transmitted
electronically. You will learn more about PARS in subsequent chapters.
VENDORS
vendors Vendors are the companies outside Canada that have sold or shipped goods to
Companies outside Canada importers in Canada. A vendor may be referred to as a foreign supplier or seller
that have sold goods to
importers in Canada.
and may be shown as "sold by;' "remit to;' "consignor;' or "shipper" on an invoice.
No matter how they are referred to, this party is shown in the field labelled "ven-
Canada Customs
Invoice (CCI) dor" on a Canada Customs Invoice (CCI). The vendor may also be a foreign
The form that is completed exporter, but the term "exporter" is usually reserved for those sending the goods,
with information about not selling them.
goods that are being
Many vendors are not familiar with Canada's import laws and regulations;
shipped to Canada.
nonetheless, they are still expected to supply the proper documents to the importer
foreign exporter
or to the customs broker so that the goods may be imported into Canada.
The party responsible for
sending goods to Canada.
FREIGHT FORWARDERS
freight forwarders Freight forwarders arrange for the movement of goods by a carrier and prepare
Parties that arrange for the all necessary documents to ensure that the goods arrive at the correct destination.
movement of goods by
the appropriate carrier and
Constantly changing information on such things as mode of transportation,
prepare all necessary transportation availability, capacity, cost, and best shipping routes makes it nec-
documents to ensure that essary for the freight forwarder to remain up to date on the import and export
the goods arrive at the requirements of many countries.
correct destination. Some
freight forwarders are also Some freight forwarders are also licensed customs brokers and thereby combine
customs brokers. the handling and movement of goods with their subsequent release and payment
of duty.

I
FOREIGN CUSTOMS BROKERS

Foreign customs brokers are the foreign counterparts to Canadian customs bro- foreign customs
kers. Because the laws within each country are complex and reflect national priori- brokers
Foreign counterparts to
ties, it is unusual to find any one broker sufficiently knowledgeable in both foreign
Canadian customs brokers.
and Canadian laws to give a client assistance in both. For this reason, foreign cus-
toms brokers aid the foreign person or company entering goods into a foreign
country. Just like Canadian customs brokers, foreign customs brokers have suf-
ficient knowledge of the import and export laws of their countries to provide the
needed expertise to Canadian and other foreign firms.
OVERVIEW OF THE LEGISLATION

Some of the main acts administered by CBSA that affect the importation of goods
are:
• the Customs Act;

Customs Act
• the Customs Tari.ff and Customs Tariff Schedule; The legislative authority for
the administration and
• the Excise Act, 2001 ;s enforcement of laws relating
• the Excise Act;9 to the importation and
exportation of goods
• the Excise Tax Act; and crossing Canadian borders.
• the Special Import Measures Act. 10 This Act also gives border
services officers the
authority to examine, search,
A brief description of each act follows. detain, and seize goods.
Customs Tariff
The legislative authority for
CUSTOMS ACT the imposition of, and
The Customs Act is the legislative authority for the administration and enforce- providing relief against, the
payment of duties. The Act
ment of the laws relating to the importation and exportation of goods crossing
also incl udes t he Customs
Canadian borders, as well as the collection of duty. This Act also gives BSOs the Tariff Schedule, the coding
authority to examine, search, detain, and seize goods. system and its details based
on t he Harmonized
Commodity Description
CUSTOMS TARIFF and Coding System, a list of
countries with their
The Customs Tariff is the legislative authority for the imposition of, and relief respective tariff treatments,
from, the payment of duty. the Genera l Rules for the
Interpretation of the
The Customs Tari.ff includes a list of countries with their respective tariff treat-
Harmonized System (GRI),
ments, the General Rules for the Interpretation of the Harmonized System (GRI), and adm inistrative
and the Administrative Guidelines. guidelines.
8 SC 2002, c 22.
9 RSC 1985, c E-14.
10 RSC 1985, c S-15.

I I
> <12 INTRODUCTION TO CUSTOMS ADMINISTRATION AND PROCEDURES
/ This Act includes the Customs Tariff Schedule. This is the coding system for
imported goods and is formally called the Harmonized Commodity Description
and Coding System. It is usually just called the Tariff, or simply the HS. Each item
imported into Canada must be classified under one of the ten -digit tariff classifica-
tions included in the tariff. Corresponding rates of duty for each tariff classification
Excise Act, 2001 are also listed.
The legislative authority for
the collection of excise duty Raters (individuals responsible for assigning the correct tariff classification to
on spirits, wine, and tobacco goods imported into Canada) use the tariff daily. More than one duty rate may
products that are manufac- be indicated for the same tariff, and the eventual selection depends on the origin
tured in Canada or imported
of the goods. For example, goods from less developed countries can often enter
into Canada. It also contains
the legislation for the Canada at a lower duty rate, as can goods from countries with which Canada has
treatment of ships' stores. a trade agreement.
excise duty The Customs Tariff and the Customs Tariff Schedule are available online.
A special duty that is
charged on certain goods
produced in Canada . When EXCISE ACT, 2001
these goods are imported,
excise duty is collected The Excise Act, 2001 is the legislation for the collection of excise duty on spirits,
in an amount that is equal wine, and tobacco products that are manufactured in Canada or imported into
to the amount that Canada. Excise duty is ordinarily charged on goods produced within a country,
would be collected if
the goods were produced rather than on goods that are imported. However, in order that imported and
in Canada. domestic goods are treated equally, excise duty is collected on imported goods in
Excise Act an amount that would be collected if they were produced in Canada.
The legislative authority for The Excise Act, 2001 is also the legislation for the treatment of ships' stores.
the collection of excise duty These are goods that are used on board ships and aircraft in international service.
on beer that is manufac-
tured in Canada or imported
into Canada.
EXCISE ACT
Excise Tax Act
The legislative authority that
The Excise Act is the legislation for the collection of excise duty on beer that is
grants the authority to manufactured in Canada or imported into Canada.
charge, collect, and The excise duty collected on imported beer is equivalent to the excise duty
administer the GST or HST.
that would be collected if the beer had been produced in Canada.
This Act also provides for the
imposition and collection of
a number of excise taxes on
other goods.
EXCISE TAX ACT
Goods and Services The Excise Tax Act grants the authority to charge, collect, and administer the
Tax (GST) Goods and Services Tax (GST), or, in some provinces, the Harmonized Sales Tax
Tax that is collected by (HST), on goods and services.
vendors and businesses at
The Excise Tax Act also provides for the imposition and collection of a number
each level in the produc-
tion and distribution chain . of excise taxes on other goods such as gasoline, diesel fuel, and automobile air
The majority of goods conditioners, both imported and domestic.
imported into Canada are
subject to GST; however,
some commodities are GOODS AND SERVICES TAX
non-taxable, exempt, or
zero-rated, and tax is not The Goods and Services Tax (GST) is a tax that is collected by vendors and busi-
col lected on them. nesses, including customs brokers, at each level in the production and distribution

I
CHAPTER 1 INTRODUCTIO N 13
chain, with the greatest amount paid by the final consumer or user. Businesses and
vendors who collect the GST must register to do so. GST registrants collect the
GST on the value of each sale they make or service they provide. In the Excise Tax
Act, "supplies" refers to both goods and services.
The majority of goods imported into Canada are subject to GST. However,
some goods and services are non-taxable, exempt, or zero-rated, and tax is not
collected on them.
NON-TAXABLE IMPORTATIONS
GST is not payable on goods that are listed in schedule VII of the Excise Tax Act.
Two examples are raw crude oil that is refined at a Canadian refinery before it is
exported and goods that are donated to a registered charity.
EXEMPT SUPPLIES
Exempt supplies (goods and services) are those on which there is no GST paid by
the purchaser and the registered supplier does not collect or charge tax. Exempt sup-
plies are listed in schedule V of the Excise Tax Act. Some examples of exempt supplies
are real property, health care services, educational services, and child and personal
care services.
ZERO-RATED SUPPLIES
Zero-rated supplies (goods and services) are those on which there is no GST paid
by the purchaser; however, the registered supplier of the goods may claim an input
tax credit (ITC) for tax paid on purchases that were used to create the zero-rated
supply. Zero-rated supplies are listed in schedule VI of the Excise Tax Act and
include prescription drugs and biologicals, basic groceries, medical and assistive
devices, exports, and financial services.
INPUT TAX CREDITS

Businesses, like other consumers, are charged GST when they purchase goods
and services. However, when a business is registered for the GST, it is entitled to
subtract the GST that it has paid (ITC) from the tax that it has collected. The dif-
ference between the two is either a negative amount (refund) or an additional Harmonized Sales Tax
amount of tax that must be remitted to the federal government for each report- (HST)
Tax composed of provincial
ing period. This method ensures that the GST applies only on the value of sales tax and the GST and
to the final consumer. By having the end consumer pay the GST, the government applicable in Nova Scotia,
is assured that the GST is paid on the net- and highest- sale price of the goods. New Brunswick, New-
foundland and Labrador,
Prince Edward Island, and
HARMONIZED SALES TAX Ontario. It is assessed
and collected on casual and
The provinces that collect the Harmonized Sales Tax (HST) are Ontario, Prince non-commercial importa-
Edward Island, Nova Scotia, New Brunswick, and Newfoundland and Labrador. tions only.

I I
> <14 INTRODUCTION TO CUSTOMS ADMINISTRATION AND PROC EDU RES
I
The HST is a blended tax comprising two taxes: GST and provincial tax. HST is
collected on casual importations only, at various rates determined by the province.
Casual importations are goods destined for individual use and not intended for
sale or commercial, institutional, occupational, or other similar use.
Taxable goods and services are subject to either GST or HST. never
both.
SPECIAL IMPORT MEASURES ACT

Special Import The Special Import Measures Act (SIMA) is the legislation that was created to
Measures Act (SIMA) protect industries in Canada from injury caused by goods that have been dumped
The legislative authority that
in Canada or subsidized in their country of export.
imposes anti-dumping,
countervailing, and Dumping occurs when goods are sold to importers in Canada at prices that
provisional duty on certain are lower than the selling price of comparable goods in the country of export or
goods. It is intended to when goods are sold to Canada at unprofitable prices. The amount of dumping on
protect Canadian industry
from injury caused by the
imported goods may be offset by the application of an anti-dumping duty.
dumping and subsidization Subsidization occurs when goods imported into Canada benefit from a for-
of imported goods. eign government's financial assistance or subsidy. The amount of subsidization on
anti-dumping duty imported goods may be offset by the application of a countervailing duty.
An additional duty that is As well as anti-dumping and countervailing duties, a provisional duty may also
collected on imported
be collected. Provisional duties are collected while an investigation into alleged
goods that have been
dumped in Canada. dumping is underway.
CBSA publishes a list of goods that may be subject to these duties, which is
Measures in Force known as Measures in Force. The list is updated regularly.
A li st of goods currently
subject to anti-dumping or
countervailing measures CUSTOMS MEMORANDA
pursuant to the Special
Import Measures Act (SIMA). Customs memoranda contain policy only, not laws. They are the means by which
customs memoranda BSOs and the public are kept informed.
Documents published by The D-memoranda, more commonly called D-memos, provide importers and
CBSA to keep border customs brokers with all the information necessary to comply with various govern-
services officers and the
ment requirements for importing goods. The D-memos take the complicated jargon
public informed of legisla-
tive requirements and from various statutes and put it into language that is easier to understand. They also
operational policies and explain how some acts are to be interpreted and how certain things, such as prepar-
procedures. ing paperwork to obtain the release of goods, or completing forms, must be done.
D-memoranda In order to use the D-memos, it is important to understand their structure,
Issued by CBSA,
their numbering system, and their organization. The material included in the
D-memoranda include the
policy by which BSOs and D-memos is consolidated into 23 operational groups. Each group contains direc-
the public are kept informed tives covering similar or related topics.
of various policies and Each of the 23 operational groups are further divided and each directive is
procedures.
referred to by three numbers, for example, Dl3-4-7, ''.Adjustments to the Price

I
CHAPTER 1 INTRODUCTION 15 t
Paid or Payable:' D13 is the operational group entitled "Valuation:' and D13-4 is
entitled "Transaction Value:' All D-memos are available online.
The R-memoranda contain additional information related to the D-memoranda
but are restricted to customs use only. These memoranda generally contain intel-
ligence or enforcement-related information.
CUSTOMS NOTICES
Policies are also made public through the issuance of customs notices. Customs
notices are issued by CESA when there is a need to quickly clarify policy and pro-
cedure or to make importers and customs brokers aware of changes before they are
included in an updated D-memo. Customs notices are available online.
CODE OF CONDUCT
ETHICS
What are ethics? Like good manners, ethics are part of our social code of behaviour.
The dictionary defines "ethics" as a moral code, an essential moral quality, or con-
formation to the standards of conduct of a given profession. Some will argue that
moral standards vary according to personal interpretations, cultural background,
and even prevailing conditions. Prevailing conditions can include, for example,
political unrest, when it can be common for ordinarily ethical individuals to act in
an unethical manner.
Ethics play a significant role in a career in international trade. Employees have
a responsibility to their employer. They should never knowingly do anything that
contravenes any Canadian law because such action will indirectly affect their
employer and, of course, their own employment.
CONFIDENTIALITY OF INFORMATION
The Customs Act allows CESA to ask an importer for information regarding the
goods they are importing. This information may be confidential and should not
be disclosed by CESA to others, especially potential competitors. The importer is
required by law to disclose this information to CESA and does so trusting that CESA
and the customs broker will conduct themselves as professionals and respect the
importer's confidentiality.
CONFLICTS OF INTEREST
It is unethical to participate in a transaction when there is a personal interest, financial
or otherwise, in an enterprise or a product. If there is a conflict, one should absent
oneself from the transaction.

I I
I
SMUGGLING BY AN EMPLOYEE
Under the Customs Act, the smuggling of goods is illegal. Those found guilty
of smuggling may be given a criminal record, and an employer might find that
it has no choice but to restrict the type of work it entrusts to a person with a
criminal record.
The term "smuggling" has a wide application, covering activities from deliber-
ate efforts to move goods across the border without declaration to misrepresent-
ing the true value or description of goods on an import declaration. Each charge
may carry a different penalty as far as the law is concerned, but the consequence
is usually a damaged reputation.
Those in the customs industry, no matter their role, should ensure that they do
not allow themselves to be in a position to be charged with smuggling; they should
be "squeaky clean:'
RELATIONSHIPS AMONG CUSTOMS BROKERS,

CBSA, CARRIERS, CLIENTS, AND COLLEAGUES
The movement of goods across borders requires accurate reporting by a number
of people. Not all people have the same objective and there is potential for lack
of cooperation. The efficient processing of detailed and complex information by
many people, all with differing areas of expertise and skill levels, requires energy
and organization. Invariably, there are times when confusion and frustration
result, leading to strained relationships.
There is no easy or surefire way to avoid these conflicts, but maintaining pro-
fessional conduct will help reduce the frequency and seriousness of such events.
Remember to treat others as you want to be treated. Exercise patience and provide
information that will help the situation. By being friendly and helpful, you will
build trusting relationships with others. Your objective is to get your job done
professionally and expeditiously.
RESPONSIBILITIES TO EMPLOYERS, CBSA,

CLIENTS, AND COLLEAGUES
Employees of customs brokers have a number of responsibilities. The interests of
one's clients take top priority, except when those interests conflict with the laws or
the regulations administered by CBSA.
All customs brokerage firms maintain information about their clients. Clients
are the businesses or individuals who have signed a General Agency Agreement
with the broker to allow the customs brokerage firm to act as their agent. It is
common practice to record the client's name, assign a client number, and build a
history or profile of instructions, contacts, and a record of imported and exported
goods. This is the client's profile and gives the customs broker insight into their
customer's business and needs. It is highly confidential.

CHAPTER 1 INTRODUCTION 17 <)
As well, the client profile is important because:
• It provides information to the release technician that enables the

technician to complete a release package properly.
• It makes the release technician aware of any special instructions.
• It allows the release technician to make a release decision based on past
performance and within the credit terms of that importer.
• It ensures that the proper company is billed.
• It enables the release technician to do their job within company and
client guidelines and with the least amount of financial risk to the firm.
It is critical that a customs broker reviews a client's profile before every trans-
action, even though it may have processed that client's paperwork many times
before. There may have been a change or an important D-memo added that, if
ignored, could cause serious loss to the client or customs broker. Keep the client
profile current and note the history of every transaction. The client profile is there
for a good reason-to ensure that the client is well served.
Not all client profiles are the same. Look at the sample client/importer profile
in Figure 1.2, and make yourself aware of the client's special requests. For example,
Note 1 indicates that the client wishes to be contacted before the release of goods
to confirm that they are to be billed for any duties and taxes. This note may appear
in those cases where charges are billed to the supplier. Should you not read this
note, or ignore it, the client may refuse to pay the customs brokerage bill, as well
as other charges such as duty and taxes.

I I
> <18 INTRODUCTION TO CUSTOMS ADMIN ISTRATION AND PROCEDU RES
I
FIGURE 1.2 Sample Client/Importer Profile
NAME:
ABC Imports
P.O. Box 123. 123 Any Street
City, Province. Canada
Telephone: 416 - 555 -1212
Fax: 416- 555-1218
GST Registration Number: 0100118090
Business Number: 12345 6789 RM 0001
Client Number: 252
Credit Code: 4
Licences: E- 0863381
DFAIT File Number: 7721
Contact: Mr Jo hn Doe, Traffic Manager
Telephone extension : 5280
WHOLESALER OF PLASTIC MATERIALS
Notes
1. Do not release any shipment until Mr Doe confirms that ABC

Imports are to be billed for any duties and taxes.
2. Contact Mr Doe for delivery instructions on overseas containers.
3. Do not pay any charges o n behalf of ABC Imports. including freight.

unless authorized to do so by Mr Doe.

KEY TERMS
Administrative Monetary Penalty Customs Act, 11 General Agency Agreement (GAA), 7
System (AMPS), 2 customs memoranda, 14 Goods and Services Tax (GST), 12
anti-dumping duty, 14 Customs Tariff, 11 Harmonized Sales Tax (HST), 13
Canada Border Services Agency D-memoranda, 14 Measures in Force, 14
(CBSA), 2
duty, 5 Special Import Measures Act
Canada Customs Invoice (CCI), 10 (SIMA), 14
Excise Act, 12
Canada Revenue Agency (CRA), 4 tariff, 7
Excise Act, 200 7, 12
Canadian customs brokers, 4 vendors, 10
excise duty, 12
Canadian importer, 8
Excise Tax Act, 12
carriers, 9
foreign customs brokers, 11
Certified Customs Specialist (CCS), 6
foreign exporter, 10
Certified Trade Compliance
freight forwarders, 10
Specialist (CTCS), 6
REVIEW QUESTIONS
MULTIPLE CHOICE AND TRUE/FALSE QUESTIONS
1. Which government agency is responsible for a. spirits
administering tax laws for the government of b. wine
Canada? c. tobacco products
a. Canada Border Services Agency (CBSA) d. beer
b. Canada Revenue Agency e. glycol
c. Canadian Food Inspection Agency
4. HST is collected on both commercia l and casual
d. Canadian Security Intelligence Service importations. True or false?
e. Canada Customs and Revenue Agency
5. Which of the following provinces does not
2. CBSA is part of which of the following? collect HST?
a. Global Affairs Canada a. Manitoba
b. The Royal Canadian Mounted Police b. New Brunswick
c. Public Safety Canada c. Newfoundland and Labrador
d. The Canadian Security Intelligence Service d. Nova Scotia
e. Justice Canada e. Ontario
3. Which of the following is not subject to excise

duty, whether they are manufactured in or
imported into Canada?

2Q INTRODUCTION TO CUSTOMS ADMIN ISTRATION AND PROCEDURES
SHORT ANSWER QUESTIONS

1. What examination must be passed before 3. List three acts administered by CBSA that affect
applying for a licence to conduct business as a the importation of goods.
customs broker? 4. Where must carriers declare or report goods to
2. What are the five requirements that must be CBSA?
met before an individual can become a licensed 5. Provide the definition of dumping.
customs broker?

LEARNING OUTCOMES
• Understand the purpose of a bill of lading.
• Complete a Canada Customs Invoice.
• Recognize t he purpose o f a commercial invoice.
• Describe the steps involved when commercial goods are imported.
• Realize the importance of Advance Commercial Information.
• Understand the arrival and reporting of imported goods. 21
>>
I
>22I INTRODUCTION TO CUSTOMS ADM INISTRATION AND PROCEDURES
INTRODUCTION
Before goods arrive in Canada, certain documents should be prepared. These
documents, often in the form of data, can include a bill of lading, covering trans-
portation, and a commercial or Canada Customs Invoice covering the goods.
Other documentation may be required, such as permits for goods regulated by
other government departments. These are discussed in Chapter 6.
BILLS OF LADING
bill of lading A bill of lading is a transportation contract between the shipper and the carrier.
A contract between the It contains the name of the shipper, the consignee, the name of the party to be
shipper and the carrier that
includes the name of the
notified when the goods arrive, and the mode of transportation. It also includes a
shipper, the consignee, description of the goods and terms of payment for shipping. A sample bill oflading
the name of the party that is (Figure 2.2) is provided at the end of this chapter.
to be notified when the Bills oflading may be either straight or negotiable. A straight bill oflading is
goods arrive, and the mode
of transportation; it also non-negotiable and is used for goods that are for a specific person or company;
includes a description of the a negotiable bill oflading is for goods that have not yet been sold. Goods listed on a
goods, their weight, terms of negotiable bill oflading may be bought, sold, or traded while in transit.
payment for shipping, and
A term often used to describe a bill of lading is "clean:' This means that the
references to other bills of
lading used to carry the goods were in good order and condition when loaded. Unless there are notes
same goods. to the contrary, a bill of lading is assumed to be clean.
There are bills of lading for every mode of transportation. Depending on the
mode, various information is listed on the bill oflading. For example:
• carrier name;
• date that the goods are loaded onto the conveyance;
• cost of shipping;
• where the goods are destined and where they will be discharged; and
• details about the goods, including their value, markings, size, and origin .
The Ambassador Bridge is the busiest Canada- US truck crossing and

handles around 8,000 trucks and 68,000 travellers daily.
Canada Customs
Invoice (CCI)
The form that is completed CANADA CUSTOMS INVOICE
with information about
goods that are being The CBSA requires information for all commercial goods entering Canada. The
shipped to Canada. form generally used to provide this information is the Canada Customs

I
CHAPTER 2 ARRIVAL AND REPORTING OF IMPORTED COMMERCIAL GOODS 23
Invoice (CCI). The description of each field is pre-printed in each field of the
CCI, making it easy to complete. A standard CCI is reproduced at the end of
this chapter (Figure 2.3); however, many importers and customs brokers develop
their own CCI.
The CCI may be completed by the supplier or importer, or by the customs
broker on behalf of a client. Below is a description of each field on the CCI.
FIELD 1: VENDOR
This field indicates the name and address of the vendor or seller.
FIELD 2: DATE OF DIRECT SHIPMENT TO CANADA

This field shows the date on which the goods began their continuous journey to
Canada. Whether the journey is continuous or not is a factor when determining
the country of origin of the goods. This date is used to determine the currency
exchange rate. The exchange rate on the date of direct shipment to Canada is the
rate used to convert the value of goods to Canadian dollars when they are in a
foreign currency.
FIELD 3: OTHER REFERENCES

This field provides other information that may be useful, such as a commercial
invoice number or purchase order number.
FIELD 4: CONSIGNEE
This field indicates the name and address of the person or company to whom or
where the goods are being delivered. This can be, but is not necessarily, the party
that is responsible for the payment of any applicable duties and taxes.
FIELD 5: PURCHASER'S NAME AND ADDRESS

This field indicates the person or company to whom the goods are sold, if it is
other than the consignee in Field 4. The purchaser is responsible for the payment
of any duties and taxes.
FIELD 6: COUNTRY OF TRANSHIPMENT

This field indicates the country through which the goods are shipped on their way
to Canada while remaining under CBSA's control.
FIELD 7: COUNTRY OF ORIGIN OF GOODS

This field indicates the country where the goods are grown, produced, or
manufactured.

>~ 2
: INTRODUCTION TO CUSTOMS ADMIN ISTRATION AND PROCEDURES
FIELD 8: TRANSPORTATION
This field shows the mode of transportation-for example, rail, highway, or
air-and the place from which the goods began their uninterrupted journey
to Canada.
FIELD 9: CONDITIONS OF SALE AND TERMS

OF PAYMENT
This field shows the terms and conditions that were agreed upon by the vendor
and the purchaser. It might say "COD" or "10 percent net 30:' COD means cash
on delivery; 10 percent net 30 means that if the purchaser pays for the goods in
30 days, they are entitled to a 10 percent discount.
FIELD 10: CURRENCY OF SETTLEMENT

This is the currency that the vendor has requested for payment. For example,
vendors in the United States (US) usually indicate US funds and Field 10 might
then show "US" (or "U.S:' or "U.S. Dollars").
FIELD 11: NUMBER OF PACKAGES

This field indicates the number of packages. Only numbers are shown in this field.
FIELD 12: SPECIFICATION OF COMMODITIES

This field shows the type of package- for example, skids or boxes-and a detailed
description of the goods being shipped. All goods that are shipped must be shown
on the invoice, even those that are provided at no charge.
FIELD 13: QUANTITY

This field shows the number of each item that was described in Field 12.
FIELD 14: UNIT PRICE

This field shows the price for each unit of the item described in Field 12.
net weight FIELD 15: TOTAL

The weight of the goods This field shows the total price paid or payable of the items described in Field 12.
excluding packag ing
materials.
gross weight FIELD 16: TOTAL WEIGHT
The weight of the goods
including any packaging This field shows both the net weight and the gross weight for the goods listed
materials. on the invoice.

I
CHAPTER 2 ARRIVAL AND REPORTING OF IMPORTED COMMERCIAL GOODS 25 t
FIELD 17: INVOICE TOTAL
This field shows the total price paid or payable for goods described on the invoice
and continuation sheet, if used. A continuation sheet is used when the CCI consists
of more than one page.
FIELD 18
If information for Fields 1 to 17 is included on an attached commercial invoice,
the box in this field must be checked.
FIELD 19: EXPORTER'S NAME AND ADDRESS

This field shows the name and address of the person or organization shipping the
goods to the consignee/purchaser, if other than the vendor shown in Field 1.
FIELD 20: ORIGINATOR

When the invoice is completed by one company on behalf of another, the company
completing the invoice is indicated in this field.
FIELD 21: AGENCY RULING

If CBSA has made a ruling regarding the goods being imported, the number and
date of the ruling must be shown. For example, CBSA may have made a decision
regarding the tariff classification of the goods, or the way in which the value of the
imported goods is determined.
FIELD 22
If any of Fields 23 to 25 are not applicable, the box in this field must be checked.
FIELD 23
This field is completed if any of the following items are included in the invoice total
shown in Field 17:
i. Transportation charges, expenses, and insurance from the place of direct ship-
ment to Canada;
ii. Costs for construction, erection, and assembly incurred after importation into
Canada; or
iii. Export packing.1
Amounts shown in Fields 23(i) and 23(ii) can be deducted from the figure shown
in Field 17 because these charges are not subject to duty.
1 "Canada Customs Invoice" (last modified 10 October 2008), online (pdf) : Canada Border
Services Agency <https://www.cbsa-asfc.gc.ca/publications/forms-formu laires/ cil.pdf>
(emphasis added).

>~ 2
:
INTRODUCTION TO CUSTOMS ADMINISTRATION AND PROCEDURES
However, export packing shown in Field 23(iii) is dutiable, and if it is included

in Field 17, it may not be deducted.
FIELD 24
This field is completed if any of the following are not included in the invoice total
shown in Field 17:
i. Transportation charges, expenses, and insurance to the place of direct ship-
ment to Canada [note the difference between these transportation costs and
those in Field 23- one is from the place of direct shipment to Canada
and the other is to the place of direct shipment to Canada];
ii. Amounts for commissions other than buying commissions; or
iii. Export packing. 2
Amounts shown in Fields 24(i), (ii), and (iii) must be added to Field 17. These
charges are dutiable and must be included in the valuation of the goods for cus-
toms purposes.
FIELD 25
This field indicates whether royalty payments or subsequent proceeds are paid
or payable by the purch aser, or whether the purchaser has supplied goods or
services for use in the production of th ese goods. In some cases, these payments
may be dutiable .
•• YOU DECIDE
ABC International is importing commercia l goods from a company in

China. The invoice total of the transaction is $45,912.35. Included in
the invoice total are transportation charges from the place of dir-
ect shipment to Canada of $2,697.19 and export packing costs of
$750.00.
QUESTIONS
1. Can the transportation charges of $2.697.19 be deducted from the
invoice total of $45,912.35?
2. Can the export packing costs of $750.00 be deducted from the
invoice total of $45.912.35?
2 Ibid.

CHAPTER 2 ARRIVAL AND REPORT ING OF IMPORTED COMMERCIAL GOODS 27 <)
THINGS TO WATCH FOR ON THE CCI
Certain information shown-or not shown-on the CCI or commercial invoice
may indicate something out of the ordinary. For example:
1. If the total on the invoice in either Field 15 or Field 17 is shown as no
charge, this may indicate that Canadian goods are being returned or that
a warranty repair has taken place.
2. If the country of origin, Field 7, is shown as Canada, there is a possibility
that Canadian goods are being returned.
3. If the number of packages, Field 11, shows something other than what is
on the Cargo Control Document (discussed below), there is a possibility of
a shortage or an overage and that these goods are part of another shipment.
4. If the description of the goods shown in Field 12 contains more
information than just a description of the goods-for example, "goods
are entering Canada temporarily;' or "goods are returning after having
been repaired in the US" -it is possible that a sale has not taken place.
In this case, the value may not be the true value of the goods and more
information will have to be provided by the importer.
5. Specification of commodities, Field 12, and quantity, Field 13, must
agree with the actual contents of the shipment. The goods declared
should match the goods shipped. If there are more goods declared than
shipped, the importer may pay too much duty and tax.
6. The unit price, Field 14, must be the same as the price actually paid or
payable, excluding discounts.
If a commercial or sales invoice is available as well as a CCI, the CCI should be
compared to ensure that the information is identical. Remember, foreign suppliers
are more familiar with their own sales or commercial invoice and are less likely to
make mistakes on a commercial invoice.
For more information on the CCI, see Dl-4-1, CBSA Invoice Requirements.3
COMMERCIAL INVOICE
A commercial invoice may be used instead of a CCI if all information required commercial invoice
on the CCI is on the commercial invoice. A document provided by the
vendor to the customer that
A commercial invoice can be prepared by any means- typed, written by hand, details the type of goods
faxed, or prepared electronically- and must show the buyer and the seller of the being shipped or sold; the
goods, the price paid or payable, and a good description of the goods, including value is usually included.
quantity.
3 (Memorandum) (1 March 2013), on line (pdf): Canada Border Services Agency <https://www.cbsa-
asfc.gc.ca/ publications/dm-md/ dl/ dl-4-1-eng.pdf>.

>~ 2: INTRODUCTION TO CUSTOMS ADMIN ISTRATION AND PROCEDURES
Either a CCI or a commercial invoice must be available before requesting the

release of goods.
STEPS IN IMPORTATION
There are five steps involved in the proper importation of commercial goods, some
of which may be done at the same time. These are:
1. submission of Advance Commercial Information data;

2. carrier arrival and reporting;
3. release of goods (may be called "interim accounting");
4. accounting (all shipment details, including the amount of duty and taxes
payable, is provided to CBSA); and
5. payment of duties and taxes.
ADVANCE COMMERCIAL INFORMATION

On April 19, 2004, marine carriers became the first participants in a new CBSA
Advance Commercial program called Advance Commercial Information (ACI). ACI for all modes
Information (ACI) of transportation involves the transmission of information to CBSA before the
Cargo and conveyance data
goods arrive. In the case of marine shipments, this information must be sent
sent to CBSA prior to the
arrival of goods; information before the goods are even loaded onto the vessel in the country of export.
provided prior to the goods' The ACI project was developed to improve risk management by providing
arrival allows CBSA to risk CBSA with electronic cargo and conveyance data within specific time frames .
assess goods that are
destined for Canada.
Under ACI, cargo and conveyance data must be sent to CBSA electronically.
Penalties may be issued if these data are not sent, if they are not sent in the
proper time frame, or if incorrect data are sent.
MARINEACI
The process begins with the ocean carrier or its agent transmitting cargo data to
Freight Remaining on CBSA. The cargo data must be transmitted according to specific time frames, and
Board (FROB) in all cases before the cargo is loaded onto the ship. Reporting time frames for ocean
Cargo that remains on a cargo shipped from the US differ from those for ocean cargo shipped from other
vessel while other goods are
discharged.
countries.
Cargo data include, among other things, the carrier name and carrier code, the
in-transit goods
Goods that remain on a ports of call, and a good description of the goods, any special instructions, and any
conveyance while the other data required for other government departments (see Chapter 6).
conveyance travels through The report must include any Freight Remaining on Board (FROB) and
one country to get to
in-transit cargo. FROB are goods that will remain on the vessel while other goods
another; t hese goods are not
entered into the commerce are discharged. In-transit goods are those that are travelling through Canada
of the intermediary country. under customs control for delivery in another country.

I
CHAPTER 2 ARR IVAL AND REPORTING OF IMPORTED COMMERCIAL GOODS 29
In some cases, marine supplementary cargo data must be reported. Marine bulk cargo
supplementary cargo data are data elements required to complete the cargo Large quantities of cargo that
is unpackaged; can be in
report. Supplementary data include detailed cargo information that was not liquid form or in a mass, such
available on the original cargo report and might include the ultimate consignee, as oil or grain.
a precise description of the goods, and shipper information. The time frames (see breakbulk cargo
Table 2.1) for reporting supplementary cargo data are the same as for primary cargo Cargo that must be loaded
reporting. Supplementary cargo data may be provided by the freight forwarder individually and is not
containerized; it includes
or the marine carrier.
goods transported in barrels,
crates, or boxes.
TABLE 2.1 Time Frames for Reporting Marine Cargo Data
TIME FRAMES FOR REPORTING MARINE CARGO DATA FOR GOODS LOADED IN A COUNTRY OTHER
THAN THEUS
• For containerized cargo, the cargo data must be transm itted electronically to CBSA at least 24 hours
before goods are loaded on board the vessel.
• For bulk cargo, the cargo data must be transmitted electronically to CBSA at least 24 hours before the
arrival of the vessel at the first Canadian port of arrival.
• For breakbulk cargo, the cargo data must be transmitted electronically to CBSA at least 24 hours before
the arrival of the vessel at the first Canadian port of arrival.
• For empty marine containers, cargo data must be transm itted electronically to CBSA at least 96 hours
before the arrival of the vessel at the first Canadian port of arrival.
• The cargo data must be transm itted before the vessel's departure f rom a fore ign port if the length of the
voyage to Canada is less than the required reporting time frame as specified above.
Cargo Transmission Time Frames

(for cargo loaded in a country other than the US)
Containerized cargo 24 hours before loading

Breakbulk cargo 24 hours before arrival
Bulk cargo 24 hours before arrival
Empty marine containers 96 hours before arrival
TIME FRAMES FOR REPORTING MARINE CARGO DATA FOR GOODS LOADED IN THE US
• Cargo data must be transmitted electronically to CBSA at least 24 hours before th e arriva l of the vesse l at
the first Canadian port of arrival, regard less of ty pe of ca rgo.
• Data for empty marine conta iners must be transmitted electronically to CBSA at least 4 hours before the
arrival of the vessel at the first Canadian port of arrival.
• The cargo data must be transm itted at the time of the vessel's departure from th e US port if the length of
the voyage to Canada is less than the required reporting time frame.
Cargo Transmission Time Frames

(for cargo loaded in the US)
Containerized, bulk, or breakbulk 24 hours before arrival


I I
> 3Q INTRODUCTION TO CUSTOMS ADMINISTRATION AND PROCEDURES
I
When all cargo data are received, and after CBSA has conducted its risk assess-
ment, the carrier may receive one of the following messages:
1. No Load Message-"Wait for instructions from foreign agency:'

2. No Load Message-"Additional detail required:'
If neither of these messages is received within a specific time frame, loading can
proceed.
Conveyance data must also be transmitted to CBSA. Conveyance data include
details that identify the vessel and its scheduled route. The freight forwarder or
other party can send these data, which include the cargo control number, the carrier
name and address, the date and time of arrival, the voyage number, the manifest
summary report, the port of entry, the nationality of the conveyance, and driver and
crew identification. These data must also be sent according to specific time frames
(see Table 2.2).
Changes to conveyance data must be made electronically as soon as they are
known and may be made at any time before the arrival of the vessel in Canada.
Updates to the estimated date and time of arrival in Canada should be transmitted
to CBSA as required.
The conveyance data must be transmitted before the vessel's departure from a
foreign port if the length of the voyage to Canada is less than the required reporting
time frame. Time frames are also specified for the transmission of data concerning
empty containers in international shuttle service.
LESS THAN CONTAINER LOAD/FULL CONTAINER LOAD

less than a container Less than a container load (LCL) shipments are those that make up less than a
load (LCL) shipments container load and full container load (FCL) shipments comprise a full container
Goods that do not require
load. An LCL shipment is one that contains goods destined for multiple importers
the full capacity of a
conveyance; LCL goods are from multiple vendors. An FCL shipment is one that contains cargo destined for
destined for multiple a single importer from a single vendor.
importers from multiple See Figure 2.1 for a geographical breakdown of marine container traffic.
vendors.
full container load
(FCL) shipments REPORTING AND ARRIVAL OF MARINE CONVEYANCES
Cargo destined for a single The arrival of marine cargo is done by submission of either a Conveyance Arrival
importer from a single
vendor.
Certification Message (CACM) or Warehouse Arrival Certification Message
(WACM). These are both electronic messages and are sent by the conveyance or
warehouse operator. Once an arrival notice is submitted, it is matched with ACI
data and, if submitted, a release request. At that point, CBSA may release the goods.
Submission of ACI data within prescribed pre-arrival time frames, combined
with the arrival of the conveyance in Canada, satisfies the requirement for "Report
of Goods;' required under section 12(1) of the Customs Act.4
4 RSC 1985, c 1 (2nd Supp).

I
TABLE 2.2 Time Frames for Reporting Marine Conveyance Data
TIME FRAMES FOR REPORTING MARINE CONVEYANCE DATA FOR GOODS LOADED IN A COUNTRY
OTHER THAN THE US
• If all the goods on board the vessel are within cargo conta iners, the conveyance data must be
transmitted electronically to CBSA at least 96 hours before the arrival of t he vessel at the first Canadian
port of arrival.
• If all the goods on board the vessel are bulk goods, the conveyance data must be transmitted elect ronica lly
to CBSA at least 24 hours before the arrival o f the vessel at the first Canad ian port of arrival.
• If all the goods on board the vessel are breakbu lk goods, the convey ance data must be
transmitted electronically to CBSA at least 24 hours before the arri val of the vesse l at the first Canad ian
port of arrival.
• If the vessel is laden solely with empty cargo conta iners that are in international shuttle service, t he
conveyance data must be transmitted electronica lly to CBSA at least 96 hours before the arrival of the
vessel at the first Canad ian port of arrival.
• However, if the goods on board the vessel are a combination of goods described above, conveyance data
must be transm itted within the most advanced (longest) t ime frame.
Conveyance Transmission Time Frames

(for cargo loaded in a cou nt ry other than the US)
Containerized ca rgo 96 hours before arrival

Breakbulk cargo 24 hours before arrival
Bulk cargo 24 hours before arrival
Combinatio n of the above 96 hours before arrival
• The conveyance data must be transmitted before t he vessel's departure from a foreign port if the lengt h of
the voyage to Canada is less than the required reporting t ime frame as spec ified above.
TIME FRAMES FOR REPORTING MARINE CONVEYANCE DATA FOR GOODS LOADED IN THE US
• Conveyance data must be transmitted electronically to CBSA at least 24 hou rs before the arrival of the
vessel at the first Canad ian port of arrival.
• Data for co ntainerized ca rgo must be transmitted electron ically to C BSA at least 24 ho urs before the arrival
of the vessel at the first Canad ian port of arrival.
• Data for empty conta iners must be transmitted electronically to CBSA at least 4 hours before the arrival o f
the vessel at the first Canadian port of arrival.
• The conveyance data must be transmitted at the ti me of t he vessel's depart ure from t he US port if t he
le ngth of th e voyage to Canada is less than the required repo rting t im e fram e as spec if ied above .
Conveyance Transmission Time Frames

(for cargo loaded in the US)
Co ntaineri zed, bulk, or breakbulk 24 hours befo re arrival

Empty marine conta iners 4 hou rs before arriva l

I I
FIGURE 2.1 Geographica l Distribution of Container Traffic
THE PORT OF MONTREAL'S NORTH AMERICAN MARKETS IN 2018

Th e Po rt of M ontre al 's s trategic geog ra p h ic loca tion provid es importers a nd exporters
a ccess t o 110 mi llion c o nsum ers in Cana d a, the U.S. Midwest and N o rthea st in und e r
t wo da ys b y rail o r tru c k.
m.fm PROVINCE O F QUEB EC

~ PROVINC E O F ONTA RIO
mm U.S.A .
...a REST O F CAN A DA
MARKET DIVERSIFICATION IN 2018

With Asia, t he Middl e East a nd Latin America representing n ea rly 4 0 % of our
containerize d market, the Po rt of Montreal is a leading internati onal container po rt
linked t o over 14 0 countries around t he world. Wit h t ransshipment throu g h t he Suez and
Pana ma canals, the Port of Montrea l is a proven competitive so lution con necti ng t he
North A merican indust rial heartl and t o t he wo rld.
mJ::D N ORTHE RN EUROPE
- - ASIA
~ MEDITERRA NE AN
1111'.m M IDDLE EA ST
7 o/o OTHER
S o/o L ATIN A MERICA
SOURCE: "The Port at the Heart of Daily Life," online (pdf): Montreal Port Authority <https://www
.port-montreal.com/files/ PDF/publications/2015-07-28_jaquette-corpo-en.pdf>.
AIRACI
Air cargo data must be sent to CBSA, electronically, before the arrival of the aircraft.
Cargo data must also be transmitted to CBSA at least four hours before arrival at
the port of report or customs office of declaration. If the duration of the flight
is less than four hours, cargo data must be reported before the actual time of
supplementary departure. Any supplementary cargo report must be sent within the same time
cargo report frames as the cargo report.
Document submitted by a
Air conveyance data must be transmitted to CBSA at least four hours before the
freight forwarder for
shipments that have been, plane's arrival at the first port of arrival in Canada. If the duration of the flight is
or will be, deconsolidated less than four hours, the data must be reported before the actual time of departure.
from an air or marine cargo
control document for freight
remaining on board (FROB)
shipments only.
The busiest airport in Canada is Toronto Pearson International Airport.

I
REPORTING AND ARRIVAL OF AIR CARRIERS

Goods carried in the air mode are reported by submission of either a CACM or
WACM, the same as in the marine mode.
HIGHWAY ACI
Highway carriers transmit cargo and conveyance data to CBSA through a process
called eManifest. Data for both the cargo and the conveyance must be transmitted
and received by CBSA no later than one hour before arrival at the First Point of
Arrival (FPOA).
REPORTING AND ARRIVAL OF HIGHWAY CARRIERS

When the highway carrier arrives at the First Point of Arrival (FPOA), they present
a lead sheet to CBSA. The lead sheet must include a:
• bar-coded Conveyance Reference Number (CRN); or Conveyance Reference

Number (CRN)
• bar-coded Cargo Control Number (CCN) with a handwritten CRN; or A number that identifies a
• handwritten CRN if an alternative bar-coded document is also being shipment t o CBSA; it consists
of a carrier's CBSA-assigned
presented; for example, a bar-coded PARS lead sheet. "PARS" stands for
carrier code, followed by a
"Pre-Arrival Review System:' unique reference number
assigned by the carrier.
The Border Services Officer (BSO) will match the lead sheet with the previously
Cargo Control Number
supplied ACI data and, if a previous decision has been made to release the goods,
(CCN)
may release the goods at the FPOA. A number, assigned by a
Submission of ACI data within prescribed pre-arrival time frames, combined carrier or freight forwarder,
with the arrival of the conveyance in Canada, satisfies the requirement for "Report to a transport document. It
begins with the carrier's
of Goods" required under section 12(1) of the Customs Act.
CBSA-assigned carrier code,
followed by a unique
reference number assigned
RAILACI by the carrier or freight
forwarder.
Rail carriers must transmit cargo and conveyance data to CBSA a minimum of two
hours before the rail carrier arrives at the border.
ARRIVAL AND REPORTING OF RAIL CARRIERS

Goods carried by rail are reported by submission of either a CACM or WACM,
the same as in the marine mode.
Submission of ACI data within prescribed pre-arrival time frames, combined
with the arrival of the conveyance in Canada, satisfies the requirement for "Report
of Goods" required under section 12(1) of the Customs Act.

I I
I
CARGO CONTROL DOCUMENT
When using paper reporting, rather than Electronic Data Interchange (EDI), the
carrier requires a paper cargo control document (CCD ). However, if the carrier has
provided cargo data electronically prior to arrival, a paper manifest is not required.
Form ASA(B), In For most modes, Form ASA(B), In Bond-Cargo Control Document, usually
Bond-Cargo Control called a manifest, is used for this purpose. A paper manifest used for ocean ship-
Document ments is Form A6A, Freight/Cargo Manifest.
A paper manifest used by
most carriers; for carriers When used in the highway mode, a highway carrier presents the paper manifest
who report using EDI, to CBSA at the FPOA.
manifest data are sent On a paper manifest, the carrier code and the characters following the carrier
electronically.
code must be bar-coded. Carriers may print their own CCDs with a bar-coded
manifest Cargo Control Number (CCN) that begins with their four-character carrier code,
Also referred to as a Cargo
Control Document, a or they may have their bar codes (with the four-character carrier code) printed
manifest lists cargo and/or on labels that are then affixed to a CCD. The carrier code plus the numbers that
crew and/or passengers on a follow make up the cargo control number. Additional information about the trans-
conveyance; it allows
portation of goods is found in D3- l- l, Policy Respecting the Importation and
customs to control the
movement of the cargo. Transportation of Goods. s An example of an A8A(B) is provided at the end of this
Form A6A, Freight/ chapter (Figure 2.4).
Cargo Manifest Special release programs require additional information to be included in the
A paper manifest used by CCD bar-code. An example of a release program is Pre-Arrival Review System
marine carriers. For marine (PARS). With PARS, information about the goods is provided to CBSA by the
carriers who report EDI,
Form A6A data are sent
importer or customs broker prior to the arrival of the goods.
electronically. The CCD acts as the initial record of the shipment's arrival. This document is
Pre-Arrival Review also used for goods moving in-bond to an inland customs office, to a sufferance
System (PARS) warehouse, or to a bonded warehouse.
A system by which an
importer or customs broker
provides information to FORM ABA(B), IN BOND-CARGO CONTROL
CBSA, prior to the arrival of
the goods, that allows CBSA DOCUMENT COMPLETION INSTRUCTIONS
to release the goods upon Appendix D is reproduced below:
their arrival in Canada.
The following outlines information to be shown on the cargo control document.
For the data elements required on electronic ACI reports for the air and marine
modes, please see Memorandum D 3-2-l (for air mode) and Memorandum
D3-5-l (for marine mode).
U.S. Port of Exit-Indicate the U.S. border crossing, both city/town and state, for
all shipments invoiced from the United States. For goods invoiced from the
United States that are entering Canada in the service of an air carrier, indicate
the U.S. Customs and Border Protection (US CBP) port where the goods are
loaded on the aircraft which is to carry the goods to Canada. ...
5 (Memorandum) (26 May 2017), online (pdf): Canada Border Services Agency <https://www
.cbsa-asfc.gc.ca/publications/dm-md/d3/d3-1-1-eng .pdf>.

I
CHAPTER 2 ARRIVAL AND REPORTING OF IMPORTED COMMERCIAL GOODS 35 t
The U.S. port of exit codes listed in Appendix H, List 6, of Memorandum D 17-1-10,
Coding of Customs Accounting Documents, may be used in lieu of the city/town
and state name.
In-transit-Indicate country of final destination.
Manifest from-Indicate the CBSA office where the goods are reported.
To-Indicate the CBSA office where the goods are to be released/destined. CBSA
offices are listed in the Directory of CBSA Offices available on the CBSA website.
Where the destination has more than one sufferance warehouse for the applicable
mode of transport (for example, Toronto), the name of the receiving CBSA office
must be followed by the name, abbreviation or code of the intended warehouse of
clearance (for example, Toronto-498).
Consignee Name and Address- For imports: Indicate the name and address of the
person (company) in Canada to whom the goods are being shipped. For in-transit
and FROB shipments: Indicate the name and address of the person (company) that
is the ultimate consignee.
Shipper's Name and Address-Indicate the name and address of the person or
firm shipping the goods.
Acquittal No.- To be completed by importer/broker or the CBSA.
Carrier Code/Cargo Control No.- On privately printed cargo control documents,
the carrier must assign the cargo control number, in accordance with the instruc-
tions outlined in the Appendix C of [Memorandum D3-1-1].
Carrier Code/Previous Cargo Control No.- This field is to be completed on sec-
ondary cargo control documents, such as re-manifests, abstracts, etc. Indicate the
carrier code and cargo control number of the original cargo control document.
No. of Packages- Indicate the quantity of goods being reported.
The following are different methods of reporting a shipment:
No. of Pkgs. I Description and Marks
1 car load containing 75 cases of motor oil on three pallets
3 pallets containing 75 cases of motor oil
75 cases of motor oil on three pallets
If a number of goods are being reported, the number of packages must be totalled.
Description and Marks- Give an accurate, concise description of the goods in com-
mon trade terms and note any marks imprinted on the package or goods. If the
goods are loaded in a container, the container number must be indicated in this field.
When goods are carried under shipper's load and count contracts, mark "shipper's
load and count" in this field.
Rail carriers must indicate the waybill numbers in this field, if a separate field for
this information does not exist on their cargo control documents.
Estimated date and time of arrival information must be included on the CCD in
either the "Description and Marks" field or the "Location of Goods" field. Any and

I I
> 36 INTRODUCTION TO CUSTOMS ADMIN ISTRATION AND PROCEDURES
I
all applicable container numbers must be included on the CCD in either the
"Container Number" field (if one exists on the CCD) or in the "Description and
Marks" field. Clients transmitting electronic EDI reports will be required to indi-
cate this information in the fields assigned to these data elements, "Estimated date
and time of arrival" and the "Container Number" fields.
Weight-Indicate the weight of the shipment in metric or imperial measure. The

unit of measure must be noted and the weight must be totalled.
Foreign Point of Lading-(To be completed by freight forwarders and marine
carriers only) Indicate the city/town and country where the goods were loaded
on board a vessel, aircraft, vehicle or rail conveyance.
Location of Goods-Indicate the name and address of the sufferance warehouse
where goods are stored pending clearance. The name of the agent handling the
load must also be shown in this field. In the case of commercial shipments, where
the carrier, freight forwarder or agent are not one and the same as the sufferance
warehouse, the warehouse sub-location code that has been assigned to the suffer-
ance warehouse by the CBSA must be included. A listing of sufferance warehouse
sub-location codes may be obtained by accessing the CBSA website, or by com-
municating with the CBSA Electronic Commerce Unit at the following:
1-888-957-7224 calls within Canada and the United States
1-613-946-0762 for overseas callers between 8 a.m. and 5 p.m. (E.S.T.)
1-613-946-0763 for overseas callers between 5 p.m. and 8 a.m. (E.S.T).
Name of Carrier-Indicate the name of the carrier transporting the goods.
Vehicle Identification-Highway carriers must indicate the vehicle identification

number (licence number, province or state, year and trailer number). Other
modes of transportation must indicate aircraft registration numbers, rail car initials
and numbers or vessel details in this field.
Any field requirements specific to only one mode of transportation may be ex-
cluded by carriers of other modes of transportation.
All carriers are obliged to include information on the cargo control document that
will allow for the efficient tracing of CBSA documentation within their operations.6
Discrepancies between the name of the consignee, the name of the shipper, or
the marks and description of the goods must be investigated. If discrepancies arise
in the number of packages or weight, the CCD must be returned to the carrier for
correction once the discrepancies have been identified.
DIVERSIONS
The "Manifest From" field on the cargo control document indicates the point
where the goods are reported to CBSA, or the first point of entry. The "Manifest
6 "Appendix D: Cargo Control Document. Form A8A(B) Completion Instructions" (last modified
26 May 2017), online: Canada Border Services Agency <https://www.cbsa-asfc.gc.ca /
publications/dm-md/d3/ d3-1-1-eng.htm l>.

CHAPTER 2 ARRIVAL AND REPORT ING OF IMPORTED COMMERCIAL GOODS 37 >)
To" field on the CCD indicates the customs office where the goods will be
released.
These fields are important. Often, a shipment manifested to a particular customs
location is diverted to another customs location. When this occurs, it is the respon-
sibility of the carrier to prepare a Form A30, Customs Diversion Notice. Form A30 Form A30, Customs
is prepared in duplicate and submitted to CBSA in order to have the goods released. Diversion Notice
A hard-copy form used by
A sample Form A30 is provided at the end of this chapter (Figure 2.5).
carriers to report to CBSA
that goods listed on their
cargo report are being
CARGO CONTROL ABSTRACT diverted to another location
upon their arrival in Canada;
If a CCD will be cancelled by more than one release or accounting package, then for carriers sending cargo
a Form A10, Cargo Control Abstract must be prepared. A Form AlO must be reports electronically, the
prepared for each portion of the shipment requiring a separate release. The total data are sent as a "change" to
the original cargo report.
quantity of all the cargo control abstract forms must equal the quantity shown on
the original CCD. Form A10, Cargo
Control Abstract
Each abstract must bear a unique number. The original cargo control number Used to split goods listed on
is used, followed by an "X" and a unique numeric digit. For example, if the ori- a manifest into more than
ginal cargo control number was 2105 1213452222 and there were three abstract one manifest so that goods
manifests, the cargo control numbers would be: can be released and
accounted for separately.
1. 2105 1213452222 x 1
2. 2105 1213452222 x 2
3. 2105 1213452222 x 3
All copies of each abstract set must be presented to CBSA before the goods are
released.
A sample Form AlO is provided at the end of this chapter (Figure 2.6).
COURIER SHIPMENTS
FedEx, Purolator, and UPS are all examples of couriers. Couriers may move goods
by air or ground and generally specialize in small shipments. A shipper may choose
to use a courier when truck or air freight rates are too expensive or when goods Courier Low Value
are urgently required. Shipment (CLVS)
Most couriers carrying international goods participate in the Courier Low program
Value Shipment (CLVS) program. This program is used for goods that have a A program that streamlines
the process to import goods
value for duty of less than Cdn$3,300.00 and are not prohibited, controlled, or valued at less than
regulated. Couriers must be approved by CBSA for participation in this program. Cdn$3,300.00 and al lows
Couriers who participate in the CLVS program report all shipments to CBSA courier participants an
expedited release process.
using a consolidated cargo release list, rather than a CCD, which identifies each
importer. consolidated cargo
release list
The consolidated cargo release list must also include an accurate description of
A list on which couriers
the goods so that CBSA can determine whether the goods are controlled, prohib- report all shipments to
ited, or regulated by an act of Parliament or government department. CBSA.

I I
I
The following information is included in the heading of the list:
1. carrier code,
2. carrier name,
3. US port of exit,
4. vehicle identification number,
5. customs office of release, and
6. date.
The following information must also be shown for each shipment on the consoli-
dated cargo release list:
1. a unique identifying number generated by the courier;

2. the consignee's name and address;
3. the importer's name and address if different from the consignee's;
4. the name of the shipper, exporter, or vendor and its address;
5. the number of packages;
6. the weight of the shipment;
7. the estimated value for duty in Canadian dollars;
8. a description of the goods; and
9. the country of origin.
The total number of shipments must be indicated. The courier may not include
goods on this list that cannot be released under the CLVS program.
Before or on arrival of the shipment, the courier presents CBSA with the con -
solidated cargo release list. The list contains all low value shipments for which
release is being requested. If the goods remaining on the consolidated cargo release
list are approved for release, CBSA will stamp one copy of the list, if paper, and
return it to the courier as proof of release. The second copy is retained by CBSA.
When presented using EDI, a response is provided by CBSA electronically.
Once goods are released, the courier is responsible for providing all sup-
porting documentation for each shipment to the importer or customs broker so
consist sheet that they may account for the goods. This information is referred to as a consist
A list on which couriers sheet and includes the same information supplied to CSBA as well as an indica-
provide release information
and supporting documenta-
tion of the customs broker to whom the list was provided. If the courier is also a
tion for each shipment to licensed customs broker and there is no customs broker indicated for a particular
the importer or customs commercial shipment, the courier may account for the goods if approval to do
broker so that they may so is given by the importer. If the goods are casual, no approval is required and
account for the goods.
the courier will account for the goods. The accounting of goods is covered in
Chapter 7.

I
COURIER IMPORTS REMISSION ORDER

With certain exceptions, the Courier Imports Remission Order (CIRO) allows Courier Imports
goods that are transported into Canada by courier to be exempt from duty and Remission Order
(CIRO)
GST. In order to qualify under this remission order, goods that are shipped from
Allows certain goods
the US or Mexico must not exceed the current valuation limit of Cdn$40.00. transported into Canada by
Goods that are shipped from anywhere else in the world must not exceed the cur- courier an exemption from
rent valuation limit of Cdn$20.00. the payment of dut y and
tax; goods must not exceed
The following goods are not eligible for the CIRO, regardless of their value:
Cdn$40.00 in value.
• alcoholic beverages,
• cigars,
• cigarettes, and
• manufactured tobacco.
Dividing single shipments into smaller packages in order to take advantage of the
CIRO is not allowed.
MAIL SHIPMENTS
International mail arriving in Canada is sorted before being sent to one of five CBSA
mail centres- Vancouver, Calgary, Winnipeg, Toronto, and Montreal. CBSA exam-
ines international mail to determine whether the goods are admissible and whether
the contents might be subject to other government department requirements.
At the mail centres, CBSA identifies mail requiring additional examination.
Mail is then sorted into duty-free and tax-free groups. Those requiring no further
review are stamped and released to Canada Post for delivery. Mail that is released
includes goods that qualify for the Postal Imports Remission Order (PIRO) and Postal Imports
goods that qualify for entry under tariff item 9816.00.00. Remission Order
The PIRO allows duty-free entry of goods shipped by mail and valued at (PIRO)
Allows cert ain goods
the current valuation limit of Cdn$20.00 or less. Goods that are not allowed under transported into Canada by
the PIRO are alcoholic beverages, cigars, cigarettes, manufactured tobacco, and mail an exemption from the
some gifts. The PIRO allows eligible goods into the regular postal stream without payment of duty and tax;
goods must not exceed
the payment of any duties or taxes.
Cdn$20.00 in value.
Tariff item 9816.00.00 also allows free entry of goods shipped by mail and reads
as follows:
Casual donations sent by persons abroad to friends in Canada, or imported per-

sonally by persons who are not residents of Canada as gifts to friends, and not
being advertising matter, tobacco or alcoholic beverages, when the value thereof
does not exceed sixty dollars in any one case.7
7 "Departmenta l Consolidation of the Customs Tariff 2019" (1 January 2019) (excludes the
Customs Tariff. SC 1977, c 36) at 98- 7, online (pdf): Canada Border Services Agency <https://
www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2019/01- 99/01-99- t2019-1-eng.pdf>.

I I
>I 4Q INTRODUCTION TO CUSTOMS ADMIN ISTRATION AND PROCEDURES
The exemption claimed under tariff item 9816.00.00 cannot be combined with
the PIRO.
Mail items not released to Canada Post for delivery are bar-coded before under-
going secondary processing, and the bar-coded data are entered into the Customs
Postal Import Control System.
CBSA does a secondary review to determine whether the goods are subject to
duties and/ or taxes, whether they require a permit, or whether they require inspec-
tion by another government department. Under section 99 of the Customs Act,B
CBSA has the authority to open mail and examine its contents.
If it is determined that these goods are duty and/ or tax free, or can be released
under the PIRO or gift exemption, the goods are stamped as "examined" before
being released into the regular mail stream.
For goods that are not released, a BSO will determine the tariff classification of
the goods as well as the value of the goods based on the information that accom-
panied the goods on the customs declaration.
As well as duty and GST/HST, provincial sales taxes are collected on non-
commercial mail items on behalf of British Columbia, Manitoba, Quebec, and
Saskatchewan.
Details of the duties, taxes, and handling fee are printed on Form El4, which is
attached to the mail item and delivered. Canada Post then collects the duties and
taxes and charges the recipient a Cdn$9.95 handling fee.
An importer who does not agree with the assessment of duties and taxes may
request an adjustment before paying duties and taxes by checking the "Return
to Customs" box on Form E14. As well, an importer may refuse the mail item by
checking the "Item Refused, RTS" box on Form E14. Canada Post will stamp the
mail item and return it to the sender.
For commercial goods (those valued at Cdn$2,500.00 or more) imported by
mail, the importer will be advised that the goods have arrived. The importer, or
its agent, must then present the customs documentation that is required to obtain
release of the goods.
A parcel will be held at the postal substation for a period of 10 days after noti-
fication. If a response has not been received from the importer, the parcel will be
returned to the sender. There are no second notices issued. When the importer
returns a parcel to CBSA for subsequent presentation of an entry, the parcel is held
sufferance
for 21 days. If an accounting document is not presented within this time frame,
warehouses
Established for the landing, the parcel is returned to the sender if there is a return address. If the mail cannot
storage, safekeeping, be returned, it may be destroyed or sold.
transfer, examination,
delivery, and forwarding of
imported goods that have
not yet been released; they SUFFERANCE WAREHOUSES
are privately owned and
operated, and are licensed Sufferance warehouses are established for the landing, storage, safekeeping,
by CBSA. transfer, examination, delivery, and forwarding of imported goods that have
8 Supra note 4.

I
not yet been released. They are privately owned and operated, and are licensed
byCBSA.
Goods may remain in a sufferance warehouse for up to 40 days. Warehouse
operators must provide CBSA with a list of goods that have not been removed
from the sufferance warehouse within the allowed time frame. Imported goods
that remain in the warehouse will be considered unclaimed and will be disposed of.
Storage charges will usually be assessed once goods have been in a sufferance
warehouse for three business days. The rate of storage may vary from one suffer-
ance warehouse to another. The storage charges are assessed on a trailer or con-
tainer basis, or may be based on the weight of the shipment. Consequently, the
greater the weight, the higher the storage charges.
BONDED WAREHOUSES
An importer may want to delay the payment of duties and taxes on imported goods
and they may do so by placing the goods in a bonded warehouses. Duty and bonded warehouse
taxes are paid when the goods are removed from the bonded warehouse. They may Allow goods to be stored
without the payment of duty
also be exported from Canada directly from the bonded warehouse without the and tax; there are two types
payment of duty and tax. of bonded warehouses:
Goods that are destined for a bonded warehouse must be reported by the private and public. Private
carrier in the same manner as any other goods. warehouses are used by
individuals or companies to
There are two types of bonded warehouses: private and public. Private ware- store their own goods, and
houses are used by individuals or companies to store their own goods, and public public warehouses are run
warehouses are run by entrepreneurs for storing goods that are imported by vari- by entrepreneurs for storing
goods that are imported by
ous companies.
various companies. Bonded
warehouses are licensed and
regulated by CBSA.
CONSOLIDATIONS AND
DECONSOLIDATIONS
A consolidation occurs when a number of shipments are grouped together out- consolidation
side of Canada by a freight forwarder and shipped under one CCD. This is typically Occurs when a number of
shipments are grouped
done to obtain a more favourable freight rate from the carrier. together outside Canada by
When a consolidated shipment enters Canada, the primary carrier-that is, the a freight forwarder and
carrier who has the goods- must indicate the freight forwarder or deconsolidator shipped to Canada under
as the consignee on the CCD. oneCCD.
The freight forwarder, upon arrival of the consolidated goods, will deconsoli- deconsolidate
date the goods, that is, divide them into individual shipments. Secondary CCDs The act of separating
consolidated goods into
are created for each shipment and these are presented to CBSA. The CCDs are separate shipments.
distributed to customs brokers or importers in order for the goods to be released.
Further information regarding deconsolidations is available in D3-3-l, Freight
Forwarder Pre-Arrival and Reporting Requirements. 9
9 (Memorandum) (20 September 2016), online (pdf): Canada Border Services Agency <https://
www.cbsa-asfc .gc. ea/ publications/ dm- md/ d3/ d3-3-1-eng .pdf>.

I I
J
FIGURE 2.2 Sample Bill of Lading
OP-097G 11/11
Straight bill of lading-original-not negotiable
DATE: PRO. NO. Place PRO label here.

B/LNO.: PAGE
SHIPPER NO. I TRAILER NO. CONSIGNEE NAME AND ADDRESS
SHIPPER NAME
ADDRESS
CITY STATE ZIP COD E DESTINATION CITY I ISTATE ZIP COD E
OR IGIN C ITY (IF DIFFERENT FROM ABOVE) STATE ZIP COD E PHONE NO.
INVOICEE O R COD REMIT TO NAME (IF DIFFERENT FROM SHIPPER) CUSTOM ER NO. STORE NO.
I DE PT.
ADDRESS P.O. NO.
CITY
I STATE
ZIP CODE SPECIAL INSTRUCTIONS
ATIN.
COD FEE PREPA ID 0 COLLECT 0 CODAMT $ I CUSTOMER CHECK OK FOR COD AMOUNT? Yes o No o
NO. SHPNG PKG WE IGHT (LB) CHARGES
UNITS TYPE HM DE SCRIPTION OF ARTICLES, SPECIAL MARKS AND EXCEPTIONS NMFC ITEM NO. CLASS SUBJ TO CORR RATE CARRIER USE ONLY
EMERGENCY CONTACT SHIPMENT CHARGES PREPAID UNLESS

TOTAL
MARKED COLLECT: COLLECT 0
Phone: Name: Contract#: CHARGES
NOTE (1) Where the rate depends on value, shippers must state specifically in writing the agreed or Note (3) Products requiring special or additional care or attention in handling or stOW"ing must be so marked and
declared val ue of the property as follows: oackaoed as to ensure safe transoortation with ordinarv care. See Sec. 2(e) of NMFC item 360.
The agreed or declared value of the property is hereby specifically stated by the shipper to be not exceeding If this shipment is to be delivered to th6 consignee without recourse on the consignor, the consignor shall sign
the following stalement
The carrier may dedine to m ake delivery of this shipment without payment of freight and all other lawful charges.
---------~ ~' ~----------~
Note : (2) Liability limitation for loss or damage on this shipment may be applicable. See 49 Signature of
U.S .C. 614706 lc lf1l1Al and IBl. consianor
Receiv ed subject to individually determined rates o r written contracts that have been agreed on in writing between the carrier and shipper, if applicable, otherwise to rates, classifications and rules that have been established by the
carrier and are available to the shiooer on raauest.
The property desaibed above is in apparent good order, except as noted (contents and condition of contents of packages It is mutually agreed as to each carrier of all or any of said property over all or any poftion of said route to destination and as
unkna.vn), marked, consigned, and destined, as indicated above which said carrier (the word carrier being understood to eadl party at any time inlefested in all or any of said property, that eveiy seMce to be performed hereunder shall be
ttroughout this contract as meaning any person or corporation i"I possession of the property under the contract) agrees ID subject lo a11 the conditions not prohibited by law, whether printed or written, herein contained, i"lduding the conditions on
carry its usual place of delivery of said destination, if on its route. otherwise to deliver to another carrier on the route to said the back hereof, which are hereby agreed to by the shipper and accepted for himself and his assigns
destination.
I h ereby declare that the contents of this consignment are fully and accurately described above by the proper shipping name and are dassified, packaged, marked and labeled/placarded and are in al! respects in proper condition
for transoort accordina to aoolicable international and national oovernmental raaulations.
SHIPPER COMPANY NAME CARRIER
I Traile'#
DATE Trailer Loaded by: 0 Shipper 0 Driver
Freight Counted by: 0 Driver: pallets said to contain
SHIPPER SIGNATURE PER H/U RECEIVED

0 Ship per 0 Driver: pallets containing
0 Driver: L oose pieces
MARK "X" IN HM COLUMN FOR HAZARDOUS MATERIALS. SINGLE SHIPMENT PICKUP 0

Printed m U.S.A
Print two copies of this page: One for your driver, one for your files.

I
CHAPTER 2 A RRIVAL AND REPO RTING O F IMPORTED COMM ERCIAL GOODS 43
Uniform Bill of Lading Terms and Conditions

Sec .1 .
(a} The carrier or the party in possession of any of the property (c) Where carrier has attempted to follow the procedure set
described in this bill of lading shall be liable as at common law for any forth in subsections 4(a) and (b) above and the procedure provided in this
loss thereof or damage thereto, except as hereinafter provided. section is not possible, nothing in this section shall be construed to
(b} No carrier shall be liable for any loss or damage to a abridge the right of the carrier at its option to sell the property under such
shipment or for any delay caused by an Act of God , the public enemy, the circumstances and in such manner as may be authorized by law. When
authority of law, or the act or default of shipper. Except in the case of perishable goods cannot be delivered and disposition is not given within a
negligence of the carrier or party in possession, the carrier or party in reasonable time, the carrier may d ispose of property to the best
possession shall not be liable for loss, damage or delay which results: advantage.
when the property is stopped and held in transit upon request of the (d) Where a carrier is d irected by consignee or consignor to
shipper, owner or party entitled to make such request; or from faulty or unload or deliver property at a particular location where consignor,
impassible highway, or by lack of capacity of a highway bridge or ferry; or consignee, or the agent of either, is not regularly located, the risk after
from a defect or vice in the property ; or from riots or strikes. The burden unloading or delivery shall not be that of the carrier.
to prove freedom fro m negligence is on the carrier or the party in
possession. Se c. 5.
(a) In all cases not prohibited by law, where a lower value than
Sec . 2. the actual value of the said property has been stated in writing by the
Unless arranged or agreed upon, in writing , prior to shipment, shipper or has been agreed upon in writing as the released value of the
carrier is not bound to transport a shipment by a particular schedule or in property as determined by the classification or tariffs upon which the rate
time for a particular market, but is responsible to transport with is based , such lower value plus freight charges if paid shall be the
reasonable dispatch. In case of physical necessity, carrier may forward a maximum recoverable amount for loss or damage, whether or not such
shipment via a nother carrier. loss or damage occurs from negligence.
(b) No carrier hereunder will carry or be liable in any way for
Sec. 3. any documents, coin money, or for any articles of extraordinary value not
(a} As a condition precedent to recovery, claims must be filed in specifically rated in the published classification or tariffs unless a special
writing with: any participating carrier having sufficient information to agreement to do so and a stipulated value of the articles are endorsed on
identify the shipment. this bill of lading.
(b} Claims for loss or damage must be filed within nine months
after the delivery of the property (or, in the case of export traffic, within Se c. 6.
nine months after delivery at the port of export}, except that claims for Every party, whether principal or agent, who ships explosives
failure to make delivery must be filed within nine months after a or dangerous goods, without previous full written disclosure to the carrier
reasonable time for delivery has elapsed. of their nature, shall be liable for and indemnify the carrier against all loss
(c} Suits for loss, damage, injury or delay shall be instituted or damage caused by such goods. Such goods may be warehoused at
against any carrier no later than two years and one day from the day owner's risk and expense or destroyed without compensation.
when written notice is given by the carrier to the claimant that the carrier
has disallowed the claim or any part or parts of the claim specified in the Se c. 7.
notice. Where claims are not filed or suits are not instituted thereon in (a) The consignor or consignee shall be liable for the freight
accordance with the foregoing provisions, no carrier shall be liable , and and other lawful charges accruing on the shipment, as billed or corrected,
such claims will not be paid. except that collect shipments may move without recourse to the
(d} Any carrier or party liable for loss of or damage to any of consignor when the consignor so sti pulates by signature or endorsement
said property shall have the full benefit of any insurance that may have in the space provided on the face of the bill of lading. Nevertheless, the
been effected, upon or on account of said property, so fa r as this shall not consignor shall remain liable for transportation charges where there has
avoid the policies or contracts of insurance, PROVIDED, that the carrier been an erroneous determination of the freight charges assessed , based
receiving the benefit of such insurance w ill reimburse the claimant for the upon incomplete or incorrect information provided by the consignor.
premium paid on the insurance policy or contract. (b) Notwithstanding the provisions of subsection (a) above, the
consignee's liability for payment of additional charges that may be found
Sec. 4 . to be due after delivery shall be as specified by 49 U.S.C. §13706, except
(a} If the consignee refuses the shipment tendered for delivery that the consignee need not provide the specified written notice to the
by carrier o r if carrier is unable to deliver the shi pment, because of faul t delivering carrier if the consignee is a for-hire carrier.
or mistake of the consignor or consignee, the carrier's liability shall then (c) Nothing in this bill of lading shall limit the right of the carrier
become that of a warehouseman. Carrier shall promptly attempt to to req uire the prepayment or guarantee of the charges at the time of
provide notice, by telephonic or electronic communication as provided on shipment or prior to delivery. If the description of articles or other
the face of the bill of lading, if so indicated , to the shipper or the party, if information on this bill of lading is found to be incorrect or incomplete, the
any, designated to receive notice on this bill of lading. Storage charges, freight cha rges must be paid based upon the articles actually shipped.
based on carrier's tariff, shall start no sooner than the next business day
following the attempted notification. Storage may be, at the carrier's Se c. 8.
option, in any location that provides reasonable protectio n against loss or If this bill of lading is issued on the order of the shipper, or his
damage. The carrier may place the shipment in public storage at the agent, in exchange or in substitution for another bill of lading, the
owner's expense and without liability to the carrier. shipper's signature on the prior bill of lading or in connection with the
(b} If the carrier does not receive disposition instructions within prior bill of lading as to the statement of value or otherwise, or as to the
48 hours of the time of carrier's attempted first notification, carrier will election of common law or bill of lad ing liability shall be considered a part
attempt to issue a second a nd final confirmed notification. Such notice of this bill of lading as fully as if the same were written on or made in
shall advise that if carrier does not receive disposition instructions within connection with this bill of lading.
10 days of that notificatio n, carrier may offer the shipment for sale at a
public auction and the carrier has the right to offer the shipment for sale . Sec. 9.
The amount of sale will be applied to the carrier's invoice for If all or any part of said property is carried by water over any
transportation , sto rage a nd other lawful charges. The owner will be part of said route, such water carriage shall be performed subject to the
responsible for the balance of charges not covered by the sale of the terms and provisio ns and limitations of liability specified by the "Carriage
goods. If there is a balance remaining after all charges and expenses are of Goods By Sea Act" and any other pertinent laws applicable to water
paid, such balance will be paid to the owner of the property sold carriers.
hereunder, upon claim and proof of ownership.
Page 2 of 2
OP-097G 03/ 12
SOURCE: "Bi ll o f Lading 02" (last visited 15 June 2019), on line (pdf) : Temp lateLAB
<http://templat elab.com / bill- o f - lading>.

I I
44
>I INT RODUCTION TO CUSTOMS ADM IN ISTRATION AND PROCEDURES
FIGURE 2.3 Sample Canada Customs Invoice
••• Canada Border Agence des services CANADA CUSTOMS INVOICE PROTECTED WHEN COMPLETED
-B
PROTt:Gt: UNE FOIS REMPLI
Services Agency frontaliers du Canada FACTURE DES DOUANES CANA DIENNES
or
de
1. Vendor {name and address) Vendeur (nom et adresse) 2. Date of direct shipment to Canada - Date d'expedition directe vers le Canada
The Fashion Showroom 2020/12/06

19985 Canal Street
New York , NY 12345 3. Other references (include ptxchase(s ooler No.)
Autres references (inclure le n• de commande de racheteur)
P .O. 7655-B
4. Consignee (name and address) - Destinataire (nom et adresse) 5. Purchaser's name and address (if other than consignee)
Norn et adresse de l'acheleur (s'il diff8re du destinataire)
Cl othes for Her East Side Warehouse

27 St . Paul Street 123A Spadina Avenue
St. Catharines , ON L7P 2Q8 Toronto, ON M8R 6B7
6 Country of transhipment - Pays de lransbordemenl
7. Country of origin of goods IFSHPMEHTINQ.LDESGOOOSOFDIFfEREHTCRGINS

ENTERORIGHS AGANST ll'EMS IN 12.
8. Transportation: Give mode and place of direct sh ipment to Canada 9.

Pays d'origine des marchandises
United States
Conditions of sale and terms of payment
I SI L'E»'Eclnctl CC*l'REtCI DES MARCHANDISES D'Of!IGllES
Dff£RENTEs,PRfaseZLBJRPRO'IENANCE EH12.
Transport : Precisez mode et point d'expedition directe vers le Csnada (i.e. sale, consignment shipment, leased goods, etc.)
Conditions de vente et moda!itlls de paiement
Highway (p. ex. vente, explldition en consignation, location de marchandises, etc.)
10 net 30
10. Currency of settlement · Devises du paiement
u. s. Dollars
11 12. Specification of commodities (kind of packages, marks and numbers, general 13. Qu antity Selling price • Prix de vente
Number of description and characteristics, i.e., grade, quality) (state un it)
Designation des artid es (nature des colis, marques et numerns, description genllrale Quantite
14 Unit price 15. Total
packages
et carac:teristiques, p. ex. classe, qua1it8) (precisezt'unit8 ) Prixunitaire
Nombre
decotis
6 box es women's skirts , wool 60 30.00 1 , 800.00

boxes women ' s blouses , silk 80 20 . 00 1 , 600.00
20 boxes women ' s rain coats, nylon 400 16.00 6 , 400.00
12 boxes women ' s bathing suits , polyester 120 25.00 3 , 000.00
24 boxes women's 3-piece suits, wool blend 144 80.00 11 , 520.00
18. If any of fields 1 to 17 are included on an alladled commercial invoice, check this box 16. To tal weight • Poi<ts total 17. Invoice total
Si tout renseignement relativement aux zones 1 a 17 figure sur une ou des fadures
comrnerciales ci-attadlMs, cochez cette case D Net Gross · Brut
Total de la facture
Commercial Invoice No. - N• de la fadure commerciale . . 2700 kg 3000 kg 24 , 320 . 0 0

19. Exporte(s name and address (if other than vendor) 20. Originator (name and address) - EJCpediteur d 'origine (nom et adresse)
Norn et adresse de rexportateur (s'il differe du vendeur)
21 . Agency ruling (if applicable) - Decision de rAgence (s'il y a lieu) 22.

If fields 23 to 25 are not applicable, check this box
a
Si les zones 23 25 sont sans objet, cochez cette case
23. If induded in Mid 17 indicate amount: 24. If not included in field 17 indicate amount: 25. Check (if applicable):
Si compris dans le total ala zone 17, ptecisez: Si non compris dans le tota l a la zone 17, precisez : Codlez (s'il y a lieu) :
(i) R~alty payments or subsequent proceeds are

(i) ~stf:~~ 6f~~·~~~~ 0aC~~~~rance
(i) Transportation ~rges, expenses and insurance
to the place of direct shipment to Csnada paid Of payable by lhfl purchaser
~~~i~~~~~re'1~t=:r~~a~~~~nada
Les frais de transport, .dSPen.ses et assuranoes Des redevances ou produits ont e te ou seront
1usqu'au point d'explld1tion d1recte vers le Canada verses par l'adleteur
(ii) Costs for construction. erection and assembly (ii) Amounts for commissions other than buying
D
in curred after importation into Canada commissions
Les coOts de construction, d'erection et Les commissions autres que celles versees (ii) The purchaser has supplied goods or services
d'assemblage apres importation au Canada pour l'adlat for u se in the production of these goods
L'acheleur a foumi des marchandises ou des
services pour la production de ces
ma rdlandises
(iii) Export packing (iii) Export packing

Le coOt de re mballage d'exportation Le coOt de remballage d'exportation
D
Dans ce formulaire, toutes les expressions desiQnant des personnes visent a la fois les hommes et Jes femmes.
Cl1 (07) BSF189
SOURCE: "Canada Customs Invoice" (last modified 10 October 2008), online (pdf):
Canada Border Services Agency <https://www.cbsa - asfc.gc.ca /publications/ forms-
formulaires/cil.pdf>.

I
CHAPTER 2 ARR IVAL AND REPORTING OF IMPORT ED COMMERCIAL GOODS 45 t
FIGURE 2.4 Sa m ple Form A8A(B), In Bond - Cargo Control Documen t
•••
IN BOND
EN DOUANE
Canada Border
Services Agency
Agence des services
frontaliers du Canada
CARGO CONTROL DOCUMENT
DOCUMENT DE CONTR0LE DU FRET
Acquittal No. - N" de l'acquittement
U.S. port of exit - Bureau de sortie des .-U. In transit - En transit

Buffalo, New York
Man~est from - Man~este de To-A
Fort Erie, ON Fort Erie, ON Cargo control No. - N' de contrOle du fret
Consignee name and address - Norn et adresse du destmata1re 45876543

Clothes for Her
27 St. Paul Street
St. Catharines, ON L7P 208
Shipper name and address - Norn et adresse de l'exp&dlteur
The Fashion Showroom
11985 Canal Street
New York, NY 12345
No. of pkgs. Rate Advances Prepaid Collect
Nombre de colis Taux Avances Port paye Port dO
6 boxes women's skirts 150 kg

4 boxes women's blouses 150 kg
20 boxes women's raincoats 900 kg
12 boxes women's bathing suits 600 kg
24 boxes women's suits 1200 kg
66 3000 kg
Foreign point of lading - Port de chargement etranger Location of goods - Emplacement des merchandises
Name of carrier - Norn du transporteur Convevance identification - Identification du moyen de transport
Bob's Cartage 627 523B NY

ASA(B ) (05)
SOURCE: "In Bond-Cargo Control Document" (last modified 15 August 2018). online (pd f): Canada Border
Services Agency <https://www.cbsa - asfc.gc.ca/publicatio ns/ forms- formulaires/a8a-b.pdf>.

I I
> 46 INT RODUCT ION TO CUSTOMS ADM INIST RATION AND PROCEDURES
FIGURE 2.5 Sample Form A30, Customs Diversion Notice
••• =:~ CUSTOMS DIVERSION NOTICE

AVIS DE DRUTEMENT DOUANIER
To: Chief Olticar ol CUllClmS llld EJa:ise Comer~ CorGa No.

Au: Agent de - • - .,, chef
Com O.lr-.p. H• di conlrOle du '*
Fort Erie, ON 1123 45876543
~Olico / _ Clt_
L• mardlandi-. V-.. par le NunWo de contrCle du fNI .....,.,..,,,,, et

~~au bur811U de dcl-. de
Fort Erie, ON
Toronto , ON
aux tins de ~.
No. .. .._,,_ .,. .... ...._1Homo. -

Clothes for He r, 27 St. Paul Street, St. Catharines, ON L7P 208 , -;-~;kg
66
~ ......,../T~dew1wpo1idwu
x;;;i·a~I SigNlute Ill r_.

-~OF NATIOllAL- - - A l l D DCIR
-.Ttlle DU -
A M (1111)
NATIOllAL-DC!UAmS 1!1' ACC11E
Canada
A diversion occurs when a shipment, prior to arrival at the destination customs office, is
diverted to a customs office other than the one noted on the A8A(B).
However, if it is noted after the arrival of the goods that they will be diverted to a
different customs office for release, then a remanifest is submitted. A remanifest is a
rewritten A8A(B).
SOURC E: "Diversion Notice" (last modified 20 February 2018), online (pdf): Canada Border Services Agency
<https: //www .cbsa -asfc.gc.ca/pu blications/forms- formulaires/ a30. pdf>.

FIGURE 2.6
CHAPTER 2 ARR IVAL AND REPORTING OF IMPORTED COMMERCIAL GOODS
Sample Form A10, Cargo Control Abstract

47 8
•••
Canada Border Agence des services
Services Agency frontaliers du Canada Acquittal No. - N° de l'acquittement
CARGO CONTROL ABSTRACT

RESUME DE CONTR0LE DU FRET
U.S. port of exit - Bureau de sortie des i:.-U.
Buffalo, New York
CBSA office - Bureau de l'ASFC Carrier code Ca~o control No.

Fort Erie, ON Code du transporteur N" e contrOle du fret
Consignee name and address - Norn et adresse du destinataire

Clothes for Her
1123 45876543 x1
27 St. Paul Street
St. Catharines, ON L7P 2Q8
Shipper name ana address - Norn et aaresse ae rexpecmeur
The Fashion Showroom Carrier code Master cargo control No.
11985 Canal Street Code du transporteur N° de contrOle du fret principal
New York, NY 12345 1123 45876543
Waybilled from or point loaded Location of goods - Emplacement des merchandises

Lieu d'6misslon du bordereau d'exp6dition ou point de chargement
No. of pieces Description and marks Weight

Nbre de pi6ces D6signation et marques Poids
6 boxes women's skirts 150 kg

_A_ boxes women's blouses 1fill....!sg
10 300 kg
Name and address of deconsolidator/broker/importer - Norn et adresse du d6groupeur/courtier/importateur
To be delivered to the CBSA

A remettre A l'ASFC
A10 (05)
Printed In Canada· lmprim6 au Canada
CBSA CONTROL COPY - EXEMPLAIRE DE CONTR0LE DE L'ASFC

Canada
If the goods on the preceding A8A(B) will be accounted for on more than one accounting
document, the A8A(B) must be abstracted . The following A10s reflect goods that will be
accounted for by three different importers.
Note that the number of boxes on the A 1Os add up to the number of boxes on the A8A(B).
SOURCE: "Cargo Control Abstract" (last modified 14 May 2018), online (pdf): Canada Border Services
Agency <https://www.cbsa - asfc.gc.ca/publicati ons/forms-formulaires/a10.pdf>.
Copyright © 2020 Emond Montgomery Publications. All Rights Reserved .

48 INTRODUCTION TO CUSTOMS ADMINISTRATION AND PROCEDURES
KEY TERMS
Advance Commercial Information Courier Imports Remission Order gross weight, 24
(ACI), 28 (CIRO), 39 in-transit goods, 28
bill of lad ing, 22 Courier Low Value Shipment (CLVS) less than a container load (LCL)
bonded warehouses, 41 program, 37 shipments, 30
breakbulk cargo, 29 deconsolidate, 41 manifest, 34
bulk cargo, 29 Form A6A, Freight/Cargo Manifest, 34 net weight, 24
Canada Customs Invoice (CCI), 22 Form A8A(B), In Bond-Cargo Postal Imports Remission Order
Control Document, 34 (PIRO), 39
Cargo Control Number (CCN), 33
Form A 10, Cargo Control Abstract, 37 Pre-Arrival Review System (PARS),
commercial invoice, 27
Form A30, Customs Diversion 34
consist sheet, 38
Notice, 37 sufferance warehouses, 40
consol idated cargo release list, 37
Freight Remaining on Board supplementary cargo report, 32
consol idation, 41 (FROB), 28
Conveyance Reference Number full container load (FCL)
(CRN), 33 shipments, 30
REVIEW QUESTIONS
1. There are various types of bills of lading, 7. The courier imports remission order allows
depending on the mode of transportation. certain goods that are transported into
True or false? Canada by courier to be exempt from duty
2. A Canadian importer may complete the Canada only. True or false?
Cust oms Invoice (CCI) for goods they are 8. What form is used by CBSA to indicate duties,
importing. True or false? taxes, and handling fees for goods shipped
3. A commercial invoice may be used in lieu of a through the mail?
CCI as long as all information required on the a. Form E14
CCI is found on the commercial invoice. True or b. Canada Customs Invoice
false? c. Bill of lading
4 . Cargo data must be transmitted to CBSA d. Form A6A
before cargo is loaded onto the ship. True e. Form A8A
or false? 9. allows CBSA to open mail
s. Sufferance warehouses are owned, operated, and examine its contents.
and licensed by CBSA. True or false? a. Section 99 of the Customs Act
6. The time frames for reporting cargo data are b. Section 12(a) of the Customs Act
the same whether cargo is loaded in the c. Dl-4-1
United States (US) or in a country other than d. D3-1-1
the US. True or false? e. D3-3-1

CHAPTER 2 ARRIVA L AN D REPORTING OF IMPORTED COMM ERCIAL GOODS 49
10. For goods shipped by air, cargo and conveyance c. 3 hours

data must be transmitted to CBSA a minimum of d. 4 hours
____ before their arrival. e. 5 hours
a. 1 hour
b. 2 hours

1. What is a bill of lading? 8. Who is responsible for the reporting of goods?
2. What is shown in Field 4 of the CCI, Con signee? 9. CBSA implemented the advance commercia l
information program in 2004 for
3 . List the five basic steps involved in the proper
marine carriers. As a result, how must
importation of commercial goods.
cargo and conveyance data be provided
4 . What is shown in Field 6 of the CCI, Country of to CBSA?
Transhipment?
10. List five items that must be shown for each
5. What is shown in Field 10 of the CCI, Currency of shipment on a courier's consolidated cargo
Settlement? release list.
6. Can the amount shown in Field 23(i) of the 11. What does 9816.00.00.00 cover?
CCI be deducted from the amount shown in
Field 17?
12. What is a consolidation?
7. Can the amount shown in Field 24(iii) of the

CCI be deducted from the amount shown in
Field 17?

LEARNING OUTCOMES
• Explain the structure of the Harmonized System of Tariff Classification.
• Describe the General Rules for the Interpretation of the Harmonized System of Tariff Classification .
• Apply the General Rules for the Interpretation of the Harmonized System of Tariff Classification.
• Explain how to classify goods under the Harmonized System of Tariff Classification.
• Classify an item using the Harmonized System of Tariff Classification.

51
I I
> 52 INTRO DUCTI O N TO CUSTOMS ADM INISTRATION AN D PROC EDURES
I
INTRODUCTION
World Customs The World Customs Organization (WCO) is responsible for producing and
Organization (WCO) maintaining what is called the Harmonized Commodity Description and Coding
An organization whose
System (Harmonized System). This system, used to classify goods imported into
primary purpose is to
facilitate the development Canada, is the basis of the Customs Tariff and also called either the HS or just the
of international trade tariff. For the purpose of this chapter, we'll call it the tariff.
through the improvement The development of the tariff, an international tool, was completed in June
and harmonization of
customs procedures.
1983. It is used by more than 200 countries as a basis for their own customs tariff
and for the collection of international trade statistics.
Harmonized System
An international classifica- The first six digits of a classification number are the same in all countries that
t ion system used to classify use the WCO Harmonized System, and countries using this system may add ad-
imported and exported ditional digits. In Canada, it is Finance Canada that adds the sixth and seventh
goods.
digits and it is at this level that the duty rate is prescribed. The final two digits are
added by Statistics Canada and are used for statistical purposes only.
FIGURE 3.1 Customs Tariff- Sectio ns
CUSTOMS TARIFF - SCHEDULE
IV
~
RAW HIDES AND SKINS, LEATHER, FURSKINS AND ARTICLES
THEREOF; SADDLERY AND HARNESS; TRAVEL GOODS,
HANDBAGS AND SIMILAR CONTAINERS; ARTICLES OF ANIMAL GUT
(OTHER THAN SILK-WORM GUT)
Chapte r
41 Raw hides and skins (other than furskins) and leather
42 Articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut (other than silk-
worm gut)
43 Furskins and artificial fur; manufactures thereof
SECTION IX
WOOD AND ARTICLES OF WOOD ; WOOD CHARCOAL;

CORK AND ARTICLES OF CORK; MANUFACTURES OF STRAW,
OF ESPARTO OR OF OTHER PLAITING MATERIALS;
BASKETWARE AND WICKERWORK
44 Wood and articles of wood; wood charcoal
45 Cork and articles of cork
46 Manufactures of straw, of esparto or of other plaiting materials; basketware and wickeiwork
~
PULP OF WOOD OR OF OTHER FIBROUS CELLULOSIC MATERIAL;
RECOVERED (WASTE AND SCRAP) PAPER OR PAPERBOARD;
PAPER AND PAPERBOARD AND ARTICLES THEREOF
47 Pulp of wood or of other fibrous cellulosic material ; recovered (waste and scrap) paper or paperboard
48 Paper and paperboard; articles of paper pulp, of paper or of paperboard
49 Printed books, newspapers, pictures and other products of the printing industry; manuscripts, typescripts and plans

I
CHAPTER 3 THE CANAD IAN HARMON IZED SYSTEM OF TAR IFF CLASSIFICATION 53
The rate of duty that is applied to imported goods depends on the tariff clas-
sification and the tariff treatment of the goods.
The tariff that is used in Canada includes 21 sections, which are further broken
down into 99 chapters. The sections are based on economic sector, with similar
goods grouped together. Sections are written in Roman numerals, for example,
section I, section 11, and section III (see Figure 3.1, above).
FIGURE 3.2 Customs Tariff- Chapters
SECTION I
LIVE ANIMALS ; AN IMAL PRODUCTS
g
(1\ Live animals
2 Meat and edible meat offal
3 Fish and crustaceans, molluscs and other aquatic invertebrates
4 Dairy produce; birds' eggs; natural honey; edible products of animal origin , not elsewhere specified or included
5 Products of animal origin, not elsewhere specified or included
SECTION II
VEGETABLE PRODUCTS
6 Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage
7 Edible vegetables and certain roots a nd tubers
8 Edible fruit and nuts; peel of citrus fruit or melons
9 Coffee , tea, mate and spices
10 Cereals
11 Products of the milling industry; malt; starches; inulin; wheat gluten
12 Oil seeds and oleaginous fruits; miscellaneous grains, seeds and fruit; industrial or medicinal plants; straw and fodder
13 Lac; gums, resins and other vegetable saps and extracts
14 Vegetable plaiting materials; vegetable products not elsewhere specified or included
The chapters are even more precise regarding the nature of goods. As you
progress through the sections and chapters, the goods become more developed,
processed, or complex (see Figure 3.2, above).
Breakdowns and consolidations of the Customs Tariff Schedule 1 can be found
online on CBSA's website in both PDF and HTML versions. We suggest that the
PDF version be used, as the HTML version, depending on one's browser, may not
display properly.
1 "Departmental Consolidation of the Customs Tariff 2019" (1 January 2019) (excludes the
Customs Tariff, SC 1977, c 36), online (pdf): Canada Border Services Agency <https://www.cbsa-
asfc.gc.ca/trade-commerce/tariff-tarif /2019/01-99/ 01-99- t2019-1 - eng.pdf>.

I I
I
CLASSIFICATION NUMBERS
hierarchical system Within the tariff, goods are classified numerically in a hierarchical system that
Describes the structure of includes a chapter, heading, subheading, tariff item, and finally, a statistical suffix.
the tariff whereby goods are
ranked from lowest to
For example, the tariff classification for shelled Brazil nuts, 0801.22.00.00, is broken
highest level of manufac- down as follows:
ture; from least to most.
• Chapter (first two digits)= 08
• Heading (first four digits) = 08.01 (When only the heading is shown,
that is, without the rest of the classification, a decimal point follows the
chapter number.)
• Subheading (first six digits) = 0801.22
• Tariff item (first eight digits) = 0801.22.00
• Classification number (all ten digits) = 0801.22.00.00
Before you attempt to classify goods, you must understand the rules of how to
interpret the Harmonized System.
GENERAL INTERPRETIVE RULES

The General Rules for the Interpretation of the Harmonized System2 are also referred
General Interpretive to as the General Interpretive Rules (GIRs). These rules are a list of principles
Rules (GIRs) that govern the classification of goods and are intended to ensure uniform legal
The rules governing the
interpretation of the Harmonized System Nomenclature.
classification of goods in the
Harmonized System. There are six international rules of classification under the Harmonized System,
plus three Canadian rules. These rules are reproduced below.
GIR 1
The titles of Sections, Chapters and sub-Chapters are provided for ease of
reference only; for legal purposes, classification shall be determined accord-
ing to the terms of the headings and any relative Section or Chapter Notes
and, provided such headings or Notes do not otherwise require, according to
the following provisions.
sub-chapters
A further division of a
chapter. Sub-chapters are
found in chapters 28, 29, 39, Rule 1 establishes that titles of sections, chapters, and sub-chapters are pro-
63, 69, 71, 72, and 98. vided for ease of reference only and not for legal purposes.
2 (Separate schedule to the Customs Tariff) (1 January 2019). online (pdf) : Canada Border
Services Agency <https ://www.cbsa-asfc.ge. ea/ trade-corn merce/ta riff-ta rif /2019 / 01-99 /rules-
regles-eng.pdf>.

I
CHAPTER 3 THE CANADIAN HARMON IZED SYSTEM OF TARI FF CLASSIFICATIO N 55 t
Rule 1 also states that the classification of goods is determined:
• according to the terms of the headings and any relative section or

chapter notes, and
• where appropriate and provided the headings or notes do not state
otherwise, according to the provisions of rules 2, 3, 4, and 5.
Many goods can be classified by using GIR 1. Let's use fresh apples as an example
and see if GIR 1 can be used to help classify them.
Section II of the Customs Tariff Schedule is entitled Vegetable Products (see
Figure 3.3). Since this is a section title, according to GIR 1 it is for ease of reference
only and it cannot be assumed that all vegetables are included in this section. And,
although apples are technically fruits, this is the section that is most applicable.
FIGURE 3.3 Customs Tariff-Section II (Brief)

11- 1
SECTION II
VEGETABLE PRODUCTS
Now let's look at the chapters under section II. Chapter 8 is entitled Edible
Fruit and Nuts; Peel of Citrus Fruit or Melons (see Figure 3.4). Again, according
to GIR 1, the chapter is provided for ease of reference, but it gives us a good place
to start looking further.
FIGURE 3.4 Customs Tariff-Sections (Detailed)
SECTION II
VEGETABLE PRODUCTS
6 Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage
7 Edible vegetables and certain roots and tubers
8 Ed ible fruit and nuts; peel of citrus fruit or melons
9 Coffee. tea, mate and spices
10 Cereals
11 Products of the milling industry; malt; starches; inulin; wheat gluten
12 Oil seeds and oleaginous fruits; miscellaneous grains, seeds and fruit; industrial or medicinal plants; straw and fodder
13 Lac; gums, resins and other vegetable saps a nd extracts
14 Vegetable plaiting materials; vegetable products not elsewhere specified or included
Now let's take a look at the headings in chapter 8. Heading 08 .08 of the
Customs Tariff Schedule is entitled "Apples, pears and quinces, fresh:' Since

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I
GIR 1 states that you can determine the classification of a good by the terms
of a heading, you can confidently classify fresh apples in heading 08.08 (see
Figure 3.5).
FIGURE 3.5 Customs Tariff-Chapter 8
08 -7
Tariff SS Unit of MFN Applicable

Description of Goods
Item Meas. Tariff Preferential Tariffs
0807.19.00 - -Other Free CCCT, LDCT, GPT, UST,
MT, CT, CRT, IT, SLT,
PT, COLT, JT, PAT, HNT,
KRT, CEUT, UAT,
C PTPT: Free
10 - - - - -Cantaloupes ... .. KGM
20 - - - - -Winter melons .. . KGM
90 - - ---0ther ... KGM
0807.20.00 -Papaws (papayas) Free CCCT, LDCT, GPT, UST,

MT, CT, CRT, IT, PT,
COLT, JT, PAT, HNT,
KRT, CEUT, UAT,
C PTPT: Free
1O - - - - -Certified organic ... KGM
20 - - - - -N ot certified organic ... KGM
08.08 Apples, pears and quinces, fresh.
0808.10 -Apples
0808.10. 10 - - -In their natural state Free CCCT, LDCT, GPT, UST,
MT, CT. CRT. IT. PT.
COLT, JT, PAT, HNT,
KRT, CEUT, UAT,
C PTPT: Free
GIR 2 (a)
Any reference in a heading to an article shall be taken to include a reference
to that article incomplete or unfinished, provided that, as presented, the in-
complete or unfinished article has the essential character of the complete or
finished article. It shall also be taken to include a reference to that article
complete or finished (or failing to be classified as complete or finished by
virtue of the Rule), presented unassembled or disassembled.
Rule 2(a) means that if a finished item is named in a heading, that item, when
incomplete or unfinished, may be classified in the same heading as the finished
item. However, the incomplete or unfinished item must have the essential character
of the finished product.
An example is a wooden bookcase that is unassembled for shipping. If it has
the essential character of a finished bookcase and is recognizable as such, it may
be classified as a wooden bookcase in heading 94.03.
An example of an unfinished good is an air conditioning unit that is missing a
part at the time of shipping. The missing part does not change the essential char-
acter of the machine; therefore, the machine without the part can be classified as
a complete air conditioning unit in heading 84.15.

CHAPTER 3 THE CANADIAN HARMONIZED SYSTEM OF TAR IFF CLASSIFICATION 57 <)
In both examples, the goods could not be classified according to GIR 1, since
an unassembled bookcase and an unfinished air conditioner unit are not named
in their respective headings.
GIR 2(b)
Any reference in a heading to a material or substance shall be taken to include a
reference to mixtures or combinations of that material or substance with other
materials or substances. Any reference to goods of a given material or substance
shall be taken to include a reference to goods consisting wholly or partly of such
material or substance. The classification of goods consisting of more than one
material or substance shall be according to the principles of Rule 3.
The first part of rule 2(b) states that if a heading includes a material or a substance, it
also includes that material or substance when it is mixed with other materials or sub-
stances. The second part of rule 2(b) states that a reference to goods made of a certain
material or substance also includes goods that are wholly or partly made of that sub-
stance. The last part of the rule means that, if by application of rule 2(b) or for any other
reason goods appear to fit equally into more than one heading, you must turn to GIR 3.
An example of the first part of rule 2(b) is a mixture of 92 percent cinnamon
and 8 percent sugar.
First, we would look to see whether GIR 1 or 2(a) apply. GIR 1 doesn't apply
since there is no heading that includes this mixture. GIR 2(a) doesn't apply either,
since the mixture of cinnamon and sugar is a complete product and GIR 2(a) pro-
vides guidance on the classification of unassembled or unfinished goods.
If we look up the classification for cinnamon, we see that it is included under
heading 09.06. Using rule 2(b ), we can classify the mixture of cinnamon and sugar
under this heading.
To illustrate the second part of the rule, consider packaged cereal that contains
a small amount of dried fruit. In this case, the goods can be classified as cereal.
GIR 3(a)
The heading which provides the most specific description shall be preferred to
headings providing a more general description. However, when two or more
headings each refer to part only of the materials or substances contained in mixed
or composite goods or to part only of the items in a set put up for retail sale, those
headings are to be regarded as equally specific in relation to those goods, even if
one of them gives a more complete or precise description of the goods.
GIR 3 includes three rules to be applied, in order, when goods appear to be equally
suited to more than one heading.
Rule 3(a) indicates that when you are considering two headings, you must
select the heading with the most specific description over the heading that has a
more general description.

I \ I
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An example is a steel spoon where you might consider headings 73.23 and
82.15. These read:
• 82.15: Spoons, forks, ladles, skimmers, cake-servers, fish-knives, butter-
knives, sugar tongs and similar kitchen or tableware; and
• 73.23: Table, kitchen or other household articles and parts thereof, of
iron or steel; iron or steel wool; pot scourers and scouring or polishing
pads, gloves and the like, of iron or steel.
82.15 is the heading with the most specific description- it refers to a spoon,
rather than tableware.
GIR 3 (b)
Mixtures, composite goods consisting of different materials or made up of
different components, and goods put up in sets for retail sale, which cannot
be classified by reference to Rule 3(a), shall be classified as if they consisted
of the material or component which gives them their essential character, in-
sofar as this criterion is applicable.
Rule 3(b) applies to mixtures, goods made up of different materials or components,

and sets. It states that the item is classified according to the material or component
that gives it its essential character.
An example of a set is a hair dressing kit that contains a hair dryer (85.16),
a comb (96.15), scissors (82.13), and a brush (96.03), all packaged in a double-
sided plastic case. It is the hair dryer that provides the essential character and so
the kit can be classified as such under heading 85.16.
GIR 3(c)
When goods cannot be classified by reference to Rule 3(a) or 3(b), they shall
be classified under the heading which occurs last in numerical order among
those which equally merit consideration.
Rule 3(c) is used when rules 3(a) and 3(b) cannot be applied. When this is the
case, Rule 3(c) indicates that you select the heading that occurs last in numeri-
cal order.
A belt that is 50 percent leather (42.03) and 50 percent textiles (62.17) would
be classified under 62.17.
GIR4
Goods which cannot be classified in accordance with the above Rules shall
be classified under the heading appropriate to the goods to which they are
most akin.

I
CHAPTER 3 THE CANADIAN HARMONIZED SYSTEM OF TARIFF CLASSIFICATION 59
If the heading of the goods still cannot be determined, rule 4 allows you to select
the heading that is suitable for the goods to which they are most alike.
This rule is generally used when classifying new products. In this case, you
would classify the goods under the same heading where you would classify goods
that are most like the product you are now classifying.
GIR S(a)
Camera cases, musical instrument cases, gun cases, drawing instrument cas-
es, necklace cases and similar containers, specially shaped or fitted to contain
a specific article or set of articles, suitable for long-term use and presented
with the articles for which they are intended, shall be classified with such arti-
cles when of a kind normally sold therewith. This Rule does not, however,
apply to containers which give the whole its essential character.
Rule 5(a) states that cases and similar containers that are specially designed to hold
a specific article or set of articles, are suitable for repeated use, and are shipped
with the goods they are designed to hold are classified under the same classifica-
tion as the goods they hold.
Examples are a camera case that is shipped with a camera, or a guitar case that
comes with a guitar. These goods are classified as a camera or a guitar.
GIR S(b)
Subject to the provisions of Rule S(a) above, packing materials and packing
containers presented with the goods therein shall be classified with the
goods if they are of a kind normally used for packing such goods. However,
this provision is not binding when such packing materials or packing contain-
ers are clearly suitable for repetitive use.
Like rule S(a), rule S(b) is used for packing. The difference is that if the packing is
suitable for repeated use, it is not included in the same classification as the goods.
For example, reusable pallets are classified as reusable pallets and not under the
same classification as the goods loaded on the pallets.
GIR6
For legal purposes, the classification of goods in the subheadings of a head-
ing shall be determined according to the terms of those subheadings and any
related Subheading Notes and, mutatis mutandis, to the above Rules, on the
understanding that only subheadings at the same level are comparable. For
the purpose of this Rule the relative Section and Chapter notes also apply,
unless the context otherwise requires.

I I
>I 6Q INTRODUCTION TO CUSTOMS ADM INIST RATION AND PROCED URES
Rule 6 states that the principles applied in rules 1 through 4 must now be applied
at the subheading level. Classifying goods directly into what might appear to be
the correct subheading without first ensuring that the heading is correct will surely
result in errors.
CANADIAN GENERAL INTERPRETIVE

RULES
There are three Canadian GIRs:
1. For legal purposes, the classification of goods in the tariff items of a sub-
heading or of a heading shall be determined according to the terms of
those tariff items and any related Supplementary Notes and, mutatis mu-
tandis, to the General Rules for the Interpretation of the Harmonized
System, on the understanding that only tariff items at the same level are
comparable. For the purpose of this Rule the relative Section, Chapter and
Subheading Notes also apply, unless the context otherwise requires.
The Canadian system of tariff classification adds additional digits to the six inter-
national digits. Canadian GIR 1 states that the process described in rule 6 of the
GIRs must be applied at the eighth and tenth digit levels.
2. Where both a Canadian term and an international term are presented in

this Nomenclature, the commonly accepted meaning and scope of the
international term shall take precedence.
When a Canadian term and an international term are used in the tariff, the interna-
tional term will take precedence. An example of this is the word "biscuit"- some-
thing we might call a cookie.
3. For the purpose of Rule S(b) of the General Rules for the Interpretation of
the Harmonized System, packing materials or packing containers clearly
suitable for repetitive use shall be classified under their respective headings.
This rule clarifies rule S(b) of the GIRs.
SECTION AND CHAPTER NOTES

The sections and chapters of the Customs Tariff Schedule often include notes. The
notes provide further clarification about the goods and may also list goods that are

I
CHAPTER 3 THE CANADIAN HARMON IZED SYSTEM OF TAR IFF CLASSIFICATIO N 61
excluded from a particular classification. For this reason, all relevant notes should
be read before the classification process begins.
PUNCTUATION
Understanding the punctuation used in the Customs Tariff is extremely important.
A semi-colon (;) is used to divide the text of the description into distinct
clauses.
A colon (:) is used to indicate that additional information follows and this
additional information further describes the goods.
A comma (,) is used to separate a series or list of items that are classified under
the same tariff provision.
The word "and" indicates that more than one condition must be satisfied.
The word "or" indicates that an alternative exists.
THE CLASSIFICATION PROCESS

After reviewing the section and chapter notes and selecting what you believe to
be the correct chapter, you must then select the heading within that chapter; the
subheading within that heading; the tariff item within that subheading; and, finally,
by adding the statistical suffix, the tariff classification. These steps will result in a
ten -digit classification number.
If there is more than one heading within a chapter, the headings must be com-
pared with each other. Only the headings within a chapter may be compared with
each other. For example, chapter 8 of the Customs Tariff Schedule is entitled Edible
Fruit and Nuts; Peel of Citrus Fruit or Melons. There are 14 headings in chapter 8,
each of which is listed below:
08.01 Coconuts, Brazil nuts and cashew nuts, fresh or dried, whether or not
shelled or peeled.
08.02 Other nuts, fresh or dried, whether or not shelled or peeled.
08.03 Bananas, including plantain, fresh or dried.
08.04 Dates, figs, pineapples, avocados, guavas, mangoes and mangosteens,
fresh or dried.
08.05 Citrus fruit, fresh or dried.
08.06 Grapes, fresh or dried.
08.07 Melons (including watermelons) and papaws (papayas), fresh.
08.08 Apples, pears and quinces, fresh.
08.09 Apricots, cherries, peaches (including nectarines), plums or sloes, fresh.
08.10 Other fruit, fresh.
08.11 Fruit and nuts, uncooked or cooked by steaming or boiling in water,
frozen, whether or not containing added sugar or other sweetening
matter.

I I
62
08. 12 Fruits and nuts, provisionally preserved (for example, by sulphur dioxide
gas, in brine, in sulphur water or in other preservative solutions), but un-
suitable in that state for immediate consumption.
08.13 Fruit, dried, other than that of headings 08.01 to 08.06; mixtures of nuts
or dried fruits of this Chapter.
08.14 Peel of citrus fruits or melons (including watermelons), fresh, frozen,
dried or provisionally preserved in brine, in sulphur water or in other
preservative solutions.
You can see in the above example that as the heading numbers get larger, the
goods become more manufactured. This is an example of the hierarchical structure
that was explained earlier.
If, for example, you are classifying fresh Golden Delicious apples that are not
certified organic and are for human consumption, you would look at each of the
headings in chapter 8 to see where the apples best fit. In this case, apples are spe-
cifically named in heading 08.08. What's next?
SUBHEADINGS AND TARIFF ITEMS

Only subheadings and tariff items at the same level are comparable. Subheadings
are preceded by either one dash or two dashes. Those with one dash may only be
compared to other subheadings with one dash. The same is true for those preceded
by two dashes. Tariff items are preceded by either three or four dashes.
Look now at the subheadings under heading 08.08; these are:
0808. l 0 - Apples
0808.30 - Pears
0808.40 - Quinces
There are three subheadings and apples quite clearly fall under subheading
0808.10
Now look at the two tariff items under heading 0808.10:
0808.10.10 - - - In their natural state
0808.10.90 - - - Other
The apples are fresh and have not been further processed so they would be
classified "in their natural state:'
The last step is the final two digits, the statistical suffix.
There are three five-dash items.
- - - - - For processing
- - - - - Certified organic
- - - - - Other
We know the apples aren't for processing-they're for human consumption-

and we know they are not organic. However, there are additional breakouts under
"- - - - - Other:'

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CHAPTER 3 THE CANADIAN HARMONIZED SYSTEM OF TAR IFF CLASSIFICATIO N 63
92 - ---- - Golden Delicious

93 - ---- - Granny Smith
94 - ---- - Ida Red
95 - ---- - Mcintosh
96 - ---- - Red Delicious
97 - ---- - Gala
98 - ---- - Honeycrisp
99 - ---- - Other
The tariff classification for fresh Golden Delicious apples that are not organic
and are for human consumption is 0808.10.10.92.

64 INTRODUCTION TO CUSTOMS ADM INIST RATION AND PROCEDURES
KEY TERMS
General Interpretive Ru les (GIRs), 54 hierarchical system, 54 World Customs Organization
Harmonized System, 52 sub-chapters, 54 (WCO), 52
REVIEW QUESTIONS
1. When classifying goods, only subheadings and d. 10
tariff items at the same level can be compared e. 12
to each other. True or false?
7. The first two digit s of the tariff classification
2. The World Trade Organization is responsible for represent the _ __
producing and maintaining the Harmonized a. chapter
Commodity Description and Coding System.
b. heading
True or false?
c. subheading
3. Where both a Canadian term and an d. tariff item
international term are presented in the customs
e. classification number
tariff, the commonly accepted meaning and
scope of the international term shall take 8. GIR 3(a) states that _ _ _ _ _ _ _ _ __
precedence. True or false?
4 . A complete tariff classification number consists a. the titles of sections, chapters and sub-
of digits. chapters are provided for ease of reference
only; for legal purposes, classification shall
a. 4
be determined according to the terms of the
b. 6
headings and any relative section or chapter
c. 8 notes and, provided such headi ngs or notes
d. 10 do not otherwise require, according to the
e. 12 following provisions
5. The developed the b. the heading which provides the most
Harmonized Commodity Description and specific description shall be preferred to
Coding System. headings providing a more general
a. Canadian International Trade Tribunal description
b. United Nations c. where both a Canadian term and an
c. Union of International Associations international term are presented in this
d. World Trade Organization Nomenclature, the commonly accepted
meaning and scope of the international
e. World Customs Organization
term shall take precedence
6. The first _ _ digits of the tariff classification d. any reference in a heading to an article shall
number are international. be taken to include a reference to that article
a. 4 incomplete or unfinished, provided that, as
b. 6 presented, the incomplete or unfinished
c. 8 article has the essential character of the
complete or finished article

CHAPTER 3 THE CANADIAN HARMO NIZED SYSTE M O F TARIFF CLASS IFICAT IO N 65
e. goods which cannot be classified in classified under the heading appropriate to
accordance with the above rules shall be the goods to which they are most akin

Consult the Customs Tariff on CBSA's website to answer Questions 1-4.
1. What is the subheading for non-alcoholic beer? 4 . What is the tariff classification of 2 percent
chocolate milk?
2. What is the subheading for crushed, roasted
cocoa beans?
3 . What is the tariff classification for a welde r's
protective face mask?

LEARNING OUTCOMES
After reading this chapter. you should be able to:
• List the six methods of customs valuation .
• Describe the value for duty codes.
• Understand how addit ions to the price paid or payable are determined.
• Understand how deductions from the price paid or payable are determined .
67
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68
INTRODUCTION
The Customs Act1 provides six methods for valuating imported goods. The result
is the value for duty (VFD), that is, the value on which duty is calculated.
methods of customs The various methods of customs valuation are intended to provide a fair,
valuation uniform, and neutral system of valuation that conforms to commercial realities
Six methods that are used to
and prohibits the application of arbitrary or fictitious customs values. This valu-
determine the value for duty
of imported goods. Listed in ation process is generally referred to as the transaction value system of customs
the order in which they must valuation and focuses on the price actually paid for goods when sold for export to
be applied, these methods Canada to a purchaser in Canada. From this price paid or payable, certain other
are the transaction value of
the goods; the transaction
costs may be added or deducted.
value of identical goods; the
transaction value of similar
goods; the deductive value;
the computed value; and the THE SIX METHODS OF CUSTOMS
residual method. VALUATION
There are six methods that are used to determine the VFD of imported goods,
shown in Figure 4.1.2 Listed in the order in which they must be applied, these
methods are:
FIGURE 4.1 Methods of Valuation
Transaction Value
•
•
Transaction Value of Identical Goods
•
Transaction Value of Similar Goods
•
Deductive Value
•
Computed Value
Residual Method
If the first method cannot be used, the value for duty is determined by one of
the five remaining methods. They must be considered in sequential order with
1 RSC 1985, c 1 (2nd Supp).

2 Ibid.

I
CHAPTER 4 VALUATION 69
the exception of the deductive and computed value. An importer may choose to
apply these two methods in reverse order if they have advised CBSA in writing
that they have done so.
THE VALUE FOR DUTY CODES

The value for duty code is a two-digit code. It is included on an accounting docu- value for duty code
ment, Form B3, Canada Customs Coding Form, and indicates the method of valu- A two-digit code that
identifies to CBSA the
ation used to determine the value for duty. The first digit signifies the relationship method of valuation used to
between the vendor and the importer; the second digit indicates the method of determine the value of
valuation used. imported goods. The first
The first digit is either a one or a two. A one indicates the vendor and the importer digit signifies the relation-
ship between the vendor
are not related. A two indicates they are related. and the importer; the second
Parties or persons are related if any of the following apply: digit indicates the method of
valuation used.
• they are individuals connected by blood relationship, marriage, parties or persons are
common law partnership, or adoption within the meaning of section related
251 (6) of the Income Tax Act;3 Related parties or persons
are any of the following:
• one is an officer or a director of the other; individuals connected by
• each such person is an officer or a director of the same two corporations, blood relationship, marriage,
common law partnership, or
associations, partnerships, or other organizations; adoption within the
• they are partners; meaning of section 251 (6) of
the Income Tax Act; one is an
• one is the employer of the other; officer or a director of the
other; each such person is
• they directly or indirectly control or are controlled by the same person; or
an officer or a director of the
• one directly or indirectly controls or is controlled by the other. same two corporations,
associations, partnerships, or
The second digit is a number from three to nine (see Table 4.1). other organizations; they are
partners; one is the employ-
er of the other; they directly
TABLE 4.1 Method of Valuation Used or indirectly control or are
controlled by the same
3 Indicates the price is paid or payable for the goods, without adjustments person; one directly or
indirectly controls or is
4 Ind icates the price is paid or payable for the goods, with adjustments controlled by the other.
Related parties may use the
5 Indicates that the transaction value of identical goods was used
transaction method of
valuation if the relationship
6 Ind icates that the transaction value of similar goods was used
did not affect the price paid.
7 Indicates that the deductive method was used
8 Indicates that the computed method was used
9 Indicates that the residual method was used
3 RSC 1985, c 1 (5th Supp).

>>
I
>70I INTRODUCTION TO CUSTOMS ADMINISTRATION AND PROCEDURES
The method of valuation used should be known by the importer. If you are acting on
behalf of an importer and the method of valuation used is not evident, the importer
should be contacted so that the correct method of valuation is provided to CBSA.
TRANSACTION VALUE OF THE GOODS

transaction value of The first method, the transaction value of the goods, is the price paid or pay-
the goods able for goods sold and is the method used most often. Set out in section 48 of
The price paid or payable for
the Customs Act, the transaction value may be used for sales between non-related
goods that have been sold.
It is the method of valuation parties and related parties. However, related parties may use this method only if
most commonly used. the relationship has not influenced the price of the goods.
There are four requirements that must be met before the transaction value may
be used:
1. The imported goods were sold.

2. The sale was for export to Canada.
3. The purchaser in the sale for export is the purchaser in Canada.
4. The price paid or payable for the goods can be determined.
As well, the price paid or payable can only be used as the value for duty when
the following conditions have been met:
1. With some exceptions, there must be no restrictions respecting the use

of the goods by the purchaser.
2. The sale of the goods by the vendor to the purchaser or the price
paid or payable for the goods is not subject to some condition or
consideration for which a value cannot be determined.
3. Where any part of the proceeds of the resale, disposal, or use of the
goods accrues to the vendor, the price paid or payable must include the
value of those proceeds.
4. Where the purchaser and vendor are related, the relationship did not
influence the price paid or payable for the goods.
If the transaction value of the goods method is used, adjustments may need to be
additions to the price made in the form of additions to, or deductions from, the price paid or payable.
paid or payable
Costs that are dutiable and
therefore must be added to ADDITIONS TO THE PRICE PAID OR PAYABLE
the price paid or payable if
they are not already Certain costs, because they are dutiable, must be added to the price paid or payable
included. if those costs are not already included. The following costs must either be added
to, or included in, the price paid or payable:
• commissions,
• brokerage fees,

I
• packing costs and charges,

• assists,
• royalties and licence fees,
• subsequent proceeds, and
• transportation costs.
COMMISSIONS
When determining whether payments of commissions and brokerage fees to an commissions
agent should be added to the price paid or payable, it is necessary to determine Buying commissions are
payments made to those
whether the agent is a selling agent, a buying agent, or a broker. who act on behalf of the
purchaser. Selling commis-
sions are payments made to
those who act on behalf of
A selling agent is a person who acts on behalf of the vendor. They look the vendor.
for customers, take orders, and, in some cases, arrange for the delivery selling agent
and storage of goods. The selling agent's earnings are usually called A person who acts on behalf
of t he vendor. They look for
selling commissions. Goods purchased through a selling agent gener-
customers, take orders, and,
ally cannot be bought unless the selling commission is paid. The selling in some cases, arrange for
commission is usually paid to the agent by the vendor. In this case. the the delivery and storage of
cost of the goods will include the selling commission, and the selling goods. The sel ling agent's
earnings are usually called
commission does not have to be added.
selling commissions and are
If the terms of the sale require the Canadian purchaser to pay the dutiable.
selling agent separately, this commission is usually not included in the
price paid or payable and, therefore. must be added.
A buying agent acts on behalf of the purchaser. A buying agent may buying agent
find suppliers, place orders, inspect goods, and ensure the delivery of A person who acts on behalf
of t he purchaser. A buying
the goods. The buying agent's payment. or buying commission, is paid
agent may find suppliers,
by the purchaser and is usually separate from the payment made for the place orders, inspect goods,
goods. Buying commissions are not dutiable and not included in the and ensure the delivery of
the goods. Commissions
transaction value of the goods.
paid to buying agents are
not dutiable.
BROKERAGE FEES
A broker is an agent who can act on behalf of the vendor, the purchaser, or both
and generally has no role other than to put the parties in touch with each other.
The broker's remuneration is called a brokerage fee and is usually calculated as a brokerage fee
Term used for payments to
percentage of the business concluded as a result of the vendor's and purchaser's intermediaries for their
activities. The percentage received by brokers typically reflects their limited risks participation in concluding a
and responsibilities. contract of sale. It does not
refer t o charges by a
Brokerage fees are payments made to intermediaries for their participation
customs broker for services
in concluding a contract of sale. It does not mean charges by a customs broker for rendered to clear goods
services rendered to clear goods through customs. If the vendor pays the broker, through cust oms.

I I
/ the brokerage fee will usually be included in the invoice price. In such cases, it is
treated like a selling commission; that is, it is either included in or added to the
transaction value.
Where the brokerage fee is paid by the vendor and charged separately to the
purchaser, it must be added to the price paid or payable. It is also possible that
the broker may be paid by the purchaser alone or that each party to the transaction
may pay part of the total brokerage fee. In these cases, the brokerage fee must be
added to the price paid or payable to the extent that it is paid by the purchaser and
not already included in the price of the goods.
PACKING COSTS AND CHARGES

All costs and charges incurred by the purchaser relating to packing, including
labour and materials, are dutiable and must be included in the value for duty. The
packing materials and packing containers may be entered under the tariff classifi-
cation of the goods if they are of the kind normally used for packing such goods,
according to rule S(b) of the General Interpretative Rules (GIRs).4
The GIRs are rules that are used when classifying goods. Rule S(b) states that
packing materials and packing containers presented with the goods therein shall
be classified with the goods if they are of a kind normally used for packing such
goods. However, this provision is not binding when such packing materials or
packing containers are clearly suitable for repetitive use.
If the packing materials or packing containers are suitable for repetitive use, they
are classified under their own tariff item.
assists
Items such as materials,
ASSISTS
artwork, and tools that are
supplied by the importer to The term "assists" includes items such as materials, tools, dies, artwork, develop-
the vendor at no charge and
ment work, and any materials that are consumed in the production of the imported
are used in the production
of imported goods for that
goods and were supplied by the purchaser of the goods at a reduced cost, or at no
importer. Assists are cost, for use in the manufacture of the imported goods. These items are dutiable
dutiable. and must have their true value determined before including it in the transaction
royalties and licence value of the imported goods.
fees
Payments made for using
or acquiring a protected ROYALTIES AND LICENCE FEES
right, such as a trademark.
For customs purposes, royalties and licence fees are regarded as payments made,
Royalties and licence fees
paid to the vendor are or to be made, for acquiring or using a protected right. Examples of such payments
dutiable. include, but are not limited to:
4 "General Rules for the Interpretation of the Harmonized System" (separate schedule to the
Customs Tariff) (1 January 2019). online (pdf): Canada Border Services Agency <https://www
.cbsa -asfc.gc .ca / trade-commerce/ tariff-tarif/ 2019 / 01-99 / rules- reg les-eng.pdf>.

I
• payments made to an author (copyright holder) to acquire the right to

sell the author's book within a geographic region;
• payments made to an inventor (patent holder) of a production process
for the use of that process during a specified period; and
• payments made to a licence holder of a trademarked name or brand for
the right to sell goods that are so marked.
SUBSEQUENT PROCEEDS
If any part of the proceeds from any subsequent resale, disposal, or use of the goods
by the purchaser accrues or will accrue to the vendor, this value must be added
to the price paid or payable. If the value of the subsequent proceeds cannot be subsequent proceeds
determined, the transaction method of valuation may not be used. An example of Payments made to the
vendor after importation
a subsequent proceed is a fee paid by the Canadian purchaser to the foreign vendor and include proceeds from
based on a percentage of future sales of the goods in Canada. subsequent sales. Subse-
quent proceeds paid to the
vendor are dutiable.
TRANSPORTATION COSTS
The Customs Act provides for two distinct treatments of transportation and associ-
ated costs incurred in shipping goods to Canada. Transportation costs that relate transportation costs
to the transportation of goods to the place of direct shipment in the country of For customs purposes,
transportation costs are
export are to be included in the value for duty. If they are not included, they must
separated into transporta-
be added. tion costs incurred to the
Transportation costs related to the movement of goods from the place of place of direct shipment and
direct shipment to Canada are not to be included in the value for duty. If they are transportation costs from
the place of direct shipment.
included, they may be deducted. Costs to the place of direct
The shipper's bill of lading is the primary document used to establish the place shipment are dutiable. Costs
in the country of export from which goods are shipped directly to Canada. If the from the place of direct
shipment are not.
vendor incurs transportation-related expenses, such as local cartage fees or storage
charges on the goods before they are laden for export directly to Canada, those costs
must be added to or included in the value for duty. The following is an example.
A Canadian importer has an agreement to buy furniture from a manu-

facturer in China. The goods are manufactured and sent to a ware-
house in Hong Kong, where they will be stored until the importer
decides to have them shipped directly to Canada. Because the ware-
house is considered the place of direct shipment, the transportation
costs between the manufacturer's location in China and the ware -
house in Hong Kong are included in the value for duty. This is because
they are transportation costs that relate to the transportation of the
goods to the place of direct shipment to Canada.

I I
I
DEDUCTIONS FROM THE PRICE PAID OR PAYABLE
Certain costs, if they have been included, may be deducted from the price paid
or payable in order to arrive at the transaction value. The following costs may be
deducted from the price paid or payable:
• transportation costs,
• costs incurred in Canada,
• duty and taxes, and
• discounts.
TRANSPORTATION COSTS
The cost of transportation and associated costs relating to the transportation of
goods from the place in the country of export from which they are shipped directly
to Canada are not dutiable. If these costs are included in the selling price, they may
be deducted.
Looking again at our example of the Canadian importer who purchased fur-
niture from a manufacturer in China, if transportation charges for shipping the
goods from Hong Kong to Canada were included in the selling price, they may
be deducted.
COSTS INCURRED IN CANADA

Any reasonable cost or expense identified separately from the price paid or pay-
able that is incurred for the construction, erection, assembly or maintenance of,
or technical assistance provided in respect of the goods after they are imported
may be deducted.
DUTIES AND TAXES

Any Canadian duties and taxes, paid or payable by reason of the importation of
the goods or sale of the goods in Canada, are not included in the value for duty.
Duties and taxes may be deducted if they are included and identified separately.
DISCOUNTS
Certain discounts given to the Canadian purchaser by the foreign vendor are
allowable deductions from the transaction value. If the condition necessary for
the discount is fulfilled or met before importation, the discount is an allowable
deduction when calculating the value for duty. If the condition is met after impor-
tation, the discount is not allowed.
ORDER OF ADJUSTMENTS
The transaction value is calculated by adding any dutiable costs to the price paid
or payable. From that subtotal, any allowable deductions are subtracted.

I
CHAPTER 4 VALUATION 75 t
TRANSACTION VALUE OF IDENTICAL GOODS
When the transaction value of the goods cannot be used to determine the value
for duty, you may be able to use the second method of valuation, the transaction transaction value of
value of identical goods. With the transaction value of identical goods, the value identical goods
The second method of
for duty is based on the value of identical goods that have been:
valuation. The value for duty
is based on the value of
• exported to Canada at the same time as those now being appraised, identical goods that have
• sold to a purchaser at the same or substantially the same trade level as been exported to Canada at
the same time as those now
the purchaser of the goods now being appraised, and being appraised; sold to a
• sold in the same or substantially the same quantity as the goods now purchaser at the same or
substantially the same trade
being appraised.
level as the purchaser of the
For the purpose of determining the value for duty of goods being appraised, goods now being appraised;
and sold in the same or
the transaction value of identical goods is adjusted to account for differences at- substantially the same
tributable to transportation costs, trade levels, and quantities. Where there is more quantity as the goods now
than one transaction value of identical goods, the lowest value should be used as being appraised.
a basis for appraising the value for duty.
TRANSACTION VALUE OF SIMILAR GOODS transaction value of

similar goods
The transaction value of similar goods is essentially the same as the transac-
The third method of
tion value of identical goods, except that the value is based on goods that closely valuation. The value for duty
resemble the goods being appraised, that is, on similar goods. The goods must be: is based on the value of
goods that closely resemble
• capable of performing the same functions; the goods being appraised,
that is, on similar goods. The
• commercially interchangeable; goods must be capable of
performing the same
• produced in the same country as the goods being appraised; functions; commercially
• produced by the same person or manufacturer as the goods now being interchangeable; produced
appraised; and in the same country as the
goods being appraised;
• considered for the quality, reputation, and existence of a trademark. produced by the same
person or manufacturer as
The same conditions, allowances, and adjustments as provided for under the iden- the goods now being
appraised; and considered
tical goods method are used by simply substituting the expression "similar goods" for the quality, reputation,
where applicable. and existence of a trade-
The transaction value of similar goods and the transaction value of identical mark.
goods are most often used when goods are imported temporarily into Canada, or deductive value
when goods are not sold. The fourth method of
valuation and may be
reversed in order with the
computed value (the fifth
DEDUCTIVE VALUE method). It is based on the
Canadian importer's most
Use of the deductive value and the computed value may, at the importer's
common selling price of
request, be reversed in their order of application if the importer has advised the goods to Canadian
CBSA, in writing, before submitting import data. customers.

>~ 7: INTRODUCTION TO CUSTOMS ADMINISTRATION AND PROCEDURES
The deductive value is based on the Canadian importer's most common selling
price of the goods to Canadian customers. From this resale figure, or price per unit,
certain amounts are then deducted.
With the deductive value, the general expenses that may be deducted and
therefore adjust the price per unit, are:
• Canadian duty and taxes;

• commissions, profits, and general expenses incurred in Canada;
computed value • transportation, insurance, and other costs related to the sale of the
The fifth method of goods in Canada;
valuation and may be
reversed in order with the • transportation, insurance, and related costs incurred from the place of
deductive method direct shipment to Canada; and/ or
(the fourth method). The
computed value is based on
• costs of assembly, packaging, or further processing after importation.
the cost of the imported
goods plus an amount for The deductive method is the method of valuation usually used for goods sold on
normal profit and general consignment.
expenses experienced by
vendors in the exporting
country when selling the
same type of goods to
COMPUTED VALUE
Canadian customers. The computed value is the most difficult and least used method of valuation. It
cost of production determines the value of goods based on the cost of production (value of materials
Specific costs that are and fabrication), plus an amount for profit and general expenses usually reflected
included in the cost to
in sales from the country of exportation to the country of importation of goods
manufacture goods,
including materials (but not of the same class or kind.
including any duties or taxes Because this method of valuation depends on in-depth knowledge of the costs
paid on imported materials of producing the actual imported goods, it is generally limited to those importers
used to manufacture the
finished good), labour, and
who are related to the vendor and where the vendor is the manufacturer of the
factory overhead. goods in question.
residual method
The sixth method of
valuation and may be used RESIDUAL METHOD
when the other five do not If all five previous methods do not apply to the goods being appraised, the resid-
apply. It does not provide
specific rules for determin-
ual method is applied. The residual method does not provide specific rules for
ing a value for duty, but determining a value for duty, but advises that the value for duty will be appraised
states that the value for duty based on:
will be appraised on the
basis of the value derived • the value derived from the method, from among the methods in the
from the method, from
among the methods in the
order set out, when applied in a flexible manner and when conforming
order set out, when applied closer to that method than any other method; and
in a flexible manner and
• information available in Canada.
when conforming closer to
that method than any other
method; and from informa- Under the provisions of section 53 of the Customs Act, the following cannot be
tion available in Canada. used to determine the value for duty:

CHAPTER4 VALUATION 77 <)
• the selling price in Canada of goods produced in Canada;
• a system that provides for the acceptance for customs purposes of the
higher of two alternative values;
• the price of goods on the domestic market of the country of exportation;
• the cost of production other th an computed values, which have been
determined for identical or similar goods in accordance with the
provisions of section 52;
• the price of the goods for export to a country other than Canada;
• minimum customs values; or
• arbitrary or fictitious values.

KEY TERMS
additions to the price paid or cost of production, 76 subsequent proceeds, 73
payable, 70 deductive value, 75 transaction value of identical
assists, 72 methods of customs valuation, 68 goods, 75
brokerage fee, 71 parties or persons are related, 69 transaction value of similar
buying agent, 71 goods, 75
residual method, 76
commissions, 71 transaction value of the goods, 70
royalties and licence fees, 72
computed value, 76 transportation costs, 73
selling agent, 71
value for duty code, 69
REVIEW QUESTIONS
1. For the purposes of determining the value for 4. The _ _ _ _ _ andthe _ _ _ _ __
duty (VFD), parties or persons are related if one is may be reversed in their order of application.
an officer or a director of the other. True or false? a. transaction value of the goods; transaction
2. There are five methods of valuation for value of identical goods
imported goods. True or false? b. transaction value of identical goods;
transaction value of similar goods
3. The _ _ _ _ _ _ _ _ is the most
commonly used method of valuation.
c. transaction value of similar goods; deductive
value
a. transaction value of the goods
d. deductive value; computed value
b. transaction value of similar goods
e. computed value; residual value
c. deductive value
d. computed value
e. residual method

1. What does a "6" signify when it is the second 4. What is a selling agent?
digit in the VFD code? 5. What are assists?
2. What four requirements must be met in order to 6. If included in the price paid or payable for
use the transaction value of the goods as the imported goods, list three items that may be
VFD? deducted from the price paid or payable to
3. If they are not included in the price paid or pay- arrive at the VFD.
able for imported goods, list three items that
must be added to the price paid or payable to
arrive at the VFD.

LEARNING OUTCOMES
• Describe the various tariff treatments and their corresponding codes.
• Find the list of countries and their applicable tariff treatments in the Customs Tariff.
• Differentiate between a direct shipment and a transhipment.
• Explain the rules of origin and their importance.
• Calculate the regional value content and when to apply t he de minimis rule.
• List the countries with specific tariff treatments.
79
I \ I
> SQ INTRODUCTION TO CUSTOMS ADMIN ISTRATION AND PROCEDU RES
I
INTRODUCTION
A tariff treatment determines the rate of duty that is applied to imported goods
trade agreement and is determined by the terms of a particular trade agreement. A trade agree-
A legal agreement between ment is a legal agreement between two or more countries that provides benefits
two or more countries that
to all signatories. As well as reducing the rate of duty on imported goods, a trade
provides benefits to all
signatories. As wel l as agreement may also include provisions on:
reducing the rate of duty on
imported goods, a trade • government procurement-that is, suppliers in one country can bid
agreement may also include on government contracts in countries with which there is a trade
other provisions.
agreement;
• professional services-for example, surveying and engineering-
performed in one country by a resident of another;
• intellectual property, such as patents and copyright;
• labour that would allow a resident of one country to work in a country
with which there is a trade agreement;
• regulations regarding investment in electricity, pipelines, and natural
gas; and
• environmental obligations, such as those related to endangered species,
the ozone layer, and the transportation of hazardous wastes.
CODES FOR TARIFF TREATMENTS

The tariff treatment of imported goods is identified by one of the codes shown in
Table 5.1. These codes must be indicated on the Form B3, Canada Customs Coding
Form accounting document presented to CBSA.
LIST OF COUNTRIES AND APPLICABLE

TARIFF TREATMENTS
In order to determine the tariff treatment or treatments that can apply to goods
from a specific country, you must consult the List of Countries and Applicable
Tariff Treatments, 1 included in the schedule to the Customs Tari.ff.2 As an example,
look for Italy on the list in Figure 5.1.
1 "Departmental Consolidatio n of the Customs Tariff 2019" (2019). online (pdf): Canada Border
Services Agency <https://www.cbsa-asfc.gc.ca/ trade- commerce/ tariff-tarif / 2019/ 01-99/01 -99 -
t2019-1-eng.pdf>.
2 SC 1997, c 36.

I
CHAPTERS TARIFF TREATMENTS 81
TABLE 5.1 Tariff Treatments and Tariff Treatment Codes
TARIFF TREATMENT CODE
Most-Favoured-Nation (M FN) 2
Australia (AUT) 4
New Zealand (NZT) 5
Commonwealth Caribbean Countries (CCCT) 7
Least Developed Country (LDCT) 8
General Preferential (GPT) 9
United States (UST) 10
Mexico (MXT) 11
Mexico-United States (MUST) 12
Canada- Israel (CIAT) 13
Canada -Chile (CT) 14
Canada -Costa Rica (CRT) 21
Iceland (IT) 22
Norway (NT) 23
Switzerland- Liechtenstein (SLT) 24
Canada - Peru (PT) 25
Canada-Colombia (COLT) 26
Canada -Jordan (CJ) 27
Canada -Panama (PAT) 28
Canada-Honduras (HNT) 29
Canada- Korea (KRT) 30
Canada- Europea n Union (CEUT) 31
Canada -Ukraine (CUFTA) 32
Comprehensive and Progressive Agreement for 33

Trans-Pac ific Partnership (CPTPP)

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I
If you follow the alphabetical list under the heading "Country Name" to Italy,
you will see an "X" in the column under Most-Favoured-Nation (MFN) tariff
treatment and under "Other" it shows CEUT. This means that Italy is entitled to
MFN tariff treatment and the tariff treatment under the Canada-European Union
Comprehensive Economic and Trade Agreement.
FIGURE 5.1 Excerpt from the List of Countries and Applicable Tariff Treatments
Tariff Treatment
Country Name , MFN) GPT LDCT ( Other)
Iran x
Iraq x x
Ireland x CEUT
Isle of Man x CEUT
Israel
,. . .- x-.., C IAT
'-
~taly") x © Eu l)
Jamaica x CCCT
Japan x CPT PT
Jordan x JT
Kazakhstan x
When a country is eligible for two or more tariff treatments, the tariff treat-
ment that provides the most favourable rate of duty is applied, provided that the
requirements of the tariff treatment and trade agreement are met.
The North American Free Trade Agreement (NAFTA) between Canada,

the United States, and Mexico came into force on January 1, 1994,
creating the largest free - trade reg ion in the world by GDP.
direct shipment
Occurs when goods are
shipped directly to a DIRECT SHIPMENT AND TRANSHIPMENT
consignee (the party and
place where the goods are Direct shipment and transhipment, which are both defined in the Customs
shipped) in Canada on a Tariff, must be considered when determining the origin, and ultimately the tariff
through bill of lading; goods treatment, of imported goods. Direct shipment occurs when goods are shipped
may pass through another
directly to a consignee (the party and place where the goods are shipped) in
country on their way to
Canada,butthejourney Canada on a through bill of lading. Goods may pass through another country
must be uninterrupted. on their way to Canada, but the journey must be uninterrupted. The transfer of

I
CHAPTERS TARIFF TREAT MENTS 83
goods from one carrier to another carrier is not considered an interruption of

the journey.
Transhipment is the shipment of goods to an intermediate destination and transhipment
then from that destination to another destination. Transhipment is allowed when The movement of goods to
an intermediate destination
determining origin if certain conditions are met:
and then from that destina-
tion to another destination.
• The goods remain under customs transit control; that is, when the goods
are in the intermediate country, they must remain under the control of
the customs agency of that country.
• The goods may not undergo any process in the intermediate country
other than unloading, reloading, splitting up of loads, or other process
necessary to keep the goods in good condition.
• The goods must not be used in the intermediate country.
• The goods must not remain in the intermediate country for longer than
six months.
COST OF PRODUCTION
Cost of production are any specific costs that are included in the cost to manu- cost of production
facture the goods, including: Specific costs that are
included in the cost to
manufacture goods,
• materials (but not including any duties or taxes paid on imported including materials (but
materials used to manufacture the finished goods), not including any duties
• labour, and or taxes paid on imported
materials used to manufac-
• factory overhead. ture the fi nished good),
labour, and factory
The cost of production does not include: overhead.
• any duties and taxes paid or payable on imported materials used to

manufacture the finished goods;
• outside packing and expenses related thereto, required for the
transportation of the goods;
• gross profit of the manufacturer or exporter and the profit or
remuneration of any person dealing in the article in its finished
manufactured condition;
• royalties;
• customs or excise duty or tax paid or payable on imported materials,
carriage, insurance, and other charges from the place of production or
manufacture in the country of origin to the port of shipment; and
• any other costs or charges incurred or to be incurred subsequent to the
completion of the manufacture of the goods.

I I
> 84 INTRODUCTION TO CUSTOMS ADM INIST RATI ON AND PROCEDURES
•• YOU DECIDE
Goods that are destined for Canada are shipped from Germany
on a through bill of lading and travel through the Un ited Kingdom
before arriving in Canada. The goods were in the United Kingdom for
a period of four months and rema ined in customs transit control
during that time. The goods were not used nor were they further
processed.
DISCUSSION
Under these circumstances, has the fact that the goods were tran -
shipped affect ed the tariff treatment ?
RULES OF ORIGIN
In order to be eligible to use a particular tariff treatment, the imported goods must
originate in a country that is a signatory to a particular trade agreement.
Section 16(1) of th e Customs Tari.ff provides the following definition of
"originate":
Subject to any regulations made under subsection (2), for the purposes of this
Act, goods originate in a country if the whole of the value of the goods is pro-
duced in that country.
This means that unless section 16(2) states otherwise, goods originate in a par-
ticular country if the entire value of the goods is derived from production in that
country.
Specific rules of origin are used to determine the origin of goods under specific
tariff treatments. Before using these rules, it is important to have first determined
the correct tariff classification of the goods.
Example
Let's say you are trying to determine if a shipment of pig iron in blocks
is an originating good under CUSMA. Pig iron is classified under
heading 72.01, as seen in Figu re 5.2.

I
CHAPTER 5 TARIFF TREATMENTS 85 t
FIGURE 5.2 Heading 72.01-Pig Iron
72 · 1
CUSTOMS TARIFF · SCH EDULE
~=:::
Unit of MFN Applicable
Description of Goods
SS Meas. Tariff Preferential Tariffs
I. .PRIMARY MATERIALS; PRODUCT S IN GRANULAR OR POWDER

FORM
72.01 Pig iron and spiegeleisen in pigs, blocks or other primary forms.
You must then check the specific rule of origin for goods of heading
72.01 w hich, under the CUSMA-specific rules of origin, looks like this:
FIGURE 5.3 Specific Rule of Origin

Chapter 72 lro_n_an_d _Ste_ei_ _ _ _ _ _ _~
8 A change to heading 72.01 from any other chapter.
7202.11 -7202.60 A change to subheadings 7202.11 through 7202.60 from any other chapter.
7202.70 A change to subheading 7202.70 from any other chapter, except from subheading 261 3.10.
The text of the specific rule states: "A change to heading 72.01
from any other chapter."a This means that any non-originating parts
and materials, as long as they are classified in any chapter other than
chapter 72, can be incorporated into the fin ished good and the good
will be considered as originating under CUSMA. For example, the
pig iron might contain coke (carbon) that is m ined in Peru (a non-
originating material), bu t because coke is classified in chapter 27, it is
an allowable change under this specific rule of origin .
This is called a tariff-shift ru le because the non - originating parts
and mate rials underwent a change, or shift, in classification - from
chapter 27 to chapter 72. Regional Value
Content (RVC)
A rule that allows a specific
a CUSMA Rules of Origin Regulations, SOR/2020 -155.
percent age of non-originat-
ing content to be included
in a finished good in order
to determine the origin of
the finished good.
REGIONAL VALUE CONTENT
Net Cost (NC)
When reading the specific rules of origin for a particular tariff treatment, one The total cost of goods
frequently encounters the term "Regional Value Content (RVC):' RVC is always minus sales promotion,
expressed as a percentage. marketing, after-sales service
costs, royalt ies, sh ipping and
There are two formulas used to determine RVC. One uses the Transaction
packing costs, and non-
Value (TV) method of the finished good and the other uses the Net Cost (NC) allow able interest costs
method of the finished good. The NC is the total cost minus sales promotion, included in the total cost

I \ I
> 86 INTRODUCTION TO CUSTOMS ADM INISTRATION AND PROCEDURES
I
marketing, after-sales service costs, royalties, shipping and packing costs, and
non-allowable interest costs included in the total cost.
The formula for the RVC when using the TV method is:
value of non-originating materials

RVC = TV - x 100
TV
The formula for the RVC when using the NC method is:
value of non-originating materials

Rvc = Ne - x 100
NC
In some cases, the specific rule of origin will indicate that, using the TV method,
the RVC must be at least 60 percent for the goods to be considered as originating.
DE MINIMIS RULE
de minimis rule Certain tariff treatments allow the de minimis rule to be used when determin-
A rule that allows a ing the country of origin. The de minimis rule excludes a certain percentage of
certain percentage of
non-originating parts and materials from having to meet the tariff-shift rule. The
non-originating parts
and materials from meet- percentage allowed for de minimis varies between tariff treatments and can vary
ing the tariff-shift rule. within a tariff treatment according to the tariff item of the finished good.
For example, look again at the rule for finished goods under heading 72.01.
Imagine that the finished pig iron you are importing from the United States (US)
is valued at Cdn$10,000.00 and contains a small amount offerro-nickel. Because
ferro-nickel is also classified in chapter 72, the same chapter as pig iron, the specific
rule of origin does not apply. However, if the ferro-nickel was valued at less than
a certain percentage of the finished item, the pig iron would still originate using
the de minimis rule. In most cases under CUSMA, the de minimis allowed is 10
percent, which means that in order to originate, the value of the ferro-nickel would
have to be Cdn$1,000.00 or less.
SPECIFIC TARIFF TREATMENTS

AND THE GENERAL TARIFF
As well as determining the tariff classification number, you must also be able to
determine the correct tariff treatment because it is the tariff treatment, in combi-
nation with the tariff classification number, that determines the rate of duty.
MOST-FAVOURED-NATION TARIFF TREATMENT

Countries that are entitled to use the MFN tariff treatment are those that are sig-
natories to the General Agreement on Tariffs and Trade, or GATT. Goods originate
in a country that is a beneficiary of the MFN tariff if:

CHAPTER 5 TARIFF TREATMENTS 87 >)
• not less than 50 percent of the cost of production of the goods is
incurred by the industry of one or more countries that are beneficiaries
of the MFN tariff, or by the industry of Canada; and
• the goods were finished in a country that is a beneficiary of the MFN
tariff in the form in which they are imported into Canada.
The goods must be shipped directly to Canada from a country that is an MFN
beneficiary country, with or without transhipment.
PROOF OF ORIGIN
To claim the benefits of the MFN tariff treatment, the owner or importer of the
goods must provide:
• a Canada Customs Invoice (CCI), completed in English or French by

the importer or owner, that indicates that the goods originate in the
applicable beneficiary country;
• where the CCI does not indicate that the goods originate in the
applicable beneficiary country, a commercial invoice, completed
in English or French by the vendor or the transferee in the country
of export, that indicates that the goods originate in the applicable
beneficiary country; or
• any other documentation, completed in English or French,
that indicates that the goods originate in the applicable beneficiary
country.
NEW ZEALAND AND AUSTRALIA TARIFF

TREATMENTS
There is no trade agreement between Australia and Canada, nor New Zealand and
Canada, but the New Zealand and Australia tariff treatments recognize the trade
relationship between these countries and Canada.
Goods originate in Australia if not less than 50 percent of the cost of pro-
duction of the goods is incurred by the industry of Australia or Canada or both
and the goods were finished in Australia in the form in which they are imported
into Canada. Goods are entitled to the Australian tariff (AUT) treatment only if
the goods are shipped directly to Canada, with or without transhipment, from
Australia.
Goods originate in New Zealand if not less than 50 percent of the cost of pro-
duction of the goods is incurred by the industry of New Zealand or Canada or
both and the goods were finished in New Zealand in the form in which they are
imported into Canada. Goods are entitled to the New Zealand tariff (NZT) treatment
only if the goods are shipped directly to Canada, with or without transhipment,
from New Zealand.

I \ I
I
PROOF OF ORIGIN
In order to claim the benefits of the Australian or New Zealand tariff treatments,
the owner or importer of the goods must provide:
• a CCI, completed in English or French by the importer or owner,

that indicates that the goods originate in the applicable beneficiary
country;
• where the CCI does not indicate that the goods originate in the
applicable beneficiary country, a commercial invoice, completed
in English or French by the vendor or the transferee in the country
of export, that indicates that the goods originate in the applicable
beneficiary country; or
• any other documentation, completed in English or French, that
indicates that the goods originate in the applicable beneficiary country.
COMMONWEALTH CARIBBEAN COUNTRIES

TARIFF TREATMENT
This tariff treatment is known as CCCT or Caribcan. To use the CCCT rates of
duty, goods must:
• meet the CCCT rules of origin; and

• be shipped directly to Canada, with or without transhipment, from a
beneficiary country.
PROOF OF ORIGIN
All originating goods must be documented on either a Form A- Certificate of
Origin or an exporter's statement of origin.
LEAST DEVELOPED COUNTRY TARIFF

TREATMENT
The General Preferential Tariff (GPT) treatment and the Least Developed Country
Tariff (LDCT) treatment are closely related. Goods from countries entitled to use
the LDCT may also use the GPT. To use the LDCT rates of duty, goods must:
• meet the LDCT rules of origin;

• be finished in an LDCT beneficiary country in the form in which they
were imported into Canada; and
• be shipped directly to Canada, with or without transhipment from a
least developed country.

I
CHAPTERS TARIFF TREATME NTS 89
PROOF OF ORIGIN
Other than for originating goods found in chapters 50 to 63 of the Customs Tariff,
either a Form A- Certificate of Origin or an exporter's statement of origin may be
submitted as proof of origin.
For originating goods of chapters 50 to 63 (textile and apparel goods), Form
B255, Certificate of Origin- Textile and Apparel Goods Originating in a Least
Developed Country must be submitted as proof of origin.
GENERAL PREFERENTIAL TARIFF TREATMENT

Implemented in July 1974, the GPT treatment was to have been in effect for a
period of ten years and has been extended several times. Effective January 1, 2015,
a major change was made and 74 of the 175 beneficiary countries were removed
from the list of countries entitled to this tariff treatment. This was because these
countries were no longer considered developing countries. To use the GPT rates
of duty, goods must:
• meet the GPT rules of origin;

• be finished in the GPT beneficiary country in the form in which they
were imported into Canada; and
• be shipped directly to Canada, with or without transhipment, from a
beneficiary country.
PROOF OF ORIGIN
All originating goods must be documented on either Form A- Certificate of
Origin or an exporter's statement of origin.
US TARIFF TREATMENT AND MEXICO TARIFF

TREATMENT
CUSMA is an agreement among Canada, the US, and Mexico that replaced the
North American Free Trade Agreement (NAFTA) on July lst, 2020. Although
Mexico is included in CUSMA, the US is Canada's largest trading partner, and
this trade agreement affects the duty rate of many goods traded between the three
countries.
Note that casual goods that are acquired in the US are considered to origi- casual goods
nate in the US and entitled to the US tariff (UST) treatment if: Goods other than goods
imported for sale or for an
• the marking of the goods is in accordance with the marking laws of the industrial, occupational,
commercial, or institutional
US and indicates that the goods are the product of the US or Canada; or or other like use.
• the goods do not bear a mark and there is no evidence to indicate that
the goods are not the product of the US or Canada.

I I
> 9Q INTRODUCTION TO CUSTOMS ADMIN ISTRATION AND PROCEDURES
I
In other words, if the goods imported from the US are casual goods and are marked
"made in the United States;' the UST may be used. The rules of origin do not have
to be consulted. Casual goods are goods other than goods imported for sale or
for any industrial, occupational, commercial, institutional, or other like use, for
example, a television set purchased for the home.
Goods that qualify for one of the NAFTA tariff treatments must fall under one
of the following six origin criteria.
CRITERION A
Criterion A indicates that the good is "wholly obtained or produced entirely" in
the territory of one or more of the CUSMA countries. Simply purchasing the good
in one of the CUSMA countries does not satisfy criterion A or any other criterion.
Examples are:
• mineral goods extracted in Canada, Mexico, or the US;

• vegetables harvested in Canada, Mexico, or the US;
• live animals born and raised in Canada, Mexico, or the US; and
• goods produced in Canada, Mexico, or the US exclusively from any
goods "wholly obtained or produced:'
Although criterion A is the most straightforward criterion, it is the one most

often misused. You should be aware that goods such as machinery and electronic
items rarely qualify under criterion A.
CRITERION B
Criterion B is for goods that are produced entirely in Canada, the US, or Mexico
and satisfy one of the specific rules of origin. The rule of origin could include a
change in tariff classification (from the parts or materials to the finished good), an
RVC requirement, or a combination of the two.
CRITERION C
In order to qualify under criterion C, the goods must be produced entirely in the
territory of one or more of the CUSMA countries using only originating materi-
als. Some of the materials may be originating because they have undergone a tariff
and/or an RVC change.
CRITERION D
Criterion D is reserved for goods that have been produced in one or more of the
CUSMA countries, but the required rule of origin cannot be met because certain

I
CHAPTERS TAR IFF TREATMENTS 91
non-originating materials do not undergo the required change in tariff. However,

the goods do meet an RVC requirement of 60 percent when the TV method is used
or 50 percent when the NC method is used.
PROOF OF ORIGIN
Under CUSMA, proof of origin is not a prescribed format; there is no actual cer-
tificate to complete. Instead, CUSMA requires a "certification of origin;' which is
a set of minimum data requirements. The data set requirements are outlined in
Annex 5-A in the Origin Procedures chapter (chapter 5) of the CUSMA text (see
Figure 5.4).
The certification of origin may be placed on any document and be completed
by the producer, exporter, or importer. It may be completed in English, French, or
Spanish. If presented to CBSA in Spanish, they may request translation.
CANADA-ISRAEL AGREEMENT TARIFF

Countries that are entitled to use the Canada-Israel Agreement Tariff (CIAT)
are Israel and any territories to which the laws of Israel apply. These include
the West Bank and the Gaza Strip. The Canada-Israel Free Trade Agreement
(CIFTA) was implemented on January 1, 1997. CIFTA rules of origin are used
to determine whether goods originate under this trade agreement.
PROOF OF ORIGIN
Once it has been determined that the goods qualify under CIFTA, the exporter,
producer, or manufacturer must complete a certificate of origin. For CIFTA goods
exported from Canada, the certificate of origin can be completed by the exporter,
producer, or manufacturer in Canada. The certificate of origin for CIFTA goods
may be completed in English, French, Hebrew, or Arabic.
CHILE TARIFF TREATMENT

Canada and Chile are signatories to the Canada-Chile Free Trade Agreement
(CCFTA), implemented on July 5, 1997. Originating goods are entitled to use the
Chile tariff (CT) treatment. CCFTA rules of origin are used to determine whether
goods originate under this trade agreement.
PROOF OF ORIGIN
A certificate of origin must be completed for goods qualifying under the CCFTA
rates of duty. For imported goods, it is completed by the exporter, produc-
er, or manufacturer and for qualifying goods exported from Canada, it must be

I I
I
completed by the exporter, producer, or manufacturer in Canada. The certificate
of origin for CCFTA goods may be completed in English, French, or Spanish.
Specific origin or preference criteria, similar to those required on the NAFTA
Certificate of Origin, must be noted when completing the certificate of origin.
COSTA RICA TARIFF TREATMENT

Canada and Costa Rica are signatories to the Canada - Costa Rica Free Trade
Agreement (CCRFTA), implemented on November l, 2002. Originating goods
are entitled to use the Costa Rica tariff (CRT) treatment. CCRFTA rules of origin are
used to determine if goods originate under this trade agreement.
PROOF OF ORIGIN
A certificate of origin must be completed for goods qualifying under the CCRFTA
rates of duty. For imported goods, it is completed by the exporter, producer, or
manufacturer and for qualifying goods exported from Canada, it must be com-
pleted by the exporter, producer, or manufacturer in Canada. The certificate of
origin may be completed in English, French, or Spanish. Specific origin criteria
must be noted when completing the certificate of origin. There are four origin or
preference criteria under the CCRFTA.
EUROPEAN FREE TRADE ASSOCIATION

The European Free Trade Association (EFTA), implemented on July 1, 2009, includes
Iceland, Norway, Switzerland, and Liechtenstein.
PROOF OF ORIGIN
The required proof of origin is a statement, referred to as an Origin Declaration.
It can be provided on an invoice or other supporting document that describes the
originating product in sufficient detail to enable its identification. The declaration
must be signed by the exporter in the EFTA country of export. Specific rules of
origin, based on the tariff classification of the goods, are used to determine origin.
PERU TARIFF
The Canada- Peru Free Trade Agreement entered into force on August 1, 2009.

I
CHAPTER 5 TARIFF TREATME NTS 93
PROOF OF ORIGIN
The required proof of origin is the Form BSF267, Canada-Peru Certificate of
Origin. This form can be completed in English, French, or Spanish. Specific rules
of origin, based on the tariff classification of the goods, are used to determine origin.
COLOMBIA TARIFF
The Canada-Colombia Free Trade Agreement entered into force on August 1, 2011.
PROOF OF ORIGIN
The required proof of origin is Form BSF459, Canada-Colombia Certificate
of Origin. This form can be completed in English, French, or Spanish. Specific
rules of origin, based on the tariff classification of the goods, are used to determine
origin.
JORDAN TARIFF
The Canada-Jordan Free Trade Agreement entered into force on October 1, 2012.
PROOF OF ORIGIN
The required proof of origin is Form BSF303, Canada- Jordan Certificate of
Origin. This form can be completed in English, French, or Arabic. Specific
rules of origin, based on the tariff classification of the goods, are used to deter-
mine origin.
PANAMA TARIFF
The Canada-Panama Free Trade Agreement entered into force on Aprill, 2013 .
PROOF OF ORIGIN
The required proof of origin is Form BSF631, Canada- Panama Certificate of
of origin, based on the tariff classification of the goods, are used to determine
origin.
HONDURAS TARIFF
The Canada- Honduras Free Trade Agreement entered into force on October 1,
2014.

I I
I
PROOF OF ORIGIN
The required proof of origin is Form BSF747, Canada- Honduras Certificate of
of origin, based on the tariff classification of the goods, are used to determine origin.
KOREA TARIFF
The Canada-Korea Free Trade Agreement entered into force on January 1, 2015.
PROOF OF ORIGIN
The required proof of origin is Form BSF760, Canada- Korea Certificate of Origin.
Canada and Korea may request that the certificate of origin for a good imported
into Canada or Korea, respectively, be completed in, or translated into, its Ian -
guage. Specific rules of origin, based on the tariff classification of the goods, are
used to determine origin.
CANADIAN EUROPEAN UNION TARIFF

The Canada-European Union Comprehensive Economic and Trade Agreement
(CETA) came into force on September 21 , 2017. The agreement is known as
"CETA'' and the Customs Tariff refers to the tariff treatment as the CEUT.
PROOF OF ORIGIN
The required proof of origin is a statement, referred to as an origin declaration. It
may be completed in several languages, given the number of countries included
in CETA. The origin declaration may be provided on an invoice or other document
that describes the originating product in sufficient detail to enable its identifica-
tion. Specific rules of origin, based on the tariff classification of the goods, are used
to determine origin.
UKRAINE TARIFF
The Canada- Ukraine Free Trade Agreement entered into force on August 1, 2017.
PROOF OF ORIGIN
The required proof of origin is an origin declaration. It may be completed in
English, French, or Ukrainian. Specific rules of origin, based on the tariff clas-
sification of the goods, are used to determine origin.

I
CHAPTERS TARIFF TREATMENTS 95 t
COMPREHENSIVE AND PROGRESSIVE TRANS-
PACIFIC PARTNERSHIP TARIFF
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership
(CPTPP) came into force on December 30, 2018 for Canada, Australia, Japan,
Mexico, New Zealand, and Singapore. Vietnam entered on January 14, 2019 and
the CPTPP will come into force for Brunei, Chile, Malaysia, and Peru at a later date.
PROOF OF ORIGIN
The required proof of origin is a statement, referred to as an origin declaration. It
may be completed in several languages, given the number of countries included in
CPTPP. The origin declaration may be provided on an invoice or other document
that describes the originating product in sufficient detail to enable its identifica-
tion. Specific rules of origin, based on the tariff classification of the goods, are used
to determine origin.
CANADA- US- MEXICO AGREEMENT

The Canada-US-Mexico Agreement (CUSMA) will replace NAFTA. As of January
1, 2019, it had not been implemented, and details regarding proof of origin and
certification requirements were not available.
GENERAL TARIFF
The general tariff is not a tariff treatment. Goods that originate in countries that
are not included in the List of Countries and Applicable Tariff Treatments or that
originate in a country included on this list but do not meet the requirements for
another tariff treatment, including MFN, are subject to the general tariff rate of
duty. The rate of duty under the general tariff is 35 percent, and the code used on
the import document to indicate use of this tariff is "Y'

I I
FIGURE 5.4 CUSMA Certificate of Origin
ANNEXS-A
MINIMUM DATA ELEMENTS
A certification of origin that is the basis for a claim for preferential tariff treatment under
this Agreement shall include the following elements:
1. Importer, Exporter, or Producer Certification of Origin
Indicate whether the certifier is the exporter, producer, or importer in accordance with
Article 5.2 (Claims for Preferential Tariff Treatment).
2. Certifier
Provide the certifier's name, title, address (including country), telephone number, and e-
mail address.
3. Exporter
Provide the exporter's name, address (including country), e-mail address, and telephone
number if different from the certifier. This information is not required if the producer is
completing the certification of origin and does not know the identity of the exporter. The address
of the exporter shall be the place of export of the good in a Party's territory.
4. Producer
Provide the producer's name, address (including country), e-mail address, and telephone
number, if different from the certifier or exporter or, if there are multiple producers, state "Various"
or provide a list of producers. A person that wishes for this information to remain confidential
may state "Available upon request by the importing authorities". The address of a producer shall
be the place of production of the good in a Party's territory.
5. Importer
Provide, if known, the importer's name, address, e-mail address, and telephone number.
The address of the importer shall be in a Party's territory.
6. Description and HS Tariff Classification of the Good
(a) Provide a description of the good and the HS tariff classification of the good to the
6-digit level. The description should be sufficient to relate it to the good covered
by the certification; and
5-A-l

CHAPTER 5 TARIFF TREATMENTS 97 >)
FIGURE 5.4 CUSMA Certificate of Origin (Continued)
(b) If the certification of origin covers a single shipment of a good, indicate, if known,
the invoice number related to the exportation.
7. Origin Criteria
Specify the origin criteria under which the good qualifies, as set out in Article 4.2
(Originating Goods).
8. Blanket Period
Include the period if the certification covers multiple shipments of identical goods for a
specified period of up to 12 months as set out in Article 5.2 (Claims for Preferential Tariff
Treatment).
9. Authorized Signature and Date
The certification must be signed and dated by the certifier and accompanied by the
following statement:
I certify that the goods described in this document qualify as originating and the information
contained in this document is true and accurate. I assume responsibility for proving such
representations and agree to maintain and present upon request or to make available during a
verification visit, documentation necessary to support this certification.
5-A-2
SOURCE: "Annex 5-A of the Origin Procedures Chapter (Chapter 5 of the CUSMA)" (last modified
20 November 2020), online (pdf): Canada Border Services Agency <https:// www.international.gc.ca/
trade -commerce/assets/pdfs/agreements -accords/cusma-aceum/r-cusma - 05.pdf>.

98 INTRODUCTION TO CUSTOMS ADMI NISTRATION AND PROCEDURE S
KEY TERMS
casual goods, 89 direct shipment, 82 t rade agreement, 80
cost of production, 83 Net Cost (NC), 85 transhipment, 83
de minimis rule, 86 Regional Value Content (RVC), 85
REVIEW QUESTIONS
1. All countries included in the list of countries and 4. The includes a list of countries
applicable tariff treatments are entitled to use and applicable tariff treatments.
the Most-Favoured-Nation tariff treatment. True a. Excise Act
or false? b. Excise Tax Act
2. The act of transhipment allows goods to remain c. Special Import Measures Act
in an intermediary country for 18 months. True d. Customs Act
or false? e. Customs Tariff
3. Which tarifftreatment code is used on a Form B3 5. It is possible for goods to satisfy the
accounting document to indicate the General requi rements of more than one tariff treatment.
Preferential Tariff? True or false?
a. 2
b. 3
c. 9
d. 14
e. 29

1. What is a trade agreement? 7. In order to determine the origin of goods under
2. Which three countries benefit from CUSMA? a specific tariff treatment, specific rules of origin
may need to be consulted. Describe what is
3. Describe direct shipment. meant by the following rule of origin:
4. List the four requirements that must be met for 39.26 A change to heading no. 39.26 from any other
transhipped goods, in order for them to chapter.
maintain their originating status.
8. Some specific rules of origin include a
5. What three items are included in the cost of Regional Value Content (RVC) requirement.
production? Which two formulas are used to calculate
6 . List th ree items that may not be included in the the RVC?
cost of production. 9. What is the de minimis rule?

CHAPTER 5 TARIFF TREATMENTS 99
10. What three criteria must be met in order to use 13. Goods must qualify under one of four o rigin
the Commo nwealth Caribbean Countries Tariff criteria in o rder to q ualify for a CUSMA rate of
treatment? duty. Mat ch each o rigin criterion in the table
below with its d escription.
11. When are casual goods acquired in the United
States entitled to use the US tariff treatment?
12. What is the rate of duty on goods under the

General Ta riff?
Criterion A
Criterion B
Criterion C
Criterion D
1 Goods must be prod uced entirely in the territory of one or more of the CUSMA countries using only
originating materials. Some of t he materials may be orig inating because they have un dergone a ta riff and /
or RVC chan ge.
2 Indicates that the good is '"wholly obtained or produced entirely'" in t he territory of one or more of the
CUSMA c ountries.
3 Reserved for goods that have been produced in o ne or more of the CUSMA countries, but the required
rule of origin cannot be met because certain non-originating materials do not undergo the required
change in tariff. However, the goods do meet a regional value content requirement of 60 percent when
the transaction value method is used, or 50 percent when the net cost method is used.
4 Used for goods that are produced entirely in Canada, the US, or Mexico and satisfy one of the spec ific
rules of origin. The ru le of origin could include a change in ta riff classification (from the parts or materia ls
to the fi nished good), a regional -value content requirement, or a combination of the two.

LEARNING OUTCOMES
• Understand the importance and use of import permits.
• Identify the legislation that requires imported goods to be regulated .
• Understand how the CBSA regulates imported goods on behalf of other government departments
and agencies.
• Understand how the regulations of other government departments and agencies affect the
importation and exportation of goods.
101
>~1;2 INTRODUCTION TO CUSTOMS ADMINISTRATION AND PROCEDURES
INTRODUCTION
other government This chapter outlines some of the supporting documents that CBSA and other
departments (OGDs) government departments (OGDs) and agencies require when importing regu-
Government departments
lated goods.
and agencies other than the
CBSA. For example, the In some cases, documents required for regulated goods must be submitted
Canadian Food Inspection prior to the goods being released, and in other cases, the required documents can
Agency, Global Affairs be submitted after the goods have been released.
Canada, Health Canada, and
Transport Canada.
The shipper is responsible for providing certain documents or data, while
other information is the responsibility of the importer. As well, a customs bro-
ker, on behalf of their client, may be involved in providing some of the required
information.
It is important that you check all documents, as well as look for discrepan-
cies between documents. Providing the wrong information to CBSA or an OGD
can cause a delay in the release of goods or even result in a penalty under the
Import Control List Administrative Monetary Penalty System (AMPS) .
(ICL)
A list of goods that require
either an individual or a
general import permit IMPORT PERMITS
before they can be imported
CBSA assists Global Affairs Canada (GAC) with the administration of the Export
into Canada.
and Import Permits Act.1 Under the EIPA, an Import Control List (ICL), an Export
Export Control List
Control List (ECL), and an Area Control List (ACL) are established. In general,
(ECL)
A list of goods that require goods that are listed on the ICL require an import permit, while goods listed on
either an individual or a the ECL require an export permit. The ACL is a list of countries for which export
general export permit before permits are required for all goods.
they can be exported from
Canada.
Area Control List (ACL)
Established under the
Export and Import Permits Important
Act, a list of countries to Goods that are destined for countries that appear on the ACL require
which the exportation of
goods is not permitted
export permits.
without an export permit.
individual import
permits (llPs)
Import permits that are There are two types of import permits: individual import permits (llPs) and
issued to a specific party; an general import permits (GIPs). IIPs require an application by the importer, while
application is required.
GIPs do not; also, a GIP is not specific to an importer. General import permits
general import often allow for the entry of certain goods from specific countries or for restricted
permits (GIPs)
quantities of specific goods. Once the previously established quantity has been
Import permits that may be
used by anyone; conditions imported, future importations may either require an individual import permit or
and restrictions apply. be subject to a higher rate of duty.
1 RSC 1985, c E-19 [EIPA].

I
CHAPTER 6 DOCUMENTATION OTHER GOVERNMENT DEPARTMENTS AND AGENC IES 1Q3
Some goods fall under a Tariff Rate Quota (TRQ) . A TRQ is a limitation on Tariff Rate Quota
the quantity of goods that are entitled entry into Canada during a specific period (TRQ)
A limitation on the quantity
and generally applies to agricultural goods. Imported goods within the established
of goods that are entitled
quota are entitled to a lower rate of duty; those outside the quota are subject to a entry into Canada during a
higher, often prohibitive, rate of duty. Goods are not entitled to the lower TRQ rate specific period and generally
of duty unless an import permit has been issued. applies to agricultural
goods. Imported goods
The description, quantity, and value shown on an import permit must agree within the established quota
with what is on the accompanying documentation. If the permit amount is for are entitled to a lower rate of
less than that shown on the documentation, CBSA will not release the goods. duty; those above the quota
If the permit is for a greater number of goods than those shipped, the importer are subject to a higher rate
of duty.
may have used up their quota allotment for product not received and may
be unable to import future shipments at the "within access" rate. In order to
remain valid, the import permit and release documents must be submitted
between the effective dates of the permit. Applications for import permits are
made either to GAC or to customs brokers who have been approved by GAC
to issue import permits .
Sugar-containing products being exported to the United States are

a quota item . That means only a certain amount of product may be
exported within a calendar year!2
GLOBAL AFFAIRS CANADA/CUSTOMS

AUTOMATED PERMIT SYSTEM Global Affairs Canada/
Customs Automated
Global Affairs Canada/Customs Automated Permit System (EXCAPS) allows Permit System
for the transmission of permit information directly from GAC to CBSA. An (EXCAPS)
importer or customs broker applies for an import permit using Electronic Data A system that allows for the
transmission of permit
Interchange (EDI) and, once issued, GAC enters the permit information into
information directly from
the Accelerated Commercial Release Operations Support System (ACROSS). GACtoCBSA.
ACROSS is a CBSA system that allows importers and brokers to exchange informa-
Accelerated
tion electronically with the CBSA. GAC will then send a transaction record to the
Commercial Release
party that applied for the permit to confirm that the permit was issued. Operations Support
When release information for the goods that require a permit is transmit- System (ACROSS)
ted through ACROSS, release data are matched to the EXCAPS permit data A system used by CBSA to
receive electronically
already in ACROSS. CBSA then processes the release request and, once the
transmitted release and
goods have been released, sends a notice to GAC informing it that the permit invoice data from customs
has been used. brokers and importers.
2 "Sugar-Containing Products for Export to the United States under the Canada-United States-
Mexico Agreement" (29 June 2020), online: Government of Canada <https://www.international
.gc.ca/trade-commerce/controls-controles/notices-avis/1001.aspx7 lang=eng>.

>~ 1;4 INTRODUCTION TO CUSTOMS ADM INISTRATION AND PROCEDURES
As discussed in Chapter 5, in order to claim a preferential tariff treatment,

proof of origin is required. Each tariff treatment has its own specific require-
ments and may include a formal certificate of origin; a Form A-Certificate
of Origin; an Exporter's Statement of Origin; or a simple origin certification
document. Below are two examples of proof of origin documentation.
Form A-Certificate of
Origin
FORM A-CERTIFICATE OF ORIGIN
A form required for The Form A-Certificate of Origin is required for shipments from countries
shipments from countries that are entitled to a reduced rate of duty under the General Preferential Tariff
that are entitled to a
(GPT). A list of countries entitled to this tariff treatment, and others, is in-
reduced rate of duty under
the General Preferential cluded in a section of the Customs Tariff Schedule3 entitled "List of Countries
Tariff (GPT) or Least and Applicable Tariff Treatments:' Having a valid Form A on hand can make a
Developed Country Tariff substantial difference in the rate of duty charged.
(LDCT).
Form A must be submitted at:
General Preferential
Tariff (GPT) • the time of release,
Because there is no
agreement between Canada • the time of accounting, or
and another country that
• when filing a refund request.
allows use of the GPT, it is
not a tariff treatment. Rather,
it is a preferential rate of duty In lieu of Form A, an Exporter's Statement of Origin, completed in English or
allowed for goods entering French and signed by the exporter in the beneficiary country, is also acceptable.
Canada from specific Figure 6.1 is an example of an exporter's statement.
developing countries.
tariff treatment
Trade agreements allow FIGURE 6.1 Exporter's Statement of Origin
goods to enter a country
under reduced duty rates,
I certify that the goods described in this invo ice or in t he attached
identified on accounting
documents by a tariff invoice # were produced in the beneficiary country of
treatment; e.g., goods that _ _ _ _ _ and that at least percent of the ex-factory
originate under the price of the goods originates in the benefic iary country/ countries of
Canada-Korea Free Trade
Agreement are subject to
the CKFTA tariff treatment. Name and title : _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Exporter's Statement Corporation name and address : _________________
of Origin
A statement that may be Telephone and fax numbers: __________________
used in place of a formal Signature: __________________________
certificate of origin when
certain conditions of a trade Date: ______
agreement are met.
3 "Departmental Consolidation of the Customs Tariff 2019" (1 January 2019) (excludes

the Customs Tariff. SC 1977. c 36), on line (pdf): Canada Border Services Agency <https://www
.cbsa-asfc.gc.ca / trade-commerce/ tariff-tarif/ 2019/ 01-99/ 01-99-t2019-1-eng.pdf>.

I
CHAPTER 6 DOCUMENTATION: OTHER GOVERNMENT DEPARTMENTS AND AGENC IES 105 t
CANADA-UNITED STATES-MEXICO
AGREEMENT
In order for an importer to take advantage of the lower duty rates under CUSMA,
a Certification of Origin is required. The Certification of Origin is required for
goods valued at Cdn $3,300.00 and over. Goods valued below this amount must
still originate under the terms of the agreement, but there is no requirement for a
written statement of certification to be provided.
The CUSMA rate of duty apply to eligible goods from Canada, Mexico and the
United States (US). For goods entering Canada, the applicable tariff treatments are:
• UST-US tariff treatment, used for goods originating in the United

States; and
• MXT- Mexico tariff treatment, used for goods originating in Mexico.
If a CUSMA Certification of Origin is not available, another tariff treatment

must be used, usually Most Favoured Nation. The certification does not have to be
presented when goods are released; however, it must be made available to the
CBSA upon request and must be in the possession of the importer at the time the
goods are released.
A CUSMA Certification of Origin may apply to one particular shipment or it
may be valid for a period of one year. A one-year certification of origin or "blanket"
certification must ensure that the goods are described in sufficient detail, that it
is readily apparent that goods covered by the blanket are the same as goods being
shipped through out the year.
The producer, exporter or importer of the goods may produce a CUSMA
Certification of Origin.
END-USE CERTIFICATE
The duty rate of goods may be reduced in some cases if the end use of the goods
is specifically named in chapter 99 of the Customs Tariff Schedule. An end-use
certificate or declaration of end use may be required. Examples of end use for
which a reduced duty rate is allowed are vehicles for use in underground mining
end-use certificate
and goods designed to alleviate the specific affects of a disability. A written attestation
An end-use certificate is a written attestation affirming the use of imported affirming the use of
goods in accordance with the provisions of the tariff item that is used. An end-use imported goods in
certificate must provide a description of the manner in which the imported goods accordance with the
provisions of the tariff item
will be used in Canada and be signed by the end-user. that is used.

>~166 INTRODUCTION TO CUSTOMS ADMIN ISTRATION AND PROCEDURES
FIGURE 6.2 NAFTA Statement of Origin
No longer valid due to enactment

of CUSMA.
CANADIAN FOOD INSPECTION

AGENCY
The Canadian Food Inspection Agency (CFIA) monitors the health, safety, and
quality of Canada's agricultural, fish, and food products and oversees the arrival
of plants, animals, and food products from around the world.
The Safe Food for Canadians Regulations 4 were implemented in January 2019.
These regulations require importers to be licensed in order to import, export, or
cross interprovincial boundaries with food products or to perform certain func-
tions related to food processing.
Automated Import THE AUTOMATED IMPORT REFERENCE SYSTEM

Reference System
The Automated Import Reference System (AIRS) is a searchable database of
(AIRS)
A searchable dat abase of CFIA import requirements. One can search using either the tariff classification
CFIA import requirement s. or the description of the goods and immediately be advised of any CFIA import
4 SOR/2018-108 [SFCR]

CHAPTER 6 DOCUMENTATION oOTHER GOVERNMENT DEPARTMENTS AND AGENCIES 107 <)
requirements. AIRS uses a series of questions, such as origin, end use, and weight,
that must be answered regarding the item to be imported. For example, if you look
in AIRS for the import requirements for fresh pears from New York State, for hu-
man consumption in a quantity greater than 200 kg, you might see the information
in Figure 6.3, below.
More than 80 percent of the Canadian fresh fruit market is supplied

through imports.
Keep in mind that the information shown in AIRS can change on a daily basis.
The AIRS tool tells us that the goods are approved for importation, whether the
importer is a member of the DRC, and that a licence is required. The DRC is the
Fruit and Vegetable Dispute Resolution Corporation (DRC), a non-profit orga- Dispute Resolution
nization that provides dispute resolution, consultation, mediation, and arbitration Corporation (DRC)
A non-profit organization
for the produce trade.
that provides dispute
Other information is provided in AIRS as well, including details specific to the resolution, consu ltation,
type of release option. For example, if the release request is not EDI, a Confirmation mediation, and arbit ration
of Sale (COS) form is required for all commercial shipments of fruits and veg- for t he produce trade.
etables. If an EDI service option is used, the information that would be available
from a COS is entered as data .
Per capita, Canada has one of the highest consumption rates of fresh
vegetables in the world.

I
> INTRODUCTION TO CUSTOMS ADMINISTRATION AND PROCEDURES
Another document often required by CFIA is a phytosanitary certificate.

A phytosanitary certificate is a document issued by the plant protection or-
ganization of the exporting country to the plant protection organization of
the importing country. It certifies that the plants or plant products covered by the
certificate have been inspected and are free from quarantine pests, as well as
practically free from other injurious pests, and are considered to conform to the
current phytosanitary regulations of the importing country.
FIGURE 6.3 AIRS Import Requirements
Recommendations to CBSA/Documentation and Registration

Requirements
Approved (must be accompanied by the following documents/
registrations):
• Dispute Resolution Corporation (DRC) membership exempt.
• Approved Ministerial Exemption.
• Safe Food for Canadians Licence.
OR
Approved (must be accompanied by the following documents/
registrations):
• Dispute Resolution Corporation (DRC) membership number.
• Approved Ministerial Exemption.
• Safe Food for Canadians Licence .
•• YOU DECIDE
An importer is debating whether to purchase tigertail spruce Christmas

trees from the state of New York. The importer will be transporting the
trees to Newfoundland and Labrador to be sold. Using the AIRS tool,
discuss the following questions:
1. Does CFIA regulate the importation of Christmas trees from
New York State?
2. If CFIA does regulate the goods, what is the OGD extension
number if you are using the llD service option?
3. Must all tree species that are haNested from a gypsy moth- regulated
area of the US and destined to non-regulated areas of Canada be
accompanied by an official state phytosanitary certificate?

I
CHAPTER 6 DOCUMENTATION: OTHER GOVERNMENT DEPARTMENTS AND AGENCIES 109
GLOBAL AFFAIRS CANADA

GAC has four ministers, each with different responsibilities. The two that deal with
trade are the Minister of Foreign Affairs and the Minister of International Trade
Diversification.
GAC is responsible for negotiating Canada's trade agreements-for example,
CUSMA, the Canada- Israel Free Trade Agreement, and the Canada- Chile Free
Trade Agreement. It was also involved in the drafting of the Canada - US- Mexico
Agreement, which, at the time of this book's publication, has not been final-
ized. CUSMA replaced the North American Free Trade Agreement when it was
implemented.
As indicated earlier in this chapter, the import and export of goods restricted
by quotas and/or tariffs is governed by GAC. Restricting trade in certain goods, as
well as controlling dangerous goods and materials, ensures the personal security
of Canadians and citizens of other countries.
AGRICULTURE AND AGRI-FOOD

CANADA
Agriculture and Agri-Food Canada seeks to assist the Canadian agriculture and
food system in providing safe and nutritious food at reasonable prices to both
Canadian consumers and export markets. As well, it strives to ensure that produc-
ers are adequately compensated. This department is responsible for all phases of
food production, including growth, processing, and marketing.
Some of the acts and regulations for which Agriculture and Agri-Food Canada
is responsible are the:
• Agricultural Marketing Programs Act;5

• Agricultural Products Marketing Act;6
• Animal Pedigree Act;7
• Canada Grain Act;s
• Canadian Dairy Commission Act;9
• Farm Income Protection Act;IO
• Farm Products Agencies Act; 11 and
• Prairie Farm Rehabilitation A ct.12
5 SC 1997, c 20.
6 RSC 1985, c A-6.
7 RSC 1985, c 8 (4th Supp).
8 RSC 1985, c G-10.
9 RSC 1985, c C-15.
10 SC 1991. c 22.
11 RSC 1985, c F- 4.
12 RSC 1985, c P-17.

I I
> <11Q INTRODUCTION TO CUSTOMS ADM INIST RATION AND PROCEDURES
I
INNOVATION, SCIENCE AND
ECONOMIC DEVELOPMENT CANADA
The website for Innovation, Science and Economic Development Canada (ISED)
states that it "works with Canadians in all areas of the economy and in all parts of
the country to improve conditions for investment, enhance Canada's innovation
performance, increase Canada's share of global trade and build a fair, efficient
and competitive marketplace:' 13
Included in ISED's portfolios is Competition Bureau Canada, which promotes
fair competition in the marketplace by discouraging deceptive business practices
and by encouraging the provision of sufficient information to enable informed
consumer choice. This bureau is responsible for the administration of the:
• Consumer Packaging and Labelling Act,14

• Textile Labelling Act,15 and
• Precious Metals Marking Act.16
CONSUMER PACKAGING AND LABELLING ACT

AND REGULATIONS
The Consumer Packaging and Labelling Act applies to any person who is a retailer,
manufacturer, processor, or producer of a product or a person who is engaged in
the business of importing, packing, or selling any product.
The Act requires that packaging and labelling be done in a certain manner,
including requirements for bilingual information.
TEXTILE LABELLING ACT

The Textile Labelling Act defines a consumer textile article as any textile fibre, yarn,
or fabric, or any product made in whole or in part from a textile fibre, yarn, or
fabric that is in the form in which it is to be sold to any person for consumption
or use. It does not include textile fibre products that are to be used in the manu-
facturing, processing, or finishing of any product for sale.
For these goods, labelling criteria include fibre content, bilingual marking,
dealer identity, and form and application of label.
Imported goods are also subject to marking requirements relating to their
country of origin, and it is important not to confuse these requirements with the
labelling requirements.
13 "Home page" (last modified 10 June 2019), online: Innovation. Science and Economic
Development Canada <http: //www.ic.gc.ca/eic/ site/ icgc.nsfI eng/ home>.
14 RSC 1985, c C- 38.
15 RSC 1985, c T-10.
16 RSC 1985, c P-19.

I
CHAPTER 6 DOCUMENTATION: OT HER GOVERNMENT DEPARTMENTS AND AGENCIES 111
Labelling requirements and marking requirements are not the same!
PRECIOUS METALS MARKING ACT

The Precious Metals Marking Act ensures that precious metals-gold, palladium,
platinum, and silver- and articles made wholly or in part from precious metals are
properly marked to assure consumers that their purchase is genuine. The method
of marking can include a sign, a device, an imprint, a stamp, a brand, a label,
a ticket, a letter, a word, or a figure.
TRANSPORT CANADA
Transport Canada's mandate is to develop and administer policies, regulations,
and services for transportation in Canada. It is responsible for ensuring that the
transportation system is safe, efficient, environmentally sound, and accessible
to all.
Transport Canada is responsible for enforcing the Motor Vehicle Safety Act, 17
including the manufacture and importation of vehicles, tires, and child restraints.
Other acts that are the responsibility of Transport Canada include the:
• Canada Marine Act,18

• Canada Shipping Act,19
• International Bridges and Tunnels Act, 20
• Railway Safety Act,21 and
• Transportation of Dangerous Goods Act.22
Registrar of Imported
Vehicles (RIV)
A national program of
REGISTRAR OF IMPORTED VEHICLES vehicle inspection,
certification, and registration
Transport Canada has contracted with another party to establish and operate a to ensure vehicles imported
national program of vehicle inspection, certification, and registration, known as to Canada meet Canadian
the Registrar of Imported Vehicles (RIV). standards.
17 SC 1993. c 16.
18 SC 1998. c 10.
19 RSC 1985. c S-9.
20 SC 2007. c 1.
21 RSC 1985. c 32 (4th Supp)
22 SC 1992. c 34.

I I
> <112 INTRODUCTION TO CUSTOMS ADM INISTRATION AND PROCEDURES
I Not all vehicles may be imported into Canada. Before importing a vehicle, it
is important to check whether the vehicle you plan to import is admissible and, if
it is not, if it can be modified to meet Canadian requirements. Transport Canada
maintains a list on its website of vehicles from the US that are admissible.
US Customs must be notified of all self-propelled vehicles being permanently
exported from the United States. Its regulations state that, at land border points, re-
quired documentation must be submitted to US Customs at least 72 hours before
export and that vehicles must be presented to US Customs at the time of export.
Once the vehicle enters Canada, CBSA confirms the vehicle's admissibility, as-
sesses duties and taxes, and initiates the RIV registration process.
If the vehicle is admissible, a Form l, Vehicle Import Form must be completed.
This form confirms that the vehicle has entered Canada legitimately and enables
the vehicle to be licensed in Canada. The Form 1 data can be submitted electroni-
cally depending on the type of release request submitted.
If the vehicle requires modification before it is admissible, any necessary mod-
ifications must be made within 45 days. Once the modifications are completed,
the vehicle is inspected and, if it passes the inspection, the Form 1 will be stamped
byCBSA.
Canadian automotive sector imports were valued at US$71.4 billion

in 2017.
ENVIRONMENT AND CLIMATE

CHANGE CANADA
The mandate of Environment and Climate Change Canada (ECCC) is to preserve
and enhance the quality of the natural environment, conserve Canada's renewable
resources, conserve and protect Canada's water resources, forecast weather and
environmental change, enforce rules relating to boundary waters, and coordinate
environmental policies and programs for the federal government.
Some of the acts that are the responsibility of ECCC are the:
• Canada Wildlife Act,23

• Canada Water Act,24 and
• Migratory Birds Convention Act.25
23 RSC 1985, c W-9.

24 RSC 1985, c C-11.
25 SC 1994. c 22.

I
CONVENTION ON INTERNATIONAL TRADE

IN ENDANGERED SPECIES OF WILD FAUNA
AND FLORA
ECCC is the lead agency responsible for implementing the Convention on Convention on
International Trade in Endangered Species of Wild Fauna and Flora (CITES).26 International Trade in
CITES is an international agreement between governments and aims to ensure Endangered Species of
Wild Fauna and Flora
that international trade in specimens of wild animals and plants does not threaten (CITES)
their survival. An international agreement
between governments
whose aim is to ensure that
international trade in
There are 183 parties to CITES.

specimens of wi ld animals
and plants does not threaten
their survival.
Since trade in wild animals and plants crosses borders, the effort to regulate this
trade requires international cooperation to safeguard certain species from over-
exploitation. CITES accords varying degrees of protection to more than 30,000
species of animals and plants, whether they are traded as live specimens, fur
coats, or dried herbs .
Approximately 5,800 species of animals and 30,000 species of plants

are protected by CITES.
CITES works by subjecting international trade in specimens of selected spe-

cies to certain controls. All import, export, re-export, and introduction from
the species covered by CITES must be authorized through a licensing system. The
species covered by CITES are listed in three appendices according to the degree
of protection required.
26 3 March 1973 (amended 22 June 1979, 30April1983) (pdf), online: <https://www.cites.o rg

I sites/ default/files/ eng/ disc/ CITES- Convention- EN .pdf>.

I I
> <114 INT RO DUCTION TO CUSTOMS ADM INISTRATION AND PROCEDURES
I FIGURE 6.4 NAFTA Certi ficate of Origin
Figure removed
due to enactment
ofCUSMA.

I
CHAPTER 6 DOCUMENTATION : OTH ER GOVERNMENT DEPARTMENTS AND AGE NCIES 115 t
FIGURE 6.4 NAFTA Certificate of Origin (Continued)
Figure removed
due to enactment
ofCUSMA.

KEY TERMS
Accelerated Commercial Release end-use certificate, 105 individual import permits (llPs), 102
Operations Support System Export Control List (ECL), 102 other government departments
(ACROSS), 103 (OGDs), 102
Exporter's Statement of Origin, 104
Area Control List (ACL), 102 Registrar of Imported Vehicles
Form A-Certificate of Origin, 104
Automated Import Reference (RIV), 111
general import permits (GIPs), 102
System (AIRS), 106 Tariff Rate Quota (TRQ), 103
General Preferential Tariff
Convention on International (GPT), 104 tariff treatment, 104
Trade in Endangered Species
Global Affairs Canada/Customs
of Wild Fauna and Flora
Automated Permit System
(CITES), 113
(EXCAPS), 103
Dispute Resolution Corporation
Import Control List (ICL), 102
(DRC), 106
REVIEW QUESTIONS
1. The Registrar of Imported Vehicles (RIV) b. Global Affairs Canada
operates a national program of vehicle c. Governor General of Canada
inspection, certification, and registration. Under d. Canadian Commercial Corporation
the RIV, all vehicles may be imported into
e. Canadian International Trade Tribuna l
Canada. True or false?
7. A is required for shipments
2. In order to import fresh fruit and vegetables into from countries that are entitled to a
Canada, the Canadian importer must be reduced rate of duty under the General
licensed with the Canadian Food Inspection Preferential Tariff.
Agency (CFIA). True or false?
a. Form A-Certificate of Origin or an
3. EXCAPS (Global Affairs Canada/Customs Exporter's Statement of Origin
Automated Permit System) allows for the b. Canada Customs Invoice
transmission of permit information directly from c. United States-Canada Transit Manifest
GAC to CBSA. True or false? d. CUSMA Verification of Origin Questionnaire
4. A Canada-US-Mexico (CUSMA) Certificate of e. Canada Customs Coding Form
Origin must be provided to CBSA at the time a
8. A CUSMA Certification of Origin is required for
release request is made. True or false?
goods valued at
5. The governor general of Canada is responsible a. $1,200.00
for negotiating Canada's trade agreements, such b. $1,600.00
as the North American Free Trade Agreement. c. $2,5000.00
True or false?
d. $3,300.00
6. Which government department administers the e. $5,000.00
Export and Import Permits Act?
a. CBSA


1. What is the Area Control List? 7. List three acts for which Agriculture and
Agri-Food Canada is responsible.
2. Which type of import permit requires an
application by the importer? 8. List three acts for which Transport Canada is
responsible.
3. What is a tariff rate quota?
9. In order to have an imported vehicle licensed
4. What are the three tariff treatments under NAFTA?
in Canada, what form must be presented to the
5. What is an end-use certificate? licensing body?
6. What is the name of the CFIA searchable 10. What is the Convention on International Trade
database for CFIA import requirements? in Endangered Species of Wild Fauna and Flora?

LEARNING OUTCOMES
• Describe the purpose of the ACROSS release systems.
• Differentiate among the various release options: RMD, PARS, llD, CSA. and FAST.
• Complete a Form 83 accounting document.
• Correct errors made on a Form 83.
• Describe the requirements for casual importations.
• Understand when goods are seized and placed in a Queen's warehouse.
119
I I
> <12Q INTRODUCTION TO CUSTOMS ADM INISTRATION AND PROCEDURES
/
INTRODUCTION
The five steps in the importation of commercial goods were outlined in Chapter 2,
and the release and accounting of goods are the fourth and fifth steps in that
process. After release data have been sent to CBSA, a release recommendation
(if the goods have not yet arrived) or a release decision (if the goods are on hand)
is made.
ACCELERATED COMMERCIAL
RELEASE OPERATIONS
SUPPORT SYSTEM
Accelerated Accelerated Commercial Release Operations Support System (ACROSS) is the
Commercial Release system that CBSA uses to receive electronically transmitted release and invoice
Operations Support data from customs brokers and importers. Goods released through ACROSS must
System (ACROSS)
A system used by CBSA t o
be confirmed (accounted for) electronically, using either Customs Automated
receive electronically Data Exchange (CADEX) or Customs Declaration (CUSDEC)- an international
transmitted release and format that operates in a manner similar to CADEX.
invoice data from customs The benefits of ACROSS include:
brokers and importers.
Customs Automated • the ability to exchange information 24 hours a day, during business and
Data Exchange non-business hours;
(CADEX) or Customs
Declaration (CUSDEC) • the ability to exchange information without having to rekey data;
A CBSA system that allows • the ability to exchange most permit data electronically;
importers and brokers to
transmit their accounting • a decrease in paper and related handling costs; and
data to CBSA for goods
already released.
• the ability to request the release of goods located at any port in Canada,
regardless of where the customs broker or importer is located.
Machine Release
System (MRS) MACHINE RELEASE SYSTEM
A component of ACROSS
t hat provides automated CBSA's Machine Release System (MRS) is an internal component of ACROSS
release decisions for that provides automated release decisions for shipments that meet a variety of
shipments t hat meet a low-risk criteria determined internally by CBSA through analytics and feedback
variety of low-risk criteria.
MRS automates the from border services officers (BSOs). MRS automates the processing oflow-risk
processing of certain and repetitive importations, allowing the release of goods without officer inter-
shipments in order to vention in order to provide officers with more time for the processing of ship-
provide inspectors with
ments that pose a greater degree of risk.
more time for the processing
of shipments that pose a Shipments regulated by other government departments (OGDs) may be eligible
greater degree of risk. for automated release once OGD requirements have been satisfied.

I
CHAPTER 7 RELEASE AND ACCOUNTING OF IMPORTED COMMERCIAL GOODS 121
RELEASE OF GOODS
RELEASE PROCEDURES
Released goods are those that CBSA has authorized to continue their journey to
their final destination- that is, they have been reported by the carrier to CBSA and
have met all import requirements.
Once the goods are released, they must be accounted for, and any appli-
cable duties and taxes must be paid. These three steps- release, accounting, and
payment- are often performed separately. However, in order for goods to be
released before any duties and taxes are paid, the customs broker or importer
must post security with CBSA. When these steps are performed separately, the security
release function is called an interim accounting. Payment of duties and taxes An amount of money or
bond posted to ensure the
is addressed in Chapter 9. payment of duties and taxes
Requests for the release of commercial goods may be made in one of the on imported goods that
following ways: have been released.
interim accounting
• Presentation of a Release on Minimum Documentation (RMD} The process that allows
package accompanied by a completed Form B3 accounting goods to be released prior to
the payment of duties and
document Type C that releases and accounts for goods at the taxes. PARS, RMD, and llD are
same time. If security has not been posted, duty and taxes are paid all considered interim
immediately. accounting.
• Presentation of an ex-warehouse Form B3 accounting document Release on Minimum

Documentation (RMD}
Type 20, with duty and taxes paid immediately, or later if security
A type of entry package
has been posted. used to request release of
• Presentation of an RMD package, provided security has been posted, goods that provides the
mi nimum amount of data
since the goods are released with a promise to pay duty and taxes at a and w here the customs
later date. broker or importer has
post ed security; RMD release
• Presentation of a Pre-Arrival Review System (PARS) package, provided
requests are used once the
security has been posted, since the goods are released with a promise to goods have arrived in
pay duty and taxes at a later date. Canada.
• Transmission of an Integrated Import Declaration (llD}, provided Integrated Import

Declaration (llD}
security has been posted, since the goods are released with a promise to
The service option that is
pay duty and taxes at a later date. part of the Single Window
Initiative (SWJ). Can be used
The difference between an RMD and a PARS is that an RMD is used when the to obtain release of both
goods are on hand and a PARS is submitted before the goods arrive at the border. regulated and non-
An IID may be presented pre- or post-arrival of the goods. regulated goods.
Release data must be sent electronically, unless there is a specific reason why it
cannot be done. When an exception to Electronic Data Interchange (EDI) exists,
the release request is made by submitting a paper entry and providing the reason.
The reason is noted on a form that is included with the paper RMD or PARS.
A copy of this form is reproduced at the end of this chapter (see Figure 7.1).

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/
SECURITY
In order to have goods released before duties and taxes are paid, either the customs
broker or importer must post security. Posting security assures CBSA that duties
and taxes will be paid at a later date.
Security can be in the form of:
1. cash,
2. a certified cheque,
3. a transferable bond issued by the Government of Canada, or
4. a bond issued by a party approved by the Canada Revenue Agency.
For customs brokers, security is based on their average monthly duties and
taxes (including GST), up to a maximum of $10 million.
For resident importers, security is based on their average monthly duties and
taxes (less the GST), up to a maximum of $10 million. For non-resident importers,
security is based on their average monthly duties and taxes (including GST), up to
a maximum of $10 million.
RELEASE OPTIONS
RELEASE ON MINIMUM DOCUMENTATION
RMD information may not be presented until the physical arrival of the goods.
When transmitting RMD data using EDI, a distinction is made between the
Appraisal Quality (AO) presentation of Appraisal Quality (AO) data and non-Appraisal Quality (non-AO)
data data. For AQ data, the invoice information provided to CBSA mirrors the com-
Data that are full and
mercial invoice and all information required to m ake a release determination is
complete. AQ data must be
provided when goods are included. Most goods are released using AQ, or full data. For non-AQ, the data
regulated by a government are recapped according to the vendor, country of origin, and/or tariff classification
department or agency and under the Harmonized Commodity Description and Coding System (HS) . That is,
full data must be provided
before time of accounting.
all items from the same vendor, that have the same country of origin, or that have
Only applies to EDI the same HS classification can be consolidated on one line. Detailed data must
transactions. be transmitted to CBSA before final accounting data are sent. A non-AQ release
non-Appraisal Quality request may not be used for goods that are regulated by any government depart-
(non-AO) data ment other than CBSA.
Release data that are not
A paper RMD, known as a "hard copy" RMD, package must include the
completed in full. Data may
be grouped to obtain following:
release; however, full AQ
data must be submitted 1. two copies of the cargo control document (CCD), the customs delivery
before the final accounting authority copy, and the "long room'' copy (retained by CBSA); and
deadline.
2. two copies of the invoice or other acceptable document providing the
following information:

I
a. the importer's name and business number;

b. the name of the exporter;
c. the unit of measure and quantity of goods;
d. the value of the goods;
e. a detailed description of the goods, including the code or model
number and size or dimensions, plus the ten-digit HS code for all
items;
f. a transaction number in bar-coded format;
g. the number of invoice pages; and
h. the country of origin.
As well, any permits, licences, and certificates must be submitted if applicable.
PRE-ARRIVAL REVIEW SYSTEM

Pre-Arrival Review System (PARS) allows for the submission of release data prior
to the arrival of goods.
Depending on the carrier and mode of transportation, there are other terms
used to describe PARS. For example, where goods arrive by rail, the term RAILPARS
is used. Marine freight uses the term MARINEPARS and airfreight uses AIRPARS.
At inland highway sufferance warehouses, the term used is INPARS.
PARS works by having the exporter or carrier provide all information about the
goods to the customs broker or importer who will be preparing the PARS package
in advance of the shipment's arrival. The information must include a bar-coded
cargo control number.
The customs broker or importer prepares a PARS release request package for
submission to CBSA. The submission of a PARS must be made at least one hour
in advance for an EDI transmission or two hours in advance in the case of a pa-
per submission and up to a maximum of 30 calendar days before the arrival of
the goods. A BSO will review the PARS package and decide whether to release
the goods or refer them for examination. This decision will be entered into the
ACROSS system but will not be made known to anyone outside of the CBSA.
If the carrier subscribes to CBSA's Release Notification System (RNS), the car- Release Notification
rier can check to confirm that the PARS package has been received by CBSA. System (RNS)
A CBSA system that advises
When the carrier reaches the border, they must present themselves at the first
customs brokers, importers,
point of arrival. For a highway carrier, this usually occurs at the Primary Inspection carriers, and warehouse
Line (PIL). The carrier provides the BSO at the PIL with a copy of the paperwork operations of release
that includes the same bar-coded cargo control number used when the PARS pack- decisions; users are notified
when a transaction is
age was submitted to CBSA. The officer will scan the bar-code, and if the message released, as well as when a
indicates that the goods can be released, the officer will stamp the driver's paperwork PARS transaction is
with the date of release and return the paperwork to the carrier. The driver may then approved by CBSA.

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/ proceed on their way. The customs broker, importer, or warehouse operator will be
advised that the goods were released by way of the RNS system.
INTEGRATED IMPORT DECLARATION

Single Window The Integrated Import Declaration (IID) is part of the Single Window Initiative
Initiative (SWI) (SWI). With a single window, all data are sent to CBSA, who in turn sends them
Streamlines the sharing of
to other government agencies who regulate the goods. Other government depart-
commercial import data
between the Government of ments (OGDs) and agencies who participate in the SWI are called participating
Canada and the import government agencies (PGAs). This is intended to reduce the number of documents
community. It balances the required, since information required by PGAs and CBSA is included on one IID.
needs of government
departments and agencies
In most cases, the IID can be transmitted to CBSA up to 90 days prior to the
with today's globally arrival of the goods and it may also be used if the goods have already arrived.
competitive business The use of the IID is not restricted to regulated goods, and it is CBSA's intention
environment. Along with the
to decommission all other EDI release options in favour of the IID.
CBSA, there are nine
participating government
departments and agencies
representing 38 government
CUSTOMS SELF-ASSESSMENT
programs. The Customs Self-Assessment (CSA) program is designed for low-risk, pre-
Customs Self- approved importers, carriers, and registered drivers. Under the CSA program, ap-
Assessment (CSA) proved importers will be allowed a streamlined release, accounting, and payment
A specific program for
process for all imported goods. CSA importers use their own business systems
approved CBSA clients.
Participants are allowed a and processes, which must meet CBSA's requirements, to forward trade data and
streamlined accounting and to report and remit payment of duties and taxes once a month to their own finan-
payment process for all cial institutions.
imported goods, may use
their own business systems
to initiate trade data reports, THE CSA PROCESS
and ea n self-assess any
duties and taxes. If they CSA-approved importers who use CSA-approved carriers and registered drivers
wish, CSA importers may and who are importing eligible goods can use a streamlined process to enter their
also take advantage of a goods into Canada. The CSA process at the border requires registered drivers
streamlined entry process
for imported goods.
to present their commercial driver registration card, the CSA-approved carrier
code, and the CSA-approved importer business number. These bar-coded data
elements are captured in the automated system by the BSO to verify that the
driver is registered, and that the carrier and importer are both CSA approved.
Once these data have been verified by CBSA, the carrier will be authorized
to deliver the goods. The CSA carrier who reports goods to CBSA for authori-
zation to deliver is liable for the payment of duties and taxes until the goods are
delivered to the place of business of the importer, owner, or consignee. To remove
this liability, the reporting carrier must ensure that proof of delivery is obtained
and kept on hand for CBSA verification. Under the CSA process, goods are
not released until they have been received at their destination. Once the CSA-
approved importer receives the goods, they will calculate and remit duties and
taxes through a unique process available only to CSA participants.

I
CHAPTER 7 RELEASE AND ACCOUNTING OF IMPORTED COMMERCIAL GOODS 125 t
CSA-ELIGIBLE GOODS
CSA-eligible goods are commercial goods that have been shipped directly from CSA-eligible goods
the United States (US) or Mexico, as long as the goods do not require, under any Commercial goods,
imported by a CSA importer,
act of Parliament or of the legislature of a province or territory, a permit, licence, that have been shipped
or other similar document to be presented to CBSA at the time of report. directly from the US or
Mexico to Canada. In all
cases, goods that are
FREE AND SECURE TRADE prohibited, controlled, or
regulated are not CSA-
The Free and Secure Trade (FAST) program is a joint Canada-US initiative eligible goods.
involving CBSA and its US counterpart, the Customs and Border Protection Free and Secure Trade
(CBP) agency. FAST supports moving pre-approved eligible goods across the (FAST) program
border quickly and verifying trade compliance away from the border. Information A joint Canada-US initiative
involving CBSA and its US
about the goods that is not required at the time of release can be supplied once the
counterpart, US Customs
goods have moved away from the border. and Border Protection. FAST
FAST is a commercial process offered to pre-approved importers, carriers, and supports moving pre-
registered drivers. Shipments for approved companies, transported by approved approved eligible goods
across the border quickly
carriers using registered drivers, will be cleared into either country with greater and verifying trade
speed and certainty and at a reduced cost of compliance. compliance away from the
In Canada, FAST builds on the CSA program and its principles of pre-approval border. It is a commercial
process offered to pre-
and self-assessment as well as on the increased security measures under the
approved importers, carriers,
Partners in Protection (PIP) program. and registered drivers.
PIP is a Canadian program designed to enlist the cooperation of the trade
Customs and Border
community and the transportation industry in the fight against contraband smug- Protection (CBP)
gling. PIP provides a framework for joint efforts and outlines the commitments of The US counterpart to
both signatories in a memorandum of understanding that focuses on three areas Canada's CBSA. An agency
under the Department of
of cooperation:
Homeland Security whose
mandate is to secure and
1. intelligence and the exchange of information, facilitate trade and travel
while enforcing US
2. security, and
regulations, including
3. joint training/information initiatives. immigration and drug laws.
Partners in Protection
Importers and carriers must be approved in the CSA program and participants in (PIP) program
the PIP program to be eligible for FAST. A CBSA program that enlists
the cooperation of private
There is a designated FAST lane at some highway border points. In order for a
industry to enhance border
carrier to use the FAST lane, the following must apply: and trade chain security,
combat organized crime and
1. goods must be designated CSA-eligible; terrorism, and help detect
and prevent contraband
2. the importer must be FAST approved-that is, both CSA and PIP smuggling.
approved;
3. the carrier must be a FAST-authorized carrier-that is, authorized under
both CSA and PIP; and
4. the driver must be authorized under the FAST driver program.

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/ The process for authority to deliver is the same as that described under the CSA.
The only difference between CSA and FAST is that if both the importer and the
carrier are both CSA and PIP approved, they may use the designated FAST lanes.
SUB-AGENCY CLEARANCES
A sub-agent is a customs broker that acts on behalf of another customs broker.
Since most release requests take place electronically and a customs broker can
request release of goods at any EDI customs port, the use of a sub-agent is generally
restricted to occasions when a customs broker must submit a paper release request
at a port where they are not located.
EXAMINATIONS AND REJECTS

A BSO is empowered under section 99 of the Customs Act1 to examine any goods
that are being imported or exported. As well, other sections of the Customs Act
allow officers access to conveyances and give authority to detain any goods that
have been imported or are about to be exported.
The examination of goods may be conducted in order to determine the proper
tariff classification; to determine a value for duty; to determine origin or quantity;
or to ascertain the admissibility of the goods under other federal laws that regulate,
control, or prohibit the importation or exportation of certain goods.
An examination can be initiated upon presentation to CBSA of an RMD pack-
age, a Form B3 accounting document Type C for release, or the arrival of a driver
using PARS.
After the examining officer has conducted the physical examination, a written
report is provided to the releasing officer. The releasing officer will make the deci-
sion to release, seize, or reject the shipment based on the report.
If the shipment is released, the goods will be forwarded to the consignee. If
the goods are held and not released, the reasons will be listed on Form YSO, Reject
Document Control.
FORM YSO, REJECT DOCUMENT CONTROL

Form YSO, Reject Form YSO, Reject Document Control, a sample copy of which is provided at the
Document Control end of this chapter (see Figure 7.2), is a document issued by CBSA indicating that a
A document issued by CBSA
paper release request has been rejected. For release information that was provided
indicating that a release
request document has been electronically, Form YSO data are transmitted electronically to the customs broker
rejected. or importer. The goods will not be released until the corrected documents or data
are presented.
Form YSO is issued against a PARs or an RMD release request. In most cases,
Form YSO requests additional information or clarification of the data presented in
1 RSC 1985, c 1 (2nd Supp).

CHAPTER 7 RELEASE AND ACCOUNTING OF IMPORTED COMMERCIAL GOODS 127 <)
order to enable the BSO to make a release decision. Minor coding errors may have
to be changed and the release request package resubmitted.
SEIZURES
A seizure takes place when goods and/or, in cases of serious infractions, the con-
veyance or vehicle, are confiscated.
When a seizure does take place, CBSA will issue a Form Kl9, Customs Seizure
Receipt. Form Kl9 describes the goods, the reason for the seizure, the conveyance
used, th e value of the goods, the amount required for return of the goods, and any
deposit taken with respect to the goods.
In some cases, seized goods may be returned to the carrier or their owner upon
payment of any duties, taxes, and/or penalties. However, drugs, firearms, weapons,
pornography, tobacco, alcohol, or vehicles modified for smuggling are obviously
not returned.
THE ADMINISTRATIVE MONETARY PENALTY SYSTEM

The Administrative Monetary Penalty System (AMPS) is a system of civil penal- Administrative
ties applied against those who contravene the Customs Act, the Customs Tariff,2 Monetary Penalty
the Special Import Measures Act,3 or their associated regulations. These penalties System (AMPS)
The CBSA's penalty regime
are used by the CBSA as a means to encourage compliance by commercial traders. that encourages compliance
In cases of non-compliance, the penalties that are applied are based on the type, by issuing monetary
frequency, and severity of the infraction. AMPS largely replaces the use of seizure penalt ies when specific
contraventions have
provisions for technical infractions; typically, an officer will take seizure action
occurred. Penalties may be
only for serious offences. issued to importers,
Officers will issue penalties under AMPS by use of a Notice of Penalty exporters, customs brokers,
Assessment (N PA), a copy of which is reproduced at the end of this chapter (see warehouse and duty free
shop operat ors, carriers, and
Figure 7.3). Contravention COOl , an example of a penalty related to keeping records, freight forwarders.
is reproduced below.
Notice of Penalty
Assessment (N PA)
DETAILS The form on which details of
a penalty are provided. It
Contravention Person failed to keep electronic records in an electronically
includes the penalty
readable format for the prescribed period.
assessment date, the
contravention and penalty
Penalty lst: $150
details, correction and
2nd: $225
redress (appeal) information,
3rd and subsequent: $450
and payment and interest
Penalty Basis Per verification information.
Legislation Customs Act. subsection 2(1.3)
D Memo 017-1-21. Maintenance of Records in Canada by Importers
Table continued on the nex t page.
2 SC 1997. c 36.
3 RSC 1985. c S-15 [SIMA]

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> <128 INTRODUCTI ON TO CUSTOMS ADMINISTRATION AND PROCEDURES
/
ELEMENT •
Guidelines Non-compliance occurs when any importer, exporter, person who
causes goods to be imported or exported, or any other designated
person on behalf of said individua ls fails to keep electronic records
in an elect ronically readable format for the prescribed period.
The pena lty is app lied as a result of an audit, a verification, o r an
examination.
The system on which data are stored must have capability of
produc ing accessible and readable electronic records.
Any person who chooses to keep records electronically must also
maintain the system requirements (including any equipment,
hardware, and software) that are necessary to access the
information contained in those records and must be willing to
provide access to the equipment to CBSA officials for the pu rpose
of reviewing the records.
The readable format must provide a link to relevant supporting
documents.
Retention 36 months
Period
SOURCE : "Administrat ive Monetary Pena lty System, Contravention COOl " (2 November
2017), online: Canada Border Services Agency <https://w w w .cbsa-asfc.gc .ca/ trade-
co m merce/ amps/ contraventions- infractions/ cOO 1-eng.html>.
HOURS OF OPERATION
CBSA offices have differing hours of operation depending on their location and
the services they provide. Some offices offer commercial service 24 hours a day.
Others provide commercial service from 8 a.m. to midnight, and others are open
only to release commercial shipments during regular office hours- for example,
8 a.m. to 5 p.m.
The hours of operation for transmitting confirming accounting documentation
for CADEX and EDI participants are 24 hours a day, 7 days a week. ACROSS is
also available 24 hours a day, 7 days a week.
In some cases, release of goods will be provided after hours with special service
charges being assessed. There may also be charges for the BSO's transportation,
accommodation, and meals .
•• YOU DECIDE
ABC Importing Co receives an AMPS penalty C071 on January 15th,
another on February Sth, a third on March 10th, and a fourth on April
Sth (all in the same year). What is the total amount of the penalties?

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ACCOUNTING FOR GOODS

CBSA needs information in order to verify the value, classification, country of
origin, tariff treatment, and exchange rate of imported goods. These data, as well as
the total amount of duty and taxes, must be submitted within five business days
from the date that the goods are released. Failure to confirm an RMD by presenting
the final accounting documentation within the stipulated time limit will result in
a penalty under AMPS. Accounting information may be presented in hard copy
or electronic format; however, EDI is most common.
CUSTOMS AUTOMATED DATA EXCHANGE

The Customs Automated Data Exchange (CADEX) system electronically links
the importer or customs broker with CBSA. Using CADEX, a customs broker
or importer can receive notification that goods have been released and send ac-
counting data to CBSA. Daily Notices and Statements of Account are also sent via
EDI in CADEX formats to EDI-enabled commercial clients.
Because of its age and limitations, CADEX is being phased out. Those
wishing to exchange data electronically with the CBSA must start to consider
alternatives.
Alternatives to CAD EX include:
• Value Added Network (VAN). A public network that allows the

exchange of data with a large number of trading partners using a single
communication interface.
• Third-party service providers. Many CESA-approved third-party
service providers currently transmit data to the CBSA, using a
variety of communication modes, on behalf of importers and
customs brokers.
• Customs Internet Gateway (CIG). The CBSA developed the CIG to
provide clients with a method of transmitting and receiving data over
the Internet. Clients are required to purchase specific software for
encryption and decryption and to develop, or purchase, the protocol
software to connect to the CIG. Clients must transmit the data from a
Canadian office because the certificate is only assigned to a device in
Canada.
• Connection made directly to the CBSA. The direct-connect option
provides clients with a direct connection to the CBSA. Form 83 accounting
document
An accounting document
FORM B3 ACCOUNTING DOCUMENT that can be used to obtain
the release of goods,
The Form 83 accounting document is a form used to account for import- account for goods, and pay
ed goods. When using CADEX, the data for each field of Form B3 must be duties and taxes on goods.

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> <13Q INTRODUCTION TO CUSTOMS ADMINISTRATION AND PROCEDURES
I
transmitted. D 17-1-104 and its appendices contain the processes and codes used for
submitting Form B3 documents, including examples. A sample Form B3 is reproduced
at the end of this chapter (see Figure 7.4). Each field of Form B3 is described below.
FIELD 1: IMPORTER NAME AND ADDRESS

Indicate the name and address of the importer-the party responsible for the pay-
ment of duties and taxes. Show the importer's business number in the "No" section,
the smaller field within Field 1.
FIELD 2: TRANSACTION NUMBER

The transaction number is a 14-digit number in bar-coded format. The first five
digits represent the account security number of the party presenting Form B3.
The transaction number used on Form B3 is the same number as that used when
the release request was made so that CBSA can match Form B3 with the goods.
FIELD 3: TYPE
There are several entry types of Form B3 accounting documents, the more com-
monly used types are:
FORMB3
ACCOUNTING
DOCUMENT TYPES
Type 10 Used to enter goods into a bonded wa rehouse.
Type 20 Used to release goods that have been entered into a

bonded wa rehouse.
Type A8 Accounts for goods that have been released on an RMD.

This is the most common type of Form 83 for commercia l
importations.
Type C Used to request the release and accounts for goods

simultaneously.
Type F A consolidated entry for goods that have been released

under the courier/ LVS program .
Type H A voluntary ent ry used to declare goods that have been

released and repo rted, but inadvertently omitted from the
original Form 83; for example, an invoice line was omitted
from the original Form 83.
4 "Coding of Customs Accounting Documents" (Memorandum) (28 November 2012), online:

Canada Border Services Agency <https://www.cbsa-asfc.gc.ca/ publications/ dm-md/ d17/d17-1-
10-eng.html>.

I
Type M Used to request the release and account for goods

imported by mail.
Type V Used to voluntarily declare goods that were delivered

without CBSA release.
FIELD 4: OFFICE NUMBER

This field identifies the CBSA office number where the goods were released. Some
common codes are Halifax Airport 26, Montreal Airport 396, Toronto Airport 497,
and Vancouver Pacific Highway 813.
FIELD 5: GST REGISTRATION NUMBER

Where the importer is registered for the GST, the nine-digit GST registration
number must be indicated.
FIELD 6: PAYMENT CODE

Left blank if the duties and taxes will be shown on the broker's Daily Notice (DN)
and Statement of Account (SOA). If an importer has posted security and the goods
have been released under a customs broker's account security number, an "I" is shown.
FIELD 7: MODE OF TRANSPORT

This field is only completed when the value of the shipment is greater than
Cdn$3,300.00 and exported from the US. This field is not completed on Form B3
Types H, M, and V. The codes are:
MODE OF TRANSPORT
Air 1
Highway 2
Rail 6
Pipeline 7
Air/Marine No Carrier Code 8
Marine 9
FIELD 8: PORT OF UNLADING

This field must be completed for all marine shipments when the value of the
shipment is greater than Cdn$3,300.00 and the shipment is exported from
the US. This field is not completed on Form B3 Types H, M, and V.

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FIELD 9: TOTAL VALUE FOR DUTY (VFD)
value for duty Entered on the first page of Form B3, the total of all values for duty of each
The value in Canadian funds classification line is calculated and rounded off to the nearest Canadian dollar.
upon w hich duty is assessed
in accordance with the
A decimal point is not used.
valuation provisions of the
Customs Act.
FIELD 10: SUBHEADER NUMBER
The first page of Form B3 will always indicate " l" in the subheader field. On
subsequent pages, this field is left blank unless information that is shown in the
subheader fields-for example, the vendor name, tariff treatment, direct shipment
date, or currency code- changes. If there is a change, a new subheader must be
shown. Subheaders are numbered from 1 to 999.
FIELD 11: VENDOR NAME

For goods from the US, the name of the vendor followed by the three-digit state
code. As well, the zip code of the vendor must be indicated. This may not always be
the same name as the party shipping the goods. Each new vendor must be shown
on a new subheader.
For goods exported from the US, but invoiced from a third country, indicate
the name of the foreign vendor followed by the state code and the zip code of the
US exporter.
Show the name of the vendor as it appears on the supporting invoice(s). The
small box in Field 11 is not completed.
FIELD 12: COUNTRY OF ORIGIN

Show the two-digit country code if the country of origin is other than the US or
show the three-digit state code if the country of origin is the US. The code is com-
pleted only on the first page of each subheader.
FIELD 13: PLACE OF EXPORT

Show the two-digit country code if the country of export is other than the US, or
show the three-digit state code if the country of export is the US. Field 13 is com-
pleted only on the first page of each subheader.
FIELD 14: TARIFF TREATMENT

Recall from Chapter 5 that Canada has entered into trade agreements with many
countries. The Customs Tariff Schedule lists these countries in alphabetical order
and with their eligible tariff treatments. The tariff treatment, or trade agreement,

I
CHAPTER 7 RELEASE AND ACCOUNTI NG O F IMPORTED COMMERCIAL GOODS 133
determines the rate of duty that is applicable under a specific HS classification.

A full list of tariff treatments is provided in Chapter 5. A few of the more com-
monly used tariff treatments are:
TARIFF TREATMENT ••
Most- Favoured - Nation (M FN) 2
Least Developed Country (LDCT) 8
General Preferential (GPT) 9
United States (UST) 10
Canada - European Comprehensive Economic 31

and Trade Agreement (C EUT)
Comprehensive and Progressive Agreement for 33

Trans-Pacific Partnersh ip (CPTPP)
Field 14 is completed only on the first page of each subheader.
FIELD 15: US PORT OF EXIT

This field is completed on the first page of each subheader on Form B3 Types AB,
AD, C, and D. A four-digit code is used if the shipment has a value greater than
Cdn$3,300.00 and is exported from the US. The US port of exit code is the US
customs port at which, or nearest to which, the land surface carrier transporting
the goods crosses the border of the US into Canada or, in the case of exportation
by vessel or air, the US customs port where the goods are loaded onto the vessel or
aircraft that is to carry the merchandise to Canada.
FIELD 16: DIRECT SHIPMENT DATE

This field may be left blank if the invoice is in Canadian dollars. If the invoice
is in a currency other than Canadian dollars, the date indicated is the date
used to determine the rate of exchange. The date of direct shipment is the date
on which the goods began their continuous journey to Canada. If a Canada
Customs Invoice (CCI) accompanies the goods, this date is found in Field 2 of
the CCI. On a Form B3 Type V entry, the date of direct shipment is the date the
entry is submitted.
FIELD 17: CURRENCY CODE

Although duty and taxes for goods entering Canada are always calculated in
Canadian dollars, goods purchased outside Canada are not always priced or sold
in Canadian dollars. The type of currency shown on the CCI or on the commercial

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> <134 INTRODUCTI ON TO CUSTOMS ADMINISTRATION AND PROCEDURES
I
invoice must be indicated in this field. Each new currency used must be shown as
a new subheader. Some examples are:
CURRENCY CURRENCY CODE
US Dollar USD
Euro EUR
Mexican Peso MXN
Indian Rupee INR
FIELD 18: TIME LIMIT

For temporarily imported goods, this field indicates the length of time that goods
will remain in Canada. For goods that are entered into a warehouse, this field
indicates how long the goods will remain in the warehouse. A new subheader is
required for each new time limit.
Some examples of how to complete this field are:
TIME LIMITS CODES
60 days 60 D
1 w eek lW
2 months 2M
1 year 1 Yor 12 M
15 years 15 y
FIELD 19: FREIGHT

If the goods are valued at more than Cdn$3,300.00 and they have been exported
from the US, this field is completed to indicate the transportation charges, rounded
to the nearest Canadian dollar, of shipping the goods from the US to Canada. This
field is only indicated on the first page of a multi-page Form B3. If there is more
than one subheader, each subheader may indicate its portion of the freight cost.
Individuals transporting their own goods and not using a commercial carrier must
indicate an estimated freight cost.
FIELD 20: RELEASE DATE

Unless you are completing a Form B3 Type F, this field is left blank.

I
CHAPTER 7 RELEASE AND ACCOUNTI NG OF IMPORTED COMMERCIAL GOODS 135 t
FIELD 21: LINE
Fields 21 through 42 are completed for each line of tariff classification on Form B3.
Each page of Form B3 is able to reflect five lines of tariff classification. If a shipment
consists of goods that will be accounted for with eight lines of classification, then
the lines are numbered 01, 02, 03, 04, 05, on page 1 of Form B3, and 06, 07, and
08 on the second page. Line numbers remain consecutive, even if the subheader
changes. Line numbers may not be skipped or duplicated regardless of the number
of subheaders.
FIELD 22: DESCRIPTION

This field contains a description of the goods as well as references to D-memos,
ruling numbers for value or classification, and import permit numbers if appli-
cable. For goods subject to duty under the SIMA, the description must conform
to the written notification provided by CBSA.
FIELD 23: WEIGHT IN KILOGRAMS

Rounded to the nearest kilogram, this field must be completed for shipments
exported from the US by air or water and with a value greater than Cdn$3,300.00.
This field is completed only on the first detail line of each transaction. This field is
not completed on Form B3 Types H, M, and V.
FIELD 24: PREVIOUS TRANSACTION NUMBER

This field is completed only on Form B3 Type H entries. Type H entries are those
that account for goods that have been released and reported, but were inadver-
tently omitted from the original Form B3 accounting document. The transaction
number of the original B3 accounting document is indicated.
FIELD 25: PREVIOUS TRANSACTION LINE

This field is left blank.
FIELD 26: SPECIAL AUTHORITY

This field indicates any special authority numbers that reduce or eliminate the
amount of duty ordinarily payable.
FIELD 27: CLASSIFICATION NUMBER

This field is used to show the ten-digit classification number from the Customs
Tariff Schedule for each of the items included in the shipment. Decimal points
must be shown.

I \ I
> <136
I
INTRODUCTION TO CUSTOMS ADMINIST RATION AND PROCEDURES
FIELD 28: TARIFF CODE

When the imported goods are used for the specific purpose outlined in
chapter 99 of the Customs Tariff Schedule, the first four digits of the tariff
classification number from chapter 99 are quoted in this field. The tariff clas -
sification numbers in chapter 99 of the Customs Tariff Schedule cover goods
that are being imported for a specific use and entitled to a reduced or free rate
of duty.
FIELD 29: QUANTITY

If the tariff item shows a corresponding unit of measure, Field 29 must be com-
pleted, otherwise it is left blank. For example, this field might show KGM (kilogram),
MTR (metre), or MIL (thousand) . If a unit of measure must be shown to calculate
payable excise tax, the unit of measure for excise tax purposes is shown on the
second line of Form B3.
FIELD 30: UNIT OF MEASURE

This field is completed if Field 29 has been completed. For example, if the
tariff item indicates that the number of kilograms must be shown, this field
must indicate the number of kilograms . The unit of measure is always metric.
If a unit of measure was shown for excise tax purposes, the quantity must also
be indicated.
FIELD 31: VALUE FOR DUTY CODE

This two-digit number must be completed on Form B3. The first digit indicates the
relationship between the vendor and the importer:
CODE RELATIONSHIP
1 The vendor and purchaser are not related firms as defined in section
45(2) of the Customs Act.
2 The vendor and purchaser are related f irms as defined in section 45(3) of
the Customs Act.
The second digit indicates the valuation method used:
•• VALUATION METHOD
3 Price paid or payable without adjustm ents (section 48 of the

Customs Act).
4 Price paid or payable with adj ustments (section 48 of the Customs Act) .
5 Transaction value of identical goods (section 49 of the Customs Act).

CHAPTER 7 RELEASE AND ACCOUNTING OF IMPORTED COMMERCIAL GOODS 137 >)
6 Transaction value of similar goods (section 50 of the Customs Act) .
7 Deductive value of imported goods (section 51 of the Customs Act).
8 Computed value (section 52 of the Customs Act) .
9 Residual method of valuation (section 53 of the Customs Act).
FIELD 32: SIMA CODE

This field is to be completed with a two-digit number if the goods are subject to
duties imposed under the Special Import Measures Act or a surtax order. The first
digit indicates the SIMA assessment type:
• SIMA ASSESSMENT TYPE
1 Goods are not subject to a finding by the Canadian International

Trade Tribunal (CITT) and/or a surtax order under the Customs
Tariff.
2 Applies only to goods covered by a price undertaking offered

by all or substantially all exporters of the subject goods and
accepted by the commissioner.
3 Applies on ly to goods subject to a preliminary determination

commencing on the day the determination was made
and ending on the day the commissioner causes the
investigation to be terminated or the day the CITT makes
an order or finding.
4 Goods are subject to a CITT finding ; there is no amount of countervailing duty

anti - dumping duty and/or countervailing duty owing, which A duty levied under the
results in a ni l payment. Special Import Measures Act
on subsidized goods where
5 Goods are subject to a CITT finding and/ o r a surtax o rder.
it has been determined that
Anti-dump ing duty and/or countervai ling duty, and/ or a surt ax
importing such subsidized
amount. is payable.
goods has caused material
injury to the production in
Note that when goods are subject to a CITT finding and/or a surtax order, and Canada of like goods.
SIMA duty and/or a surtax amount are covered by a remission order, SIMA provisional duty
code 50 should be used. The second digit indicates a nil assessment of the pay- Duty levied under the
Special Import Measures Act
ment mode:
when a preliminary decision
is issued by the Canad ian
• •• PAYMENT TYPE International Trade Tribunal
(CITI) on the dumping or
0 Nil payment
subsidizing of imported
goods; provisional duty is
1 Cash
collected until a final
2 Bond (used only for provisional duty o r during the t ime of an decision regarding dumping
expedited review) or subsidizing has been
determined.

I \ I
> <138 INTRODUCTION TO CUSTOMS ADMINIST RATION AND PROCEDURES
I
The following are the only valid SIMA codes:
•• WHEN CODE IS USED
10 Used to identify non-subject goods when sp litting the line of a

Form 83 to separate goods of the same classification from goods
that are subject to a CITT finding .
20 Used for goods covered by a price undertaking.
30 Used for goods where the provisional duty assessment is nil.
31 Used for goods where the provisional duty assessment is covered

by cash.
32 Used for goods where the provisional duty assessment is covered

by a SIMA bond.
40 Used for subject goods where the SIMA duty assessment is nil.
50 Used for subject goods where the SIMA duty assessment is

covered by a valid order in counci l (OIC) number, which must be
entered in Field 26.
51 Used for goods where the SIMA duty assessment and/or the surtax
amount is covered by cash.
52 Used for subject goods under an expedited review where t he SIMA

duty assessment is covered by a SIMA bond.
FIELD 33: RATE OF CUSTOMS DUTY

This field must be completed if customs duty applies. It shows the rate of duty
applicable to the HS classification of the goods. Some examples follow:
• SHOW
Duty free "free," "O," or leave blank
16.5 percent 16.5
18 percent 18 or 18.0
$.85/kg .0085
$1.50/kg .015
If both a percentage and specific rate apply, the percentage rate is shown on the
first detail line and the specific rate is shown on the next detail line. No line
number applies.
FIELD 34: EXCISE TAX RATE

If applicable, this field must show either an excise tax rate or an exemption code
on the first detail line. Products with different excise tax rates or exemption codes

I
CHAPTER 7 RE LEASE AND ACCOUNTING OF IMPORTED COMMERCIAL GOODS 139
must be shown on separate classification lines. Some examples of how to indicate

the rate of excise tax follow:
SHOW
4C per hundred .04
2C per pack .02
lOC each .10
44.72C per litre .4472
$.0205/L .0205
10 percent 10or10.0
FIELD 35: RATE OF GST/HST

This field must be completed with either a GST/HST rate or a GST code on the first
line of each classification line. If GST is applicable, the rate is shown as 5 or 5.0. If
a GST code applies, the field is completed using the code.
FIELD 36: VALUE FOR CURRENCY CONVERSION

The value of the goods, in the currency indicated on the CCI or commercial in-
voice, is indicated in this field. This field must be completed on each classification
line. Show this amount in the currency specified on the invoice to a maximum of
two decimal points-for example, 500,000 euros is shown as 500,000.00.
Starting here, and to the last field of Form B3, we'll use machinery that has a
duty rate of 9.2 percent as an example.
The value of the machinery is 660,000 Japanese yen, which Field 36 would show
as 660,000.00.
FIELD 37: VALUE FOR DUTY

This field indicates the value of the goods in Canadian dollars. This amount is
calculated by multiplying the figure in Field 36 by the exchange rate that applies
to the currency code shown in Field 17.
Using our example of Japanese yen, Field 17 would show JPY. Because 660,000
Japanese yen multiplied by the exchange rate of .0110580 equals 7,298.28 Canadian
dollars, Field 37 indicates 7,298.28.
FIELD 38: CUSTOMS DUTIES

This field is completed if customs duty applies; dollar and cent signs are not used.
To calculate the amount of duty payable, the value for duty from Field 37 is mul-
tiplied by the rate of duty- in this case, 9.2 percent.

I I
> <14Q INTRODUCTION TO CUSTOMS ADM INISTRATION AND PROCEDURES
I
Since 7,298.28 multiplied by 9.2 percent equals 671.44, Field 38 will indicate
671.44-the amount of duty.
FIELD 39: SIMA ASSESSMENT

Complete this field by indicating the amount of surtax, provisional, anti-dumping,
or countervailing duty payable.
FIELD 40: EXCISE TAX

If excise tax applies, this field must be completed by indicating the amount of ex-
cise tax payable. This is determined by adding together the value for duty (Field 37),
the customs duties payable (Field 38), and the SIMA assessment (Field 39) before
multiplying the total by the rate of excise tax.
FIELD 41: VALUE FOR TAX

If GST applies, the figure on which GST is calculated is shown in Field 41. This
is determined by adding together the value for duty (Field 37), the customs duty
(Field 38), any SIMA assessment (Field 39), and any excise tax (Field 40).
Using our example, the value for tax is 7,969.72 (7,298.28 + 671.44 = 7,969.72).
FIELD 42: GST/HST

The actual amount of GST/HST payable is shown in this field.
Using our example, this field indicates 398.49 (7,969.72 multiplied by
5 percent= 398.49).
FIELD 43: DEPOSIT

This field is completed only for Form B3 Types D and AD and indicates the deposit
applicable for a sight entry. Sight entries are rarely used, but can be presented to
obtain release of imported goods when the normal documentation required for
release is lacking or incomplete.
FIELD 44: WAREHOUSE NUMBER

This field is completed only for goods that are entering or exiting a bonded ware-
house. Only the last three or four digits of the warehouse number are shown; these
are the numbers assigned by CBSA.
FIELD 45: CARGO CONTROL NUMBER

The cargo control number, as it appears on the cargo control document, is indicated
in this field. For a multi-page Form B3, this field is completed on the last page only.

I
FIELD 46: CARRIER CODE AT IMPORTATION

This field is completed for all shipments valued at more than Cdn$2,500.00 and
exported from the US by air or water. Only the four-digit carrier code of the
carrier who transported the goods into Canada is required.
FIELD 47: DUTIES

This field indicates the total amount of customs duties payable (Field 38) plus
any deposit indicated in Field 43. If no duty is payable, this field may show
zeros or be left blank. On a multi-page Form B3, this field is completed on the
last page only.
Using our example, Field 47 indicates 671.44.

If a SIMA assessment is payable, then the total from all completed Field 39s is
indicated. On a multi-page Form B3, this field is completed on the last page only.

This field is completed only if excise tax is payable; otherwise, it is left blank or
contains zeros. The total from all completed Field 40s is indicated. On a multi-page
Form B3, this field is completed on the last page only.
FIELD 50: GST/HST

The field shows the total amount of GST payable; otherwise, it is left blank or
contains zeros. The total from all completed Field 42s is shown. On a multi-page
Form B3, this field is completed on the last page only.
Using our example, Field 50 indicates 398.49.
FIELD 51: TOTAL

This field shows the total of all duties and taxes payable from Fields 47, 48, 49, and
50. On a multi-page Form B3, this field is completed on the last page only.
Using our example, this field indicates 1069.93.
FIELD 52: IMPORTER/AGENT DECLARATION

This field indicates the name of the individual, importer, or agent making the dec-
laration (Form B3). A telephone number may also be indicated. If the individual
making the declaration is doing so on behalf of an importer or a licensed customs
broker, the importer's or customs broker's name must be indicated.

I I
•• YOU DECIDE
Raptolutions in Pole Garden, Hawaii has sold 200 jars of petroleum jelly
from their warehouse to Shadow Works in Tofty, Quebec. The petroleum
jelly is manufactured in Ireland and is flown to Canada from the vendor
in Hawaii. Each jar has a unit value of US$7.63 and the US exchange rate
for the date of direct shipment is 1.296. The total value of the shipment
is $1,526.00, including transportation charges of US$150.00 from the
place of direct shipment to Canada .
1. What is shown in Field 27 of Form 83?

2. What amount is indicated in Field 9 of Form 83?
FORM B3 ACCOUNTING DOCUMENT TYPE C

(PAYING ALL DUTIES AND TAXES)
At times, goods may be released at the same time that duties and taxes are paid.
This usually occurs in cases where security has not been posted although a Type C
can be presented with duty and taxes paid later if security has been posted. The
following documents must be submitted with the completed Form B3:
• any commercial or customs invoices;

• the cargo control document; and
• any permits, certificates, or licences.
EX-WAREHOUSE FORM B3 ACCOUNTING

DOCUMENT
It is not until goods are removed from a bonded warehouse that they are con-
Detailed Coding sidered released and accounted for. Form B3 Type 20 is most often used to
Statement (DCS) remove goods from the bonded warehouse and to pay duty and taxes at the
A statement issued by CBSA
when it finds anomalies in same time. Form B3 Type 20 entries may also be submitted electronically, in
accounting data. A DCS is sent which case the duties and taxes are paid at a later date.
to the party that submitted
the accounting data and
may be a Notification of DETAILED CODING STATEMENTS
Rejection, a Notification
of Adjustment, or a Notifica- Once accounting data have been submitted to CBSA, they are reviewed. Any
tion of Acceptance. errors in coding or calculation are printed on a Detailed Coding Statement (DCS).

I
The DCS and the accounting package are then returned to the customs broker or
importer for correction.
The three reasons a DCS may be issued are:
• Notification of Rejection. Generated when CBSA's system encounters

an error while processing Form B3 input data. The DCS displays the
original Form B3 input data as well as CBSA's calculations. At the end of
the DCS, there is a list of the error(s).
• Notification of Adjustment. Generated when the total revenue payable
calculated by CBSA does not agree with the total indicated on Form B3 but
the discrepancy is less than $2.00. In this case, Form B3 is accepted and the
adjusted amount is payable and indicated on the Daily Notice.
• Notification of Acceptance. Generated when Form B3 is a "cash type" -
that is, the goods are being duty paid at time of release. In this case the
DCS is stamped "duty paid" and returned to the importer or customs
broker after payment is received.
Samples of DCSs can be found in Appendix G of Dl?-1-10.5
CORRECTING ERRORS
Errors can and will occur during the processing of documentation. One of the
most common errors is the use of incorrect business or transaction numbers.
CHANGES PRIOR TO FINAL ACCOUNTING

Before final accounting and after the release of the goods, changes may be made to
information provided on an RMD package by using Form A48, RMD Correction.
In addition to changes to the business number and transaction number, changes
can be made to the Cargo Control Number, container number(s), sub-location
code, or customs office.
The completed form is presented to CBSA where the goods were released and
must be presented within a time frame that allows the goods to be accounted for,
or confirmed, within the required time limits. A sample Form A48 is reproduced
at the end of this chapter (Figure 7.5).
CHANGES BETWEEN TIME OF FINAL ACCOUNTING

AND PAYMENT OF DUTIES AND TAXES
All requests to change the importer name, account number, or business number
after the final accounting has been presented, but before the payment of duties
and taxes, must be accompanied by a letter from the importer or customs broker
explaining the reason for the change. When the letter is presented by the customs
5 Supra note 4.

I I
> <144 INTRODUCTION TO CUSTOMS ADMINIST RATION AND PROCEDURES
I
broker, it must indicate that the original importer of record has been advised of
the change.
CHANGES AFTER PAYMENT OF DUTIES AND TAXES

In order to change the importer name and/ or number after final accounting, the
importer or customs broker must submit a letter to CBSA client services in the region
in which the goods were released requesting the change and providing the reason
for doing so. Ifthe letter is presented by the customs broker or other agent, the letter
must indicate that a copy of the letter was sent to the party named as the importer
on the original documentation.
The record will then be corrected and the customs commercial system (CCS)
will be updated to reflect this change. The customs broker or importer will be sent a
Detailed Adjustment Detailed Adjustment Statement (DAS) indicating that the change has been made.
Statement (DAS)
A statement issued by CBSA,
once duties and t axes have QUEEN'S WAREHOUSE
been paid, to an importer or
customs broker to indicate Queen's warehouses are operated by CBSA and are used to store seized, forfeited,
that the final accounting detained, abandoned, and unclaimed goods before they are released or disposed
document is not correct;
ofbyCBSA.
also issued by the CBSA as
confirmat ion after an
The importer or customs broker has 40 days from the date the carrier presents
importer or a customs a CCD to CBSA in which to present a release or accounting package. If the goods
broker has asked the CBSA are still on hand after 40 days, CBSA will issue a Form E44, Notice-Unclaimed
to review and adjust an
Goods. At this point, the goods are deemed to be placed in the Queen's warehouse.
accounting document.
The importer or customs broker has an additional 30 days from the date of
Queen's warehouse
A warehouse operated by
issue of Form E44 to have the goods released. If the goods are not released within
CBSA and used to store this time, they are deemed to be forfeited to the Crown. There is no recourse at
seized, forfeited, detained, this point for the importer to claim the goods. The goods will now be sold by the
abandoned, and unclaimed
CBSA at its next public auction. If the goods cannot be sold, they will be destroyed
goods before they are
released or disposed of byCBSA.
byCBSA. It is important to monitor time limits on shipments that have not been released.

I
CHAPTER 7 RELEASE AND ACCOUNTI NG O F IMPORTED COMMERCIAL GOODS 145 t
FIGURE 7.1 Exceptions to EDI
The following commercial shipment has been identified as an

EXCEPTION to the requirements for EDI release under Customs
Notice 07-008.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ (Broker/Importer)
Re:CCN _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ~
Date: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _~
* Invoice greater than 999 lines

* More than one warehouse sub-location code
* Multiple Cargo Control Numbers at frontier
* Bonded warehouse RMD (grey wrapper)
* Goods being released from Queen's Warehouse
* OGD Paper Permit or Certificate Required
* Shortages, Entered to Arrive, Value Included, Provisional, etc.
* Courier Low Value Shipment Reject from Consist List
* Live Animals (not day- old chicks)

I I
> <146 INTRODUCTION TO CUSTOMS ADM IN IST RATION AND PROCEDURES
I
FIGURE 7.2 Sample Form YSO, Reject Document Control
••• canada Customs

and Revenue Agency
Agence des douanes
et du revenu du Canada
REJECT DOCUMENT CONTROL

CONTROLE DES DOCUMENTS REJETES
Customsollloe
8ul98U
deadoulnel
1427
1--Agent· I...,.,_...--
I ABC Customs Brokers
~;.=Me
o=c:,;u.:=
D =:.-codage
D Dupllcale COtgO -
fnltr6p616
-
Num6ro du document d e - d u
==':r'
o=•dettl~~~
D mamhlndltes
o-de con-r *~ omla
Container number mlssl
o==~:::=-.r
D~=."~":'~:...
-
Location
D pulndiqu6o not
d gooda I~
L.ocationdeslTlllthsldl-n'eot o ~
REMARKS - REMARQUES
~- · Agent--
Business number not on file.
lmpo--Agont·lmpo-r-Mlnclalolro
Y50(<13112)
PriDd t'I CW-. - lmprim6 8U Clnedl
-------
SOURCE: "Release of Commercial Goods, Appendix A: Form YSO, Reject Document Control" (last
modified 19 April 2012), on line (pdf) : Canada Border Services Agency <https://www.cbsa-asfc.gc.ca/
publications/dm - md/d17/d17-1-4 -eng.pdf>.

FIGURE 7.3
CHAPTER 7 RELEASE AND ACCOUNTING Of IMPORTED COMMERCIAL GOODS
Sample Notice of Penalty Assessment (NPA)

147 8
Client Customs Account Name/Address
<<client/business name>>
<<address>>
Legal Name
123-456 Canada Inc.
Client Identifier Penalty Amount Line Object Code

98765432IR}l.{0001 $1,000 4S4S
Reason for Penalty Assessment

On October 7, 2019, it was determined that you moved, delivered or exported, or caused to be moved, delivered or exported
goods that have been reported but not released, without customs authorization.
Contravention C033
Contravention
Person moved, delivered, or exported, or caused to be moved, delivered, or exported goods that have been reported but not
released, without customs authorization.
Legislative/Regulatory Authority
Customs Act, subsection 19( 1)
Penalty Calculation Information
Number of Shipments: I
Penalty Level: 1
Amount: $ 1,000
This is a flat rate penalty. You have been assessed at $1,000 per shipment.
Related Information
CCRA Cross-Reference No: 3512101210121
Mode: Highway
Carrier: ABCDEF Transport Inc.
Tractor Licence Number: 123ABC
Tractor Province/State: ON
Trailer Licence Number: 45678
Trailer Province/State: BC

I\ I
>-< 148 INTRODUCTION TO CUSTOMS ADMINISTRATION AND PROCEDURES
FIGURE 7.3 Sample Notice of Penalty Assessment (NPA) (Continued)
Payment
Remit the amount of $1,000 to the Receiver General. This amount is payable on receipt of this notice. Your payment may be
made at the issuing office listed below or at any Canada Customs and Revenue Agency office. A copy of this notice must
accompany your payment.
If payment is not received within 30 days from the date of this notice, the amount will be subject to interest at the prescribed
rate, beginning the date following the date of this notice.
Review or Enforcement Action
Correction
If you believe that the action taken was incorrect, you may contact the issuing Canada Customs and Revenue Agency office
within 30 days from the date on this notice (see below for address). Errors must be evident to both parties and would include,
but are not limited to, errors in calculation, name, address, contravention type, o r amount of penalty.
Redress
The Customs Act provides an avenue of appeal to dispute an enforcement action taken. If you believe the penalty assessment
has been applied inappropriately, you may request a decision of the Minister. The request must be submitted in writing to a
Canada Customs and Revenue Agency office (see Appendix D for address), within 90 days of being served the notice of
penalty assessment.
ISSUING OFFICE/ADDRESS ISSUING OFFICER IDENTIFICATION

CCRA-ADRC <<customs office>> <<name or badge number>>
<<address>>
Telephone: (613) 555-5555
Fax: (613) 999-9999
CUSTOMS CLIENT SERVICES

Atlantic 1557 Hollis Street
9th floor
Halifax NS B3J 3G6
Telephone: (902) 426-7~82
Fax: (902) 426-8825
Quebec 400 Place d'Youville
5th floor
Montreal QC H2Y 2C2
Telephone: (514) 286-7879
Fax: (514) 496-1448
Northern Ontario Region 2270 St. Laurent Blvd.
l st floor
Ottawa ON KIG 4KI
Telephone: (613) 991-0537
Fax: (613) 952-7149
Southern Ontario Region I Front Street West
3rd floor
P.O. Box 10, Station " A"
Toronto ON M5W IA3
Telephone: (416) 954-562 1
Fax: (416) 954-8337
Prairies 269 Main Street
Winnipeg MB R3C IB3
Telephone (204) 983-6000
Fax (204) 983-6635
Pacific 333 Dunsmuir Street
5th floor
Vancouver BC V6B 5R4
Telephone: (604) 666-6753
Fax: (604) 666-7027

I
CHAPTER 7 RE LEASE AND ACCOUNTI NG OF IMPORTED COMMERCIAL GOODS 149
FIGURE 7.4 Sample Form 83, Canada Customs Coding Form
Agence des services

l+I Canada Border
Services Agency frontaliers du Canada
CANADA CUSTOMS CODING FORM
DOUANES CANADA· FORMULE DE CODAGE
PROTECT[D () (W H EN COMPL ETED)
PROTEGf B iU Nf f O ISRfMPll)
1 IMPORTER NAME AND ADORESS 2.TRANSACTION NO. · N" DE T ~SACTION

NOM ET AORESSE OE L1"'6'0ATA1CUA
1:;;456789RM000l 1277745678900
East Side warehouse

123A Spadina Avenue
Tor onto, ON M9R 6B7
1·~-1 ,_ii
~" '~'"
S GST REGISTRATION NO. 9 TOTAL VFD· TOTAL DE lA VO
""" N° OETPS
'""'' I'""""°·
AB
""""
427
""'"
""""" 2
""-""""
rr~
TRANS.
26752
""" ..
,.
''""'"·
~TE
11 \IENOOA NAME · NOM OU \1£NOEUR
I"° ... 12 COUKTRY Of~
PAYSD'ORIGIE
ll Pl.ACfOffXPORT
lEUD'EXPOATAllON
14 TARIFF TREATMENT
TRAIT'EMENTTARf"Aft
15 US PORTOffXfl
~~SOATE
tlNY tlNY 2 0901

The Fashion Showroom
I"~
IS mlECT SHAENT MTE 18 TIME LIMIT - ~VJ 19 FREIGHT - FRET
MT£0'£Xf'£OITIOHDIRECTE
19995 Canal Street DEVOSE
New York, NY 12345 " ""
12 6 l,800
I OSD
I
20 RELEASE OATE • OATE OE LA IAAINLEv£E
21 LINE 22 OESCRIPTION
LIGNE o£SIGNATION
l Women ' s skirts, wool

27 Ct.ASSIFICATION NO. 29 TARIFF OODf N QUANTITY XIU-M 30 VALUE FOR CURRfNCY CONVERSION
N' DE CV.SSEMENT TAAfMff. OUANTITE CONVERSION VALEUR POUR CHANGE
6204510000 60.000 NMB l,800.00

37 VALUE FOR DUTY 38 CUSTOMS DUTIES 42GST
VALEUR EN OOUANE DROITS DE DOIJANE TPS
1980.00 356 .40 116.82

21 LINE 22 DESCRIPTION
LIGNE DE:SIGNATION
women's blouses, silk
29
~:~
20
27 Cl..ASSlflCATION NO.
N• DE ClASSEMENT ~Zmtl
6206100000 80.000 NMB
37 VALUE FOR DUTY 38 CUSTOMS DUTIES
VALEUR EN 00\JANE DROITS DE DOI.JANE
1760.00 281.60
21 LINE
U()NE 22~f~:g::
women's rai ncoats, nyl on
27 CLASSIFICATION NO.
N• DE ClASSEMENT
6202110000 400.000
37 VALUE FOR DUTY 38 CUSTOMS DUTIES
VALEUR EN OOUANE DROITS OE DOIJANE
70 40 . 00 1267.20
21 LINE 22 DESCRIPTION
LIGNE DE.SIGNATK>N
4 women ' s bathing suits, polyester

27 Cl..ASSlflCATION NO.
N' DE ClASSEMENT
6211129000 120.000
37 VALUE fOR DUTY 38 CUSTOMS DUTIES
VALEUR EN OOUANE OROITS DE DOI.JANE
3300.00 594.00
21 LINE
LOGNE 22~f~~~:g::
5 women's pi ece suits, wool blend
27 CLASSIFICATION NO. 29 TAAf'F OOOE 29 QUANTITY JOU-M
N• OE CV.SSEMENT TARWAl!f OUANTITt
6204210000 144.000 NMB
37 VALUE FOR DUTY 38 CUSTOMS DUTIES 42GST
VALEUR EN DOI.JANE OROITS OE OOUANE TPS
12672.00 2280.96 14952.96 747.65
DECLARATION- oE:ClARATION
~E J . Doe
Of'
PU:ASEPRINTHAMIE! · L.ETmES"'5til£ss.v.P.
I"' WAREHOUSE "°·.... D'ENTREP6T

..""''"""
....
COTISo\TIOff
4 , 780 .16
0 . 00
oe ABCD customs Brokers
"""'
DECLARE THE PARTICUl.AAS Of THIS DOCUMENT TO 6E TRUE, ACCURATE ANO COMPLETE. 0 .0 0
DE.CLARE aue
LES RENSEIGHEMENTS Cl-OESSUS SONT \IRAIS ET COMPLETS. 45 CARGO CONTROL NO. - N° DE CONTROl..E OU FRET
1123 45876543
l,576.61
48 CARRIERCOOEATIMPORTATION
2020/12/12 COOE. OE TRANSPORTEUR A l1MPORTATION
6,536.77
1123
83-3 (04)
Canada
SOURCE: "Form 83, Canada Customs Coding Form" (last modified 3 April 2013). online (pdf) : Canada
Border Services Agency <https://www.cbsa -asfc.gc.ca /publications/forms-formulaires/ b3-3.pdf>.

I \ I
> <15Q INTRODUCTIO N TO CUSTO MS ADMINI STRAT IO N AND PROCEDURES
I
FIGURE 7.5 Sample Form A48, RMD Correction
I
••• Canada Border
Services Agency
Agence des services
f rontaliers OJ Canada
R.M.D. CORRECTION ·CORRECTION DE MOM

Date (yy-mm-dd - aa-mm-D)
This document must be submitted to customs slgMd by the Ce document dolt 6tre slgn6 par les dlreeteurs des flnnes de
managers of the brokerage flnns Involved In the change In bar courtiers vls6es par le changement des codes A barres, avant d'6tre
codes. pr6aente la douane. a
Original importer/broker - lmportateur/courtier Initial I
Telephone number· Numilro de 1616phone
J . Doe customs Broker s I nt 1 1. 416 . 555.1212

Manager • Directeur Signature
Ma ry Doe I
Correct importer/broker - lmportateur/courtier 16gltime I
Telephone number · Num«o de t61ephone
ABCDE Customs Broker s 4 1 6 .000 . 000

Manager - Olrecteur Signature
John Smith
Original transaction number Original cargo control number(s) Original Business Number Original container number(s)
Numlwo de transaction initial Num6ro(s) de contrOle du fret initial(aux) Num6ro d'antreprise initial Num6ro(s) de oontenaur original(aux}
123'-56789
1234 5-9976543 1234 5 6789 N/A
RP 0002
Correct transaction number Correct cargo control number(s) Correct Business Number Correct container number(s)
NumtM'o de transaction pertinent Num6ro(s) de contrOJe du fret pertinen~s) Num6ro d'entreprise pec1inent Nurn6ro(s) de conteneur pertinent(s)
67789 - 9976543 1 234-56789

99 2 34 1222 N/A
RP 0002
If unabkt to make corrections, retum to • S'il est impossible d'apporter les corrections, retoumez A Original sub-k>catlon code
Code secondalre d'entrepOt d'attente Initial
N/A
CmectsulHocationcode
Code secondan <fentrepOt d'attante pMilent
N/A
Expi&naUon of circumstances - Oesctfptk>n des clroonstanoes
Goods released in erro r f or J. Doe ' s c l i ent under J . Doe' s customs Brok ers
s e curi t y numbe r.
The following documents must be attached for correction to be considered: Pour qu'une correction soit envisag8e, le pr6sent formulaire doit 6tte acoompagne des
documents suivants :
- the revised RMD package; - les documents de MOM nlvls6s,
: : ~~~~=r~%Y from correct broker. : ~g: =~:U:~~:':iQnte par le courtier ltgltime.
Do 1101 U ' 1 !111 11 1 1 N I l l '. ( r 1v t l flt 11 I ( I
Date stamp - Timbre dateur

D Corrections made - Corrections D Unable to make corrections - Impossible d'apporter Jes corrections
Explanation • Explication
Manager/superintendent - Gestionnalrelsurintendant Signature
I
A48 (05)
Canada
SOURCE: "Form A48, RMD Correction " (last m o dified 19 February 2013), o nline (pdf} :
Canada Bo rder Services Agency <https://www.cbsa- asfc.gc.c a/publi cations/for ms-
fo rmulaires/a48.pdf>.

CHAPTER 7 RELEASE AND ACCOUNTI NG O F IMPO RTED COMMERCIAL GOODS 151
KEY TERMS
Accelerated Commercial Release Detailed Adjustment Statement Notice of Penalty Assessment
Operations Support System (DAS), 144 (NPA), 127
(ACROSS), 120 Detailed Coding Statement (DCS), 142 Partners in Protection (PIP)
Administrative Monetary Penalty Form B3 accounting document, 129 program, 125
System (AMPS), 127 provisional duty, 137
Form Y50, Reject Document
Appraisal Quality (AQ) data, 122 Control, 126 Queen's warehouse, 144
countervailing duty, 137 Free and Secure Trade (FAST) Release Notification System
CSA-eligible goods, 125 program, 125 (RNS), 123
Customs and Border Protection Integrated Import Release on Minimum
(CBP), 125 Declaration (llD), 121 Documentation (RMD), 121
Customs Automated Data Exchange interim accounting, 121 security, 121
(CADEX) or Customs Declaration Machine Release System (MRS), 120 Single Window Initiative (SWI), 124
(CUSDEC), 120
non-Appraisal Quality (non-AQ) value for duty, 132
Customs Self-Assessment (CSA), 124 data, 122
REVIEW QUESTIONS
1. Only a customs broker can post security so that 5. The maximum number of days before the goods
goods can be released prior to the payment of arrive at the border and a PARS release request
dut ies and taxes. True or false? can be subm itted to CBSA is - -·
2 . The maximum security amount that customs a. 10

brokers must post to have goods released prior b. 15
to the payment of duties and taxes is c. 20
d. 30
a. $1 million e. 40
b. $5 million 6. Final accounting must be submitted to CBSA
c. $10 million w ithin days of the release of t he goods.
d. $15 million a. 3
e. $20 million b. 5
3. Appraisa l Quality data must be transmitted to c. 7
CBSA when requesting the release of goods d. 9
using a Release on Minimum Documentation e. 12
(RMD). True or false?
7. What is the value for duty of goods that are so ld
4. A Pre-Arrival Review System (PARS) release to an importer in Canada for 93,000 euros w ith
request m ay only be used for goods t ravelling an exchange rate of 0.57?
by road. True or false? a. $5,301 .00
b. $53,010.00

152 INTRO DUCTIO N TO CUSTOMS ADMINISTRATION AN D PROCED URES
c. $93,530.00 d. $5,406.56
d. $98,301.00 e. $8,030.55
e. $146,010.00 9. Based on the information from questions 7 and
8. Based on the information from question 7, how 8, how much GST will be applicable?
much duty will be applicable if the duty rate is a. $145.78
5.5 percent? b. $257.21
a. $291.56 c. $2,650.50
b. $2,915.55 d. $2.796.28
c. $5,144.16 e. $4,946.83

1. Release data must be sent electronically, unless 4. What is the Accelerated Commercial Release
there is a specific reason why it cannot be done. Operations Support System (ACROSS)?
Provide three reasons why release data cannot 5. Describe the d ifference between an
be submitted electronically. RMD release request and a PARS release
2. Describe CBSA's Machine Release System. request.
3. When is Field 7 (Mode ofTransport) of Form B3
completed?

LEARNING OUTCOMES
• Describe the procedure for importing goods into Canada temporarily.
• Understand the Canadian Goods Abroad Program.
• Explain the procedure for importing returned goods into Canada.
• Give examples of prohibited goods.
• Explain how to deal with short shipments.
153
I \ I
I
INTRODUCTION
When goods are imported into Canada, there are often unique circumstances
surrounding their entry. This chapter discusses these unique circumstances and
the decisions that must be made before releasing and accounting for these goods.
TEMPORARY ENTRIES
There are often times when an importer will choose to import goods temporarily.
In most cases of temporary importation, the payment of full duties and taxes is
not required. However, the goods must still be documented at the time of im-
portation to ensure that they remain under customs control while in Canada.
A few examples of goods that are not subject to the payment of duties and
taxes when imported temporarily are:
• goods for display,

• goods for emergency use,
• commercial samples,
• goods for demonstration,
• goods for trial use,
• goods requiring repair, and
• in-transit goods.
Form E29B, Temporary Goods imported temporarily into Canada may be documented on Form E29B,
Admission Permit Temporary Admission Permit; Form B3, Canada Customs Coding Form; or on
A form that may be used to
an ATA Carnet (Admission Temporaire/Temporary Admission Carnet). In some
document goods qualifying
for temporary importation cases, both Form E29B and Form B3 are required.
into Canada .
ATA Carnet (Admission
••
Temporaire/Temporary
Admission Carnet) DID YOU KNOW?
"ATA" is an abbreviation for
the French and English
words "Admission Tempo- Goods being imported temporarily for repairs are generally accounted for
raire/Temporary Admission:' using Form E29B, never on a carnet. The World Customs Organization's
A carnet is an internationally International Customs Convention on the ATA Carnet for the temporary
recognized document for
the temporary importation
admission of goods prohibits the use of a carnet for this purpose.
of goods and is accepted in
over 78 countries.
But first, they must be classified in one of the tariff items found in chapters 1
to 97 of the Customs Tariff Schedule.1
1 "Departmenta l Consolidation of the Customs Tariff 2019" (1 January 2019) (excludes the
Custo ms Tariff, SC 1977, c 36), online (pdf): Canada Bo rder Services Agency <https://
www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2019/ 01-99/ 01-99-t2019-1-eng.pdf>.

I
CHAPTER 8 RETURNED GOODS. TEMPORARY ENTRIES. AND OTHER SPECIAL CIRCUMSTANCES 155 t
Once classified, chapter 99 can be checked to see if the goods qualify for tem-
porary importation under tariff item 9993.00.00. If they qualify, the first four digits
of tariff 9993.00.00.00 (9993) are quoted on the import accounting document to
indicate a temporary importation. Use of this tariff code allows duty-free entry of
the goods.
Tariff classification 9993.00.00.00 states:
Goods, not including conveyances, containers or baggage of Tariff item

No 9801.10.10, 9801.10.20, 9801.10.30 or 9801.20.00, or of Chapter 89 (except
when imported for the purpose of repair, overhaul, alteration, adjustment, stor-
age, display at an exhibition of similar manufacturers, racing, testing, certifica-
tion by an accredited organization, or to be employed in the production of films
or commercials, or in response to an emergency or emergency response training
exercise, or for in-transit movement through Canada, or as a commercial sample,
or when imported by non-resident teams or athletes, or their support personnel,
for their use in professional or organized amateur sports activities, or when im-
ported by non-residents for their use in providing live entertainment such as
aquatic displays), when imported on a temporary basis, on condition that
(a) the goods are not sold or further manufactured or processed in Canada;
(a.I) the goods are not leased except where imported for use
(i) in an emergency or emergency response training exercise,
(ii) on loan pending delivery of new machinery or equipment on
order, or
(iii) as temporary replacements for machines or other equipment previ-
ously accounted for and undergoing repairs;
(b) the use of the goods is specified by the importer at the time of reporting
of the goods under the Customs Act, that use is not limited or restricted
by regulation, and the goods are released for that specified use;
(c) the goods are imported in no greater quantity than is reasonable, in the
view of the Minister of Public Safety and Emergency Preparedness or a
designated customs officer, for the use specified under paragraph (b);
(d) the goods are accompanied, in prescribed circumstances, by prescribed
documents and by security of a nature and in an amount satisfactory to
the Minister of Public Safety and Emergency Preparedness or a desig-
nated customs officer, unless otherwise provided by regulation;
(e) the goods are not diverted to a use that is limited or restricted by regula-
tion, or to a use that would preclude the goods from being classified un-
der this tariff item; and,
(f) within eighteen months of the date of the reporting of the goods under
the Customs Act or within any other period prescribed for those goods,
the goods are:
(i) exported from Canada and evidence, satisfactory to the Minister
of Public Safety and Emergency Preparedness or the designated
customs officer, of the exportation is provided to the Minister of
Public Safety and Emergency Preparedness or the designated cus-
toms officer,

I \ I
> <156
I
INTRODUCTION TO CUSTOMS ADM INIST RATION AND PROCEDURES
(ii) destroyed and the destruction is certified by a customs officer or by

another person designated by the Minister of Public Safety and
Emergency Preparedness, or
(iii) consumed or expended under prescribed circumstances.
The following definitions apply to this tariff item:
"accredited organization" means an organization accredited by the Standards

Council of Canada to certify that goods tested or examined by that organization
meet the standards set by the Council in respect of those goods.
"emergency" means an urgent and critical situation of a temporary nature that
(a) is of such proportions or nature as to exceed the capacity or authority of a
province or municipality to deal with it;
(b) is caused by an actual or imminent
(i) fire, flood, drought, storm, earthquake, or other natural phenomenon,
(ii) disease in human beings, animals or plants,
(iii) accident or pollution, or
(iv) act of sabotage or terrorism; and
(c) results or may result in
(i) danger to the lives, health or safety of individuals,
(ii) danger to property,
(iii) social disruption, or
(iv) a breakdown in the flow of essential goods, services or resources.
"emergency response training exercise" means an activity intended to educate or
provide training related to emergency preparedness.
"exhibition" means a display of goods open to the general public.2
GST/HST
For goods that are imported temporarily, GST/HST is either fully relieved, fully
payable, or payable in part. Full relief of GST/HST means that, although goods are
ordinarily taxable, GST is not collected. However, if there is a requirement for
security to be posted, it must cover both the duty and GST.
Appendix B of D8- l - l 3 provides the tax status on goods imported temporarily.
The following is an excerpt from this appendix:
2 Ibid at 99-72 to 99- 73.

3 "Ca nadian Goods Abroad Program" (Memorandum) (25 June 2015), o nline: Canada Border
Services Agency <https://www.cbsa-asfc.gc.ca/ publications/ dm-md/ d8/d8 -2-1-eng.html>.

CHAPTER 8 RETURNED GOODS, TEMPORARY ENTRIES, AND OTHER SPECIAL CIRCUMSTANCES 157 <)
TYPE AND SPECIAL
CONDITIONS MAXIMUM PERIOD AUTHORITY
AND EXAMPLES OF GST/HST RELIEF LEGISLATIVE AUTHORITY CODE
Animals Animals and Full Non - taxable Imported Goods 39-089Z1663

equipment for use (GSTI HST) Regulations cross
therewith, for 12 months reference to item 39 of the
pasturage, schedule to the Temporary
competition, The minister may Importation (Excise Levies and
training or breeding extend Additional Duties) Regulations
This means that animals that meet the listed conditions are entitled to full GST
relief and that this relief is granted for 12 months. The Special Authority Code is
what allows the full relief of tax and must be quoted on the import document.
Another example is:
TYPE AND SPECIAL

CONDITIONS AND MAXIMUM PERIOD AUTHORITY
KEYWORD EXAMPLES OF GST/HST RELIEF CODE
Academic Academic regalia consisting 1/60 Value of Imported 56-089Z1663

Regalia of academic hoods, caps, Goods (GSTIHST)
gowns, sashes and other 30 days Regulations cross
articles of wearing appa rel reference to item 56
imported by non- of the schedu le to the
commercial importers for Temporary
graduation and Importation (Excise
commencement Levies and Additional
ceremonies Duties) Regulations
For these goods, l/60 of the total amount of GST that would be payable is col-
lected for each month that the goods remain in Canada. Security is posted for the
balance of GST.
When GST is payable, Form B3 is used to account for the GST. The following
chart is helpful when determining the import document used:
Duty free w hen classified

. .:
Form E29B or ATA Carnet,
• GST/HST PARTIALLY
RELIEVED
Form B3
GST/HST FULLY
PAYABLE
Form B3 (treated as if
in chapters 1 to 97 of the with some exceptions the goods are imported
Customs Tariff Schedule permanently)
Dutiable w hen classified in Form E29B or ATA Ca rnet Form B3 Form E29B or ATA
c hapters 1 to 97 of the Carnet, plus Form B3
Customs Tariff Schedule

I \ I
I
EXPLANATION
ROW 1, COLUMN 3
When GST is payable in full and the goods are duty free when classified in chapters
1 to 97 of the Customs Tariff Schedule, a Form B3 entry is prepared. There is no
need for Form E29B or ATA Carnet, since a temporary entry is no different than
a permanent one for these particular goods.
ROW 2 , COLUMN 1
When GST is fully relieved, and the goods are dutiable according to chapters 1
to 97 of the Customs Tariff Schedule, Form E29B (with tariff code 9993) or
ATA Carnet is used. If security is required, it must cover the GST as well as
the duty.
ROW 2, COLUMN 3
When GST is payable in full, and the goods are dutiable according to chapters 1
to 97 of the Customs Tariff Schedule, Form B3 is used to account for the duty and
Form E29B or ATA Carnet, with tariff code 9993, is used to document the goods
entering on a temporary basis and ensure they remain under customs control
while in Canada.
FORM E29B, TEMPORARY ADMISSION PERMIT

Goods entering Canada on a temporary basis for a specified time period and under
certain conditions may qualify for entry on Form E29B. A sample Form E29B is
reproduced at the end of this chapter (see Figure 8.1).
When preparing Form E29B, it's a good idea to indicate model or serial num-
bers of the imported goods in the description field. This will make it much easier
to identify the goods when they are exported.
In most cases, Form E29B also requires a security deposit. The maximum
amount of security that could be requested is the total amount of duties and taxes
that would be payable if the goods remain in Canada. If the goods are imported
for commercial purposes and the total customs duties owing would be $100.00 or
less, CBSA does not require a security deposit. Security is also not required to be
posted for goods that qualify under CUSMA, CCFTA, or CCRTA.
The security deposit may be in the form of:
1. cash;
2. a certified cheque;
3. a transferable bond issued by the Government of Canada; or
4. a bond issued by:

I
CHAPTER 8 RETURNED GOODS, TEMPORARY ENTRIES, AND OTHER SPECIAL CIRCUMSTANCES 159
a. an entity that is licensed or otherwise authorized to carry on the

fidelity or surety class of insurance business,
b. a bank, or
c. a credit union.
Form E29B is a five-copy form. It may be completed online but must be pre-
sented in hard copy.
After the completed Form E29B is submitted to CBSA, it is numbered by CBSA
and copies are returned to the importer or customs broker. Requests to extend the
time frame of Form E29B are treated by CBSA on a case-by-case basis.
Form E29B is cancelled and, if applicable, security refunded when:
1. the goods have been exported; or

2. the goods have been accounted for and the duties owing have been paid; or
3. the goods have been destroyed and the destruction certified by an
officer; or
4. the goods have been consumed or expended under prescribed
circumstances; or
5. the goods have been abandoned to the Crown. abandoned to the
Crown
The act of relinquishing
ATACARNET ownership of goods to CBSA
for destruction or disposal.
Another form used to document goods entering Canada temporarily is an ATA
Carnet. A carnet is an international customs document designed to simplify and
streamline temporary entry procedures. Carnets are particularly useful for goods
that will be imported into more than one country during the period of validity of
the carnet, usually one year. Another feature is that they do not require the posting
of security in each country.
Carnets are usually issued by the Chamber of Commerce in a participating
country. The issuing party-in the case of Canada, the Canadian Chamber of
Commerce-may require a security deposit that is generally set at 40 percent of the
value of the goods.
Generally, a carnet may be used for any reason that Form E29B would be used;
however, it may not be used for goods entering Canada for repair.
ATA Carnets were established by the World Customs Organization

(WCO) in 1961 and are accepted in over 78 countries.

I I
I
CANADIAN GOODS ABROAD
Canadian Goods The Canadian Goods Abroad Program (CGAP) provides for relief from the pay-
Abroad Program ment of duty on the Canadian portion of goods that are returning to Canada after
(CGAP) having been exported for repairs, additions, or further processing, providing that
A CBSA program that
provides for relief from the
certain conditions are met. The program is outlined in greater detail in DS-2-14
payment of duties on the on CBSA's website.
Canadian portion of goods Relief from the payment of duties will be granted if the minister is satisfied that:
that are returning to Canada
after having been exported • the repairs could not be made in Canada where the goods were located
for repairs, additions, or
further processing, provided or within a reasonable distance,
that certain conditions • the equipment added to the goods was not available in Canada or is of a
are met.
class or kind not made in Canada, or
• it would not be practicable to do the work in Canada.
In addition, in order to qualify for relief, no duty drawback may be claimed or paid
on the exported goods and the goods must be returned to Canada within one year.
drawback A drawback is a refund of duty paid on imported goods that are subsequently ex-
A type of refund claim to ported from Canada. Note that if a drawback is claimed when goods are exported
recover duty paid on
imported goods that are
from Canada for repair, they are subject to duty on their return.
exported under certain Essentially, the CGAP provides relief on the Canadian portion of goods being
conditions or used returned after repair and provides full relief of duty and taxes on emergency re-
in Canada under certain pairs. In order to qualify, the goods must be returned to Canada within one year
conditions.
of being exported for repair or further processing.
In order to take advantage of this CGAP, the Canadian shipper must make a
formal request to CBSA for permission. When the repaired goods are returned, the
foreign exporter must provide an invoice that includes the cost of repairs, labour,
and any parts that were incorporated into the repaired good. Goods repaired in
one of Canada's free trade partner countries can be re-imported into Canada under
the provision of tariff item 9992.00.00.
TARIFF ITEM 9992.00.00

Goods, regardless of their country of origin or tariff treatment that have been
sent to Chile, Colombia, Costa Rica, a CPTPP country, an EU country or other
CETA beneficiary, Honduras, Iceland, Israel or another CIFTA beneficiary, Jordan,
Korea, Liechtenstein, Mexico, Norway, Panama, Peru, Switzerland, or the US for
repair, may be brought back into Canada duty free under tariff item 9992.00.00.
In order to use this tariff item, the goods must first be classified under a tariff
found in chapters 1 to 97 of the Customs Tariff Schedule. This tariff item, as well
4 "Canadian Goods Abroad" (Memorandum) (25 June 2015), online (pdf): Canada Border Services
Agency <https://www.cbsa-asfc.gc.ca /publications/dm -md/d8/d8-2-1-eng.pdf>.

I
CHAPTER 8 RET URNED GOODS, T EMPORARY ENT RIES, AND OTHER SPECIAL CIRCUMSTANCES 161
as the first four digits of tariff 9992.00.00 (9992), must be quoted on the import
document.
Although the tariff code is duty free, tax is payable. If the goods were repaired
under warranty, the value for duty is the cost of repairs only, and GST is calculated
on this amount.
EMERGENCY REPAIRS
Aircraft and vehicles that have undergone emergency repairs outside Canada are
not only allowed relief of any duty and taxes when they return, but also allowed
relief of duty on the value of the repairs. In order to be relieved of duty on the cost of
emergency repairs, the importer must immediately advise CBSA at the port of en-
try that the aircraft or vehicle has been repaired while abroad. If CBSA is satisfied
that the repairs were necessary as a result of an accident or some other unforeseen
problem, or if the repairs were necessary for the safe return of the vehicle, duty
relief will be granted.
ADDITION
Goods that have been exported for the purpose of having additions made may be
granted relief from the payment of duties if:
• it would not be practicable to do the work in Canada, and

• the importer obtains authorization from CBSA prior to exporting the
goods to claim the benefits of paragraph lOl(l)(b) of the Customs Tariff
The application must be submitted at least three months prior to the exportation
of the goods. CBSA officials must have sufficient time to review the material pro-
vided and, where necessary, contact other government departments. The applica-
tion is to be submitted to the closest CBSA office.
WORK DONE
Goods that have been exported for the purpose ofhaving work done may be granted
relief from the payment of duties if:
• the goods to be exported are a product of Canada and the work to be

done, generally a phase of production, cannot practicably have been
done in Canada; and
• the importer obtains authorization from the CBSA prior to exporting
the goods to claim the benefits of this provision.
The application must be submitted in writing at least three months prior to

the exportation of the goods.

I I
I
CANADIAN GOODS AND DUTY PAID
GOODS RETURNED
Canadian goods Canadian goods returned-that is, goods that were made in Canada and have
returned been exported and subsequently returned to Canada-may be entered duty and
Goods that originate in
tax free on their return to Canada providing certain criteria are met.
Canada and have been
exported and subsequently Tariff item 9813.00.00 applies to goods of Canadian origin. The tariff item is
returned to Canada. reproduced below:
9813.00.00
Goods, including containers or coverings filled or empty, originating in Canada,
after having been exported therefrom, if the goods are returned without having
been advanced in value or improved in condition by any process of manufacture
or other means, or combined with any other article abroad.
For the purpose of this tariff item:
(a) goods on which a refund of customs duty or drawback of customs

duty has been made shall not be classified under this tariff item
except upon payment of the customs duty equal to the refund or
drawback allowed; and
(b) goods manufactured in bond or under excise regulations in Canada
and exported shall not be classified under this tariff item except
upon payment of the customs duty to which they would have been
liable had they not been exported from Canada.s
duty paid goods Duty paid goods returned -that is, goods that have been imported into
returned Canada, have had duty paid on them, are exported, and are then brought back
Goods that have been
to Canada-may be entered duty and tax free on their return to Canada pro-
imported into Canada, have
had duty paid on them, are viding certain criteria are met.
exported, and are then Tariff item 9814.00.00 applies to goods previously imported into Canada. The
brought back to Canada. tariff item is reproduced below:
9814.00.00
Goods, including containers or coverings filled or empty, which have once
been released and accounted for under section 32 of the Customs Act and have
been exported, if the goods are returned without having been advanced in value
or improved in condition by any process of manufacture or other means, or
combined with any other article abroad.
For the purpose of this tariff item:
(a) goods on which a refund of customs duty or drawback of customs

duty has been made shall not be classified under this tariff item except
5 Supra note 1 at 98-6.

I
CHAPTER 8 RETURNED GOODS. TEMPORARY ENTRIES. AND OTHER SPECIAL CIRCUM STANCES 163
upon payment of the customs duty equal to the refund or drawback

allowed; and
(b) goods manufactured in bond or under excise regulations in Canada
and exported shall not be classified under this tariff item except
upon payment of the customs duty to which they would have been
liable had they not been exported from Canada. 6
In order to be imported under the provisions of tariff item 9813.00.00 or

9814.00.00, the importer must be able to prove that the goods were in Canada
at one time. A copy of the export bill of lading and the sales invoice are usually
acceptable proof of export.
How do goods qualify as Canadian goods or duty paid

goods returned?
1. Goods must be returned to Canada without having been
advanced in value or improved in condition by any process of
manufacture or other means.
2. Goods that were exported from Canada and are returning to
Canada must be described in sufficient detail on any commercial
documents to enable verification that the goods exported are the
same as those returning to Canada .
Should CBSA request proof of export and an export report is not avail-
able. they may accept the following:
a. validated CBSA documents. such as Form 83 or Form BSF715.

Casual Goods Accounting Document;
b. transportation company documents;
c. customs accounting documents from the foreign country;
d. a declaration made by the exporter or importer of the goods
from or into Canada identifying the goods as having originated
in Canada or as having been previously released and
accounted for and supported by sales invoices to the fore ig n
purchaser. purchase orders. shipping or delivery instructions.
foreign registration of exported goods (e.g .. state registration
of an automobile). or invoices from customs brokers that
relate to the exported goods or shipments; o r
e. primarily for non - commercial goods, a sales invoice from the
Canadian owner showing the purchase of the goods in Canada.
6 lbidat98 - 7.

I I
I Goods eligible for relief under heading 98.13 or 98.14 cannot have received nor
been eligible for a refund or drawback of customs duty. If a refund or drawback
was granted, this amount must be repaid before the goods may be classified in
either heading.
WAREHOUSING AND EX-WAREHOUSING

Customs bonded warehouses are regulated and licensed by CBSA and operated by
the private sector. An importer may choose to put goods into a bonded warehouse
for several reasons, including:
• the deferral of payment of duties (for up to four years) until the goods
are released by CBSA;
• to consolidate imported and domestic goods for export;
• to perform certain operations on the goods while in the bonded
warehouse; or
• to display goods temporarily at conventions, exhibitions or trade shows.
Various functions can be performed while goods are in a bonded warehouse.
These functions include:
• disassembling or reassembling goods that have been assembled
or disassembled for packing, handling, or transportation;
• marking, labelling, tagging, or ticketing; and
• testing.
When goods are entered into a bonded warehouse, the quantity shown on the
accounting document is extremely important. The quantity shown on the ware-
house entry must be in the same unit in which the goods will be removed from
the warehouse. For example, if an accounting document indicates ten cases, ex-
warehouse entries must also be in cases.
Goods that enter a bonded warehouse are documented on Form B3 Type 10
and in hard copy only. When preparing the import document to enter goods into
a warehouse, only similar goods with the same value may be shown on one clas-
sification line. Therefore, if goods are classified under the same tariff classification
but have different values, they must be documented on two separate lines on the
Form B3 warehouse entry. When removing the goods from the warehouse, Form B3
Type 20 is prepared, EDI or paper. The amount of duty payable will be listed on
the Daily Notice (DN) and Statement of Account (SOA). We review the DN and
the SOA in detail in Chapter 9.
MAINTAINING WAREHOUSE RECORDS

ex-warehoused
Strict control must be kept on goods warehoused and ex-warehoused, and record
Form B3 Type 20 used to
remove goods from a keeping systems must be able to track the movement of all goods. As the goods are
bonded warehouse. ex-warehoused, the quantity must be documented.

I
CHAPTER 8 RETURNED GOODS. TEMPORARY ENTRIES. AND OTHER SPECIAL CIRCUMSTANCES 165 t
PROHIBITED GOODS
For various reasons, certain goods are prohibited entry into Canada. Prohibited
goods are listed in tariff items 9897.00.00, 9898.00.00, and 9899.00.00, and include
members of an endangered species; goods that are mined, manufactured, or pro-
duced wholly or in part by forced labour; used mattresses; certain used vehicles;
weapons; and books, printed paper, drawings, paintings, prints, photographs, or
representations of any kind that are deemed to be obscene, constitute hate propa-
ganda, or are treasonable or seditious in nature. More information on prohibited
goods can be found in the D9 series of the customs D-memos.
SHORTAGES AND ENTERED-TO-

ARRIVE SHIPMENTS
An importer unpacking their shipment may find that some goods have not been
shipped; this is commonly referred to as a shortage. shortage
There are two types of shortage situations: The number of pieces
received is less than the
number declared to CBSA.
1. The total number of packages reported does not match the number of
packages received. For example, the carrier reports that it has 100 boxes,
but, when the boxes are counted, there are only 99.
2. Package contents are incomplete. For example, the carrier reports 100 Entered to Arrive (ETA)
boxes, 100 boxes are delivered, but two of them are empty. In both cases, it A paper entry prepared to
is quite possible that duty will be paid on more goods than were received. address a shortage; an ETA is
prepared when, on the
The vendor should be advised of the shortage. If the shortage is discovered original shipment, the total
number of packages
after release but before final accounting, the importer or customs broker has two
reported did not match the
options: number of packages
1. Account for the total quantity and have the balance of the goods received.
released as Entered to Arrive (ETA) or Value Included (VI) when they Value Included (VI)
arrive. An ETA is prepared if the total number of packages reported did A paper entry prepared to
address a shortage; a VI
not match the number of packages received, and a VI entry is prepared entry is prepared w hen, on
if the package contents were incomplete. the original shipment, the
number of pieces inside a
2. Provide CBSA with evidence of the shortage with the final accounting
package was less than the
document and account for the goods on hand only. When the remaining number on which duty was
goods arrive, they should not be reported as a shortage. Instead, paid.
standard release procedures will apply. Form 82, Canada
Customs Adjustment
If the shortage is discovered after final accounting, either the balance of the Request
short-shipped goods may be released as an ETA or VI, or a claim may be made for A form used to make a
a refund if the importer does not expect the goods to be delivered at a later date. correction to an accounting
document. It can be used to
If duty has been paid before the shortage was noted, the vendor can provide
request a refund, pay
a corrected invoice and a credit note. The importer or customs broker, using additional duty, or when
Form 82, Canada Customs Adjustment Request can apply for a refund of duty there is no change in the
on the goods that were not shipped. final amount of duty.

I I
I Shortages must be substantiated by a third party and documentation originat-

ing from the carrier is not considered as acceptable evidence of a shortage.
ETA and VI release options cannot be used when:
• the importer or customs broker is aware that the entire quantity of

the goods reported on the invoice will not be in the shipment when it
arrives in Canada,
• the BSO finds that the quantity reported does not match the quantity
found during an examination of the goods,
• the goods are reported by the shipper to be on back order, or
bonded warehouse • the goods are bonded warehouse shortages.
shortages
When goods are delivered ETA and VI shipments cannot be submitted using EDI and must be presented
to a bonded warehouse in hard copy.
and the shipment is "short;' A shortage might also be discovered when:
a "nil" Form B3 is presented
for the goods short shipped
when the goods are
• the number of pieces on the cargo control document does not
removed from the correspond to that on the invoice,
warehouse.
• the weight on the cargo control document does not correspond to that
on the invoice,
• the description on the cargo control document does not correspond to
that on the invoice, or
• the client advises its customs broker that all goods were not received.
As you can see from reading this chapter, there are many factors that can
affect a release decision. Many of the shipments released will be given very little
thought because they are for your usual clients and the goods are repetitive.
Many importers import the same goods on a continuous basis and clearing these
shipments becomes a matter of routine. However, what about shipments that
are not routine?
Besides the usual questions including:
• Who is the importer?

• Who is the exporter?
• What are the goods?
• What is their value?
• What is the date of direct shipment?
• What is the country of origin?
• Where are the goods going?
• Is all the necessary paperwork available?

CHAPTER 8 RETURNED GOODS, TEMPORARY ENTRIES, A N D OTHER SPEC IAL CIRCUMSTANCES 167 <)
the following questions must be asked:
• Where are the goods going? (An exhibition or a fairground might

indicate a temporary entry. A warehouse might indicate bonded
warehousing requirements.)
• What type of goods are in the shipment?
• Are the goods prohibited?
• Are they special-purpose goods? For example, display equipment may
be eligible for a temporary entry.
• Is there any indication that there might be a shortage?
• Do the goods need a permit?
• Are the goods perishable?
It is important that all documents be carefully reviewed before a release decision

is made.

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Canada
SOURCE: "Form E29B, Temporary Admission Permit" (la st modified 21 November 2018), online (pdf): Canada Border Services
Agency <https ://www.cbsa-asfc.gc.ca/pu blications/form s-formu lai res/ e29 b.pdf>.
CHAPTER 8 RETU RN ED GOO DS, TEMPORARY ENTRIES, AN D OT HER SPECIAL CI RCUMSTAN C ES 169
KEY TERMS
abandoned to the Crown, 159 Canadian goods returned, 162 Form B2, Canada Customs
ATA Carnet, 154 drawback, 160 Adjustment Request, 165
bonded warehouse shortages, 166 duty paid goods returned, 162 Form E29B, Temporary Admission
Permit, 154
Canadian Goods Abroad Program Entered to Arrive (ETA), 165
(CGAP), 160 shortage, 165
ex-warehoused, 164
Val ue Included (VI), 165
REVIEW QUESTIONS
1. can be used to document b. 9807.00.00
goods that are entering Canada temporarily. c. 9811.00.00
a. Only Form E29B d. 9813.00.00
b. Only Form B3 e. 9814.00.00
c. Only an ATA Carnet
6. Tariff items cover goods
d. Only Form C6 that are prohibited from entering Canada.
e. Form E29B, Form B3, or an ATA Carnet a. 9897.00.00, 9898.00.00, and 9899.00.00
2 . Tariff code is used to identify goods b. 9813.00.00, 9814.00.00, and 9815.00.00
that are entering Canada temporarily. c. 9830.00.00, 9831 .00.00, and 9832.00.00
a. 9901 d. 9815.00.00, 9816.00.00, and 9817.00.00
b. 9905 e. 9816.00.00, 9807.00.00, and 9808.00.00
c. 9947
7. Form B3 Type _ _ is used to enter goods into
d. 9979 a bonded warehouse.
e. 9993 a. AB
3. GST is always relieved when importing goods b. H
temporarily. True or false? c. v
4 . Form B3 Type _ _ is used to remove goods d. 10
from a bonded warehouse. e. 20
a. c 8. Form E29B is an international document designed
b. 10 to simplify and streamline customs temporary
c. 20 entry procedures and is particularly useful for
d. AB goods that will be imported into more than one
e. v country during its period of validity. True or false?
5. Providi ng that the requirements of the tariff 9 . If a security deposit is required for goods
classification have been met, tariff classification entering Canada tempora rily, the security
may be used for goods that are of deposit required is equal to twice the regu lar
Canadian origin and are returning to Canada amount of duty and tax that would have been
after having been exported. payable if the goods had been imported
a. 9801.30.00 permanently. True or false?

17Q INTRODUCTION TO CUSTOMS ADMIN ISTRATION AND PROCEDURES

1. List the three ways in which a temporary useful for goods that will be imported into more
importation can be cancelled or closed. than one country during its period of validity?
2. What international customs document is 3. Within how much t ime must shortages be
designed to simplify and streamline customs reported to the CBSA in the case of perishable
temporary entry procedures and is particularly goods? And for all other goods?

LEARNING OUTCOMES
• Remit the correct amount of duties and taxes to C8SA.
• Understand the purpose of a Detailed Adjustment Statement.
• Complete a Form 82, Canada Customs Adjustment Request.
• Comply with the legislated time frames for filing Form 82.
171
>~1;2 INTRODUCTION TO CUSTOMS ADMINISTRATION AND PROCEDURES
REVIEW
Before starting this chapter, let's review the release process from Chapter 7.
A request for the release of goods may be made by:
• Submitting a Release on Minimum Documentation (RMD) package or

Pre-Arrival Review System (PARS) package, both referred to as "interim
accounting;' if the customs broker or importer has posted security for
the release of goods prior to the payment of duties and taxes (RMD and
PARS release requests may be transmitted electronically or submitted in
hard copy).
• Submitting an Integrated Import Declaration (IID) if the customs
broker or importer has posted security for the release of goods before
the payment of duties and taxes (this is an EDI option only).
• Presenting a completed Form B3 Type C accounting document. Duty
and taxes may be paid at the time Form B3 is presented or payment may
be deferred if security has been posted. Form B3 Type C allows for both
release and accounting to take place at the same time.
After goods have been released, final accounting document data are trans-
mitted to CBSA within a specific time frame. Note that this step is not required
if a Form B3 Type C entry has been used. The data include all information
relating to that particular release or transaction, plus the amount of duties and
taxes payable. Accounting data are transmitted electronically in most cases;
however, with a Form B3 Type C entry, it is submitted at the same time release
Daily Notice (DN) is requested.
Form issued daily by CBSA to The final step in the process is the payment of duties and taxes.
customs brokers and
importers, advising them of
the duty and taxes for
transactions that were
processed the previous day.
PAYMENT OF DUTIES AND TAXES
If the customs broker or importer has not posted security, duties and taxes must
Statement of
Account (SOA) be paid by cash or certified cheque before the goods are released.
Monthly statement issued On a daily basis, customs brokers and importers who have posted security
by CBSA to customs brokers for the release of goods prior to the payment of duty and taxes are issued a Daily
and importers who have Notice (DN).
posted security for the
release of goods before the A DN lists the accounting documents that were accepted the previous busi-
payment of duty and taxes. ness day. It will also indicate any credits (refunds) that were issued the previous
The SOA provides a summary business day.
of all Daily Notices from the
On the 25th of each month, a Statement of Account (SOA) is issued. The SOA
25th day of the previous
month to the 24th day of the provides a summary of all DNs from the 25th day of the previous month to the
current month. 24th day of the current month.

I
CHAPTER 9 AFTER FINAL ACCOUNTING 173
In the 2015-16 fiscal year, customs duties accounted for about

$5.4 billion or 1.8 percent of all federal revenue. offsetting
An amount to be credited is
matched against an
outstanding debt on the
client's account at the end
The SOA shows the amount owing after offsetting any credits and adding any of the payment period and
late accounting penalties. Late accounting penalties are issued when final account- before an SOA is issued,
reducing the total amount
ing documents are not transmitted within the five-day time limit.
owing. If there is a credit
DNs and SOAs are transmitted to the customs broker or importer through balance owing after the
CBSA's Accounts Receivable Ledger (ARL) system, a fully integrated and central- offsetting has occurred, a
ized accounting system that allows for the offsetting of credits (refunds) against refund cheque will be issued
if the credit balance exceeds
debits (amounts payable). $1,000.00; if the amount is
less than $1,000.00, the
account must have a credit
VOLUNTARY ENTRIES balance for two consecutive
months or longer.
In some cases, goods may be released but inadvertently excluded from an Accounts Receivable
accounting document. As well, goods may find their way into Canada without Ledger (ARL)
having been released. In both cases, a voluntary entry must be submitted. There CBSA's fully integrated and
are two types of voluntary entries. centralized accounting
system that allows for the
offsetting of account credits
VOLUNTARY ENTRY: FORM B3 TYPE H against debits.
A Form B3 Type H entry is submitted when goods have been reported and released voluntary entry
A paper entry that is
but not accounted for at the time of final accounting. For example, the original prepared when goods are
invoice might have consisted of many pages and many items, and some might have released but inadvertently
been missed on the accounting document. excluded from an
accounting document, or
In a Form 83 Type H, "H" is indicated in Field 3. Field 24, Previous Transac-
when goods enter Canada
tion Number indicates the transaction number from which the goods were without being released.
omitted. There are two types of
A Type H entry cannot be submitted electronically, and a statement must be voluntary entries: Hand V.
included in the body of Form B3 stating why it is being submitted. Form 83 Type H
A voluntary entry prepared
for goods that have been
VOLUNTARY ENTRY: FORM B3 TYPE V released but not included on
an accounting document.
A Form 83 Type V entry is submitted when goods have been delivered without
Form 83 Type V
CBSA release. A Form B3 Type V is completed in the same manner as an ordinary
A voluntary entry prepared
Form B3, with "V" being indicated in Field 3. An example of a Type Ventry occurs for goods that are delivered
when a carrier delivers goods to the consignee before the goods have been released. without customs release.

>~ 1~ INTRODUCTION TO CUSTOMS ADM INISTRATION AND PROCEDURES
A Form B3 Type V cannot be submitted electronically, and a statement must

be included in the body of Form B3 stating why it is being submitted.
•• YOU DECIDE
Hair Products Canada is importing a full ocean container of flat irons

(hair straighteners) from their Japanese supplier. The flat irons are
manufactured in Japan and shipped directly to Canada. The total value
of the shipment is 3,462,459.33 Japanese yen. The rate of exchange is
0.0122330. What type of Form B3 is prepared if it is discovered that the
goods reached their final destination without having been released?
REASON TO BELIEVE
Section 32.2 of the Customs Act1 instructs an importer to make changes to an
reason to believe accounting document after payment of duties and taxes if they have reason to
An importer has specific believe that there was an error in the data provided to CBSA. A change, or correc-
information regarding the
origin, tariff classification,
tion, is required only if there is additional duty and/ or tax owing or if the result of
value for duty, or diversion the correction makes no change to the amount payable (revenue neutral). There is
of imported goods that no similar requirement to make a change if the result of the correction is a refund.
indicates the accounting
"Reason to believe" occurs when the importer has specific information regard-
data are incorrect.
ing the origin, tariff classification, value for duty, or diversion of imported goods
that indicates the accounting data are incorrect. Once an importer has reason to
believe, they are obligated to make a correction within 90 days. If they do not, they
are at risk of a penalty.
deemed determination
A BSO does not make a
determination of the origin,
tariff, and/or value of Deemed Determinations
imported goods at or
BSOs have the power to make a determination of the origin, tariff.
before the time they are
accounted for under and/or value of imported goods at or before the time they are ac-
authority of section 58(1) of counted for. If they do make a determination at this time, they do so
the Customs Act. When a under section 58(1) of the Customs Act.
determination has not been
If they do not make a determination. a deemed determination is
made, a deemed
determination is said to said to have been made. Deemed determinations are made under the
have been made. Deemed authority of section 58(2) of the Customs Act.
determinations are made Once one of the above determinations has been made, other
under the authority
of section 58(2) of the actions can take place. For example, the importer or customs
Customs Act.
1 RSC 1985, c 1 (2nd Supp)

I
CHAPTER 9 AFTER FINAL ACCOUNTING 175 t
broker can file a correction or refund claim. or CBSA can make re-
determinations. up until four years from the date of accounting.
Redeterminations and further redeterminations are made by CBSA
under section 59 of the Customs Act. After that. redeterminations and
further redeterminations are made under section 60.
DETAILED ADJUSTMENT STATEMENTS

If CBSA finds an error after accounting, they may issue a Detailed Adjustment Detailed Adjustment
Statement (DAS). This statement makes changes to the data submitted for final Statement (DAS)
A statement issued by CBSA,
accounting and may request additional payment. A DAS may also be issued by
once duties and taxes have
CBSA as a response to a request by the importer or customs broker for a review been paid, to an importer or
of, and/or changes to, the accounting document. customs broker to indicate
A DAS should be reviewed thoroughly before any additional duties and/or that the final accounting
document is not correct;
taxes are paid, in case CBSA has made an error. Should that happen, a note to this also issued by the CBSA as
effect should be attached to the DAS when returning it to CBSA. confirmation after an
importer or a customs
broker has asked the CBSA
to review and adjust an
REFUNDS AND PAYMENTS accounting document.
In most cases, corrections to accounting documents are made by completing

Form B2, Canada Customs Adjustment Request. As well as a request for a
refund, Form B2 is also used to remit any additional duty and taxes resulting
from a correction.
Accounting documents must be amended even where there is no change in
the amount of duties and taxes payable, that is, they are revenue neutral. CBSA
does not issue penalties for neglecting to file a correction that results in a re-
fund on the assumption that one will always submit a correction when a refund
is involved.
Form B2 mirrors Form B3. The first line in the body of Form B2, the ''As
Accounted For" line, is copied directly from the original transaction. The second
line, the ''As Claimed" line, is the correction, or the way Form B3 should have read.
A sample Form B2 is reproduced at the end of this chapter (see Figure 9.2).
Each field of Form B2 is completed as follows.
FIELD 1: IMPORTER NAME AND ADDRESS

The importer number, name, and address, including postal code, are entered here.
This is the same information as indicated on the original Form B3. The business
number (BN) is shown in the small box inside the larger outside box.

>~1:6 INTRODUCTION TO CUSTOMS ADMIN ISTRATION AND PROCEDURES
FIELD 2: TRANSACTION NUMBER

This is a new 14-digit transaction number, different from that used on the original
Form B3.
FIELD 3: GST REGISTRATION NUMBER

If applicable, the importer's GST registration number is shown. If a business number
was entered in Field 1, this may be left blank.
FIELD 4: PAGE
The page number of Form B2, starting with 1, must be shown. If there will be more
than one page, the pages must state 1 of 2, 1 of 3, 1 of 4, and so on.
FIELD S: OFFICE NUMBER

Show the customs office code number used on the original Form B3.
FIELD 6: ORIGINAL TRANSACTION NUMBER

Show the transaction number of the original Form B3 for which Form B2 is now
being filed. This is the link between Form B3 and Form B2.
FIELD 7: DATE
Show the date that appears in the Accounting Date field of the DN or SOA. In
the case of cash transactions, show the date of duty payment. The format used is
YYMMDD.
FIELD 8: DATE RECEIVED

Completed by CBSA with the date that Form B2 is received.
FIELD 9: SUBHEADER NUMBER

This field is completed when a new subheader is being requested or when the
number of the current sub header is being changed. The subheader includes Fields
12, 13, 14, 15, 16, and 17 of Form B3. If a new subheader is being requested, "NS"
is shown in this field.
FIELD 10: MAIL TO

This field must be completed on the first page of Form B2 if the mailing address
is different from that shown in Field 1. This will indicate the address that the DAS
will be mailed to.

CHAPTER9 AFTER FINAL ACCOUNTING 177 <)
FIELD 11: SECURITY NUMBER
This field is completed only if security is being posted. Security may be posted for
an amount that is in dispute and should not be confused with security posted
for the release of goods before payment.
FIELD 12: COUNTRY OF ORIGIN

This field is completed only if a new subheader is being requested or the country
of origin is being changed from the most recent transaction-that is, the original
Form B3, DAS, or previous refund claim.
FIELD 13: PLACE OF EXPORT

This field is completed only if a new subheader is being requested or the country
of export is being changed from the most recent transaction-that is, the original
FIELD 14: TARIFF TREATMENT

This field is completed only if a new subheader is being requested or the tariff
treatment is being changed from the most recent transaction-that is, the original
FIELD 15: DIRECT SHIPMENT DATE

This field is completed only if a new subheader is being requested or the direct
shipment date is being changed from the most recent transaction-that is, the
original Form B3, DAS, or previous refund claim.
FIELD 16: CURRENCY CODE

This field is completed only if a new subheader is being requested or the currency
code is being changed from the most recent transaction- that is, the original
FIELD 17: TIME LIMIT

This field is completed only if a new subheader is being requested or the time limit
is being changed from the most recent transaction- that is, the original Form B3,
DAS, or previous refund claim.
FIELDS 18 TO 36: AS ACCOUNTED FOR

Complete these fields exactly as they appear on the most recent transaction for
each classification line being adjusted.

>~1:8 INTRODUCTION TO CUSTOMS ADMINISTRATION AND PROCEDURES
FIELDS 18 TO 36: AS CLAIMED

Complete the fields as described below.
FIELD 18: LINE

This field must be completed on each classification line. The line number from the
original Form B3 transaction or the line number assigned by CBSA for a new line
or split line on a previous adjustment to the same transaction is shown.
FIELD 19: DESCRIPTION

This field must be completed on all classification lines. An accurate description of
the goods must be shown, as well as any applicable references, such as D-memos,
rulings, or import permit numbers.
FIELD 20: SPECIAL AUTHORITY

This field must be completed on all classification lines, if applicable. When the
importer is authorized by an order in council to import goods under special condi-
tions, the OIC is shown in this field.
FIELD 21: CLASSIFICATION NUMBER

This field must be completed on all applicable classification lines. Show the correct
classification number for each item whose classification is being changed.
FIELD 22: TARIFF CODE

This field is completed if a tariff code applies. The tariff code is the first four digits
of the tariff classification from chapter 99 of the Customs Tariff Schedule. 2
FIELD 23: QUANTITY

Must be completed on all classification lines if the unit of measure is required by
the Customs Tariff Schedule.
FIELD 24: UNIT OF MEASURE

Completed on all classification lines as specified in the Customs Tariff Schedule.
2 "Departmenta l Consolidation of the Custo ms Tariff 2019" (1 January 2019) (excludes

the Customs Tariff, SC 1977, c 36), o nline (pdf): Canada Border Services Agency <https://
www.cbsa - asfc.gc.ca/trade- commerce/tariff-tarif /2019/01-99/01-99- t2019 -1-eng.pdf>.

I
CHAPTER 9 AFTER FI NAL ACCOU NT ING 179
FIELD 25: VALUE FOR DUTY CODE

Must be completed on each classification line. The selection of the code is made
the same way as it is when completing Form B3.
FIELD 26: SIMA CODE

This field is completed if a SIMA amount is shown in Field 33. The selection of the
code is made the same way as when completing Form B3.
FIELD 27: CUSTOMS DUTY RATE

Complete on each classification line if a rate of customs duty is applicable. If a rate
is not applicable, this field may be left blank or completed with a zero.
FIELD 28: EXCISE TAX {ET) RATE

If applicable, complete on each classification line either with an excise tax rate or
an excise tax exemption code.
FIELD 29: GST RATE

Complete with either a GST rate or an exemption code on the first detail line of
each classification line.
FIELD 30: VALUE FOR CURRENCY CONVERSION

This field is completed on each tariff classification line.
FIELD 31: VALUE FOR DUTY

This field is completed in the same manner as Form B3-that is, the value for cur-
rency conversion is multiplied by the exchange rate to arrive at the value for duty
in Canadian dollars.

Complete on all classification lines if customs duty is applicable.

This field is completed if surtax, provisional, anti-dumping, or countervailing duty
is being adjusted or is payable.

I I
I
Complete on each classification line if an excise tax is applicable.
FIELD 35: VALUE FOR TAX

Complete on each classification line if:
• GST is payable; or
• GST is rebated. It may be rebated by CRA to a non-registrant as a result
of CBSA issuing a related adjustment decision.
Note: If a non-registered party wishes to file a refund for GST paid in error and
there is no related adjustment decision, the GST refund is requested using Form
GST 189E, General Application for Rebate of GST/HST, not Form B2.
FIELD 36: GST

Complete on each classification line if:
• GST is payable; or
• GST is rebated. It may be rebated by the CRA to a non-registrant as a
result of the CBSA rendering a related adjustment decision.
FIELD 37: DOCUMENTS ATTACHED

Complete this field with a check mark if supporting documentation is attached,
otherwise leave blank.

This field is completed if customs duties are payable or will be refunded. If cus-
toms duties are refundable, show a negative sign in front of the amount. If there
is no duty payable, or refundable, leave this field blank or show any combination
of zeros.
To obtain the total duty payable or refundable, calculate the difference between
the "as accounted for" and "as claimed" amounts shown in Field 32.
If Form B2 has two or more pages, this field is completed only on the last page.

Complete this field if a SIMA assessment amount is payable or receivable. If a
SIMA assessment is refundable, show a negative sign in front of the amount shown
in this field.

I
To obtain the total SIMA assessment, calculate the difference between

the "as accounted for" and "as claimed" amounts shown in Field 33, unless the
amount is deferred by a bond, as indicated by SIMA assessment code 32 in
Field 26.

Complete this field if excise tax is payable or receivable. If excise tax is refundable,
show a negative sign in front of the amount shown in this field.
Where there is no excise tax payable or receivable, leave the field blank or show
any combination of zeros.
To obtain the total excise tax payable, calculate the difference between the "As
Accounted For" and "As Claimed" amounts shown in Field 34.
If Form B2 has two or more pages, this field is completed only on the last
page.
FIELD 41: SUBTOTAL

This field shows the total of Fields 38 to 40.
FIELD 42: GST

Complete this field when GST is payable or, for non-registrants, where GST is being
refunded. Where no GST is payable, or where GST is subject to rebate, leave the
field blank or show any combination of zeros.
If Form B2 has two or more pages, this field is completed only on the last
page.
FIELD 43: INTEREST

Completion of this field is not mandatory. However, when interest is payable or
refundable, CBSA will show the date on which interest begins as well as the prin -
cipal on which the interest will be assessed in the remarks section of the result-
ing DAS.
If the importer or agent chooses to show the amount of interest payable or
receivable, it is completed on the last page of Form B2.
FIELD 44: AMOUNT DUE RECEIVER GENERAL

FOR CANADA
This field must be completed on the last page of Form B2 when an amount is pay-
able to the receiver general for Canada. Leave this field blank if an amount is
not due to the receiver general.

I I
> <182 INTRODUCTION TO CUSTOMS ADMINISTRATION AND PROCEDUR ES
I
FIELD 45: AMOUNT DUE CLAIMANT
This field must be completed on the last page of Form B2 when requesting a re-
fund, or when requesting a reversal of a CBSA decision that has been secured and
not paid. If an amount of GST is shown in Field 42, it is not included in the amount
shown in this field.
JUSTIFICATION FOR REQUEST

This field must be completed on the last page of Form B2. Indicate the type of
request-for example, correction, refund, redetermination, or reappraisal-under
the section, subsection, and/or paragraph number of the applicable legislation-
for example, a refund of duty under section 74(l)(d) of the Customs Act.
EXPLANATION
All Form B2s must include an explanation (see Table 9.1). Clearly state the reason(s)
for the request, providing as much information as possible to support the claim,
such as CBSA D-memos, or information on CBSA's website. Depending on why the
correction is being made, you may need to include confirmation of price from
the vendor or a Certificate of Origin. Samples of the goods in question should not
be submitted; this is done only at the request of CBSA.
TABLE 9.1 Using Form B2s
REASON FOR FORM B2 ••

To correct the declaration o f origin when a Section 32.2(1) In o rder to avoid a penalty, a correction
preferential tariff treatment under a free trade of the Customs m ust be made within 90 days of having
agreement w as incorrectly applied and the result Act reason to believe that the decla ration
is either "revenue neutral" or an amount owing. of origin on the accounting document
is incorrect. However, under section
32.2(4), an obligation to correct
remains until four years from the
accounting date.
To correct the declaration of origin (except in the Section 32.2(2) In order to avoid a penalty, a correction
situation named above). the value, or tariff of the Customs must be made within 90 days of having
classification of goods and the result is either Act reason to believe that the declaration of
"revenue neutral" or an amount owing. orig in on the accounti ng document is
incorrect. However, under section 32.2(4).
an ob ligation to correct remains until four
years from the accounting date.
To request a refund of duty paid on goods that Section 74(1)(a) Four years after the date of accounting.
have suffered damag e, deterioration, or of the Customs
destruction at any time from the t ime of Act
shipment to Canada to the time of their release.

I
CHAPTER 9 AFT ER FI NAL ACCOUNTING 183
TABLE 9.1 Using Form B2s (Continued)
•• TIME FRAME
To request a refund of duty paid on goods when Section 74(1)(b) Four yea rs after the date of accounti ng.
it is found that the quantity of goods released is of the Customs
less than the quantity on wh ich duty was paid. Act
To request a refund of duty paid on goods t hat Section 74(1)(c) Four years after the date of accounting.
are of an inferior quality to those upon which of the Customs
duties were paid. Act
To request a refund of duty paid on goods that Section 74(1) Four years after the date of accounting.
originate under CC FTA but the CCFTA tariff (c.1) of the
treatment was not used at time of accounting. Customs Act
To request a refund of duty paid on originat ing Section 74(1) Four years after the date of accounting.
goods included in a free trade agreement other (c.11) of the
than CCFTA and a preferential ta riff treatment Customs Act
was not used at time of accounting.
To request a refund of duty paid on goods when Section 74(1)(d) Four years after the date of accounting.
the calculation of duties owing was based on a of the Customs
clerical, typographical, or similar error. Act
To request a refund of duty paid or overpaid as a Section 74(1)(e) Four years after the date of accounting.
result of an error in the (deemed) determination of the Customs
under section 58(2) of origin [o t her than in the Act
circumstances described in paragraph (c.1) or
(c.11)). tariff classification, or value for duty in
respect of the goods and the determination has
not been the subject of a decision under any of
sections 59 to 61.
To request a refund of duty paid on goods, or other Section 74(1)(f) Four years after the date of accounting.
goods into which they have been incorporated, or of the Customs
are sold or otherwise disposed of to a person, Act
or used in compliance with a condition imposed
under a tariff item in the List of Tariff Provisions set
out in the schedule to the Customs Tariff, or under
any regulations made under that Act in respect of a
tari ff item in that list. before any other use is made
of the goods in Canada. This means that t he goods
were eligible for entry under one of the tariff codes
in chapter 99 of the Customs Tariff Schedule or
sold to an eligible end - user.
To request a refund of duty overpa id on goods or Section 74(1)(g) Four years after the date of acco unting.
paid in error for any reason that may be of the Customs
prescribed by the minist er. This includes Act
retroactive orders or duty removal under the
Customs Tariff.
(Table 9.1 is continued on the next page.)

I I
TABLE 9.1 Using Form B2s (Concluded)
•• TIME FRAME
To request a refund of duty paid on goods that Section 76(1) Four years after t he date of accounting.
are defective, are of a quality inferior to that in of the Customs
respect of which duties were paid, or not the Act
goods ordered; a refund of the whole or part of
the duties paid thereon if the goods have,
subsequent to importation, been disposed of in a
manner acceptable to the minister at no expense
to Her Majesty in right of Canada or exported.
Goods must have been exported or destroyed in
Canada in order to use this provision.
DECLARATION
This field is completed on all adjustment requests. If the request has two or more
pages, complete only the last page. It must show the name and company name of
the person completing the claim. The declaration is then dated and signed.
TIME FRAMES
Form B2 must be filed within a specific time frame. A table that includes the time
frames for filing Form B2 is provided.
Once Form B2 is completed, it, along with all required supporting documen-
tation and payment or security, if applicable, is submitted to CBSA in various
locations.
For goods released in the Atlantic, Northern Ontario, and Quebec regions,
Form B2s are submitted to:
CBSA
Trade Operations Division
c/o Form B2 processing
400 Youville Square, 5th Floor
Montreal, QC H2Y 2C2
For goods released in the Greater Toronto Area (GTA), Southern Ontario, and
Pacific regions, Form B2s are submitted to:
CBSA
c/ o Form B2 processing
55 Bay Street North, 6th Floor
Hamilton, ON L8R 3P7

I
CHAPTER 9 AFTER FINAL ACCOUNTING 185 t
For goods released in the Prairie region, Form B2s are submitted to:
CBSA
c/o Form B2 processing
55 Town Centre Court, Suite 718
Scarborough, ON MlP 4X4
How a payment is made depends on whether a DAS was issued. There are two
ways to make a payment:
1. When a DAS has been issued as a result of Form B2 being filed, the
importer or broker can make a payment at the port or online. If the
payment is made online, the importer or broker must send an email to
the CBSA Assessment and Revenue Management (CARM) project CBSA Assessment and
mailbox to advise that a payment has been made. Revenue Management
(CARM) project
2. When making a payment where a DAS has not been issued, the payment A multi-year business
is made at the port. The CBSA cashier will code the payment in ARL to transformative initiative.
identify the payment as a prepaid Form B2. When Form B2 posts to the Once implemented, it will
facilitate trade compliance
account, the payment will automatically be matched to it.
and enhance the use of data
analytics to streamline
The following Form B2 was prepared to change the tariff treatment from Most business processes.
Favoured Nation to the US tariff treatment. It is based on the Canada Customs
Invoice from Chapter 2, the corresponding Form B3 entry from Chapter 7,
and assumes that the importer is now in possession of a CUSMA Certification of
Origin. Note that not all goods that were imported on this shipment are eligible
for the US tariff treatment.

I I
I FIGURE 9.2 Form 82, Canada Customs Adjustment Request
... . Canada Border

Services Agency
Ager'ICe des servioes
lronlaliers du Canada CA NADA CUSTOMS - ADJUSTMENT REQUEST
DOUANES CA NADA- DEMANDE DE RAJUSTEMENT
1 IMPORTER NAME ANO ADDRESS 16USINESS NO. - N' D'ENTREPRISE 2 TRANSACTION NO
NOM ET ADRESSE DE l'IMPORTATEUR N" DE TRANSACTION
123456789RM0002
East Side Warehouse
123A Spadina Avenue
Toronto, ON
3 GST REGISTRATION NO. 4 PAGE
N"OETPS
&SUBHORt«>. 10 MAIL TO-POSTER A : 5 OFFICE NO .

I
16 ORIGINAL TRANSACTION NO.
OF
OE
8 DATE RECEIVED
N"DESOUS N" OE BUREAU N' DE LA TRANSACTION ORIGINALE DATE OE RECEPTION
EN-T£'TE
ABCD Customs Brokers 427 127777 45678900
01 77 The Queensway 11 SECURITY NO.
N' DE SECURITE
Toronto ON
12 COUNTRY OF ORIGIN 13 PLACE OF EXPORT 14 TARIFF TREATMENT
PAYS O'ORIG INE LIEU O'EXPORTATION TRAITEMEITT TARIFAIRE
1
15 DIRECT SHIPMENT DATE 16 CRCY. CODE 17 TIME LIMIT· DEL.Al
DATE D'EXP£DITION OIRECTE COOEOEVISE
M O.J
I 1 I
18 LINE 19 DESCRIPTION - AS ACCOUNTED FOR • 20 SPECIAL AUTHORITY
1
LIGNE 0£SIGNATION - SELONLA0£CLARATION women s raincoats, nylon AUTORlSATION SPECIALE
03 1 1
21 CLASSIFICATION NO 122TARIFF CO 123 QUANTITY 124 U/M 125 VF0~1 26 SIMACD• 127CUSTOMSOUTYRAT£ 26 E.T . RATE 29 GST RATE 130 VALUE FOR CURRENCY CONVERSION
N"OECLASSEMENT COTARIF. QUANTIT£ COVO COLMSI TAUX.ClROITDEOOUANE TAUXT.A. TAUX TPS CONVERSION VALEUR POUR CHANGE
6202.13.00.30 400 NMB 13 18 1 5 6400.00
31 VALUE FOR OUTY 132 CUSTOMS DUTIES 133 SIMA ASSESSMENT 134 EXCISE TAX 35 VALUE FOR TAX 36 GST
VALEUR EN OOUANE OROITS OE OOUANE COTISATION OE LMSI TAXE D'ACCISE VALEUR POUR TAXE T PS
7040.00 1267.20 8307.20 1 415.36

16 LINE
UGNE
119 DESCRIPTION-AS CLAIMED
0£SIGNATION - SELON LA DEMANDE women , s raincoa
· t s, ny Ion 20 SPECIAL AUTHORITY
AUTORlSATION SP£CIALE
03 1
21 CLASSIFICATION NO 122 TARIFFCD 123 QUANTITY 124 U/M 125 VF0~1 26 SIMAC0> 127CUSTOMSOUTYRAT£ 26 E.T . RATE 29 GST RATE 130 VALUE FOR CURRENCY CONVERSION
N " OECLASSEMENT COTARIF. QUANTIT£ COVO CDLMSI TAUX-OROITDEOOUANE TAUXT.A TAUX TPS CONVERSION VALEUR POUR CHANGE
6202.13.00.30 400 NMB 13 0.00 1 5 6400.00

31 VAL UE FOR DUTY 132 CUSTOMS DUT IES 133 SIMA ASSESSMENT 134 EXCISE TAX 35 VALUE FOR TAX 36 GST
VAL EUR EN OOUANE OROITS OE OOUANE COTISATION OE LMSI TAXE D'ACCISE VALEUR POUR TAXE TPS
7040.00 0.00 1
16 LINE 119 O~SCRIPTION - AS ACCOUNTED FOR • • 20 SPECIAL AUTHORITY
o •s NE 0 SIGNATION - SELONLAD£CLARATION WOmen'S 3-pleCe SUltS, WOOi blend AUTORlSATION SP£CIALE
1
21 CLASSIFICATION NO . 22 TARIFF CO 123 QUANTITY 24 U/M 125 VFD CDr SIMA C0• 127 CUSTOMS DUTY RATE 28 E.T. RATE 29 GST RATE 130 VALUE FOR CURRENCY CONVERSION
N " DE CLASSEMENT CO TARIF. OUANTIT£ CO VO CO LMSI TAUX-OROIT DE OOUANE TAUXT.A. TAUX TPS CONVERSION VALEUR POUR CHANGE
6204.11.00.00 1 144 1NMB 13 18 1 5 11520.00
31 VALUE FOR DUTY 32 CUSTOMS DUTIES 33 SIMA ASSESSMENT 34 EXCISE TAX 35 VALUE FOR TAX '6 GST
VAL EUR EN OOUANE DROITS DE OOUANE COTISATION DE LMSI TAXE D'ACCISE VALEUR POUR TAXE TPS
12672.00 1 2280.96 1 1 14592.96 1

747.65
16 LINE 119 DESCRIPTION - AS CLAIMED 20 SPECIAL AUTHORITY
~·;NE 0£SIGNATION - SELONLADEMANOE women's 3-piece suits , wool blend AUTORJSATION SP£CIALE
1
21 CLASSIFICATION NO 122 TARIFF CO 123 QUANTITY 124
1 U/M 125 VFD~1 26 SIMAC0• 127QJSTOMSOUTYRAT£ 26 E.T. RATE 29 GST RATE 130 VALUE FOR CURRENCY CONVERSION
N " OE CLASSEMENT CO TARIF. 0UANTIT£ CO VO CO LMSI TAUX-OROIT OE OOUANE TAUXT.A. TAUX TPS CONVERSION VALEUR POUR CHANGE
6204.11.00.00 144 NMB 13 0.00 1 5 11520.00

31 VALUE FOR DUTY 32 CUSTOMS DUT IES 33 SIMA ASSESSMENT 34 EXCISE TAX 35 VALUE FOR TAX 36 GST
VALEUR EN OOUANE OROITS OE DOUANE COTISATION OE LMSI TAXE D'ACCISE VALEUR POUR TAXE TPS
12672.00 1 0.00 1 1 1
37 DOCS I JUSTIFICATION FOR REQU EST . JUSTIFICATION OE LAOEMANDE 38

CUSTOMS DUTIES
-3548.16
~;:;~~~ A
0
Refund UNDER 74(1 )(c.1) of the CA DROITS DE DOUANE
1---~ UNE -----..,,,<"'""""'"''""= •·"'G<N°'"="'.,-"'°-"=OE,-J- - - - ENVERTU OE~l".,.Gl,-

''u<•"" &A.,.m~,.,..,.,..,,,-.,,"-"~',-·'.,.".,.'".,.".,."',-'~'G"<&A,..T,~-~
I 39
SIMA ASSESSMENT
EXPLANATION - EXPLICATION : COTISATION DE LMSI 0.00
Raincoats and 3-piece suits are el igible for the UST treatment under EXCISE TAX
TAXE D"ACCISE 0.00
NAFTA. Properly completed NAFTA Certificate of Origin is attached.
SUBTOTAL
TOTA L PARTIEL -3548.16
GST
0.00
" INTEREST
INTER!:TS 0.00
DECLARATION- 0£CLARATION
OF
I J.Doe OE ABCD Customs Brokers
JE
PLEASE PRINT NAME - LETTRES MOUL!':ES S.VP
DECl..'J'IE THE PARTICVVJIS Of THIS OOCUMENT TO Elf TRUE, ACCIJRATE ANO COM"'-ETE - o£Cl.ARE OUE ~ES RENSflGNfMEHTS Cl-OESSUSSONT YFWS ET COO"'-ETS
03/19/19 416 555 1212

3548.16 1
DATE SIGNATURE TELEPHONE NUMBER - NUM£RO OE T£U: PHONE
82 (08) BSF182
Canada
SOURCE: "Form 82, Canada Customs Adjustment Request" (last modified 18 February 2013),
online (pdf): Canada Border Services Agency <https://www.cbsa- asfc.gc.ca/pu blications/
forms-formulaires/b2.pdf>.

CHAPTER 9 AFTER FINAL ACCOUNT ING 187>
•• YOU DECIDE
Blue Jackets received 75 men's cotton/poly blend ski jackets, not knitted or crocheted,
from their supplier in Alaska. When the importer received an invoice from his customs broker, he
noticed that the wrong description and wrong tariff classification had been used and that the ski
jackets had been entered as raincoats.
Using the partially completed Form 82 shown below answer the following questions.
The ski jackets do not originate under CUSMA.
FIGURE 9.1 Partially Completed Form 82
CANADA CUSTOMS -ADJUSTMENT REQUEST PROTECTED when completed

DOUA NES CANADA- DEMAN DE DE RAJUSTEMENT PRO TE GE B une fo1s remph
' IMPORTER NAME AND ADDRESS

NOM ET AORESSE OE L'IMPORTATEUR
IBUSINESS NO. • N" D'ENTREPRISE 2 TRANSACTION NO.
N' DE T RANSACTION
123456789RMOOO
Blue Jackets
1O Wallaby Way
Chillin AB T2J 2C5
3 GST REGISTRATION N O. 4 PAGE
N"DE TPS OF
POSTAL f ZIP CODE
CODE POSTAL I DE
I I
9SVBHDRNO 10 MAIL TO - POSTER A· 5 OFFICE NO. 16 ORIGINAL TRANSACTION NO Y-A ().J 8 DATE RECEIV ED
H'DE SOUS
EH-TE:TE
N" DE BUREAU
11 SECURITY NO.
N' OE SECURITt
N" DE LA TRANSACTION OR1G1NALE
1234-987654321 I' M
DATE OE RtCEPTION
12 COUNTRY OF ORIGIN
PAYS O'ORIGINE
113 PLACE OF EXPORT
LIEU O'EXPORTATION
14 TARIFF TREATMENT
TRAITEMENT TARIFAIRE
15 DIRECT SHIPMENT DAT E 17 T IME LIMIT - Ot!LAI

DATE D'EXPE:OITION OIRECTE /" CRCY.COOE
CODE DEVISE
POSTAL I ZIP CODE M ().J
CODE POSTAL I I
18 LINE 119 DESCRIPTION - AS ACCOUNTED FOR 1 • • 120 AUTORISATION
SPECIAL AUTHORITY
LIGNE D's10NAr10N - s•LDNLAD,cLARAr10N Men s raincoats, of man-made fibres, not knitted or crocheted SPECIALE
1
21 CLASSIFICATION NO. 28 E.T. RATE
N' OE CLASSEMENT
122 TARIFF CO 123 QUANTITY
CO TARIF. OUANTtTE r 4 U/M VF0~1
. 125 CO VO 26 CO
SIMAC~
LMSI 1 27CUSTOMSDUTYRATE
TAUX-OROIT DE DOUANE TAUX T.A.
29 GST RATE 130 VALUE FOR CURRENCY CONVERSION
TAUX TPS CONVERSION VALEUR POUR CHANGE
6201 .13.00.00 75 NMB 13 18 5 4422.00
31 VALUE FOR DUTY
VALEUR EN OOUANE
4956.28
132 CUSTOMS DUTIES
OROITS OE OOUANE
892.13
133 SIMA ASSESSMENT
COTISATION OE LMSI
134 EXCISE TAX
TAXE D'ACCISE
35 VALUE FOR TAX
VALEUR POUR TAXE
5848.41
I'" TPS
GST
292.42
SOURCE: "Form 82, Canada Customs Adjustment Request" (last modified 18 February 2013),
online (pdf): Canada Border Services Agency <https://www.cbsa - asfc.gc.ca/publications
/forms-formulaires/b2.pdf>.
1. What is indicated in Field 21 of the "As Claimed" portion of Form 82?

5. What is indicated in Field 36 of the "As Claimed " portion of Form 82?
6. What is indicated in Field 38 of Form 82?
7. What is indicated in the "Justification for Request" portion of Form 827

188 INTRODUCTION TO CUSTOMS ADM IN ISTRATI ON AND PROCEDUR ES
KEY TERMS
Accounts Receivable Ledger deemed determination, 174 offsetting, 173
(ARL), 173 Detailed Adjustment Statement reason to believe, 174
CBSA Assessment and Revenue (DAS), 175 Statement of Account (SOA), 172
Management (CARM) project, 185 Form B3 Type H, 173 vol untary entry, 173
Daily Notice (DN), 172 Form B3 Type V, 173
REVIEW QUESTIONS
1. Form B3 Types Hand V are only submitted to 5. What is the time limit in which a refund of duty
CBSA in paper format. True or false? must be requested when filing a claim under
section 74(1)(e) of the Customs Act?
2. A penalty under the Administrative Monetary
Penalty System will be issued if a refund claim is a. Four years after accounting
not filed. True or false? b. Five years after accounting
3. When a request for a refund of duty has c. Two years after accounting
been approved by the CBSA, a corresponding d. One year after accounting
refund of GST is always granted. True or fa lse? e. 90 days after accounting
4 . If an incorrect rate of exchange used on an 6 . If goods are entitled to a Canada- Chile (CCFT)
accounting document resu lts in additional tariff treatment and this tariff treatment was not
dut ies owing, what section of the Customs Act is used at the time of accounting, which section of
quoted on Form B2? the Customs Act is quoted if the change results in
a. Section 32.2(1) of the Customs Act a refund of duty?
b. Sect ion 32.2(2) of the Customs Act a. Section 74(1 )(c.1 1) of the Customs Act
c. Sect ion 74(1 )(g) of the Customs Act b. Section 74(1 )(c.1) of the Customs Act
d. Sect ion 74(1 )(c.11) of t he Customs Act c. Section 74(1 )(d) of the Customs Act
e. Sect ion 76(1) of the Customs Act d. Section 74(1)(e) of the Customs Act
e. Section 76 (1) of the Customs Act

1. A Daily Notice (DN) is issued by CBSA to 4 . When is Form B3 Type H used?
customs brokers and importers who have 5. When is Field 12, Country of Origin completed
posted security for the release of goods before on Form B2?
the payment of duties and taxes. What does a
DN indicate? 6. When is Field 16, Currency Code completed
on Form B2?
2 . What does a monthly Statement of Account
indicate? 7 . When using Form B2 to request a refund of duty
because of an error in tariff classification, what
3. List two situations where the CBSA could issue a does Field 21, Classification Number of the As
Detailed Adjustment Statement. Claimed section indicate?

8. When using Form B2 to request a refund of duty 11. If a CUSMA tariff treatment is used on an
because of an error in value for duty, what does accounting document and it is later
Field 29, GST Rate of the As Claimed section determined that the Most Favoured Nation rate
indicate? of duty applies, what section of the Customs
Act is quoted on Form B2 if additional duty is
9. If Form B2 has been filed to request a refund of
duty, what sign precedes the amount of duty owed?
shown in Field 38, Customs Duties? 12. Refer to question 8. What is the time frame in
which Form B2 must be filed?
10. If an incorrect rate of exchange used on an
accounting document results in a refund of 13. Refer to question 9. What is the time frame in
duty, what section of the Customs Act is quoted which Form B2 must be filed?
on the refund request?

LEARNING OUTCOMES
• File an export report/declaration.
• List the four ways of submitting an export declaration to the CBSA.

• Explain the time frames for export reporting using various modes of conveyance.
• Describe carrier obligations in the exporting process.
• Understand the differences in exporting goods t o the United States (US) and to countries other
than the US.
• Complete a US Customs Invoice.
191
I I
> <192 INTRODUCT ION TO CUSTOMS ADMINISTRATI ON AND PROCEDURES
/
EXPORTING GOODS
For goods to be exported as efficiently as possible, both Canada's export regula-
tions and the importing country's importing regulations must be considered.
Canadian exporter Canadian export regulations require the Canadian exporter to file an export
The entity who exports the report before the goods are loaded onto a conveyance. The exporter may delegate
goods from Canada; the
exporter is not to be
the reporting to a service provider, such as a customs broker, but the exporter is
construed as the person ultimately responsible for the accuracy of the information provided in the export
involved in the transporta- report, which is also known as an export declaration.
tion arrangements (e.g., The exporter or their agent submits the export declaration to CESA. It includes
carriers or customs service
providers). all declarations, permits, and documents pertaining to a specified time period for
goods going to a particular place. Once the export declaration has been filed, the
export report/export
declaration exporter or their agent will receive a confirmation from CESA that the export
A document containing declaration has been made. The confirmation format varies depending on the ex -
informat ion to report goods port reporting method used. This confirmation is referred to as "proof of export
t hat w ill be exported or that
have been exported.
reporting:'
When the goods are physically ready to be exported, the exporter or their agent
export reporting office must report to a CESA export reporting office that the goods are leaving Canada.
A CBSA office designated to This allows CESA to confirm the goods leaving with what was previously declared
deal w ith the exportation of
in the export declaration. This must be done within a certain time period and
goods from Canada.
these time periods are listed later in this chapter (see the "Minimum Time Frames
for Reporting of Exports" chart located under the subheading "Time Frame for
Reporting").
A carrier must ensure that it has received the confirmation, the proof of export
reporting, from the exporter, prior to the loading of the goods onto a conveyance.
conveyance report With all modes of conveyance, the carrier must file a conveyance report; how-
A document used to report ever, highway carriers and regularly scheduled flights of air carriers only file a
the movement of a convey-
conveyance report when requested by CESA to do so.
ance to a place outside
Canada. This report contains Additionally, all carriers except highway must file a cargo report. A cargo
details such as the vehicle report can be filed after the goods have been exported if the exporter has permis-
type, name of carrier, and sion from the CESA to submit summary export declarations or when a carrier has
date of export.
special permission to do so. The special carrier permission will be reviewed later
cargo report
in this chapter (see "Carrier Reporting").
A document used to report
the goods that are con- There are three ways an exporter or their agent can submit and report an export
tained within a conveyance declaration to CESA:
and that provides specific
information about the
1. Canadian Export Reporting System;
goods. 2. G7 Electronic Data Interchange (EDI); and
3. Summary Reporting.

I
CHAPTER 10 EXPORTING COMMERCIAL GOODS AND US CUSTOMS PROCEDURES 193
CANADIAN EXPORT REPORTING SYSTEM

Canadian Export Reporting System (CERS) is a web-based solution that al-
lows exporters or their agents to report exports electronically from any location
that has internet access. CERS does require registration before declarations are
made; this allows CERS to provide an enhanced verification of key data such
as the Business Number and for identification of a businesses customs service
provider (if used). When using CERS, goods must be classified according to the
eight-digit HS Export Classification code. The Canadian Export Classification is
based on the Harmonized Commodity Description and Coding System; however,
it is not an exact match in all cases. Export classification codes can be found
within the CERS look up tool. The eight-digit HS export code is based on six
international digits, with two additional digits that have been added to collect
export statistical information for domestic purposes.
CERS is the responsibility of CBSA; however, statistical information is shared
with Statistics Canada.
G7 ELECTRONIC DATA INTERCHANGE EXPORT

REPORTING
G7 Electronic Data Interchange (EDI) export reporting is a method of reporting
exports electronically. G7 EDI includes data sets, standardized data elements, and
common definitions for customs import and export procedures between G7 coun-
tries. It harmonizes the export data required for the G7 exporting country with the
import data requirements of the importing G7 country.
Exporters wanting to use G7 EDI must register to do so. More information is
available online.2
EXPORT SUMMARY REPORTING PROGRAM

The export summary reporting program allows authorized exporters to provide a
single, monthly summary export report after goods have been exported. Summary
reporting is used mainly for low-risk goods, especially if they are in bulk cargo
form. Exporters must request approval from CBSA to participate in the summary
export reporting program.
CERS is designed to accept transmission of the monthly summary export report.
1 "Canadian Auto mated Export Declaratio n" (27 December 2017), o nline: Sta tistics Canada
<https://www.statcan.gc.ca/ eng/ exp/ index>.
2 "G7 Electronic Data Interchange Export Reporting" (5 September 2017), online: Canada Bo rder
Services Agency <https://www .cbsa-asfc.gc.ca/ eservices/ g 7I exporting -eng. htm l>.

I I
/
WHERE TO REPORT EXPORTS
Certain CBSA offices have been designated to deal with the exportation of goods
from Canada and are referred to as export reporting offices. An export reporting
office can be any CBSA office that has been designated under the Customs Act3 to
receive export reports and examine goods for export, and that is open for business
at the time the goods are being reported. These offices may be inland, at the border,
or at the customs office closest to the "place of exit" from Canada. The goods must
be available for inspection at the office where the export documents are submitted.
Exporters who report their exports using EDI send their export declaration
bulk cargo
Large quantities of cargo directly from their places of business to CBSA. Both CAED/CERS and G7 EDI
that is unpackaged; can be reports are considered submitted to any export reporting office because CBSA has
in liquid form or in a mass, EDI access to these reports.
such as oil or grain.
TIME FRAME FOR REPORTING

The time frames for export reporting are as follows (see also Table 10.1):
• For goods exported by mail. Not less than two hours before the goods
are delivered to the post office from which the goods will be mailed.
Two hours before the goods are mailed means two hours before the goods
are delivered to any post office in Canada that accepts mail for export.
Canada is the 12th largest exporting economy in the world .
• For goods exported by vessel. Not less than 48 hours before the goods
are loaded onto the vessel. When the exporter arranges with a carrier or
customs service provider to transport goods in the marine mode, it is
given a booking reference number that states when the goods should be
at the carrier's premises for loading. The reporting requirement of not
3 RSC 1985, c 1 (2nd Supp)

I
CHAPTER 10 EXPORTING COMMERCIAL GOODS AND US CUSTOMS PROCEDURES 195 t
less than 48 hours before the goods are loaded onto the vessel means
that the goods have been reported to CBSA not less than 48 hours
before they are given to the marine carrier.
• For goods exported by aircraft. Not less than two hours before the
goods are loaded on board the aircraft. The air carrier will advise
the exporter when the goods should be at their premises for loading.
The reporting requirement of not less than two hours before the goods
are loaded on board the aircraft means not less than two hours before
the goods are given to the carrier.
• For goods exported by rail. Not less than two hours before the railcar
on which the goods have been loaded is assembled to form part of a
train to be exported. Railcars are loaded at different places and then
moved to a rail yard where the cars are assembled into a train to begin
their journey from Canada. The exporter must report the goods not less
than two hours before the railcars holding the goods are given to the rail
carrier to be assembled into a train for export.
• For goods exported by any other mode of transportation. Immediately
before the exportation of the goods. In the case of goods being exported
by highway or by any other mode not previously mentioned, goods must
be reported immediately before being exported, which means before the
conveyance that is transporting the goods crosses the border or leaves
Canada.
TABLE 10.1 Minimum Time Frames for Reporting of Exports
•• • ••• MINIMUM TIME FRAME FOR REPORTING
Ocean/Marine 48 hours prior to loading of the vessel
Air Two hours prior to loading of the airc raft
Truck/Highway Immediately prior to export
Rail Two hours before the f inal tra in is bui lt /added
Postal Two hours prior to mailing

I I
/
CARRIER REPORTING
Under the Reporting of Exported Goods Regulations,4 carriers must comply with
specific cargo reporting requirements enforced by the CBSA. As with imports,
carriers prepare a cargo report, typically a cargo control document. Carriers must
supply CBSA with the proof of export reporting made by the exporter. There are
exceptions where some goods do not have to be reported. When an export declara-
tion is not required the exporter must advise the carrier of the exception, which the
carrier will note in their records and on the cargo report. We will review the most
common exception later in this chapter (see the heading "Exports to the US").
There are different requirements for carriers who have entered into a Mem-
orandum of Understanding (MOU) for carrier reporting with the CBSA and
those who have not. Carriers who sign an MOU are approved carriers. Under the
MOU, approved carriers have the privilege of reporting their cargo within less
rigorous time frames.
Approved carriers are permitted to submit their cargo reports after the goods
have left Canada. By signing the MOU, the carrier has agreed to transport only
goods that have been reported to CBSA.
Approved carriers agree to transport for export only those goods for which the
exporter has met, or will meet, the legislated export reporting requirements. Therefore,
the exporter or their agent must provide proof to the carrier that the goods have been
or- in the case of goods reported under the summary reporting program- will be
reported to CBSA. The approved carrier does not validate the proof of report; they
simply provide the proof of report as part of their cargo report to CBSA.
If the proof of export report-or proof that the goods are exempt from export
reporting- has not been presented, the approved carrier will not load the goods.
individual export EXPORT CONTROLS AND PERMITS

permits (IEPs)
Export controls are imposed in order to comply with Canada's domestic and foreign
Permits obtained by
individual applications and policies regarding national security and defence, as well as Canada's obligations
that include items such as under international treaties and agreements. There are two types of export permits:
controlled goods and goods individual and general.
destined for specific
countries.
Individual export permits (IEPs) require individual applications and include
items such as controlled goods and goods destined for specific countries.
general export
permits (GEPs) General export permits (GEPs) do not require an application and are a means
Permits available to all of controlling non-regulated exports and gathering statistics. The GEP number
exporters and that do not must be quoted on the export declaration. Some examples of GEPs are:
require an application; they
are a means of controlling
1. General Export Permit No 15- eggs.
non-regulated exports and
gathering statistics. 2. General Export Permit No 31- peanut butter.
4 SOR/2005-23.

CHAPTER 10 EXPORTING COMMERCIAL GOODS AND US CUSTOMS PROCEDURES 197 >)
3. General Export Permit No 12-US-origin goods (explained in detail
later in this chapter).
Goods requiring export permits are listed in either the Area Control List (ACL) Area Control List (ACL)
(a list of countries for which export permits are required) or the Export Control Established under the Export
and Import Permits Act, a list
List (ECL) (a list ofgoods requiring export permits). Global Affairs Canada admin- of countries to which the
isters these requirements and further details can be found on its website under the exportation of goods is not
Export Controls Handbook. s permitted without an export
permit.
Export Control List
(ECL)
EXPORTS TO THE US A list of goods that require
Most goods that are exported from Canada and shipped to countries other than either an individual or a
general export perm it
the US must be listed on an export declaration and reported to CBSA upon export. before they can be exported
Canada and the US have a signed Memorandum of Understanding that allows from Canada.
the US to provide Canada with data on goods that have been imported into the US
from Canada. In this way, the US import data become Canada's export data, and
an export declaration, in most cases, does not have to be filed for goods shipped
to the US from Canada.
The following are situations where export declarations must be filed for goods
exported from Canada to the US:
• when the exported goods are trains (railcars and engines); and
• when the exported goods are restricted goods, including goods restricted goods
covered under general export permits (GEPs), going to the US for Goods whose exportation is
prohibited, controlled, or
consumption. Although permits are required for the export of certain regulated under the Customs
softwood lumber products to the US, the permits do not have to be Act or any other act of
presented to CBSA. Parliament.
Restricted goods are goods whose exportation is prohibited,

controlled, or regulated under the Customs Act or any other act of
Parliament- for example, the Cultural Property Export and Import Act,6
or the Controlled Drug and Substances Act.7
Note that although an export declaration is not required for most exports to
the US, if an officer requests a report, one must be provided.
5 (2017), online: Global Affairs Canada <https://www.international.gc.ca/ controls-controles/

export-exportation/TOC-exp_ctr_hand book-manuel_ctr_exp.aspx?tang =eng>.
6 RSC 1985, c C-51.
7 SC 1996. c 19.

I I
/
GENERAL EXPORT PERMIT NO 12
General Export Permit No 12 (GEP 12) is used when goods of US origin are ex-
ported from Canada to a country other than the US. Exportation of these goods
from Canada is allowed, but exportation from Canada of goods of US origin to a
country with which the US has a trade embargo is not.
GEP No 128 states:
1. Subject to section 2, any person may, under the authority of this Permit,
export from Canada any goods of United States origin as described in item
5400 of Group 5 of the Schedule to the Export Control List.
2. This Permit does not authorize the exportation of goods described in

section 1 to any country listed in the Area Control List or to any of the fol-
lowing countries:
(a) Cuba;
(b) Democratic People's Republic of Korea;
(c) Iran; and
(d) Syria.
3. Where any goods exported under the authority of this Permit are required to be
reported in the prescribed form under the Customs Act, the statement "GEP-12"
or "LGE-12" shall be inserted in the appropriate field of the report.9
Item 5400 of Group 5 of the Schedule to the Export Control List, 10 referred to
in the context of GEP 12, states:
All goods and technology of United States origin, unless they are included else-
where in this List, whether in bond or cleared by Canada Border Services Agency,
other than goods or technology that have been further processed or manufac-
tured outside the United States so as to result in a substantial change in value,
form or use of the goods or technology or in the production of new goods or
technology. 11
This means goods of US origin exported from Canada to specific countries other
than the US are exported under the provisions of GEP 12. However, this GEP
applies only to goods going to countries other than Cuba, Democratic People's
Republic of Korea, Iran, and Syria. Goods of US origin exported from Canada
to any of these countries require an individual export permit. This ensures that
Canada is not being used to re-export US-origin goods to countries with which
the US has an embargo.
8 General Export Permit No 12-United States Origin Goods, SOR/97-107.

9 Ibid, s 1.
10 SOR/89 -202.
11 Ibid.

I
In 2017, Canada's exports were valued at $377 billion, with $274 billion
destined for the US.
EXPORTS TO NON-US LOCATIONS

The following goods exported to non-US destinations must be reported:
• commercial goods destined for a single consignee, when the total value
of all the goods in the shipment is Cdn$2,000.00 or more;
• restricted goods, regardless of their value; one exception is goods
exported under GEP 12 and valued at less than Cdn$2,000.00;
• goods moving in transit through the US to a third destination, if their
value is Cdn$2,000.00 or more;
• goods exported from a bonded warehouse; imported goods, other than
alcohol and tobacco, that have entered the Canadian economy on a
Form B3 Type 10 entry and have been placed in a bonded warehouse
must be reported on an export declaration when they are exported
from Canada;
• goods that were in Canada temporarily to be repaired or have value
added to them-where the valued added is Cdn$2,000.00 or more, only
the repairs or additions are declared as exports, unless the repairs are the
result of a Canadian warranty;
• goods exported from Canada for processing, or foreign goods that
have been processed in Canada-the valuation of goods exported after
processing in Canada must include the original cost of the materials,
plus the cost of the Canadian processing;
• certain non-commercial goods valued at Cdn$2,000.00 or more, such as
gifts, donations, and personal effects;
• company transfers- for example, of goods and machinery-valued at
Cdn$2,000.00 or more;
• contractor's tools and equipment, valued at Cdn$2,000.00 or more, after
having been in Canada for one year or more;
• non-circulated currency such as non-monetary gold, unissued bank
notes and securities, and coins not in circulation;
• currency and monetary instruments;

>~ 2~Q INTRODUCTION TO CUSTOMS ADM INISTRATION AND PROCEDURES
• goods originally imported into Canada and being returned to the supply
country for credit;
• leased goods that have been in Canada for one year or more;
• samples if they have been in Canada for one year or more; and
• ships' stores-that is, goods that are expected to be consumed during a
voyage by non -Canadian carriers.
TABLE 10.2 A Summary Overview of the Requirements When Exporting

Goods from Canada
DESTINATION: NON-US
(INCLUDING GOODS
MOVING IN-TRANSIT
THROUGH THE US)
Non-controlled Export declaration not An export declaration is

goods required EXCEPT for the sale requ ired for goods valued at
of trains o r if a BSO requests Cdn $2,000.00 o r more
an export declaration
Controlled Permit, licence, or Permit, licence, or certificate

goods, certificate Any document required by
regardless of Any document requi red by another government
value another government department or agency
department or agency Export report required
No export report required
(reporting requirement is met
by the submission o f the
permit, certificate, and/ or
licences or other documents)
EXPORT DOCUMENTATION
Since most of Canada's exports are destined for the US, we will concentrate on
the paperwork required to ship goods to that country. The US Customs Invoice is
the most common form used and, when correctly completed by the shipper, con -
tains all the information required by US Customs. A US Customs Invoice is
reproduced at the end of this chapter. Its fields are self-explanatory (see Figure 10.2).
A commercial or sales invoice can be used instead of a US Customs Invoice
as long as all the data meets the Border Cargo Selectivity (BCS) requirements. The
following general information is required:
• a federal employer identification number (EIN);

• an Internal Revenue Service (IRS) number;
• the social security number (SSN) of the US purchaser;

I
CHAPTER 10 EXPORTING COMMERCIAL GOODS AND US CUSTOMS PROCEDURES 2Q1
• the shipper's and consignee's complete names and addresses;

• the quantity (number of packages and weight);
• a complete product description;
• country of origin certificates of all products;
• currency of settlement (for example, US or Canadian dollars); and
• terms of sale, payment, and discount-for example, "payment due in
30 days:'
A CUSMA certificate of origin is required for qualifying goods.
US CUSTOMS PROCEDURES
The customs system in the US requires the filing of entry documents before it will
release the goods, followed by the filing of summary documents to determine the
amount of duty payable.
The filing of entry documents must be done within 15 days of the arrival of the
goods and must include the following:
• an entry manifest (Customs Form 7533);

• evidence of right to make entry;
• a commercial invoice or pro-forma invoice; and
• any other documents, such as permits, to determine the admissibility of
the goods.
After a review of the entry documents by US Customs and Border Patrol, the
goods may be released. Within ten days of the date of release, the entry summary
must be filed.
The entry summary includes:
• the original entry documents;

• the entry summary form (Customs Form 7501); and
• any other documents necessary to assess duties, collect statistics, or
determine that all import requirements have been satisfied.
liquidation
Once an entry summary has been accepted, liquidation occurs-that is, an en- A US process that denotes
try's rate of duty and amount payable become final. All liquidations are supposed when the ent ry's rat e of duty
and amount payable
to be performed within 314 days from the date of entry. No entry can be liquidated
become finalized; similar to
until 180 days have passed from the date of entry. This allows the importer time to the Canadian Statement of
make claims for adjustments or refunds. Account (SOA) process.

I >I
> > 202 INT RODUCT ION TO CUSTOMS ADMIN ISTRATION AND PROCEDURES
FIGURE 10.1 Form B13A, Export Declaration
Figure removed
due to enactment
ofCUSMA.

I
CHAPTER 10 EXPORTING COMMERCIAL GOODS AND US CUSTOMS PROCEDURES 2Q3
FIGURE 10.1 Form B13A, Export Declaration (Continued)
Figure removed
due to enactment
ofCUSMA.

><2~4 INTRODUCTION TO CUSTOMS ADMIN ISTRATION AND PROCEDURES
FIGURE 10.1 Form B13A, Export Declaration (Continued)
Figure removed
due to enactment
ofCUSMA.

I
CHAPTER 10 EXPORTING COMMERCIAL GOO D S A ND US CUSTOMS PROCED URES 2Q5 t
FIGURE 10.2 US Customs Invoice
4. PAGE OF PAGES
CUSTOMS INVOICE I I I
1. SHIPPER - NAME ANO ADDRESS REF. NO. 2. U.S. CUSTOMS HANDLED BY: 3. OTHER REF. NOS.
East Side Warehouse ABC Brokers
I 23A Spadina Avenue Three Commerce Plaza
147 Washington Avenue
Toronto, ON Canada L7P2Q8
New York, NY 1223 1
PHONE 614-555-1 212 CONTACT John Smith
5. CONSIGNEE I SHIP TO PARTY NAME AND ADDRESS 6. IMPORTER OF RECORD NAME AND ADDRESS
The Fashion Showroom The Fashion Showroom
19985 Canal Slreet 19985 Canal Street
New York, NY 12345 New York, NY 12345
IRS/TAX ID# OR IRS/TAX ID# OR
SOCIAL SECURITY# 17-0987654 SOCIAL SECURITY# 17-0987654
"MANDATORY FOR U.S. CLEARANCE "MANDATORY FOR U.S. CLEARANCE
7. BILL CUSTOM CHARGES TO

D SHIPPER ~ CONSIGNEE OR
8. ORIGIN (COUNTRY/PROVINCE) 1·9. DESTINATION (COUNTRY/STATE)
D ~
10. U.S. DUTY AND BROKERAGE
INCLUDED IN INVOICE VALUE YES NO USA/New York USA/New York
14. TERMS OF SALE, PAYMENT AND DISCOUNT
~ D
11. PARTIES TO THIS TRANSACTION ARE NOT
RELATED RELATED
No sale: return of defective goods to supplier.
12. DATE OF EXPORT
IF THE GOODS ARE OF U.S. ORIGIN,
January 15, 2021 THEY MUST BE PRODUCED OR
MANUFACTURED IN THE U.S. AND
13. EXPORTING CARRIER 15. CURRENCY USED 16. IS FREIGHT
NOT MERELY SHIPPED/PURCHASED YES: LJ NO:~
FROM THE U.S. INCLUDED IN INVOICE
Sam's Trucking US O VALUE? IF YES YOU MUST COMPLETE BOX 26
17. 18. 19. 20. 21. 22. 23.
COUNTRY OF HS TARIFF NOOF DESCRIPTION OF GOODS UNIT QUANTITY UNIT PRICE TOTAL
MANU- UNITS GIVE SUFFICIENT DETAIL TO PERMIT CLASSIFICATION (TONS. CWT, LBS,
FACTUREOR ACCORDING TOTARIFF SCHEDULE OF THE U.S. F.B.M., ETC)
GROWTH
USA 980 1. 10 60 200 1bs 30.00 1,800.00

Women's skirts, wool
Goods were shipped to Canada on December 6, 2008,
purchase order 7655-B
All have defective zippers.
Goods packed in 4 boxes for return to the supplier.
SHIPPING WEIGHT. GROSS: 200 NET: 200 ~lb,(}gs

124. US CUSTOMS PORT OF ENTRY: 25. TOTAL
4 << TOTAL PACKAGES Buffalo, NY 1,800.00
INVOICE VALUE »
26. ACTUAL FREIGHT CHARGES 28. IF GOODS NOT SOLD STATE REASON FOR
TO PORT OF EXIT S TO DESTINATION $ REPORT (LOAN. REPAIR. PROCESSING. ETC.)
29. MODE OF TRANSPORTATION FROM POINT OF EXIT

~ ROAD DRAIL DAIR O ocEAN
130.CONTAINERIZED D YES: i Z ] No
Defective goods returning to supplier
31 . EXPORTING CARRIER AIR WAYBILL AND OR BILL OF LADING NUMBER 32. 1HEREBY CERTIFY THAT THE INFORMATION GIVEN ABOVE AND ON THE
CONTINUATION SHEET(S), IF ANY, IS TRUE AND COMPLETE IN EVERY RESPECT.
STATUS:
DATE: Jan. 15/2 1
~ D
Bill of Lading 37728B
YOUR NAME OR SIGNATURE: Jolm Smith SHIPPER: AGENT:

206 INTRODUCTION TO CUSTOMS ADM INISTRATIO N AND PROCEDURES
KEY TERMS
Area Control List (ACL), 197 conveyance report, 192 general export permits (GEPs), 196
bulk cargo, 194 Export Control List (ECL), 197 individual export permits (IEPs), 196
Canadian exporter, 192 export report/export declaration, 192 liquidation, 201
cargo report, 192 export reporting office, 193 restricted goods, 197
REVIEW QUESTIONS
1. Export declarations must be filed by the a. Not less than 2 hours before the goods are
exporter and proof of export reporting must loaded onto the vessel
be provided by CBSA before the goods are b. Not less than 12 hours before the goods
loaded onto a conveyance for export. True or are loaded onto the vessel
false? c. Not less than 24 hours before the goods are
2. When required, whose responsibility is it to file loaded onto the vessel
an export conveyance report? d. Not less than 36 hours before the goods
a. The carrier's are loaded onto the vessel
b. The exporter's e. Not less than 48 hours before the goods are
c. The importer's loaded onto the vessel
d. The freight forwarder's on behalf of the 5. In most cases, General Export Permit (GEP)
importer No 12 applies to goods of United States (US)
e. The consignee's origin that are exported from Canada to
destinations other than the US. True or false?
3. The Canada Export Report System (CERS) can
accept G7 EDI reports. True or false? 6. In order to request the release of goods entering
the US, entry documents must be filed within
4. What is the time frame for reporting goods that 30 days of their arrival. True or false?
are exported by vessel?

1. List the three ways in which an export report 6. In most cases, goods that are exported from
can be filed. Canada to the US do not require an export
2. Which method of export reporting harmonizes declaration to be filed. List the two instances
the export data required for the exporting where an export declaration must be filed for
country with the import data requirements of goods exported to the US.
the importing country? 7. Under GEP 12, the export of goods to four
3. What is a CBSA export reporting office? specific countries is prohibited. What are
these countries?
4. What is the time frame for reporting goods that
are exported by truck? 8. List four classes of goods that must be reported
when exported to non-US destinations.
5. What is the Export Control List?

9. List five pieces of information that must be 11. Within how many days of the goods being
shown on a US Customs Invoice or commercial released by US Customs must an entry summary
invoice for goods entering the US. be filed?
10. List the three documents that must be included 12. With respect to importing into the US, what is
with the entry document for goods entering liquidation?
the US.

GLOSSARY
abandoned to the Crown assists
The act of relinquishing ownership of goods to CBSA Items such as materials, artwork, and tools that are
for destruction or disposal. supplied by the importer to the vendor at no charge and
are used in the production of imported goods for that
Accelerated Commercial Release Operations importer. Assists are dutiable.
Support System (ACROSS)
ATACarnet
A system used by CBSA to receive electronically "ATA'' is an abbreviation for the French and English
transmitted release and invoice data from customs words "Admission Temporaire/Temporary Admission:'
brokers and importers. A carnet is an internationally recognized document for
Accounts Receivable Ledger (ARL) the temporary importation of goods and is accepted in
CBSA's fully integrated and centralized accounting over 78 countries.
system that allows for the offsetting of account credits Automated Import Reference System (AIRS)
against debits. A searchable database of CFIA import requirements.
bill of lading
additions to the price paid or payable
A contract between the shipper and the carrier that
Costs that are dutiable and therefore must be added to the includes the name of the shipper, the consignee, the
price paid or payable if they are not already included. name of the party that is to be notified when the goods
Administrative Monetary Penalty System (AMPS) arrive, and the mode of transportation; it also includes a
The CBSA's penalty regime that encourages compli- description of the goods, their weight, terms of payment
ance by issuing monetary penalties when specific for shipping, and references to other bills of lading used
to carry the same goods.
contraventions have occurred. Penalties may be
issued to importers, exporters, customs brokers, bonded warehouse
Allow goods to be stored without the payment of duty
warehouse and duty free shop operators, carriers, and
and tax; there are two types of bonded warehouses:
freight forwarders. private and public. Private warehouses are used by
Advance Commercial Information (ACI) individuals or companies to store their own goods,
Cargo and conveyance data sent to CBSA prior to and public warehouses are run by entrepreneurs for
the arrival of goods; information provided prior to the storing goods that are imported by various compa-
nies. Bonded warehouses are licenced and regulated
goods' arrival allows CBSA to risk assess goods that are
byCBSA.
destined for Canada.
bonded warehouse shortages
anti-dumping duty When goods are delivered to a bonded warehouse and
An additional duty that is collected on imported goods the shipment is "short;' a "nil" Form B3 is presented for
that have been dumped in Canada. the goods short shipped when the goods are removed
Appraisal Quality (AQ) data from the warehouse.
Data that are full and complete. AQ data must be provided breakbulk cargo
when goods are regulated by a government department or Cargo that must be loaded individually and is not
containerized; it includes goods transported in barrels,
agency and full data must be provided before time of
crates, or boxes.
accounting. Only applies to EDI transactions.
brokerage fee
Area Control List (ACL) Term used for payments to intermediaries for their
Established under the Export and Import Permits Act, a participation in concluding a contract of sale. It does
list of countries to which the exportation of goods is not not refer to charges by a customs broker for services
permitted without an export permit. rendered to clear goods through customs.
209
21Q GLOSSARY
bulk cargo Cargo Control Number (CCN)

Large quantities of cargo that is unpackaged; can be in A number, assigned by a carrier or freight forwarder, to a
liquid form or in a mass, such as oil or grain. transport document. It begins with the carrier's CBSA-
buying agent assigned carrier code, followed by a unique reference
A person who acts on behalf of the purchaser. A buying number assigned by the carrier or freight forwarder.
agent may find suppliers, place orders, inspect goods, cargo report
and ensure the delivery of the goods. Commissions paid A document used to report the goods that are con-
to buying agents are not dutiable. tained within a conveyance and that provides specific
Canada Border Services Agency (CBSA) information about the goods.
The federal agency responsible for customs programs, carriers
intelligence, interdiction and enforcement functions, Airlines, railways, postal services, steamship lines,
and passenger and inspection services. CESA manages couriers, and trucking lines are all carriers. Regardless
Canada's borders by enforcing the laws governing trade of how goods arrive at the Canadian border, the carrier
and travel, as well as international agreements and must declare or report the goods to CESA at the first
conventions. point of arrival.
Canada Customs Invoice (CCI) casual goods
The form that is completed with information about Goods other than goods imported for sale or for an
goods that are being shipped to Canada. industrial, occupational, commercial, institutional, or
Canada Revenue Agency (CRA) other like use.
The federal agency that administers tax laws for the CBSA Assessment and Revenue Management
government of Canada and for most provinces and (CARM) project
territories; also administers social and economic A multi-year business transformative initiative. Once
benefits and incentive programs delivered through the implemented, it will facilitate trade compliance and
tax system. enhance the use of data analytics to streamline business
Canadian customs brokers processes.
Customs brokers act as intermediaries between Certified Customs Specialist (CCS)
importers and the government on most import transac- An individual who has achieved a level of proficiency in
tions and make it easier for individuals and firms to customs matters and been accredited by the Canadian
comply with complex government legislation. Society of Customs Brokers.
Canadian exporter Certified Trade Compliance Specialist (CTCS)
The entity who exports the goods from Canada; the An individual who has achieved a level of proficiency in
exporter is not to be construed as the person involved customs compliance and been accredited by the
in the transportation arrangements (e.g., carriers or Canadian Society of Customs Brokers.
customs service providers). commercial invoice
Canadian Goods Abroad Program (CGAP) A document provided by the vendor to the customer
A CESA program that provides for relief from the that details the type of goods being shipped or sold; the
payment of duties on the Canadian portion of goods value is usually included.
that are returning to Canada after having been exported commissions
for repairs, additions, or further processing, provided Buying commissions are payments made to those who act
that certain conditions are met. on behalf of the purchaser. Selling commissions are
Canadian goods returned payments made to those who act on behalf of the vendor.
Goods that originate in Canada and have been exported computed value
and subsequently returned to Canada. The fifth method of valuation and may be reversed in
Canadian importer order with the deductive method (the fourth method).
The party responsible for the payment of duties and The computed value is based on the cost of the import-
taxes on imported goods. The importer is not necessar- ed goods plus an amount for normal profit and general
ily the party to whom the goods are being delivered expenses experienced by vendors in the exporting
since in some cases goods are delivered directly to the country when selling the same type of goods to
importer's customer. Canadian customers.

GLOSSARY 211
consist sheet Customs Act
A list on which couriers provide release information The legislative authority for the administration and
and supporting documentation for each shipment to enforcement of laws relating to the importation and
the importer or customs broker so that they may exportation of goods crossing Canadian borders. This
account for the goods. Act also gives border services officers the authority to
consolidated cargo release list examine, search, detain, and seize goods.
A list on which couriers report all shipments to CESA. Customs and Border Protection (CBP)
consolidation The US counterpart to Canada's CESA. An agency
Occurs when a number of shipments are grouped under the Department of Homeland Security whose
together outside Canada by a freight forwarder and mandate is to secure and facilitate trade and travel
shipped to Canada under one CCD. while enforcing US regulations, including immigration
Convention on International Trade in Endangered
and drug laws.
Species of Wild Fauna and Flora (CITES) Customs Automated Data Exchange (CADEX) or
An international agreement between governments Customs Declaration (CUSDEC)
whose aim is to ensure that international trade in A CESA system that allows importers and brokers to
specimens of wild animals and plants does not threaten transmit their accounting data to CESA for goods
their survival. already released.
Conveyance Reference Number (CRN) customs memoranda
A number that identifies a shipment to CESA; it consists Documents published by CESA to keep border
of a carrier's CESA-assigned carrier code, followed by a services officers and the public informed ofleg-
unique reference number assigned by the carrier. islative requirements and operational policies and
conveyance report procedures.
A document used to report the movement of a convey- Customs Self-Assessment (CSA)
ance to a place outside Canada. This report contains A specific program for approved CESA clients.
details such as the vehicle type, name of carrier, and Participants are allowed a streamlined accounting
date of export. and payment process for all imported goods, may
cost of production use their own business systems to initiate trade data
Specific costs that are included in the cost to manufacture reports, and can self-assess any duties and taxes.
goods, including materials (but not including any duties or If they wish, CSA importers may also take advan -
taxes paid on imported materials used to manufacture the tage of a streamlined entry process for imported
finished good), labour, and factory overhead. goods.
countervailing duty Customs Tariff
A duty levied under the Special Import Measures Act on The legislative authority for the imposition of, and
subsidized goods where it has been determined that providing relief against, the payment of duties. The
importing such subsidized goods has caused material Act also includes the Customs Tariff Schedule, the
injury to the production in Canada oflike goods. coding system and its details based on the Harmo-
Courier Imports Remission Order (CIRO) nized Commodity Description and Coding System,
Allows certain goods transported into Canada by a list of countries with their respective tariff treat-
courier an exemption from the payment of duty and ments, the General Rules for the Interpretation of
tax; goods must not exceed Cdn$40.00 in value. the Harmonized System (GRI), and administrative
guidelines.
Courier Low Value Shipment (CLVS) program
A program that streamlines the process to import goods D-memoranda
valued at less than Cdn$3,300.00 and allows courier Issued by CESA, D-memoranda include the policy by
participants an expedited release process. which ESOs and the public are kept informed of various
CSA-eligible goods
policies and procedures.
Commercial goods, imported by a CSA importer, Daily Notice (ON)
that have been shipped directly from the US or Form issued daily by CESA to customs brokers and
Mexico to Canada. In all cases, goods that are prohibit- importers, advising them of the duty and taxes for
ed, controlled, or regulated are not CSA-eligible goods. transactions that were processed the previous day.

212 GLOSSARY
de minimis rule duty

A rule that allows a certain percentage of non- An amount levied on imported goods. Duty rates are
originating parts and materials from meeting the established by the Government of Canada and can vary
tariff-shift rule. significantly.
deconsolidate duty paid goods returned
The act of separating consolidated goods into separate Goods that have been imported into Canada, have had
shipments. duty paid on them, are exported, and are then brought
deductive value back to Canada.
The fourth method of valuation and may be reversed in end-use certificate
order with the computed value (the fifth method). It is A written attestation affirming the use of imported
based on the Canadian importer's most common selling goods in accordance with the provisions of the tariff
price of the goods to Canadian customers. item that is used.
deemed determination Entered to Arrive (ETA)
A ESO does not make a determination of the origin, A paper entry prepared to address a shortage;
tariff, and/or value of imported goods at or before an ETA is prepared when, on the original shipment,
the time they are accounted for under authority of the total number of packages reported did not match the
section 58(1) of the Customs Act. When a determina- number of packages received.
tion has not been made, a deemed determination is
ex-warehoused
said to have been made. Deemed determinations are
Form E3 Type 20 used to remove goods from a bonded
made under the authority of section 58(2) of the
warehouse.
Customs Act.
Excise Act
Detailed Adjustment Statement (DAS)
The legislative authority for the collection of excise duty
A statement issued by CESA, once duties and taxes have
on beer that is manufactured in Canada or imported
been paid, to an importer or customs broker to indicate
into Canada.
that the final accounting document is not correct; also
issued by the CESA as confirmation after an importer Excise Act, 2001
or a customs broker has asked the CESA to review and The legislative authority for the collection of excise duty
adjust an accounting document. on spirits, wine, and tobacco products that are manufac-
tured in Canada or imported into Canada. It also
Detailed Coding Statement (DCS)
contains the legislation for the treatment of ships' stores.
A statement issued by CESA when it finds anomalies in
accounting data. A DCS is sent to the party that excise duty
submitted the accounting data and may be a Notifica- A special duty that is charged on certain goods pro-
tion of Rejection, a Notification of Adjustment, or a duced in Canada. When these goods are imported,
Notification of Acceptance. excise duty is collected in an amount that is equal to the
direct shipment
amount that would be collected if the goods were
Occurs when goods are shipped directly to a consignee produced in Canada.
(the party and place where the goods are shipped) in Excise Tax Act
Canada on a through bill oflading; goods may pass The legislative authority that grants the authority to
through another country on their way to Canada, but charge, collect, and administer the GST or HST. This
the journey must be uninterrupted. Act also provides for the imposition and collection of a
Dispute Resolution Corporation (DRC) number of excise taxes on other goods.
A non-profit organization that provides dispute Export Control List (ECL)
resolution, consultation, mediation, and arbitration for A list of goods that require either an individual or a
the produce trade. general export permit before they can be exported
drawback from Canada.
A type of refund claim to recover duty paid on import- export report/export declaration
ed goods that are exported under certain conditions or A document containing information to report goods
used in Canada under certain conditions. that will be exported or that have been exported.

GLOSSARY 213
export reporting office Form B3 Type H
A CESA office designated to deal with the exportation A voluntary entry prepared for goods that have been
of goods from Canada. released but not included on an accounting document.
Exporter's Statement of Origin Form B3 Type V
A statement that may be used in place of a formal A voluntary entry prepared for goods that are delivered
certificate of origin when certain conditions of a trade without customs release.
agreement are met. Form E29B, Temporary Admission Permit
foreign customs brokers A form that may be used to document goods qualifying
Foreign counterparts to Canadian customs brokers. for temporary importation into Canada.
Form YSO, Reject Document Control
foreign exporter
The party responsible for sending goods to Canada. A document issued by CESA indicating that a release
request document has been rejected.
Form A-Certificate of Origin
Free and Secure Trade (FAST) program
A form required for shipments from countries that are
A joint Canada-US initiative involving CESA and its
entitled to a reduced rate of duty under the General
US counterpart, US Customs and Border Protection.
Preferential Tariff (GPT) or Least Developed Country
FAST supports moving pre-approved eligible goods
Tariff (LDCT).
across the border quickly and verifying trade compli-
Form A6A, Freight/Cargo Manifest ance away from the border. It is a commercial process
A paper manifest used by marine carriers. For offered to pre-approved importers, carriers, and
marine carriers who report EDI, Form A6A data are registered drivers.
sent electronically. freight forwarders
Form ABA(B), In Bond-Cargo Control Document Parties that arrange for the movement of goods by the
A paper manifest used by most carriers; for carriers appropriate carrier and prepare all necessary docu-
who report using EDI, manifest data are sent ments to ensure that the goods arrive at the correct
electronically. destination. Some freight forwarders are also customs
brokers.
Form AlO, Cargo Control Abstract
Used to split goods listed on a manifest into more than Freight Remaining on Board (FROB)
one manifest so that goods can be released and ac- Cargo that remains on a vessel while other goods are
counted for separately. discharged.
Form A30, Customs Diversion Notice full container load (FCL) shipments
A hard-copy form used by carriers to report to CESA Cargo destined for a single importer from a single
that goods listed on their cargo report are being vendor.
diverted to another location upon their arrival in General Agency Agreement (GAA)
Canada; for carriers sending cargo reports electroni- An agreement that authorizes a customs broker to act
cally, the data are sent as a "change" to the original on behalf of a particular person or firm.
cargo report. general export permits (GEPs)
Form B2, Canada Customs Adjustment Request Permits available to all exporters and that do not
A form used to make a correction to an accounting require an application; they are a means of controlling
document. It can be used to request a refund, pay non-regulated exports and gathering statistics.
additional duty, or when there is no change in the final general import permits (GIPs)
amount of duty. Import permits that may be used by anyone; conditions
Form B3 accounting document and restrictions apply.
An accounting document that can be used to obtain the General Interpretive Rules (GIRs)
release of goods, account for goods, and pay duties and The rules governing the classification of goods in the
taxes on goods. Harmonized System.

214 GLOSSARY
General Preferential Tariff (GPT) Integrated Import Declaration (llD)

Because there is no agreement between Canada and The service option that is part of the Single Window
another country that allows use of the GPT, it is not a Initiative (SWI). Can be used to obtain release of both
tariff treatment. Rather, it is preferential rate of duty regulated and non-regulated goods.
allowed for goods entering Canada from specific
interim accounting
developing countries.
The process that allows goods to be released prior to the
Global Affairs Canada/Customs Automated Permit payment of duties and taxes. PARS, RMD, and IID are
System (EXCAPS) all considered interim accounting.
A system that allows for the transmission of permit
information directly from GAC to CBSA. less than a container load (LCL) shipments
Goods that do not require the full capacity of a convey-
Goods and Services Tax (GST) ance; LCL goods are destined for multiple importers
Tax that is collected by vendors and businesses at from multiple vendors.
each level in the production and distribution chain.
The majority of goods imported into Canada are liquidation
subject to GST; however, some commodities are A US process that denotes when the entry's rate
non-taxable, exempt, or zero-rated, and tax is not of duty and amount payable become finalized;
collected on them. similar to the Canadian Statement of Account (SOA)
process.
gross weight
The weight of the goods including any packaging Machine Release System (MRS)
materials. A component of ACROSS that provides automated
Harmonized Sales Tax (HST)
release decisions for shipments that meet a variety of
Tax composed of provincial tax and the GST and low-risk criteria. MRS automates the processing of
applicable in Nova Scotia, New Brunswick, New- certain shipments in order to provide inspectors with
foundland and Labrador, Prince Edward Island, and more time for the processing of shipments that pose a
Ontario. It is assessed and collected on casual and greater degree of risk.
non-commercial importations only. manifest
Harmonized System Also referred to as a Cargo Control Document, a
An international classification system used to classify manifest lists cargo and/or crew and/or passengers on a
imported and exported goods. conveyance; it allows customs to control the movement
of the cargo.
hierarchical system
Describes the structure of the tariff whereby goods are Measures in Force
ranked from lowest to highest level of manufacture; A list of goods currently subject to anti-dumping or
from least to most. countervailing measures pursuant to the Special Import
Import Control List (ICL)
Measures Act (SIMA).
A list of goods that require either an individual or a methods of customs valuation
general import permit before they can be imported Six methods that are used to determine the value for
into Canada. duty of imported goods. Listed in the order in which
in-transit goods they must be applied, these methods are the transac-
Goods that remain on a conveyance while the convey- tion value of the goods; the transaction value of
ance travels through one country to get to another; identical goods; the transaction value of similar goods;
these goods are not entered into the commerce of the the deductive value; the computed value; and the
intermediary country. residual method.
individual export permits (IEPs) Net Cost (NC)
Permits obtained by individual applications and that The total cost of goods minus sales promotion, market-
include items such as controlled goods and goods ing, after-sales service costs, royalties, shipping and
destined for specific countries. packing costs, and non-allowable interest costs included
individual import permits (llPs)
in the total cost.
Import permits that are issued to a specific party; an net weight
application is required. The weight of the goods excluding packaging materials.

GLOSSARY 215
non-Appraisal Quality (non-AQ) data Postal Imports Remission Order (PIRO)
Release data that are not completed in full. Data may Allows certain goods transported into Canada by mail
be grouped to obtain release; however, full AQ data an exemption from the payment of duty and tax; goods
must be submitted before the final accounting must not exceed Cdn$20.00 in value.
deadline. Pre-Arrival Review System (PARS)
Notice of Penalty Assessment (NPA) A system by which an importer or customs broker
The form on which details of a penalty are provided. provides information to CBSA, prior to the arrival of
It includes the penalty assessment date, the contraven- the goods, that allows CBSA to release the goods upon
tion and penalty details, correction and redress their arrival in Canada.
(appeal) information, and payment and interest provisional duty
information. Duty levied under the Special Import Measures Act
offsetting when a preliminary decision is issued by the Canadian
An amount to be credited is matched against an International Trade Tribunal (CITT) on the dumping or
outstanding debt on the client's account at the end of subsidizing of imported goods; provisional duty is
the payment period and before an SOA is issued, collected until a final decision regarding dumping or
reducing the total amount owing. If there is a credit subsidizing has been determined.
balance owing after the offsetting has occurred, a Queen 's warehouse
refund cheque will be issued if the credit balance A warehouse operated by CBSA and used to store
exceeds $1,000.00; if the amount is less than $1,000.00, seized, forfeited, detained, abandoned, and
the account must have a credit balance for two consecu- unclaimed goods before they are released or dis-
tive months or longer. posed of by CBSA.
other government departments (OGDs) reason to believe
Government departments and agencies other than the An importer has specific information regarding the
CBSA. For example, the Canadian Food Inspection origin, tariff classification, value for duty, or diversion
Agency, Global Affairs Canada, Health Canada, and of imported goods that indicates the accounting data
Transport Canada. are incorrect.
Regional Value Content (RVC)
parties or persons are related
Related parties or persons are any of the following: A rule that allows a specific percentage of non-originat-
individuals connected by blood relationship, mar- ing content to be included in a finished good in order to
riage, common law partnership, or adoption within determine the origin of the finished good.
the meaning of section 251 (6) of the Income Tax Act; Registrar of Imported Vehicles (RIV)
one is an officer or a director of the other; each A national program of vehicle inspection, certification,
such person is an officer or a director of the same and registration to ensure vehicles imported to Canada
two corporations, associations, partnerships, or meet Canadian standards.
other organizations; they are partners; one is the Release Notification System (RNS)
employer of the other; they directly or indirectly A CBSA system that advises customs brokers, import-
control or are controlled by the same person; one ers, carriers, and warehouse operations of release
directly or indirectly controls or is controlled by the decisions; users are notified when a transaction is
other. Related parties may use the transaction released, as well as when a PARS transaction is ap-
method of valuation if the relationship did not proved by CBSA.
affect the price paid.
Release on Minimum Documentation (RMD)
Partners in Protection (PIP) A type of entry package used to request release of goods
A CBSA program that enlists the cooperation of private that provides the minimum amount of data and where
industry to enhance border and trade chain security, the customs broker or importer has posted security;
combat organized crime and terrorism, and help detect RMD release requests are used once the goods have
and prevent contraband smuggling. arrived in Canada.

216 GLOSSARY
residual method sub-chapters

The sixth method of valuation and may be used when A further division of a chapter. Sub-chapters are found
the other five do not apply. It does not provide specific in chapters 28, 29, 39, 63, 69, 71, 72, and 98.
rules for determining a value for duty, but states that the subsequent proceeds
value for duty will be appraised on the basis of the value Payments made to the vendor after importation and
derived from the method, from among the methods in include proceeds from subsequent sales. Subsequent
the order set out, when applied in a flexible manner and proceeds paid to the vendor are dutiable.
when conforming closer to that method than any other
sufferance warehouses
method, and from information available in Canada.
Established for the landing, storage, safekeeping,
restricted goods transfer, examination, delivery, and forwarding of
Goods whose exportation is prohibited, controlled, or imported goods that have not yet been released; they
regulated under the Customs Act or any other act of are privately owned and operated, and are licensed
Parliament. byCBSA.
royalties and licence fees supplementary cargo report
Payments made for using or acquiring a protected right, Document submitted by a freight forwarder for
such as a trademark. Royalties and licence fees paid to shipments that have been, or will be, deconsolidated
the vendor are dutiable. from an air or marine cargo control document for
security freight remaining on board (FROB) shipments only.
An amount of money or bond posted to ensure the tariff
payment of duties and taxes on imported goods that An amount levied on imported goods; the term is
have been released. interchangeable with "dutY:' Also, the term used to
selling agent describe the schedule that includes the ten-digit
A person who acts on behalf of the vendor. They look for classification number for identifying goods.
customers, take orders, and, in some cases, arrange for the Tariff Rate Quota (TRQ)
delivery and storage of goods. The selling agent's earnings A limitation on the quantity of goods that are entitled
are usually called selling commissions and are dutiable. entry into Canada during a specific period and gener-
shortage ally applies to agricultural goods. Imported goods
The number of pieces received is less than the number within the established quota are entitled to a lower rate
declared to CBSA. of duty; those above the quota are subject to a higher
Single Window Initiative (SWI) rate of duty.
Streamlines the sharing of commercial import data tariff treatment
between the Government of Canada and the import Trade agreements allow goods to enter a country under
community. It balances the needs of government reduced duty rates, identified on accounting documents
departments and agencies with today's globally com- by a tariff treatment; e.g., goods that originate under the
petitive business environment. Along with the CBSA, Canada- Korea Free Trade Agreement are subject to the
there are nine participating government departments CKFTA tariff treatment.
and agencies representing 38 government programs. trade agreement
Special Import Measures Act (SIMA) A legal agreement between two or more countries that
The legislative authority that imposes anti-dumping, provides benefits to all signatories. As well as reducing
countervailing, and provisional duty on certain goods. the rate of duty on imported goods, a trade agreement
It is intended to protect Canadian industry from may also include other provisions.
injury caused by the dumping and subsidization of transaction value of identical goods
imported goods. The second method of valuation. The value for duty is
Statement of Account (SOA) based on the value of identical goods that have been
Monthly statement issued by CBSA to customs exported to Canada at the same time as those now
brokers and importers who have posted security for being appraised; sold to a purchaser at the same or
the release of goods before the payment of duty and substantially the same trade level as the purchaser of
taxes. The SOA provides a summary of all Daily the goods now being appraised; and sold in the same
Notices from the 25th day of the previous month to or substantially the same quantity as the goods now
the 24th day of the current month. being appraised.

GLOSSARY 217
transaction value of similar goods Value Included (VI)
The third method of valuation. The value for duty is A paper entry prepared to address a shortage; a VI
based on the value of goods that closely resemble the entry is prepared when, on the original shipment, the
goods being appraised, that is, on similar goods. The number of pieces inside a package was less than the
goods must be capable of performing the same func- number on which duty was paid.
tions; commercially interchangeable; produced in the values for duty
same country as the goods being appraised; produced The value in Canadian funds upon which duty is
by the same person or manufacturer as the goods now assessed in accordance with the valuation provisions of
being appraised; and considered for the quality, the Customs Act.
reputation, and existence of a trademark.
vendors
transaction value of the goods Companies outside Canada that have sold goods to
The price paid or payable for goods that have been sold. importers in Canada.
It is the method of valuation most commonly used.
voluntary entry
transhipment A paper entry that is prepared when goods are
The movement of goods to an intermediate destination released but inadvertently excluded from an account-
and then from that destination to another destination. ing document, or when goods enter Canada without
transportation costs being released. There are two types of voluntary
For customs purposes, transportation costs are entries: H and V.
separated into transportation costs incurred to the World Customs Organization (WCO)
place of direct shipment and transportation costs An organization whose primary purpose is to
from the place of direct shipment. Costs to the place facilitate the development of international trade
of direct shipment are dutiable. Costs from the through the improvement and harmonization of
place of direct shipment are not. customs procedures.
value for duty code
A two-digit code that identifies to CBSA the method of
valuation used to determine the value of imported
goods. The first digit signifies the relationship between
the vendor and the importer; the second digit indicates
the method of valuation used.

INDEX
abandoned to the Crown, 159 assists, 72 employee responsibilities,
Accelerated Commercial ATA Carnet, 154, 159 16-17
Release Operations Support Automated Import Reference ethics, 15
System (ACROSS), 103, 120 System (AIRS), 107 relationships among
accounting for imported goods brokers, CESA, etc., 16
CADEX, 129 bill of lading smuggling by an
correcting errors, 143-44 overview, 22 employee, 16
Detailed Adjustment sample, 42-43 conditions oflicensing, 5
Statement (DAS), 144 bonded warehouse, 41 form of business, 5-6
Detailed Coding Statement General Agency
bonded warehouse shortages, 166
(DCS), 142-43 Agreement, 7-8
border services officers, 2
Form B3 accounting positions within a
document, 129-42 breakbulk cargo, 29
brokerage firm, 6-7
brokerage fee, 71-72
Queen's warehouse, 144 role of, 4-5
Accounts Receivable bulk cargo, 29, 194
sub-agents, 7
Ledger (ARL), 173 buying agent, 71
Canadian Food Inspection
additions to the price Agency (CFIA), 4, 106-8
paid or payable Canada Border Services
Canadian General
assists, 72 Agency (CESA)
Interpretive Rules, 60
brokerage fees, 71-72 as part of Public Canadian Goods Abroad
commissions, 71 Safety Canada, 2
Program (CGAP), 160-61
overview, 70 border services officers, and, 2 Canadian goods returned, 162
packing costs/charges, 72 CESA Assessment and Canadian importer, 8-9
royalties and licence fees, 72-73 Revenue Management
Canadian Security Intelligence
(CARM) project, 184
subsequent proceeds, 73 Service (CSIS), 2
defined, 2
transportation costs, 73 Cargo Control Abstract, 37, 47
Administrative Monetary Penalty organizational structure, 2, 3
Cargo Control Document (CCD)
System (AMPS), 2, 9, 102, 127 Canada Customs Invoice (CCI)
diversions, 36-37
Advance Commercial completion of fields, 23-26
Form A8A(B), In Bond-
Information (ACI) information to watch for, 27 Cargo Control Document
air, 32-33 overview, 10, 22 completion, 34-36
highway, 33 sample, 44 overview, 34
marine, 28-32 Canada Revenue Agency (CRA), 4 sample, 45
overview, 28 Canadian Automated Export Cargo Control Number
rail, 33 Declaration, 191 (CCN), 33, 34
Agriculture and Agri- Canadian customs brokers cargo report, 192
Food Canada, 109 client profile, use of, 16-18 carriers, 9-10
air ACI, 32-33 code of conduct casual goods, 89-90
anti-dumping duty, 14 confidentiality of CESA Assessment and
Appraisal Quality (AQ) data, 122 information, 15 Revenue Management
Area Control List (ACL), 102, 197 conflicts of interest, 15 (CARM) project, 184
219
22Q INDEX
Certificate of Origin (NAFTA), Customs Diversion Notice, 37, 46 end-use certificate, 106
96-97, 105-6, 114-15 customs memoranda, 14 Entered to Arrive (ETA), 165
Certified Customs customs notices, 15 Environment and Climate
Specialist (CCS), 6 Customs Self-Assessment Change Canada, 112-13
Certified Trade Compliance (CSA), 124-25 ex-warehoused, 164
Specialist (CTCS), 6 Customs Tariff EXCAPS, 103-4
client profile, 16-18 Canadian general Excise Act, 12
commercial invoice, 27-28 interpretive rules, 60 Excise Act, 2001, 12
commissions, 71 classification numbers, 54 excise duty, 12
computed value, 76 classification process, 61-62 Excise Tax Act, 4, 12
consist sheet, 38 contravention of, 127 exempt supplies, 13
consolidated cargo release list, 37 general interpretive Export and Import Permits Act, 102
consolidation, 41 rules, 54-60 Export Control List
Consumer Packaging and Harmonized System, and, 52 (ECL), 102, 197
Labelling Act, 110 overview, 2, 11-12 export controls/permits
Controlled Drug and punctuation, 61 non-US locations, 199-200
Substances Act, 197 sections and chapters, types of, 196-97
Convention on International Trade 52-53, 60 US destinations, 198
in Endangered Species of Wild subheadings and tariff export declaration
Fauna and Flora (CITES), 113 items, 62-63 automated export
Conveyance Reference tariff treatments, 80-97 declaration, 193
Number (CRN), 33
customs valuation carrier reporting, 196
conveyance report, 192 methods, see methods of designated reporting
Correctional Service of customs valuation offices, 193, 194
Canada (CSC), 2 overview, 6 Form Bl3A, Export
cost of production, 76, 83
value for duty codes, 69 Declaration, 193-94, 202-4
countervailing duty, 137
G7 electronic data
Courier Imports Remission D-memoranda, 14-15, 165 interchange (EDI), 193
Order (CIRO), 39
Daily Notice (DN), 172-73 requirement to file, 192
Courier Low Value Shipment summary reporting
de minimis rule, 86
(CLVS) Program, 37-38
deconsolidation, 41 program, 194
courier shipments, 37-39 time frame, 194-95
deductive value, 75-76
CSA-eligible goods, 125
deemed determination, 174 United States, exports to, 197
Cultural Property Export
Detailed Adjustment export documentation, 200-1
and Import Act, 197
Statement (DAS), 144, 175 export report, see export declaration
Customs Act, 2, 9, 11, 15,
Detailed Coding Statement export reporting office, 193, 194
16,40,68, 70, 73, 76, 126,
127, 174, 182-83, 197 (DCS), 142 export summary reporting
direct shipment, 82 program, 192, 194
Customs and Border
Protection (CBP), 125 Dispute Resolution exporter
Customs Automated Data Corporation (DRC), 107 Canadian, 192
Exchange (CADEX), 120, 129-44 drawback, 160 foreign, 10
Customs Brokers Professional duty paid goods returned, 162-64 Exporter's Statement of Origin, 104
Examination, 5 duty
Customs Declaration defined, 5 foreign customs brokers, 11
(CUSDEC), 120 payment, 172 Form A- Certificate of Origin, 104

INDEX 221
Form A6A, Freight/ Global Affairs Canada Machine Release System
Cargo Manifest, 34 Customs Automated Permit (MRS), 120
Form A8A(B), In Bond-Cargo System (EXCAPS), 103-4 mail shipments, 39-40
Control Document, 34-37, 45 responsibilities, 109 manifest, 34
Form AlO, Cargo Control Goods and Services see also Cargo Control
Abstract, 37, 47 Tax (GST), 12-13 Document (CCD)
Form A30, Customs gross weight, 24 marine ACI, 28-32
Diversion Notice, 37, 46 Measures in Force, 14
Form A48, RMD Correction, 150 methods of customs valuation
Harmonized Sales Tax
Form B2, Canada Customs (HST), 13-14 computed value, 76
Adjustment Request, 165, 175-87
Harmonized System deductive value, 75-76
Form B3 accounting
Canadian general duty codes, 69
document, 129
interpretive rules, 60 overview, 68
Form B3, Canada Customs
classification numbers, 54 residual value, 76-77
Coding Form, 149, 175
classification process, 61-62 transaction value of
Form B3 Type 10, 164
general interpretive goods, 70-74
Form B3 Type 20, 164
rules, 54-60 identical goods, 75
Form B3 Type C, 172
overview, 2, 11-12, 52 similar goods, 75
Form B3 Type H, 173
punctuation, 61
Form B3 Type V, 173
sections and chapters, 52-53, 60 National Parole Board, 2
Form Bl3A, Export
subheadings and tariff Net Cost (NC), 85-86
Declaration, 193-94, 202-4
items, 62-63 net weight, 24
Form E29B, Temporary
hierarchical system, 54 non-Appraisal Quality
Admission Permit, 154, 158-59
highway ACI, 33 (non-AQ) data, 122
Form Y50, Reject Document
Control, 126, 146 non-taxable importations, 13
Free and Secure Trade Import Control List (ICL), 102 North American Free Trade
(FAST) program, 125 import permits, 102-4 Agreement (NAFTA), 82,
freight forwarders, 10 importation, steps in, 28-33 96-97, 105-6, 114-16
Freight Remaining on in-transit goods, 28 Notice of Penalty Assessment
Board (FROB), 28 Income Tax Act, 4, 69 (NPA), 127, 147-48
full container load (FCL) individual export permits
shipments, 30 (IEPs), 196 offsetting amount, 173
individual import other government departments
permits (IIPs), 102 (OGDs), 102
G7 Electronic Data
Interchange (EDI), 193 Innovation, Science and
Economic Development parties or persons are
General Agency Agreement
Canada (ISED), 110-11 related, 69
(GAA), 78
input tax credits, 13 Partners in Protection (PIP), 125
General Export Permits
(GEPs), 196-97, 198 Integrated Import Declaration Postal Imports Remission
(IID), 121, 124, 172 Order (PIRO), 39-40
General Import Permits
(GIPs), 102 interim accounting, 121 Pre-Arrival Review System
General Interpretive (PARS), 10, 34, 123, 172
Rules (GIRs), 54-60 less than a container load Precious Metals Marking
General Preferential (LCL) shipments, 30 Act, 111
Tariff (GPT), 104 liquidation, 201 prohibited goods, 165

222 INDEX
provisional duty, 137 Safe Foods for Canadians European Free Trade
Public Safety Canada, 2 Regulations, 4 Association (EFTA), 92
security, 121, 122 general preferential (GPT), 89
Queen's warehouse, 144 seizures, 127 general tariff, 95
selling agent, 71 Honduras, 94
R-memoranda, 15 shortage, 165-67 Jordan, 93
rail ACI, 33 Single Window Initiative Korea, 94
reason to believe, 174 (SWI), 124 Least Developed Country
Regional Value Content Special Import Measures (LDCT), 88-89
(RVC), 85-86 Act (SIMA), 14, 127 Most-Favoured-Nation
Registrar of Imported Standard Operating (MFN), 86-87
Vehicles (RIV), 111-12 Procedures (SOPs), 8 New Zealand and
related parties or persons, 69 Standard Trading Australia, 87-88
Release Notification Conditions (STCs), 8 overview, 80, 104
System (RNS), 123 Statement of Account Panama, 93
release of goods (SOA), 172-73 Peru,93
Customs Self- sub-agents, 7 Ukraine, 94
Assessment, 124-25 US and Mexico, 89-91
sub-chapters, 54
examinations and temporary entries, 154-59
subsequent proceeds, 73
rejects, 126-28 Textile Labelling Act, 110
sufferance warehouses, 40-41
Free and Secure Trade trade agreement, 80
supplementary cargo
(FAST) program, 125
report, 32 transaction value of
hours of operation, 128 the goods, 70-74
Integrated Import Declaration identical goods, 75
(IID), 124, 172 tariff, 7
tariff item 9992.00.00, 160 similar goods, 75
Pre-Arrival Review System
transhipment, 83
(PARS), 123, 172 TariffRate Quota (TRQ), 103
Transport Canada, 111
procedures, 121 tariff treatment
transportation costs, 73
Release Notification Canada - Israel, 91
System (RNS), 123 Canada- US - Mexico
US customs invoice, 200, 205
Release on Minimum Agreement (CUSMA),
Documentation (RMD), 95, 96-97 US customs procedure, 201
121, 122-23, 172 Canadian European
security, 121, 122 Union (CEUT), 94 valuation, see customs valuation
sub-agency clearances, 126 Chile, 92 value for duty, 132
Release on Minimum codes for, 80-86 value for duty code, 69
Documentation (RMD), Colombia, 93 Value Included (VI), 165
121, 122-23, 172 Commonwealth Caribbean vendors, 10
Reporting of Exported Goods Countries (CCCT), voluntary entry, 173
Regulations, 196 88-89
residual method, 76-77 Comprehensive and warehousing, 164
restricted goods, 197 Progressive Trans- World Customs Organization
Royal Canadian Mounted Police, 2 Pacific Partnership (WCO), 52
royalties and licence fees, 72-73 (CPTPT), 95
rules of origin, 84 Costa Rica, 92 zero-rated supplies, 13

CREDITS
CHAPTER1 CHAPTER6
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Page 32 (Figure 2.1): "The Port at the Heart of Daily Life":
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CHAPTER 7
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CHAPTERS
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CHAPTER3
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CHAPTERS
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THE CANADIAN SOCIETY OF CUSTOMS BROKERS

e 0 n d • Toronto, Canada • 2020

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Emond Montgomery Publications Limited

We acknowledge the financial support of the Government of Canada. Canada

Vice president, publishing: Anthony Rezek

Library and Archives Canada Cataloguing in Publication

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Steps in Importation............. . .............. .. . 28 Transaction Value of Similar Goods ....... . .... . 75

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Changes to the Second Edition

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• Identify the players and their roles in international trade.

• Identify the legislation governing international trade.

• Understand a customs broker's code of ethics.

THE ROLES OF THE PLAYERS IN

CANADA BORDER SERVICES AGENCY

1 RSC 1985, c 1 s 32 (2nd Supp).

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CANADA REVENUE AGENCY

•• DID YOU KNOW?

CANADIAN CUSTOMS BROKERS

3 SOR/ 2018- 108.

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Every customs brokerage company must employ at least one individual

Remember, customs broker licences are issued to companies, not individuals.

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(ii) has sufficient financial resources to conduct its business in a

The phrase "[having] a sufficient knowledge . . . determined in accordance with

7 Customs Brokers Licensing Regulations, SOR/ 86-1067, s 3.

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GENERAL AGENCY AGREEMENTS

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The Canada - US border is the longest international border between

Although the regulations for each mode of transport vary, it is mandatory

1. Pre-arrival information is provided to CBSA electronically about the

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3. The driver reports to CESA at the border.

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FOREIGN CUSTOMS BROKERS

OVERVIEW OF THE LEGISLATION

• the Customs Act;

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> <12 INTRODUCTION TO CUSTOMS ADMINISTRATION AND PROCEDURES

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INPUT TAX CREDITS

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SPECIAL IMPORT MEASURES ACT