Archive for the ‘H.S. Tariff Classification’ Category


 

Requirements for Importing Wooden Articles Into Canada

Wooden articles

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

When importing goods containing wooden components, certain information is needed to determine the necessary import documents required by the Canadian Food Inspection Agency (CFIA). Please ensure these admissibility requirements are known and met prior to purchasing or shipping the items. Some examples of subject goods fall under the tariff items listed below:

H.S. Tariff Classification Description
4419 Tableware and kitchenware, of wood
4420 Decorative articles of wood
4421 Other articles of wood
6702 Artificial flowers, foliage and fruit and parts
9403 Wooden furniture
9505 Festive articles
9703 Original sculptures and statuary

 

The following information is needed to determine the necessary requirements to ensure admissibility under the CFIA import requirements:

  • Is it greater than, less than or equal to 1.5cm thick?
  • Does the item contain bark?
  • Is the product made with “processed” or “unprocessed” wood?

The term “processed wood materials” are defined under the International Standards For Phytosanitary Measures (ISPM) as:

“Products that are a composite of wood constructed using glue, heat and pressure, or any combination thereof [ISPM 15:2002]”

There has been a lack of clarity surrounding requirements due to viewing the term ‘finished’ wooden articles as being synonymous with ‘processed’ wooden articles. Please note that the term ‘processed’ does NOT mean ‘finished’. The CFIA is currently working on changing and clarifying their wording in the on-line AIRS tool. The term ‘finished’ will no longer be used and will be replaced with ‘processed’ as defined as above.

Examples of ‘processed’ wood include aspenite, masonite, plywood, veneer, fiberboard, particle board, oriented strand board, sawdust, and wafer board.

A complete outline of the requirements and reasoning can be found here.

It is strongly recommended that this information is clearly indicated on the invoice for each wooden commodity. If the required information is not provided then affected importers will need to be contacted to obtain this information before the shipment can be processed for Customs. This can potentially result in delays in customs clearance and additional handling costs.

In general:

Wooden articles that are less than 1.5 cm thick and not containing bark will most likely be approved for import with no additional document requirements.

Wooden articles that are greater than 1.5 cm thick or containing bark, depending on the origin, could require any or all of the following:

  • Plant Protection Import Permit – issued by the CFIA
  • Phytosanitary Certificate – certified by the (National Plant Protection Organization) NPPO of the exporting country
  • Phytosanitary Certificate for Re-export – certified by the USDA

Wooden furniture, regardless of thickness, made with unprocessed wood, depending on the origin, could require any or all of the following:

  • Plant Protection Import Permit – issued by the CFIA
  • Phytosanitary Certificate – certified by the (National Plant Protection Organization) NPPO of the exporting country
  • Phytosanitary Certificate for Re-export – certified by the USDA

Case Studies Pacific Customs Brokers Has Encountered

Missing Information on Documentation

We have encountered several transactions containing decorative wood products where the invoice description did not provide the thickness of the wood, if it contained bark, or if it was made with unprocessed wood.

  • Once the information was obtained, it was determined that the goods did not meet the necessary requirements and were inadmissible to enter Canada
  • The goods were then required to either be returned to the vendor or to be destroyed under Customs supervision.

Inaccurate Information on Documentation

In other cases goods have been released with inaccurate information which resulted in the CFIA performing a site inspection on the shipment.

  • In many cases products were found to exceed 1.5 cm thickness and were of foreign origin. The requirement for this is a Phytosanitary Certificate for Re-export covering the goods.
  • If this was not prepared at the time of export, then the supplier will not be able to produce the required documents.
  • The CFIA will then enforce the admissibility requirements and the importer is required to destroy the goods in question.

In either scenario significant expenses are incurred by the importer and the potential for delays and inspections is greatly increased.

If you are considering importing any of the subject goods outlined above or any articles containing wooden components please ensure the goods meet admissibility requirements under CFIA prior to purchasing or shipping the items.

Should you need more information, please contact your local CFIA office at: Area and Regional Offices

If you have any questions about importing any of the aforementioned articles share them in the comments section below or email us at Ask Your Broker.

Earn Credits Towards Your Professional Development with Pacific Customs Brokers

Are you caught up on your professional development credits for 2016?

The responsibility of understanding and abiding by trade regulations falls upon all of us playing a part in global trade. We want to help your business import and export successfully. For this reason we offer a series of seminars and webinars that will educate you on just that and contribute to your professional designations’ maintenance requirements.

Whether you are a Canadian or U.S. Certified Customs Specialist (CCS), a Certified Trade Compliance Specialist (CTCS), a Certified Export Specialist (CES), a designate with the Law Society of British Columbia (LSBC) or accounting professional, taking any of Pacific Customs Brokers’ seminars and webinars will earn you maintenance points, credits and hours towards your professional designations.

Review and plan your maintenance for the second half of 2016 here.

CSCB NEI LSBC
Webinar CCS CTCS CCS CES
CDN Importing for Beginners Part 1
CDN Importing for Beginners Part 2 *5
US Importing for Beginners Part 1 1
US Importing for Beginners Part 2 *5 1
FDA Regulated Goods *5 1
CFIA Regulated Goods *5
NAFTA for Beginners Part 1 1 1
NAFTA for Beginners Part 2 *5 1 1
*Taking any three of these 1-hour events qualifies for 5 CCS points. To claim your points, contact Adriana Zamora with the three course names upon completion of the third.
Seminar
CDN Trade Compliance Part 1  5  5  –  –  –
CDN Trade Compliance Part 2  5  5  –  –  3
Exporting from Canada  5  5  3  3  –
US Trade Compliance Part 1  5  5  3  –  –
US Trade Compliance Part 2  5  5  3  –  3
HS Tariff Classification  5  –  6  –  4
FTAs & Rules of Origin  5  –  5  –  –
Customs Valuation  5  –  3.5  –  –
CFIA  5  5  –  –  –
FDA  5  5  3  –  –
C-TPAT & PIP  2.5  2.5  2  2  –

 

If you have never attended one of our courses before, the following information might help you decide on attending the next one.

Seminars and Workshops

At these in-person sessions, our experts share their knowledge on cross-border and international shipping. They will keep you current with customs and other government department regulations. You will learn the best practices on being compliant as an importer and/or exporter, helping you expedite shipments rather than trigger costly delays. The benefits of attending an in-person seminar or workshop include:

  • All day access – Get our experts to answer your questions one-on-one
  • Cost-effectiveness – More affordable than industry standards
  • Range of topics – Choose from a wider variety of seminar topics than offered in our webinar format
  • Certificate of Completion – Receive a certificate for each course you attend
  • Case studies and real-life examples – Examine other attendees’ trade compliance issues
  • Networking – Connect with other like-minded professionals
  • Handouts – Take home your own set of course material
  • Industry recognized sessions – Earn points towards maintenance of your industry designations

Webinars

Our webinars are designed to meet the demands of the global trade community. These live webinars are a convenient way for trade professionals to stay ahead of new regulations with international trade and gain additional knowledge in key areas. The benefits of attending an online course include:

  • Global accessibility – Travel is removed from the equation for companies with multiple locations or branches
  • Cost-effectiveness – Complimentary part 1 and more affordable than industry standards
  • Concise training – In a fast-paced industry, efficiency becomes just as important as staying compliant
  • Convenience – Attend from the comfort of your desk
  • Industry recognized sessions – Earn points towards maintenance of your industry designations

Have a question about any of the seminars or webinars listed above? Use the comment section below or email Ask Your Broker.

Advance Trade Data: End State eManifest Process for In-Bond Shipments

 

 

 

 

Currently carriers and freight forwarders who have filed security with Canada Border Services Agency (CBSA) are considered “bonded” and therefore permitted to carry goods in-bond from the First Port of Arrival (FPOA) to an inland destination for examination and/or release. The trade community benefits greatly from this type of movement of goods and CBSA recognizes that to not allow this would pose a significant challenge.

With the implementation of eManifest, CBSA continued to allow in-bond movements as long as the pre-arrival data was provided by the carrier within the prescribed time frames. However, once mandatory, in addition to the requirement for highway carriers to provide advance cargo and conveyance data, importers will be required to submit Advance Trade Data (ATD) for that in-bond shipment in a new end state process.

Advance Trade Data

The ATD elements that importers will soon be required to submit include:

  • Importer of Record (IOR) number, name and complete address
  • Country/State of Origin
  • Country/State of Export
  • Commodity H.S. code to the 6th digit
  • Name and complete addresses of Manufacturer/Supplier, Seller/Vendor, Exporter (if different than the seller), Buyer/Purchaser, and Consignee (if different than the buyer)

Once ATD is mandatory, CBSA will receive and risk assess the carrier’s pre-arrival cargo and conveyance data as well as the importer’s ATD. If the importer’s ATD submission has not been received upon the carrier’s arrival at the FPOA, CBSA will determine:

  • If the carrier and driver are not members of a CBSA Trusted Trader Program, the shipment will not be permitted to move in-bond until the ATD is provided and risk assessed.
  • If the carrier and driver are approved members of a CBSA Trusted Trader Program, the shipment will be permitted to move in-bond to an approved warehouse.

Trusted Trader Programs

This end state process provides benefits to carriers who have invested in these programs.

CBSA has not yet announced when ATD for highway shipments will become mandatory for importers; however, for carriers who transport goods in-bond into Canada, it may be prudent to research becoming a member of a Trusted Trader Program if not a member already.

Are you an approved member of a Trusted Trader Program? Which program did you choose? Share your experience of the application process or any tips you may have in the comments section below or email us at Ask Your Broker.

Trade Compliance Verifications – July 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Canada Border Services Agency (CBSA) publicly releases a semi-annual list of all of its active compliance verification priorities, in the interest of transparency and the promotion of self-compliance. It recently published its trade verification targets for the second half of 2016. While new targets have been added, many continue from the past. The eight new items on the list range from live plants to cell phone cases.

 

Types of Post-release Verification Processes

The CBSA manages compliance with the Tariff Classification, Tariff Treatment, Valuation, and Origin programs using the following two post-release verification processes:

1. Random Verifications

Random verifications are designed to measure compliance rates and revenue loss and the results may be used for many purposes, including:

  • Risk assessment;
  • Revenue assessment; and
  • Promoting voluntary compliance.

2. Verification priorities

Targeted verification priorities are determined through a risk-based, evergreen process, meaning that new targets are added throughout the fiscal year. Verification priorities may also be carried over from previous years.

 

Trade Compliance Verifications – July 2016

A summary of the current targeted priorities can be found below:

Tariff Classification (TC) HS Number(s)
Curling Irons (Round 2) 8516.32.10
Spectacle Lenses (Round 2) 9001.40.10 and 9001.50.10
Furniture for Non-Domestic Purposes Various goods of Headings 94.01 and 94.03
Seaweed (Round 3) 1212.21.00 and 1212.29.00
Dextrins and Other Modified Starches (Round 3) 3505.10.90
Disposable and Protective Gloves (Round 3) 3926.20.10 and 4015.19.10
Coconut Milk from Asian Countries (Round 2) 1106.30.00, 2008.19.90 and 2106.90.10.90
Batteries 8506.10.10 and 8506.50.10
Gazebos (Round 2) 9406.00.90.20
Footwear ($30 or more per pair) (Round 2) 6403.59.20 and 6403.99.30
Hair Extensions (Round 2) 6703.00.00
Machinery for Public Works 8479.10.00
Special Purpose Motor Vehicles 8705.90.90.90
Polyurethanes in Primary Forms 3909.50.00
Parts for Power Trains Heading 87.08
Geophysical and Oceanographic Instruments Heading 90.15
Cereals Heading 10.08
Articles of Apparel and Clothing Accessories (Round 2) Heading 39.26
Bicycle Parts Heading 87.14
Articles of Plastics Subheading 3926.90
Articles of Iron or Steel Heading 73.26
Vices and Clamps Heading 82.05
Parts for Use with Machinery of Chapter 84 Heading 84.31
Tubes, Pipes and Hoses Heading 39.17
Parts of Lamps Heading 94.05
Chemical Products (Round 2) Heading 38.08
Pasta Heading 19.02
Hair Dryers and Electric Smoothing Irons Heading 85.16
Cell Phone Cases (New) Headings 39.26, 42.02 and 85.17
Mountings, Fittings and Similar Articles (New) Heading 83.02
Stone Table and Counter Tops (New) 9403.90.00
Prepared Meat of Swine (New) Heading 16.02
Live Plants (New) Heading 06.02
Interchangeable Tools (New) Heading 82.07
 Air Brakes and Parts Thereof (New) Subheading 8607.21
Handkerchiefs, Towels and Related Paper Products (New)
Heading 48.18
Valuation HS Number(s)
Apparel (Round 2) Various goods of Chapters 61 and 62
Preparations and Pastrycooks’ Products Various goods of Chapter 19
Origin HS Number(s)
T-Shirts Heading 61.09
Jewelry 7113.11.90, 7113.19.90 and 7113.20.90

As your customs broker, we make every effort to provide you with the right tools and information to ensure that your company is as proactive as possible with the CBSA. In this way, we hope to help lessen your exposure to any penalties or fines.

 

Trade Compliance Education

As part of our ongoing efforts, we offer a number of  Trade Compliance Seminars and Webinars throughout the year on trade compliance, customs audits among other subjects like, HS Tariff Classification, Free Trade Agreements and Rules of Origin, Canadian Food Inspection Agency and U.S. Food and Drug Administration. Visit our upcoming calendar today!

 

Trade Compliance Audit Assistance

Should your company get selected for a customs audit, Pacific Customs Brokers can help. Our Certified Trade Compliance Specialists will work with you to guide your business through the audit process and avoid incurring further penalties.

 

Trade Advisory Services

Our trade compliance consulting services include but are not limited to:

  • Thorough HS database review with ongoing updates
  • Current industry training and education to review transactions completed by customs brokers thereby minimizing errors
  • Experienced counsel on valuation and origins
  • Strategic advice on withstanding a customs audit
  • Firm support through the challenges of the audit process

For more information about our trade compliance audit services, contact us today or learn more at Canada Customs Trade Compliance.

 

Do you have questions about CBSA’s  July 2016 trade compliance verification priorities? Use the comments section below to leave us your thoughts or email Ask Your Broker .

The Most Crucial Aspect of Global Trade: HS Tariff Codes

HS Tariff CodesEvery commodity that clears through customs must have an accurate and correct Harmonized System code (HS code) applied to it. This code identifies the item to Canada Border Services Agency (CBSA), as well as indicates the duty rate payable.

The Canada Customs Invoices or Commercial Invoices prepared must provide enough detail to identify the goods and correctly establish the H. S. tariff classification code.

Tariff classification can be very complex and speaks to the essential character of the article being imported:

  • What article is being imported?
  • What is the article made of?
  • What is the item used for?

Almost 200 countries, representing about 98 percent of world trade use the Harmonized System as a basis for trade negotiations collecting international trade statistics, quota controls, rules of origin and for statistical and economic research and analysis.

Anatomy of an HS Code:

The HS code is a 10 digit code. The first six (6) digits of the HS code are universal (meaning that all countries use the same first six digits to classify a commodity); the remaining four (4) digits that make up the HS Code are unique from country to country and used for statistics.

Classifying commodities correctly is key with regards to the importer paying the correct amount of duty and avoiding Administrative Monetary Penalty System (AMPS) penalties, or worse, seizure of your goods.

The Customs Tariff book is a comprehensive list of all HS codes laid out in 99 chapters; the progression being from raw products to the most highly processed. These 99 chapters are also broken into 21 sections for ease of reference. The tariff book contains over 10,000 detailed tariff options. In order to select the correct tariff code, you or your customs broker are required to understand the rules contained in the tariff book, and have detailed knowledge of the item(s) being imported.

All imported items must be classified in the Harmonized Tariff System (HTS) using the General Rules of Interpretation and other aids.

 Commodities entering Canada are classified based on:

  1. Six (6) Universal General Interpretive Rules (GIR) and
  2. Three (3) Canadian Rules

 The Six Universal General Interpretive Rules (GIR):

Rule No.1:

The titles of Sections, Chapters and Sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according 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.

Rule No.2:

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 incomplete 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 falling to be classified as complete or finished by virtue of this Rule), presented unassembled or disassembled.

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.

Rule No. 3:

3. When by application of Rule 2 (b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:

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.

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, insofar as this criterion is applicable.

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 No. 4:

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.

Rule No. 5:

5. In addition to the foregoing provisions, the following Rules shall apply in respect of the goods referred to therein:

5(a) Camera cases, musical instrument cases, gun cases, drawing instrument cases, 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 articles when of a kind normally sold therewith. This Rule does not, however, apply to containers which give the whole its essential character.

5(b) Subject to the provisions of Rule 5 (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 containers are clearly suitable for repetitive use.

Rule No.6:

6. For legal purposes, the classification of goods in the subheadings of a heading 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.

The Three Canadian Rules:

1. For legal purposes, the classification of goods in the tariff items of a subheading or of a heading shall be determined according to the terms of those tariff items and any related Supplementary Notes and, mutatis mutandis, 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.

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.

3. For the purpose of Rule 5 (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.

 

Correctly understanding and interpreting the General Interpretive Rules (GIR), and using them to apply the most accurate HS code, is the basis of tariff classification. A customs broker has years of practice using the GIR to apply true and accurate HS codes chosen from the 99 Chapters of the Customs Tariff book.

 

The Explanatory Notes

In addition to the GIRs contained in the Customs Tariff, a second publication, the Explanatory Notes, is used to assist in correctly classifying commodities. The Explanatory Notes is a list of definitions, explanations and rules that apply to and clarify headings and subheadings in the Customs Tariff.

As well as identifying the commodity and duty rate to CBSA, the HS code also indicates if the product requires additional clearances from other government agencies such as the Canadian Food Inspection Agency (CFIA) or Natural Resource Canada (NRCan).

 

Advanced Ruling

In the event that there is no obvious classification that fits the item being imported, an Advanced Ruling should be requested. An advanced ruling ensures that the item will be classified to CBSA’s satisfaction and there will be no penalty for misclassified items. This is recommended for any item that is not clearly stated in the Customs Tariff or appears to have more than one equally applicable tariff.

Should you get an advanced tariff classification ruling from CBSA?

Not all goods require an advanced ruling from customs in order to be properly classified, however the process remains complex and all imported items must be classified in the Harmonized Tariff System (HTS) using the General Rules of Interpretation and other aids. Getting an advance ruling ensures that the tariff classification number used is deemed correct by the CBSA. The advance ruling provides certainty to the importer, or his or her representative, as to how goods are to be classified and thereby facilitates the documentation and other governmental department requirements for clearing goods at the border.

 

Proper classification is the starting point of compliance. A thorough knowledge of the Harmonized System is essential for anyone involved in global trade. If you would like to further your understanding of tariff classification and find the correct commodity codes for your goods, attend our upcoming H.S. Tariff Classification Workshop. In this hands-on session you will learn how to classifying goods and parts , understand the complexities of the various rules of interpretations of the H.S. Tariff System, gain a better understanding of how duties are determined and learn about preferential tariff treatments. Register today!

 

Have questions or comments on H.S. tariff classification? Post your thoughts in the comments section below or email us at Ask Your Broker.