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What Does CPTPP Stand For? | CPTPP FAQ

CPTPP

What Does CPTPP Stand For?

The CPTPP stands for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. As of February 2018, CPTPP is a new free trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Who Has Ratified CPTPP?

The countries that have ratified the CPTPP includes:

  • Mexico | June 28, 2018
  • Japan | July 6, 2018
  • Singapore | July 19, 2018
  • New Zealand | Oct 25, 2018
  • Canada | Oct 29, 2018
  • Australia | Oct 31, 2018
  • Vietnam | November

Who Has Not Ratified?

  • Peru | Expected before 2019
  • Brunei
  • Chile
  • Malaysia

When Does It Start?

Since 6 of the countries have ratified, CPTPP will start on Dec 30th, 2018. For all of the countries that have ratified, they will be able to start using the agreement on Dec 30th. For the rest of the countries who have yet to ratify, the agreement will come into force for them 60 days after that country ratifies and deposits as well.

When Was It Signed?

The CPTPP was signed on March 8th, 2018, in Santiago, Chile.

When Will CPTPP Come Into Force?

The CPTPP will come into force on Dec 30th, 2018, which would mean 2018 is year 1 and 2019 is year 2. Which means faster duty reductions. The “years” for the agreement run from Jan 1 – Dec 31.

Who Can Use The CPTPP Agreement?

The agreement can only be used by the countries that have ratified the agreement.

For example, since Canada is ratified but Malaysia is not, Canada and Malaysia are not able to use the agreement with each other until Malaysia ratifies and the 60 days has passed.

What Are The Benefits?

Approximately 98% of the customs duties will be removed at the time of final implementation. Once CPTPP comes into force, many commodities will be duty free upon entry. The elimination of tariffs will depend on the staging category. Some items will have the duty reduced faster than others. A few commodities will not be reduced at all.

Are You Prepared For The Agreement?

The CPTPP agreement will affect the world of trade. Are you prepared for the new CPTPP agreement? You can learn about the rules of origin, regional value content, de minimis, and more from an expert trade advisor from Pacific Customs Brokers. Contact one of our experienced trade advisors today for your trade edge.

 

 

 

 

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Attention Seafood Importers | New SIMP Regulations Effective January 2019

Seafood Importers

On January 1st, 2019, the Seafood Import Monitoring Program (SIMP) will change.

Do your Seafood Imports fall under the new SIMP regulations?

Your import will be regulated by SIMP if you import any of the following products:

  • Atlantic Cod
  • Blue Crab (Atlantic Crab)
  • Dolphinfish (Mahi Mahi)
  • Grouper
  • King Crab (Red Crab)
  • Pacific Cod
  • Red Snapper
  • Sea Cucumber
  • Sharks
  • Shrimp*
  • Swordfish and Tunas (Albacore, Bigeye, Skipjack, Yellowfin, and Bluefin)
  • Abalone*

*Abalone and Shrimp will now be required to report as of January 1st, 2019.

When does SIMP reporting become mandatory?

The effective date for SIMP is Monday January 1st, 2018. The effective date for SIMP regarding Abalone and Shrimp is January 1st, 2019.

Are U.S. goods that are exported and returned exempt from SIMP?

U.S. goods are NOT exempt from SIMP. It is a safe precaution to obtain required information for even your U.S. goods, as it is hard to foresee if they will leave the country and then be re-entered.  

Is there an official form to be completed for SIMP?

No, there is no official form to be completed for your imports under SIMP. There is a model catch certificate that, when completed, will provide all of the necessary information required to file your entry. We strongly suggest using this template to avoid shipment delays.

Who must obtain the International Fisheries Trade Permit (IFTP) required to file SIMP?

Under the rules and regulations of SIMP, to apply for the IFTP you must be a U.S. Resident. This does not mean that a foreign importer cannot clear goods regulated under SIMP, it simply means they will require to have a company or individual in the U.S. obtain a permit on their behalf and act as their permittee. The permittee must be listed as such on the U.S. Customs invoice, and under SIMP will be considered to be the Importer of Record (IOR). The IFTP holder is responsible for obtaining and retaining all required documents and information required under SIMP at the time of import.

The IOR under SIMP is not the same as the IOR for U.S. Customs purposes. The non-resident company can still act as the IOR with U.S. Customs, clearing the entry under their name and bond. However, the SIMP information and permit (held by the SIMP IOR) must be a U.S. Company. You can apply for your permit on the IFTP website.

Who is legally responsible for goods imported under SIMP?

The entity responsible for retaining and providing the required documentation is the permit holder, also referred to as the Importer of Record under SIMP.  The party that holds the International Fisheries Trade Permit is responsible for having all information required under SIMP readily available upon request at the time of import into the U.S.

What additional information am I required to report on my shipments to the U.S.?

  1. Three letter Alpha Code that represents the Genus and Species of your product must be listed on the catch certificate. The spreadsheet to obtain the appropriate Alpha Code can be accessed here
  2. Name and Flag State in which the vessel is registered. The Flag State is the country the vessel is registered under and must be listed on the catch certificate
  3. Evidence of authorization to fish – For example, your License to Fish or Business Number
  4. Vessel Identifier – IMO number (International Marine Organization)
  5. Fishing Gear Used. For example Longline, Handline pole etc…
  6. Landing Date
  7. Product form, quantity and weight at time of landing
  8. Area of harvest or capture
  9. Point of first landing
  10. The Receiver at time of landing

Can I start sending the information on my Shrimp and Abalone shipments now?

Yes, you are encouraged to start complying with the regulation on shrimp and abalone now so the transition into mandatory reporting will be seamless.

If my goods are subject to NOAA Form 370 reporting am I still required to report under the SIMP regulations?

Yes, goods subject under NOAA Form 370 will also be subject to SIMP reporting starting January 1st, 2018. Some of the information on the NOAA Form 370, will apply to SIMP as well. It is a good idea to cross reference the catch certificate with your NOAA Form 370 to make sure all of the information is completed and you are compliant with both program requirements.

If my goods qualify as a Section 321, do I still have to file an entry?

Due to limitations with U.S. Customs software, all goods that require SIMP reporting will require a formal entry, Section 321’s will not be allowed.

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Canada Imposes Provisional Safeguard Surtax On Seven Steel Products

Steel Surtax

On October 25, 2018, the Government of Canada imposed a provisional safeguard surtax of 25% on imports of certain steel products.

What Steel Products Are Affected By The Surtax?

  1. Heavy plate
  2. Concrete reinforcing bar (rebar)
  3. Energy tubular products
  4. Hot-rolled sheet
  5. Pre-painted steel
  6. Stainless steel wire
  7. Wire rod

A complete description of the products that are subject and their tariff classifications is found on the Department of Finances website.

What Countries Are Exempt From The Surtax?

  • United States
  • Chile
  • Israel or other beneficiary of the Canada-Israel Free Trade Agreement
  • Mexico
    • However, energy tubular products and wire rod imported from Mexico are subject to the provisional safeguard.
  • Developing countries
    • With the exception of imports of rebar from Vietnam, which are subject to the provisional safeguards.

What Are The Exceptions To The Surtax?

There is a specified quantity of these products that can be imported from each country, free from the safeguard surtax, under Tariff Rate Quotas administered by Global Affairs Canada (GAC). A shipment specific import permit must be obtained from GAC prior to final accounting of the Customs entry (within 5 days of customs release). Global Affairs has a Notice to Importers which includes detailed information about tariff rate quota and permits.

Quota will be issued to importers on a first come, first served, shipment-specific basis. Once the quota runs out, permit applications will be rejected and surtax will be applicable to imports of these products.

What Steps Should An Importer Take?

Review Your Steel Products

Review the steel products you import and compare them to the list on the Department of Finance website. Based on tariff, description and origin, are your steel products subject to the provisional safeguards?

If the products you import are subject to the provisional safeguards, you must advise your customs broker which products fall within the scope, in order to potentially reduce surtaxes by way of Tariff Rate Quotas.

For imports of any subject goods, we recommend copies of your Customs documents are provided a minimum of 48 hours in advance but no more than 5 days in advance of Customs clearance with a request for an import permit. Your Customs documents should include the statement “Goods Subject to Provisional Safeguards” and an indication of which items are subject.

Obtain Your Export and Imports Permits Act File Number

Ensure your companies Export and Import Permits Act File Number with GAC is open and active, then you are able to apply for a Tariff Rate Quota permits. You can check directly with GAC to determine the status of your file number. Once you have confirmation your file number is active, you can send your customs broker the number to add to your account information.

If the products you import are classified under the tariffs listed and originate in a subject Country but are NOT of the specifications listed, ensure your Customs documents include a detailed description and the statement “Goods Not Subject to Provisional Safeguards.”

If your Customs documents do not contain enough information to confirm if the products are subject or exempt, contact your customs broker to verify this information prior to final accounting.

Also, if surtaxes are not paid on subject goods at the time of import, CBSA can issue Detailed Adjustment Statements for the additional amounts and interest, as well as fines for non-payment.

Trade Advice You Can Trust

If you would like assistance verifying if your products fall within the scope of this order, Pacific  Customs Brokers expert Trade Advisors would be happy to assist you. Connect with an experienced Trade Advisor today to get your edge in the world of trade.

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USMCA Effective Date | Is The Deal Done?

USMCA Effective Date

In the USMCA Details blog you learned what is new in the revised North American Free Trade Agreement (NAFTA). This includes the changes to the auto industry, dairy, Chapter 19, intellectual properties and de minimis threshold. The next question on your mind is when will the United States Mexico Canada Agreement (USMCA) become live, in other words,  when is the USMCA effective date?

When Is The USMCA Effective Date?

The USMCA is not in law yet, and will not likely be until 2020. As of late October, 2018, NAFTA is still live. A few bureaucratic knots are still tied, and this blog will cover what needs to happen in each respective country until the USMCA is effective.

What Steps Do The Countries Have To Take Before USMCA Is Effective?

All three countries still have a number of steps to take before the USMCA comes into force.

  1. All three governments will take a look at the agreement and gather a better understanding of the NAFTA revisions.
  2. Each country will sign the USMCA agreement. The signing is projected to take place at the end of November. Conveniently prior to Mexico’s next President entering into office December 1st, 2018.
  3. Finally, each country must take their specific necessary steps to ratify and implement the USMCA.

How Will the U.S. Ratify And Implement USMCA?

In the U.S., the President notified Congress of the intent to sign a trade agreement with Mexico and potentially Canada, on August 31st. The notification set off the Trade Promotion Authority (TPA). The 90-day consultation period finishes at end of November where the USMCA could, in principle, be signed.

All three leaders could sign the agreement at the G20 Leaders Summit in Buenos Aires, which is scheduled for the end of November. The U.S. Midterm elections take place November 6th, 2018 and the new incoming Congress takes effect January 3rd, 2019. The U.S. Administration has 60 days from signing the agreement to submit a list of changes. The Final Agreement text is submitted to Congress at least 30 days prior to implementing it as Legislation.

Sometime in April, an Implementation Bill will be introduced in the House and the Senate where it is debated and considered before a final vote. Around the middle of July 2019, the Senate will vote on the USMCA Implementation Bill and then shortly after the President will sign the agreement into law.

How Will Canada Ratify And Implement USMCA?

For Canada, once the agreement is signed it will be tabled in the House of Commons for discussion. There is a full discussion but no vote to change the text of the agreement. The House of Commons has 21 days to consider the agreement before the Executive takes the necessary steps to ratify it. The Cabinet controls the ratification. The Governor – in Council (Cabinet) prepares an Order-in-Council authorizing the Minister of Foreign Affairs to sign an Instrument of Ratification or Accession.

After, an Implementing Bill is tabled in the House of Commons where the treaty is implemented into Canadian Law. Once the Bill is passed in the House of Commons it is sent to the Canadian Senate where it is debated. It is possible that the Senate may quash the Bill. If passed, the Bill is then provided to the Provinces and Territories, which may pass provincial legislation regarding the Bill. Regulations are then written to implement the Bill.

The date the agreement comes into force is part of the agreement itself, January 2020. The pressing timeline for Canada is to have all of the above completed before October 2019 when Canada has its next Federal Election.

How Will Mexico Ratify And Implement USMCA?

Mexico has a similar process to Canada. Most of the process is already complete and Mexico intends to ratify the agreement in December 2018 when the New President takes office.

Will The USMCA Come Into Effect?

The USMCA is far from being a reality and anything can happen in the U.S., Mexico and Canada to throw this agreement off the tracks. You will know if the USMCA is a reality by July 2019.

If the agreement fails, the original NAFTA would remain in effect until the time NAFTA 3.0 is renegotiated.

If you have questions about NAFTA or USMCA feel free to contact our Trade Advisory Specialists for NAFTA or USMCA details, and how they will affect you.

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Canadian Steel And Aluminum Importers Can Receive U.S. Surtax Relief At Time Of Import

Steel Railroad

You learned in Are You Eligible To Request Remission Of Canada’s New U.S. Surtaxes? how an importer can receive a refund on surtax paid in special circumstances of steel and aluminum imports. But as an importer of steel or aluminum, what if you could avoid paying the surtax at the time of import?

On October 11th, 2018, Canada Border Services Agency published the United States Surtax Remission Order. The Order notes that certain commodities can be relieved of paying the surtax at the time of import. To be relieved of surtaxes the items must be classified under the tariffs and be of the same description listed in Schedule 1 and Schedule 2 of the remission order. A description of the conditions these products must meet are listed below:

What Steel and Aluminum Commodities are Relieved of U.S. Surtax?

In this Notice, CBSA states “Remission is granted for those goods described in Schedule 1 and Schedule 2 attached to the remission order under the following conditions:

  • (a) the good listed in the schedule was imported into Canada on or after July 1, 2018 and subject to surtaxes;
  • (b) no other claim for relief of the surtax has been granted under the Customs Tariff in respect of the good;
  • (c) the importer makes a claim for remission to the Minister of Public Safety and Emergency Preparedness within two years after the date of importation.
  • (d) the importer files, on request, the evidence or information that the Canada Border Services Agency requires to determine eligibility for remission;
  • (e) the importer agrees that it is subject, at any time, including after the remission, to review by the Canada Border Services Agency for the purpose of determining whether the information supplied by the importer under paragraph (c) or (d) is accurate and complete and whether the facts on which the Canada Border Services Agency relied or intends to rely to determine the eligibility for remission remain unchanged in all material respects; and
  • (f) at the time when the Canada Border Services Agency conducts the review referred to in paragraph (e), the Canada Border Services Agency must be able to conclude that the information supplied remains accurate and complete and that the facts remain unchanged in all material respects.
  • (g) goods described in Schedule 2 must be imported into Canada no later than December 31, 2018.” Canada border Services Customs Notice 18-16, october 11, 2018.

Proof in meeting these criteria must be provided.

What Other Commodities are Relieved of the U.S. Surtax?

Remission is granted for goods classified under tariff item No. 8903.10.00, 8903.91.00, 8903.92.00 or 8903.99.90 in the List of Tariff Provisions set out in the schedule to the Customs Tariff, excluding those that have been exported from Canada and then subsequently re-imported into Canada. Remission for these goods is granted under the following conditions as stated in the Notice:

  • (a) the good was imported into Canada on or after July 1, 2018 and subject to surtaxes;
  • (b) the good was both purchased under contract and sold under contract prior to May 31, 2018;
  • (c) no other claim for relief of the surtax has been granted under the Customs Tariff in respect of the good;
  • (d) the importer makes a claim for remission to the Minister of Public Safety and Emergency Preparedness within two years after the date of importation;
  • (e) the importer files, on request, the evidence or information that the Canada Border Services Agency requires to determine eligibility for remission;
  • (f) the importer agrees that it is subject, at any time, including after the remission, to review by the Canada Border Services Agency for the purpose of determining whether the information supplied by the importer under paragraph (d) or (e) is accurate and complete and whether the facts on which the Canada Border Services Agency relied or intends to rely to determine the eligibility for remission remain unchanged in all material respects; and
  • (g) at the time when the Canada Border Services Agency conducts the review referred to in paragraph (f), the Canada Border Services Agency must be able to conclude that the information supplied remains accurate and complete and that the facts remain unchanged in all material respects.” Canada border Services Customs Notice 18-16, october 11, 2018.

CBSA further states that the remittance will only be granted if they were correctly classified under tariff item No. 8903.10.00, 8903.91.00, 8903.92.00 or 8903.99.90. The item could not have been exported from Canada and then re-imported, unless temporarily imported for repair, alteration or storage. Proof of meeting all criteria must be provided.

Are Goods Temporarily Imported Into Canada Relieved of U.S. Surtax?

Yes, if they were imported for repair, alteration, or storage and the following criteria are met as outlined by the Notice.

  • (a) the goods are exported immediately after having been repaired, altered or removed from storage, whichever occurs last, but no later than twelve months after the date on which the imported goods were released; and
  • (b) no other claim for relief of the surtax has been granted under the Customs Tariff in respect of the goods.
  • (c) the importer makes a claim for remission to the Minister of Public Safety and Emergency Preparedness within two years after the date of importation;
  • (d) the importer files, on request, the evidence or information that the Canada Border Services Agency requires to determine eligibility for remission;
  • (e) the importer agrees that it is subject, at any time, including after the remission, to review by the Canada Border Services Agency for the purpose of determining whether the information supplied by the importer under paragraph (c) or (d) is true, accurate and complete and whether the facts on which the Canada Border Services Agency relied or intends to rely to determine the eligibility for remission remain unchanged in all material respects; and
  • (f) at the time when the Canada Border Services Agency conducts the review referred to in paragraph (e), the Canada Border Services Agency must be able to conclude that the information supplied remains true, accurate and complete and that the facts remain unchanged in all material respects.” Canada border Services Customs Notice 18-16, october 11, 2018.

In order to be eligible for any of these above noted exemptions, the products must both be of a tariff item and description listed in the Department of Finance notice found here: List of Goods Subject to Remission of Countermeasures on Certain Steel and Aluminum Goods from the U.S.

You must also provide proof of meeting these criteria to CBSA. If working with a Customs Broker, you will need to provide supporting documentation to them in order to receive these exemptions.

What If You Already Paid the U.S. Surtax?

If you have already paid surtax on items listed in this post, and would like for us to submit a claim for remission of the surtaxes paid, please provide documentation and/or product literature which proves your product is one of those listed in the linked document above for each import transaction. The CBSA will require this proof in order to review and process the claim for refund of the surtaxes paid. Note: Additional charges will apply for preparing and submitting the request for the refund.

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