Archive for the ‘Agriculture’ Category


 

USMCA Details | United States Mexico Canada Agreement | NAFTA 2.0

USMCA Details

The United States Mexico Canada Agreement (USMCA)

The U.S., Mexico and Canada reached a revamped NAFTA deal in the 11th hour on Sunday September 30th, 2018. NAFTA 2.0 has been renamed the United States Mexico Canada Agreement.

After more than a year of intense negotiations, the U.S., Mexico and Canada reached an agreement to update NAFTA. NAFTA dates back to 1994 when the pact was originally signed by all three countries to govern the $1.2 trillion worth of trade between the countries.

In August, the U.S. and Mexico resolved an issue over auto manufacturing but Canada and the U.S. still had some contentious points to resolve. The U.S. wanted Canada to open its dairy market to U.S. farmers and Canada wanted to preserve a mechanism for resolving disputes. These goals were eventually achieved which resulted in the new USMCA.

Auto Industry

Starting in 2020, to qualify for zero tariffs, a car or truck must have 75% of its components manufactured in the U.S., Mexico, or Canada, a boost from the current 62.5% requirement. In addition, also starting in 2020, cars and trucks should have at least 30% of the work on the vehicle done by workers earning at least $16 an hour, which will gradually move to 40% for cars by 2023.

Supply Management Agriculture Sector

Canada agreed to set new quotas for dairy imports from the U.S. Canada will still put tariffs on dairy products that exceed quotas. The new quotas will give the U.S. access to 3.6% of Canada’s market. U.S. farmers will now be able to export 120 million eggs into Canada the first year. This will grow 1% per year for the next 10 years. The chicken concession will allow 57,000 metric tons phased in over six years and in year 7 will increase 1% per year for the next 10 years.

Chapter 19

Canada wanted to keep Chapter 19 in place and in the end Chapter 19 remained intact. Chapter 19 allows the U.S., Mexico and Canada to challenge anti-dumping and countervailing duties in front of a panel of representatives from each country. In the past, Canada has successfully used Chapter 19 to challenge the U.S. on its softwood lumber restrictions.

Intellectual Properties Protections

The USMCA has a new IP chapter, which is 63 pages long and contains stricter protections for patents and trademarks, including biotech, financial services and even domain names. Copyright terms in Canada now extend for 70 years beyond the year the creator of the work dies, bringing Canada in line with those of the U.S. and Europe. The IP chapter also includes an extension of the length of time new biological drugs will be protected from generic drug competition, up 2 years from Canada’s previously agreed upon 8 years to 10 years of exclusivity. This was necessary for all sides to update this field as the original agreement was over 25 years old.

De Minimis Threshold

The de minimis threshold or the duty-free amount Canadians can buy in the U.S. and import into Canada without having to pay a duty has increased from $20 to $150. Mexico agreed to raise their de minimis from $50 to $100.

The tax portion of the de minimis threshold has been separated. The new rules will see the tax threshold rise to $40.

For example, when someone in Canada buys something online in the U.S. for $149 they will be spared the duty but they will pay anywhere from $17 to $22 in taxes depending on the province and the tax rate for that province.

Labor & Environmental Rights

Significant upgrades to environmental and labor regulations were made, especially in Mexico. Mexican trucks crossing the border must meet higher safety regulations and Mexican workers must have the ability to organize and form unions.

Chapter 11

Chapter 11 provided companies and investors a special process to resolve disputes with one of the governments of the agreement. The premise being that if an investor put money into a project and then the government changed the rules, there is a dispute process outside the court system where the investor could get their problem resolved. Chapter 11 is essentially gone with the exception of few industries such as energy and telecommunications.

USMCA Timeline

The USMCA will not go into effect right away. Most of the key provisions will not start until 2020. The leader of each country still has to sign the agreement, and then congress in the U.S. and the legislatures in Canada and Mexico have to approve it. This process is expected to take months.

How Will The USMCA Affect You?

You have the opportunity to get an early edge on your competitors with the advantage of a trade advisor. Pacific Customs Brokers has you covered with expert trade advisors who are able to help you navigate the changes that will affect you with the new United States Mexico Canada Agreement.

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Jan Brock | Author

Safe Food For Canadians Regulations To Require License For Businesses

 

Safe Food for Canadians Regulations


Safe Food For Canadians Regulations (SFCR)

If you have a business providing food to Canadians, you will most likely be affected by the new SFCR being implemented January 15, 2019. The SFCR focus is to prevent unsafe foods from entering into Canadian marketplaces, as well as, providing faster means to eliminate unsafe foods when they manage to penetrate the marketplace.

How Will SFCR Affect Food Businesses?

Starting January 15, 2019, if you provide food to Canadians, and the food crosses provincial or territorial borders, you will be required to have a license under the SFCR.

The SFCR will also require you to have preventative controls, traceable goods, packaging requirements, and labeling standards to make sure your food is safe for Canadians.

As a food business, the Canadian Food Inspection Agency (CFIA) has a helpful tool to inform you;

  1. If you need a license,
  2. When you will need the license by, and
  3. How to apply for the license.

What Food Business Activities Will Require A SFCR License?

For more information on if you need a license, the CFIA has also produced a well structured guide “Food business activities that require a license under the Safe Food for Canadians Regulations”. This guide is helpful for the DIY (Do It Yourself) approach. It covers who will need a license and who will not. For instance, if you are going on a road trip across Canada and you have a few snacks, you will not need a license. However, if you are importing food into Canada, you will need a license if you are importing food additives, alcoholic beverages, and for all unprocessed foods listed in Schedule 1 of the SFCR.

An Expert Trade Advisor You Can Rely On

For those who do not want to study the requirements top to bottom, a customs broker or trade advisor will be able to help you navigate the new regulations of the SFCR beginning early 2019. You can contact one of our expert trade advisors today to help you simplify the complicated world of trade.

 

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The Danger in Altering Phytosanitary Certificates

Phytosanitary CertificateIt has come to the attention of the customs brokerage community that there has been an increased occurrence of alterations being made to Phytosanitary Certificates by persons unknown. Specifically, these alterations are in the form of invalid “Shipper’s Original” stamps being affixed to the certificates. As outlined below, modifying documents in this manner is a very serious offense with staggering repercussions.

What is a Phytosanitary Certificate?

A Phytosanitary Certificate is a legal document issued by the National Plant Protection Organization of the exporting country. It certifies that the indicated commodity is free of pests and meets the regulations of the importing country. The Phytosanitary Certificates that are currently being altered are issued by the U.S. Department of Agriculture (USDA) for product entering Canada.

What does ‘Shipper’s Original’ mean?

This is a statement that appears on the bottom of the Phytosanitary Certificate in the form of a pre-printed stamp. There are several variations of the certificate depending on whether it has been pre-printed and filled out by hand or computer generated. Regardless, the words “Shipper’s Original” will appear in either red or black ink on the bottom right-hand corner and may show “Part 1 – Shipper’s Original” versus simply stating “Shipper’s Original”.

Acts that Constitute Alterations

Altering a document includes, but is not limited to:

  • Changing information on the document
  • Attaching a PARS sticker to the document
  • Writing over top of the printing to clarify quantities or other information
  • Cutting out portions of one Phytosanitary and attaching them to another

Suspected Cause for Modified Documents

Due to the unfortunate placement of the “Shipper’s Original” statement, it is relatively easy for the stamp to get cut off on a scan or a fax. The Canadian Food Inspection Agency (CFIA) will reject the certificate if the “Shipper’s Original” is not visible on the documentation that they receive by fax. We believe that this has led to the unauthorized cutting and pasting of this statement from one Phytosanitary Certificate to another.

While it may be viewed as a way to expedite the import process, intentionally modifying a Phytosanitary Certificate in any way is forgery of a legal document. Original copies of each Phytosanitary Certificate are forwarded to the regional CFIA office by which the goods were released. CFIA and USDA can, and do, conduct internal and external audits of the Phytosanitary process and match original copies to the copies faxed to CFIA at the time of importation. In instances where forgery has been discovered, harsh penalties will be assessed against importers, exporters and/or carriers, depending on who is conducting the investigation.

Repercussions for Modifying Phytosanitary Certificates

It cannot be stressed enough that alterations of any kind to legal documents are forbidden and the repercussions for committing these forgeries are severe. The fine print on the Phytosanitary certificate issues the following warning:

Warning: Any alteration, forgery, or unauthorized use of this phytosanitary certificate is subject to civil penalties of up to $250,000 (7 U.S.C. Section 7734(b)) or punishable by a fine of not more than $10,000, or imprisonment of not more than 5 years, or both (18 U.S.C Section 1001).

These penalties will be assessed in addition to Administrative Monetary Penalty System (AMPS) penalties issued by Canada Border Services Agency and the Canadian Food Inspection Agency.

In summary, Phytosanitary Certificates are legal documents that are issued by government agencies and it is a criminal offense punishable by law to alter these documents in any way.

For more information on export certification please visit CFIA’s website: Phytosanitary Certificates

 

Have questions about Phytosanitary Certificates? Leave them in our comments section below or email Ask Your Broker.

Biennial FDA Food Facility Re-registration Now Open

FoodAbout the Food Safety Modernization Act (FSMA) program:

The Food Safety Modernization Act (FSMA) improves the registration process by ensuring, among other things, that the FDA has accurate contact information for each facility. The new registration form also includes new categories of foods. These new categories will help FDA rapidly communicate with the right facilities in the event of an emergency. Food producers and manufacturers have long been required to register with the Food and Drug Administration. Facilities can register online, via mail or fax. If your company is not domestic (not located within the U.S.) you will be required to assign a U.S. agent in your registration. See below for more information on assigning a U.S. agent.

 

Read more in our blog: Food Modernization Safety Act – Re-Registering your Facility with the FDA

The U.S. Food and Drug Administration (FDA) issued further information and guidance regarding registration requirements for domestic and foreign manufacturers, processors, packers or holders of food for human or animal consumption based on changes made by the FDA Food Safety Modernization Act (FSMA) to the Federal Food, Drug, and Cosmetic Act (FD&C Act). Biennial registration renewal for food facilities began at 12:01 AM on October 1, 2014. The updated food facility registration system is accepting food facility registration renewals.

Who must register?

Under the Food Safety Modernization Act (FMSA), all domestic and foreign facilities that manufacture, pack or store food, food ingredients, pet foods or dietary supplements are required to renew their registration with the FDA before the end of 2014 and to re-register every two years thereafter. This represents a change from the previous registration requirement for food facilities. The re-registration form contains new food categories, and requires more detailed and updated contact information.

 Read more in our blog: U.S. Food Safety Modernization Act – Does It Affect Me?

How to re-register a domestic company?

To submit a registration renewal to FDA, a food facility is required to submit required registration information to FDA, including the additional registration information. If you are affected by the new regulations, you may re-register your food facility online.

How to re-register if not a domestic company?

Pacific Customs Brokers offers the following services:

  • Act as your U.S. Agent
  • Assist with FSMA re-registration
  • Answer your queries regarding FDA requirements

Note: Pacific Customs Brokers does not have to be your U.S. customs broker in order to assist your company with FSMA re-registration.   Contact Pacific Customs Brokers for assistance with food facility registrations or the FSMA. To stay current on this topic, you may also want to subscribe to Pacific Customs Brokers weekly trade newsletter.   Do you have questions on the FDA food facility re-registration? Share them in our comments section below.

FDA Releases Updates to FSMA Proposals

Food Safety StampThe Food and Drug Administration (FDA) proposed a number of new rules during 2013 which have been in various stages of “public comment” for some time. The FDA has recently announced updated proposals to four of the seven rules, based on feedback received from the public.

Four Food Safety Modernization Act Rule Revisions

These four updated proposed rules include:

  1. Produce Safety – More flexible criteria for determining the safety of agricultural water for certain uses and a tiered approach to water testing. A commitment to conduct extensive research on the safe use of raw manure in growing areas and complete a risk assessment.
  2. Preventive Controls for Human Food – Requirements that human food facilities, when appropriate, test products and the food facility’s environment, as well as implement certain supplier controls.
  3. Preventive Controls for Animal Food – Requirements that animal food facilities, when appropriate, test products and the food facility’s environment, as well as implement certain supplier controls.
  4. Foreign Supplier Verification Program – A more comprehensive analysis of potential risks associated with foods and foreign suppliers, and more flexibility for importers in determining appropriate supplier verification measures based on their evaluation of those risk

Modifications to Originally Proposed Rules

Some of the modifications to the originally proposed rules include:

  • Revisions to the water quality testing provisions to account for natural variations in water sources and to adjust its approach to manure and compost used in crop production pending further research.
  • Revised definition of which farms would be subject to the produce safety rule, eliminating farms with $25,000 or less in produce sales from being subject to this rule.
  • Spent grains, which are byproducts of alcohol brewing or distilling, commonly used as animal feed,would not be subject to both the animal food rule if the facility already complies with the human food rule.
  • Extended flexibility to determine appropriate supplier verification measures based on risk and previous experience with suppliers.

Commenting on Proposed Regulations

The FDA states that they will accept comments on the proposed revisions for 75 days, and will continue to review previously submitted comments on parts of the rules that will remain the same in their final iterations.  Final rules are now scheduled to be issued in 2014, and will become final within 90 days of issuance.

We should bear in mind that there are still other proposed rules within the FMSA that are in different stages of completion. These are just four of those issues that we believe are of primary importance to importers and exporters who need to ensure all parties within your supply chain are complying with these rules that are now expected to be in place during 2015.

As food and beverage producers adapt to an array of stringent food safety requirements in the coming year, Pacific Customs Brokers is here to help. We can assist you in understanding these regulations and how they may affect your business, all while cutting through the red tape of importing to the United States.

 

Do you have questions about these updates to FSMA proposals? Use the comments section below to offer your thoughts or email Ask Your Broker.

 

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