Archive for the ‘Canada Customs’ Category


 

Possible Trade War: U.S. and Canada

 

Canada, the U.S. and Mexico Flags NAFTA

On June 1, 2018, the U.S. committed to a 25% tariff on imports of steel and 10% tariff on aluminum, on the European Union, Canada and Mexico. The tariffs have triggered retaliatory tariffs on U.S. goods and heightened the chance of a trade war.

The U.S. steel industry will initially benefit from the tariff increase through decreased international competition, driving up the price of U.S. steel and therefore the profits. These profits can be reinvested into the steel industry by improving their technologies and potentially providing more job opportunities.

A potential downfall to the tariff increase is retaliatory measures from U.S. trade partners, as is the case with Canada. Canada has announced $16.6 billion in retaliatory tariffs. The Canadian tariffs will go into effect July 1, 2018, and cover a broad range of commodities. Some, mainly unfinished iron and steel products will be hit with a 25% tariff, while others including many consumer products will be hit with a 10% duty.

 

If history repeats itself, trade policy experts warn tariff increases could cause future harm. An example of this was in 2002, when the U.S. enacted a tariff of 8% to 30% on international steel. The increased tariffs set off a chain reaction with the European Union responding with tariffs of its own and a number of countries disputed the tariffs at the World Trade Organization. The WTO ruled the U.S. violated the international trade agreements, and opened the door for sanctions and retaliation. Retaliation by the EU cost many Americans their jobs, and in late 2003 the U.S. Government reversed the sanctions.

Canada’s Stance

The tariffs could cost the Canadian economy over $3 billion a year.  According to the Canadian Steel Producers Association, Canada is the largest supplier of steel and aluminum to the U.S.  Approximately 90% of Canada’s steel is exported to the U.S. The price of steel and aluminum is going to go up as a result of these tariffs and jobs will be lost in Canada. Steel production employs around 22,000 people in Canada concentrated mainly in Ontario. Canada exports around 84% of its aluminum to the U.S., which represents around 8,300 jobs in the aluminum sector with the majority being in Quebec.

Canadian consumers can expect to pay more for products imported from the U.S. that are largely made of steel and aluminum which could apply to anything from cars, refrigerators, canned sodas and beer.

International Stance

China, and the European Union have also responded negatively to the U.S. tariff increases. Brazil contributes 13%, followed by South Korea at 10%, and Mexico at 9%. The original target China only imports 2% of the U.S. steel imports.

Along with fighting the tariffs at the World Trade Organization, European officials have been preparing levies on an estimated $3 billion worth of imported American products in late June. In a joint statement, ministers from France and Germany said the countries would coordinate their response.

Steel and Aluminum Statistics

Below you can see a few interesting statistics on Canada-U.S. cross-border steel and aluminum trade.

  • In 2017, Canada exported nearly $17 billion of steel and aluminum products into the U.S. (Statistics Canada)
  • More than $14 billion of steel crossed the Canada-U.S. border in 2017 (Canadian Steel Producers Association)
  • Canada exported $11.1 billion of aluminum and aluminum articles to the U.S. in 2017 compared to $3.6 billion of imports from the U.S. (Statistics Canada)
  • Close to 45% of Canada’s steel production is exported to the U.S.  Predominantly to Michigan, Ohio, Illinois, and New York.
  • Over 50% of American steel exports go to Canada.
  • Canada sent more than $5.6 billion of primary aluminum exports to the U. S. in 2016. New York, Kentucky, Michigan and Pennsylvania are the top destinations.
  • Between 2000 and 2015, Canada’s share of world aluminum production fell from 10% to 5%. For the U.S. from 15% to 2.7%. While China’s increased from 11% to 55%.
  • U.S. aluminum production fell following the 2008 financial crisis and recession. It was up 6.9% in 2018 from 2017.
  • Canadian aluminum production is down 7.6% for the first two months of 2018 compared to the same time in 2017.

The Beginning of the End for NAFTA?

With the likelyhood of eliminating multilateral trade agreements in favor of bilateral trade agreements. In order to have control over your trade in these uncertain times, you must arm yourself with the knowledge of what your duty rates will be without NAFTA, alternative countries of origin for your imported goods and freight quotations on getting your goods from your new origin to the final destination.

You can talk with our trusted trade advisors to determine your rate of duty without NAFTA. Click here to get in contact with a trade advisory expert today.

Jan Brock | Author

 

 

 

 

 

 

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CBSA Releases 2018 Departmental Plan

CBSA Departmental Plan

The CBSA Departmental Plan for the next two years supports the Government of Canada’s effort to improve travel and trade facilitation. The departmental plan covers a number of initiatives specific to various modes. The trade initiatives are as follows:

Pre-clearance for Cargo

CBSA will continue to advance the development and expansion of the pre-clearance program for cargo. In 2018-19 CBSA will work with U.S. Customs and Border Protection (CBP) on the Bi-national Rail Cargo Pre-screening Pilot. This Pilot involves CBSA Border Services Officers (BSOs) pre-screening rail cargo by viewing x-ray images of northbound rail cars at Rouses Point, New York. BSOs working with U.S Customs officers can note any irregularities and finish processing the goods in Canada. This pilot is the first time Canadian BSOs have worked in the U.S.  Additional pilot projects are being promoted. Canada is working to develop required legislative and regulatory frameworks to make this a reality. Bill C-23, the Preclearance Act,  is one example of this.

Marine Container Examination Facility

CBSA has invested in the new Marine Container Examination Facility at Roberts Banks, which is near completion. This is a joint project with the Vancouver Fraser Port Authority. This facility is scheduled to be operational in the summer of 2018.

CBSA Assessment and Revenue Management

The CBSA Assessment and Revenue Management (CARM) project is forging ahead. This project automates the processes to assess, collect, manage and report on revenue. It enables importers to self-assess and comply with Canada’s trade requirements. In 2018-19 CBSA will work with a third party vendor and external stakeholders to proceed with the design phase of the CARM project.

Improved Compliance and Duty Collection

The CBSA will conduct an analysis in 2018-19 to identify improvements in trade compliance and duty collection as identified in the 2017 Auditor General’s Report.

Anti-dumping and Countervailing

CBSA will implement new scope proceedings and anti-circumvention investigations to further strengthen the administration of the Anti-dumping and Countervailing Program.

Trusted Trader Mutual Recognition Arrangements

The CBSA intends to advance the Trusted Trader Mutual Recognition Arrangements (MRA) with China and EU and is pursuing an MRA negotiation with Hong Kong and Brazil.

Trusted Trader Corridor Concept

CBSA intends to pilot a Trusted Trader Corridor Concept (TTCC) in the highway mode. The TTCC is expected to create a seamless border experience where pre-approved, low-risk drivers with pre-approved low risk goods can cross the land border though an expedited process.

Harmonize C-TPAT and PIP

CBSA is moving to harmonize the Partners in Protection (PIP) program with the U.S. Customs-Trade Partnership Against Terrorism(C-TPAT) program with a focus to implement a joint application process for highway carriers.

Emerson FAST Lanes

CBSA intends to expand Free and Secure Trade (FAST) by adding FAST lanes in Emerson, Manitoba in late 2018

Revise Trade Appeal

CBSA intends to revise the internal Trade appeal process.

Additional Port Of Entry

And lastly the CBSA will continue to work closely with the Windsor-Detroit Bridge Authority to advance the Gordie Howe International Bridge project, which will add a new border crossing option at the busiest trade corridor between Canada and the U.S.

Advice You Can Trust

Pacific Customs Brokers strives to stay ahead of all CBSA and Canadian government initiatives. If you need any help regarding CBSA’s new initiatives please contact our experienced trade compliance team for expert trade advisory services.

Jan Brock | Author

 

 

 

 

 

 

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Canada Customs Focus: Improve Tariff Rate Quota Enforcement

Grapes and Cheese

The Office of the Auditor General of Canada (OAG) reported on the mismanagement of tariff rate quotas. Both Canada Border Services Agency (CBSA) and Global Affairs Canada were provided feedback to improve. This was included in the Spring Report to Parliament – Report 2 – Customs Duties, in May of 2017.

Limits on Tariff Rate Quota Exceeded

The OAG reported that “the Canada Border Services Agency and Global Affairs Canada did not work together to adequately manage the limits on quota-controlled goods coming into Canada.” The OAG estimated in 2015 the government should have assessed approximately $168 million of customs duties on imports of quota-controlled goods. Simply, the quota limits were exceeded. The goods included in this loss of revenue were dairy, chicken, turkey, beef and eggs.

Tariff Rate Quotas Protect Canadian Industry

This is important since quotas and Customs duties protect Canadian markets. By limiting the import of certain products, the Canadian government can assist Canadian businesses which compete with products that face fierce competition from export markets.

Certain goods imported into Canada are quota-controlled. Canada applies tariff rate quotas on these goods, which is a two-tier level of Customs duty rates. This is done to control the volume of goods coming into Canada. Examples of quota-controlled goods are dairy products, chicken, turkey, beef and egg products. A tariff rate quota sets a volume of a good which can be imported into Canada at a lower rate of duty and once the quota has been reached duties on subsequent imports are applied a higher rate of duty.

What Goods are Subject to Tariff Rate Quotas?

Goods subject to tariff quotas are listed in the Import Control List of the Export and Import Permits Act. Importers must obtain a permit from Global Affairs Canada either directly or through a Customs broker to bring these goods into Canada. If the importer does not have a permit to import a quota-controlled good at the time of the import, the CBSA allows the importer five days to get a permit from Global Affairs Canada.

Failure to Enforce Tariff Rate Quotas

The OAG report found that CBSA was negligent by failing to enforce the permit for quota-controlled goods in 2015. CBSA recorded the permit information in one system and the duties and taxes paid and owed in another. This meant the permitted amount and the actual amount imported on quota-controlled goods were rarely compared.

Global Affairs Canada were responsible for issuing the authorizations, certificates and permits for items on the Import Control List. However, the volumes imported did not match the volumes authorized at a lower rate of duty. The OAG found importers likely imported a significant volume of controlled goods into Canada without a permit and without paying the appropriate amount of duty.

Focus to Improve Tariff Rate Quota Enforcement

Both Global Affairs Canada and CBSA agreed they need to work more closely together to better enforce tariff rate quotas. Both parties agreed tighter enforcement would commence by September 2017.

It is important to note that regardless of whether a permit, a certificate or other authorization is issued or granted under the Export and Import Permits Act (EIPA) by Global Affairs Canada, it is the Importers and Exporters responsibility to ensure ALL requirements are met with respect to their importation of tariff rate quota goods.  Ensure all of your imports have been properly declared and duty paid before an audit determines otherwise.

You can contact a Pacific Customs Brokers Trade Advisor to assist you with reviewing your processes and help you obtain a permit or authorization from Global Affairs Canada.

Jan Brock | Author

 

 

 

 

 

 

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Deadline of Single Window Initiative Extended by CBSA

Single Window Initiative Vector

What is Single Window Initiative?

Single Window Initiative (SWI) is a program implemented by Canada Border Services Agency (CBSA) to streamline the sharing of data between the import community and the Canadian government.

You learned in our previous post, What is the Single Window Initiative, the amount of data reported in the current declaration to CBSA will increase under SWI when the commodities being imported are subject to Participating Government Agency (PGA) review. Therefore, the amount of information you will provide at the time of the import will increase to include any additional details the PGAs require.

If you are unsure of what Participating Government Agencies regulate your goods, you can find out in our guide, What Does My Commodity Need.

CBSA Extends Single Window Initiative Deadline

CBSA is implementing the recommendations made by the Federal Auditor General’s (OAG) Report 1 – The Beyond the Border Action Plan. The OAG recommended CBSA consider the perspectives of their stakeholders and ensure SWI enhanced the benefits to the stakeholders needs. CBSA has continued to reach out to its trade chain partners and with this extension the trade community will be able to become more equipped to handle SWI and IID changes.

It was reported by CBSA in March only 125 customs brokers were on board with SWI and less than 5% of transmissions per month were using Integrated Import Declaration (IID).

CBSA announced it “recognizes the transformative change SWI adoption represents to the trade community” and as a result has extended the deadline to onboard SWI/IID to January 1, 2019 and to decommission service options OGD PARS and OGD RMD to April 1, 2019.

CBSA realizes system changes for importers and customs brokers are costly. Identifying and completing data elements is a big step with SWI in comparison to faxing a permit to a PGA. In addition, if an importer is entering into a service agreement with a third party service provider for SWI the process is lengthy and can be complicated. The trade community has clearly stated it needs more time.

Are You Prepared for Single Window Initiative?

Although the deadline has been pushed a year, some early adopters have already implemented SWI reporting at the time of importation. Therefore, your imports that have previously entered Canada without issue, may now experience delays with CBSA and PGAs if they require additional information and you are not SWI ready.

Being an early adopter of SWI has allowed us to work out the technological changes and data sharing, far in advance of the implementation date. The strides our team is taking to accomplish being SWI compliant will greatly benefit you.

Pacific Customs Broker is proud to have passed all 99 test cases provided by CBSA and received CBSA’s endorsement for SWI readiness.

If you are importing into Canada we highly recommend you speak to your customs broker to ensure you are prepared for SWI and the IID requirements. If you prepare now you can become SWI compliant before the implementation phase is complete, and you will be able to trade with confidence knowing you are ready once SWI is fully implemented.

Have concerns about SWI or the IID? Tell us about them in the comments section below. As national members of the Canadian Society of Customs Brokers, we advocate for you by sharing your concerns to policy makers.

Jan Brock | Author

 

 

 

 

 

 

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How to Import for a Trade Show in the U.S. or Canada

 

 

Trade Show Imports Stand

Are you attending a trade show across the border? This post will teach you what you need to know about Trade Show Imports into the U.S. or Canada.

Trade Show Imports: Saul Better Call Us

Saul was going to display his super duper machine at a trade show in Houston, Texas. His machine was bound to be a disruptor in the market and he was excited to show it off. Saul booked his booth, made his travel plans and hooked his machine to the back of his pick up, threw his promotional material in his suitcase and headed for the border.

What Saul did not know was he had to take certain steps before he made his way out of Canada and into the U.S.

  1. He did not realize that the entire bottle of window cleaner would need to be declared and the Toxic Substances Control Act (TSCA) would require a statement for the declaration.
  2. Saul did not know that the promotional material he would distribute at the event would need a consumption entry
  3. He did not understand that the super duper machine could be a consumption entry or a bond. A consumption entry would be the better choice if the machine is dutiable. If it is not dutiable, it would be better to use a bond. However, a bond comes with a tight timeline and increases the chance of a penalty.

 

Needless to say, Saul was late to his trade show and he had a few more expenses (in the form of penalties) that he did not account for in his budget.

With 2018 freshly upon us you might have the same opportunity ahead. A trade show could likely be on your horizon. If you are asking the question “how can I get my trade show goods across the border?” first off, kudos to you for researching. Secondly, hooray, you have come to the right place.

In this blog you will find a practical checklist to help you prepare for an international trade show. As well as, what you will need to know to import your trade goods into the U.S. or Canada.


Trade Show Imports Checklist (7)

(1) Take Inventory

Make a list of what you want to bring to the show and split the list into two sections.

Section One

Section one will include anything you could leave behind. Anything you would use, consume, giveaway or sell while in the country.

Section Two

The second section will include everything you will bring home in its entirety.

(2) Remove Purchasable Products

If you have an item that will be used or consumed in the visiting country, a simple option is to buy the product once you arrive rather than import them. A good example would be cleaning supplies. Even something as simple as glass cleaner could provide a hold-up at customs. Purchasing supplies in the country you are visiting will eliminate risks when clearing customs.

(3) Are the Goods Eligible?

Check with Canada Border Services Agency (CBSA), U.S. Customs and Border Protection (CBP), the Participating Government Agency, or your Customs Broker to see if there are any restrictions on the goods you are wanting to take to the show.

(4) Marking, Quantity & Packaging

All samples must meet marking regulations, and they must be within the country’s quantity and packaging requirements. Otherwise your goods could experience delays or be seized at customs.

(5) Entry Type

Find out from your customs broker what is the best type of entry to use for your goods. A Customs Broker will be able to help with your timeline requirements and potentially reduce your costs at customs.

(6) Letter of Recognition

The International Events and Convention Services Program (IECSP) was developed to encourage businesses and organizations to hold trade shows, conventions, events and exhibitions in Canada. They provide guidance and information to facilitate event participants, foreign exhibitors, and temporary imported goods and materials, into and out of Canada.

CBSA offers the IECSP in order for you to have one primary contact to provide you with federal government services and requirements associated with international events and conventions taking place in Canada.

Some trade shows will have a letter of recognition that is provided from CBSA to the event organizer. If the trade show you are attending has a letter of recognition you will be able to contact the event organizer for a copy of the letter of recognition.

If your Trade Show has a letter of recognition, the letter will contain:

  • The name and type of event
  • The date and location of the event
  • The expected number of participants
  • Who is responsible for processing any CBSA documents
    • Event Organizer
    • Customs Broker
    • Delegated Representative
  • A list of goods brought into Canada, their origin and intended use
  • A list of controlled goods being imported
  • A list of goods that will be sold or given away
  • If applicable, a note requesting the event be considered for Border to Show Service
  • What goods can possibly enter duty free and/or receive partial relief from GST/HST

What if the trade show you are attending does not have a letter of recognition? If your trade show does not have a letter of recognition, it means you have no designated exemptions.

(7) Time Limits

Some temporary imports and sample imports must be exported within a certain time frame. Take note of the entry date to make sure you do not go past expiry.

 


Trade Show Importing into the U.S.

Is Your Import Duty Free?

Your import will be duty free if it is recognized in a letter of recognition, if it is imported under a Temporary Import Bond (TIB), or if it is eligible to be imported under a Free Trade Agreement.

Is a Merchandise Processing Fee Applied?

All of your imports require a merchandise processing fee unless they are under a Free Trade Agreement. Unsure of what a Merchandise process Fee is? Check out our Blog Merchandise Processing Fee (MPF) Explained.

Your Recommended Entry

Consumption entries are recommended for anything that is consumable. Any goods where the duty is above $100.00 USD you would best be suited to import under a Temporary Import Bond. Keep in mind Temporary Import Bond items must be exported within 6-12 months depending on the commodity.

Errors You Will Most Often See

In speaking with our U.S. release Operations Manager, Breanna Leininger, she described the most common errors you will see when you try to import items for a trade show into the U.S.:

“The most common errors we see are in packaging and invoicing.  When looking to import goods into the U.S. for a tradeshow it is vitally important to package and invoice consumables such as giveaways separate from the trade show booth. This will prove to be helpful if you are flagged for inspection, as well as open you up to entry filing options that will save you time, money, and a headache.”

Note: We recommend getting items you could buy from a store, such as cleaning supplies, in the country your trade show is in. Items purchased in a store can require additional statements and manufacturing information you may not have access to when purchasing from a store.

Trade Show Imports U.S.

 

 

 


Trade Show Importing into Canada

Is Your Import Duty Free? Tax Free?

Your import will be duty free if it is recognized in a letter of recognition, if it is imported under a Temporary Import Bond, or if it is eligible to be imported under a Free Trade Agreement. To be tax free your import must either be imported on a Temporary Import Bond or waived by a letter of recognition.

Your Recommended Entry

Souvenirs and advertising materials intended for sale or consumption in Canada must be accounted for on a B3. Any branded paraphernalia left in Canada must also be accounted for on a B3. E29Bs are required for returning branded paraphernalia, office machines and equipment, as well as, display goods.

Errors You Will Most Often See

In speaking with our Canadian release Operations Manager, Cherie Storms, she described the most common errors you will see when you try to import items for a trade show into Canada:

“Forgetting to ask the event organizer if the event has been approved by CBSA, and if so, travelling with the approval letter which supports the purpose of entry. Also, bringing in consumables that will not be returned, forgetting that there may be duties and taxes on those”.

Trade Show Imports Canada

 

 

 


Why You Should Declare Your Trade Show Imports

Not declaring items intended for business purposes is illegal. Customs can make samples useless for resale and your goods could even be seized or destroyed. Keep in mind not being prepared at customs can delay your journey. Being forced to complete all of the paperwork at the port of entry can be a huge headache and time consuming. Knowing before you go will make your trade show experience pain-free.

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