McGill CustomsIssues.ppt [Mode de compatibilit ]) · A "person" who acts as an intermediary between ... The obligation to correct ends 4 years after the accounting of the goods

CUSTOMS ISSUESTHE ROYAL INSTITUTION FOR THE

ADVANCEMENT OF LEARNING

MCGILL UNIVERSITY

Training Session intended for McGill University

Table of Contents

Introduction

1. Role and Services of the Customs Broker

2. Importer’s Responsibilities� Declaration of the goods

� Description of the goods

� Import Permits/Licenses

� Temporary Imports

� Re-importation of exported goods

3. Customs Clearance – Overview

� HVS / LVS

� Penalties

� NAFTA

4. Exports – Summary

Conclusion | Questions

2

INTRODUCTION

� Training Objectives

� Customs’ Key Elements

3


Training Objectives

◘ Provide you with :

� A general overview of the main activities of the Customs Brokerage

� An awareness of laws and regulations governing the importation of goods into Canada; and of exporting goods from Canada

� A basic comprehension of the responsibilities that an importer and its Customs Broker must jointly assume in order to ensure compliant customs operations

4


Customs’ Key Elements

◘ Customs rests on 4 distinctive pillars -

Pillar 1 Pillar 2 Pillar 3 Pillar 4

Customs

Tariff

Classification(HS Codes)

Country

Of

Origin(Manufacturing)

Value(VFD)

Audit Trail(Proof of …)

5



◘ Customs’ Definition

� "Agency, establishment or procedure" for collecting duties by the sovereign law of a country, on imports and exports of goods

BUT ALSO:

� Protection of the border

◘ Environment, Health and Security of its citizens;

� Protection of the national industry

◘ Application of Trade Policies

6



◘ CBSA� Looks after the applicable Customs legislations/

regulations

◘ 6 Acts in Canada

� Customs Act: Gives authority to examine, search, detain and seize goods

� Responsible also to enforce OGDs legislations/ regulations

◘ Foreign Affairs, Trade and Development (FATD)

� Import/export of controlled goods

◘ Health Canada

� Pharmaceutical products

◘ Environment Canada

� Chemical products…

7

ROLE OF THE CUSTOMS BROKER

� Definit ion

� Legislation

� Special ists

� Services

8


Definition | Legislation

Definition

◘ A "person" who acts as an intermediary between two parties involved in commercial & financial transactions

Legislation

◘ Need to be licensed in accordance with the Canadian Customs Laws and Regulations

� Customs Broker license

◘ Must have at least one person who has passed the Customs Brokers Professional Examination from Customs Authorities

9


Legislation

◘ To be issued a Customs Broker License:

� Company must be financially stable

� The person to whom the license is issued must be of age (18 years old); and

� Meet the citizenship requirements

◘ No law that prevents importer doing its own Customs Brokerage

� Except for the full accounting of the goods (B3) that can only be done by a Customs Broker

◘ Importer, through the Agency Agreement, gives the Customs Broker the authority to act on its behalf

10


Specialists

◘ Release Technicians: Responsible, at the port of entry

(border) for all aspects of the release of the imported goods

◘ Individuals that have a Customs Specialist Certification (CSC) from the Canadian Society of Customs Brokers: Ensures that employees are kept up to

date on the changing laws, regulations, policies and procedures of trade

◘ CADEX Technicians: Finalizes import entry (missing

info/docs) and submit B3 to Customs

◘ CADEX Raters: Determine the correct tariff classification

and submit B3 to Customs

◘ CADEX Verifiers: validate entry and submit B3 to Customs

11


Services

◘ Services provided:

� Prepare import and export documents

� Obtain permits or licenses (import & export)

� See to customs clearances of goods

� Arrange for local delivery

� Prepare transactions (B3) for payment of duties & taxes

� Prepare drawbacks & refunds

� Offer consultation services

◘ Pre-audit

◘ Ruling application

12


Services

◘ Services provided …

� Timely and professional services, in accordance with industry standards and in compliance with laws and regulations of customs

� Respect confidentiality of information

� Respect & follow instructions from the client (as per signed agreement)

� Copy of transactions or accounting documents to client

� Prompt reimbursement to client, when applicable

13


Customs Bond

◘ Customs require a ‘Security Deposit’ in order to secure:

� Payment of applicable customs duties;

� Compliance to the declarations; and/or

� Request that goods be returned at border/frontier

�May come from the importer or the Customs Broker, according to the Agency Agreement signed between the two parties

◘ Calculated based on: � An average of the customs duties and taxes (GST)

paid during the last 12-month operated, or

� A minimum of $5 000 CAD

14

IMPORTER’S RESPONSIBILITIES

� Declaration of the goods

� Description of the goods

� Import Permits/Licenses

� Temporary Imports

� Re-importation of exported goods

15


Declaration of the goods

◘ Ultimate Responsibility - IMPORTER

� Even if an Agency Agreement is signed with a Customs Broker

◘ Declaration at the time of importation

� Obligation to provide true, accurate and complete

information

� Declaration of the goods: (4 pillars)

◘ Description/Classification (HS code 10-digit level);

◘ Country of Origin;

◘ Value; and

◘ Audit Trail to back up … classification | origin | value

16


Declaration of the goods

◘ Voluntary Declaration after importation

� 90 days after the "reason to believe" that there is an

error on the: D11-6-6 "Reasons to believe"

◘ Origin

◘ Tariff Classification

◘ Value

… without penalties

� After the 90-day period, must comply with the obligation

to correct BUT subject to penalties (Voluntary

Disclosure Program)

◘ The obligation to correct ends 4 years after the

accounting of the goods (B3)

17


Description of the goods

◘ Description of product� Generic and specific name, if applicable

� Product code or SKU #

BUT

� Specific enough to validate/find classification

Examples:

◘ Biological substances … what type/kind of virus?

◘ Samples (e.g. food grade samples) … what type of food?

◘ Machined Part … what part? for which machine? made from which component (plastic, metal, wood ….)?

◘ AN-240 ???

◘ Animal Tissue/Animal parts … which animal/which part?

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◘ Description of product …

� Specific enough …

Examples …

◘ Specimens … animal, vegetal, mineral?

◘ Vegetable fats and oils … what type of vegetable? Oils or Fats?

◘ Lab reagents … synthetic? Biologic? HS 38.22 Reagents other than 30.02 "blood; vaccines" and 30.06 "blood grouping reagents"

19



◘ Composition of product

� e.g. plastic, metal, wood;

� For textiles products/garments: need fibre composition

◘ Final end-use of product

� Employ directly in teaching or research

◘ Preferential tariff classification and duty free entry

� Parts of general use vs parts to be used solely or principally with …

◘ Tariff classification

AND

� Changes in the end-use

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◘ Origin of product

� Live / natural products

◘ Where (country) product is extracted, harvested, born &

raised, …

� Altered products

◘ Where (country) transformation/manufacturing/ production

is done

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◘ Reasonable advance notice for certain situations

� Ex.: Perishable or temperature sensitive goods

◘ Sending copy of FedEx Waybill + Commercial Invoice + authorization # (FOAPAL) the day of the shipment (before 3:00 pm) to Affiliated (David Jodoin [email protected])

� Can electronically submit PARS to CBSA so when FedEx arranges their delivery the next morning, the goods - being already cleared - can be delivered to McGill

� Otherwise FedEx sends it to Mirabel, awaiting Customs clearance before delivery the following day

22


Import Permits/Licenses

◘ OGDs requirements

Importance

� Must be issued BEFORE all imports

◘ Before the arrival of the goods at the border for release

� Covers the import of very specific products and for specific use

� May cover a specific exporter and specific importer

◘ Several suppliers/users � as many permits as

� Time Limit � must be renewed on time

23



◘ Public Health Agency

� Regulations: Infectious & Chronic Diseases; Health Security …

◘ Covers Human/Animal Pathogens

24



◘ Canadian Food Inspection Agency

� Regulations: Food, drugs, plants, ...

25



◘ Canadian Nuclear Safety Commission

� Nuclear substances; Radiation Devices

◘ Nuclear Safety and Control ACT (NSCA)

26


Temporary Import

◘ Annex Code 9993: Goods temporarily imported for: (D8-1-1)

� Repair / Restore

� Transformation

� Adjustment

� Trade Shows

� Emergency Situations …

◘ Maximum: 18 months (depending on the reason)

� Can be extended if required (maximum 4 years)

� GST exemption for the same period

◘ Extension of the GST exemption is subject to CBSA approval

27


Temporary Import

◘ Annex Code 9993…

� CBSA Form E29B – Temporary Admission Permit

◘ Usually utilized when value of imported goods is very high and Customs Duties otherwise payable

� MUST BE CANCELLED by CBSA

◘ Verification and proof that the goods listed are exported

◘ Otherwise they should be declared for consumption in Canada

28


Re-importation of exported goods

◘ In the same conditions

� Requirements:

◘ Goods must return in the same condition as exported, without having been advanced in value or improved in condition by a manufacturing process or other means, or combined with any other article abroad

◘ Submit a proof of export with sufficient description of goods

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◘ In the same conditions …

� Examples:

◘ 9813.00.00 : Goods originating in Canada, after having been exported from Canada, if the goods are returned without having been advanced in value or improved in condition …

� 9813.00.00.30 – demonstration or exhibition goods of Canadian origin

◘ 9814.00.00 : Goods which have once been released and accounted for …

� 9814.00.00.30 - demonstration or exhibition goods of foreign origin

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◘ Repaired in a Free Trade country: D8-2-26

� Requirements:

◘ The work performed must meet the definition of the terms “repair” or “alteration”

◘ Submit a proof of export with sufficient description of the goods

� Exported to the USA – Form 7501

� Exported elsewhere – B/L

◘ An invoice or written statement showing details and value of repairs or alteration must be supplied by the person who performed the work

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◘ Repaired in a Free Trade country …

� Example:

◘ 9992.00.00 : goods returned to Canada , regardless of the country of origin, after been exported in Canada by a "free-trade country", for repair or alteration (other than 9971.00.00 cruise ships, excursion boats, etc.)

◘ FTAs: Chile, Colombia, Costa Rica, Honduras, Israel, Iceland, Jordan, Korea, Liechtenstein, Mexico, Norway, Panama, Peru, Switzerland, USA

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◘ Repaired abroad: (other than FTA countries) D8-2-1

� Requirements:

◘ It is impossible or not practical to perform the work in Canada

◘ Work must be performed within one year, or any other prescribed period

◘ Submit a proof of export with sufficient description of the goods and the reason for export

◘ Import documents must show separately the value of the goods when new and value of the work performed abroad

◘ Duty paid only on the foreign value (partial exemption)

33

CUSTOMS CLEARANCE OVERVIEW

� Release of imported goods

HVS / LVS

� Penalt ies

� NAFTA

34


Release of imported goods

◘ All imported merchandise must be cleared by Customs and this process varies according to:

� The Mode of Transport (land – truck & rail, air, sea) that will determine:

◘ The type of document (Carrier Manifest) used by the transporter for his declaration; and

◘ The time limits within which he must produce it

35



◘ All imported merchandise must be cleared ... and this process varies according to …

� The Value of the shipment

◘ Low Value Shipments (LVS): less than $ 2,500 (CAD)

� Exception: OGDs requirements fall under HVS

◘ High Value Shipments (HVS): $ 2,500 and more (CAD)

� Affects the time limit for transmitting the Customs Accounting form (B3)

36



◘ In all cases, the merchandise must :

� Be declared at the first port of entry (e.g. road or rail road frontier, airport, maritime port);

� Be released by Customs;

� The full & complete declaration (Accounting) must be transmitted to Customs within the prescribed timeframe, e.g. 5 working days from the date of release

� Duties & Taxes must also be paid within the time limit

◘ As the Importer, you must supply the required information to do so

37



◘ Documents/information to be provided by:

Shipper To the Carrier

� Invoice:

◘ Commercial Invoice; Canada Customs Invoice

◘ Bill of Lading (B/L)

� A valid Certificate of Origin

◘ Proof to use Preferential Tariff Rates (e.g. NAFTA)

� Packing List

◘ Not mandatory for customs; BUT

◘ Highly recommended by the Customs Broker to validate the information on the B/L and/or the invoice

◘ Also used by Customs Authorities during an audit or when requesting paper documents to clear the goods

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◘ Documents/information to be provided by …

Shipper …

� Obtaining Licenses, Permits/Forms for goods controlled by OGDs [exporting country], if applicable

Carrier To CBSA:

� eManifest (electronic manifest)

◘ Advanced electronic transmission of cargo and conveyance data on the CBSA portal

� Declaration of his vehicle and goods he carries on behalf of the importer

◘ Must be received and validated by the CBSA at least one hour before the shipment arrives at the border (highway carrier)

39




Carrier To the Customs Broker:

� PARS (Pre-Arrival Review System)

◘ Carrier code; and

◘ Cargo control number (bar code), unique code number assigned to the shipment

� And all the documents from the shipper

� Informs also about:

◘ The date;

◘ The projected time of arrival at border; and

◘ Which Customs Border (Port of Entry) he will cross with the shipment

40




IMPORTER To the Customs Broker:

� Any other documents relevant to the importation of the goods

◘ Import License/Permit, if applicable

◘ Required Forms by OGDs, if applicable

◘ Temporary Import Form (E29B/TIB)

◘ Single Entry Bond (SEB), if applicable in the U.S.A.

◘ These documents must be provided to the Customs Broker prior to the arrival of the goods at the port of entry

41




IMPORTER …

� Any other relevant documents/information required by

the customs broker in order to submit the B3 to

Customs without rejection

◘ NAFTA certificate, if applicable

◘ Proof of export, when re-importing goods

� From the USA: Entry Summary 7501

� Elsewhere: B/L

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◘ Customs Broker At port of entry

� Upon receiving the documents and information related to the shipment (imports)

◘ Prepare the "release package" in preparation for the customs release; and

◘ Transmit to Customs, through EDI and in advance, all the required information (other documents + PARS) needed for the release1 of the goods

1 The privilege to release the goods without immediately paying the customs duties – appropriate bond posted with financial institution accepted by Revenue Canada


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◘ Customs Broker … CADEX – Customs Automated Data Exchange

� Once the goods are released, the Customs Broker will submit to CBSA, on your behalf, the full & complete declaration (Accounting of goods)

◘ B3 Coding Form

� 5 working days for HVS shipments

� For LVS, the 24th of the month following the imports made during the 1st to 30th/31st of the previous month

44



◘ Port of Entry (by road)

Customs Officer

� Scans the barcode and all the information appears on his computer screen

◘ The documents provided will allow Customs to determine whether the goods covered by the entry requires examination or can be released

� Information are needed to verify:

◘ Value

◘ H.S. classification

◘ Country of Origin

◘ Usage of Preferential Tariff Treatments

◘ Monetary Currency

45


IMPORTER #AB12

HISTORY

1. SEIZURES2. AMOUNT DUE

3. RULINGS

4. SECURITY (PIP/C-TPAT)5. PENALTIES (AMPS)


◘ Customs Officer does not look only at the documents, but also at the importer history listed in their data base

46



Reminder

◘ Even though your imports, into Canada are free of duty (Preferential Tariff under NAFTA) and there are no taxes to be paid, CBSA is still verifying your entries

47


Penalties

◘ AMPS (Administrative Monetary Penalty System)

� Gradual Penalty System

◘ Applicable on the error

◘ Amount varies according to

◘ The type of impact (Risk Criteria - from very low to very high); and the frequency of the infractions

� Contravention limit of 25 000 $ (first audit)

◘ BUT Notice of Penalty Assessment (NPA) may include penalties for multiple contraventions � therefore no $$$ limit in case of accumulation

48


Penalties

◘ AMPS - Example 1

� Importer or owner failed to account for goods (B3) in prescribed time and manner D17-1-5

Penalty (imposed during a verification)

◘ 1st level: $1,200 (1st verif.: Max set at $25,000/contravention)

◘ 2nd level: $2,400 (2nd verif.: Max set at $200,000/contravention)

◘ 3rd and subsequent level: $4,800 (3rd & following verif.:

Max set at $400,000/contravention)

per invoice/document

◘ Retention period: 36 months

49


Penalties

◘ AMPS - Example 2

� Failed to make the required corrections within 90 days after "having reason to believe that" the declaration1 was incorrect D11-6-6

◘ Origin | Classification | Value (VFD)

Penalty

◘ 1st level: 150$ - max. 5 000$ by disputed point (times on the document the error occurs), or $ 25,000 per event (for each document)

◘ 2nd level: 225$ - max. 200 000$ per event

◘ 3rd and subsequent level: 450$ - max. 400 000$ per event

◘ Retention period: 36 months1 Duties and/or taxes owed or not

50


Penalties

◘ AMPS – Example 3

� Importer of the goods failed to supply the proof of

origin upon request (NAFTA cert.) D11-4-2, D11-4-4

Penalty

◘ 1st level: 150$

◘ 2nd level: 225$

◘ 3rd and subsequent level: 450$

per request

◘ Retention period: 36 months

Note: Certificate signed but filled with false, inaccurate and incomplete

information (same $ penalty / per document)

51


Penalties

◘ Administrative appeal applicable case by case

◘ Best defence consist of: � Demonstrate that there are processes and controls in

place ensuring that your goods have:

◘ An adequate description (composition, origin)

◘ An accurate tariff classification (ruling, if necessary)

◘ An exact valuation (rebates, direct/indirect costs, commissions, royalties, related parties, etc.)

◘ A conform declaration (origin, marking, quotas, etc.)

� Prove that the system in place connects the information across all the steps of the logistics and movements of your goods

4

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Customs Compliance

52


NAFTA

◘ Eligible goods:

� Imported directly from a NAFTA territory:

◘ USA

◘ Mexico

� "Originating" as per the NAFTA Rules of Origin

◘ Determination of origin certifying the product

� Accompanied by a valid certificate of origin, or certificate available upon request

◘ Tariff Treatments COUNTRIESCOUNTRIESCOUNTRIESCOUNTRIES TTTTTTTT

United-States UST

Mexico MT

Mexico – United-States MUST

53


NAFTA

◘ The Exporter is responsible:

� For determining if the goods qualified for NAFTA origin; and

� To complete a Certificate of Origin

◘ It may also be completed voluntarily by the producer for use by the exporter

◘ Producer can also provide an Affidavit of manufacture

54


NAFTA

◘ The Importer is thereafter responsible:

� To apply for the preferential rate of duties on imported goods; and

� For all penalties related to non-compliant usage

◘ Important to verify the validity of the Certificate

� The rules of origin ensure that parts and materials not originating from a NAFTA country undergo a sufficient transformation to become a product that qualifies for NAFTA Preferential Tariff Treatment

◘ The rules of origin are based on tariff classification

� Important to have the proper H.S. tariff classification of the finished product, parts and non-originating materials

55


NAFTA

◘ Importers, using a non-valid NAFTA Certificate of Origin, will not be entitle for duty-free entry status

� Customs duties will be applicable retroactively

◘ Tariff classification at the time of imports

◘ Rate of Duty applicable to the year of importation

56


NAFTA - Rules of Origin

◘ Goods qualifying for NAFTA origin must fall under 1 of the 6 following criteria

◘ No Tariff Change or requirements of a Regional Value Content; and

◘ No foreign material allowed

Note: Buying a product from a NAFTA country does not make it "wholly obtained or produced“ from that NAFTA country

CRITERIA A – Goods are "wholly obtained or produced" in the NAFTA

territory (Articles 401 a) and 415)

57


WHOLLY OBTAINED OR PRODUCED (A)

Live Animals Meat Dairy

Sea Products

Hunting/Trapping

Products

Vegetable Products

Recycled Goods

Goods produced from

Ex.: aluminum ingot made from the

mineral

MineralProducts

58



◘ Requires a change in tariff classification; and/or

◘ A Regional Value Content (RVC)

� Will then need to:

◘ Determine the tariff classification of the finished good

◘ Determine the tariff classification of the raw material

◘ Identify the Rule of Origin according to the tariff classification of the finished good, as per Annex 401

CRITERIA B – Goods meet the “specific rules of origin” of Annex 401 of the

Agreement (Article 401b)

59


FINAL PRODUCT

Specific Rules of Origin (B)

Annex 401: 16.01 to 16.05 -

A change to headings 16.01 to 16.05 from any other CHAPTER

ORIGIN: U.S.A.

PORK: H.S. CHAPTER 02

HEADING 02.03

ORIGIN: HUNGARIA

CEREALS (WHEAT): H.S. CHAPTER 10

HEADING 10.01

ORIGIN: U.S.A.

SPICES: H.S. CHAPTER 09

HEADING 09.07 – 09.10

ORIGIN: BARBADOS

ORIGINATING TRANSFORMATION

PROCESS: U.S.A.

SAUSAGES

H.S. CHAPTER 16

HEADING 16.01

60



◘ In addition to meet the NAFTA Rules of Origin, Customs require to have in hands a NAFTA Certificate of Origin, confirming that the contents are "Originating"

CRITERIA C – Goods are wholly produced, in one or more NAFTA countries,

from originating material (Article 401c)

61


NAFTA Originating Material (C)

Annex 401: 8302.10.90.10 (hinges for furniture)

83.02-83.04 - A change to headings 83.02 to 83.04

from any other HEADING

ART. 401 (C) CANADA

ART. 401 (B) MEXICO

Mineral products

Chapter 26Origin: Brazil

ART. 401 (A) U.S. ART. 401 (A) U.S.

1. Finished Product: Office chair of a

wooden frame - 9401.61.90.00

2. Bill of Material:

• Wood US 44

• Fittings MX 83

• Leather US 41

• Screws MX 71

• Bolts MX 71

• Casters MX 39

• Foam CA 39

• Other parts MX 94

3. Manufacturing: Mexico originating

4. Cost of Manufacturing: also accepted as

"Originating"

62



◘ May require a Regional Value Content, calculated using two (2) different methods: A) Transactional Value method; or B) Net Cost method

� Regional Value Content (RVC) :

◘ Goods containing at least 60% of RVC using the Transactional Value method (TV); or

◘ 50% of RVC using the Net Cost method (NC)

CRITERIA DCRITERIA DCRITERIA DCRITERIA D – 1) Unassembled goods; or

2) Goods classified in the same tariff classification as their parts

(Article 401d)

63



64

CRITERIA E CRITERIA E CRITERIA E CRITERIA E –––– Certain automatic data processing goods and their parts, specified

in Annex 308.1

CRITERIACRITERIACRITERIACRITERIA F F F F –––– The product is an originating agricultural product of the reference

criterion A, B or C and is not subject to quantitative restrictions

(other than TRQ) (Reference: Annex 703.2)

Note: not applicable for products wholly originating from Canada

and the US


NAFTA - Certificate of Origin

◘ Information to appear on the Certificate

� Legibly completed in ENGLISH

◘ Sections 1 to 4

65



◘ Sections 5 to 10

66



◘ Section 11

67


NAFTA

◘ Responsibilities:

� Exporters and producers issuing NAFTA Certificate of Origin must:

◘ Keep their NAFTA register for a period of 6 years;

◘ Advise any parties receiving their NAFTA Certificate for any modification affecting the eligibility or validity of the certificate

◘ Supply a copy of their NAFTA Certificate to their own Customs Administration upon request

68


NAFTA

◘ Responsibilities …

� Importers applying for NAFTA Preferential Tariff Treatment on their imports, must also:

◘ Keep their NAFTA register for a 6-year period

◘ Supply a copy of their NAFTA Certificate to their own Customs Administration upon request

� Copy also to their Customs Broker for the full declaration to Customs (B3)

69

Exports - Summary

70


Exports - Summary

◘ Reasons to export:

� Most frequent � Sales

� Others: must be clearly identified on the Commercial Invoice/Proforma Invoice

◘ Goods Returned to Vendor

◘ Repairs (under warranty or not)

◘ Tests

◘ Research

◘ Collaboration (with other Universities/Parties)

71


Exports - Summary

U.S. Customs Bond

◘ If you are importing merchandise into the U.S. for commercial purposes that are valued over $2,500, you must post a Customs bond to ensure that all duties, taxes and fees will be paid

◘ 2 types of Surety Bonds:

� Single Entry Bond (SEB): Rate is calculated on the value, duties and taxes of a single shipment

� Continuous Bond: Yearly rate based on

◘ 10% of the estimated duties payable over 1 year; or

◘ Minimum of $50 000 USD

72


Exports - Summary

◘ Exports to the USA – US Special Classification Provisions

� Products of the US, returning after being exported, without having been advanced or improved in condition abroad

◘ 9801.00.10: Duty Free

� Need Affidavit of Manufacture, signed by US manufacturer, to prove US Origin

� MPF charges not applicable (for US or NAFTA goods)

◘ 9801.00.10.12: Returned for repair/alteration, to be reexported

◘ 9801.00.10XX: Returned of US Goods

73


Exports - Summary

◘ Exports to the USA – US Special Classification Provisions

� Articles to be repaired, altered or processed …

◘ 9813.00.05

� NTR: Duty Free under Bond (TIB)

� NAFTA* origin: Duty Free (* Canada or Mexico)

◘ 9813.00.05.40: Other (repaired/altered)

� Articles intended solely for testing, experimental …

◘ 9813.00.30

� NTR: Duty Free under Bond (TIB)

� NAFTA* origin: Duty Free (* Canada or Mexico)

74


Exports - Summary

◘ Exports to the USA – Example 1: 9813.00.30

1. Temporary entry for further research in the USA; to be returned back to Canada (as stated on McGill Commercial Invoice) Electromagnetic articulography speech research system (EG6 3348275-7)

2. Entered duty-free under TIB, for a limited time period

� No NAFTA certificate or no Affidavit of Manufacture to prove ORIGIN

� TIB MUST be closed when goods will returned to Canada

◘ Truck driver will have to stop at US Customs on his way back to Canada (same port of entry when goods went in the US) to have US Customs officer stamped the TIB for closure

◘ Otherwise goods subject to duties and importer subject to penalties

75


Exports - Summary

◘ Exports to the USA – Example 2: 9801.00.1098

1. US goods returned, with Affidavit of Manufacture (as stated on McGill Commercial Invoice) Multimedia controllers (EG6 3377636-4) | Quick Media Distributor & keypad (EG6 3436938-3)

2. Entered duty-free under US Goods Returned

� Affidavit of Manufacture provided by US manufacturer proving US origin

◘ Note: Affidavits were accepted as supplied because of Low Value; otherwise, need proper Affidavit of Manufacture form (includes additional info needed from manufacturer)

76


Exports - Summary

◘ Exports to the USA – Example 3

1. Returned of loaned item (as stated on McGill Commercial Invoice) ID photonics C band 1 laser (EG6

34177716-5)

� Origin Germany: not subject to US Special Provisions

◘ Duties and MPFs charged

� Goods subject to FDA regulations

◘ Electronic products subject to radiation control standards

◘ Form FDA 2877 MUST be provided with export documentation

77


Exports - Summary


1. Exported for repair (as stated on McGill Commercial Invoice) IR-Viewer (camera) (EG6 3469902-9)

� Origin Canada BUT no NAFTA or other proof of origin to use US Special Classification 98.13.00.05

� Low Value shipment

◘ Duties and minimum MPF charged VERSUS cost of using TIB for "duty-free" entry

� Goods subject to FDA regulations

◘ Electronic products subject to radiation control standards

◘ Form FDA 2877 MUST be provided with export documentation

78


Exports - Summary


1. Exports ("sales") of books (as stated on McGill Commercial Invoice) (EG6 3496682-4 | EG6 3349181-6)

� Important to state the condition of the goods

◘ New VS Used

◘ Impact on Value For Duty

79

CONCLUSION | QUESTIONS

80


Conclusion

◘ Customs and Trades are vast and complex topics

◘ An importer can benefit from certain advantages provided through Customs Laws and Trade Agreements

� As long as Customs/OGDs Requirements are met; and

� Customs Compliance is monitored

◘ This is only an introduction that will enable you to further broaden your knowledge and see if what was learned can apply to your working environment

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