Customs Legislation

Customs legislation

Canada's Border Agency is a government agency that manages and enforces nearly 90 acts, regulations, and international agreements. There are also customs laws, customs tariffs, trade permit laws, food and drug legislation, prohibitions, and restrictions on goods. Recent legislation changes have led to increased requirements for information for importers and exporters, and the new regulations will require more information before shipment.

Regulations

To ensure that trade is conducted fairly and openly, the Canadian government has put in place a series of regulations. These include the Customs Act, the Customs Tariff, the Export and Import Permits Act, and the Special Import Measures Act.

The Customs Act is the primary piece of legislation governing the import and export of goods into and out of Canada. The Act sets out the rules and procedures for the clearance of goods and establishes the powers of customs officers to enforce the Act.

The Customs Tariff is a list of goods that are subject to duty, and the rates of duty that apply to those goods. The Tariff also includes a list of goods that are exempt from duty.

The Export and Import Permits Act provides for the issuance of permits to control the export and import of goods that are in short supply or that are otherwise regulated.

The Special Import Measures Act provides for the imposition of special import measures, such as tariffs, on goods that are imported into Canada and that cause injury to Canadian producers.

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Prohibitions and restrictions

In addition to the customs laws, several other laws prohibit or restrict the importation or exportation of certain goods. These include the Food and Drugs Act, the Hazardous Products Act, the Explosives Act, and the Controlled Substances Act.

The Food and Drugs Act prohibits the importation of food, drugs, cosmetics, and medical devices that are adulterated or misbranded.

The Hazardous Products Act prohibits the importation of hazardous products that are not properly labeled or that do not meet safety standards.

The Explosives Act prohibits the importation of explosives that are not properly packaged or that do not meet safety standards.

The Controlled Substances Act prohibits the importation of controlled substances, such as drugs and narcotics.

Trade agreements

Canada is a party to several trade agreements, such as the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO) agreement. These agreements establish rules and procedures for the conduct of international trade and provide for the elimination or reduction of tariffs and other trade barriers.

To take advantage of the benefits of these agreements, importers and exporters must comply with the rules and procedures set out in the agreement.

Permits and licenses

Some goods require a permit or license to be imported into Canada. These include firearms, ammunition, and certain controlled substances.

Importers and exporters must obtain the necessary permits or licenses from the relevant government department or agency before importing or exporting these goods.

Penalties

Violations of customs laws can lead to civil or criminal penalties. Civil penalties can include fines and the seizure of goods. Criminal penalties can include fines and imprisonment.

The above is an overview of Canadian customs legislation. For more information, please consult the relevant legislation or contact a customs broker.

Please note that this is not legal advice and you should always consult a lawyer if you have any questions about the import or export of goods into or out of Canada.

Canada border services agency

The Canada Border Services Agency (CBSA) is the federal agency responsible for administering customs laws. The CBSA is responsible for the clearance of goods entering and leaving Canada, and for the enforcement of customs laws.

The CBSA operates at all major ports of entry into Canada, including airports, land border crossings, and marine ports. The CBSA also operates inland offices, which are responsible for the clearance of goods entering Canada by rail, road, and air.

The CBSA provides a variety of services to importers and exporters, including customs clearance, permits and licenses, and compliance and enforcement.

Customs tariff

The customs tariff is a list of goods that are subject to duty. The tariff lists the rate of duty that is payable on each good.

Duty is a fee that is levied on imported goods. Duty is calculated as a percentage of the value of the good. The value of the good is determined by the CBSA.

The customs tariff is divided into two parts: the general tariff and the preferential tariff.

The general tariff applies to goods that are not eligible for a preferential tariff. The preferential tariff applies to goods that originate in countries with which Canada has a free trade agreement.

Goods that are subject to the general tariff are subject to duty at the rate specified in the tariff. Goods that are subject to the preferential tariff are eligible for a reduced or nil duty rate.

The customs tariff is administered by the Department of Finance.

Customs valuation

The customs value of a good is the value used to calculate duty. The customs value is determined by the CBSA.

The customs value is generally the transaction value of the good, which is the price paid or payable for the good.

In some cases, the transaction value may not be available. In these cases, the customs value may be determined using the method set out in the Customs Valuation Agreement.

The Customs Valuation Agreement is an international agreement that sets out the rules and procedures for determining the customs value of goods.

The Agreement is administered by the World Customs Organization.

Origin of goods

The origin of a good is the country in which the good was produced, manufactured, or grown. The origin of a good is used to determine whether the good is eligible for a preferential tariff.

Preferential tariffs are available for goods that originate in countries with which Canada has a free trade agreement.

The origin of a good is determined by the rules set out in the relevant free trade agreement.

Free trade agreements

Canada has free trade agreements with several countries, including the United States, Mexico, and Chile.

Under these agreements, goods that originate in the country with which Canada has the agreement are eligible for a preferential tariff.

The rules of origin set out in each free trade agreement determine whether a good is eligible for a preferential tariff.

Customs procedures

Importers and exporters are required to comply with certain customs procedures. These procedures are designed to ensure the efficient and orderly movement of goods across the border.

Customs procedures include the following:

- declaration

- classification

- valuation

- origin determination

- payment of duties and taxes

Declaration

Importers and exporters are required to make a customs declaration for all goods that are imported or exported. The declaration must be made in writing and must be lodged with the CBSA.

The declaration must include the following information:

- the name and address of the importer or exporter

- a description of the goods

- the value of the goods

- the country of origin of the goods

- the customs tariff classification of the goods

Classification

Goods imported into Canada are classified under the customs tariff. The classification of a good determines the rate of duty that is payable on the good.

The customs tariff is divided into two parts: the general tariff and the preferential tariff.

The general tariff applies to goods that are not eligible for a preferential tariff. The preferential tariff applies to goods that originate in countries with which Canada has a free trade agreement.

Goods that are subject to the general tariff are subject to duty at the rate specified in the tariff. Goods that are subject to the preferential tariff are eligible for a reduced or nil duty rate.

Customs duties

Customs duties are taxes or charges levied on the import and export of goods. The purpose of customs duties is to protect each country's economy, residents, jobs, environment, etc., by controlling the flow of goods, especially restrictive and prohibited goods, into and out of the country.

Customs also collect important revenue for governments. The level of duty depends on the type of goods being imported or exported and the country of origin of the goods.

Goods that are subject to the general tariff are subject to duty at the rate specified in the tariff. Goods that are subject to the preferential tariff are eligible for a reduced or nil duty rate.

Value-added tax

The value-added tax (VAT) is a tax levied on the import and export of goods. The VAT is a consumption tax that is levied on the value added to goods and services.

The VAT is payable by the consumer of the good or service. The rate of VAT depends on the country in which the good or service is consumed.

In Canada, the VAT is levied at the rate of 5% on the import and export of goods.

Origin determination

The origin of a good is used to determine whether the good is eligible for a preferential tariff.

Preferential tariffs are available for goods that originate in countries with which Canada has a free trade agreement.

The origin of a good is determined by the rules of origin set out in the free trade agreement.

The rules of origin vary depending on the type of good and the free trade agreement.

Some goods may be eligible for a preferential tariff even if they do not originate in the country with which Canada has the free trade agreement. These goods are known as "cumulation" goods.

Cumulation is a system that allows goods to benefit from the preferential tariff even if they do not originate in the country with which Canada has the free trade agreement.

Cumulation is available under certain free trade agreements, including the North American Free Trade Agreement (NAFTA) and the Canada-European Union Comprehensive Economic and Trade Agreement (CETA).

Payment of duties and taxes

Duties and taxes must be paid on all goods that are imported into Canada. The importer is responsible for paying the duties and taxes.

Duties and taxes can be paid online, by phone, or in-person at a CBSA office.

Importers can also arrange for a customs broker to pay the duties and taxes on their behalf.

When goods are imported into Canada, the importer must declare the goods to the CBSA. The declaration is used to determine the value of the goods, the rate of duty that is payable, and the applicable taxes.

Instruments of delegation and subdelegation

Under section 19 of the Customs Act 1901, the CEO may delegate any or all of his or her powers under the Act to a Deputy Commissioner or Assistant Commissioner. The powers that may be delegated are set out in section 20 of the Act.

The person to whom a power is delegated must be an SES employee or acting SES employee.

Under section 21 of the Act, a person to whom a power is delegated may subdelegate the power to another SES employee or acting SES employee.

A subdelegation must be in writing and must specify the conditions under which the power may be exercised.

Free Trade Agreement between Canada and the European Union

The Canada-European Union Comprehensive Economic and Trade Agreement (CETA) is a free trade agreement between Canada and the European Union. The agreement came into force on September 21, 2017. The CETA eliminates tariffs on 98% of goods traded between Canada and the EU. The CETA also provides for the liberalization of trade in services, investment, government procurement, and other areas.

The CETA is the most comprehensive trade agreement ever negotiated by Canada.

The CETA creates a new framework for cooperation on regulatory issues, including technical barriers to trade and sanitary and phytosanitary measures.

The CETA also establishes a Joint Committee on Regulatory Cooperation to oversee the implementation of the Agreement and to resolve any issues that may arise.

The CETA contains a dispute settlement mechanism that is based on the World Trade Organization's Dispute Settlement Understanding.

The CETA also establishes a framework for cooperation on labor and environmental issues.

The Parties to the CETA have committed to ratify the Agreement and to take all necessary steps to bring it into force as soon as possible.

The CETA will enter into force provisionally on a date to be determined by the Parties.

The Agreement will apply provisionally to trade in goods, except for those goods that are subject to tariff-rate quotas.

The Agreement will also apply provisionally to trade-in services, except for those services that are subject to sector-specific limitations on market access and national treatment.

The CETA will not apply to investment until it is ratified by all the EU Member States and by Canada.

The Agreement will not apply to government procurement until it is ratified by all the EU Member States and by Canada.

The CETA will not apply to intellectual property until it is ratified by all the EU Member States and by Canada.

The CETA will not apply to labor and environmental issues until it is ratified by all the EU Member States and by Canada.

The Agreement will enter into force on the first day of the month following the expiration of a period of 30 days after the date on which the Parties to the Agreement notify each other in writing that their respective ratification instruments have been deposited.

The CETA will remain in force for 20 years unless it is extended by the Parties.

The CETA will be reviewed every five years, beginning on the fifth anniversary of the date on which the Agreement enters into force.

The CETA will terminate on the date on which a Party to the Agreement notifies the other Party of its intention to withdraw from the Agreement.