Guide to Importing Commercial Goods

• Introduction
• Before Importing
• Importing
• After Importation
• Duty Deferral and Trade Incentive Programs
• More Information
• Comments or Suggestions?

Introduction

The information in this guide provides an overview of the commercial importing process; it is not intended to replace existing regulations, acts or references.

It is in your best interest to find out as much as possible about reporting, releasing, accounting and paying duties to make sure you conduct your business within the law. Doing business correctly each time you import will save you and the Canada Border Services Agency (CBSA) time and money.

Throughout this publication, we refer you to other CBSA brochures, leaflets and technical documents (D-memoranda) that contain more detailed information. Copies of these publications may be obtained online or by contacting our Forms and Publications Distribution Centre toll-free line at 1-800-959-2221.

You may also buy a complete set of the D series of memoranda by contacting:

Government of Canada Publications
Public Works and Government Services Canada
Tel.: 1-800-635-7943 or 613-941-5995
Fax: 1-800-565-7757 or 613-954-5779
Web site: www.publications.gc.ca

Protecting Canadians

The CBSA is at Canada’s entry points to ensure the security and prosperity of this country by managing the access of people and goods to and from Canada.

The CBSA is responsible for providing integrated border services that support national security and public safety priorities and facilitate the free flow of persons and goods, including animals and plants, that meet all requirements under the program legislation.

In carrying out our responsibilities, our commitment is to serve you with integrity, respect and professionalism. We will serve you in the official language of your choice at designated bilingual offices.

Before Importing

The business number

You must obtain a business number (BN) from the Canada Revenue Agency (CRA) for your import/export account.

There are three ways you can register for a BN or add an import/export account to an existing BN:

• call the CRA's Business Window at 1-800-959-5525;
• visit the CRA's Business Registration online site at www.businessregistration.gc.ca; or
• submit a completed Form RC1, Request for a Business Number (BN), to the nearest CRA office.

You can obtain a copy of Form RC1 from any CRA office or from the “Registering your business” page. CRA offices are listed in the government section of your telephone book.

The BN has 15 characters: nine digits to identify the business followed by two letters to identify the account and four digits for the specific account reference. Different letters are used to identify different types of accounts. The four major accounts are as follows:

RT - goods and services tax/harmonized sales tax (GST/HST)
RP - payroll deductions
RC - corporate income tax
RM - import/export

The import/export account is identified by an “RM” extension. For example, your import/export account will look like this: 123456789RM0001

If you do not use your import/export (RM) account it will expire after two years. You can reactivate it by contacting the CRA's Business Window (the CRA will make the referral to the CBSA). If there is any change in your status (e.g. name or address change), you must report these changes to the CRA's Business Window as soon as possible.

Identify the goods you want to import and their country of manufacture and/or export

You should gather as much information as possible about the goods you want to import. Wherever possible, obtain product samples, descriptive literature and/or material data sheets. This information is crucial to determine tariff classification and, along with the origin information, it will be used to determine the rate of duty your goods will be subject to.

Make sure you are allowed to import the goods

Certain goods are prohibited from entering Canada. For example:

• material that is considered to be obscene, treasonable, seditious, hate propaganda or child pornography;
• used or second-hand automobiles of all kinds (except from the United States);
• used or second-hand aircraft of all kinds (with certain exceptions);
• debased or counterfeit currency;
• certain birds;
• aigrettes, egret plumes and certain other feathers;
• used or second-hand mattresses;
• articles manufactured or produced by prisoners;
• reprints of Canadian works protected by copyright; and
• matches made with white phosphorus.

See the D9 series of memoranda for a complete list of prohibited goods.

Determine if the goods you want to import are subject to restrictions or other requirements

The CBSA is responsible for administering the import requirements legislated by other government departments and agencies.

Certain goods may be subject to import controls, import permits or quotas:

• Controlled imports: For more information on these import controls, visit the Foreign Affairs and International Trade Canada's Export and Import Controls Bureau Web site at www.dfait.gc.ca or call 1-877-808-8838. These controls are pursuant to the Export and Import Permits Act. For more information on this Act, see Memorandum D19-10-2, Export and Import Permits Act (Importations).
• Examples of goods subject to import controls:
  • agricultural products
  • steel products
  • weapons and ammunition (see Memorandum D19-13-2, Importing and Exporting Firearms, Weapons, and Devices Customs Tariff, Criminal Code, Firearms Act, and Export and Import Permits Act)
• Import permits: For more information on obtaining import permits, visit the Export and Import Controls Bureau's Web site at www.dfait.gc.ca or call 1-877-808-8838.
• Tariff rate quotas: For more information on tariff rate quotas, visit the Export and Import Controls Bureau's Web site at www.dfait.gc.ca or call 1-877-808-8838, or see Memorandum D10-18-1, Tariff Rate Quotas. For more information on tariff rate quotas for certain agricultural products and on the Import Control List, see Memorandum D10-18-4, Importation of Certain Agricultural Products and the Import Control List (ICL).

We require that the permits/certificates for goods be presented at the time of importation into Canada. The goods may also need to be examined. If the necessary documentation is not presented at the time of importation, we may detain the goods. The following are examples of specific goods that require permits, certificates and/or examination:

• Automobiles: For more information on importing a vehicle into Canada, visit Transport Canada's Web site at www.tc.gc.ca or see Memorandum D19-12-1, Importation of Vehicles. Also, for more information on importing vehicles from the United States, you can visit the Registrar of Imported Vehicles' Web site at www.riv.ca or call 1-888-848-8240.
• Endangered species of wild fauna and flora: For more information on importing animals and plants and their derived products, visit the Convention on International Trade in Endangered Species of Wild Fauna and Flora's (CITES) Web site at www.cites.ec.gc.ca, call 1-800-668-6767 or see Memorandum D19-7-1, Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).
• Food and agricultural products, animals and animal products, and plant products: For more information on importing these products, visit the Canadian Food Inspection Agency's Web site at www.inspection.gc.ca and consult its Automated Import Reference System (AIRS) and Import Service Centre (ISC) Web pages. You can also call the ISC nearest you:

  Eastern ISC: 1-877-493-0468
  Central ISC: 1-800-835-4486
  Western ISC: 1-888-732-6222

• Precious metals and articles such as jewellery (marking): For more information on precious metals marking, visit Competition Bureau Canada's Web site at www.competitionbureau.gc.ca or call 1-800-348-5358.
• Textiles and textile products: For more information on textile labelling and advertising regulations, call Competition Bureau Canada at 1-800-348-5358. You can also refer to the Guide to the Textile Labelling and Advertising Regulations available at www.competitionbureau.gc.ca.

Please contact the appropriate government department or agency to determine if any documentation is required. For more information on other government requirements, see the D19 series of memoranda.

Tariff classification, rates of duty and taxes, and value for duty

Once you are sure that the goods may be imported, you have to determine the tariff classification number, the applicable tariff treatment, the rate of duty and the taxes you will have to pay when you import the goods.

Classification number

You have to determine the correct 10-digit tariff classification number for each item you are importing. Classification numbers are found in the Customs Tariff. These numbers are used to determine the rate of duty that you must pay when importing.

Most trading countries, including Canada, the United States, Japan and the United Kingdom, use the Harmonized System (HS) as the basis of their classification systems.

The first six digits of the classification number will be the same for all countries using the HS. The other four digits are unique to Canada.

Example
The tariff classification number for women's all-leather shoes that do not cover the ankle and are valued at less than $30 is
6403.59.90.92
6403.59 - the subheading is used for statistical purposes at the international level
90 - the tariff item is used at the Canadian level to vary duty rates
92 - the statistical suffix is used to provide more detailed product information to Statistics Canada

It is important that you use the correct tariff classification number as this information helps to paint a true picture of Canada's economic situation. This information is used nationally to establish monetary policy and promote Canadian interests abroad and internationally by foreign investors who are considering Canada for potential business ventures.

There are special classification provisions in Chapter 99 of the Customs Tariff that are unique to Canada and provide importers with lower rates of duty. These classification provisions eliminate or reduce the customs duty rate for qualifying goods under specific conditions, such as the end use of the goods in Canada. Once you have determined the initial 10-digit classification number in Chapters 1 to 97, you should verify whether your goods qualify for classification under a Chapter 99 special classification provision.

You can determine the tariff classification number in several ways:

• consult the Customs Tariff and legal notes;
• request an advance ruling for tariff classification from a regional client services office (see Memorandum D11-11-3, Advance Rulings for Tariff Classification for more information on advance rulings); or
• call the Border Information Service (BIS) toll-free line during regular office hours at 1-800-461-9999 to speak with an agent.

For detailed information on classifying goods under the Customs Tariff, see Memorandum D10-13-1, Classification of Goods.

Determining the applicable tariff treatment and rate of duty

Once you have determined the correct tariff classification number, you need to establish the applicable tariff treatment that applies to your goods before you can determine the rate of duty. There are two columns listed in the Customs Tariff called “MFN Tariff” and “Applicable Preferential Tariffs.”

• Most Favoured Nation (MFN) Tariff
  Goods originating from all countries except North Korea and Libya are entitled to use the rate of duty specified under this column unless otherwise specified by the tariff item.
• Applicable Preferential Tariffs
  This column lists reduced rates of duty for goods based on trade agreements such as the following:
  
  
  • United States Tariff (UST)
  • Mexico Tariff (MT)
  • Mexico-United States Tariff (MUST)
  • Chile Tariff (CT)
  • Canada-Israel Agreement Tariff (CIAT)
  • Canada-Costa Rica Tariff (CRT)

  or those based on special tariff provisions such as the following:

  • General Preferential Tariff (GPT)
  • Least Developed Country Tariff (LDCT)
  • Commonwealth Caribbean Countries Tariff (CCCT)
  • Australia Tariff (AUT)
  • New Zealand Tariff (NZT)

The requirements of the particular trade agreement or tariff treatment must be satisfied in order for you to benefit from a preferential duty rate. You must possess a valid certificate of origin for the specific trade agreement at the time of importation. For example, to claim the UST you must have a valid NAFTA certificate of origin. Various proof of origin requirements exist for all other preferential tariff treatments. These can include Form A - Certificate of Origin or the Exporter's Statement of Origin. In addition, the goods normally have to be shipped to Canada from a beneficiary country on a through bill of lading.

A complete list of countries eligible for the above tariff treatments can be found at the beginning of the Customs Tariff. Regulations on origin can be found in the D11 series of memoranda (D11-4 and D11-5).

GST, excise tax and excise duty

You will pay 5 percent GST on most goods at the time of importation under Part IX, Division III, of the Excise Tax Act.

Some importations such as prescription drugs, certain medical and assistive devices, basic groceries and certain agricultural and fishing goods are non-taxable. They are listed under Schedule VII of the Excise Tax Act. The codes that are to be used on Form B3, Canada Customs Coding Form, to relieve the GST are listed in Memorandum D17-1-10, Coding of Customs Accounting Documents.

For more information on the GST, contact a CRA GST/HST Rulings Centre at 1-800-959-5525.

You should also check to see if your goods are subject to excise tax or excise duty. Excise tax is levied on the following:

• automobile air conditioners, whether separate or permanently installed ($100 per air conditioner); and
• certain vehicles designed for use as passenger vehicles.

Excise duty is levied on tobacco and alcohol products.

A complete reference to excise rates and excise duties can be found in the Excise Tax Act schedules.

More information on the GST/HST, excise taxes and excise duties can also be found on the Technical information section of the CRA's Web site.

Value for duty

Now that you have established the tariff classification number and tariff treatment, you need to determine the value for duty.

The transaction value method is Canada's primary system of valuing imported goods, and it is based on an internationally approved set of rules under the World Trade Organization's Customs Valuation Agreement, also referred to as the Customs Valuation Code, to which Canada and most of its major trading partners are signatories.

To use the transaction value method, a sale in the country of origin for export to Canada must have taken place, and there must be a price paid or payable for the goods.

Ensure that the vendor or exporter provides you with a receipt or a sales invoice. It should describe the goods in detail and show the selling price and conditions and terms of sale. For more information, see Memorandum D1-4-1, Canada Customs Invoice Requirements.

The value for duty is essentially the price you paid for the goods (selling price) converted to Canadian funds. To this amount, you may need to make certain additions or deductions. In rare cases when you cannot use the transaction value method, you must use other methods to determine the value for duty of the goods. For more details on how to determine the value for duty of your shipments, see the online brochure called Importer's Valuation Guide - How to determine customs value for duty and the D13 series of memoranda.

Calculating duties and taxes

Now you are ready to calculate your duties and taxes.

Take the value in the currency indicated on the invoice. Convert the value into Canadian dollars using the exchange rate in effect on the date of direct shipment (the date the goods began their direct and continuous journey to a specific destination in Canada). To obtain the proper exchange rate call the BIS toll-free line at 1-800-461-9999.

Here is an example of an invoice indicating a value of US$100 (the rate of exchange is 1.15):
US$100.00 x 1.15 = CAN$115.00 (value for duty)
$115.00 (value for duty) x 4% (rate of duty) = $4.60 (customs duties)
$115.00 (value for duty) + $4.60 (customs duties) = $119.60 (value for tax)
Calculate the GST on this value for tax:
$119.60 x 5% = $5.98 (amount of GST)
Total of duties and taxes to pay: $4.60 + $5.98 = $10.58

Other considerations

Anti-dumping duty and countervailing duty

Under the Special Import Measures Act (SIMA), Canada imposes countervailing duties on imported goods subsidized in their country of origin that cause injury to Canadian industry. The CBSA may also assess antidumping duties on goods imported into Canada at prices that are less than their selling price in the country of origin. For more information, refer to the brochure called The SIMA Self-Assessment Guide as well as the D14 and D15 series of memoranda. A listing of goods currently subject to SIMA is available on our Web site.

Marking

Certain goods are required to be marked to clearly indicate at the time of importation the country in which the goods were made. The foreign exporter or producer usually applies the country of origin marking. However, Canadian importers are responsible for ensuring that imported goods comply with marking requirements at the time they import the goods. For more information on marking requirements, including a list of goods that require country of origin marking, see Memorandum D11-3-1, Marking of Imported Goods.

Importing

Identify where the goods will arrive

Most shipments are released at the CBSA office of arrival (land or rail border crossing, international airport, marine port or mail centre). If you use a carrier bonded by the CBSA, you may choose another inland service point that is closer to your residence. For more information on CBSA office locations and hours of service, see the directory of CBSA offices or call the BIS line at 1-800-461-9999.

Identify how the goods will be shipped

Goods arrive via highway, sea, rail, air or by postal or courier service. Use a shipper with a good reputation who knows CBSA procedures well. A carrier who is bonded with the CBSA may transport goods in-bond to different points in Canada for release other than at the border.

Reporting cargo

All cargo must be reported to the CBSA whether you transport it yourself or have a carrier transport it for you. A carrier must report all commercial goods arriving in Canada to the CBSA using a bar-coded cargo control document or the electronic data interchange (EDI) system.

The Advance Commercial Information (ACI) program introduces more effective risk-management processes and tools to identify threats to health, safety and security before cargo and conveyances arrive in Canada. Under the ACI program, cargo arriving by marine or air modes of transportation must be reported to the CBSA before it arrives in Canada. Future phases of the ACI program will require that cargo arriving by highway and rail also be reported in advance.

For more information on the ACI program, including a list of advance time frames for cargo reporting, visit the ACI section.

Cargo control document

Your carrier uses the cargo control document (CCD) to report your shipment to the CBSA. The most common type of CCD is Form A8A, Customs Cargo Control Document. The CCD acts as our initial record of the shipment's arrival. This document is also used for all shipments moving in-bond to an inland CBSA office, sufferance warehouse or bonded warehouse.

Your carrier also has to send you a copy of the CCD to inform you that your shipment has arrived. The CCD must have a bar-coded cargo control number (CCN). The first four digits of the CCN must be the carrier's unique carrier code.

Obtaining release of and accounting for your shipment

Carriers provide the CBSA with the appropriate documents to report the arrival of your shipments. The transportation mode determines what type of reporting document the carrier must use.

As an importer, you also need to submit release and accounting documents, which you may prepare yourself or you may hire a customs broker to do so on your behalf. You will have to pay a fee for these services, which are established by the brokerage firm. For more information on hiring an agent, and for a listing of licensed customs brokers, visit the Border Services Officers section.

We license customs brokers to carry out CBSA-related responsibilities on behalf of their clients. A broker's services include the following:

• obtaining release of the imported goods;
• paying any duties and GST that apply;
• obtaining, preparing, presenting or transmitting the necessary documents or data;
• maintaining records; and
• responding to any CBSA concerns after payment.

It is important to note that customs brokers do not work for the Government of Canada and they are not federal public servants.

As the importer, you remain liable for all duties owing until they are paid. This applies regardless of whether or not you paid the amount to your broker.

There are two options for obtaining release of your imported goods: accounting for and paying duties on shipments before they are released or paying duties after the shipments are released.

Full accounting and payment of duties before release

You must complete and present in person one copy (if presented at an automated CBSA commercial office) or two copies (if presented at a non-automated office) of Form B3, Canada Customs Coding Form. Form B3 must include the following:

• your importer name and the import/export (RM) account number;
• a description of the goods;
• the date of direct shipment;
• the tariff treatment;
• the country of origin;
• the tariff classification number;
• the value for duty;
• the appropriate duty or tax rates; and
• the calculation of duties owing.

Instructions on completing Form B3 can be found in the publication called Importing Commercial Goods Into Canada or in Memorandum D17-1-10, Coding of Customs Accounting Documents.

You will also need the following documents:

• Two copies of the CCD, which will be provided by your carrier.
  Note: If you are carrying your own goods, and accounting for them at the time of release, then a CCD is not required.
• One copy of the Canada Customs Invoice (or the commercial invoice that provides the required data). For more information on Canada Customs Invoice requirements, see Memorandum D1-4-1.
• A paper copy of all import permits, certificates, licences or documents required by other government departments (OGDs) and agencies (or an electronic copy for EDI participants with OGDs).
• Proof of origin, when necessary, i.e. Form A - Certificate of Origin.

For more information on accounting documents, see Memorandum D17-1-5, Importing Commercial Goods.

Release of goods before the payment of duties

By using release on minimum documentation (RMD), you can fast-track the release of your goods by paying duties on your shipments after they are released by the CBSA. To take advantage of this privilege, you must follow an application process, which includes posting an approved amount of security with us. This option is generally used by established importers with high import volumes.

Currently the CBSA is working towards mandatory EDI for release of commercial shipments. Therefore, paper RMD requests are accepted only in a limited number of exceptional cases. For information on EDI systems and becoming an EDI client, contact the Electronic Commerce Unit.

RMD release documentation requirements

Unless the CBSA decides to examine your shipment, we will release it after you have successfully transmitted your RMD request using EDI. For those RMD requests that are exceptions and must be reported on paper, you must report your shipment by presenting a CCD, any required import permits or health certificates and, in most cases, two copies of a properly completed invoice. In either case, a final accounting package must be presented no later than five business days after we release the goods.

If you do not present your accounting package or if our computer system is unable to validate the package within the five-day period, the CBSA will charge you a late accounting penalty for each shipment. If you repeatedly file your accounting package late, you may receive a notice requiring you to account for the goods on time for a specified period. If you fail to comply with the notice, you will receive an additional penalty.

Posting security

To take advantage of RMD, which includes uncertified cheque privileges, you have to post security with us. You can post security at a local or national office, depending on whether or not you need your shipments released at one specific CBSA office or at various CBSA offices across the country. If you hire a customs broker, you can pay to use the security your broker has posted for otherwise unsecured importers. Also, if you hire a customs broker, and you are a resident importer, you can complete a letter of authorization and pay GST directly. See the “Security Options” section in Memorandum D17-1-5 for more details.

You can use the following as security:

• cash;
• certified cheque;
• transferable Government of Canada bonds; or
• bonds issued by a registered Canadian bank or approved financial institution.

As the importer, your security amount is based on an amount equal to the average monthly duties you owed during the previous year, minus the GST, up to a maximum of $10 million.

In certain regions, you can post security at one location to cover release at nearby offices. For example, you can post security at the downtown Toronto office and we will honour that security at Toronto Pearson International Airport.

There are two ways to pay duties owing on goods we release under RMD:

• you can pay every month based on our monthly bill (Form K84); or
• you can make any number of interim payments based on the daily statements we send you.

Remember that when you post security to use the RMD option, you have uncertified cheque privileges for amounts owing up to and including $25 million. Amounts owing in excess of $25 million are to be paid at a financial institution and a copy of an RC165 (Remittance Voucher - Non CSA) must be stamped “paid” by the financial institution and taken to a CBSA office as proof of payment.

The CBSA will bill you monthly on a Form K84, Importer/Broker Account Statement, for all accounting packages we processed between the 25th of one month and the 24th of the following month. Your payment is due on the last business day of that month.

If you fail to pay duties within the prescribed time frame, we will charge you interest at a specified rate on the outstanding overdue balance. You will receive a notice that requires you to pay duties owing within a specified time period.

For more information on other release procedures, see memoranda D17-1-4 and D17-1-5.

Transaction number

At the CBSA, we identify each shipment with a unique 14-digit transaction number. We use this transaction number to identify your shipment at various times throughout the clearance process. If you are paying by cash, we assign a transaction number to the documents in the accounting package when you present them to obtain release of your goods.

If you have RMD privileges, we will assign you a unique five-digit account security number. This number will always appear as the first five digits of the transaction number. After you receive your account security number, you will have to affix this transaction number in bar-coded format to your release and accounting documents for all subsequent shipments.

Importing by mail

When you import most goods by mail that are worth CAN$20 or less, they may be exempt from duties under the Postal Imports Remission Order. This exemption does not apply to alcohol or tobacco.

Commercial postal imports valued at less than CAN$1,600

Canada Post will deliver to you any commercial postal shipments worth less than CAN$1,600. With this delivery you will receive a Form E14, CBSA Postal Import Form, that will list the duty rate that applies to each item. This form shows the tariff classification, the duty rate, the value for duty, the total duties and taxes owing on the imported goods and the Canada Post handling fee. Canada Post collects and remits any duties owing to the CBSA on your behalf. Canada Post will charge you a $5 fee ($8 for priority post shipments) to offset the costs it incurs to perform these functions.

If you disagree with the assessment shown on Form E14, you have two options:

• You may request a refund after paying duties and taxes using Form B2, Canada Customs - Adjustment Request. You should submit the completed Form B2 and supporting documentation to the CBSA Client Services Division. For more details on Form B2 processing, refer to Memorandum D17-2-2, Processing of Adjustment Request Forms; or
• You may request a review before paying duties and taxes by checking the “Return to CBSA” box on Form E14. When Canada Post returns the parcel to us, we will contact you. If the goods are deemed duty-free and non-taxable, the mail item will be released by the CBSA and delivered to you by Canada Post. If duties and taxes still apply, Canada Post will then deliver the mail item to you a second time and collect any amounts owing.

Commercial postal imports valued at CAN$1,600 or more

In the case of commercial mail importations of goods valued at CAN$1,600 or more, the importer will be advised that the shipment has arrived and then be required to present the appropriate CBSA documentation to obtain release of the goods. RMD is allowed, provided the importer/owner or customs broker has posted the required security for release before payment privileges. Form B3, Canada Customs Coding Form, will be required for importers who have not posted security for release before payment. Once the release documentation has been approved, the CBSA office will advise the applicable mail centre to release the shipment to Canada Post for delivery.

For more complete details on importing by mail, see the D5 series of memoranda.

Importing by courier

If you import goods worth CAN$20 or less by courier, they may be exempt from duties under the Courier Imports Remission Order. This exemption does not apply to alcohol or tobacco.

For more details, see Memorandum D8-2-16, Courier Imports Remission Order.

Courier imports valued at less than CAN$1,600

Many international couriers who transport large volumes of low-value goods participate in the Courier/LVS (low-value shipment) Program. Unless we examine your shipment, the CBSA can almost instantly release commercial goods you import via couriers participating in the Courier/LVS Program, provided the following applies:

• the goods have an estimated value for duty of less than CAN$1,600 and are not prohibited, controlled or regulated;
• the courier has a written undertaking with you, or your agent, that the commercial goods will be accounted for and that the duties owed will be paid within the prescribed time; and
• you have posted security with us.

When the CBSA releases shipments under the Courier/LVS Program, the courier reports all shipments arriving at the same time on a consolidated cargo release list. The list identifies the importer for each shipment. The courier will advise you of your shipment's arrival. You or your broker will have to submit a consolidated accounting package to the CBSA no later than the 24th day of the month after the month in which we released the goods. Any duties and taxes owing are due at the end of the month in which you account for the goods.

If your shipment is forwarded by courier and is valued at less than CAN$1,600, the courier company will offer to complete the customs documentation on your behalf for a fee.

For more details on Courier/LVS Program shipments, see Memorandum D17-4-0, Courier/Low Value Shipment Program - Low Value Commercial Goods.

Courier imports valued at CAN$1,600 or more

The courier will notify you when any shipments arrive that are worth CAN$1,600 or more. You must account for the goods and pay the duties by cash, certified cheque or uncertified cheque (for amounts up to $2,500) before the CBSA will release them. If you have RMD privileges, the courier can immediately deliver your goods after they are released.

For more details on RMD, see Memorandum D17-1-4, Release of Commercial Goods.

Payment of duty and taxes

Payments can be made in Canadian or U.S. funds using the following methods:

• cash;
• debit card (available at most CBSA offices);
• certified cheque or money order (payable to the Receiver General for Canada);
• traveller's cheque;
• credit card for amounts up to $500 (American Express, Visa, MasterCard);
• uncertified cheque for amounts up to $2,500 if certain conditions are met (payable to the Receiver General for Canada); or
• bank remittance for amounts over $25 million.

You may also choose to have a broker pay on your behalf.

Warehousing or storing your shipment

After your carrier reports a shipment to us, you may wish to move your shipment inland via a bonded carrier to a licensed warehouse facility for CBSA release. This means that goods can be moved beyond the border or at an airport without having cleared the CBSA but they remain under CBSA control.

Sufferance warehouse

Sufferance warehouses are privately owned and operated facilities licensed by the CBSA for the short-term storage and examination of imported goods pending release from the CBSA or export from Canada. Sufferance warehouse operators charge user fees to their clients for storage and handling. Your goods may stay in a sufferance warehouse for up to 40 days. For more details on sufferance warehouses, see Memorandum D4-1-4, Customs Sufferance Warehouses.

Customs bonded warehouse

You can place imported non-duty-paid goods destined for export in a CBSA customs bonded warehouse (CBW) for up to four years. CBWs are part of the Duty Deferral Program. These facilities provide you with a complete deferral of all import levies - including duties, GST, provisional and anti-dumping duty, etc. - while the goods remain in the warehouse provided they are eventually exported. Duties and other applicable import levies are payable only on the portion of goods that are removed from a warehouse for consumption in the Canadian domestic market. Goods stored in a CBW are subject to examination and audit by CBSA border service and trade compliance officers.

The goods may undergo the following value-added alterations while in a CBW:

• labelling and marking;
• packaging and repackaging;
• testing and separating defective from prime-quality goods;
• diluting, cutting, slitting, trimming and filing; and
• disassembling or reassembling goods that have been disassembled for packing, handling or transportation.

For more information, see Memorandum D7-4-4, Customs Bonded Warehouses

Unclaimed goods

If you do not claim your goods from the sufferance warehouse after 40 days, we will transfer them, at your expense, to a place of safekeeping. If this happens, the CBSA will notify you that if your goods are not formally released and accounted for or exported within 30 days from the date of the notice, they will be forfeited to the Government of Canada to be disposed of accordingly. You are responsible for all reasonable expenses incurred by the CBSA to dispose of your goods unless they are sold.

For more information, see Memorandum D4-1-5, Storage of Goods Regulations.

Examination of shipments

Under section 99 of the Customs Act, the CBSA has the authority to randomly select shipments for examination to verify compliance or to take samples in reasonable amounts. The frequency of examinations will depend on a variety of factors, including your compliance record and that of other persons or organizations involved with the shipment as well as the type of goods you are importing.

Why does the CBSA examine goods?

We may choose to examine your shipment for several reasons:

• to detect prohibited or restricted items (e.g. pornography, narcotics) or smuggled goods;
• to fulfil legislative requirements of other government departments (e.g. meat inspection, import permits); or
• to ensure the goods comply with border services legislation (i.e. to verify their description, value, quantity and marking against the invoice information).

Examination costs

Because carriers are responsible for making shipments available to the CBSA for examination, you may ultimately have to pay for the examination costs associated with unloading and loading cargo. You may also have to pay special service charges for a border services officer's time and travel costs when the officer conducts examinations and releases goods at locations other than designated CBSA facilities or when you need after-hours service.

After Importation

Self-adjustments

If you made an error in the accounting information provided to the CBSA, and we have not made a re-determination, you are required to correct the accounting declaration if the change is revenue-neutral or if you owe us money. The requirement to make a correction ends four years after the date of accounting. If the change in the accounting information results in a refund of the duties or taxes paid to us, an application for a refund can be filed in most cases up to four years from the date the goods were accounted for. Goods exported from a NAFTA country or from Chile where preferential tariff treatment was not claimed are an exception; in these cases, you may apply for a refund up to one year after the goods were accounted for.

When the self-adjustment results in additional duties owing, you must pay this amount and any applicable interest. For self-adjustments that reduce the amount of duties payable, we will refund the customs duties and, if your business is not a GST registrant, the applicable GST may also be refunded by the CRA.

For more information on self-adjustments, see Memorandum D11-6-6, Self-Adjustment to Declarations of Origin, Tariff Classification, Value for Duty, and Diversion of Goods. For refund of duties, see Memorandum D6-2-3, Refund of Duties. Form B2, Canada Customs - Adjustment Request, must be completed to obtain refunds. For more information, see memoranda D17-2-1, Coding of Adjustment Request Forms and D17-2-2, Processing of Adjustment Request Forms.

The detailed adjustment statement

If the CBSA needs to adjust your accounting package, including the confirmation of changes you have requested, we will let you know by sending you a detailed adjustment statement (DAS). On this statement, we will ask you to submit any additional duties owing and interest that may be payable because of the adjustment within 30 days. We also use the DAS to inform you of any refunds due to you, as well as any interest owing. A DAS is also sent to you when the adjustment is revenue-neutral and does not result in any change to the amount of duty and GST.

Re-determinations

The CBSA may re-determine or further re-determine the tariff classification, value for duty and country of origin you have reported for your shipment. This re-determination may be done before you have made any self-adjustments or it may be done after you have self-adjusted your accounting information. In most cases, we have four years from the date of accounting to re-determine the tariff classification, origin or value for duty of the goods.

If you do not understand the reason for our re-determination, you may contact the officer who made the decision. If you disagree with the decision, you may ask us to review it by filing a dispute notice.

Disputing a decision with the CBSA

As the importer, you or your representative has the right to ask for an impartial review of most decisions we make on the tariff classification, origin or value for duty of imported goods. A recourse officer will make a decision on behalf of the President of the CBSA.

If you want us to review a decision, you must, by law, make your request no later than 90 days after the date we made the initial decision. Generally, you must use Form B2. You can also use a letter to dispute the tariff classification of certain prohibited goods. You may present your dispute notice, addressed to the Recourse Division, to any CBSA office in Canada; however, we prefer that you present it to a CBSA office in the region where the goods were released.

For more information, see Memorandum D11-6-7, Importers' Dispute Resolution Process for Origin, Tariff Classification, and Value for Duty of Imported Goods.

Your appeal rights

If you do not agree with the President's decision, you have the right to appeal it. If you are appealing a decision that does not relate to prohibited goods classified as obscene, child pornography or hate propaganda, you must appeal to the Canadian International Trade Tribunal (CITT). To do so, you must file a written appeal notice with both the President of the CBSA and the Secretary of the CITT no later than 90 days after we issue the President's decision.

The CITT is an independent quasi-judicial tribunal that reviews disputes from importers or Canadian producers. It also acts as an impartial body to which policy departments, like the Department of Finance Canada, can refer certain issues for resolution. The CITT posts hearing notices in the Canada Gazette at least 21 days before any hearing.

If you contact the Secretary of the CITT before a hearing, you can appear at the hearing to explain how the matter affects your business.

On a point of law, you can appeal the CITT's decision to the Federal Court of Appeal no later than 90 days after the CITT has issued its decision.

If you do not agree with the President's re-determination decision that relates to obscene material, child pornography or hate propaganda, you have the right to appeal it to a provincial court of jurisdiction. To do so, you must file a written appeal notice with the President and the clerk of the provincial court of jurisdiction no later than 90 days after the President's decision has been issued.

On any question of law, you can appeal the provincial court of jurisdiction's decision to a higher court no later than 90 days after the court has issued its decision.

You are responsible for administrative court costs and your legal fees for appeals to the CITT, the Federal Court of Appeal and the provincial court of jurisdiction, unless otherwise ordered by the Court.

What books and records do you have to keep?

You must keep all records pertaining to your importations. This includes information relating to the quantities received, the price paid, the country of origin, vendor information, product information and all other related information. You must keep all records, whether in electronic or paper format, for six years after the year of importation. If you want to keep your records outside Canada, you must obtain written approval from the CBSA.

Your carrier must keep records at its place of business in Canada for three years after the year they transported your goods to Canada. These records can include charts of accounts, trip logs, movement history reports and bills of lading. They may include paper documents or those stored electronically. Carriers can keep these records outside Canada if they receive written permission from us.

Even if you use the services of a customs broker, you as the importer are responsible for keeping all records on the reporting, release, accounting and payment of duties and GST on imported goods, as well as any later adjustments.

For more information on maintenance of records and books in Canada by importers, see Memorandum D17-1-21, Maintenance of Records and Books in Canada by Importers.

Compliance means faster service

We believe that most of our clients voluntarily comply with the law once they understand their obligations and know how to meet them.

When you comply with the law, your goods will be subject only to the occasional random examination, which reduces the release time of your goods and in turn, your business costs.

To determine if you, your goods or your carrier is high-risk or low-risk, we maintain compliance and commodity profiles to target shipments for examination based on risk-management principles.

Penalties for non-compliance

At the CBSA, we recognize that some people wilfully attempt to break the law by falsifying accounting documents, smuggling or by misdescribing or undervaluing goods.

The Customs Act allows the CBSA to apply penalties under the Administrative Monetary Penalty System (AMPS) for technical infractions and, for the most serious offences, to seize goods and the vehicles in which circumstances surrounding the violation. To be fair and consistent, we judge each case against established parameters. We will prosecute for more serious offences, such as fraud.

If you contravene the law, you can expect us to examine your goods more frequently until you establish a record of compliance.

Settling disputes

You can appeal if you disagree with the reasons why we have issued a penalty assessment or seized your goods. To take advantage of this dispute-settlement mechanism, you must submit a letter indicating that you intend to appeal the seizure or penalty assessment within 90 days from the date of the penalty assessment or seizure.

If you disagree with our final decision, you then have 90 days from the decision date to file a claim statement with the Federal Court of Canada that justifies your appeal.

Duty Deferral and Trade Incentive Programs

Duty Deferral Program

The Duty Deferral Program consists of three elements or individual programs:

1. Drawback
2. Duties relief
3. Customs bonded warehouse

You can take advantage of the CBSA's drawback, duties relief or customs bonded warehouse programs, which are collectively known as the Duty Deferral Program. You can use them to defer customs duties and/or other applicable import levies depending on which program is being used on qualifying goods. These and other trade incentive programs enable Canadian businesses to compete more effectively in the international market. All duty deferral programs are administered by the CBSA.

Drawback

This program allows eligible claimants to receive a full or partial drawback of duties paid on certain imported goods that, in some cases, are imported to be used in the manufacture of goods that will later be exported. Drawbacks are also available for duty-paid goods that are exported in the exact same condition as imported.

For more information on drawbacks, see Memorandum D7-4-2, Duty Drawback Program.

Duties relief

Under this program, once you have been approved for a duties-relief licence, you can defer paying duties on goods destined for export or you can defer payment of duties on imported goods that are further processed and ultimately exported from Canada. You must apply and be granted authorization from the CBSA to participate in this program. It is important to note that this program only offers deferral of import duties. There are other GST programs available from the CRA that can offer relief of the GST in certain circumstances.

For more information, please consult Memorandum D7-4-1, Duty Deferral Program.

Customs bonded warehouse

This is another program that offers deferral of all import levies, including GST, associated with imported goods to be stored in a customs bonded warehouse (CBW).

You can place imported non-duty-paid goods destined for export in a CBSA CBW for up to four years. CBWs are part of the Duty Deferral Program. These facilities provide you with a complete deferral of all import levies - including duties, GST, provisional and anti-dumping duty, etc. - while the goods remain in the warehouse provided they are eventually exported. Duties and other applicable import levies are payable only on the portion of goods that are removed from a warehouse for consumption in the Canadian domestic market. Goods stored in a CBW are subject to examination and audit by CBSA border service and trade compliance officers. Requirements of other government departments, such as permits, certificates, etc., must be presented at the time when the goods enter a CBW.

The goods may undergo the following value-added alterations while in a CBW:

• labelling and marking;
• packaging and repackaging;
• testing and separating defective from prime-quality goods;
• diluting, cutting, slitting, trimming and filing; and
• disassembling or reassembling goods that have been disassembled for packing, handling or transportation.

For more information on CBWs, see Memorandum D7-4-4.

Trade incentive programs

All goods entering Canada, even those imported temporarily or returning to Canada, are subject to customs duties on their full value unless there is a legislative or regulatory provision that entirely or partially relieves the requirement to pay.

Temporary importations

All goods imported into Canada for less then 18 months will qualify for customs duty-free entry as long as they are not imported for sale, for lease to a third party or for further manufacturing or processing. There are various provisions that render the goods non-taxable for the purposes of the GST/HST. These provisions generally apply to specific goods or goods imported under specific circumstances. For example:

• commercial samples;
• articles you import to be tested and specialized test equipment permanently attached to or installed on those articles; and
• goods you temporarily import to use in an emergency (you must export any goods not consumed or destroyed during the emergency when they are no longer required).

For more information on temporary importations, see Memorandum D8-1-1, Temporary Importation (Tariff Item No. 9993.00.00) Regulations.

Temporary exportations

The Canadian Goods Abroad Program conditionally provides partial relief from the payment of customs duties on goods that you export temporarily from Canada for repairs, additions or other work.

Tariff item Nos. 9971.00.00 and 9992.00.00 provide for the customs duty-free entry of goods and vessels respectively, regardless of origin, which are returned to Canada after being exported to one of Canada's free trade partner countries for repair (whether or not the repair is performed under a warranty arrangement) or for alteration.

Goods originating in Canada or goods that have been previously accounted for may return to Canada customs duty-free under tariff item Nos. 9813.00.00 or 9814.00.00 respectively if they have not been advanced in value or combined with any other article abroad.

For more information on temporary exportations, see the following memoranda:

• D8-2-1, Canadian Goods Abroad
• D8-2-10, Goods Returning to Canada Having Been Repaired Outside of Canada
• D8-2-11, Goods Returning to Canada After Being Altered or Worked on Outside Canada
• D8-2-25, Canadian Vessels Repaired or Altered in the United States, Mexico, Chile, Israel, or Another CIFTA Beneficiary
• D8-2-26, Goods Re-Entered After Repair or Alteration in the United States, Mexico, Chile, Israel, or Another CIFTA Beneficiary

Refunds

The CBSA will conditionally grant partial or full refunds of the customs duties you paid on exported or destroyed goods, defective goods, shortages or equipment you removed from the goods and returned to the manufacturer for credit.

For more information on refunds, see the D6 series of memoranda.

More Information

Small and Medium-sized Enterprise Centre

The Small and Medium-sized Enterprise (SME) Centre is an important online resource for all importers and exporters of commercial goods in Canada and is available 7 days a week, 24 hours a day.

Visit the SME Centre where you can find the following information:

• step-by-step guides to importing and exporting;
• information on upcoming seminars;
• acronym and glossary lits;
• Customs Tariff; and
• SME Newsflash.

Border Information Service

You can also call the Border Information Service (BIS), a computerized, 24-hour telephone service that automatically answers all incoming calls and provides general border services information. If you require more in-depth information on a certain topic, you can speak directly to an agent during regular business hours, Monday to Friday (8:00 a.m. to 4:00 p.m. local time except holidays) by pressing “0” at any time during the recorded message.

Calls within Canada: 1-800-461-9999 (toll-free line)

Call outside Canada: 204-983-3500 or 506-636-5064 (long-distance charges will apply)

Business seminars

The CBSA holds seminars for businesses on various topics, including the import process. You can find out about upcoming seminars being held in your region and register online.

Need information on exporting?

If you need information on exporting goods from Canada, please see the brochure called Exporting Goods From Canada - A Handy Guide for Exporters. You can also refer to “A Step-by-Step Guide to Exporting.

Comments or Suggestions?

The CBSA is committed to providing you with quality service. If you have any comments or suggestions about the service you received at a CBSA office, contact the superintendent or manager in charge at that location. You can also write to the CBSA at the following address:

The President
Canada Border Services Agency
Ottawa ON K1A 0L8