Regulatory and Compliance News

In Budget 2021, the government proposed the introduction of a tax on the sale of new luxury cars and aircraft with a retail sale price over $100,000, and new boats over $250,000. The tax would be calculated at the lesser of 20 per cent of the value above these price thresholds or 10 per cent of the full value of the luxury vehicle, aircraft or vessel.

To implement this commitment, today the government released for public comment draft legislative proposals. The draft legislative proposals reflect, and respond to, input received during consultations with stakeholders.

The draft legislative proposals released today build on, and replace, the backgrounder that was released on August 10, 2021, as part of the consultation on the proposed Luxury Tax.

Two notable new provisions contained in these draft legislative proposals are as follows:

•  relief is proposed to be provided to after-sale improvements that are made to vehicles, aircraft or vessels purchased below the relevant price threshold; and
• relief for aircraft is proposed to be expanded to take into account qualifying flights that are conducted in the course of a business with a reasonable expectation of profit.

Subject to Parliamentary approval, this tax would come into effect on September 1, 2022.

Canadians are invited to share comments on these draft legislative proposals by April 11, 2022, by emailing fin.luxury-luxe.fin@fin.gc.ca.

Related products

• Draft Legislative proposals relating to the Select Luxury Items Tax Act
• Consultation on proposed Luxury Tax

Canadian Society of Customs Brokers (CSCB)
 

CONTACT SCHENKER FOR MORE INFORMATION:
If you have any questions, please email your KAM or Schenker’s Client Services team at schenkercustoms.cs@dbschenker.com Schenker of Canada Limited (Customs Department)

Download: Schenker_Luxury Tax_Consultation Process Launched_March 14, 2022

1. The purpose of this Customs Notice is to advise that the entitlement to the Most-Favoured-Nation (MFN) Tariff has been withdrawn, effective March 2, 2022, from goods that originate in Russia or Belarus.

2. Order in Council P.C. 2022-0182, SOR / 2022-0035 is established to withdraw the entitlement to the MFN Tariff for goods that originate in Russia or Belarus. Such goods must now be accounted for under the General Tariff rate of customs duty of 35%, citing tariff treatment code 03. However, as per subsection 29(2) of the Customs Tariff, those goods are subject to the Most-Favoured-Nation Tariff rate of customs duty if:

• (a) that rate is, or is equivalent to, more than 35%; or
• (b) a Note or Supplementary Note to a Chapter of the List of Tariff Provisions or a tariff item so provides.

3. This order does not apply to goods that were in transit to Canada on or before March 2, 2022. For the purpose of this Customs Notice, "in transit to Canada" refers to goods bound to Canada which were under the control of a carrier on or before March 2, 2022.

4. Importers should have in their possession proof that such goods were in transit to Canada on or before March 2, 2022. Such proof may include, but is not limited to, the following documentation: shipping documents, report of entry documents, and cargo control documents and it may be requested at any time by a Canada Border Services Agency officer.

5. To claim the MFN Tariff rate of customs duty for goods that were in transit to Canada on or before March 2, 2022, but released and accounted for on or after March 2, 2022, importers must complete and submit Form B3-3, Canada Customs Coding Form, as follows:

• (a) in field No. 14, "Tariff Treatment", enter the General Tariff, tariff treatment "03";
• (b) in field No. 26, "Special Authority", enter "22-0182";
• (c) in field No. 33, "Rate of Customs Duty", enter the General Tariff rate of customs duty;
• (d) in field No. 34, "E.T. Rate", enter the excise tax rate if applicable;
• (e) in field No. 35, "Rate of GST", enter the GST rate applicable;
• (f) in field No. 38, "Customs Duties", enter the customs duties owing, calculated based on the MFN rate in effect on the day of the release;
• (g) in field No. 40, "Excise Tax", enter the excise tax owing, if applicable; and
• (h) in field No. 42, "GST", enter the GST owing.

6. To claim the MFN Tariff rate of customs duty for goods that were released before March 2, 2022, but accounted for on or after March 2, 2022, importers must complete and submit Form B3-3, Canada Customs Coding Form, as per the normal accounting procedures prior to the withdrawal of the MFN rate (i.e. without quoting the special authority number and using the regular tariff treatment).

7. To claim the MFN Tariff rate of customs duty on Courier Low Value Shipment (CLVS) goods released in February and accounted for by March 24, 2022, the consolidated F type B3 is to be completed and submitted as per the normal accounting procedures whereby a release date of March 1, 2022 and the MFN Tariff are to be used.

8. To claim MFN on CLVS goods that were in transit to Canada on or before March 2, 2022, and released on or after March 2nd , an F-type B3 is to be completed and submitted as per the Special Authority Shipments instructions found in Memorandum D17-1-10, Coding of Customs Accounting Documents Appendix J, quoting "22-0182" in Field 26.

9. An application for a refund of duties under paragraph 74(1)(c.11) of the Customs Act may be made within four years from the date the goods were accounted for under subsections 32(1), (3), or (5), in respect of goods that were imported on or after March 2, 2022.

10. The CBSA recommends that importers request a ruling if they have any doubt as to the tariff classification or value for duty of goods. The procedures for obtaining a ruling are outlined in Memorandum D11-11-1, National Customs Rulings (NCR) or Memorandum D11-11-3, Advance Rulings for Tariff Classification.

11. For more information, call the CBSA Border Information Service (BIS):
Calls within Canada and the United States (toll free): 1-800-461-9999
Calls outside Canada and the United States (long distance charges apply):
1-204-983-3550 or 1-506-636-5064
TTY: 1-866-335-3237
Email: contact@cbsa-asfc.gc.ca

Contact Us at the CBSA website may also be accessed for information.

https://www.cbsa-asfc.gc.ca/publications/cn-ad/cn22-02-eng.html

CONTACT SCHENKER FOR MORE INFORMATION:
If you have any questions, please email your KAM or Schenker’s Client Services team at schenkercustoms.cs@dbschenker.com Schenker of Canada Limited (Customs Department)

Download: Schenker Status Withdrawn from Russia & Belarus_March 11, 2022

The CBSA Assessment and Revenue Management (CARM) project successfully launched its first two releases in January (Release 0) and May (Release 1) 2021. These releases represent the foundation on which the third release (Release 2) is being built. Release 2 is the largest, most complex CARM release and requires careful consideration for its implementation.

We are aware of the significant investment that Release 2 represents for industry, as well as the impact that COVID-19 has had on many businesses. With the goal of shared success, and in consideration of other Release 2 pressures, the CBSA is carefully reviewing the appropriate timing for Release 2 implementation.

At this time, we can share that we do not intend to proceed with the implementation of CARM Release 2 any time before January 2023. The CBSA will continue to consult with our trade chain partners, and communicate information via our working groups and the CARM website.

In the meantime, the CBSA is exploring opportunities to de-risk and facilitate the adoption of CARM at Release 2, which may include a CARM Experience Simulation (CES) / pilot with volunteers from our trade chain partner community in a non-production environment. More information will be shared on this as it becomes available.

Thank you for your continued engagement and support for CARM.

Sincerely,

CBSA - CARM Stakeholder Engagement Team

How can Schenker help?

• Schenker still encourages all importers to be proactive and register their business in the CARM Client Portal and obtain a D120 Customs Bond.
• We can help you with live portal registration and customs bonds setup.
• We can provide you with critical and specific information to ensure your business is set-up for imports into Canada in compliance with CARM
• We offer comprehensive guidance and support throughout the transition process

We are making significant investments in systems, people, and capabilities to support your business and we will be ready with you!

CONTACT SCHENKER FOR MORE INFORMATION:

If you have any questions, please email your KAM or Schenker’s Client Services team at schenkercustoms.cs@dbschenker.com Schenker of Canada Limited (Customs Department)

Download: Schenker CARM Update - March 10, 2022

On January 1st, 2022, amendments to the Harmonized System (HS) nomenclature by the World Customs Organization (WCO) will enter into force.

The updated version of the 2022 Customs Tariff (T2022-1) contains 351 sets of amendments covering a wide range of goods throughout multiple chapters. These are triggered by various factors to account for environmental concerns, technological advancements and innovation, health and safety considerations, food and agriculture and changes in global trade.

The Canada Border Services Agency (CBSA) has provided a Statistical concordance table at the 10-digit level in Microsoft Excel format, listing out all of the affected HS classification codes changes from 2021 to 2022 Customs Tariffs.

2022 Customs Tariff Key Changes

Advance and National Customs Rulings

Any importers who may currently hold an advance ruling or national customs ruling for tariff classification or origin,
should be advised that it may not be valid as of January 1st, 2022 when the 2022 Customs Tariff comes into effect.

“Where the tariff classification and/or the origin (when applicable) of the goods subject to a ruling may be impacted, the
CBSA strongly recommends that ruling recipients submit a request for validation of a ruling to the CBSA.” (CBSA CN 21-20)

What Should Importers Do?

• Review the 2022 Customs Tariff changes and identify if any of your goods are impacted (see Concordance table)
•  Contact Schenker and communicate which commodities and HS code changes are affecting your imports, so we can update our commodity database for future shipments in 2022.
• Determine if you have any CBSA HS rulings, which could be affected by the HS changes and contact Schenker’s Consulting team to help you obtain a revised ruling.

How can Schenker help?

• Analyze your imports to see if the goods you have imported are affected by the HS changes and update our records accordingly.
• Help you classify your products with correct HS classification in compliance with CBSA
• Assist you to update your existing Advance/National Customs Rulings with CBSA or obtain new ones.
• Assess your goods and HS classification changes against any Free Trade Agreements (FTA) and certificates requiring updates.
• Submit any FTA duty refund opportunities to CBSA

CONTACT SCHENKER FOR ASSISTANCE:

Email your Key Account Manager (KAM) or Schenker’s Client Services team at schenkercustoms.cs@dbschenker.com

Contact our Consulting team at consulting.canada@dbschenker.com

Download: 2022 CBSA CUSTOMS TARIFF CHANGES_Effective Jan 1 2022

On August 3rd, 2021, the Canada Border Services Agency (CBSA) made its final determination of dumping and subsidizing under the Special Import Measures Act (SIMA) of certain upholstered domestic seating originating in or exported from China and Vietnam.

Due to insignificant amounts of subsidy or no subsidy, the CBSA decided to terminate the subsidy investigation for certain exporters based on the below listing:

From China by the following exporters:

• Anji Hengrui Furniture Co., Ltd., Anji Hengyi Furniture Co., Ltd., Dongguan Tianhang Furniture Co., Ltd., Foshan
  DOB Furniture Co., Ltd., Foshan Xingpeichong Huitong Furniture Co., Ltd., Gu Jia Intelligent Household Jiaxing Co.,
  Ltd., Haining Fanmei Furniture Co., Ltd., (Hangzhou) Huatong Industries Inc., HTL Furniture (China) Co., Ltd., HTL
  Furniture (Huai An) Co., Ltd., Jiaxing Motion Furniture Co., Ltd., Man Wah Furniture Manufacturing (Huizhou) Co.,
  Ltd., Natuzzi (China) Ltd., Ruihao Furniture MFG Co., Ltd, Shanghai Trayton Furniture Co., Ltd., Violino Furniture
  (Shenzhen) Ltd.

From Vietnam, by the following exporters:

• Delancey Street Furniture Vietnam Co., Ltd., Koda Saigon Co. Ltd., Timberland Co., Ltd., UE Vietnam Co., Ltd.,
  Vietnam Hang Phong Furniture Company Limited, Wanek Furniture Co., Ltd., and Wendelbo SEA JSC.

The same day, the CBSA has also made final determinations of dumping and subsidizing of certain upholstered
domestic seating from China and Vietnam, with respect to exporters for which the investigations have NOT been
terminated.

The subject goods are typically classified under the following HS tariff classification numbers:

Please note that the SIMA provisional duties are in addition to any standard MFN duties payable based on the HS Code.

ACTIONS and LIABILITIES

Provisional duties will continue to be imposed on the imports of subject goods that were Customs released after May 5,
2021, per the margins as determined at the time of the preliminary determinations, to the date of the Canadian
International Trade Tribunal (CITT)`s decision, which will be issued by September 2, 2021. The CITT will be continuing its
inquiry on the question of injury to the domestic market.

Provisional countervailing duties will no longer be collected on imports of goods from exporters for whom the subsidy
investigation was terminated, and any provisional countervailing duty paid, or security posted by these importers for
those goods during the provisional period will be refunded by CBSA.

CITT FINDING IMPACTS

If the CITT finding determines that the dumped and subsidized goods have caused injury, CBSA will finalize the amounts of
anti-dumping and countervailing duties payable during the provisional period, any provisional duties paid in excess of the
margin of dumping and amount of subsidy, per the final determinations, will be refunded by the CBSA.

If the CITT finds that the subject goods have not caused or are not threatening to cause injury, all of the proceedings
related to the dumped and subsidized goods will be terminated and subsequent imports will not be subject to antidumping
and countervailing duties. All provisional duties paid, or security posted by importers will be refunded by CBSA.

FURTHER DETAILS AND INFORMATION

• The full CBSA Notice of final determinations showing the margins of dumping, amounts of subsidy and amount
  of subsidy per piece, broken down by exporter can be found in the following Appendix.
• The complete product definition of the subject goods can be found in Appendix 1 of the original CBSA notice
  link.
• The Statement of Reasons will also be available for additional information about the investigations within 15 days
  from August 3rd.

Sources and French Version:

CBSA Notice of Final Determination
CSCB Notice

For any additional information regarding the application of provisional duties on subject goods imported into Canada,
please refer to the CBSA officers contact information:

Kevin Lambertsen: 613‑954‑7341
Jeffrey Laplante: 613‑954‑7236
Email: simaregistry-depotlmsi@cbsa-asfc.gc.ca

Schenker is here to assist you with any questions you may have and provide support with this process. We can analyze
your imports to see if the goods you have imported may be part of the subject list.

Please contact our Consulting team consulting.canada@dbschenker.com

Download
CBSA Notice of Final Determinations: Certain Upholstered Domestic Seating from China and Vietnam

On July 27, 2021 Canada Border Services Agency announced that border officers voted in favour of a strike. Strike actions can or may cause delays in border clearances which will have a cascading impact on the entire industry.

Our processes have not changed, and we are committed to service delivery excellence. Schenker of Canada Limited will process your shipments timely and efficiently. Due to border service disruptions, we strongly recommend providing as much advance notice
as possible to the arrival of your goods.

To Check Your Shipments Release Status , Click on Tracking https://www.dbschenker.com/ca . If you re quire further assistance , please
contact us toll -free 1-800-711-3979

We thank you for your patience as we navigate this situation with CBSA and will continue to keep you advised as new information becomes available.

Official CBSA announcement and additional information can be found below.

Schenker of Canada Limited
____________________________________________________

LEGAL STRIKE POSITION – CBSA CONTINUED OPERATIONS

“Following the announcement made today, July 27, 2021, by the Public Service Alliance of Canada (PSAC), on behalf of the Customs and Immigration Union (CIU), the Border Services Officers (FB) bargaining unit has voted in favour of a strike.

As early as the first week of August, CBSA Border Services Officers, represented by PSAC, will be in a legal strike position as a result of an impasse in negotiations between their union and the Government of Canada.

Ninety percent (90%) of Border Services Officers have been identified as essential, meaning that they will continue to offer essential services if there is a strike. We expect that our officers will fulfill their duties with the highest level of integrity and professionalism.

CBSA operations will carry on as planned as the Agency continues to ensure the safety and security of Canadians while maintaining the flow of goods and services across the border. However, travellers and businesses could experience an increase in border wait times, picketing outside CBSA premises, and wearing of union-related accessories. The CBSA has been actively working to plan for these situations and has developed mitigation strategies to ensure operations will continue.

The CBSA will respond quickly to any job action or work disruption in order to maintain the safety and security of our border, ensure compliance with our laws, and keep the border open to facilitate the flow of legitimate goods and travel.”

Canada Border Services Agency / Government of Canada

Download: CBSA Legal Strike Position

On May 5, 2021, the Canada Border Services Agency (CBSA) made preliminary determinations of dumping and subsidizing under the Special Import Measures Act (SIMA) of certain upholstered domestic seating originating in or exported from China and Vietnam.

The subject goods are typically classified under the following HS tariff classification numbers:

Please note that the SIMA provisional duties are in addition to any standard MFN duties payable based on the HS Code.

Provisional duties will be payable on the subject goods that are Customs released on or after May 5, 2021 (includes goods which were in-transit to Canada prior to this date). Where amounts of dumping and/or subsidy are considered insignificant, the investigations will continue but provisional duties will not be payable.

The full CBSA Notice of preliminary determinations showing the estimated margins of dumping, estimated amounts of subsidy and total provisional duties owing by exporter can be found in the following Appendix.

The complete product definition of the subject goods can be found in Appendix 1 of the original CBSA notice link.

The Statement of Reasons is also available for additional information about the investigations.

The investigations are continuing and the CBSA must make final determinations or terminate the investigations by August 3, 2021.

Email for subjectivity opinions and duty assessment questions can be sent to:
Trade_Programs-Programmes_commerciaux@cbsa-asfc.gc.ca.

Prior to submitting a subjectivity opinion request, please review the ‘detailed product information’. Each request must be supported with essential information including, but not limited to, pictures, mill certificates, measurements, origin of the goods, etc. in relation to the specific product in question.

Failure to provide sufficient information will result in a rejection of the request by the CBSA.

Schenker is here to assist you with any questions you may have and provide support with this process. We can analyze your imports to see if the goods you have imported may be part of the subject list.

Please contact our Consulting team consulting.canada@dbschenker.com

Download: CBSA__Certain Upholstered Domestic Seating_Notice of Preliminary Determinations_May 5, 2021

As of March 15, 2021, food importers of meat, fish, dairy, eggs, processed eggs, processed fruits or vegetables, honey, maple and fresh fruits or vegetables are required to correctly declare their valid Safe Food for Canadians (SFC) licence to CFIA to import food into Canada.

The Canadian Food Inspection Agency (CFIA) has advised that import transactions will be rejected automatically unless a valid Safe Food for Canadians (SFC) licence is entered in the Single Window Integrated Import Declaration (IID). The SFC licence holder may experience delays and have their related food shipment(s) held at the border until the error is addressed and the import transaction is resubmitted.

The following criteria must be met or food import transactions will be rejected:

1. the importer’s Safe Food for Canadians (SFC) licence number must be correctly declared, without mistakes or typos
2. the importer’s SFC licence must cover the activity of “Importing Food”
3. the importer’s SFC licence must cover the food commodity or commodities you intend to import

Imports of food categorized as manufactured foods such as confectionary, snack foods, beverages, coffee and tea, oils, dried herbs and spices, nuts and seeds, processed grain-based foods such as baked goods, cereals and pasta will NOT be affected.

You must obtain your SFC licence to import before presenting your shipment at the border, as you will not be able to obtain one at the border. If you currently hold a licence, review your licence profile in My CFIA portal to ensure that your licence has been issued for the activity of "Importing" and for the food commodity or commodities you intend to import.

License Validation Message

• English
• French

Useful references for food importers:

Importing food into Canada with a Safe Food for Canadians license

What to consider before applying for a Safe Food for Canadians license.

Refer to Annex A for more information on food commodities, including examples of the types of food included in each sub-commodity.

Information for Non-resident Importers

Download

SFCR License Requirements_March 15, 2021

On December 22, 2020, the Canada Border Services Agency published the United Kingdom Trade Continuity Remission Order (the Order).

The Order states that effective January 1, 2021, the United Kingdom (UK) and particular associated territories will no longer be covered by the Canada-EU Comprehensive Economic and Trade Agreement (CETA) by way of Brexit, but can still preserve the CETA duty rates for qualifying imports from the UK. These goods would now have to be accounted under the Most-Favoured-Nation (MFN) tariff treatment.

To continue to benefit from the remission of duties, importers must instead cite the Remission Order #20-1135 on their B3, Canada Customs Coding Form. The remission applies to qualifying goods until the day on which the new Canada-United Kingdom Trade Continuity Agreement (CUKTCA) enters into force.

To qualify for the remission, importers must ensure that the products still meet the rules of origin under the CETA agreement and are responsible to obtain documentation in support of the claim for remission under the Order.

Any importers who have goods originating from the UK, which were in transit to Canada prior to January 1, 2021, may still claim the CEUT preferential tariff treatment.

For additional information, please access the full CBSA Customs Notice 20-39.

Schenker is here to assist you with any questions or concerns you may have and provide support.

Please contact our client services team schenkercustoms.cs@dbschenker.com

Download
Customs Notice 20-39: United Kingdom Trade Continuity Remission Order

On December 21, 2020, the Canada Border Services Agency (CBSA) initiated investigations under the Special Import Measures Act (SIMA) regarding the dumping and subsidizing of certain upholstered domestic seating originating in or exported from China and Vietnam.

The investigation is a result of a complaint filed by Palliser Furniture Ltd. (Winnipeg, MB), and supported by several other companies.

The subject goods are typically classified under the following HS tariff classification numbers:

9401.40.00.00
9401.61.10.10
9401.61.10.90
9401.71.10.10
9401.71.10.90

The complete product definition of the subject goods can be found in Appendix 1 of this CBSA notice link.

The Canadian International Trade Tribunal (CITT) has begun preliminary injury inquiry to determine whether such imports are causing harm to Canadian producers. A decision will be issued by February 19, 2021. The CBSA is also simultaneously investigating whether the imports are currently being sold in Canada at unfair and/or subsidized prices. Their preliminary decision will be made by March 22, 2021.

If the CITT determines that the goods are causing injury, and CBSA determines that the goods are dumped and/or subsidized, there may be provisional duty applied to future shipments. If no injury, dumping or subsidizing is determined, the investigations will be terminated.

Some importers may have already received a letter from CBSA, identifying them as a potential importer of the subject goods. The request would include submission of an Importer Request for Information (RFI) with necessary product information by a defined timeline in order to establish the normal value and export price of the subject goods.

Submissions by any parties who are opposed to the complaint must be filed by no later than noon (EST), on January 18, 2021. The complainant and supporting parties may make submissions in response to the submissions of parties opposed to the complaint not later than noon (EST), on January 25, 2021.

Detailed information can be found in the CITT Notice Of Preliminary Injury Inquiry.

The Statement of Reasons is also available for additional information about the investigations.

Schenker is here to assist you with any questions you may have and provide support with this process. We can analyze your imports to see if the goods you have imported may be part of the subject list.

Please contact our client services team schenkercustoms.cs@dbschenker.com

Download
CBSA_Initiation of Investigations_Certain Upholstered Domestic Seating