Vol. 139, No. 4 — February 23, 2005

Registration
SOR/2005-23 February 1, 2005

CUSTOMS ACT

Reporting of Exported Goods Regulations

P.C. 2005-46 February 1, 2005

Her Excellency the Governor General in Council, on the recommendation of the Solicitor General of Canada, pursuant to section 9(see footnote a) of the Customs Act(see footnote b), hereby makes the annexed Reporting of Exported Goods Regulations.

REPORTING OF EXPORTED GOODS REGULATIONS

INTERPRETATION

1. The following definitions apply in these Regulations.

"Act" means the Customs Act. (Loi)

"bulk goods" means goods that are loose or in mass, such that they are confined only by the permanent structures of a large container or a transport unit, without intermediate containment or intermediate packaging. (marchandises en vrac)

"carrier", in respect of goods that are exported, means the person, other than the exporter of the goods, who transports them from Canada. (transporteur)

"chief officer of customs", in respect of an area or place, means the manager of the customs office or customs offices that serve that area or place. (agent en chef des douanes)

"commercial goods" means goods that are exported for sale or for any industrial, occupational, commercial, institutional or other similar use. (marchandises commerciales)

"customs service provider", in respect of goods that are exported, means a person who provides to the exporter customs services relating to the exportation of the goods, other than the sole service of transporting the goods from Canada, and includes an agent or other representative of the exporter, a customs broker and a freight forwarder. (prestataire de services douaniers)

"exporter", in respect of goods that are exported, means the holder of a business number for the purposes of the Act who exports commercial goods or causes them to be exported. (exportateur)

"export reporting office" means a customs office designated under section 5 of the Act for the purpose of reporting goods that are exported. (bureau de déclaration des exportations)

"homogeneous goods" means goods that

(a) closely resemble each other in respect of their component materials and characteristics; and

(b) are intended to be used for the same purpose. (marchandises homogènes)

"restricted goods" means goods the exportation of which is prohibited, controlled or regulated under the Act or any other Act of Parliament. (marchandises d'exportation restreinte)

"time-sensitive goods" means goods that

(a) would lose their value or principal utility if not immediately exported for use within a limited time after the exportation; or

(b) are part of a manufacturing and stock control system in which goods are produced and delivered as they are required. (marchandises d'utilité temporaire)

PRESCRIBED CLASSES OF PERSONS

2. For the purposes of section 95 of the Act, the following classes of persons are required to report goods that are exported:

(a) exporters;

(b) carriers; and

(c) customs service providers.

REPORTING BY THE EXPORTER

Reporting at an Export Reporting Office

3. (1) Subject to subsection (2) and sections 4, 6 and 7, all goods that are exported shall be reported in writing by the exporter at an export reporting office

(a) if the goods are exported by mail, not less than two hours before the goods are delivered to the post office where the goods are mailed;

(b) if the goods are exported by vessel, not less than 48 hours before the goods are loaded onto the vessel;

(c) if the goods are exported by aircraft, not less than two hours before the goods are loaded on board the aircraft;

(d) if the goods are exported by rail, not less than two hours before the railcar on which the goods have been loaded is assembled to form part of a train for export; and

(e) if the goods are exported by any other means, immediately before the exportation of the goods.

(2) Live animals, bulk goods, homogeneous goods or time-sensitive goods may, unless they are restricted goods, be reported immediately before they are exported.

Summary Reporting

4. (1) An exporter may, in writing on a monthly basis, report bulk goods or homogeneous goods that are exported if, before the exportation,

(a) the exporter has received written confirmation from the chief officer of customs at the appropriate regional office of the Agency that the goods qualify as bulk goods or homogeneous goods that may be reported in accordance with this section; and

(b) where the goods are restricted goods, the exporter has received written confirmation from an appropriate official responsible for the administration of the Act of Parliament under which the exportation of the goods is restricted that the goods may, under that Act, be reported in accordance with this section.

(2) The report referred to in subsection (1) shall be sent to the Chief Statistician of Canada within five business days after the end of the month in which the goods are exported.

Restricted Goods

5. (1) If goods that are exported are restricted goods, the exporter of the goods shall, in addition to making the report referred to in section 3 or 4, as applicable, provide evidence that the exportation of the goods complies with the Act of Parliament under which the exportation of the goods is restricted.

(2) The evidence referred to in subsection (1) and a copy of the report made under section 3 shall be provided to the chief officer of customs, within the applicable time set out in that section, and the goods made available for inspection, at

(a) the place specified in the permit authorizing the exportation; or

(b) if no place is specified in that permit, at the export reporting office located closest to the place of exit of the goods from Canada.

Exceptions to Reporting by the Exporter

6. Subject to section 8, the following classes of goods may, if the goods are not restricted goods, be exported without being reported by the exporter:

(a) personal and household effects, other than those of an emigrant, that are not for resale or commercial use;

(b) commercial goods having a value of less than $2,000 Canadian;

(c) conveyances that would, if they were imported, be classified at the time of importation under tariff item No. 9801.10.00, 9801.20.00 or 9801.30.00 in the List of Tariff Provisions set out in the schedule to the Customs Tariff;

(d) cargo containers that would, if they were imported, be classified at the time of importation under tariff item No. 980l.10.00 in the List of Tariff Provisions set out in the schedule to the Customs Tariff;

(e) reusable skids, drums, pallets, straps and similar goods used by a carrier in the international commercial transportation of goods;

(f) goods exported by diplomatic embassy or mission personnel for their personal or official use;

(g) personal gifts and donations of goods, excluding conveyances;

(h) goods that were imported into Canada and are exported from Canada after being transported in transit through Canada en route to a non-Canadian destination;

(i) goods that were manufactured or produced in Canada and that are exported from Canada for the purpose of being transhipped through another country to another Canadian destination;

(j) goods exported for repair or warranty repair that will be returned to Canada;

(k) goods for use as ships' stores by a Canadian carrier;

(l) goods manufactured or produced outside Canada and removed for export from a bonded warehouse or sufferance warehouse; and

(m) goods, other than goods exported for further processing, that will be returned to Canada within 12 months after the date of exportation.

7. Subject to section 8, goods that are described in or come within the scope of a written arrangement made between the Government of Canada and the government of another country may be exported to that country without being reported by the exporter if, under that arrangement, information respecting the exportation will be collected by that country as information relating to importations into that country and will be shared with Canada.

8. Goods that are exported and are of a class described in section 6 or of a type referred to in section 7 shall be reported in writing by the exporter before the goods leave Canada if an officer, at the time of the exportation, suspects on reasonable grounds that they are being exported contrary to an Act of Parliament and, for that reason, requests that they be reported.

REPORTING BY A CARRIER

Conveyances Used to Export Goods

9. (1) Subject to subsection (2), if goods are exported by a carrier by means of a conveyance, the exportation of the conveyance shall be reported in writing by the carrier before the exportation

(a) in the case of a vessel, at the export reporting office located closest to the place where the goods are loaded aboard the vessel for export;

(b) in the case of a railcar, at the export reporting office located closest to the place where the railcar on which the goods are loaded is assembled to form part of a train for export; and

(c) in any other case, at the export reporting office located closest to the place of exit of the conveyance from Canada.

(2) Subsection (1) does not apply in respect of a conveyance that is

(a) a regularly scheduled aircraft; or

(b) a highway conveyance, except if the conveyance is used to export goods from Canada in the circumstances described in paragraph 6(i).

Goods Other Than the Conveyances Used to Export Them

10. Subject to sections 11 to 13, all goods that are exported by a carrier, other than the conveyance used to export them, shall be reported in writing by the carrier, before the exportation, at the export reporting office located closest to the place where the goods are loaded on board the conveyance for export.

11. Goods that are imported into Canada and are exported from Canada after being transported in transit through Canada en route to a non-Canadian destination shall be reported in writing by the carrier before the goods leave Canada

(a) if the goods are exported by mail, at the export reporting office located closest to the post office where the goods are mailed;

(b) if the goods are exported by vessel, at the export reporting office located closest to the place where the goods are loaded aboard the vessel for export;

(c) if the goods are exported by aircraft, at the export reporting office located closest to the place of departure of the aircraft from Canada;

(d) if the goods are exported by rail, at the export reporting office located closest to the place where the railcar on which the goods are loaded is assembled to form part of a train for export; and

(e) if the goods are exported by any other means, at the export reporting office located nearest the place of exit of the goods from Canada.

12. Goods that are exported by a carrier by means of a highway conveyance, other than goods described in section 11, are not required to be reported by the carrier unless an officer, at the time of the exportation, suspects on reasonable grounds that they are being exported contrary to an Act of Parliament and, for that reason, requests that they be reported.

13. (1) Subject to subsection (4), goods that are exported by a carrier by means of a conveyance other than a highway conveyance and that have been or will be reported by the exporter in accordance with these Regulations may be reported by the carrier after their exportation if the carrier

(a) has, before the exportation, given an undertaking in writing to an officer that the carrier is exporting only such goods; and

(b) has on that basis been authorized in writing by that officer to report the goods in accordance with this section.

(2) Goods referred to in subsection (1) shall be reported by the carrier in writing at an export reporting office

(a) if the goods are exported by vessel, within three business days after the departure of the vessel from the place in Canada where it is loaded;

(b) if the goods are exported by rail, within one business day after the day on which the railcar on which the goods are loaded is assembled to form part of a train for export; and

(c) if the goods are exported by aircraft, within one business day after the day on which the aircraft departs from the place in Canada where it is loaded.

(3) In the case of goods referred to in paragraph (2)(a), the carrier must also report the goods in writing to the Chief Statistician of Canada within five business days after the end of the month in which the conveyance departs from Canada.

(4) Goods referred to in subsection (1) shall be reported in writing by the carrier at an export reporting office before the goods leave Canada if an officer, at the time of the exportation, suspects on reasonable grounds that they are being exported contrary to an Act of Parliament and, for that reason, requests that they be reported.

REPORTING BY A CUSTOMS SERVICE PROVIDER

14. Goods that are exported by a customs service provider shall be reported in writing by the customs service provider at an export reporting office before the goods leave Canada if an officer, at the time of the exportation, suspects on reasonable grounds that they are being exported contrary to an Act of Parliament and, for that reason, requests that they be reported.

ORAL REPORTING OF GOODS

15. Notwithstanding anything in these Regulations, the following goods may, if they are exported, be reported orally at the export reporting office located closest to the place of exit of the goods:

(a) a Canadian military conveyance that does not contain any goods or cargo, if the conveyance is not a restricted good;

(b) goods that are the property of and are for the exclusive use of the Department of National Defence and that are being exported by that Department to its defence bases abroad or in support of Canadian Forces deployment operations; and

(c) goods that are being exported because of a medical emergency, fire, flood or other disaster that threatens life, property or the environment.

MANNER OF REPORTING FISHING VESSELS

16. Each exportation, during a fishing season, of a commercial fishing vessel that is registered or licensed under the Canada Shipping Act need not be reported if the carrier, before the first exportation of the vessel during that fishing season, reports the vessel in writing to the chief officer of customs at an export reporting office.

MANNER OF REPORTING CATCH

17. All catch that is caught by a Canadian registered commercial fishing vessel in Canadian territorial waters and then delivered by that vessel to a port outside Canada, or delivered from that vessel to a foreign registered commercial fishing vessel bound for a port outside Canada, shall be reported in writing by the exporter to the chief officer of customs at an export reporting office, immediately on the return of the vessel to Canada.

MANNER OF REPORTING FERRIES

18. If a vessel is used by a carrier on a particular day solely or principally for the transportation of motor vehicles or passengers across international waters, the carrier shall, immediately on the return of the vessel to Canada after its last trip on that day, report the vessel in writing to the chief officer of customs at the export reporting office located closest to the place at which the vessel lands in Canada.

MANNER OF REPORTING CONVEYANCES

19. Any person who intends to permanently export a conveyance shall, before the exportation and in addition to making any other report required by these Regulations, provide documentation indicating the vehicle identification number (VIN) of the conveyance to the chief officer of customs at the export reporting office located closest to the place of exit of the conveyance.

REPEAL

20. The Reporting of Exported Goods Regulations(see footnote 1) are repealed.

COMING INTO FORCE

21. These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT
ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Description

The current Reporting of Exported Goods Regulations are unclear as to who is ultimately responsible for reporting goods that are exported. In addition, they do not identify specific time frames under which export reporting must take place, nor do they identify where goods that are exported must be reported. In order to address these issues, and to reflect modern customs practices, the current Regulations are repealed and replaced with new Reporting of Exported Goods Regulations.

The new Regulations establish, under the authority of section 95 of the Customs Act, who must report goods that are exported from Canada, as well as the time, place and manner of reporting those goods. They also specify exceptions to reporting requirements and alternatives to the general manner of reporting. In addition, the new Regulations address the responsibilities of exporters, carriers and customs service providers with respect to the reporting of exported goods and the conveyances by means of which they are exported.

Under the new Regulations, exporters have to report goods destined for export within prescribed time frames and at designated locations, except in cases where they are specifically exempted from the reporting requirement. The Regulations provide exemptions from the reporting requirement for certain classes of goods, such as personal and household effects (other than those of an emigrant), commercial goods having a value of less than $2,000 Canadian, goods exported by diplomatic embassy or mission personnel for their personal or official use, and goods for which there is a written arrangement between Canada and another country (e.g., Canada has a sharing of information agreement with the United States under which goods exported to the United States do not have to be reported).

The Regulations also provide that exporters approved by the Canada Border Services Agency (CBSA) are entitled to report under the Summary Reporting program. Reporting under this program is done on a monthly basis and is applicable to certain goods only. In addition, the Regulations provide exporters with the option of reporting inland, rather than only at the last point where the goods leave Canada.

Under the new Regulations, carriers are required to submit export reports to CBSA officials prior to the export of the goods. However, where a carrier satisfies the CBSA that they will only transport goods that have been or will be properly reported by the exporter of the goods in accordance with the Regulations, the carrier may be authorized by the CBSA to report all goods at a prescribed time following the exportation. On the other hand, highway carriers are only required to report in transit goods moving through Canada and are required to do so before the exportation.

Under the new Regulations, customs service providers, such as freight forwarders, are only required to report exported goods when requested to do so by a CBSA official before the goods leave Canada.

Alternatives

In order to ensure compliance with and enforcement of the law, the requirements regarding the exportation of goods from Canada need to be regulated rather than be included in a policy or administrative framework. Therefore, there are no practical alternatives to these Regulations.

The new Regulations are necessary in order to implement a number of changes required to both control and streamline the administration of Canada's Export Program. They are required to provide clarity to exporters, carriers and service providers as to their regulatory responsibilities in regards to the export of goods.

Benefits and Costs

Reporting of exported goods is important to collect trade statistics, control the export of restricted goods, such as art or cultural artefacts, and control the outbound movement of goods in transit through Canada that could have security implications. These Regulations enable the CBSA to use risk management techniques to provide greater efficiencies for enforcement targeting by receiving timely information prior to the export of goods. This gives CBSA better control over what goods leave the country and allocates additional time to officials in order to target strategic and controlled exports as well as possible contraband shipments. In addition, this assures Canada's trading partners that Canadian exports have been reported prior to export and therefore screened for security purposes by the CBSA.

Given that exporters have the option of reporting inland, greater flexibility as to where exported goods can be reported will reduce congestion at heavier travelled places of exit from Canada. As well, reporting by the carrier after the exportation, will contribute to reduced congestion at places of exit. These measures eliminate in the majority of cases the need to stop at busy border crossings. This is an important policy objective under the Smart Border Accord. Furthermore, the introduction of the requirement to submit the Vehicle Identification Number before a conveyance leaves Canada will significantly assist in preventing stolen vehicles from being exported from Canada illegally.

With the new Regulations, exporters, in most cases, are required to report exported goods within specific time frames. To ensure that these time frames are met, many exporters will choose to automate their export reporting. Although not mandatory, automated systems ensure timely transmission of export declarations to the CBSA. The number of exporters registering for CBSA's automated export reporting systems has increased exponentially to over 30,000 companies at this time. However, the paper-based method of reporting continues to be available for exporters that still wish to use it. In addition, these Regulations provide all exporters with a proof of report number, thereby eliminating the chances of receiving an administrative penalty for failure to report.

The implementation of these Regulations does not mandate any specific costs or require additional resources for either the federal government or industry. However, the introduction of time frames for export reporting will require the exporting industry to modify its business practices to allow for timely reporting prior to the export of goods from Canada.

Consultation

The CBSA has consulted extensively with the exporting community. Presentations were made to various stakeholders, both at a national and regional level. Their comments and suggestions were actively sought and taken into consideration.

For example, CBSA has incorporated in the Regulations the suggestion to have exports reported inland. However, the CBSA did not include the suggestion to change the reporting time frame from 48 hours to 24 hours for exporters exporting their goods via the marine mode. This suggestion was not incorporated because, from a security perspective, the 48 hour period provides customs officers additional time to do a detailed risk analysis of the shipment. The export community has accepted this requirement.

The new Regulations were pre-published in the Canada Gazette, Part I, on July 31, 2004. The CBSA received comments from 2 stakeholders.

They submitted the following concerns:

• the Regulations seem to cover only reporting done on paper;
• the Regulations are ambiguous in that they do not describe the processes that need to be followed for the stakeholders to accomplish their responsibility within the regulatory framework;
• the coming into force date of the Regulations should be delayed till January 2005;
• an administrative grace period should be afforded before assessment of any new penalties under the Administrative Monetary Penalty System (AMPS) created as a result of the new export regime.

The CBSA assured its stakeholders that the Regulations provide for electronic reporting. The Regulations stipulate that all goods that are exported shall be reported in writing. This includes automated reporting.

The CBSA also explained that Regulations are not meant to provide detailed administrative or technical processes, as these are frequently updated to meet changing needs or to keep up-to-date with technological advancements.

The CBSA also advised the stakeholder that there will be no delay in the processing of the new Regulations. However, it has been agreed and acknowledged that there will be a phased in implementation period for these Regulations. With respect to AMPS penalties, the stakeholder is aware that since Customs needs to have both new and amended penalties in place to support these new Regulations, penalties will not come into effect until the administrative means to support them have been put in place, sometime later in 2005. A Customs Notice will advise stakeholders when these penalties will come into effect.

However, following their pre-publication in the Canada Gazette, Part I, the new Regulations were amended to correct spelling and grammatical errors and to remove "(2004)" from the title.

Compliance and Enforcement

The new Regulations are designed to support the CBSA's mandate of ensuring that accurate export trade data is collected, that goods transiting Canada are not diverted while in Canada, and that Canada meets its commitments to its international partners in the management of controlled and/or embargoed goods.

The existing resources of the CBSA are adequate to ensure compliance with these regulatory requirements. Administrative monetary penalties will ensure compliance with these Regulations.

Contact

Mr. Doug Waldie
Director
Export Process Division
Policy and Operational Development
Canada Border Services Agency
Sir Richard Scott Building, 15th Floor
191 Laurier Avenue West
Ottawa, Ontario
K1A 0L8
Telephone: (613) 954-6986
FAX: (613) 946-0241
E-mail: Doug.Waldie@cbsa-asfc.gc.ca

Footnote a

S.C. 2001, c. 25, s. 55

Footnote b

R.S., c. 1 (2nd Supp.)

Footnote 1

SOR/86-1001

NOTICE:
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