Registration
SOR/2008-23 January 31, 2008

CUSTOMS ACT

Regulations Amending the Designated Provisions (Customs) Regulations

P.C. 2008-0179 January 31, 2008

Her Excellency the Governor General in Council, on the recommendation of the Minister of Public Safety and Emergency Preparedness, pursuant to subsection 109.1(3) (see footnote a) of the Customs Act (see footnote b), hereby makes the annexed Regulations Amending the Designated Provisions (Customs) Regulations.

REGULATIONS AMENDING THE DESIGNATED PROVISIONS (CUSTOMS) REGULATIONS

AMENDMENT

1. Items 10 to 13 of Part 2 of Schedule 2 to the Designated Provisions (Customs) Regulations (see footnote 1) are replaced by the following:

Item	Column 1 Designated Provision	Column 2 Short-form Description
10.	14(a)	Receiving domestic cigars into a bonded warehouse
10.1	14(b)	Receiving domestic, packaged raw leaf tobacco into a bonded warehouse
10.2	14(c)	Receiving domestic, manufactured tobacco that is not stamped into a bonded warehouse
10.3	14(d)	Receiving domestic, non-duty paid packaged or bulk spirits into a bonded warehouse
10.4	14(e)	Receiving domestic, non-duty paid packaged or bulk wine into a bonded warehouse
10.5	14(f)	Receiving domestic, non-duty paid specially denatured alcohol into a bonded warehouse
11.	15	Receiving into or removing from a bonded warehouse imported tobacco products or imported packaged spirits or wine
12.	16(a)	Receiving imported bulk spirits into a bonded warehouse
13.	16(b)	Receiving imported bulk wine into a bonded warehouse
13.1	16(c)	Receiving imported specially denatured alcohol into a bonded warehouse

COMING INTO FORCE

2. 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.)

Notice

The Advance Commercial Information (ACI) Initiative is a component of the 2000 Customs Action Plan. The Initiative was implemented in phases, starting with Phase I in 2004, with marine offshore shipments, followed by Phase II in 2006, with marine shipments loaded in the United States and air shipments. The objective of these regulatory amendments is to complete the implementation of these initial two phases.

The ACI Initiative is part of the Government’s Smart Regulations Initiative because its standards are compatible with those of the United States Customs and Border Protection Bureau, it removes certain barriers to cross-border trade, it changes our way of managing risks, it assures a better focus of resources on high-risk goods and it reduces the costs for businesses and the government. This approach enhances our ability to detect contraband and identify threats to health, safety and security.

Description

Several regulations made pursuant to the Customs Act need to be amended to continue implementing Phases I and II of the ACI Initiative.

• Presentation of Persons (2003) Regulations

1. The definition of “commercial goods” is added to section 1 of the Regulations. This definition is required for the application of section 14.1 of the Regulations.

2. The French version of paragraph 11(a) is amended to reflect the English version. “Aéronef commercial” replaces “aéronef d’affaires.”

3. The text of paragraph 11(c) is amended in order that it be consistent with the other paragraphs in section 11.

4. The Regulations are amended by adding section 14.1. This section specifies that, in certain cases, an authorization to present oneself in an alternative manner is only valid if, on arrival in Canada, the person has no commercial goods in their actual possession or in their baggage, and, in other cases, if no commercial goods are on board the conveyance that the person uses to arrive in Canada.

• Reporting of Imported Goods Regulations

1. The definition of “vessel” is amended by the repeal of subsection 2(c) of the Regulations, and section 13.71 is added. These amendments are necessary in order to allow the notices and information required in sections 13.2 and 13.5 to be provided separately for each vessel.

2. The definition of “cargo container” in section 2 is amended to be aligned with international definitions. The minimum internal capacity of containers subject to the Regulations is reduced to one cubic metre. The nature and use of containers is defined and ancillary equipment and demountable bodies are now included as being part of the container.

3. A definition of “CSA importer” in section 2 is added. The definition has the same meaning as in the Accounting for Imported Goods and Payment of Duties Regulations.

4. The Regulations are amended by adding section 13.91 in order to exclude goods under the Customs Self-Assessment Program (CSA) from the ACI requirements found in sections 13.2 to 13.7 and 13.87 to 13.9 of the Regulations.

5. The Regulations are amended to clarify three headings:

• The heading preceding section 12.1 is replaced by “ADVANCE NOTICE OF ARRIVAL: VARIOUS MODES”;
• The heading preceding section 13.2 is replaced by “ADVANCE NOTICE OF ARRIVAL: MARINE MODE”;
• The heading preceding section 13.87 is replaced by “ADVANCE NOTICE OF ARRIVAL: AIR MODE”.
• Transportation of Goods Regulations

1. Subsection 7(2) is amended by adding to the list of documents to retain, as part of the CSA, any instructions specified in subsection 13.91(c) of the Reporting of Imported Goods Regulations.

2. Subsection 7(3) of the Regulations is amended to include the records that are to be kept as part of the ACI Initiative. Subsection 7(3) sets out requirement to retain records, or copies of them, of the data that has been sent pursuant to subsections 13.2 to 13.7 and 13.87 to 13.9 of the Reporting of Imported Goods Regulations, any acknowledgement message received by the Canada Border Services Agency and exemptions issued by the minister under section 13.8 of the Reporting of Imported Goods Regulations.

3. Subsection 7(4) of the Regulations is amended to include a requirement to keep the records used to create the records referred to in subsection 7(1) to 7(3).

4. Subsection 7(5) is added to the Regulations to specify the period of time that the records mentioned in subsections 7(1) to 7(4) must be kept.

• Designated Provisions (Customs) Regulations

Technical regulatory amendments are made to the Designated Provisions (Customs) Regulations. Sections 10 to 13 in PART 2 of Schedule 2 (designating sections 13 to 16 of the Customs Bonded Warehouses Regulations) are amended to reflect the amendments to the designated provisions made in 2003 further to the implementation of the Excise Act2001 (SOR/2003-241).

Alternatives

The ACI Initiative uses more effective risk management processes and tools to identify threats to our health, safety and security before the arrival of freight and conveyances in Canada. Regulatory amendments are the best way to achieve this result because they carry on the implementation of Phases I and II of the ACI Initiative.

Benefits and costs

The goal of the ACI is to identify shipments with high or unknown risk prior to arrival in Canada. The continuation of the ACI initiative will allow the Canada Border Services Agency (CBSA) to better target high-risk shipments, to better manage the increasing amount of trade with other countries and to improve processing within advanced timeframes.

Treasury Board has provided funding for the implementation of the ACI Initiative and for the development of the electronic systems required to administer the ACI. These regulatory amendments do not involve any additional cost to industry or to the government of Canada.

Consultation

Extensive consultations with stakeholders were held throughout the design and development of the various phases of the ACI Initiative. The objective of these amendments is to continue the Initiative and consultations were held on the following topics:

• Presentation of Persons (2003) Regulations

There were no public consultations on these regulatory amendments in light of the fact that this clarifies the application of certain CBSA programs already in place. Extensive inter-departmental consultations were held to ensure compliance with the program components, including NEXUS, CSA and FAST.

• Reporting of Imported Goods Regulations

1. Definition of “vessel”

Internal consultations were held to confirm that changing the definition would have a negligible effect on other governmental programs. No public consultations were held because these standards are already recognized by the industry. A letter to this effect was sent to the relevant maritime associations, and no objections were raised.

2. Definition of “cargo container”

Consultations were held with the air and marine industries to determine the sizes and capacities of containers currently used by carriers. Internal government consultations were also held. Empty cargo containers need to be reported in the marine mode, but not in the air mode. Further consultations will be held should CBSA determine that empty cargo containers need to be reported in the air mode.

3. Section 13.91

No public consultations were held with the industry because the design of the CSA Program necessitates that CSA goods be excluded from the ACI initiative. Internal consultations were held, primarily with CSA officials. Industry is aware that CSA goods are excluded from ACI requirements.

4. Definition of “CSA importer” and headings

No consultations were held on these topics because these amendments are being made for the purpose of clarity and conformity.

• Transportation of Goods Regulations

The obligation to retain records on transported goods is already in existence in the Transportation of Goods Regulations. As a result, no consultations were held as ACI data, exemptions and messages were simply added to section 7. External stakeholders raised questions regarding the time period to retain the information (three years plus current year) and no objections were raised.

• Designated Provisions (Customs) Regulations

The Canada Customs and Revenue Agency (CCRA) held extensive consultations with the stakeholders affected by the Excise Act, 2001. No consultations were held on the Regulations Amending the Designated Provisions (Customs) Regulations because these amendments stem directly from the adoption of the Excise Act, 2001.

The regulatory amendments were pre-published in the Canada Gazette, Part I, on August 4, 2007 and did not raise any concerns or questions from the public. The CBSA will continue its consultations with the industry and will work with all the parties involved to ensure the smooth implementation of the other phases of the ACI initiative.

Compliance and enforcement

The ACI Initiative is monitored and shipments can be randomly examined to ensure that they comply with the legislation. Shipments and means of transportation will be inspected based on the risk factor identified by the Canadian Automated Targeting System. By concentrating its resources on high or unknown risk sectors, the ACI Initiative will improve the effectiveness of enforcement efforts in the commercial sector.

The owner or person responsible for a means of conveyance who does not meet requirements will be sanctioned. Fines will be imposed under the Administrative Monetary Penalty System (AMPS) based on the provisions of the Designated Provisions (Customs) Regulations.

These regulatory amendments do not include any new sanctions for the ACI Initiative because the regulatory amendments will serve to support an initiative already in place.

Contact

Émilie Bélanger-Simard
Senior Policy Officer
Regulations
Strategy and Coordination Branch
Canada Border Services Agency
191 Laurier, 7th Floor
Ottawa, Ontario
K1A 0L8
Telephone: 613-954-6371
Fax: 613-948-4855
Email: Emilie.Belanger-Simard2@cbsa-asfc.gc.ca

Footnote a
 S.C. 2001, c. 25, s. 62

Footnote b
 R.S., c. 1 (2nd Supp.)

Footnote 1
 SOR/2002-336

NOTICE:
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