Vol. 145, No. 21 — October 12, 2011

Registration

SOR/2011-208 September 30, 2011

CUSTOMS ACT

Regulations Amending Certain Regulations Made Under the Customs Act

P.C. 2011-1113 September 29, 2011

His Excellency the Governor General in Council, on the recommendation of the Minister of Public Safety and Emergency Preparedness, pursuant to subsection 8.1(8) (see footnote a), sections 12.1 (see footnote b), 32 (see footnote c) and 33 (see footnote d) and subsections 40(3) (see footnote e) and 164(1) (see footnote f) of the Customs Act (see footnote g), hereby makes the annexed Regulations Amending Certain Regulations Made Under the Customs Act.

REGULATIONS AMENDING CERTAIN REGULATIONS MADE UNDER THE CUSTOMS ACT

REPORTING OF IMPORTED GOODS REGULATIONS

1. The portion of section 13.91 of the Reporting of Imported Goods Regulations (see footnote 1) before paragraph (a) is replaced by the following:

13.91 Sections 13.2 to 13.7 and 13.87 to 13.9 do not apply in respect of commercial goods that have been shipped directly from the United States or Mexico if

ACCOUNTING FOR IMPORTED GOODS AND PAYMENT OF DUTIES REGULATIONS

2. The definition “eligible goods” in section 2 of the Accounting for Imported Goods and Payment of Duties Regulations (see footnote 2) is replaced by the following:

“eligible goods” means commercial goods that have been shipped directly from the United States or Mexico and for which there is no requirement under any Act of Parliament or of the legislature of a province or any regulation made under such an Act that a permit, licence or other similar document be provided to the Agency before the goods are released; (marchandises admissibles)

3. Subsection 7(4) of the Regulations is repealed.

4. Section 7.4 of the Regulations is replaced by the following:

7.4 When goods have been released in accordance with sections 7.1 to 7.3, the person required by subsection 32(5) of the Act to account for the goods shall do so no later than the 24th day of the month following the month in which the goods are released.

5. (1) Paragraph 10.5(2)(h) of the French version of the Regulations is replaced by the following:

  1. h) il est en mesure de transmettre par voie électronique à l’Agence, conformément aux exigences, spécifications et pratiques techniques qui visent l’échange de données informatisées et qui sont énoncées dans le Document sur les exigences à l’égard des clients du commerce électronique, les informations soumises lors de la déclaration en détail de marchandises dédouanées en vertu du paragraphe 32(2) de la Loi et tout changement apporté à ces informations.

(2) Paragraph 10.5(3)(f) of the French version of the Regulations is replaced by the following:

  1. f) il fournit une garantie conformément au Règlement sur le transit des marchandises;

6. (1) Paragraph 10.6(1)(d) of the French version of the Regulations is replaced by the following:

  1. d) l’importateur ou le transporteur, selon le cas, omet d’aviser le ministre en application des articles 10.8 ou 10.81 de changements relatifs aux renseignements visés aux alinéas 10.5(1)b) ou c), selon le cas;

(2) Paragraph 10.6(1)(i) of the English version of the Regulations is replaced by the following:

  • (i) the importer or carrier, as the case may be, has been convicted of an offence under the Act or its regulations.

(3) Section 10.6 of the Regulations is amended by adding the following after subsection (2):

(2.1) In deciding whether to suspend or cancel the CSA authorization of a CSA importer or CSA carrier, the Minister is to consider

  • (a) the severity of the breach and whether or not it was rectified soon after it was discovered;
  • (b) the economic impact of the suspension or the cancellation; and
  • (c) the security and safety of Canadians.

7. Paragraph 10.7(2)(b) of the Regulations is replaced by the following:

  • (b) the 15th day after the day on which that notice is sent by mail or courier.

8. (1) Paragraph 10.8(2)(a) of the Regulations is replaced by the following:

  • (a) changes to the importer’s name or corporate name, as the case may be, residence or business address, as the case may be, solvency or security referred to in paragraph 10.5(2)(f);

(2) Paragraph 10.8(2)(d) of the French version of the Regulations is replaced by the following:

  1. d) le fait qu’il n’est plus en mesure de transmettre par voie électronique à l’Agence les informations soumises lors de la déclaration en détail de marchandises dédouanées en vertu du paragraphe 32(2) de la Loi et tout changement apporté à ces informations.

9. Paragraph 10.81(2)(a) of the Regulations is replaced by the following:

  • (a) changes to the carrier’s name or corporate name, as the case may be, residence or business address, as the case may be, solvency or security referred to in paragraph 10.5(3)(f);

10. Item 1 of Schedule 2 to the Regulations is replaced by the following:

1. Name or corporate name, as the case may be

11. Item 3 of Schedule 2 to the French version of the Regulations is replaced by the following:

3. Noms commerciaux, s’ils diffèrent du nom, de la dénomination sociale ou de la raison sociale indiqué à l’article 1

12. Item 14 of Schedule 2 to the French version of the Regulations is replaced by the following:

14. Noms des divisions canadiennes qui importent des marchandises au Canada

13. Item 16 of Schedule 2 to the Regulations is replaced by the following:

16. Names of Canadian divisions responsible for purchasing goods

14. Item 17 of Schedule 2 to the French version of the Regulations is replaced by the following:

17. Noms des divisions qui utiliseront le numéro d’entreprise de l’importateur pour la déclaration en détail et le paiement des droits relatifs aux marchandises commerciales dédouanées en vertu du paragraphe 32(2) de la Loi

15. Item 21 of Schedule 2 to the French version of the Regulations is replaced by the following:

21. Accords ou ententes conclus avec des ministères fédéraux ou d’autres agences pour permettre l’entrée des marchandises au Canada

16. Items 30 and 31 of Schedule 2 to the Regulations are replaced by the following:

30. Name or corporate name, as the case may be, and addresses of consignees in Canada that receive direct delivery of the imported goods

31. For goods imported from the United States or Mexico, the vendor’s name and address, as well as the shipping address where the goods are stored for export from the United-States or Mexico, if that address is different from the vendor’s address

17. Item 34 of Schedule 2 to the English version of the Regulations is replaced by the following:

34. Name and address of the entity listed in section 3.5 of the Act where the payments to the Receiver General will be made

18. Item 1 of Schedule 3 to the Regulations is replaced by the following:

1. Name or corporate name, as the case may be

19. Item 9 of Schedule 3 to the French version of the Regulations is replaced by the following:

9. Noms commerciaux, s’ils diffèrent du nom, de la dénomination sociale ou de la raison sociale indiqué à l’article 1

20. Items 24 and 25 of Schedule 3 to the Regulations are replaced by the following:

24. Names of divisions where the imported goods are delivered and corporate names and business numbers of the corporations to which those divisions belong

25. Every carrier code that is assigned by the Agency and the name of the carrier that is associated with each code

21. Item 28 of Schedule 3 to the Regulations is replaced by the following:

28. For all Canadian and U.S. divisions, their names, business numbers, types of transportation business, carrier codes, and business addresses, and the names and addresses of their terminals and warehouses

PERSONS AUTHORIZED TO ACCOUNT FOR CASUAL GOODS REGULATIONS

22. The portion of paragraph 7(b) of the Persons Authorized to Account for Casual Goods Regulations (see footnote 3) before subparagraph (i) is replaced by the following:

  1. (b) in the case of casual goods that have not been delivered to the importer or owner,

COMING INTO FORCE

23. 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.)

Issue and objectives

These Regulations represent amendments of an administrative and technical nature that flow from the Standing Joint Committee for the Scrutiny of Regulations (SJC)’s comments to the Accounting for Imported Goods and Payment of Duties Regulations. These amendments include the repeal of subsection 7(4) of the Accounting for Imported Goods and Payment of Duties Regulations and consequential amendments to the Regulations and to the Persons Authorized to Account for Casual Goods Regulations.

The Accounting for Imported Goods and Payment of Duties Regulations are also amended as a result of changes to the CBSA’s Customs Self Assessment (CSA) program. A consequential amendment to the Reporting of Imported Goods Regulations is being made as well.

Description and rationale

The Accounting for Imported Goods and Payment of Duties Regulations prescribe the general requirements for the accounting and release of imported goods, as well as for the payment of applicable duties on those goods. They also prescribe specific accounting and payment of duties requirements applicable to Courier Low Value Shipments (LVS) and CSA programs participants.

Amendments of a technical nature that flow from the SJC’s comments

A number of technical amendments intended to clarify the wording and to correct errors in the Accounting for Imported Goods and Payment of Duties Regulations are being made. The following are examples of these amendments:

  • Deleting the word “aux” in paragraph 10.5(3)(f) of the French version. This change is necessary to correct a typographical error contained in the text brought to the CBSA’s attention by the SJC.
  • Amending section 10.6 to specify the factors that are considered by the CBSA prior to suspending or cancelling a CSA authorization.
  • Deleting the words “or delivered by hand” contained in subsection 10.7(2) of the English version and replacing the words “de remise de l’avis en main propre ou de son envoi” in the French version by the words “d’envoi de l’avis.” These changes are required to ensure consistency between the English and French versions.

Other amendments involve making minor technical changes to, among others, paragraphs 10.5(2)(h), 10.6(1)(d) and (i), 10.8(2)(d) and to the contents of Schedules 2 and 3 of the Accounting for Imported Goods and Payment of Duties Regulations.

Repeal of subsection 7(4)

The SJC has advised that subsection 7(4) of the Accounting for Imported Goods and Payment of Duties Regulations, which is intended to allow for goods imported by courier and released to a LVS program participant to avoid being accounted for when those goods are demonstrated to have been exported or destroyed, must be repealed. The SJC concluded that the Customs Act does not authorize the prescription of circumstances in which goods that have been released subject to an accounting requirement later cease to be subject to such a requirement. To address the SJC’s concern, the CBSA is repealing subsection 7(4) and modifying two related provisions: section 7.4 of the present Regulations and section 7 of the Persons Authorized to Account for Casual Goods Regulations.

The CBSA has established administrative procedures to deal with the repeal of subsection 7(4) that will allow importers to account for imported goods released to LVS program participants which have not been delivered and have been subsequently exported or destroyed under CBSA supervision.

CSA expansion

The CSA program is designed to simplify the import process for authorized low-risk importers who have the system capability to self-assess the accounting for imported goods and to report and remit payments of duties to the CBSA.

At the time the CSA program was first implemented, only commercial goods shipped directly from the United States or commercial goods shipped directly from Mexico to an importer who is a vehicle manufacturer were eligible for CSA clearance. As a result of changes made to the CSA program, all commercial goods shipped directly from Mexico have become eligible for CSA clearance. Due to this change to the CSA program, the CBSA is amending the definition of “eligible goods” in section 2 of the Accounting for Imported Goods and Payment of Duties Regulations to include all commercial goods shipped directly from Mexico. A consequential amendment to the Reporting of Imported Goods Regulations is also being made.

Consultation

In regard to the technical amendments, external consultations were not required as they have no impact on the substance of the Accounting for Imported Goods and Payment of Duties Regulations.

In regard to the administrative procedures that have been established to deal with the repeal of subsection 7(4), the CBSA consulted with stakeholders from the courier and customs broker industries. These administrative procedures were set out in Customs Notice 09-008, entitled Goods Released under the Courier LVS Program which have not been Delivered to the Importer or Owner Thereof, which was posted on the CBSA Web site on May 13, 2009. The administrative procedures came into effect in February 2010 and did not cause any controversy.

In regard to the expansion of the CSA program to include all goods shipped directly from Mexico, discussions between the CBSA and the importing community regarding this matter have been on-going and support for this proposal has been favorable. The CBSA posted Customs Notice 09-004, entitled Expansion of Customs Self Assessment (CSA) to Mexico, on its Web site on April 15, 2009.

Since amendments to the regulations are the only means of enacting these changes, no alternatives were considered.

Implementation, enforcement and service standards

The repeal of subsection 7(4) of the Accounting for Imported Goods and Payment of Duties Regulations is expected to have minimal financial impact on the importing community. It may result in slightly increased monitoring and administrative costs to the courier and customs broker companies. The change is expected to have minimal impact on current CBSA enforcement and compliance strategies relating to the accounting for and payment of duties of imported goods.

There will be no changes to the compliance and enforcement strategies relating to the CSA program as a result of the regulatory changes. The changes to the CSA program are expected to result in reduced brokerage and customs clearance fees for the importing community.

There are no implementation or enforcement considerations relating to the technical amendments recommended by the SJC.

Contact

André Lamoureux
Manager
National Trusted Traders and Risk Assessment
Trusted Traders Division
Pre-Border Programs Directorate
Programs Branch
Canada Border Services Agency
150 Isabella Street, 4th Floor
Ottawa, Ontario
K1A 0L8
Telephone: 613-941-2713

Footnote a
S.C. 2001, c. 25, s. 8(2)

Footnote b
S.C. 2009, c. 10, s. 6

Footnote c
S.C. 2005, c. 38, s. 63

Footnote d
S.C. 2002, c. 22, s. 334

Footnote e
S.C. 2001, c. 25, s. 31

Footnote f
S.C. 2009, c. 10, s. 16

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

Footnote 1
SOR/86-873

Footnote 2
SOR/86-1062

Footnote 3
SOR/95-418