Vol. 147, No. 26 — December 18, 2013

Registration

SOR/2013-218 November 29, 2013

CUSTOMS ACT

Regulations Amending the Proof of Origin of Imported Goods Regulations

P.C. 2013-1294 November 28, 2013

Whereas, pursuant to paragraph 167.1(b) (see footnote a) of the Customs Act (see footnote b), the annexed Regulations give effect, in part, to public announcements made on June 29, 2009, July 30, 2009 and August 10, 2011 known as Customs Notice 09-014, Customs Notice 09-018 and Customs Notice 11-013, respectively;

And whereas Customs Notice 09-014, Customs Notice 09-018 and Customs Notice 11-013 provide that the regulatory amendments giving effect to their announcements come into force on July 1, 2009, August 1, 2009 and August 15, 2011, respectively;

Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of Public Safety and Emergency Preparedness and the Minister of Finance, pursuant to subsection 35.1(4) (see footnote c) and section 164 (see footnote d) and paragraph 167.1(b) (see footnote e) of the Customs Act (see footnote f), makes the annexed Regulations Amending the Proof of Origin of Imported Goods Regulations.

REGULATIONS AMENDING THE PROOF OF ORIGIN OF IMPORTED GOODS REGULATIONS

PART 1

AMENDMENTS RETROACTIVE TO JULY 1, 2009

1. The Proof of Origin of Imported Goods Regulations (see footnote 1) are amended by adding the following after section 12:

PROOF OF ORIGIN OF GOODS THAT ARE ENTITLED TO THE BENEFIT OF PREFERENTIAL TARIFF TREATMENT UNDER CEFTA

12.1 (1) Subject to subsections (2) to (4), if the benefit of preferential tariff treatment under CEFTA is claimed for goods, the importer or owner of the goods shall, at the times set out in section 13, furnish to an officer, as proof of origin for the purposes of section 35.1 of the Act, a Certificate of Origin for the goods that is completed in English or French.

(2) The importer and owner of the goods are exempt from the requirements of subsection 35.1(1) of the Act if the importer or owner furnishes to an officer, at the time set out in paragraph 13(a), a written and signed declaration in English or French certifying that the goods originate in an EFTA state and that a completed Certificate of Origin is in the importer’s possession.

(3) If the benefit of preferential tariff treatment under CEFTA is claimed for casual goods, the importer and owner of the goods are exempt from the requirements of subsection 35.1(1) of the Act when the goods are entitled to preferential tariff treatment under CEFTA in accordance with the CEFTA Rules of Origin for Casual Goods Regulations.

(4) If the benefit of preferential tariff treatment under CEFTA is claimed for commercial goods whose estimated value for duty is less than $1,600, the importer and owner of the goods are exempt from the requirements of subsection 35.1(1) of the Act if

12.2 The Certificate of Origin referred to in subsection 12.1(1) may apply in respect of

12.3 The Certificate of Origin referred to in subsection 12.1(1) is acceptable as proof of origin for four years after the day on which it is completed.

PART 2

AMENDMENTS RETROACTIVE TO AUGUST 1, 2009

2. The heading before section 6 of the Regulations is replaced by the following:

PROOF OF ORIGIN OF GOODS THAT ARE ENTITLED TO THE BENEFIT OF PREFERENTIAL TARIFF TREATMENT UNDER NAFTA, CCFTA, CCRFTA OR CPFTA

3. (1) Subsections 6(1) to (3) of the Regulations are replaced by the following:

6. (1) Subject to subsections (2) to (4), if the benefit of preferential tariff treatment under NAFTA, CCFTA, CCRFTA or CPFTA is claimed for goods, the importer or owner of the goods shall, at the times set out in section 13, furnish to an officer, as proof of origin for the purposes of section 35.1 of the Act, a Certificate of Origin for the goods that is completed in English, French or Spanish.

(2) The importer and owner of the goods are exempt from the requirements of subsection 35.1(1) of the Act if the importer or owner furnishes to an officer, at the time set out in paragraph 13(a), a written and signed declaration, in English or French, certifying that the goods originate in a NAFTA country, Chile, Costa Rica or Peru, as the case may be, and that a completed Certificate of Origin is in the importer’s possession.

(3) If the benefit of preferential tariff treatment under NAFTA, CCFTA, CCRFTA or CPFTA is claimed for casual goods, the importer and owner of the goods are exempt from the requirements of subsection 35.1(1) of the Act if the goods are entitled to preferential tariff treatment under, as the case may be,

(2) The portion of subsection 6(4) of the Regulations before paragraph (a) is replaced by the following:

(4) If the benefit of preferential tariff treatment under NAFTA, CCFTA, CCRFTA or CPFTA is claimed for commercial goods whose estimated value for duty is less than $1,600, the importer and owner of the goods are exempt from the requirements of subsection 35.1(1) of the Act if

(3) Subparagraphs 6(4)(b)(i) and (ii) of the Regulations are replaced by the following:

PART 3

AMENDMENTS RETROACTIVE TO AUGUST 15, 2011

4. The heading before section 6 of the Regulations is replaced by the following:

PROOF OF ORIGIN OF GOODS THAT ARE ENTITLED TO THE BENEFIT OF PREFERENTIAL TARIFF TREATMENT UNDER NAFTA, CCFTA, CCRFTA, CPFTA OR CCOFTA

5. (1) Subsections 6(1) and (2) of the Regulations are replaced by the following:

6. (1) Subject to subsections (2) to (4), if the benefit of preferential tariff treatment under NAFTA, CCFTA, CCRFTA, CPFTA or CCOFTA is claimed for goods, the importer or owner of the goods shall, at the times set out in section 13, furnish to an officer, as proof of origin for the purposes of section 35.1 of the Act, a Certificate of Origin for the goods that is completed in English, French or Spanish.

(2) The importer and owner of the goods are exempt from the requirements of subsection 35.1(1) of the Act if the importer or owner furnishes to an officer, at the time set out in paragraph 13(a), a written and signed declaration, in English or French, certifying that the goods originate in a NAFTA country, Chile, Costa Rica, Peru or Colombia, as the case may be, and that a completed Certificate of Origin is in the importer’s possession.

(2) The portion of subsection 6(3) of the Regulations before paragraph (a) is replaced by the following:

(3) If the benefit of preferential tariff treatment under NAFTA, CCFTA, CCRFTA, CPFTA or CCOFTA is claimed for casual goods, the importer and owner of the goods are exempt from the requirements of subsection 35.1(1) of the Act if the goods are entitled to preferential tariff treatment under, as the case may be,

(3) Subsection 6(3) of the Regulations is amended by striking out “or” at the end of paragraph (c), by adding “or” at the end of paragraph (d) and by adding the following after paragraph (d):

(4) The portion of subsection 6(4) of the Regulations before paragraph (a) is replaced by the following:

(4) If the benefit of preferential tariff treatment under NAFTA, CCFTA, CCRFTA, CPFTA or CCOFTA is claimed for commercial goods whose estimated value for duty is less than $1,600, the importer and owner of the goods are exempt from the requirements of subsection 35.1(1) of the Act if

(5) Subparagraphs 6(4)(b)(i) and (ii) of the Regulations are replaced by the following:

PART 4

COMING INTO FORCE

6. (1) Part 1 is deemed to have come into force on July 1, 2009.

(2) Part 2 is deemed to have come into force on August 1, 2009.

(3) Part 3 is deemed to have come into force on August 15, 2011.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issue

In order for the Canada Border Services Agency (CBSA) to administer the customs procedures surrounding the proof of origin of imported goods that were described in the Canada-European Free Trade Association Free Trade Agreement (CEFTA), the Canada-Peru Free Trade Agreement (CPFTA), and the CanadaColombia Free Trade Agreement (CCOFTA), respectively, it is necessary to make amendments to the Proof of Origin of Imported Goods Regulations (the Regulations).

Background

Pursuant to the Customs Tariff, goods imported into Canada from all countries, other than North Korea, are entitled to the Most-Favoured-Nation Tariff. The Customs Tariff also establishes a series of preferential tariff treatments, whose rates of duty are lower than the Most-Favoured-Nation Tariff rate. Preferential tariff treatments include the General Preferential Tariff, Least Developed Country Tariff, Commonwealth Caribbean Countries Tariff, Australia Tariff, New Zealand Tariff and the various preferential tariffs that have been negotiated between Canada and its free trade partners.

In order to qualify for one of the preferential tariff treatments set out in the Customs Tariff, including those resulting from free trade agreements, proof of origin of the goods being imported must be provided in accordance with section 35.1 of the Customs Act. The Regulations prescribe the proof of origin requirements for importers claiming the benefit of a preferential tariff treatment.

To claim a preferential tariff treatment afforded under a free trade agreement, the importer must have in its possession, at the time of import, a proof of origin provided by the exporter or producer. This proof of origin serves as the exporter’s attestation that the goods meet the free trade agreement’s rules of origin, and is used by the CBSA to validate the importer’s claim for the preferential tariff treatment.

The CEFTA was signed on January 26, 2008, and came into force on July 1, 2009. The European Free Trade Association (EFTA) member states include Iceland, Norway, Switzerland and Liechtenstein.

The CPFTA was signed on May 29, 2008, and came into force on August 1, 2009.

The CCOFTA was signed on November 21, 2008, and came into force on August 15, 2011.

Each of these agreements provides preferential tariff treatments to Canada for goods of the other parties, provided they satisfy the rules of origin contained in the agreement. The agreements also contain provisions governing the proof requirements that can be imposed to ensure that goods satisfy these rules of origin.

The amendments to the Regulations were publicly announced by the CBSA in Customs Notices posted on June 29, 2009 (09-014 describing the CEFTA), July 30, 2009 (09-018 describing the CPFTA), and August 10, 2011 (11-013 describing the CCOFTA), respectively.

Paragraph 167.1(b) of the Customs Act allows regulatory changes that have previously been the subject of a public announcement to have a retroactive effect. As a result, the CBSA has been administering the proof of origin requirements on a provisional basis since the coming into force of these free trade agreements (FTAs).

The amendments to the Regulations described below simply finalize the process begun with the public announcements contained in the Customs Notices, formalizing proof of origin processes that are already being administered. These amendments will officially incorporate the proof of origin requirements associated with these FTAs into Canada’s existing regulatory regime.

Objectives

The amendments to the Regulations incorporate the CEFTA, the CPFTA, and the CCOFTA into Canada’s existing regulatory framework by allowing customs procedures related to proof of origin to be administered in accordance with the terms of each of these FTAs.

Description

Sections 6 through 9 of the Regulations describe the proof of origin requirements for claiming the benefit of preferential tariff treatment under the North American Free Trade Agreement (NAFTA); the Canada-Chile Free Trade Agreement (CCFTA); and the Canada-Costa Rica Free Trade Agreement (CCRFTA).

Due to commonalities with respect to the use of English, French or Spanish for the completion of a Certificate of Origin, the Regulations are being amended to subject goods imported from Peru and Colombia to the same proof of origin requirements as goods imported from NAFTA states, Chile, and Costa Rica.

The proof of origin requirements for claiming preferential tariff treatment under the CEFTA do not share the characteristics of the requirements for claiming other preferential tariff treatments. Consequently, new provisions outlining the proof of origin requirements for imported goods that are entitled to the benefit of preferential tariff treatment under the CEFTA are being added to the Regulations.

“One-for-One” Rule

The “One-for-One” Rule does not apply to this proposal, as there is no change in administrative costs to business.

Small business lens

The small business lens does not apply to this proposal, as there are no costs on small business.

Consultation

Prior to launching the negotiations for the CEFTA, the CPFTA, and the CCOFTA, respectively, Canadian manufacturers, importers and exporters were consulted extensively; furthermore, these stakeholders were kept informed of developments throughout the negotiation process for each FTA, including developments with respect to proof of origin issues.

The regulatory proposals contained herein were announced by the CBSA in Customs Notices 09-014, 09-018, and 11-013. These Customs Notices provided opportunities for the public to review the proposed regulatory changes and provide comments to the CBSA. No comments were received.

Rationale

Canada’s free trade agreements are governed by a network of regulations (including the Proof of Origin of Imported Goods Regulations) that, taken together, implement into Canadian law the customs procedures negotiated as part of each FTA.

Consequently, with each new FTA implementation bill passed by the Canadian Parliament, a series of minor, technical amendments are needed in order to incorporate the new FTA into Canada’s existing regulatory framework.

Implementation, enforcement and service standards

The CBSA will continue to monitor compliance with the Regulations in the course of its regular administration of customs- and tariff-related legislation and regulations. In the event that the requirements set out in the Regulations are not met, subsection 35.1(5) of the Customs Act provides for the denial or withdrawal of preferential tariff treatment.

Contact

Caley Sayers
Trade Programs Directorate
Canada Border Services Agency
150 Isabella Street, 11th Floor
Ottawa, Ontario
K1A 0G5