Regulations Amending the Accounting for Imported Goods and Payment of Duties Regulations: SOR/2018-121

Canada Gazette, Part II, Volume 152, Number 13

Registration

June 12, 2018

CUSTOMS ACT

P.C. 2018-716 June 11, 2018

Her Excellency the Governor General in Council, on the recommendation of the Minister of Public Safety and Emergency Preparedness, pursuant to section 32 footnote a and subsection 164(1) footnote b of the Customs Act footnote c, makes the annexed Regulations Amending the Accounting for Imported Goods and Payment of Duties Regulations.

Regulations Amending the Accounting for Imported Goods and Payment of Duties Regulations

Amendments

1 The long title of the Accounting for Imported Goods and Payment of Duties Regulations footnote 1 is replaced by the following:

Accounting for Imported Goods and Payment of Duties Regulations

2 Section 1 of the Regulations and the heading before it are repealed.

3 (1) Paragraph 10.5(2)(c) of the Regulations is replaced by the following:

(2) Paragraph 10.5(3)(c) of the Regulations is replaced by the following:

4 Paragraphs 10.6(2)(b) and (c) of the Regulations are replaced by the following:

Coming into Force

5 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.)

Issues

The Standing Joint Committee for the Scrutiny of Regulations (SJCSR) identified the term “good character” in the Accounting for Imported Goods and Payment of Duties Regulations (Regulations) as being vague and overly dependent on administrative discretion; and recommended that it be defined in regulations.

Background

The Regulations outline the requirements that must be fulfilled when presenting importation documents to the Canada Border Services Agency (CBSA), including for the CBSA’s Customs Self-Assessment (CSA) Program. The CBSA’s approval of these importation documents results in release of goods into Canada, and they are the basis upon which commercial shipments that enter the country are accounted for. The CSA Program simplifies importation requirements for low-risk shipments, so that they can be processed more efficiently at the border for both the CBSA and the CSA Program members.

The CSA Program involves two key sets of stakeholders: (1) importers; and (2) carriers that transport goods for importers. The importer is responsible for the payment of any duties and taxes that may be owing on the goods that they have imported. A carrier is typically a company that transports the goods from the shipper to the importer in Canada and is in possession of them until they are delivered to the importer.

For most commercial shipments (e.g. of automotive parts), it is a carrier (acting on behalf of an importer) who reports the arrival of the shipment at the border. Whereas, the importer (or the owner, or the broker) submits the release and accounting documents to the CBSA. The Regulations permit an alternate release and accounting process for authorized CSA importers and CSA carriers. The requirements for this alternate release and accounting are outlined in the Regulations. To take advantage of these alternate release and accounting mechanisms, an importer or carrier must obtain a CSA authorization.

The Regulations contain the term “good character.” “Good character” is used as a criterion to evaluate membership applications to the CSA Program. When processing CSA Program applications, the CBSA reviews the compliance record of each applicant prior to issuing an authorization. In administering the “good character” criterion, the factors considered in examining an applicant’s compliance record were (1) whether the applicant has violated any Canadian laws that regulate the import and export of people and goods into and out of Canada; (2) whether the applicant has a criminal record; and (3) whether the applicant has a debt owing to the CBSA.

Objectives

The objective of these amendments is to eliminate the term “good character” and replace it with more precise criteria that are currently used in policy to assess applicants for CSA Program membership.

Description

The Regulations have been amended to require that an importer applicant to the CSA Program must

The Regulations have been amended to require that a carrier applicant to the CSA Program must have

“One-for-One” Rule

The “One-for-One” Rule does not apply to these amendments, as there is no change in administrative costs or burden to business.

Small business lens

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

Consultation

The CBSA advised stakeholders in 2015 that this amendment was being contemplated through its Border Commercial Consultative Committee on Trusted Trader Programs. This Committee is comprised of members from various industry associations, including the Canadian Manufacturers and Exporters Association; the Canadian Association of Importers and Exporters; the Canadian Courier and Logistics Association; the Canadian Vehicle Manufacturers Association; the Private Motor Truck Council of Canada; the Association of International Customs and Border Agencies; the Canadian Chamber of Commerce; and the Canadian Produce Marketing Association. No comments or concerns were raised by the Committee in response to these changes.

Rationale

These amendments have been adopted to address recommendations made by the SJCSR; they serve to improve the clarity and transparency of the application process for membership into the CSA Program. The criteria that were previously used in practice (on a policy or administrative basis) to determine importer and carrier eligibility for membership in the CSA Program have now been codified into the Regulations. As a result, it is anticipated that CSA Program members and importer/carrier applicants will not see any change in the existing application and assessment process.

The amendments do not impose any costs on the Government of Canada, CSA Program members, or current/future applicants, but they will allow stakeholders to more clearly understand (in advance) what factors the CBSA will use when processing an application.

Implementation, enforcement and service standards

The eligibility criteria for membership in the CSA Program are identified in the CBSA’s published policies (CSA D-Memos), which were available on the CBSA’s website. Once approved, the D-memos will be adjusted to reflect the revised program eligibility criteria.

Contact

Paul Allen
Manager
Trusted Trader Unit
171 Slater Street, 8th Floor
Ottawa, Ontario
K1A 0L8