Canada Gazette, Part I, Volume 156, Number 48: Financial Security (Electronic Means) Regulations
November 26, 2022
Canada Border Services Agency
REGULATORY IMPACT ANALYSIS STATEMENT
For the Regulatory Impact Analysis Statement, see Regulations Amending Certain Regulations Administered and Enforced by the Canada Border Services Agency.
PROPOSED REGULATORY TEXT
Notice is given that the Governor in Council proposes to make the annexed Financial Security (Electronic Means) Regulations under paragraph 8.6(1)(a)footnote a and subsection 166(1)footnote b of the Customs Act footnote c.
Interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. They are strongly encouraged to use the online commenting feature that is available on the Canada Gazette website but if they use email, mail or any other means, the representations should cite the Canada Gazette, Part I, and the date of publication of this notice, and be sent to Janine Harker, Director, Commercial and Trade Policy Division, Strategic Policy Branch, Canada Border Services Agency, 10th Floor, 100 Metcalfe Street, Ottawa, Ontario K1A 0L8 (email: CBSA.OCT/CECO.ASFC@cbsa-asfc.gc.ca).
Ottawa, November 17, 2022
Assistant Clerk of the Privy Council
Financial Security (Electronic Means) Regulations
Definitions and Application
1 The following definitions apply in these Regulations.
- means the Customs Act. (Loi)
- means the person required to give security under the Act or the Customs Tariff. (débiteur)
- security agreement
- means an agreement between a debtor and a surety under which the surety guarantees payment of amounts that the debtor owes under the Act or the Customs Tariff. (contrat de garantie)
2 These Regulations apply to security required under the Act or the Customs Tariff.
Nature of security
3 For the purposes of paragraph 166(1)(b) of the Act, security required to be given must be a deposit or a written security agreement.
Security agreement — deemed terms and conditions
4 (1) The following terms and conditions are deemed to be an integral part of every security agreement and take precedence in the case of any conflict or inconsistency with any other provision of the security agreement:
- (a) the debtor and the surety represent and warrant that the security agreement constitutes a valid and legally binding obligation; and
- (b) if the debtor has failed to pay an amount that they owe under the Act or the Customs Tariff by the day on which the amount is payable, the surety must pay to His Majesty in right of Canada, in accordance with section 9, the lesser of the amount that the debtor owes and the amount of the security that the surety provides or confirms under paragraph 5(2)(e).
(2) The surety that is a party to a security agreement must be one of the following:
- (a) an entity that is licensed or otherwise authorized under the laws of Canada or of a province to carry on the fidelity or surety class of insurance business in Canada and that is recognized by the Treasury Board as an entity whose bonds or suretyships may be accepted by the Government of Canada;
- (b) a member of the Canadian Payments Association referred to in section 4 of the Canadian Payments Act;
- (c) a corporation that accepts deposits insured by the Canada Deposit Insurance Corporation or the Autorité des marchés financiers to the maximum permitted by the statutes under which those institutions were established;
- (d) a credit union as defined in subsection 137(6) of the Income Tax Act;
- (e) a corporation that accepts deposits from the public, if repayment of the deposits is guaranteed by His Majesty in right of a province.
5 (1) Subject to subsection (4), all security must be given by means of the electronic system specified by the Minister.
Security agreement — information
(2) In the case of a security agreement, the surety must either provide or confirm the following information by means of that system:
- (a) the agreement number;
- (b) the names of the parties;
- (c) the relevant Agency program;
- (d) the applicable business number;
- (e) the amount of the security;
- (f) the applicable legislative authority; and
- (g) the validity period of the agreement.
(3) The debtor and the surety must ensure that all information provided under subsection (2) is updated within two days after any change.
(4) Despite subsection (1), the Minister may require that security be given by any other means that is made available or specified by the Minister for that purpose if the Minister determines that
- (a) the infrastructure is inadequate or incompatible with the electronic system specified by the Minister;
- (b) a natural disaster, national crisis or any other exceptional circumstance prevents or impedes the use of the electronic system or makes using it unreliable; or
- (c) it is impracticable for a debtor, due to circumstances outside of their control, to give security by means of the electronic system.
Copy of security agreement
6 On the Minister’s request, the debtor or surety must provide a copy of the security agreement to the Minister by means of the electronic system specified by the Minister.
Termination of security agreement
7 (1) The surety must give at least 30 days’ notice, by means of the electronic system specified by the Minister, of the termination date of the security agreement.
(2) The Minister may claim from the surety amounts that accrued before or were payable on the date of the agreement’s expiry or termination.
8 (1) Subject to section 9, the Minister may enforce a security agreement once the surety has either confirmed or provided, in accordance with subsection 5(2), the information set out in that subsection.
(2) The amount that the Minister may claim from the surety is the lesser of the amount that the debtor owes under the Act or the Customs Tariff and the amount of the security that the surety provided or confirmed in the electronic system under paragraph 5(2)(e).
9 (1) If the debtor has failed to pay an amount that they owe under the Act or the Customs Tariff by the day on which the amount is payable, the Minister may send the surety a notice of claim that sets out the amount claimed and the information set out in subsection 5(2) that the surety provided or confirmed in the electronic system.
(2) In the case of a security agreement that has expired or been terminated, the Minister must send the notice of claim within one year after the date of the agreement’s expiry or termination.
(3) Within 60 days after the day on which the notice of claim is sent to the surety, the surety must pay His Majesty in right of Canada the amount claimed or provide the Minister with information to rebut the claim.
(4) If the surety provides information under subsection (3), the Minister must review the information, make a decision in relation to the claim and notify the surety of the decision.
Requirement to pay
(5) The surety must pay the amount claimed on receipt of the Minister’s decision to that effect.
Payment by surety
10 For greater certainty, the payment of an amount by the surety to His Majesty in right of Canada under subsection 9(3) or (5) does not relieve the debtor or any other person from liability to pay any amount otherwise owed.
Continuation of security
11 These Regulations do not apply to security, other than security given under the Accounting for Imported Goods and Payment of Duties Regulations, that has been given under the Act or the Customs Tariff and that is valid immediately before the day on which these Regulations come into force. Such security continues to be valid until the day on which it expires or is terminated.
Coming into Force
S.C. 2022, c. 10
12 These Regulations come into force on the day on which section 303 of the Budget Implementation Act, 2022, No. 1 comes into force, but if they are registered after that day, they come into force on the day on which they are registered.
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