From: UPS Supply Chain Solutions [mailto:Communications_Center@ups-scs.service.

com] Sent: June-27-13 12:20 PM To: Subject: Importers to Be Cautious When Importing Under End-Use and Other Conditional Duty Reduction Related Tariff Items

June 27, 2013 Dear Valued Customer: As you may know, a group of importers formed a coalition in December 2012 to protest against an import policy shift by the Canada Border Services Agency (CBSA) with regards to the use of 1 exemption tariff item 9948.00.00 (9948). To date, importers have used tariff item 9948.00.00 to declare electronic goods including music CDs, MP3 players, televisions, television monitors and computer speakers. However, recent CBSA actions suggest that tariff item 9948.00.0 only applies to such electronic goods if the importer of record obtained end-use certificates from the consumers, and is able to produce them upon request. Failing to comply with the end-use provisions may lead to the reassessing of duties up-to four years prior. While the CBSA states that officers are just applying existing import regulations , importers are questioning CBSA's motivation given the Agency's long-standing tariff exemption history on such electronic goods. Specifically, the Canadian Importers 9948 Fair Treatment Coalition is questioning CBSA's apparent willingness to disregard certain of the Agency's binding advance rulings and past CITT decisions while seeking to retroactively reassess duties. The coalition also fears that the success of this initiative might lead CBSA to target all end-use provisions throughout the entire Customs Tariff. Currently, trade associations are partnering with their members to outline and address the importing community's concerns with the CBSA and the federal government. In the meantime, UPS recommends that importers begin to analyse their import patterns to understand the extent to which their businesses may be impacted. If you or your suppliers import goods under end-use tariff item 9948.00.00, you should review your current import processes to detect potential compliance pitfalls, whether you hold a CBSA advance ruling or not. Similar precautions should also be taken by importers of goods under any other enduse tariff item in Chapter 99 or any other chapter of the Customs Tariff that reduces or eliminates regular customs duty rates. Our UPS Trade Management Services Group can assist you through the review and help identify a sourcing strategy. If you would like to join the Canadian Importers 9948 Fair Treatment Coalition, please let us know and we will provide you with additional information. For any questions on the above services, please email our Trade Management Services Group attmscanada@ups.com. Sincerely, UPS
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Source: theglobeandmail.com; newswire.ca; IE Canada

1 Canada Customs Tariff Item 948.00.00 - Articles for use in the following: Automatic banknote dispensers; Automatic data processing machines and units thereof, magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data; Automatic word-processing machines; Chart recorders and other instruments for measuring or checking electrical quantities, designed for use with automatic data processing machines; Electronic calculating machines; Magnetic discs; Numerical control panels with built-in automatic data processing machines; Power supplies of automatic data processing machines and units thereof; Process control apparatus, excluding sensors, which converts analog signals from or to digital signals; Video games used with a television receiver, and other electronic games; Parts and accessories of the foregoing. 2 Imported Goods Records Regulations (SOR/86-1011) article 3.(a)

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