Canadian Customs Process Overview

Canada Border Services Agency
• Dec 12/03 a new agency has been established “Canada Border Services Agency”, replacing “Canada Customs Revenue Agency” • CBSA is part of “Public Safety Canada” • Employees of C.C.R.A., Citizenship & Immigration Canada (CIC), and Canadian Food Inspection Agency, (CFIA) were transferred to the new agency. • Alain Jolicoeur: President of CBSA

Public Safety Canada is Comprised of: Royal Canadian Mounted Police (R.C.M.P.) Canadian Security Intelligence Service (C.S.I.S.) Correctional Service of Canada (C.S.C.) National Parole Board (N.P.B.) Canada Border Services Agency Minister of Public Safety.

Stockwell Day

Main Acts Administered
• Customs Act • Customs Tariff Act • Excise Act • Excise Tax Act (G.S.T.) • Special Import Measures Act • Over 80 other Acts of Parliament

Customs Act
• • • • Main Law of Customs Import and Exports Basis for giving Customs their powers Allows Customs to set up their own regulations • D Memorandums • Regulations regarding Customs Brokers • Administrative Monetary Penalty System (A.M.P.S.)

Customs Tariff Act
• Contains Canadian H.S.#’s & Duty Rates • Tariff Treatments & Which Country is Afforded Which Treatment • Prohibited Goods • Concessionary Rates Of Duty • Supporting Legislation

• Excise Act - Beer, Wine, Spirits & Tobacco • Excise Tax Act - G.S.T. & “Luxury Items”

Excise Act & Excise Tax Act

Special Import Measures Act
• Regulations Regarding AntiDumping and Foreign Government Subsidies. • Anti-Dumping Duties • Countervailing Duties

A Customs Brokerage
• Is Bonded with Customs Border Service Agency • Importer signs Powers Of Attorney, giving the brokerage the right to clear goods through customs and pay C.B.S.A. the duties and taxes on the importers behalf. • Has “Account security” allowing the brokerage to clear shipments on minimum info., and pay the duties and taxes at the end of the month.

A Customs Brokerage
• Is connected to C.B.S.A. to clear goods , and assess duties & taxes via: A.C.R.O.S.S., C.A.D.E.X., R.N.S.

• A.C.R.O.S.S. : Accelerated Customs Release Operating Support System (release) • R.N.S.: Release Notification System (release notification) • C.A.D.E.X.: Customs Automated Data Exchange (confirmation)

A Customs Broker
• Is A Canadian Citizen or Landed Immigrant • Is of “Good Character” • Has demonstrated to C.B.S.A. they have sufficient knowledge of the laws regarding importing and exporting. • Professional: (Licensed) written and passed a 4 hour professional exam • A Customs Brokerage must have at least 1 Professional Customs Broker on staff (“designated”).

Shipment Flow……….

Conveyance Arrives in Canada with freight onboard…….

Freight is offloaded to a sufferance Warehouse

Or the conveyance waits for Customs Clearance.

Driver/Carrier notifies Customs and the Customs Broker that shipment has arrived via A8A Cargo Control Document

A commercial invoice or a Canada Customs Invoice is supplied with the shipment

Customs Broker notifies Customs of shipments details electronically (via A.C.R.O.S.S.) R.M.D.: Release On Minimum Documentation

CBSA Release
• C.B.S.A. officers read information on RMD and transfer release into the C.C.S. (Customs Commercial System) and the release decision will depend upon multiple factors: - Importer History - Commodity - Country of Origin

CBSA Release
Machine Release Importers who have good clean importing records with C.B.S.A. are put on Machine Release Entries are cleared immediately after input by Customs Officer

• Whether random or not, shipments are inspected from time to time.
– to detect prohibited or smuggled items – other government department regulations – verification

If there are no concerns, C.B.S.A. releases goods and the carrier or warehouse is notified of release via Release Notification System ( R.N.S.)

Freight is allowed to continue on its way to it’s final destination (or to the importer)

Customs Broker “Confirms” entry by ving HS# , applying duties & taxes nd other information via Form “B3”, and will pay C.B.S.A. on importer’s behalf.

Customs Broker uses the Customs Tariff to apply the correct Harmonized Tariff number, Tariff Treatment, and Duty rate.

B3 form captures all information regarding shipment, and amount of Duties and GST owed. It is sent to Customs hardcopy or (more often) electronically.

. Then… The Customs Broker bills the importer the duties and GST along with a brokerage fee

Goods & Services Tax
• “Value Added Tax” applied on every transaction in the economic chain. • Every registered party along the chain can claim the GST back via an “Input Tax Credit”. • Remit or get a refund of the difference between GST collected and GST paid out.