Canada Customs Tariff Changes Planned for January 1, 2012

Plan Ahead Your Related Responsibilities Today

On January 1, 2012, amendments to the Canada Customs Tariff will take effect, which will follow a number of amendments to the existing Harmonized System (HS) of the World Customs Organization (WCO). Other changes to the existing Canada Customs Tariff are being undertaken by Finance Canada and Statistics Canada. Although details regarding these changes to the Canadian Tariff have not been published by the Government to date, UPS advises importers to plan ahead in order to ensure that the movement of their goods and their duty free privileges will not be hindered by HS commodity code issues.

Changes adopted by the WCO Council:

The HS 2012 includes 220 sets of amendments to the six-digit level that are divided as follows:

• 98 relate to the agricultural sector;
• 27 to the chemical sector;
• 9 to the paper sector;
• 14 to the textile sector;
• 5 to the base metal sector;
  
• 30 to the machinery sector; and
• an additional 37 that apply to a variety of other sectors.

These amendments specifically include but are not limited to:

• Improved specifications for species from the Southern hemisphere;
• New subheadings created for the separate identification of certain edible vegetables, roots and tubers, fruit and nuts, as well as cereals;
• New subheadings for specific chemicals controlled under the Rotterdam Convention[1] and ozone-depleting substances controlled under the Montreal Protocol[2]; and
• More than 40 subheadings deleted due to the low volume of trade in specific products.

Source: Canada Border Services Agency; World Customs Organization

Changes Prepared by Finance Canada

As currently provisioned in the 2011 Federal Budget, the Government of Canada aims to simplify the Customs Tariff by initiating changes that are intended to:

• Reduce customs processing burden for businesses, including eliminating many so-called "end-use provisions" which impose an administrative burden on importers;
• Make the Customs Tariff more user-friendly; and
• Revoke obsolete provisions that have either expired or become redundant due to the recent tariff or trade initiatives such as the duty eliminations for input manufacturing products, the majority of which were eliminated in 2010.

These changes are expected to be revenue-neutral.

Source: Department of Finance Canada; Government of Canada

Amendments by Statistics Canada

Finally, Statistics Canada is reportedly planning to reduce the number of detailed 10-digit HS classification codes that are used to report commodities for statistical purposes by January 2012. According to reports, the agency is
proposing to discontinue the 10-digit numbers that have reported import trade values of less than $4 million annually in each of the last three years. The reported purpose of this initiative is to improve efficiency, maintain data quality and reduce response burden.

Source: I.E.Canada

UPS recommends

January 1 is approaching fast and changes to the 2012 Tariff will add to your year-end peak season actions. As an importer, you will need to plan ahead the actions that will be required to ensure that the movement of your goods is not disrupted and your duty free rights not undermined.

These actions specifically include:

• Identify which classifications remain the same and which ones will be affected by the changes based on the international amendments. To consult the new WCO HS nomenclature that will enter into force on January 1, 2012, please visit: http://www.wcoomd.org/files/1.%20Public%20files/PDFandDocuments/HarmonizedSystem/HS%20Overview/NG0163B1.pdf;
• Revise the list of goods regulated by Other Government Departments (OGD), where applicable;
• Revise the list of commodities subject to dumping, where applicable;
• Review Customs rulings that apply to your products and ensure the new Customs Tariff technical changes do not have an impact on the ruling or request a new ruling if necessary;
• Communicate with your business partners and work with your suppliers as they should provide you with complete explanation or description of the commodity you are importing; and
• Once all the changes are known, convert your HS commodity database to reflect the new Canadian Tariff.
  
  

UPS can help

UPS can help verify and update your commodity database. If you are interested, please contact a UPS representative.

[1] The Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade covers pesticides and industrial chemicals that have been banned or severely restricted for health or environmental reasons by the Parties and creates a legally binding obligation for parties to implement the Prior Informed Consent procedure. Canada is a party to the Convention, which entered into force on February 24, 2004. Source: Health Canada

[2] Signed on September 16, 1987 and amended several times, the Montreal Protocol on Substances that Deplete the Ozone Layer is an international treaty designed to protect the ozone layer by phasing out the production and importation of ozone-depleting substances (ODS). Source: Environment Canada

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