Vol. 150, No. 13 — June 29, 2016

Registration

SOR/2016-147 June 14, 2016

CUSTOMS ACT

Regulations Amending the Proof of Origin of Imported Goods Regulations

P.C. 2016-516 June 14, 2016

Whereas the annexed Regulations give effect, in part, to a public announcement made on March 22, 2013, known as Customs Notice 13-006;

And whereas the Notice provides that the regulatory amendments giving effect to that announcement come into force on April 1, 2013;

Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of Public Safety and Emergency Preparedness and the Minister of Finance, pursuant to subsection 35.1(4) (see footnote a), section 164 (see footnote b) and paragraph 167.1(b) (see footnote c) of the Customs Act (see footnote d), makes the annexed Regulations Amending the Proof of Origin of Imported Goods Regulations.

Regulations Amending the Proof of Origin of Imported Goods Regulations

Amendments

1 The heading before section 6 of the Proof of Origin of Imported Goods Regulations (see footnote 1) is replaced by the following:

Proof of Origin of Goods that are Entitled to the Benefit of Preferential Tariff Treatment under NAFTA, CCFTA, CCRFTA, CPFTA, CCOFTA or CPAFTA

2 (1) Subsections 6(1) and (2) of the Regulations are replaced by the following:

6 (1) Subject to subsections (2) to (5), if the benefit of preferential tariff treatment under NAFTA, CCFTA, CCRFTA, CPFTA, CCOFTA or CPAFTA is claimed for goods, the importer or owner of the goods shall, at the times set out in section 13, furnish to an officer, as proof of origin for the purposes of section 35.1 of the Act, a Certificate of Origin for the goods that is completed in English, French or Spanish.

(2) The importer and owner of the goods are exempt from the requirements of subsection 35.1(1) of the Act if the importer or owner furnishes to an officer, at the time set out in paragraph 13(a), a written and signed declaration, in English or French, certifying that the goods originate in a NAFTA country, Chile, Costa Rica, Peru, Colombia or Panama, as the case may be, and that a completed Certificate of Origin is in the importer’s possession.

(2) The portion of subsection 6(3) of the Regulations before paragraph (a) is replaced by the following:

(3) If the benefit of preferential tariff treatment under NAFTA, CCFTA, CCRFTA, CPFTA, CCOFTA or CPAFTA is claimed for casual goods, the importer and owner of the goods are exempt from the requirements of subsection 35.1(1) of the Act if the goods are entitled to preferential tariff treatment under, as the case may be,

(3) Subsection 6(3) of the Regulations is amended by striking out “or” at the end of paragraph (d), by adding “or” at the end of paragraph (e) and by adding the following after paragraph (e):

(4) The portion of subsection 6(4) of the Regulations before paragraph (a) is replaced by the following:

(4) If the benefit of preferential tariff treatment under NAFTA is claimed for commercial goods whose estimated value for duty is less than $2,500 or if the benefit of preferential tariff treatment under CCFTA, CCRFTA, CPFTA, CCOFTA or CPAFTA is claimed for commercial goods whose estimated value for duty is less than $1,600, the importer and owner of the goods are exempt from the requirements of subsection 35.1(1) of the Act if

(5) Subparagraphs 6(4)(b)(i) and (ii) of the Regulations are replaced by the following:

Coming into Force

3 These Regulations are deemed to have come into force on April 1, 2013.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

In order for the Canada Border Services Agency (CBSA) to administer the customs procedures surrounding the proof of origin of imported goods that were described in the Canada-Panama Free Trade Agreement (CPAFTA), it is necessary to make amendments to the Proof of Origin of Imported Goods Regulations (the Regulations).

Background

Pursuant to the Customs Tariff, goods imported into Canada from all countries, other than North Korea, are entitled to the Most-Favoured-Nation Tariff. The Customs Tariff also establishes a series of preferential tariff treatments, whose rates of duty are lower than the Most-Favoured-Nation Tariff rate. Preferential tariff treatments include the General Preferential Tariff, Least-Developed Country Tariff, Commonwealth Caribbean Countries Tariff, Australia Tariff, New Zealand Tariff and the various preferential tariffs that have been negotiated between Canada and its free trade partners.

In order to qualify for one of the preferential tariff treatments set out in the Customs Tariff, including those resulting from free trade agreements (FTA), proof of origin of the goods being imported must be provided in accordance with section 35.1 of the Customs Act (the Act). The Regulations prescribe the proof of origin requirements for importers claiming the benefit of a preferential tariff treatment.

To claim a preferential tariff treatment afforded under a free trade agreement, the importer must have in its possession, at the time of import, a proof of origin provided by the exporter or producer. This proof of origin serves as the exporter’s attestation that the goods meet the free trade agreement’s rules of origin, and is used by the CBSA to validate the importer’s claim for the preferential tariff treatment.

The CPAFTA was signed on May 14, 2010, and came into force on April 1, 2013.

The CPAFTA provides preferential tariff treatment into Canada for goods originating in Panama, provided they satisfy the rules of origin contained in the CPAFTA. The agreement also contains provisions governing the proof requirements that can be imposed to ensure that goods satisfy these rules of origin.

The amendments to the Regulations described below were publicly announced by the CBSA in a Customs Notice posted on March 22, 2013 (CN13-006).

Paragraph 167.1(b) of the Customs Act allows regulatory changes that have previously been the subject of a public announcement to have a retroactive effect. As such, the CBSA has been administering the proof of origin requirements on a provisional basis since the coming into force of the CPAFTA.

The Customs Notice can be viewed at the following Web address:

CN13-006:

http://www.cbsa-asfc.gc.ca/publications/cn-ad/cn13-006-eng.html

The amendments to the Regulations described above simply finalize the process begun with the public announcement contained in the Customs Notice, formalizing proof of origin processes that are already being administered. These amendments will officially incorporate the proof of origin requirements associated with the CPAFTA into Canada’s existing regulatory regime.

Objectives

The amendments to the Regulations incorporate the CPAFTA into Canada’s existing regulatory framework by allowing customs procedures related to proof of origin to be administered in accordance with the terms of the CPAFTA.

Description

The proof of origin requirements for claiming preferential tariff treatment under the CPAFTA share many of the characteristics of the requirements for claiming other preferential tariff treatments. The language requirement for completing the CPAFTA certificate of origin align with the proof of origin requirements for other Spanish speaking countries with which Canada has a free trade agreement, thus allowing for the CPAFTA certificate of origin to be completed in English, French or Spanish.

“One-for-One” Rule

The “One-for-One” Rule does not apply to this proposal, as there is no change in administrative burden to business.

Small business lens

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

Consultation

Canada and Panama launched free trade negotiations in October 2008. Prior to launching the FTA negotiations, Canadian manufacturers, importers and exporters were consulted extensively and kept informed of developments throughout the negotiations, including with respect to rules of origin issues.

The amendments to the Proof of Origin of Imported Goods Regulations were announced by the CBSA in Customs Notice CN13-006. The Customs Notice provided opportunities for the public to review the proposed regulatory changes and provide comments to the CBSA. No comments were received.

Rationale

Canada’s free trade agreements are governed by a network of regulations (including the Proof of Origin of Imported Goods Regulations) that, taken together, implement into Canadian law the customs procedures negotiated as part of each FTA.

Consequently, with each new FTA implementation bill passed by the Canadian Parliament, a series of minor, technical amendments are needed in order to incorporate the new FTA into Canada’s existing regulatory framework.

There will be no business or consumer impacts, or additional costs to the CBSA or to stakeholders, as a result of these amendments

Implementation, enforcement and service standards

The CBSA will continue to monitor compliance with the Regulations in the course of its regular administration of customs and tariff-related legislation and regulations. In the event that the requirements set out in the Regulations are not met, paragraph 35.1(5) of the Customs Act provides for the denial or withdrawal of preferential tariff treatment.

Contact

Caley Sayers
Trade and Anti-dumping Programs Directorate
Canada Border Services Agency
222 Queen St., 4th Floor
Ottawa, Ontario
K1A 0L8