Vol. 149, No. 8 — April 22, 2015
SOR/2015-82 April 1, 2015
Regulations Amending the Imported Goods Records Regulations
P.C. 2015-406 April 1, 2015
Whereas the annexed Regulations give effect to a public announcement made on June 28, 2013, known as Customs Notice 13-015;
And whereas the Notice proposes that the amendments to the Imported Goods Records Regulations (see footnote a) come into force on June 28, 2013;
Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of Public Safety and Emergency Preparedness, pursuant to paragraphs 164(1)(i) (see footnote b) and 167.1(b) (see footnote c) of the Customs Act (see footnote d), makes the annexed Regulations Amending the Imported Goods Records Regulations.
REGULATIONS AMENDING THE IMPORTED GOODS RECORDS REGULATIONS
1. Section 3 of the Imported Goods Records Regulations (see footnote 1) is amended by striking out “or” at the end of paragraph (a) and by adding the following after that paragraph:
- (a.1) in the case where the commercial goods have been released free of duty under tariff item No. 9948.00.00 in the List of Tariff Provisions set out in the schedule to the Customs Tariff, an attestation signed by the person who imports the goods or causes them to be imported indicating the person’s name, address and occupation and the intended use of the commercial goods, sufficient to confirm that the goods fall within the description of goods corresponding to that tariff item; or
COMING INTO FORCE
2. These Regulations are deemed to have come into force on June 28, 2013.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Regulatory amendments are needed to clarify the recordkeeping requirements relating to goods imported duty free under tariff item 9948.00.00 so that the record-keeping requirement rests at the importer level, rather than at the end-user level.
General legislative and regulatory framework
There are three framework components that are relevant to understand the nature of the proposal: (i) the Customs Tariff; (ii) the Customs Act; and (iii) the Imported Goods Records Regulations.
The Customs Tariff is a statute that imposes customs duties. In addition, the Customs Tariff can provide relief against the imposition of customs duties, under certain conditions. There is a schedule contained within the Customs Tariff. The Customs Tariff schedule contains a list of items. Each item is a description of a type of good. An eight-digit number is assigned to each type of good, referred to as a “tariff item.” The tariff item is used to assign the customs duty rate that is applicable to the value of the goods upon importation into Canada. The customs duty rate within a tariff item can also be zero as long as certain conditions, outlined in the tariff item itself, are met.
Subsection 40(1) of the Customs Act obligates importers to maintain records of goods that they have imported into Canada.
Imported Goods Records Regulations
The Imported Goods Records Regulations (IGRR), made under the Customs Act, describe the type of records that must be kept by the importer. These records are required as evidence to levy duties upon goods imported into Canada. The records required under the IGRR can also be used by importers to provide evidence for obtaining tariff relief on imported goods, if applicable, on those goods.
Tariff item 9948.00.00 and the IGRR
Tariff item 9948.00.00 permits the relief of customs duties on imported goods that are “[…] articles for use in the following […]Automatic data processing machines and units thereof” (i.e. computers). There are conditions to obtain duty relief for these articles (or goods). To qualify for the benefits of the tariff item, the article must be functionally joined to the computer, which requires that it must also enhance the function of the computer.
The type of evidence required to demonstrate compliance with tariff item 9948.00.00 is described under paragraph 3(a) of the IGRR. The importer must keep a record indicating the actual use made of the goods. It must be signed by the user of the goods and must contain the user’s name, address and occupation.
Tariff item 9948.00.00 evolved from a tariff code drafted in 1986 with the intention of providing customs duty relief to computer manufacturers. Computer components made elsewhere, imported into Canada, and ultimately destined to be assembled together into a computer, would be relieved of the customs duties that they attracted when classified in their own right.
However, technology has changed significantly since 1986. Importers began using tariff item 9948.00.00 to obtain customs duty relief of goods that could be connected directly to a computer.
Typically, the importers of these goods that can be connected directly to a computer are not the users; the importers are usually wholesalers or retailers of these types of goods. The users of these items are, generally, private Canadian consumers who have purchased the items from retailers.
To ensure that the record-keeping requirements for importation of goods under tariff item 9948.00.00 rests at the importer level, rather than the end-user level.
For qualifying goods imported duty free under tariff item 9948.00.00, the Canada Border Services Agency (CBSA) will allow the importer of the goods to certify their intended use.
The “One-for-One” Rule does not apply to this proposal, as there is no change in administrative costs to business.
Businesses will not be required to modify their current practices as a result of the proposal.
Small business lens
The small business lens does not apply to this proposal, as there are no costs to small business.
Small businesses will not be required to modify their current practices as a result of the proposal.
After seeking policy clarification from the Department of Finance, the CBSA issued a customs notice on June 28, 2013, committing the CBSA to make this regulatory change and permitting importers, on a going-forward basis, to confirm the intended use to be made of the goods in an article listed in tariff item 9948.00.00, rather than requiring a certificate to be signed by the end user of the commercial goods (e.g. the individual consumer) confirming their actual use. See: http://www.cbsa-asfc.gc.ca/publications/cn-ad/cn13-015-eng.html.
This regulatory amendment implements the provisions of the June 28, 2013, customs notice, which clarified that importers can confirm the intended use of goods imported under tariff item 9948.00.00 in order to satisfy the section 3 conditional-use record-keeping requirement of the IGRR. This confirms that importers and retailers are not required to collect end-use certificates from consumers.
Implementation, enforcement and service standards
The customs notice also announced regulatory amendments with retroactive effect to its date of publication, as provided for under section 167.1 of the Customs Act. The amendments, once made by the Governor in Council, will be retroactive to the date of the customs notice.
Trade and Anti-dumping Programs Directorate
Canada Border Services Agency
150 Isabella Street, 11th Floor