United Kingdom Trade Continuity Remission Order, 2021: SOR/2020-290
Canada Gazette, Part II, Volume 155, Number 1
SOR/2020-290 December 21, 2020
P.C. 2020-1135 December 20, 2020
Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to section 115 footnote a of the Customs Tariff footnote 1, makes the annexed United Kingdom Trade Continuity Remission Order, 2021.
United Kingdom Trade Continuity Remission Order, 2021
1 The following definitions apply in this Order.
- means the Comprehensive Economic and Trade Agreement between Canada and the European Union and its Member States, done at Brussels on October 30, 2016. (Accord)
- means goods that would have been eligible for the rate of customs duty under the tariff in the Agreement had the Agreement continued to apply to the United Kingdom after December 31, 2020. (marchandises)
- United Kingdom
- includes the Channel Islands, Gibraltar and the Isle of Man, but does not include Anguilla, the British Antarctic Territory, the British Indian Ocean Territory, Bermuda, the British Virgin Islands, the Cayman Islands, the Falkland Islands, Montserrat, Pitcairn, Saint Helena and Dependencies (Ascension Island and Tristan Da Cunha), South Georgia and the South Sandwich Islands and the Turks and Caicos Islands. (Royaume-Uni)
2 Remission is granted of customs duties paid or payable under the Customs Tariff in respect of goods imported from the United Kingdom during the period commencing on January 1, 2021 and ending on the day on which the Agreement on Trade Continuity between Canada and the United Kingdom of Great Britain and Northern Ireland comes into force, in an amount equal to the difference between
- (a) the customs duties paid or payable at the Most-Favoured-Nation Tariff rate for those goods under the Customs Tariff and the regulations made under it; and
- (b) the customs duties that would be payable at the Agreement rate of duty for those goods as if those goods qualified for that rate of duty under the Customs Tariff and the regulations made under it.
3 Remission is granted on condition that a claim for remission is made to the Minister of Public Safety and Emergency Preparedness within two years of the date of importation.
Coming into Force
4 This Order comes into force on January 1, 2021.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Order.)
Since 2017, Canada has had a free trade agreement with the European Union (EU) and its Member States, the Comprehensive and Economic Trade Agreement (CETA). On January 31, 2020, the United Kingdom (U.K.) ceased to be a Member State of the EU (commonly referred to as “Brexit”), and of the EU customs union on January 1, 2021. As a result of Brexit, the U.K. no longer qualifies for preferential treatment under CETA as of January 1, 2021. Given this, the Government has engaged with the U.K. in negotiations for a bilateral free trade agreement that would ensure continuity of trade preferences with the U.K. until a new permanent agreement can be negotiated. On November 21, 2020, Canada and the U.K. announced the conclusion of negotiations on a bilateral Trade Continuity Agreement (TCA). The TCA effectively replicates the outcome of the CETA and both the U.K. and Canada are working to bring this free trade agreement into force as soon as possible in 2021.
Because of the timing outlined above, there is a gap between the termination of CETA benefits and the entry into force of the TCA. During that time, imports from the U.K. will only be eligible for the Most-Favoured-Nation rate of customs duty.
- Ensure the continuity of reciprocal tariff preferences between Canada and the U.K. until the TCA comes into force
- Reduce uncertainties for importers
Description and rationale
The United Kingdom Trade Continuity Remission Order, 2021 (the Order) remits the difference between the Most-Favoured-Nation (MFN) rate of customs duty and the rate of duty that would otherwise apply under the TCA to imports of originating goods from the U.K. and U.K. territories that benefited from CETA tariff preferences prior to the end of the Brexit transition period. This remission applies to goods imported on or after January 1, 2021.
This Order replicates the tariff benefits that would have applied to imports from the U.K. and U.K. territories under provisions of CETA, and are also provided for in the negotiated TCA. The Order reduces uncertainty for Canadian importers and bridges the gap between Brexit and entry into force of the TCA by ensuring continued tariff preferences. The U.K. will accord similar tariff preferences to imports from Canada over the same time period, thus providing certainty to Canadian exporters to the U.K.
One-for-one rule and small business lens
The one-for-one rule does not apply to the Order, as there is no change in administrative costs or burden to business.
Analysis under the small business lens has determined that small businesses will benefit in the same way all businesses will benefit, i.e. by reducing uncertainty and bridging the gap between Brexit and entry into force of the TCA through access to continued tariff preferences.
The Canada–European Union Comprehensive Economic and Trade Agreement Implementation Act received royal assent on May 16, 2017. Regulatory amendments to implement Canada’s commitments under the CETA were approved by the Governor in Council on August 31, 2017. These approvals were supported by a comprehensive consultation strategy. In addition, stakeholders were consulted on the Canada–U.K. trade dialogue and were regularly updated on the TCA negotiations. As the Order replicates existing preferential tariff treatment accorded to imports from the U.K., consultations were not required.
International Trade Policy Division
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