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GENERAL IMPORT CLEARANCE INFORMATION

Clearance Process

FedEx Clearance Working with Customs officials throughout the world, FedEx has developed innovative technology to eliminate many paperwork-handling steps and expedite the movement of international shipments. This technology is called the FedEx Expressclear electronic Customs clearance system. Starting at the origin, state-of-the-art technology allows the processing of shipment paperwork and electronic transmission of documents to the designated FedEx hub and destination clearance location. The Expressclear system also keeps a database of regulatory information that includes importer numbers, broker designation, corporate contact names and telephone numbers. At a FedEx hub, international shipments are sorted, scanned and loaded onto an international flight. Vital shipment information is keyed into a worldwide manifest database that is linked to computer systems operated by brokers and Customs officials in many countries. Even before the plane has taken off, or while it is in the air, Customs agents and brokers at the destination airport of entry can begin examining shipping manifests, query air waybill data if they need more details, assess duties and taxes, and select which shipments they wish to examine. By the time the plane arrives at its destination, many packages have already been cleared by Customs. As the plane is unloaded, the Expressclear system identifies packages to be examined and prints "cleared" Customs labels for all others. Cleared shipments can be transferred to trucks for immediate delivery. International shipments are scanned at all key points throughout the process and allows for up-to-date status reports including when Customs clearance is obtained.

Customs Clearance

There are currently 256 approved ports of entry throughout Canada. This information can be found on the Canada Border Services Agency site:  http://www.cbsa-asfc.gc.ca/

Canada Border Services Agency 
1 Front Street West
Toronto, Ontario,
M5W 1A3 - Phone 416-973-6413

(For exporters shipping goods to Canada and for Canadian residents and businesses importing goods from other countries.)
Source - Revenue Canada Customs Memorandum D1-4-1, D3-1-1, D3-4-2

There are four primary entry types for importing into Canada:

  1. Order in Council (O.I.C.) clearances for shipments of $20.00 CAD or less; these types of shipments are automatically released through Canada Customs duty and tax-free. These shipments do not require any formal document preparation, as long as there is a full description and valuation shown on the manifest (e.g. air waybill, bill of lading etc.)
  2. Low Value Entries (LVS) for commodities valued at $1,599.99 CAD or less; these types of shipments are generally automatically released through Canada Customs, the presentation of the entry and accounting for the duty and tax are submitted later. In order to account for the shipments a minimum of documentation is usually required. A manifest could be sufficient as long as it fully describe the goods and values, however it is always best to send some sort of commercial invoice that fully describes the commodities in the shipment, their values and origin, so that the duties/taxes will be assessed correctly.
    • Note: Not all commodities valued at $1,599.99 CAD or less may be cleared as LVS entries. Some commodities require HVS entries regardless of value and/or quantity.
  3. High Value Entries (HVS) for commodities valued at $1,600.00 or more; these types of shipments must be released through a more formal process, and this could result in delays. HVS shipments require the following documentation:
    • Manifest, Bill of Lading, Air Waybill or A8A (The carrier's notification document)
    • Canada Customs invoice form CI1 (CCI) or Commercial Invoice or Pro Forma Invoice that provide all data requirements as shown on the CCI;
    • Packing lists, if appropriate;
    • Any other documents necessary to determine merchandise admissibility, such as Import Permits, Export Permits, Form A, NAFTA, CIFTA, CCFTA certificate of origin forms.
  4. CSA (Customs Self-Assessment) clearance is a CBSA initiative to provide certified importers with the ability to clear all non-other government department goods of U.S. origin based on three data elements: business number, date of arrival, and cargo control number.  Customs has also provided for specific importers to clear goods of Mexican origin.  FedEx, as a CSA approved air carrier, is required to provide and maintain proof of delivery as well as the date for all shipments released under the CSA initiative.  The CSA program also provides approved importers, approved carriers and registered drivers with the benefits of a streamlined clearance option for eligible goods.  The streamlined option eliminates the requirement for transactional transmissions of data related to eligible goods at the point of entry.  The option allows for the clearance of goods based on the identification of the CSA-approved importer, approved carrier, and registered driver at the border.  In order to take advantage of CSA clearance, accounting and payment; a comprehensive risk assessment, including a rigorous pre-screening of advance information, must be performed. 
The importer of record or a licensed Customs Broker may account for goods once the shipment reaches Canada. The importer of record is the person or firm that will be responsible for any Canadian duties and taxes assessed on the shipment. The Importer of Record has a choice to either use an outside Customs Broker or use Federal Express as their Customs Broker. It is the role of a customs broker to ensure that the shipment is cleared through Canada Customs within the law, and that the payment of duties and taxes are made to Canada Customs.

When a shipment reaches Canada, FedEx will either advise the importer's broker or file entry release documents on behalf of the importer of record (owner, purchaser or consignee) with Canada Customs at the port of entry. Imported goods are not legally entered until after the shipment has been released by Canada Customs. Canada Customs may pull any shipment at any time for review or investigation, which could result in clearance/delivery delays.

Note: In addition to Canada Customs, importers should contact other regulatory agencies when questions regarding particular commodities arise. For example, questions about products regulated by the Plant Protection Act and Regulations should be forwarded to the Canadian Food Inspection Agency (CFIA). The same is true for alcohol, tobacco, firearms, wildlife products (furs, skins and shells), motor vehicles and other products and merchandise regulated by the nine Canadian Federal Agencies for which the CCRA enforces entry laws.

The importer of record or a licensed Customs Broker may account for goods. Dependant on who the Importer of Record has designated as their Customs Broker, FedEx or an outside broker the shipment paperwork will be turned over to that party for clearance with the Canada Customs.

An Agency Agreement form is required for the importation of commercial shipments into Canada. The Agency Agreement must be completed or an original must already be on file with FedEx Canada or your customs broker in order to avoid clearance delays. There are several Agency Agreement scenarios that apply depending on whether the importer of record is a Canadian or non-Canadian citizen or business entity. Please be advised that if FedEx does not hold an Agency Agreement and the importer of record has designated FedEx as the Customs Broker, the shipment will be subject to an additional service fee.

According to Customs regulations, it is the importer's responsibility to keep records of all their transactions for a period of six previous years plus the current year. At any time, Customs may raise importer compliance issues regarding any one or all transactions. Much of the information that Customs is concerned with is provided by the importer's entry documentation.

If it is desired to postpone the release of the goods, they may be placed in FedEx's cage in our bonded warehouse until all documentation has been obtain for appropriate release. The goods may only remain in the cage for 30 days from the date of arrival. If the goods are not released from Customs custody within 30 days, they are reported to the Queen's warehouse.

Storage fees may be applied if an outside broker is handling the shipment's clearance; no storage fees are apply for FedEx brokered shipments.



Document Requirements

Source: FedEx GTS, FedEx SRG, and Memorandums D1-4-1, D8-1-7

Air Waybill ‚Äď An air waybill or carriers certificate (naming the consignee for customs purposes) as evidence of the consignee's right to make entry.

Commercial Invoice ‚Äď Required for non-document shipments and to help prevent clearance delays. It should be completed in English or French. If the CI is not completed in one of the legal languages of Canada, the Canada Customs Revenue Agency (CCRA) may request a translation from a party who is knowledgeable of the transaction, which will cause a clearance delay. Specific invoice details are required for a number of commodities including the following:

  • For audio/video cassettes and tapes, the length and width of the tape, a brief synopsis of content and the reason for importation.
  • For textiles, unless stated on the textile declaration, the fabric breakdown, whether knit or woven and, for clothing articles, the gender.
  • For marked/mutilated samples the words mutilated samples or marked samples, not for resale¬†as applicable.¬†
Canada Customs Invoice Form CI1 (CCI) ‚Äď Invoice developed by the Canadian government for commercial shipments to Canada. This invoice holds all relevant information required by Canada Border Services Agency.¬†¬†It is not the document that must be used, but does provide a good guide for information that is required if you are to use your own commercial invoice.

Certificate of Origin - A Certificate of Origin Form A may be required for goods under entry claiming preferential duty or exemption under the various agreements, General Preferential Tariff (GPT). It should be produced at the time of entry and must be in the possession of the importer at the time of entry. Origin of the goods must be detailed on the commercial invoice.

NAFTA (North-American Free Trade Agreement) Certificate of Origin - It must be provided for qualifying goods from the U.S. or Mexico on a high value shipment entry. For commercial shipments under an low value shipment entry, the invoice must include a statement certifying that the goods qualify as originating. Even if the certificate is not required to be presented, it should be in the possession of the importer at the time of entry and available should Customs request it.

CIFTA (Canada-Israel Free Trade Agreement) Certificate of Origin - It must be provided for qualifying goods from Israel under a high value shipment entry. For commercial shipments under a low value shipment entry, the invoice must include a statement certifying that the goods qualify as originating. Even if the certificate is not required to be presented, it should be in the possession of the importer at the time of entry and available should Customs request it.

CCFTA (Canada-Chili Free Trade Agreement) Certificate of Origin - It must be provided for qualifying goods from Chile under a high value shipment entry. For commercial shipments under a low value shipment entry, the invoice must include a statement certifying that the goods qualify as originating. Even if the certificate is not required to be presented, it should be in the possession of the importer at the time of entry and available should Customs request it.

Blanket Certificates of Origin (NAFTA/CIFTA/CCFTA) - Blanket certificates are issued to verify origin for multiple imports of the same commodity over a specific period of time that does not exceed 12 months.

Artwork Statement - The artwork statement is required for duty-free entry of original works of art such as sculptures, etchings, engravings, and lithographs.

Certification of Visual and Auditory Materials of an Educational, Scientific, and Cultural Character - A Certificate issued by Heritage Canada is required to qualify for the use of the following H.S. classification numbers 3705.90.10, 4905.99.10, 4911.99.10, 8524.51.20, 8524.52.20, 8524.53.20, and 8524.99.90. These H.S. classification numbers cover certain audio-visual goods that must be used for instructional or informational purposes by an approved educational, scientific, or cultural institution or society.

Declaration of Antiquity - A declaration of antiquity (over 100 years old) must be shown on the invoice to claim duty-free entry of goods over 100 years old. The statement must include the words circa date followed by the year of manufacture whether known or estimated.

Import Permits ‚Äď Permits are required from DFAIT for the following:

  • Milk and Dairy products
  • Cheese
  • Broiler Hatching Eggs & Chicks
  • Eggs and Egg Products
  • Margarine
  • Wheat, Barley and Other grains
  • Steel
  • Livestock and animals and parts thereof
  • Poultry and related products
  • Softwood lumber and products there of
  • Items listed on the Import Control Listing (ICL)
  • Firearms, ammunitions and explosives
  • Radioactive materials and nuclear reactors



Customs Valuation

All goods shipped to Canada must have a value and description for the goods shipped. The value is usually based on the transaction value between the shipper and the importer, in other-words the sale value of the goods.  However, if no actual transaction has taken place, for example, a sample or a no charge shipment, there still must be a value assessed; this basically would be the fair market value, or replacement value. Non-tangible items such as a cheque, business documents, accounting documents, plane tickets, etc. must also be assessed a value, but this should be based on the value of the paper rather than the actual value plane ticket or cheque. While duties and taxes would not be assessed on these non-tangible items they still must be reported to Canada Customs.  For more information, please visit the following Canada Border Services Agency (CBSA) website for detailed information:  http://www.cbsa-asfc.gc.ca/publications/dm-md/d13/d13-1-3-eng.pdf



Import Duties

All merchandise coming into Canada must clear Customs and are subject to customs duty assessment unless the goods are duty or tax exempt by law. Generally, customs duties are subject to an ad valorem rate (percentage) that is applied to the transaction value (in Canadian dollars) of the imported goods. Some articles, however, are dutiable at a specific rate of duty (so much per piece, liter, kilo, etc.) and others at a compound rate of duty (combination of both ad valorem and specific rates). The dutiable value of merchandise is determined by the Canada Border Services Agency.  Several appraisal methods are used to arrive at this value. Generally, the transaction value of the merchandise serves as the basis of appraisal. Transaction value is the price the buyer actually pays the seller for the goods being imported. The Harmonized Tariff Schedule of Canada (1999 Edition), issued by the International Trade Commission, prescribes the rates of duty and classification of merchandise by the type of product; e.g., animal and vegetable products, textile fibers and textile products. The tariff schedule provides several rates of duty for each item: the "general" rates under Most-Favored Nation's (MFN) and "preferential" rates for specific trade programs (NAFTA/CIFTA/CCFTA/LDCT/GPT).



Antidumping

Under strict enforcement of unfair trade laws, Customs will assess antidumping duties.  Antidumping duties are assessed on imported merchandise sold in Canada at less than the normal price of the good in the manufacturer’s home market (also called fair market value).



Excise Duties

Spirits, beer and tobacco products are subject to excise taxes.



Additional Duties

Countervailing duties are assessed to counter the effects of subsidies provided by the foreign government for merchandise exported to Canada resulting in artificially low prices that are detrimental to Canadian industries.



Import Taxes
Goods and Service Tax (GST) of 5% is levied on all taxable imports and a Provincial Sales Tax (PST) is generally assessed to imports which are not for re-sale.

Based on an agreement between the provinces of Nova Scotia, New Brunswick, Newfoundland and the federal government, GST and PST taxes were combined into a flat rate of 13% for the three participating provinces which is known as the Harmonized Sales Tax (HST).

A listing of the different classes of goods exempt from GST can be located at the Canada Customs and Revenue Agency website at http://www.cra-arc.gc.ca/tax/business/topics/gst/menu-e.html



Customs Fees

Examination Costs

Special service charges can be assessed on some commodities to cover the expense of performing the examinations and or testing required as a condition of the goods entry into the commerce of Canada.  Examinations are not performed on all shipments prior to their release; however, Canadian Customs has the authority to randomly select shipments for examination.



Exchange Controls

There are no exchange controls.



Technical Barriers to Trade (TBT's)

Technical barriers or non-tariff barriers to trade as they are sometimes known as, can cause many problems for exporters looking for new markets for their products.  These barriers can be in the form of regulations, standards, testing and certification procedures.  The World Trade Organization (WTO) Agreement on Technical Barriers to Trade tries to ensure that these barriers do not create unnecessary obstacles.  To obtain further information on Technical Barriers to Trade as well as Notifications on technical regulations and conformity assessment procedures, go to the WTO website at http://www.wto.org/english/tratop_e/tbt_e/tbt_e.htm.

 



Consular Fees

There are no consular fees.



GENERAL IMPORT CLEARANCE INFORMATION
Advanced Cargo Information The ACI  program is introducing more effective risk-management processes and tools for unknown and high-risk shipments to enhance the Canada Border Service Agency (CBSA) ability to protect the Canadian border while at the same time facilitate the legitimate flow of goods and trade.  In order to support the risk-assessment process, the CBSA will require certain cargo, conveyance and importer data before the goods arrive into the country.  It will be mandatory that this data be transmitted electronically in order to ensure quick and efficient processing.  The CBSA will use a risk-management approach with sophisticated selection and targeting capabilities to detect high-risk or unknown shipments.   

Air carriers will be required to electronically transmit cargo and conveyance data to the CBSA at least four hours before the arrival of the airplane at the airport in Canada or at the time of departure if the voyage is less than four hours. 

Admissibility of freight will take precedence over Customs clearance.  This could impact the release and delivery of your shipment.  In order to avoid delays, please make sure that a valid description and value, as well as the importer and exporter information, is completed fully on the FedEx Air Waybill and the accompanying paperwork.

Administrative Monetary Penalty System (AMPS)

The Administrative Monetary Penalty System is a new graduated regime that will allow Canada Customs and Revenue Agency (CCRA) to impose strong penalties to correct infractions. The introduction of AMPS will result in more costly penalties for both import and export shipments that are proportional to the frequency and severity of non-compliance. For more information on the contraventions and penalties, please visit the following website to view the master penalty document and schedule: http://www.cra-arc.gc.ca/

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