Update  From  The  Great  White  North,  Eh?  

Kerry  Rasmussen  &  Cheryl  Corbeil  Cole  Interna@onal  Inc.  

Agenda,  Eh?  

  Trade  Agreements  

  Duty  Recovery  Opportuni@es  

  Compliance  Verifica@on  –  Canada    Classifica@on    Valua@on    NAFTA  

  The  NRI  Advantage  

Trade  Agreements,  Eh?    

  16  Trade  Agreements  

  EU  Trade  Agreement    Signed  October  19,  2013    Duty  free  entry  into  Canada    Does  not  apply  to  all  countries    Goods  need  to  be  directly  shipped  into  Canada    Expected  to  be  ra@fied  within  the  next  two  years  

Trade  Agreements,  Eh?  

  Duty  free  entry  for  qualifying  goods  under:    LDCT  (Least  Developed  Countries  Tariff)    Canada  Chile    Canada  Israel    Canada  Norway    Canada  Switzerland    Canada  Jordan    Canada  Iceland    Canada  Panama    NAFTA  

Trade  Agreements,  Eh?  

  Reduced  duty  rate  for  qualifying  goods  under:    Australia  Trade  Agreement    New  Zealand  Trade  Agreement    Costa  Rica  Trade  Agreement    GPT  (72  countries)  

–  Going  away  in  2015  

 

Qualifying  for  Trade  Agreements  

  Trans-­‐shipment  rules  may  apply    Watch  the  wording  of  the  agreement    Rules  are  specific  to  each  agreement  

  Goods  may  qualify  if  produced  from  non-­‐origina@ng  materials    Specific  to  each  agreement  

  Documenta@on  (cer@ficates)  are  specific  to  each  agreement  

Minimizing  Duty,  Eh?  

  Baby  clothes  (up  to  a  size  2T,  tex@le  baby  boo@es)    Duty  free  as  of  April  1,  2013  

  Sports  and  athle@c  equipment  (excluding  bicycles)    Duty  free  as  of  April  1,  2013    Limited  to  certain  H.S.  Classifica@ons  

  Ladies  shoes  over  $30.00    11%  duty  versus  18%  

  Material  composi@on  of  products  may  result  in  reduced  du@es  

Duty  Drawbacks,  Eh?  

  US  CBP  allows  for  99%  return  of  duty  and  MPF    Products  must  be  exported  in  same  condi@on    Must  be  exported  within  3  years  of  import    Drawback  can  be  claimed  by  the  importer  or  the  exporter  of  the  

merchandise  

  Can  be  one  @me  or  through  a  program    Permission  must  be  granted  prior  to  applica@on    1313(J)  Unused  Merchandise  

  Record  keeping  requirements  are  stringent  

The  NRI  Advantage,  Eh?  

  NRI  =  Non-­‐Resident  Importer    Company  outside  of  Canada  ac@ng  as  the  importer  of  record    Responsible  for  payment  of  all  du@es/taxes  at  the  border    All  charges  incurred  to  land  goods  in  Canada  can  be  passed  along  

to  your  customer    Freight  is  prepaid  to  your  customer’s  door  

The  NRI  Advantage,  Eh?  

  Trade  Agreements    Many  apply  only  if  goods  are  shipped  directly  to  Canada    Reduced  risk  of  your  customer  seeing  your  pricing  if  you  are  the  

importer  of  record  

  Duty  Drawback    Detailed  import  records  from  Canada  are  required    If  your  customer  provides  them  to  you  they  may  want  a  “cut”  

The  NRI  Advantage,  Eh?  

  Consolida@on  op@ons  for  transporta@on  &  customs  clearance    Mul@ple  smaller  shipments  travel  as  one  big  shipment  into  

Canada    One  customs  broker/freight  forwarder    Consistency  in  applica@on  of  tariff,  reduces  chance  of  audit  

Speaking  of  Audits...  

  Footwear  and  tex@les  are  on  the  target  list    High  duty  rates  mean  more  revenue  for  CBSA  

  Valua@on    Are  goods  shipped  direct  from  offshore?    When  was  the  purchase  order  issued?    Was  there  a  sale  made  prior  to  export?    Where  was  the  sale  made?    Who  is  responsible  for  what?    Do  you  have  a  paper  trail  to  back  it  up?    

Speaking  of  Audits...  

  Classifica@on    Needs  to  be  accurate  to  the  8th  digit    Composite  toes  vs  metal  toes  (different  than  U.S.)  

  NAFTA    Cer@fica@on  should  be  done  on  a  regular  basis  if  product  or  

suppliers  are  changed  regularly    Annex  401  explains  the  rules  of  origin  for  each  individual  H.S.    Paper  trail  for  every  component  should  be  handy  

Speaking  of  Audits...  

  Impact  you  whether  or  not  you  are  the  importer  of  record  into  Canada  

  Informa@on  sent  to  Customs  is  the  informa@on  you  provide  on  your  paperwork  

  Ensure  that  your  customs  declara@ons  are  accurate  

  If  unsure,  ask  for  help  or  perform  a  mock  audit  

GST/EhST  

  Province  of  Bri@sh  Columbia  is  no  longer  an  HST  (Harmonized  Sales  Tax)  province    5%  tax  is  applicable  where  supply  is  in  BC  

  HST  is  not  applicable  to  children’s  clothing  items  in  Ontario    Point  of  sale  rebate  offered  –  you  are  not  required  to  charge  HST  

on  sales  of  children’s  items  into  ON    Also  applies  to  children’s  footwear  valued  at  less  than  $30.00  

Almost  Done,  Eh?  

  Several  retailers  are  star@ng  to  move  into  Canada  or  merging  with  Canadian  retailers  

  Many  of  these  retailers  are  requiring  their  product  to  arrive  into  Canada  “duty  paid”  

  Bilingual  labelling      Is  a  requirement  but  not  enforced  unless  a  consumer  files  a  

complaint    Different  rules  for  footwear  vs  other  tex@le  ar@cles  

Ques@ons?