Import & Customs Requirements Guide
Importing Into Canada
Can you define the term “importing into Canada” in one sentence? Most seasoned importers would probably answer with the following quote – “Find a good product at a good price from a good foreign supplier, and then hire a reliable customs broker to handle all customs matters and a reliable transportation company to physically handle the goods from the supplier’s facility to yours, and voilà!”
Yes, to many, importing into Canada is pretty much that simple. But is it really? What is importing? What does it imply? What is the process for importing into Canada?
Let’s take a quick look at the Canadian import process!
Importing Into Canada - Overview of the import process
In Canada, the importer (resident or non-resident) is responsible for reporting and accounting for its imported goods to the Canada Border Services Agency (CBSA). The importer must accurately describe the quantity and nature of the goods he imports and he must assign a ten-digit tariff classification number to each product for duty and tax purposes as well as for trade statistics purposes.
The importer must also accurately declare the proper value for customs duty.
Based on the country of origin and the country of direct shipment to Canada, the importer determines the applicable tariff treatment for the imported goods and then accounts for the goods and pays the applicable customs duties, excise duties, excise taxes, goods and services taxes (GST), and other defined duties.
During the import process, the importer must always be certain that he satisfies all the applicable regulatory requirements, statutes, regulations and government requirements that impact imported goods and he must also make sure that the goods are not prohibited from coming into Canada.
The importer must also obtain applicable import permits from Foreign Affairs, Trade and Development Canada in connection with products that are listed on the Import Control List and that are subject to tariff rate quotas.
Finally, importers must maintain books and records in Canada, as prescribed, and must be prepared to provide access to and copies of pertinent books and records during a CBSA or other government agency trade compliance audit.
Importing Into Canada - Steeps and timelines
The following steps and timelines are intended to assist businesses that are already in operation and that have a business number (BN) and an import/export program account number issued by the Canada Revenue Agency (CRA) and wish to import commercial goods into Canada.
We have divided the steps into four separate timelines/categories:
Here are the logical steps to follow in order to successfully import goods into Canada.
1. Before placing an order / Purchasing the googs
DETERMINING THE ADMISSIBILITY OF EACH PRODUCT BEFORE IMPORTING INTO CANADA
Identify the goods that you plan on importing into Canada. Obtain a detailed description (including composition, ingredients, etc.) of each product you intend to import.
Identify the country of origin of the goods, and determine from which country the goods will be shipped directly to Canada.
Determine the Canadian import tariff classification number for each product at: Customs Tariff 2019
Based on the description, the tariff classification number, and the country of origin of each product, determine if the goods are subject to any prohibition, import restrictions, government sanctions or special measures or other government requirements.
To find out if the goods you plan on importing into Canada are restricted, controlled or otherwise are subject to government regulations, refer to the Acts and Regulations of other government departments in the D19 series Memoranda. To find out if the goods are prohibited from being imported into Canada, refer to the D9 series Memoranda.
Determine if the goods are subject to transportation restrictions or require a transportation permit.
Determine if the foreign supplier of the goods can provide government of Canada approved ISPM 15 packaging (approved wood pallets, etc.)
Wood Packaging – Questions and Answers
Determine if the foreign supplier can meet mandatory Canadian government marking and labelling requirements. Refer to the D11 series Memoranda for marking requirements. For labelling requirements, refer to the:
DETERMINING THE RATES OF APPLICABLE DUTIES AND TAXES
Once you have determined that the goods are admissible for import into Canada, you are ready to determine the applicable tariff treatment, rates of customs duty, excise duty, excise tax, goods and services tax (GST), anti-dumping or countervailing duties and Special Import Measures Act (SIMA) duties or surtax as well as the applicable tariff treatment for each product you intend to import.
You are now ready to proceed to number 2.
2. Before Shiping to Canada / Before leaving the foreign shipper's facility / Before the border
ARRANGEMENTS FOR THE CUSTOMS CLEARANCE OF YOUR SHIPMENT
Determine if you are going to use the services of a CBSA licensed customs broker such as Dilas International Customs Brokers that can handle customs matters and transmit electronic release requests and accounting data to any CBSA office across Canada.
FULL ACCOUNTING AND PAYMENT OF DUTIES & TAXES PRIOR TO RELEASE
If you are going to personally arrange for the customs clearance and accounting of your goods on Form B3-3 directly with Canadian customs officials at the CBSA office near your place of business, and your business is not located at the border, you must hire a CBSA bonded carrier that can transport your shipment in-bond to an approved local customs sufferance warehouse in your area. The carrier will then provide you with an arrival notice, and you will be able to present the arrival notice along with all the other customs documents and a completed form B3-3 to the local CBSA office in your area. You will also be required to immediately pay all applicable duties and taxes to the CBSA.
Note that if you choose to self-clear your shipment, you will still be required to transmit the mandatory electronic CBSA eManifest importer data in the prescribed timeframes depending on the transportation mode used to bring your goods into Canada.
CUSTOMS RELEASE OF GOODS BEFORE THE PAYMENT OF APPLICABLE DUTIES AND TAXES
By posting security with your local CBSA office or with the CBSA headquarters office in Ottawa, you can obtain immediate customs release of your shipments and then account (pay the applicable duties and taxes) for your shipments within the next five (5) business days. By using the pre-arrival review system (PARS) you can actually transmit your release data up to 30 days before the arrival of your shipments in Canada. Note that many carriers are now demanding that importers or their customs broker transmit PARS data as it cuts operating costs for carriers and diminishes delays at the border.
Note that the customs release prior to payment privilege is only allowed if you transmit your customs declarations electronically to the CBSA. Dilas International Customs Brokers can provide you with access to the very easy to use, affordable and reliable CustomsCA software that will enable your business to comply with the EDI requirements of the CBSA, the CFIA, Natural Resources Canada (NRCan) and of many carriers.
CANADIAN FOOD INSPECTION AGENCY (CFIA) RELEASE – CUSTOMS/CFIA INTERFACE
A CFIA release is required for food, plants, animals, agricultural products, plant products and animal products imported into Canada. Note that other products such as vehicles and wooden furniture are also subject to CFIA approval.
NATURAL RESSOURCES CANADA (NRCan) RELEASE – OGD INTERFACE
The CBSA assists NRCan in the administration of the Energy Efficiency Act and the Energy Efficiency Regulations. The Act and Regulations prohibit the importation of certain energy-using products unless they meet specific requirements. Importers, who are dealers of these regulated products, must provide the CBSA with prescribed data elements to be included in the release package
transmitted electronically to the CBSA through the Other Government Department (OGD) Interface.
ARRANGEMENTS FOR THE TRANSPORTATION OF YOUR SHIPMENT (FULL SHIPMENT OR CONSOLIDATED CARGO)
Determine if you are going to use the services of an international freight forwarder or freight broker to arrange for the transportation of your goods from the shipper’s facility to your place of business or if you will deal directly with a carrier (Transportation Company).
Choose a carrier that best meets your transportation needs, and who is registered to transmit electronically all the mandatory CBSA eManifest cargo data to the CBSA prior to arriving in Canada, or in the case of marine/ocean shipments, prior to lading in a foreign port.
In scenarios where you are importing a limited amount of goods equaling to less than a container load (LCL) or less than a truck load (LTL), and that you have hired a consolidator/freight forwarder to arrange for the shipment of your goods, make sure that the freight forwarder is registered with the CBSA and that he will transmit the mandatory advanced house bill eManifest data to the CBSA in the prescribed timeframes depending on the transportation mode used to bring your goods into Canada. http://www.cbsa-asfc.gc.ca/prog/manif/reqfrfwdrs-extransitaires-eng.html
WAREHOUSING YOUR IMPORTED GOODS – THE CANADIAN FOREIGN TRADE ZONE (FTZ) PROGRAM
Determine if you are going to pay all the applicable import duties and taxes at the border or if you are going to participate in one of the many foreign trade zone type programs available in Canada that can defer or even waive the payment of duties and taxes. You can contact your local economic development organization or our Dilas International trade services advisors for further details on the Canadian FTZ program.
DETERMINATING THE FIRST POINT OF ARRIVAL (FPOA) – CBSA OFFICE WHERE THE CARRIER ARRIVES IN CANADA
Determine where the carrier will enter Canada and at which CBSA office you desire to present your customs release request.
Directory of CBSA Offices and Services
PROPER CUSTOMS DOCUMENTATION WHEN IMPORTING INTO CANADA
Make sure that the foreign shipper provides you with the properly completed customs documentation required by the CBSA for the customs clearance of your goods, such as the Canada Customs Invoice (CCI) or a commercial invoice containing CCI data, a Free Trade Agreement (FTA) specific Certificate of Origin or a Certificate of Origin Form A, etc. Other documents may be required to determine the date and place of direct shipment to Canada, such as an ordinary commercial invoice, a confirmation of sale, a freight invoice or a bill of lading.
IMPORT PERMITS AND IMPORT CERTIFICATES
Make sure that you obtain the proper import permits or import certificate for the goods that are subject to such permits or certificates. Importing
You are now ready to proceed to number 3
3. Arrival at the border
If you are using the PARS release option, the carrier and/or the CBSA will advise you once the goods have arrived at the border and have been released.
If you are not using the PARS release option, the carrier will notify you of the arrival of your shipment at the CBSA office or the CBSA licensed customs sufferance warehouse where you will be arranging for the customs clearance of your shipment.
Once you have received the carrier’s arrival notice, you can proceed to the designated CBSA office and present your fully completed form B3-3 type C and immediately pay all the applicable duties and taxes, unless you are a participant in the Canadian FTZ program.
The CBSA will then advise you if your shipment is released and delivery to your place of business is authorized or if it is held for a customs examination. If it is held at the border where the examination will be performed, you will be informed of the status or the examination and the next steps.
If your shipment is located at a sufferance warehouse, you will be informed at the counter by a border services officer that your shipment is referred for a secondary examination, and that you will be contacted at a later time/date. In such cases, the CBSA will advise the customs sufferance warehouse operator of such an examination, arrange for the examination to be performed, and then advise both you and the warehouse operator of whether the shipment is released or if other action is/will be taken.
If and when your shipment is released and delivered to your place of business, you will be ready to proceed to number 4
4. After the border
Once the goods have cleared customs at the CBSA office and the goods have been delivered to your place of business, you may still have dealings with the CBSA or other government departments/agencies.
PARTICIPANTS OF THE CANADIAN FTZ PROGRAM – INVENTORY CONTROL
For importers who participate in the FTZ program, goods have been delivered to your warehouse, distribution center or manufacturing facility, without having to pay duties and/or taxes until a later time.
Under this program, strict inventory controls have to be in place and movement and manipulation activities inside the facility must also be well documented. Applicable duties and taxes are only paid if the imported goods enter the manufacturing process (for manufacturers) or when they leave the warehouse/distribution center to enter into the commerce of Canada.
Goods that are exported from warehouses/distribution centers, are not subject to any duties or taxes.
INTERNAL AUDIT –SHORTAGES, OVERAGES, ADJUSTMENTS, CORRECTIONS OF ERRORS AND OMISSIONS
Careful examination of the imported goods and accompanying import and customs documentation should be performed for each incoming shipment. Shortages and overages should be declared to the CBSA as early as possible. Corrections of errors and omissions and/or adjustments should also be reported as soon as possible, it is in fact advisable to submit corrections and/or adjustments within ninety (90) days after the date of importation. Errors identified by the CBSA in a trade verification audit may result in the issuance of an Administrative Monetary Penalty System (AMP) penalty.
PROPER RECORD KEEPING
Keep all documents in Canada for a period of at least seven (7) years.
POST-RELEASE VERIFICATIONS / TRADE VERIFICATION AUDIT
The CBSA may conduct post-release verifications to confirm trade compliance and to correct errors. These verifications may result in reassessments to collect additional duties and taxes and the issuing of AMPS penalties when errors are found.