Blog Posts

Compliance Verification Trends Issue #2 – April 2018

CBSA identifies specific industries and products as priorities for audits, and updates their verification priority list on an ongoing basis. The up-to-date list of priorities is available on the CBSA website.

Compliance Verification Trends

Forewarned is forearmed

If you import a targeted item, you face a high likelihood of being audited by the CBSA. This in itself can certainly be manageable, provided you’re adequately prepared. However, if you aren’t adequately prepared and the CBSA finds non-compliance, you can be assessed duties, taxes and additional penalties that can harm your business. 
Being prepared – both by knowing which goods are being targeted and by ensuring customs compliance when importing those items – gives you the chance to adapt, account for added costs, adjust selling prices and generally lessen impacts to your business.

Target update – April 2018

We have recently seen a number of verifications relating to customs tariff heading 8716.90.30.00, covering parts of trailers imported solely for use in the manufacture of new trailers and semi-trailers at a duty-free rate.

CBSA is currently targeting these imports to verify that the product is legitimately duty-free, due to the possibility that some parts used to repair trailers are being incorrectly imported under this tariff heading. In such a case, the product would be reclassified to a dutiable customs tariff item at a rate of 6.5%.

What to do

If you import any of the targeted goods – or think the CBSA could consider your goods to be included in their target list – our audit specialists recommend the following:

  • Conduct an internal review to ensure accurate and complete documentation of your imports

  • Provide your customs broker or consultant with detailed technical information on your products, and copies of any past rulings, verification results or custom opinions so they can help review your product classifications

  • Consider making a voluntary disclosure if that review reveals any errors or omissions

We can help

Our dedicated Audit Response Unit is staffed by professionals with extensive experience managing customs verifications who keep current on audit trends. They understand the potential risks and costs to a business facing an audit and work with clients to both avoid being audited and to respond effectively if an audit does happen.

Email our Audit Response Unit today!

Information provided by: Audit Response Unit (ARU). - Cole International

EDI: Electronic Data Interchange

EDI (electronic data interchange) is the electronic exchange of business data in a standardized format between trading partners and with customs agencies. It replaces paper-based document exchanges of the past and offers the benefits of lower costs, increased transaction speed, improved accuracy, and smoother transactions.

EDI Electronic dataIn the world of Customs, faster data transfer means faster shipments. And the less time you spend documenting and transporting your shipments, the healthier your bottom line.

We have extensive experience using automated data exchange to help businesses meet their data-transfer requirements quickly and easily. Our EDI program works with a variety of data formats using various data communication protocols, meaning we will be sure to have the right fit for every business.

 

Features of our EDI service include:

  • Efficient, automated data exchange in the format that suits each business
  • The ability to easily generate electronic reports for importer accounts 
  • The capability to map files to a company’s system in the suitable format
  • The flexibility to transfer EDI documents using a Value-Added Network (VAN), File Transfer Protocol (FTP) or an automated email solution 

Email us today to learn how our EDI solutions can help improve the efficiency of your business and ensure you’re in step with today’s technology.

Information provided by: Customs Brokerage Dept. - Cole International

 

 

Importing a Vehicle from the U.S. into Canada

But what’s involved in importing, and how do you know for sure whether the car you’re considering will be allowed across the border? Will that “great deal” still be as good once you factor in all the duties, taxes and other fees to get it here?

The import of vehicles is overseen by Transport Canada and the Canada Border Services Agency. Before you import, here are some things you should know.

Vehicle admissibility: Your first step should be to check your vehicle against Transport Canada’s List of Vehicles Admissible from the United States to make sure it’s allowed into Canada.

Vehicle “branding:” A “brand” is a permanent designation on a vehicle’s title indicating that the vehicle has previously sustained substantial damage through collision, natural disaster or any other occurrence requiring repair. Check the vehicle’s brand history: some brand status issues will render a vehicle inadmissible into Canada.

RIV is the Registrar of Imported Vehicles, Canada’s national program of vehicle registration, inspection and certification. Consult the RIV website for information and to initiate the mandatory registration process. (Exemptions: Vehicles older than 15 years are exempt from registration, as are select other vehicles; see this link for more information.)

Modification requirements: Vehicles may require modifications in order to comply with Canada Motor Vehicle Safety Standards (for example, a metric or dual-reading speedometer or daytime running lights). Before youImporting a vehicle from US import a U.S. vehicle, find out what modifications it will require, if any. Modifications and the associated costs are the responsibility of the importer.

Vehicle inspections: The RIV – Registrar of Imported Vehicles – must complete an inspection within 45 days (clear status) and 1-year (salvage status) of the date of import. And all required modifications must be completed prior to the inspection. A number of independent centres across Canada (including most Canadian Tire stores) are authorized to perform these inspections. The RIV website provides a list of inspection centres across Canada. Each province also requires an inspection on vehicles coming from out-of-province before they can be registered. Contact your provincial insurance provider for more information.

Recalls: Purchasers are advised to contact the vehicle manufacturer or dealer to ensure the vehicle is not subject to any recall. Vehicles with an outstanding recall are not allowed into Canada. Proof of “recall clearance” is required by the RIV before it will clear the vehicle for inspection. Vehicles older than 15 years are exempt from recalls.

Cost: Various federal and provincial agencies levy fees and taxes on imported cars.

The list below provides an estimate of what’s required but may not be complete. Consult the CBSA, the RIV, or a knowledgeable customs broker to understand the full cost of importing a vehicle.

  • Duty: The CBSA will assess duty on a vehicle manufactured in a country other than Canada, the US and Mexico (see the relevant CBSA memorandum for details).

  • RIV fees: $295 + GST (less if the car is being imported for “parts-only”)

  • Air conditioning excise tax: $100 + GST

  • Excise tax on fuel inefficient cars: $1000-$4000 (amount depends on the vehicle’s “weighted average fuel consumption” and kicks in if this is 13L/100km or more)

  • GST: calculated based on the cost of the vehicle plus any duties and excise taxes

  • Miscellaneous costs for other things such as licensing, temporary trip permit, provincial insurance, emissions testing, environmental levies, etc.

The RIV website can help you build a checklist of importer requirements specific to the vehicle you’re interested in, with specific considerations for the border crossing you’ll use as well as the province into which you will be importing.

At the border, both countries’ customs agencies need to be involved:

  • U.S. Customs requires electronic filing (AES) which must be done by a U.S. firm – usually a customs broker or freight forwarder. Once electronic filing is complete, U.S. Customs requires a minimum of 72 hours’ advance notice (this may vary by port) prior to the permanent export of self-propelled land vehicles from the country.  The specific U.S. Customs requirements are detailed on the RIV website.

  • Canada Border Services Agency processes the import of vehicles into Canada. They are responsible for confirming vehicle admissibility, assessing duties and taxes, and initiating the RIV registration process. The specific requirements are detailed on the RIV website. The CBSA website also provides detailed information on the import process.

We can help

If this all seems a bit overwhelming, don’t worry – there are experienced professionals available who can take the hassle, uncertainty and delays out of the vehicle import process.

For a flat fee, our vehicle import professionals can coordinate transportation of the vehicle, pay the various fees and submit all required documentation. See our Vehicle Importing page for complete information on our services.

Information provided by: Vehicle Imports Dept. - Cole International

Duty relief: Don’t miss a chance to save

What is duty?

Duty is a tax paid to the customs authority of the country into which goods are being imported. The amount of duty is usually calculated based on the value of the goods – but can also vary depending on other factors such as quotas, timing, quantity and country of origin.

Paying duty when importing into Canada

All goods are classified into different categories which determine the tariff rate or duty amount that is owed upon import. If you haven’t seen it yet, check out our short video on “Paying Duty and GST on Imports” on our website (you’ll find lots of other informative videos there, too).

If you want to delve a little deeper, the CBSA has a wealth of resources on their website to help understand how duty is calculated, including a video on classifying imports and their main Import page that has plenty of information on importing goods and programs available to help you save duty.

Duty relief Duty relief dont miss a chance

Here are some potential duty-savings opportunities that all importers should know about.

Free Trade Agreements 

In addition to the well-known NAFTA which gives us free trade with the U.S. and Mexico, Canada enjoys duty-free trade with dozens of other countries – The European Union, Ukraine, Chile, Korea… to name a few.

Free-trade agreements vary in their conditions, though, so in addition to knowing which countries we have agreements with, importers should also understand which goods qualify, and the requirements that must be met to reap their benefits.

For more information on free trade agreements, check out our blog and video on FTAs and contact our Free Trade Department.

Conditional relief

Certain otherwise dutiable goods, when destined for specific end-uses, can be brought into the country duty-free. An importer can either state the end-use at the time of importation, or can submit a claim later, once the good has been put to use at its final destination. Importers must accurately attest that the end-use of the good is one that renders it duty-free.

Refer to CBSA’s memorandum on Conditional Relief Tariff Items to see if your goods qualify. And, be sure to properly document the product’s importation and end-use by referring to the CBSA’s guidelines for record-keeping regarding conditional relief tariff items.

Claims must be accurate and CBSA must be informed if end-uses change from what was claimed. Once approved, conditional relief exemptions can be applied to future shipments of those same goods, providing ongoing savings.

This is just a sampling of the programs available to help save you money when trading goods across the border. Visit the CBSA’s Trade incentive programs website for more.

Don’t miss out. Connect with someone in the know.

Save yourself valuable time and effort by enlisting the help of a professional. We have professionals in Trade Compliance, Free Trade and Customs Consulting who are available to answer your questions and help you save duty. Contact us today and start saving more!

Information provided by: Canadian Customs Consultimg Dept. - Cole International

SWI – the Single Window Initiative Update

The Single Window Initiative (SWI) is a federal government process for collecting information on imports into Canada. Rather than submitting information individually to different government agencies, as in the past, SWI allows importers to provide all

44699394 s required information on imported goods in a single submission to the Canadian Border Services Agency (CBSA).

The CBSA then shares the required information with the PGA(s) responsible for regulating the goods and the PGAs assess that information in order to provide any border-related decisions.

Along with the CBSA, the following PGAs are participating:

  • Global Affairs Canada
  • Health Canada
  • Natural Resources
  • Canada Public Health Agency of Canada
  • Transport Canada
  • Canadian Food Inspection Agency
  • Environment and Climate Change Canada
  • Canadian Nuclear Safety Commission
  • Fisheries and Oceans Canada

In some cases, SWI will mean more information is required than before. But the trade community will enjoy many benefits in return, including aligning of Canadian and U.S. border processes, removing non-compliant commodities from the marketplace and a simplified submission for imports.

Update on SWI implementation date

CBSA and the trade community have been preparing for SWI over the past three years, with the goal of full functionality on April 1 of this year. However, CBSA announced just this week that the implementation date has been pushed back to January 1, 2019. Three months following that – on April 1, 2019 – the existing OGD service options (PARS and RMD) will be retired.

We can help

As an importer adjusting to the requirements and information flow under the SWI, you may have questions about how it works and what’s required. Our customs professionals are available to help you understand the SWI and ensure you take advantage of the efficiencies it offers.

Previous SWI Blog Published: Dec 2017

Information provided by: Canadian Customs Brokerage Dept. - Cole International

Shipping your goods on time and on budget

Do you ever feel frustrated by glitches and blips during the shipment of your goods?

Are you wondering how you can ensure a smooth and successful transit every time?

Who doesn’t? Even though there are often many steps involved in getting your goods from A to B, paying attention to a few key areas can greatly increase your chances of success.

The two most important – and powerful – tips we can offer are to…

  1. Be as thorough and attentive as possible when filling out your customs and transport documents, and

  2. Partner with an experienced and trusted customs broker who can guide you along the way.

The Paperwork

It may not be the most glamorous part of your business, but preparing all your shipping and customs documents with a perfectionist’s eye for detail is probably the single most effective thing you can do to ensure smooth transit of your goods. Savvy importers and exporters will have a process in place and experienced staff to carry it out.

Shipping your goodKeeping these considerations in mind will help ensure you get it right:

  • Know which documents are required for your goods to clear at the border. Because requirements can vary greatly for different types of goods, check with Customs – or your broker – to make sure you understand exactly what’s needed, especially if shipping a new product for the first time.

  • Complete the paperwork yourself as much as possible. It may be tempting to leave it for someone else farther down the supply chain, but doing it yourself will give you better certainty that everything was done correctly.

  • Maintain close communication with the transportation firm(s) involved in carrying your goods. This is becoming ever-easier with apps and technology that allow to-the-moment updates so you can know where your goods are at all times.

Customs Broker

Partnering with a trusted advisor who has a thorough understanding of your business needs will go a long way to ensuring your peace of mind – and successful shipment of your goods. There are plenty of qualified brokers out there. If you don’t already have one – or if you feel the fit is not quite right – it’s worth it to take the time to find a broker who will work best for you.

The following considerations will help you make the most of your relationship with your broker:

  • Find a broker with plenty of experience shipping the goods you’re moving. Customs and shipping requirements can change over time and for different products so find someone who understands your business needs.

  • Choose a broker who’s connected to carriers through mobile apps and can offer in-transit information on a shipment's status.

  • Choose a broker with a local presence who’s readily available to quickly resolve any problems that may arise.

  • Email the required documents and/or set up an electronic interface with your broker, so you’re not relying on outdated paper documentation methods.

We understand how essential it is for your goods to ship on time and on budget. Our experienced brokers make your shipping success a priority. Find out how we can help by emailing us today and speaking with one of our trusted professionals.

Information provided by: Canadian Customs Dept. - Cole International

What exactly does a freight forwarder do…and do I need one?

Importing and exporting are key activities for many businesses. But the process, paperwork, and regulations involved in international trade can be very complex – intimidating, even. Many successful international shippers avoid getting bogged down in these logistics by working with a freight forwarder.

A freight forwarder is an agent who acts on behalf of an individual or company to organize the transportation of goods. Forwarders make use of established relationships with carriers (over air, land, ocean and rail) to negotiate the best rates for moving goods safely and efficiently.

The roles of a freight forwarder include: What exactly does a freight forwarder

  • preparing and filing transport and customs documents to ensure compliance with all regulations and requirements 

  • packing, crating and warehousing of goods in transit

  • transport tracking

  • negotiating freight charges

  • booking cargo space

  • freight consolidation

  • protecting against mishaps through cargo insurance (and taking care of any subsequent filing of insurance claims, if needed)

…and, at the final destination, the freight forwarder (or their agent) can provide document delivery, deconsolidation, and freight collection services.

Savvy companies large and small make use of freight forwarders’ experience and knowledge of documentation requirements, customs regulations, transportation costs and logistics to ease the process of moving goods around the globe.

With offices in the U.S. and Canada, and over 50 years of experience, out logistics professionals can take the stress out of international shipping. Freight forwarding: It’s what we do.

Information provided by: Freight Dept. - Cole International

Classifying goods for trade – What’s the deal?

Proper tariff classification is the foundation of import and export trade compliance.

The Harmonized Commodity Description and Coding System (usually shortened to Harmonized System, or just HS) is the internationally standardized system of classifying traded products. It is applied by over 180 countries and territories worldwide.

It’s all about the categories…

The HS is organized into 21 sections that are divided into 99 chapters. These are further subdivided into approximately 5,000 headings and subheadings for classifying traded goods.

The HS is designed as a “core” system that can be adopted by any country and then further subdivided based on that country’s particular tariff and statistical requirements.

Goods are organized in the HS in numerical order, beginning with crude and natural products, and increasing in complexity through to advanced manufactured goods.

Classifying goods for trade

It’s important to get it right. Really important.

Canada Border Services Agency has clearly articulated that importers have responsibility for knowing and understanding import regulations and for filing accurate and timely corrections to declarations of origin, tariff classification and value for duty. Importers are expected to manage and achieve full compliance with import regulations.

Similarly, the U.S. Customs Modernization Act places responsibility on the importer of record to exercise reasonable care to enter, classify and value imported merchandise, and to provide any other information necessary to enable Customs to properly assess duties, collect accurate statistics and determine whether all legal requirements are met.

Incorrect classification can cause an importer huge headaches – including border delays, increased scrutiny of activities, fines and varying degrees of punitive measures.

What it all means

Classifying goods is known primarily as the means by which duties are assigned. But classifying goods can also help clarify for an importer whether the goods they’re importing are subject to Free Trade Agreements, quotas, restraints, embargoes or other restrictions.

For all these reasons, it is extremely important to understand your responsibilities and to correctly classify your imported goods.

We can help

If you don’t have in-house classification expertise, consider enlisting a qualified customs broker or customs consultant to help you get it right.

Our consulting group has extensive knowledge of the HS and can help you classify your merchandise and fulfill all your importing responsibilities. Email us today!

Information provided by: Canadian Customs Consulting Dept. - Cole International

Comprehensive and Progressive Trans-Pacific Partnership – update

The Trans-Pacific Partnership, the ambitious trade agreement that nearly happened, was to encompass 12 nations spanning four continents and 800 million people. But when U.S. President Trump pulled that country out of negotiations early last year, the 11 remaining members carried on, eventually forging the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), which they formally agreed to this January.

Canada signed the deal last week in Santiago, Chile, taking it one step closer to implementation. At least six member countries are needed to ratify the deal before it will come into force – expected by the end of 2018 or timely updateearly in 2019.

The CPTPP will reduce tariffs in countries that house nearly 500 million people and account for more than 13 per cent of the global economy: a total of about $10 trillion. It also seeks to reduce non-tariff measures – things like regulations can be create obstacles to trade. There are chapters that aim to harmonize these regulations, and others that aim to improve labour and environmental standards – among others. See the Government of Canada’s FAQs on the CPTPP for more.

CPTPP member countries are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

What this means for Canadian businesses

Importers should consider the implications of CPTPP ratification now to determine how it will effect their business. By preferentially sourcing from CPTPP countries, for example, importers could enjoy significant savings in tariffs and smoother trade.

Email us today to speak to a free trade professional and keep up to date on this and other trade agreements that can benefit your business.

Information provided by: Canadian Customs Consulting Dept. - Cole International 

U.S. Customs and Border Protection – Update on ACE, the automated commercial environment

ACE is the Automated Commercial Environment – the single-window system through which the U.S. trade community reports import and export of goods. Customs and Border Protection (CBP)  uses the data submitted through this system to determine the admissibility of goods into the U.S.

A recent blog post on the Canadian equivalent of ACE – SWI, the Single Window Initiative – was published earlier this summer. Check it out here, if you haven’t read it yet.

Which transactions need to be done through ACE?

CBP maintains an updated list of the transactions that are supported by – and must be conducted using – ACE, in addition to the anticipated implementation dates for new ACE functions: https://www.cbp.gov/trade/automated/ace-transaction-details

What’s the implementation status of ACE?U.S. customs and border protection

The number of U.S. Partner Government Agencies (PGAs) now linked electronically through ACE is growing, meaning trade data for goods crossing the border is reaching the necessary government departments seamlessly through a single submission. This has increased accuracy and data flow, while decreasing the work required by importers and exporters. 

Prior to ACE, only four PGAs had access to electronic data submitted to CBP. Today, more than 20 PGAs have data interfaces through ACE – including the Environmental Protection Agency, Centers for Disease Control and the Drug Enforcement Administration (among others) – with more being added all the time.

A full list of participating PGAs is available on the CBP website.

ACE makes PGAs “smarter”

Because ACE allows for quick and easy information flow, CBP and the other PGAs can more readily identify missing or inaccurate submissions. And because of this, shipments requiring compliance efforts are being targeted at a higher rate. Simply put, the PGAs are getting smarter!

What’s the best way to ensure a trouble-free customs experience?

  • Monitor the PGA guidelines and implementation schedule on the CBP website.

  • Make sure you know whether your products are regulated by any PGAs, and that you know – and can provide – all the information needed to secure a timely release at the border by all agencies involved.

  • PGAs may be getting smarter, but you can too: Importers who have their ducks in a row will also benefit from faster releases and less hassles at the border.

It is now more important than ever to be fully informed before you take your shipment to the border. If you aren’t sure what you need to do, call your customs broker for information or advice.

Information provided by: U.S. Customs Consulting Dept. - Cole International

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