End use tariff codes or conditional relief tariff items reduce or eliminate the rates of duty that would otherwise apply, provided that the conditions of relief imposed under the tariff item are satisfied.
The specified conditions must be satisfied by either the importer or by the people who purchase or otherwise acquire the goods.
For example, rubber gloves that are to be used with protective suits in a noxious atmosphere are duty free. However, surgical gloves are subject to 15.5% duty unless there is a beneficial tariff treatment to reduce the duty.
For some of the end use provisions, there might be a D-memoranda that explains further the conditions. For the glove example, a memo explains what is considered a noxious atmosphere.
Importers can claim the benefit of the conditional relief item at the time of import, before the conditions have actually been met.
When using an end use tariff code, the importer is declaring that the conditions of relief will be met and backed up by supporting documentation.
Distributing the goods in a way that doesn’t adhere to the specific conditions of the code requires you or the subsequent owner of the goods to file a correction to the declaration and pay any duties owing.
CBSA may do periodic compliance verification audits or reviews for goods claimed under conditional tariff items.
The most common errors importers make with conditional relief items are:
For importers considering using a tariff code or conditional relief tariff item, make sure to:
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Information provided by: Customs Consulting Dept. - Cole International