Under Canada’s customs laws, the importer of record is responsible to provide the correct tariff classification of the commercial invoice and the B3 “Canada Customs Coding Form”.  While importers often rely on information provided by the exporter, they must do so understanding that they will have to pay the price for errors.  The Canada Border Services Agency (CBSA) may conduct a verification and determine that the tariff classification was incorrect.  If a tariff classification is incorrect, the duty rate may be incorrect and additional duties may be payable.  Whether or not additional duties are payable, the importer may be subject to an administrative monetary penalty.

We have created for clients a Tariff Classification Checklist, which are the documents/things we require in order to assist with the tariff classification of the goods:

1. The invoice, the purchase order & the contract – we need this to see how the goods are described in these documents because the tariff classification should be consistent with the description (and if the description is incorrect, it should be changed);

2. Promotional materials (e.g., product catalogues, brochures, web-based materials, etc.) – see 1 above;

3. A sample – a sample is always helpful;

4. If a sample cannot be provided, the packaging;

5. The technical drawings and/or a listing of the bill or materials (a list of the parts/components);

6. The ingredient listing;

7. Documents filed with foreign government agencies where approvals are required (e.g., FDA filings);

8. A description of the manufacturing process – how the good is assembled/manufactured

9. Information from the inventor, R&D department, engineers concerning the use and purpose of the goods; and

10. Market analysis regarding buyers – who is the target market and how will they use the goods.

Depending on the specifics of a particular case, there may be other pertinent documents.

It is important to recognize that if the CBSA disagrees with the tariff classification selected and an appeal is filed with the Canadian International Trade Tribunal, this information will have to be filed as evidence to assist the Tribunal in classifying the goods.  For this reason, all documents relating to the tariff classification of the goods (including legal opinions and legal instruments used in the tariff classification process) should be maintained in a record, such as a binder or an electronic folder.  You never know when you will need the information and it takes a lot of time to reconstruct the documentation years later.