On September 29, 2016, the Supreme Court of Canada upheld a decision of the Canadian International Trade Tribunal (“CITT”) as reasonable. In Attorney General of Canada v. Igloo Vikski Inc., the majority of the Supreme Court of Canada held that imported hockey gloves should be classified as “gloves, mittens and mitts” under tariff item 6216.00.00 and not “other articles of plastics” under tariff item 3926.20.92. The importer, Igloo Vikski Inc. had classified the imported hockey gloves as “other articles of plastics” and lost at the CITT (see Igloo Vikski Inc. v The President of the Canada Border Services Agency, AP-2009-046). The importer successfully appealed the CITT decision to the Federal Court of Appeal (See Igloo Vikski v. President of Canada Border Services Agency). The Federal Court of Appeal Decision was reversed by the Supreme Court of Canada and the CITT decision was reinstated.
Yesterday, in “How Canadian! The Supreme Court of Canada’s First Tariff Classification Decision Is For Hockey Gloves” we discussed what the Supreme Court of Canada said about the tariff classification under Canadian law and the application of the General Rules for the Interpretation of the Harmonized System. Today, we will focus on what the Supreme Court of Canada said about appeal of tariff classification decisions of the CITT.
The Supreme Court of Canada made the following findings and statements that should be considered by a party who is thinking about appealing a CITT tariff classification decision:
- The standard of review applicable to a tariff classification decision of the CITT is reasonableness.
- The CITT has specific expertise in interpreting “the very complex customs tariff and the international and national rules for its interpretation”.
- Reasonableness review is concerned with the reasonableness of the substantive outcome of the decision, and with the process of articulating that outcome.
- The reasoning of the CITT must exhibit “justification, transparency and intelligibility within the decision making-process”.
- The substantive outcome and the reasons, considered together, must serve the purpose of showing whether the result falls within a range of possible outcomes.
- Considerable prudence must be exercised when reviewing the CITT’s interpretation and application of the Customs Tariff. Care must be taken when reviewing decisions of the CITT interpreting the unique and complex scheme of the Customs Tariff. This is because “the Customs Tariff bears little resemblance to ordinary legislation”.
- CITT decisions may still be upheld even if they “lack perfect clarity”. Reasonableness review “does not require perfection”.
- A decision of the CITT may be considered to be “reasonable” “if its reasons allow the reviewing court to understand why the CITT made its decision and permit it to determine whether the conclusion is within the range of acceptable outcomes”.
- Just because an alternative interpretation to that given by the CITT may be available with respect to an Explanatory Note, that does not mean that the CITT’s interpretation was necessarily unreasonable.
It is important to note that the dissenting opinion of Madame Justice Côté did not dispute the points above. Madame Justice Côté reached a different conclusion from the majority and held that the CITT’s interpretation of the General Rules was unreasonable, internally contradictory and interpreted the Explanatory Notes in a manner that was irreconcilable with the words.
In the dissenting opinion, Madame Justice Côté looked at a concession that was given by Igloo Vikski’s counsel before the CITT and determined that it should be given no weight by the Court. Before the CITT, counsel had conceded “that the gloves were not prima facie classifiable under heading 39.26 using Rule 1 alone.” Madame Justice Côté stated that:
“A concession, to be considered as such, has to be of a clear nature. Assuming – without deciding – that it is a concession, it should be accorded little or no weight in the context of these proceedings as it was merely Igloo Vikski’s opinion on a matter of law…, namely the proper interpretation of heading No. 39.26.”
For more information about appealing tariff classification decisions and advance customs rulings of the Canada Border Services Agency to the CITT and appeals of CITT decisions to the Federal Court of Appeal, please contact Cyndee Todgham Cherniak at 416-307-4168 or email email@example.com. For more free information about Canada’s customs laws, please go to the LexSage web-site.
For example, please look at:
What is a Detailed Adjustment Statement?
How to File a Customs Valuation Appeal in Canada