Canada
On March 7, 2017, BillC-31 “An Act to implement the Free Trade Agreement between Canada and Ukraine“ passed second reading in Canada’s Senate. Bill C-31 is now being reviewed by the Senate of Canada Standing Committee on Foreign Affairs and International Trade. After the Report is prepared by the Standing Committee on Foreign Affairs and International Trade, Bill C-31 returns to the Senate for third reading and debate. After third reading, the Canada-Ukraine Free Trade Agreement (“Canada-Ukraine FTA”) can be ratified.
Canada has agreed to reduce most customs duty rates to “free” or 0% immediately upon implementation on goods that meet the rules of origin. Pursuant to Chapter 2 of the Canada-Ukraine FTA, each party shall reduce or eliminate customs duties on goods originating in either party in accordance with the tariff elimination schedules in Annex 2-B. In Article 1 of Annex 2-B, Canada agrees to eliminate customs duties on all goods in Chapters 1-97 of the Harmonized System that provides for Most-Favoured-Nation rate of duty, with the exception of any goods Canada has listed in Annex 2-B (which is a short list).
We have prepared the following chart, which sets out the H.S. Chapters and Canada’s commitments to reduce customs duties when the Canada-Ukraine FTA enters into force:
| H.S. Chapter | Description | 2016 MFN Rate of Duty In Canada | What Canada’s Schedule Says |
| 1 | Live animals | Up to 238% | Some items duty free immediately
Some items excluded from duty relief |
| 2 | Meat and edible meat offal | Up to 249% | Some items duty free immediately
Some items excluded from duty relief |
| 3 | Fish and crustaceans, mollusks and other aquatic invertebrates | Up to 5% | Entire Chapter is duty free immediately |
| 4 | Dairy produce; birds’ eggs; natural honey; edible products of animal origin, not elsewhere specified or included | Up to 313.5%
|
Some items duty free immediately
Some items excluded from duty relief |
| 5 | Products of animal origin, not elsewhere specified or included | Free | Entire Chapter is duty free |
| 6 | Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage | Up to 16% | Entire Chapter is duty free immediately |
| 7 | Edible vegetables and certain roots and tubers | Up to $10.31/kg | Entire Chapter is duty free immediately |
| 8 | Edible fruit and nuts; peel of citrus fruit or melons | Up to 14.5% | Entire Chapter is duty free immediately |
| 9 | Coffee, tea, maté and spices | Up to 3% | Entire Chapter is duty free immediately |
| 10 | Cereals | Up to 94.5% | Entire Chapter is duty free immediately |
| 11 | Products of the milling industry; malt; starches; inulin; wheat gluten | Up to $397.30/tonne | Entire Chapter is duty free immediately |
| 12 | Oil seeds and oleaginous fruits; miscellaneous grains, seeds and fruit; industrial or medicinal plants; straw and fodder | Up to 10% | Entire Chapter is duty free immediately |
| 13 | Lac; gums, resins and other vegetable saps and extracts | Free | Entire Chapter is duty free |
| 14 | Vegetable plaiting materials; vegetable products not elsewhere specified or included | Free | Entire Chapter is duty free |
| 15 | Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes | Up to 218%
|
Some items duty free immediately
Some items excluded from duty relief |
| 16 | Preparations of meat, of fish or of crustaceans, mollusks or other aquatic invertebrates | Up to 253% | Some items duty free immediately
Some items excluded from duty relief |
| 17 | Sugars and sugar confectionery | Up to $30.86/tonne | Some items duty free immediately
Some items excluded from duty relief |
| 18 | Cocoa and cocoa preparations | Up to 265% | Some items duty free immediately
Some items excluded from duty relief |
| 19 | Preparations of cereals, flour, starch or milk; pastry cooks’ products | Up to 267.5% | Some items duty free immediately
Some items excluded from duty relief |
| 20 | Preparations of vegetables, fruit, nuts or other parts of plants | Up to 17% | Entire Chapter is duty free immediately |
| 21 | Miscellaneous edible preparations | Up to 277% | Some items duty free immediately
Some items excluded from duty relief |
| 22 | Beverages, spirits and vinegar | Up to 11% | Some items duty free immediately
Some items excluded from duty relief |
| 23 | Residues and waste from the food industries; prepared animal fodder | Up to 205.5% | Some items excluded from duty relief |
| 24 | Tobacco and manufactured tobacco substitutes | Up to 13% | Entire Chapter is duty free immediately |
| 25 | Salt; sulphur; earths and stone; plastering materials, lime and cement | Up to 2.5% | Entire Chapter is duty free immediately |
| 26 | Ores, slag and ash | Free | Entire Chapter is duty free immediately |
| 27 | Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes | Up to 12.5% | Entire Chapter is duty free immediately |
| 28 | Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes | Up to 6.5% | Entire Chapter is duty free immediately |
| 29 | Organic chemicals | Free | Entire Chapter is duty free |
| 30 | Pharmaceutical products | Up to 6.5% | Entire Chapter is duty free immediately |
| 31 | Fertilizers | Free | Entire Chapter is duty free |
| 32 | Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks | Up to 6.5% | Entire Chapter is duty free immediately |
| 33 | Essential oils and resinoids; perfumery, cosmetic or toilet preparations | Up to 8% | Entire Chapter is duty free immediately |
| 34 | Soap, organic surface-active agents, washing preparations, lubricating preparations, artificial waxes, prepared waxes, polishing or scouring preparations, candles and similar articles, modelling pastes, “dental waxes” and dental preparations with a basis of plaster | Up to 6.5% | Entire Chapter is duty free immediately |
| 35 | Albuminoidal substances; modified starches; glues; enzymes | Up to 270% | Some items duty free immediately
Some items excluded from duty relief |
| 36 | Explosives; pyrotechnic products; matches; pyrophoric alloys; certain combustible preparations | Up to 6.5% | Entire Chapter is duty free immediately |
| 37 | Photographic or cinematographic goods | Up to 6.5% | Entire Chapter is duty free immediately |
| 38 | Miscellaneous chemical products | Up to 15.5% | Entire Chapter is duty free immediately |
| 39 | Plastics and articles thereof | Up to 6.5% | Entire Chapter is duty free immediately |
| 40 | Rubber and articles thereof | Up to 15.5% | Entire Chapter is duty free immediately |
| 41 | Raw hides and skins (other than fur-skins) and leather | Free | Entire Chapter is duty free |
| 42 | Articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut (other than silk-worm gut) | Up to 15.5% | Entire Chapter is duty free immediately |
| 43 | Fur-skins and artificial fur; manufactures thereof | Up to 15.5% | Entire Chapter is duty free immediately |
| 44 | Wood and articles of wood; wood charcoal | Up to 9.5% | Entire Chapter is duty free immediately |
| 45 | Cork and articles of cork | Free | Entire Chapter is duty free |
| 46 | Manufactures of straw, of esparto or of other plaiting materials; basket-ware and wickerwork | Up to 11% | Entire Chapter is duty free immediately |
| 47 | Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or paperboard | Free | Entire Chapter is duty free |
| 48 | Paper and paperboard; articles of paper pulp, of paper or of paperboard | Free | Entire Chapter is duty free |
| 49 | Printed books, newspapers, pictures and other products of the printing industry; manuscripts, typescripts and plans | Free | Entire Chapter is duty free |
| 50 | Silk | Free | Entire Chapter is duty free |
| 51 | Wool, fine or coarse animal hair; horsehair yarn and woven fabric | Free | Entire Chapter is duty free |
| 52 | Cotton | Up to 8% | Entire Chapter is duty free immediately |
| 53 | Other vegetable textile fibres; paper yarn and woven fabrics of paper yarn | Free | Entire Chapter is duty free |
| 54 | Man-made filaments; strip and the like of man-made textile materials | Up to 8% | Entire Chapter is duty free immediately |
| 55 | Man-made staple fibres | Up to 8% | Entire Chapter is duty free immediately |
| 56 | Wadding, felt and non-wovens; special yarns; twine, cordage, ropes and cables and articles thereof | Up to 16% | Entire Chapter is duty free immediately |
| 57 | Carpets and other textile floor coverings | Up to 14% | Entire Chapter is duty free immediately |
| 58 | Special woven fabrics; tufted textile fabrics; lace; tapestries; trimmings; embroidery | Free | Entire Chapter is duty free |
| 59 | Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use | Up to 18% | Entire Chapter is duty free immediately |
| 60 | Knitted or crocheted fabrics | Free | Entire Chapter is duty free |
| 61 | Articles of apparel and clothing accessories, knitted or crocheted | Up to 18% | Entire Chapter is duty free immediately |
| 62 | Articles of apparel and clothing accessories, not knitted or crocheted | Up to 18% | Entire Chapter is duty free immediately |
| 63 | Other made up textile articles; sets; worn clothing and worn textile articles; rags | Up to 18% | Entire Chapter is duty free immediately |
| 64 | Footwear, gaiters and the like; parts of such articles | Up to 20% | Entire Chapter is duty free immediately |
| 65 | Headgear and parts thereof | Up to 15.5% | Entire Chapter is duty free immediately |
| 66 | Umbrellas, sun umbrellas, walking-sticks, seat-sticks, whips, riding-crops and parts thereof | Up to 7.5% | Entire Chapter is duty free immediately |
| 67 | Prepared feathers and down and articles made of feathers or of down; artificial flowers; articles of human hair | Up to 15.5% | Entire Chapter is duty free immediately |
| 68 | Articles of stone, plaster, cement, asbestos, mica or similar materials | Up to 15.5% | Entire Chapter is duty free immediately |
| 69 | Ceramic products | Up to 8% | Entire Chapter is duty free immediately |
| 70 | Glass and glassware | Up to 6.5% | Entire Chapter is duty free immediately |
| 71 | Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal and articles thereof; imitation jewelry; coin | Up to 8.5% | Entire Chapter is duty free immediately |
| 72 | Iron and steel | Free | Entire Chapter is duty free |
| 73 | Articles of iron or steel | Up to 8% | Entire Chapter is duty free immediately |
| 74 | Copper and articles thereof | Up to 9.5% | Entire Chapter is duty free immediately |
| 75 | Nickel and articles thereof | Up to 3% | Entire Chapter is duty free immediately |
| 76 | Aluminum and articles thereof | Up to 6.5% | Entire Chapter is duty free immediately |
| 77 | (reserved for possible future use) | ||
| 78 | Lead and articles thereof | Free | Entire Chapter is duty free |
| 79 | Zinc and articles thereof | Up to 3% | Entire Chapter is duty free immediately |
| 80 | Tin and articles thereof | Up to 3% | Entire Chapter is duty free immediately |
| 81 | Other base metals; cermets; articles thereof | Free | Entire Chapter is duty free |
| 82 | Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal | Up to 11% | Entire Chapter is duty free immediately |
| 83 | Miscellaneous articles of base metal | Up to 7% | Entire Chapter is duty free immediately |
| 84 | Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof | Up to 9% | Entire Chapter is duty free immediately |
| 85 | Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles | Up to 9% | Entire Chapter is duty free immediately |
| 86 | Railway or tramway locomotives, rolling-stock and parts thereof; railway or tramway track fixtures and fittings and parts thereof; mechanical (including electro-mechanical) traffic signalling equipment of all kinds | Up to 11%
|
Entire Chapter is duty free immediately |
| 87 | Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof | Up to 13% | Some items duty free immediately
Some items customs duties reduced over 8 years |
| 88 | Aircraft, spacecraft, and parts thereof | Up to 15.5% | Entire Chapter is duty free immediately |
| 89 | Ships, boats and floating structures | Up to 25% | Entire Chapter is duty free immediately |
| 90 | Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof | Up to 8.5% | Entire Chapter is duty free immediately |
| 91 | Clocks and watches and parts thereof | Up to 14% | Entire Chapter is duty free immediately |
| 92 | Musical instruments; parts and accessories of such articles | Up to 7% | Entire Chapter is duty free immediately |
| 93 | Arms and ammunition; parts and accessories thereof | Up to 7.5% | Entire Chapter is duty free immediately |
| 94 | Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishings; lamps and lighting fittings, not elsewhere specified or included; illuminated signs, illuminated name-plates and the like; prefabricated buildings | Up to 15.5% | Entire Chapter is duty free immediately |
| 95 | Toys, games and sports requisites; parts and accessories thereof | Up to 8% | Entire Chapter is duty free immediately |
| 96 | Miscellaneous manufactured articles | Up to 8% | Entire Chapter is duty free immediately |
| 97 | Works of art, collectors’ pieces and antiques | Up to 7% | Entire Chapter is duty free immediately |
There are other restrictions such as quotas and rules of origin that must be considered.
The Canada-Ukraine FTA should be in effect soon after ratification by Canada. Canadian importers should start to consider what opportunities are available to import goods originating in Ukraine on a duty free basis.
For more information, please contact Cyndee Todgham Cherniak at 416-307-4168 or cyndee@lexsage.com. For more information about Canada’s customs laws and the Canada-Ukraine FTA, please go to the LexSage web-site.