Last week, I was informed by four different U.S. non-resident importers (or their representatives) that the non-resident companies were frustrated in their dealings with the Canada Border Services Agency (“CBSA”) – to the point that they may cease selling to Canadian customers. While some of the complaints were more connected with customs brokers, many of the complaints fall squarely on the shoulders of the CBSA. Some of the concerns/issues raised are as follows:
- Non-resident importers cannot find information on the CBSA web-site concerning their positions on the tariff classification of goods. In the United States, rulings provided to importers are published. While the CBSA does have a process for receiving and issuing advance customs rulings, the CBSA does not publish the rulings in the same way as the United States. In recent years, the CBSA has started to publish limited information about select rulings, the volume of available information is minimal at best.
- The CBSA does not allow non-resident importers to access their import data. This is correct. The CBSA does not have such a system whereby an importer can access the CBSA data via a computer portal. The importer must go to its customs broker to retrieve their import data. One customs broker cannot access the import data of a different customs broker. It is possible to obtain FIRM data from the CBSA in connection with a verification, it is also common for a verification officer to say they cannot provide the data and it must be obtained through the access to information process. The CBSA is not transparent or consistent in how an importer can obtain its import data in order to make a complete B2 adjustment request when required.
- Non-resident importers use the HTSUS codes and find the CBSA uses a different tariff classification number. This does happen because Canada is a different country than the United States. The CBSA undertakes its own review. The Customs Tariff Schedule uses the tariff classification numbers determined by the Canadian government. The last 7-10 digits are for the collection of Canadian trade statistics data. As a result, it is important to ask questions about tariff classification before importing goods into Canada.
- The CBSA is not allowing the use of transaction value when non-resident importers transfer goods from their U.S. warehouses into Canada. Non-resident importers want to save on customs duties and often ship to Canada using the landed costs into the USA as the Canadian value for duty. The CBSA often takes the position that the non-resident importer’s status affects their behaviour and declared value for the goods. Many non-resident importers are targets of selected CBSA verifications (audits).
- The CBSA has conducted numerous verifications and issued a number of DASs. Once the CBSA finds one area of non-compliance, they look for others. This is normal as the CBSA prefers to look for the low hanging fruit. This is why it is important to seek assistance as soon as the CBSA reaches out for the first verification.
- The non-resident importer does not understand the CBSA’s determination after a verification. There are times that the CBSA letters are very short and and the importer cannot determine the reasons for the CBSA position. They are told to use a tariff classification number or origin or valuation method in the future, but are not given enough information to understand why. This limits the importer’s ability to apply the rules for other like goods on a going forward basis and to file B2 adjustment requests correcting past importations.
- Non-resident importers have to pay GST at the border with respect to importations. The non-resident importers may be able to recover the GST by way of input tax credits, but must register for GST/HST purposes to do so. Their customs brokers tell the non-resident importers to obtain an import number and a GST/HST number. This is perceived to be a border issue by non-resident importers. However, there is limited information on the CBSA web-site to assist importers to understand Canada’s GST/HST regime and provincial sales tax regimes.
For more information, please contact Cyndee Todgham Cherniak at 416-307-4168 or at firstname.lastname@example.org.