Canada-U.S. Blog Trade Lawyers Cyndee Todgham Cherniak and Susan K. Ross

You need an export permit to export certain recyclables and scrap products from Canada to China

Posted in Canada's Federal Government, Cross-border trade, Export Controls & Economic Sanctions, Exports

Canada’s export controls go beyond dual-use goods, chemicals, defence and military items, and other goods on the Export Control List.  Canada imposes export controls under a variety of statutes and regulations.  For example, Canada controls exports of cannabis, cultural property, hazardous waste, hazardous recyclable and scrap materials, rough diamond, human pathogens, honey, maple syrup, (the list is very long – these are just a few items).

On January 5, 2018, the Canada Border Services Agency (“CBSA”) issued Customs Notice 18-02 “Exports of waste materials and recyclables and scrap materials to China under the Export and Import of Hazardous Waste and Hazardous Recyclable Materials Regulations”, in which the CBSA notified exporters of new export permit requirements.

On January 1, 2018, China amended the Catalogue of Solid Wastes Forbidden to Import into China to include some mixed or unsorted scrap paper, cardboard, some specified scrap plastics, and unsorted loads of scrap plastic, and other materials including scrap metal, vanadium slag and used or scrap textiles. See below examples of newly added commodities into the Catalogue of prohibited imports (without being exhaustive):

  1. Waste and scrap of ethylene polymer
  2. Aluminum – plastic composite film
  3. Styrene scrap
  4. Waste and scrap of vinyl chloride polymer
  5. Plastic waste scrap and scrap, not including waste plastic beverage bottles
  6. Waste plastic drink bottles
  7. Other plastic waste scrap and scrap, not including scrap disc broken material
  8. Scrap disc broken material
  9. Smelting steel produced by vanadium scum, slag, vanadium pentoxide content> 20% (except smelting steel produced by the granular slag)
  10. Other smelting steel produced by vanadium scum, slag (except smelting steel produced by the granular slag)
  11. Slag, ore ash and residue containing other metals and their compounds, vanadium pentoxide> 20% (except for smelting steel)
  12. 10% <vanadium pentoxide ≤ 20% (except for smelting steel) containing slag, ore ash and residue containing other metals and their compounds
  13. Other recycled paper or cardboard (including unselected waste)
  14. Other animal fine wool waste (including waste yarn, excluding recycled fiber)
  15. Other animal coarse waste (including waste yarn, excluding recycled fiber)
  16. Other animal fine hair or coarse hair recycling fiber
  17. Waste cotton yarn (including waste cotton)
  18. Recycled fiber of cotton
  19. Other waste cotton
  20. Synthetic fiber waste (including falling cotton, waste yarn and recycled fiber)
  21. Man-made fiber waste (including falling cotton, waste yarn and recycled fiber)
  22. New or unused textile materials, etc. (new or unused, including waste lines, ropes, cables and their products).

China’s action has resulted in the export permit requirement under Canadian law. However, this list appears to be very broad and could include returns of purchased textiles from China.  Canada is seeking clarification from China.

There is also a question whether some of the listed items are disguised technical barriers to trade. China is a significant exporter of textile products. An import prohibition on new textile products may be an attempt to protect the Chinese textile sector from foreign competition.

Canada imposes export permit requirements on certain recyclables and waste materials under the Export and Import of Hazardous Waste and Hazardous Recyclable Material Regulations.   Waste and recyclable material being exported for disposal or recycling are considered hazardous waste or hazardous recyclable material if:

  1. they are defined as, or considered to be, “hazardous” under the legislation of the importing country or that of a transit country;
  2. their importation is prohibited under the legislation of the importing country; or
  3. they are one of the “hazardous wastes” or “other wastes” in the Basel Convention, and the importing country is a party to the Basel Convention.

Under the EIHWHRMR, metals, plastics, paper, and other household-generated wastes may be defined as hazardous waste or hazardous recyclable material when a foreign country prohibits the importation of certain goods.

Before exporting such waste products, Canadian exporters must obtain an export permit from Environment and Climate Change Canada.  If a shipment is started without an export permit, the Canadian exporter may be prosecuted.  Individuals may be jailed for up to three years and can be fined for first offence can be up to $1,000,000 and subsequent offences can be up to $2,000,000.  Corporations may be fined up to $6,000,000 for a first offence and up to $12,000,000 for a subsequent offence.

It is important to understand that the CBSA does detain exports and does ask for export permits when they want to determine if an export permit should have been obtained.  Canadian exporters should apply for the export permit before shipping the goods.  Since the CBSA has issued Customs Notice 18-02, it will be reviewing exports to China for the listed items.  Exporters are required to provide Advance Commercial information about exports and the CBSA flag shipments for inspection.

Canada has published a user guide to assist Canadians comply with the EIHWHRMR.  For more information on export permits, please contact Cyndee Todgham Cherniak at 416-307-4168 or at cyndee@lexsage.com.