Ecommerce, Customs and You

Answers to your questions on imports

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Labelling versus Marking

One of the most popular questions we receive are those concerned with the labelling of imported goods in Canada.

These questions should be split into two parts: ‘marking’ needs to be done before importation and ‘labelling’ before the item is re-sold

Before Importing: Marking

Marking is merely the notation of the country of manufacture on the imported product. This is enough to satisfy Customs officials — the lack of a bilingual or detailed label does not concern them. To be clear, Customs only wants to confirm where your product is made or produced.

If your shipment is inspected, Customs will definitely check that the country of origin is marked on the goods. If they find no such marking, they will hold the shipment until you provide a letter guaranteeing that the marking will be applied. Customs will also issue you a penalty if this is the case (depending on whether it is a first offense, the penalty is $150).

*Most, but not all, imported goods require marking. You can check the appendix here.

**It is possible that Customs can inspect your import — and if they discover that an existing label is misleading or deficient — demand a similar correction from you before releasing the product. (We have yet to experience this phenomenon, but the Food and Drug Regulations does provide for this scenario).

Before you re-sell: Labelling

Once the goods are released into Canada for consumption, it is then up to the importer to determine that the goods meet any specific labelling requirements before being sold at retail. What the label must provide depends on what type of good you are re-selling:

Food: Use the CFIA’s online tool

Note:  “name and address” may be your company — the importer — rather than the manufacturer

Apparel and textile articles: fibre content, care instructions, country of origin, and responsible party (Canadian brands may use a CA#)

FAQ

Does my product need to have a bilingual, detailed label applied before it arrives in Canada?

No. The product or its packaging should be marked with its country of origin, but the additional elements required on a label may be added to a product post-release.

I am importing apparel, does it need to be labelled before arrival?

For clothes, marking is often on the label itself. So, unless the marking of the origin exists elsewhere on the apparel, then a label indicating country of manufacture must be added before importation.

How do I know if my product is ‘marked’?

Is the country of origin clearly indicated on the product or packing? If so, it is marked.

What should I do to ensure that my imported goods are clearly marked?

If you do not trust your vendor, we recommend requesting a photograph of the marking from them before shipping.

Border Bee estimates that less than 1% of all importations into Canada are penalized for lack of marking — but it is always a possibility.

 



Canada – EU Free Trade (Apparel Edition)

Please find below more specific information on how imports of European-Union made apparel will be treated under CETA.

The vast majority of E.U. made apparel will need to pass through a quota system established for the deal. Why?

CETA, similar to NAFTA, contains special provisions for clothing. Due the globalized nature of apparel production, barely any finished clothes are made wholly within a single country (or even a single continent).

Typically, clothes that are “made” in the E.U. are cut and sewn from fabric made in Asia.

The fact that the fabric comes from outside the E.U. disqualifies these products.

Therefore, most E.U. made clothes will still be hit with an 17-18% duty because fabric from outside the E.U. is NOT ALLOWED. The production of fabric creates jobs, therefore Canada and the E.U. are all protectionist about it.**(see footnote)

So… CETA changes nothing for clothes?

Not quite! a quota system (similar to the TPL under NAFTA) will allow a specific amount of clothing each year that is only cut and sewn in Europe to be imported duty-free.
The key to the quota system is that it is typically only open for the first half of the year (it is also specific to the HS code).

Questions to ask yourself before ordering E.U. made clothes in the anticipation of paying only GST:

1. Does my vendor manufacture their clothes within the E.U.?

Yes
No


Additional questions? Still confused? Contact us!

**It should be noted that the actual rules of origin are more complex and consist of specific ‘tariff shifts’ for different subcategories of apparel (i.e. shirts and shoes — very different). The complexity means that a rule of thumb (known as ‘yarn-forward’) is most often used by importers when speaking of these requirements which we used to write this article. This means that your imports/exports may qualify or not be qualified even if they pass our little quiz.

Should you or your vendor have questions regarding their eligibility, they can check the transformation requirements in Annex 5 of the CETA .

Annex 5 contains the requirements for goods to be considered duty-free no matter what the status of the quota system is.
Annex 5-A contains the requirements for goods failing the requirements of Annex 5 but that can still be imported under quota.



Canada – EU Free Trade (what you need to know)

Sept. 21st, 2017 marks a large event in Canadian trade — the coming into effect of the largest trade deal since NAFTA. Similar to the NAFTA agreement, some important exclusions and information are buried in the agreement that importers should be made aware of. Please find below our guide to profiting from the deal:

Note: you are an apparel importer, please read this accompanying article

1. How do we apply?

The duty-free tariff will be applied automatically in most cases, although your vendors will need to reproduce the statement described below on their commercial invoice. Note that for most of your vendors the signature will not be required so long as they supply their REX number (if they have one).

An example of the statement below: 
(Period: from___________ to __________(1)) The exporter of the products covered by this document (customs authorisation No …(2))* declares that, except where otherwise clearly indicated, these products are of …(3) preferential origin. ……………………………………………………………………………………………………(4) (Place and date) …………………………………………………………………………………………………(5) (Signature and printed name of the exporter)**
Statement notes

*REX number goes here (if your vendor does not have a REX number, they can provide their signature)
**If the statement is printed separately from the invoice, it must reference the invoice # as well the items on the invoice that qualify.

2. What if my seller does not include the statement on their invoice?

No problem, they can still provide the statement on a separate page. You may send them this
template to complete.

3. What’s the catch?

Similar to NAFTA, Customs will be performing audits to ensure that no unqualified goods (goods principally made outside the eurozone) are being snuck in using the CETA advantages. Border Bee would like to remind importers that they are ultimately responsible for their own compliance (even if your seller provide faulty information).

4. What if I order European goods from the U.S.?
The items must come directly from Europe to Canada (although an item may be manufactured in one European country and exported from another).

5. Does the CETA cover everything?
Nearly all imported items will have their duties immediately revoked — the exception remains on agricultural goods which will be phased out over a period of seven years.

Textiles and apparel mark another significant exception — please read our separate article here on how the CETA affects apparel importers.

6. Europe is huge, which countries actually qualify?

All official member states of the E.U. are eligible for free-trade, including principalities and newer members.

You may consult the official list on the Canada Gazette’s website.

7. How do I tell if the CETA was claimed on my importation?
To see if the CETA was claimed on your import, check your B3 to see if code 31 has been declared as the tariff treatment.

8. Is it possible for my supplier to provide a ‘blanket’ statement that will cover all of our importations?

Yes, the CBSA has recently clarified that suppliers can provide a ‘blanket’ statement so that a statement does not need to be included with each shipment.

The catch? The blanket statement must include sufficient detail regarding the eligibility under CETA of future orders. The CBSA suggests including an appendix to the blanket statement that identifies which items are covered.

Do you have additional questions about how CETA affects your business? Contact us



NAFTA, TPL and You

NAFTA, TPL and You

Here is our guide to NAFTA’s quirkiest catch: the Tariff Preference Level for imported apparel

What is the TPL?

Tariff Preference Level: A specific exception under NAFTA relating to garments (and some other commodities) that use fabric from foreign sources. This covers most clothing for any vendors that are only involved in the cutting and sewing of their clothing production.

Why does this concern me?

If you are involved in the importation of clothing made within the USA or Mexico, an extra document will be needed in order to avoid paying duty.

Are all American-made clothes subject to TPL?

No, only goods that are made from fabric sourced outside the NAFTA zone. Certain fabrics, such as linen and silk, are also exempt regardless of where the fabric originates.

How do I know if the goods I am buying qualify for TPL?

You don’t– but your seller does. Make sure before placing any orders that your seller understands their TPL eligibility as a producer and can supply an Exporter’s Certificate of Non-Originating Textile Goods.

What is required to apply for a TPL permit?

Your customs broker will need a copy of your commercial invoice and the Exporter’s Certificate of Non-Originating Textile Goods to obtain your TPL permit.

Are the permits free?

No, they range in price based on the value of the order. Please find a schedule below:
image (1)

Can I apply for TPL permits anytime?

Yes, although the permits are subject to a first-come, first-serve quota that typically fills up halfway through the year.

I imported goods that qualify for TPL, but my broker did not obtain the permit at time of import and I am stuck paying the duty. Is there any way out?

Yes, if you have the Exporter’s certificate of Non-originating textile goods is required, Border Bee can obtain the permit and file a claim for you to obtain the duty back. However, if the quota for the year is full then the permit will not be issued even if the shipment was imported at a time when permits were available.

Need a TPL permit?

info@borderbee.com



The Canadian Importer Number and You

The Canadian Importer Number and You

An importer number–aka your business number, GST number, or ‘RM’ number–is required to import into Canada.

45 million parcels and pallets enter Canada each year, and to keep track of all that cargo, Customs uses your business number (or ‘importer number’) for identification and compliance. Simple enough! but who is the importer? When is a business number required, and who is eligible to obtain one? Please find our answers to the most common questions below:

Do you need a business number to import?

Yes, all commercial cargo imported into Canada requires a business number. Please note the CBSA’s definition of ‘commercial’ is extremely broad: anything for “commercial, institutional, or occupational use” is considered commercial. Personal orders of a high volume (e.g. 100x of the same item) or peculiar nature (industrial machinery) may also require a business number regardless of their end use.

What is the difference between a business number and an importer number?

None. The business number is the master number used by Ottawa to track Canadian business activity, and the importer number is a sub-account (business number + RM0001) that is activated when your business imports commercial goods.

Your business number -> 888888888

Your business number for importing -> 888888888RM0001

The numbers currently only start with 1, 7 or 8 and stretch to nine digits. Other sub-accounts of the business number include payroll, GST/HST, and Corporate reporting.

Why is the business number important?

As the CBSA now conducts most of its compliance checks following importation, the business number allows Customs to release cargo and audit later. As well, since verification is required to obtain an importer number, it eliminates confusion or debate about who is responsible when a Customs problem does arise.

What is a business number?

A business number is a nine-digit identification number issued by the Canada Revenue Agency to all active businesses in Canada. The number itself consists of four distinct accounts (RM0001, RT0001, RS0001 and RC0001). The business number is largely used by Ottawa and other government agencies to track business activity and is akin to a social insurance number for a company.

Who should apply for an importer number?

It is typically the buyer of the goods who is responsible for each import, unless the seller has stated that they will take responsibility for duties and taxes. In the latter case, the seller will need to register as a non-resident importer before they can complete Customs clearance for their client.

Am I eligible to obtain an importer number?

Any Canadian resident or non-resident business is eligible for an importer number.

We are not registered for GST, do we have a business number?

Yes, all registered companies in Canada are issued a business number, regardless of their GST status.

We’ve been shipping to Canada for years, why do we need a business number now?

Parcels, which are four times more common than pallets, undergo an expedited release process and due diligence is often not exercised. Many non-resident companies are active in Canada for years before their first formal release is required. If your company has never needed a Canadian business number before, this is likely why.

Need a business number?

Still confused?

Ask us: info@borderbee.com