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The HS classification of plant-based meat

 



What is a classification?

HS classification is the process of determining a products place in the universal index of international trade. Proper classification is essential to compliance, but finding the true classification of a certain product can be challenging and sometimes  absurd.

Plant-based meat vendors are working hard to brand their products as a meat alternative rather than as a traditional vegetarian product. While this marketing strategy is working, for Customs purposes these products remain under the same heading as all other imitation meats (2106.90). However, new products are arriving quickly (such as plant-based eggs and bacon) which could be classified differently depending on their ingredient list and level of manufacturing — if the product has one dominant ingredient (i.e. it is made of 100% beets) then the correct classification could reasonably shift to a different category.

 

Description HS Code Current Duty Rate PGA Requirements* Detail
Plant-based meat (incl. burger patties and sausages) 2106.90.99.99  10.5%  CFIA, Environment Canada  All plant-based meat products are classified as ‘food preparations not elsewhere specified’

*Note that the PGA requirements can vary depending on the country of origin, end use and state (dried, chilled, fresh) of the items you are importing. For more information, please contact us.

**Classifications are provided by Border Bee Customs Brokers as a reference guide for importers and should not be relied upon solely for commercial classification.



The HS Classification of Drones

Look up in the sky! its a … helicopter of an unladen weight not exceeding 998 kg


What is a classification?

HS classification is the process of determining a products place in the universal index of international trade. Proper classification is essential to compliance, but finding the true classification of a certain product can be challenging and sometimes  absurd.

Drones pose an interesting challenge for classification since their end use can vary significantly — most rulings to date have focused on their end use (as either surveying equipment or videography) leading to a variety of different headings and duty rates. The admissibility in Canada as Transport Canada has yet to regulate such products at time of import. Perhaps even more interesting from a Customs perspective, is how cargo drones will be regulated when it comes to cross-border traffic!?

 

 

 

Description HS Code Current Duty Rate PGA Requirements* Detail
Drone (UAV) 8802.11.00.14  0%  n/a  Drones for carrying cargo are classified as mini-helicopters. We would place other drones — including hobby and racing drones — under this heading as well.
Video Drone 8525.80.00.50  0%  n/a  Drones outfitted with video cameras — for which the principal purpose is taking video — will be classified as cameras.
Drone for Surveying 9006.30.90.00  5%  n/a  Some specialized drones, such as those for aerial surveying, have been classified by the CBSA as surveying cameras.
Drone Propellers and other parts 8803.10.00.00  0%  n/a  Parts for drones — excluding cameras — will be classified as parts of helicopters.

*Note that the PGA requirements can vary depending on the country of origin, end use and state (dried, chilled, fresh) of the items you are importing. For more information, please contact us.

**Classifications are provided by Border Bee Customs Brokers as a reference guide for importers and should not be relied upon solely for commercial classification.



Can CBD oil be imported into Canada?

We’ve been fielding a lot of questions lately about the eligibility of CBD oil for importation. Based on our research, it would appear that regardless of its THC content, CBD is not eligible for importation unless the importer is a licensed grower and eligible for an import license from Health Canada.

But what if the CBD oil contains 0% THC?

This does not appear to make a difference since Health Canada and the CBSA consider CBD (cannabidiol) to be a controlled substance notwithstanding its THC content.

What hemp products can be imported?

Other derivatives of hemp are eligible for importation without a permit, although they must be processed from specific elements of the plant, contain proper labelling and be shipped with a certificate of analysis indicating the products THC content. Please ensure you’ve verified with Health Canada that your specific product is cleared for import/export without a license before shipping and seizures and fines can occur if the CBSA’s rules are not followed.

I am a licensed grower. How can I get my hands on a CBD sample?

The process is similar to importing other cannabis products: contact Health Canada to obtain an import permit, then hire a customs broker to clear the shipment for you.

 

Note: This article reflects the most up-to-date news as of its publication date; regulations may change so please check with Health Canada directly.

Further reading: http://cbsa-asfc.gc.ca/publications/dm-md/d19/d19-9-2-eng.html

 



#Made in the Transpacific

Canada has seen its free trade reach increase incrementally in the past three years: starting with Europe in 2017 and extending now to the pacific rim in 2018. This expanded reach comes with a lot of promise but also many pitfalls.

Please find below specific information on how the deal will impact Canadian importers.

The TPP deal has made a free trade zone of the Pacific rim

1. How do we apply?
The duty-free tariff will be applied automatically by your broker where appropriate confirmation of origin has been provided by your vendors. This statement MUST be either reproduced on the invoice or on an additional document and signed by the seller. An example of the statement can be found at the end of this article, while our branded PDF version can be found here.

2. Does this free trade agreement cover all goods?
No, as is the case with most free trade deals, exceptions abound: garments and textiles in particular are subject to a harsh ‘yarn-forward’ requirement, making it unlikely that apparel produced in Vietnam would qualify as duty-free. Agricultural goods are faced with similar issues.

For all other products, specific rules of origin must be passed in order for the product to qualify. A general rule of thumb would mean that the majority of the products will qualify so long as enough work is done on them within the borders of a member nation. Please read the below examples for an explanation of this:

An example of a qualifying item

An sofa has its wooden frame manufactured in Japan and then is upholstered in Vietnam. Since both nations are qualifying, the end result will still quality.

Example of an item that would not qualify

A light fixture is made in China, and then has a small Vietnamese flag applied in Vietnam before being exported to Canada. In this case, the real origin of the product would be better described as China since the amount of work done in Vietnam did not appropriately consume or transform said light fixture. Had the light fixture been installed in a large machine, then likely the machine would be considered eligible for duty-free status.

3. What is yarn-forward?!
‘Yarn-forward’: This means that garments must be cut-and-sewn from fabric and yarn produced inside the transpacific territory in order to qualify. A lot of attention has surrounded Vietnam as a prominent exporter of garments, but given the restrictions of the yarn-forward rules it is unlikely such imports will qualify.

4. Who are the transpacific members?
The TPP membership includes: Vietnam, Singapore, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, and Australia.

5. Why is the TPP not more of a big deal?
The vast majority of products entering Canada are already duty-free regardless of origin, and one of the major categories that remain dutiable (garments) are more or less excluded from duty-free eligibility as a result of strict transformation rules (yarn-forward). The real winners of the deal will include importers of household articles and appliances that are manufactured in the transpacific territory.

6. How can I know if the benefits of TPP were claimed on my imported goods?
On the B3 document provided to you by your broker, check if the ‘tariff treatment’ box includes the digits 33. If so, the goods were imported as TPP-qualifying merchandise.

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

Appendix

Below is a sample of the statement that must be signed
 
Your vendor can include this on the invoice
Annex 3–B: Minimum Data Requirements
A certification of origin that is the basis for a claim for preferential tariff treatment under this Agreement shall include the following elements:1. Importer, Exporter or Producer Certification of OriginIndicate whether the certifier is the exporter, producer or importer in accordance with Article 3.20 (Claims for Preferential Treatment).

2. Certifier

Provide the certifier’s name, address (including country), telephone number and e-mail address.

3. Exporter

Provide the exporter’s name, address (including country), e-mail address and telephone number if different from the certifier. This information is not required if the producer is completing the certification of origin and does not know the identity of the exporter. The address of the exporter shall be the place of export of the good in a TPP country.

4. Producer

Provide the producer’s name, address (including country), e-mail address and telephone number, if different from the certifier or exporter or, if there are multiple producers, state “Various” or provide a list of producers. A person that wishes for this information to remain confidential may state “Available upon request by the importing authorities”. The address of a producer shall be the place of production of the good in a TPP country.

5. Importer

Provide, if known, the importer’s name, address, e-mail address and telephone number. The address of the importer shall be in a TPP country.

6. Description and HS Tariff Classification of the Good

(a) Provide a description of the good and the HS tariff classification of the good to the 6-digit level. The description should be sufficient to relate it to the good covered by the certification; and
(b) If the certification of origin covers a single shipment of a good, indicate, if known, the invoice number related to the exportation.
7. Origin Criterion

Specify the rule of origin under which the good qualifies.

8. Blanket Period

Include the period if the certification covers multiple shipments of identical goods for a specified period of up to 12 months as set out in Article 3.20.4 (Claims for Preferential Treatment).

9. Authorised Signature and Date

The certification must be signed and dated by the certifier and accompanied by the following statement:

I certify that the goods described in this document qualify as originating and the information contained in this document is true and accurate. I assume responsibility for proving such representations and agree to maintain and present upon request or to make available during a verification visit, documentation necessary to support this certification.



What does the future hold for cannabis importing into Canada?

The Canada Border Services Agency released a Customs Notice yesterday regarding the Excise Taxes that will apply to importations of cannabis products. Similar to alcohol, the rates vary by province and can be found on the Department of Finance’s website. These excise taxes are largely a formality at the moment (few parties can legally import cannabis), but they do suggest some dramatic changes to Canada’s import policy regarding cannabis products.

Please find our questions to importing Cannabis after Oct. 17 below:

Who can import Cannabis?

At this stage, only licensed producers with a valid Health Canada permit can import Cannabis products into Canada for commercial use, which has been the case since licensing started.

Under this regime, licensed growers must provide the details of their order to Health Canada, and then wait for the permit to be issued (which can be a long wait). Once issued, the permits must be used before they expire, and only at the port of entry described on the permit.

These permits are also only issued for seeds or other small amounts of cannabis. The importing of bulk quantities of cannabis is still not permitted.

For details on what exactly is required to import, please read here.

Can individuals import Cannabis?

Per D19-9-2, individuals may import cannabis for their own medical use, but only where and when regulations authorize it. Other exemptions can be granted on a case by case basis if a scientific or medical purpose exists and the exemption is granted in advance.

Even travelling across provincial borders could pose problems, as the CBSA has stated: “If you transport cannabis or products containing it across the border, regardless of quantity, and even to or from jurisdictions that have legalized cannabis, you could face prosecution”

What does the future hold for Cannabis importing?

commercial

It seems inevitable that Canada will approve and accelerate the processing of import requests for bulk orders of cannabis, and many licensed growers are already invested in offshore production. One factor preventing this is that other countries will only permit the exportation to Canada to take place if the cannabis is for medical purposes, which would add conditions to re-selling for recreation. Even if that hurdle is overcome, bulk imports will still be subject to Health Canada approval as well as other controls, such as an annual quota system or provincial permits.

For an example of what a quota system would like like, we can use dairy and textiles, which are controlled by Global Affairs: permits are issued using online software, and are available until a specific amount (i.e. 100,000 kgm) is met each year. After that, imports are still permitted, but at a much higher rate of duty, which helps shelter the domestic industry (jobs!) from too much competition.

An alternative would see the provinces take control, as is the case with alcohol. Currently, for a company to import alcohol, they must first order from the appropriate provincial agency (i.e. the LCBO or SAQ). The provincial agency then submits the order to the foreign supplier and controls the shipment and pricing. It is hard to see provinces not fighting for something like this, as it means additional revenue and control.

 

personal

For individuals and travellers, they will also likely be able to import small amounts in the future for recreational use, but will probably be obliged to pay hefty provincial markups as is currently the case with alcohol (this effectively makes importing large amounts impractical).

Read More:

The CBSA’s official memoranda regarding cannabis importing is available on their website.