Ecommerce, Customs and You

Answers to your questions on imports

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Importing clothes into Canada

Importing clothes into Canada

Part two in our series of import guides on specific commodities: the rag trade or schmatta business.

Garments are one of the most popular items imported into Canada–and one of the most protected–with duty rates averaging 17.5% and legislation (particularly for NAFTA-sourced goods) reaching epic levels. That said, no specific permits are required to import textiles or garments. Assuming you have already found a vendor overseas, please follow the below check list to assure a smooth importing process.

Importing difficulty Easy
Classification Header Chapters 61 or 62
Duty rate 17-18%
Tax rate 5%
Additional Requirements Textile Labelling and Advertising Regulations (post-import)
Shipping method Ocean or air freight
Sources  Anywhere
  1. Vendor communication: ensure the goods are marked with the country of manufacture in advance of shipping (this can be on the label). If the garments or textiles arrive without labelling, you could face penalties as well as the requirement to label all of the articles before they are released.
  2. Duty reduction: are the clothes made in Europe, the NAFTA zone or a GPT nation? Ask your vendor if the goods qualify for duty-reduction and ensure they provide the correct certification to take advantage of the lower duty rate.
  3. Shipping and customs: Is your seller handling shipping for you? If not, please contact Border Bee for any freight orders you need help shipping.
  4. Pay the duty: as mentioned, duty on garments is steep and there is little you can do about it. Even garments made in the USA and Europe must meet additional requirements for duty-free entry.

That’s it! When the clothes arrive in Canada, your customs broker will pay the duties and release the package. In the case of small parcels, the goods will bed delivered once the items are released. For freight, your broker may need to arrange the local delivery.

More questions? Need help shipping or importing your orders? contact us



A Brief History of Customs

In an increasingly globalized world, it can be difficult to understand the behaviour or even the purpose of Customs agencies. What gave rise to such an institution, and why are its laws so complex? Perhaps the best way to understand the motivations of today’s federal agencies is to examine the history of Customs itself.

Although we tend to think of globalization as a modern phenomenon; the hallmarks of its activity, from free trade zones to duty rates, have been around for millennia. Evidence of Customs activity has been excavated all over the world, from the ports of Ancient Greece to the Great Wall of China.
The evidence suggests that complex systems of controls and taxes on traded commodities were in existence well before industrialization, as well as the reasoning behind them. It was easy to see among small populations that unmitigated dependence on foreign merchandise would in-debt and stress the community.

Scholars believe that the earliest Customs fees were actually voluntary, and offered by travelling merchants as a bribe to sovereigns for considerate treatment. Over time, this bribe became mandatory. It was called ‘duty,’ a fee charged for the privilege of trading in a particular kingdom. The collection itself was outsourced to tax farmers, who would use any means necessary–including violence–to obtain what had become an essential revenue source for monarchies.

The first written Customs tariff was developed in Palmyra (present day Syria) and was engraved in stone (its still there!). Despite its age, the ancient tariff bears a striking resemblance to the modern harmonized system, and included specific duty rates for commodities such as camels, slaves, fleece, and aromatic oils.

Customs Tariff of Palmyra (est. 167 AD)
  • per camel-load of aromatic oil in alabaster jars, seven denarii at importation and exportation
  • per camel-load of olive oil comprising four goatskin bags, ten denarii at importation and exportation
  • per camel-load of salted provisions, ten denarii at importation and exportation
  • for salted goods carried by donkey, the Customs agent shall collect three denarii per load, at importation and exportation
Canada Customs Tariff (2016)
3301.13.00 00 Essential oils (terpeneless or not), including concretes and absolutes; resinoids; extracted oleoresins; concentrates of essential oils in fats, in fixed oils, in waxes or the like, obtained by enfleurage or maceration; terpenic by-products of the deterpenation of essential oils; aqueous distillates and aqueous solutions of essential oils. – Essential oils of citrus fruit: – Of lemon KGM Free
1509.90.00 20 Olive oil and its fractions, whether or not refined, but not chemically modified. – Other – In container sizes of 18 kg or more KGM Free

Ancient Rome introduced professional customs offices and officers. Similarly to Palmyra’s tariff wall, trade information found on artifacts (imported jars of olive oil) contained inscriptions nearly identical to modern Customs declarations.

Roman-era Customs data Canada Customs Invoice (current)
  • port of loading
  • date of shipment
  • name of city where duty was paid
  • weight
  • value
  • order #
  • producer
  • officer who weight the goods
  • amount of duty paid
  • Vendor (name and address)
  • Date of direct shipment
  • Other references
  • Consignee
  • Purchaser’s name and address
  • Country of transhipment
  • Country of origin of goods
  • Transportation mode
  • Conditions of sale and terms of payment
  • Currency of settlement
  • Number of packages
  • Specification of commodities
  • Quantity
  • Selling price
  • Total weight

A newer concept of Customs as a complex, evolving filter began at the dawn of the industrial age when nations promoted exporting as a powerful tool for national wealth. As trade increased, so did competition, and streams of legislation became a necessity to balance the needs of domestic labour with market forces. Countervailing duty was charged against subsidized products, and anti-dumping duty against unsold surplus. Unbridled attempts to push exports led to a series of trade wars that halted shipping and resulted in economic crashes, revealing the dangers of protectionism. Following the wars, international organizations were established, and an era of (somewhat) transparent cooperation continues to this day.

Despite major advances, the essence of Customs has neither disappeared nor changed. While today’s agencies screen for a variety of novel threats, from security to the environment, protecting the local market is the motivation behind every decision, even if it is not always clear to the importer.

Sources:

SJ de Leat: Portorium (1975)
Hironori Asakura, World History of the Customs and Tariffs (2003)
Douglas A. Irwin, Against the Tide (1996)



How to Import Alcohol into Canada

How to Import Alcohol into Canada

Want to ship that wine or beer back to Canada?

Alcohol in Canada is one of the more difficult items to import since it is regulated heavily by both the federal and provincial governments. While the provincial liquor boards represent monopolies that control and approve all imports of alcohol into their regions, in most cases private imports are allowed. Border Bee has created a calculator specifically for this channel of imports, so you can see in advance how much that bourbon will cost before you ship it back home.

Note: travellers may import without a permit when arriving with alcohol in their luggage or car. The below requirements are for unaccompanied alcohol shipped to Canada.

Here are some general requirements:

  • No more than 45 L of beer, wine or alcohol can be imported per shipment
  • You can only import into your province of residence and must be of legal drinking age in your province
  • Authorization must be obtained from your provincial liquor board before customs release
    • although the goods can be shipped beforehand, we recommend contacting a broker to ensure the alcohol in question can be imported
  • Most provinces permit businesses and individuals to import as long as the goods are not re-sold (incl. at an event)
  • Each provinces has a mark up and requires specific details to approve your importation. In addition to the mark up, federal customs and excise taxes will apply (at a much lower rate than the mark up).
    • be sure to know the following details before shipping:
      • the year
      • the country of origin
      • the manufacturer
      • the alcohol content
      • the brand
    • you will also need proof of payment (we strongly recommend not paying in cash)
  • as an alternative to shipping your alcohol, you can also order directly through your liquor board, who will handle the shipping and clearance for you

Quebec/SAQ:

Quebec is the most advanced when it comes to private imports of alcohol, as they have even developed an online permit issuing system. Calculate your cost here.

Ontario/LCBO:

Ontario also allows imports of alcohol for private end uses. Before shipping, you will need to consign the shipment to the “LCBO c/o ” + “your name, address and contact.” Find out your cost here.

British Columbia/BCL:

The BCL is reviewing their current system, but as of 2016 both consumers and businesses can import into the province. The shipment must be consigned to “BC Liquor Distribution Branch C/O” + “your name, address and contact.” On arrival, you will need to contact the LCDB or hire a broker to obtain the release of your shipment before the courier can deliver it. Find out your cost here.

Alberta/AGLC:

In Alberta, individuals should contact the AGLC directly to import their purchases. Their customs team will release your shipment once your mark up invoice has been paid.

Border Bee has contacted the remaining Canadian provinces and is awaiting confirmation of their particular mark ups and requirements.

Got some mescal stuck in Customs? Need a quote to ship a crate of wine? info@borderbee.com

Manitoba/MBLL:

Imports of alcohol are permitted but must be made directly through the liquor board, who will clear and bill the order for you. Importers should contact the MBLL directly to ensure their shipments can be imported and cleared: 204-957-2500 ext. 5538



What is undervaluation?

“Undervaluation” is one of the most common Customs infractions and one that the CBSA invests a lot of time in discovering. The infraction is an attempt by the importer or shipper to conceal the real cost of a sale so that Customs duties and taxes will be assessed on a lower amount. While undervaluation can take many forms, the least complicated and most common is simply including a fake price on the invoice used for Customs clearance.

The CBSA uses a few methods to combat this scheme. They will frequently ask importers to present a “proof of payment” from a verified third-party (such as a bank or credit card provider) before releasing control of the goods. Should the price initially declared to Customs vary greatly from what was actually paid, Customs will often issue a penalty against the importer and may deny their right to import and seize the goods in question.



How to import Wine into Quebec

caveat empor: the casual import channel is not the best way to stock your cellar. The mark up is high and you may need to drink all your wine at once to overcome the sticker shock. What private permits do offer is a way for you to get that Bordeaux your friend shipped you out of Customs purgatory. If you are interested in collecting or sampling, most provincial liquor boards offer a B2C sourcing channel which is likely more cost-effective and less stressful.
SAQ import permit

You will need a permit from the SAQ to get your wine out of customs

note: If you are a traveler bringing back alcohol in your car or luggage, you merely need to declare the amount when you arrive at the frontier.

Generally speaking, each provincial liquor board constitutes a monopoly under which only they can import wine and alcohol. Even interprovincial importing is illegal, as one unfortunate New Brunswick man discovered after a beer run to Quebec. Despite this, private imports of alcohol do occur (although the procedure will vary by province).

The following procedures are based on import steps into Quebec, which has its own online portal to expedite occasional imports. First you must be:

  • importing less than 45 L of wine, beer or alcohol
  • a resident of Quebec
  • over 18 years of age

Here is the process:

  1. Hire a customs broker: As usual, self-clearing is an option, although it will require a few trips back and forth between the customs office, the SAQ, and the transporter carrying your goods. Your broker will only require your transporter’s manifest and a commercial invoice with the following details:
    1. Quantity of wine in litres
    2. Percentage of alcohol for each wine
    3. country of origin and year of the wine
  2. Ship your goods and indicate your customs broker if using a third-party shipping service
  3. Your broker will obtain a permit from the SAQ, pay the taxes on your behalf, then bring the permit to the Customs office for release and to pay the other taxes (there are several different kinds of taxes on alcohol and all must be remitted to the correct party).
  4. Once released, your broker will present the proof of release to the SAQ and you will be free to pick up your wine (your broker may also arrange delivery for you)

Residents can also self-clear by following the above steps and creating an account on the SAQ’s website. If you are confused by the shipping documents, we recommend hiring a broker. Be warned when self-clearing that even once your SAQ mark up is paid, additional duties and taxes must be paid to the Customs office.

Cost

Use our mark up calculator to determine whether importing your purchase is worth it

Is there another way?

Rest assured that there is no cheaper way of getting booze into the country other than by old-fashioned rum-running.

Can businesses import private orders?

Yes, obtaining import permits for commercial samples of wine is common. If you plan on wholesaling however, you will have to deal directly with the SAQ as the permit process is for occasional imports only.

I’ve been collecting a cellar while living abroad, can I bring it back tax-free?

No, but you will be subject to lower rate of $4.40 / litre. To qualify you must have lived abroad for over a year and bought the wine more than three months before moving back.