Customs Government Processes & Compliance

Question 1

What is the importance and relevance of customs?

Answer 1

To protect Canadian industries and Canadian jobs.
To protect Canadian agriculture, domestic animals and wildlife.
To protect the health and well-being of Canadian citizens.

Question 2

Who overseas border legislation and regulations?

Answer 2

CBSA (Canada Border Services Agency) overseas the main departments involved in the development of legislation:
Foreign Affairs, Trade & Development Canada (DFATD)
Agriculture and Agri-Food Canada
Health Canada
Industry Canada
Justice Canada

Question 3

What are the 7 main pieces of legislation?

Answer 3

1. The Customs Act
2. The Customs Tariff Act
3. The Excise Tax Act
4. The Excise Act
5. The Excise Act,2001
6. The Special Import Measures Act (SIMA)
7. The Export and Import Permits Act (EIPA)

Question 4

Customs Act, has how many parts and sections?

Answer 4

7 parts, and 213 sections.

1. General
2. Importation
3. Calculations of Duty
4. Abatement, refunds
5. Exportation
6. Enforcement
7. Regulations

Question 5

What is the purpose of the Customs Act?

Answer 5

Regulated the duties and tariffs levied on imported goods and services.
Legislative authority for administration and enforcement of laws related to the importation and exportation of goods crossing borders.
Authorizes BSO to examine, search,detain,and seize commercial or passengers goods.
Rules concerning how goods are reported.
Rules concerning penalties and non-compliance.

Question 6

How many parts and sections to the Customs Tariff? And what is it purpose?

Answer 6

9 parts and 213 sections.
Contains the detail of the Harmonized System (HS) of Tariffs Classification.
Impose or provide relief of customs duties and excise duties.
Tariff or HS examines Customs Duty and GRI (General Rule of Interpretation)
Each imported item must be classified under one of 10 digit Tariff classification.
“Raters” use the Tariff to assign the correct tariff classification.

Question 7

Purpose of the Customs Tariff Act?

Answer 7

Tariff treatment 
Commodity classification 
Duty rates
General rules for interpretation of the Harmonized Systems
Specific Canadian rules

Question 8

Purpose of the Excise Tax Act?
GST
Non-taxable importations
Exempt supplies
Zero-rated goods 
Input tax credits
Harmonized sales tax

Answer 8

Grant authority to charge, collect, and administer the goods and services tax (GST)
Goods and Services Tax (GST)
Non-taxable importations: GST is not payable on goods that are listed in schedule VII of the Excise Tax Act. (Medals, trophies, prizes)
Exempt supplies: GST is not paid by the purchaser and the registrant does not collect tax. (Health care, educational, legal aid services)
Zero-rated Goods: Goods which there is no GST paid by the purchaser, but the registrant supplier may claim an “Input Tax Credit” for the Tax paid on purchases that were used to create the zero-rated supplies.
Input tax credits: tax businesses pay on a purchase and that it can use to reduce its tax liability when it makes a sale.
Harmonized sales tax: consumption tax, used in provinces where both the federal goods and services tax and the regional provincial sales tax have been combined into a single value added sales tax.

Question 9

What is DFATD?

Answer 9

Department of Foreign Affairs, Trade and Development
International peace and security, global trade and investment, international development and humanitarian assistance, providing consular assistance to Canadians visiting, living, studying and/or doing business overseas.

Question 10

The Excise Act

The Excise Act 2001

Answer 10

The Excise Act imposed duty on beer both domestic and imported
The Excise Act, 2001 imposes duty on spirits, wine and tobacco products

Question 11

Special Import Measures Act (SIMA)

Answer 11

Purpose of SIMA is to protect Canadian industry from injury caused by dumping and subsidization of imported goods and unfair foreign competition in the Canadian marketplace.
Anti-dumping, countries importing goods at prices far lower than market value.
Countervailing duty an import tax imposed on certain goods in order to prevent dumping or counter export subsidies.

Question 12

The Export and Import Permits Act (EIPA)

Answer 12

EIPA is an act respecting the Export and transfer of goods and technology and the import of goods.
Protect Canadian industries from low cost foreign-made goods.
Area Control List: list of countries established to control the export or transfer of any goods or technology.
Export control list: List of goods and technology that is necessary to be controlled for export.
Import control list: List of goods and technology that is necessary to be controlled for import.

Question 13

Departmental Memoranda (D Memos)

Answer 13

Customs and Excise Directives are the means by which government employees and the public are kept informed of the legislative and operational field policies and procedures
Provide guidelines and general information on customs programs.

Question 14

What do you need to clear shipments going to Canada?

Answer 14

B/L
Canada Customs Invoice (CCI)
Commercial Invoice for items valued at less than CAD $2,500.00
Exporter’s NAFTA Certificate of Orgin

Question 15

PARS
INPARS
and Enhanced INPARS
EXCAPS

Answer 15

(PARS) Pre-Arrival Review Systems allows customs brokers to submit shipment release information to CBSA for review and processing before the goods arrive in Canada.
Rail PARS
Marine PARS
Air PARS

(INPARS) PARS release process, FF and importers can use to expedite cargo releases.
Enhanced INPARS pre arrival were bonded warehouses (warehouse operator is allowed to release goods)
EXCAPS allows other governments or brokers to submit documents to customs prior/after shipments.

Question 16

Importer of record?

Answer 16

Refers to an importer, whether an entity or individual, who is responsible for ensuring that the legal goods are imported in accordance with the law of the place.

Question 17

LVS Program?

Answer 17

Low Value Shipments programs allow for expedited release of goods with the value of less than $2,500.00 CAD per shipment.

Question 18

Release methods?

Answer 18

1. Release with full accounting and payment
2. Release on Minimum Documentation (RMD), with final accounting documents submitted within 5 days.
3. Release of goods arriving by mail and courier has special provisions under the LVS Process.
4. Pre Arrival Review System (PARS)

Question 19

ACROSS, CADEX, CUSDEC?

Answer 19

ACROSS, Accelerated Commercial Release Operations Support System. Allows importers and customs brokers to exchange,electronically transmit release and invoice data to the CBSA. Goods released through ACROSS must be confirmed using either: CADEX ( Customs automated data exchange) or
CUSDEC (Customs Declaration)

Question 20

RNS, ITC, EDI.

Answer 20

Release Notification System where brokers, importers, carriers, and warehouse operators are notified electronically by CBSA.
Inland Transport Committee

Question 21

Methods of Valuation?

Answer 21

1. Transaction Value
2. Transaction value of Identical Goods
3. Transaction Value of Similar Goods
4. Deductive Method of Valuation
5. Computed Method of Valuation
6. Residual Method

Question 22

What is Duty Deferral Program?
Duty Relief
Drawback
Customs Bonded Warehouses

Answer 22

Duty Deferral Programs; the imported goods can be sold or transferred before they are exported without paying duties, as long as the receiving company is also an authorized program participant.
Duty relief programs permits approved participants to import goods without paying duties, or posting a bond as long as they eventually export goods.
Drawback; to qualify a party must be directly, or indirectly involved in importing goods that are later exported in the same condition they were imported or the party may further manufacture or use imported goods in a limited manner to produce other goods for export.
Customs bonded warehouse; the importer can completely defer paying duties and taxes until the time customs release the goods for Canadian consumption.

Question 23

Exported Distribution Center Program

Answer 23

Enables qualified companies to import goods and/or acquire goods in Canada without paying the GST/HST on purchases worth $1000 or more, as long as they later export the goods.

Question 24

Bonded Warehouse Program

Answer 24

A building or secured area in which dutiable goods may be stored, manipulated, or undergo manufacturing operations without payment of duty.

Question 25

Drawback Program?

Answer 25

Which is a refund of customs duties paid for imported goods. You may import goods without paying duties if:
Goods are eventually exported
Goods are manufactured and eventually exported

Question 26

Temporary Importations;
ATA Carnet
TIR Carnet
Temporary Imports-E 29B
AMPS

Answer 26

ATA Carnet are used for goods that will be imported into more than one country during the validity of the document. Carnet provide a guarantee for duties and taxes that would be payable should the goods be imported and not re-exported within the time frame allowed by customs.
TIR Carnet multilateral treaty that Canada is no longer participants in.
Temporary Imports E-29B; this form is temporary admission permit which enables you to retain the goods described on this form in Canada under certain conditions.
AMPS administrative Monetary Penalty System.