Part 2: Module 2.3 Lesson 1 The Customs Act and The Customs Tariff Act

Question 1

describe the Customs Act

Answer 1

Short: The Customs Act provides the legislative authority for the Canada Border Services Agency (CBSA) to collect duty.

Long: legislation that supports CBSA’s responsibility for providing border services that support national security, health & safety priorities, and facilitate the free flow of persons and goods
&
provides legislative authority to apply and enforce the collection of duties and taxes under tax legislation
https://laws-lois.justice.gc.ca/eng/acts/C-52.6/index.html

Question 2

describe the Customs Tariff Act

Answer 2

Short: Duties are imposed by the Customs Tariff Act. This act also provides relief of the imposition of certain duties.

Long: “An act respecting the imposition of duties of customs and other charges, to give effect to the International Convention on the Harmonized Commodity Description and Coding System, to provide relief against the imposition of certain duties of customs or other charges, to provide for other related matters and to amend or repeal certain acts in consequence thereof Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada.”
https://laws-lois.justice.gc.ca/eng/acts/C-54.011/index.html

Question 3

explain their role in importing and exporting

Question 4

list prohibited goods

Question 5

describe smuggling and the penalties for doing so

Question 6

What are the 5 pieces of legislation that outline tax

Answer 6

Customs Tariff Act, the Excise Tax Act, the Excise Act, the Excise Act, 2001 and the Special Import Measures Act.

Question 7

What are the 7 Key parts of the Customs Act?

Answer 7

PART I - General
PART II - Importation
PART III - Calculation of Duty
PART IV - Abatements and Refunds
PART V - Collection
PART VI - Enforcement
PART VII - Regulations

Question 8

Describe PART 1 - General in the Customs Act

Answer 8

• definitions and general information
• customs brokers and agents (sections 9 and 10)
• control over the movement of goods and persons into and out of Canada by all modes of conveyance (section 12)

Question 9

Describe PART II - Importation in the Customs Act

Answer 9

• authority for the collection of customs duties (section 17)
• accounting for imported goods (sections 32 and 33)
• payment of duties and taxes (sections 32 and 33)
• record keeping obligations (section 40)

Question 10

Describe PART III - Calculation of Duty in the Customs Act

Answer 10

• valuation methods of goods for customs purposes (sections 48-53)

Question 11

Describe PART IV - Abatements and Refunds in the Customs Act

Answer 11

• refunds of duties and taxes under certain circumstances (sections 74 and 76)

Question 12

Describe PART V - Collection in the Customs Act

Answer 12

• actions that may be taken by the CBSA when payments are not made (section 97)

Question 13

Describe PART VI - Enforcement in the Customs Act

Answer 13

• powers and duties of Border Services Officers (sections 98 - 105)
• ability to seize goods and conveyances that under circumstances that contravene the Customs Act, such as smuggling (section 110)

Question 14

Describe PART VII - Regulations in the Customs Act

Answer 14

• authority for regulations to be made by the Governor-in-Council

Question 15

What are Duties?

Answer 15

Duties are a payment assessed against imported goods.

Question 16

How does the Customs Act define Duties?

Answer 16

“Duties means any duties or taxes levied or imposed on imported goods under the Customs Tariff, the Excise Act, 2001, the Excise Tax Act, the Special Import Measures Act or any other Act of Parliament, but, for the purposes of subsection 3(1), paragraphs 59(3)(b) and 65(1)(b), sections 69 and 73 and subsections 74(1), 75(2) and 76(1), does not include taxes imposed under Part IX of the Excise Tax Act.”

Question 17

TRUE or FALSE? when applying for a refund of duty under one of these subsection listed under the definition of Duties (Subsection 3(1) etc. from card 16), paragraphs, or sections of the Customs Act, a refund of “duty” does not include a refund of GST.

Answer 17

true

Question 18

What does Section 7.1 of the Customs Act stipulate?

Answer 18

Any information provided to an officer in the administration or enforcement of this act (The Customs Act), the Customs Tariff or the Special Import Measures Act or under any other Act of Parliament that prohibits, controls or regulates the importation or exportation of goods, shall be true, accurate and complete
*majority of penalties are based upon contraventions of this section of the Customs Act

Question 19

What system is used to issue the majority of the penalties for the Customs Act?

Answer 19

the Administrative Monetary Penalty System (AMPS)

Question 20

What is the composition of the Customs Tariff Act?

Answer 20

ncludes nine parts, comprised of 214 sections; also various schedules (used daily in teh work of a CCS) including the Harmonized System

Question 21

What are the 9 parts of the Customs Tariff Act?

Answer 21

PART 1 - Interpretation & General
PART 2 - Customs & Duties
PART 3 - Duties relief
PART 4 - Regulations & Orders
PART 5 - Prohibited Goods
PART 6 - Transitional Provisions
PART 7 - Related amendments
PART 8 - Consequential amendments
PART 9 - Repeal and coming into force

Question 22

Desribe PART 1 - Interpretation & General in eh Customs Tariff Act

Answer 22

Contains definitions and general information.

Question 23

Describe PART 2 - Customs & Duties in the Customs Tariff Act

Answer 23

Contains information on rules of origin, direct shipment and transhipment, marking of goods, imposition of customs duties, tariff treatments, and special measures, emergency measures, and safeguards.

Question 24

Describe. PART 3 - Duties relief in the Customs Tariff Act

Answer 24

Explains duties relief including duty rate reduction, importation without full payment of duties, obsolete or surplus goods, and additional relief.

Question 25

Describe. PART 4 - Regulations & Orders in the Customs Tariff Act

Answer 25

Identifies who may make certain regulations that affect certain tariff items, lists some of the powers of the Minister of Public Safety Canada, and also lists the regulations that may be made by the Governor in Council with respect to this act.

Question 26

Describe. PART 5 - Prohibited Goods in the Customs Tariff Act

Answer 26

Prohibited Goods

Question 27

Describe. PART 6 - Transitional Provisions in the Customs Tariff Act

Answer 27

Deals with amendments to acts and regulations that affect the Customs Tariff, references to former tariff items and codes, and retroactivity of former regulations and orders.

Question 28

Describe. PART 7 - Related amendments in the Customs Tariff Act

Answer 28

Lists amendments to the Customs Tariff Act or Customs Tariff as a result of bills or laws being passed. These amendments are not published as part of the tariff but are available in the Canada Gazette.

Question 29

Describe. PART 8 - Consequential amendments in the Customs Tariff Act

Answer 29

Lists of amendments to an act, other than the Customs Tariff Act, that affect the Customs Tariff or Customs Tariff Act. For example, changes to the Customs Act or the Excise Tax Act can affect the Customs Tariff and Customs Tariff Act. These amendments are not published as part of the tariff but are available in the Canada Gazette.

Question 30

Describe. PART 9 - Repeal and coming into force in the Customs Tariff Act

Answer 30

Indicates that the current Customs Tariff Act came into force on January 1, 1998 and that the former act was repealed.

Question 31

TRUE OR FALSE: Finance Canada prepares all tariff legislation

Answer 31

True; since the tariff involves the collection of revenue.

Question 32

What does subsection 99 (1) of the Customs Act describe in regards to BSOs

Answer 32

a Border Services Officer (BSO) is authorized to open and take samples of goods that he suspects, on reasonable grounds, to contain any goods referred to in the Customs Tariff as prohibited, or any goods the importation of which is prohibited by any other Act of Parliament.

Question 33

What does section 101 of the Customs Act describe in regards to BSOs

Answer 33

a BSO may detain goods prior to release or goods which are about to be exported, until he is sure that the goods may be legally imported or exported.

Question 34

What section of the Customs Tariff Act states that the importation of certain goods specified in the Customs Tariff schedule is prohibited?

Answer 34

Section 136

Question 35

What is Section 136 of the Customs Tariff Act?

Answer 35

Prohibited goods, eg. certain firearms and weapons, and books, printed paper, drawings, paintings, and photographs due to the content they contain.

Question 36

Name some of the Miscellaneous goods listed as Prohibited

Answer 36

• certain live animals and birds
• base or counterfeit coins
• used or second-hand mattresses
• goods mined, manufactured or used wholly or in part by prison labour
• reprints of Canadian copyrighted works
• smoke screen apparatus for use on motor vehicles or on vessels of Chapter 89
• white phosphorus matches

Question 37

Name some of the goods listed under Firearms & Weapons as Prohibited

Answer 37

• certain automatic firearms
• switch blades
• brass knuckles
• tear gas, mace, pepper spray
• prohibited ammunition like hollow point shells

Question 38

Name some of the goods listed under Books, printed paper, drawings

Answer 38

• deemed obscene under the Criminal Code of Canada
• constitute hate propaganda
• are of a treasonable character
• child pornography

Question 39

What Operational Group of the D Memos describes Prohibited Goods

Answer 39

Operational Group D9 – Prohibited Importations
Contains 9 individual memos:
D9-1-1 - Canada Border Services Agency’s Policy on the Classification of Obscene Material
D9-1-3 - Coin, Base or Counterfeit
D9-1-6 - Goods manufactured or produced part by prison or forced labour
D9-1-7 - Used or Second-hand Mattresses and Materials Therefrom
D9-1-9 - False Description of Geographical Origin of Goods and Goods With Trade Marks -Tariff Item No. 9897.00.00
D9-1-11 - Importation of Used or Second-hand Motor Vehicles
D9-1-13 - White Phosphorous Matches
D9-1-15 - Canada Border Services Agency’s Policy on the Classification of Hate Propaganda, Sedition and Treason
D9-1-17 - Canada Border Services Agency’s Determination Procedures for Obscenity and Hate Propaganda
https://cbsa-asfc.gc.ca/publications/dm-md/d9-eng.html

Question 40

What section of the Customs Act allows CBSA to seize goods that have been smuggled?

Answer 40

Section 110

Question 41

What are smuggled goods?

Answer 41

goods brought into Canada illegally, usually because the goods are prohibited or to avoid the payment of duties and taxes

Question 42

What are seized goods?

Answer 42

those confiscated by the CBSA *includes in some cases conveyances used to transport smuggled goods

Question 43

what are conveyances?

Answer 43

vehicles which transport people or goods.

eg. Cars, trucks, trains, airplanes and boats are examples of conveyances.

Question 44

What happens after CBSA seizes goods?

Answer 44

1. BSO will issue Receipt
2. importers who wish to appeal any seizures must do so in writing within 90 days of the seizure date (defined by the Customs Act in Section 129)
3. For non prohibited goods, the goods may returned to the person once penalty (usually based on % of goods) paid when the Minister of Public Safety authorizes the goods to be returned
4. Prohibited goods such as illegal drugs, firearms, and weapons are not returned and are forfeited

Question 45

Define Smuggling

Answer 45

wide application, covering activities that range from deliberate efforts to move goods across the border without declaration, to misrepresenting the true value or description of goods on an import declaration to evade paying duties and taxes.

Question 46

What does section 159 of the Customs Act state

Answer 46

Every person commits an offence who smuggles or attempts to smuggle into Canada, whether clandestinely or not, any goods subject to duties, or any goods the importation of which is prohibited, controlled or regulated by or pursuant to this or any other Act of Parliament.
and is subject to the terms of section 160

Question 47

What does section 160 of the Customs Act state

Answer 47

(a) is guilty of an offence punishable on summary conviction and liable to a fine of not more than fifty thousand dollars or to imprisonment for a term not exceeding six months or to both that fine and that imprisonment; or

(b) is guilty of an indictable offence and liable to a fine of not more than five hundred thousand dollars or to imprisonment for a term not exceeding five years or to both that fine and that imprisonment.

Question 48

Lesson 1 Summary

Answer 48

Key points covered in this lesson:

the Customs Act:
is divided into seven parts;
includes the legislation that controls the movement of goods and persons into and out of Canada;
provides for the accounting of imported goods and the payment of duties and taxes; and
lists the valuation methods to be used for imported goods;
the Customs Tariff Act:
is divided into nine parts and several schedules;
provides for the imposition of customs duty, as well as for relief of other duties;
the Customs Act provides the legislative authority for the CBSA to collect duty;
duties are imposed by the Customs Tariff Act. This act also provides relief of the imposition of certain duties;
subsection 99(1) of the Customs Act gives BSOs the authority to open goods they suspect to be prohibited;
section 101 of the Customs Act gives BSOs the authority to detain goods they suspect are prohibited;
section 110 of the Customs Act gives BSOs the authority to seize goods and/or conveyances which they believe are in contravention of the regulations;
section 136 of the Customs Tariff Act states that the importation of certain goods specified in the Customs Tariff schedule are prohibited;
prohibited goods may be miscellaneous goods, firearms and weapons, books, printed paper, drawings that are deemed to be obscene, constitute hate propaganda, or are of a treasonable character; and
any person who smuggle or attempts to smuggle goods into Canada, commits an offence under section 159 of the Customs Act.