Order Amending the General Import Permit No. 80 — Carbon Steel: SOR/2019-317

Canada Gazette, Part II, Volume 153, Number 18

Registration

SOR/2019-317 August 26, 2019

EXPORT AND IMPORT PERMITS ACT

The Minister of Foreign Affairs, pursuant to subsections 8(1.1) footnote a and 10(1) footnote b of the Export and Import Permits Act footnote c, makes the annexed Order Amending the General Import Permit No. 80 — Carbon Steel.

Ottawa, August 23, 2019

Chrystia Freeland
Minister of Foreign Affairs

Order Amending the General Import Permit No. 80 — Carbon Steel

Amendment

1 The heading before section 3 and sections 3 and 4 of the General Import Permit No. 80 — Carbon Steel footnote 1 are replaced by the following:

Terms and Conditions

3 A resident of Canada who imports goods under the authority of this Permit must

Documents and Records

4 A resident of Canada who imports goods under this Permit must retain, for a period of six years after the year in which the import is made, documents and records containing the following information:

Coming into Force

2 This Order comes into force on the day on which it is registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the orders.)

Issues

On April 26, 2019, the Government of Canada announced an intensive 30-day consultation with the steel industry and its workers in order to determine what further protections are required to protect Canadian jobs and industry from unfair trade practices. One of the recommendations resulting from this working group is the addition of a reporting requirement to the General Import Permits (GIPs) 80 and 81 to improve Canada’s steel import monitoring regime. The addition of a reporting requirement will also further Canada’s efforts to implement its commitments set out in the Joint Statement by Canada and the United States on Section 232 Duties on Steel and Aluminum (Joint Statement).

In this context, the orders amend GIPs 80 and 81 to add a reporting requirement as a term and condition, in order to improve Canada’s steel import monitoring regime. This will enable Global Affairs Canada (GAC) to impose reporting obligations on any importer for the purpose of identifying errors in import data, and determining the source of inconsistencies in a targeted manner. These amendments will also encourage importers to provide complete and accurate information in their customs declaration forms.

Background

Import monitoring of steel products began on September 1, 1986, when carbon steel products were added to the Import Control List (ICL) for the purpose of collecting information concerning the importation of such goods pursuant to subsection 5.1(1) of the Export and Import Permits Act (EIPA). This provision enables the Governor in Council to add a certain type of steel or a certain product made of steel to the ICL where it is, in the opinion of the Minister of Foreign Affairs, being traded in circumstances of surplus supply and depressed prices and where a significant proportion of world trade in the aforesaid steel or steel products are subject to control through the use of non-tariff measures. Specialty steel products were later added to the ICL in 1987.

In 2012, the Minister of Foreign Affairs issued the GIPs 80 (Carbon Steel) and 81 (Specialty Steel Products) for goods described in items 80 and 81 of the ICL. With the issuance of these GIPs, importers were no longer required to obtain individual permits for the importation of these goods.

On March 8, 2018, the United States announced that it would impose tariffs on steel and aluminum imported from all countries, citing national security concerns. Canada was initially exempted from these tariffs. However, on May 31, 2018, the United States announced that the section 232 tariffs would also apply to Canada. Accordingly, tariffs of 25% on steel and 10% on aluminum imported from Canada were applied starting June 1, 2018. In response to the application of these U.S. tariffs, on June 29, 2018, the Government announced that Canada would impose countermeasures, effective July 1, 2018. In addition, Canada initiated dispute settlement proceedings at the World Trade Organization (WTO) and under the North American Free Trade Agreement (NAFTA) dispute settlement provisions challenging the section 232 tariffs.

On April 26, 2019, the Government announced an intensive 30-day consultation with the steel industry and steelworkers in order to determine what further protections could be required. One of the recommendations resulting from this consultation process was to add a reporting requirement to the steel GIPs 80 and 81 in order to improve Canada’s steel monitoring regime.

On May 17, 2019, in the Joint Statement, the United States agreed to eliminate its tariffs imposed under section 232 on imports of steel and aluminum from Canada. Likewise, Canada agreed to eliminate all tariffs imposed in retaliation to the section 232 tariffs. The removal of these tariffs was announced on May 20, 2019. Under the Joint Statement, Canada and the United States also agreed to establish an agree-upon process for monitoring steel and aluminum trade. Permits with reporting requirements allow timely monitoring of imports of steel into Canada.

Objective

The objective of these two orders is to improve Canada’s steel import monitoring regime, following recommendations resulting from consultations with industry and workers, and to implement Canada’s commitments to improve steel monitoring under the Joint Statement. The addition of a reporting requirement to GIPs 80 and 81 will enable GAC officials to impose reporting obligations on an importer for the purpose of identifying errors in import data, and determining the source of inconsistencies in a targeted manner. Importers using GIPs 80 and 81 to import steel goods into Canada must provide documents and records specified in the amended orders upon GAC’s request. This will contribute to more timely and accurate data.

Description

The Order Amending the General Import Permit No. 80 — Carbon Steel and the Order Amending the General Import Permit No. 81 — Specialty Steel Products

The Order Amending the General Import Permit No. 80 — Carbon Steel and the Order Amending the General Import Permit No. 81 — Specialty Steel Products amend GIPs 80 and 81 to add a reporting requirement as a term and condition of those permits in order to improve Canada’s steel import monitoring regime.

This will enable GAC officials to impose reporting obligations on an importer for the purpose of identifying errors in import data, and determining the source of inconsistencies in a targeted manner. This will also encourage importers to provide complete and accurate information in their customs declaration forms.

Regulatory development

Consultation

These proposed amendments follow recommendations made to the Minister of Foreign Affairs by a joint working group between federal government officials and the Canadian steel industry and workers’ representatives on actions that could be taken to strengthen Canada’s trade remedy regime and steel import monitoring regime. The Canadian steel industry and workers have indicated strong support to include additional reporting requirements to the GIPs, which will enhance the accuracy of steel import data.

Further consultations were carried out with other groups of stakeholders, including provincial and territorial governments, industry associations (including those representing downstream industries and steel importers), and other stakeholders that are users of the trade remedy system or that have participated in previous consultations on trade remedy issues.

Modern treaty obligations and Indigenous engagement and consultation

Constitutional and modern treaty implications were considered and none have been identified.

Instrument choice

Subsection 10(1) of the Export and Import Permits Act provides the Minister of Foreign Affairs with the authority to amend, by ministerial order, any permit issued under the EIPA, including GIPs 80 and 81.

Regulatory analysis

Costs and benefits

The orders will implement a recommendation made following consultations with steel industry and workers, and will advance Canada’s commitments to improve steel monitoring, as set out in the Joint Statement. The orders will also not result in significant costs for steel importers.

Small business lens

The amendments of the GIPs 80 and 81 to add reporting requirements may result in limited incremental costs on small businesses. There may be additional costs for record-keeping should the importers be asked to submit an import report to GAC for the purpose of data verification.

“One-for-One” Rule

The orders amending GIPs 80 and 81 to add reporting requirements impose low cost (less than $1 million per year for businesses) of additional administrative burden when required to submit an import report to GAC upon request.

The orders implement a non-discretionary obligation and are exempted from the requirement to offset administrative burden and regulatory titles under the “One-for-One” Rule.

Regulatory cooperation and alignment

The orders are not related to a work plan or commitment under a formal regulatory cooperation forum.

Strategic environmental assessment

In accordance with The Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary review concluded that the orders would not result in positive or negative effects on the environment; therefore, a strategic environmental assessment is not required.

Gender-based analysis plus

No gender-based analysis plus (GBA+) impacts have been identified for the orders.

Implementation, compliance and enforcement, and service standards

Under the EIPA, GAC is responsible for administering the import permits regime, including the issuance of import permits. Importers of carbon and specialty steel must cite the appropriate GIP (General Import Permit No. 80 — Carbon Steel or General Import Permit No. 81 — Specialty Steel Products) on their customs documentation. GAC provides information and guidance to industry on the process, as requested, with contact information posted on its website. Failure to cite the required import permit may lead to the levying of penalties by the Canada Border Services Agency (CBSA) under the Administrative Monetary Penalty System, which authorizes the CBSA to assess monetary penalties for non-compliance with customs’ legislative, regulatory and program requirements. Importers may also face prosecution under the EIPA for contravening a provision of the Act or its regulations (section 19). Compliance is monitored by the CBSA and GAC.

To comply with new reporting requirements for GIPs 80 and 81, GAC will provide administrative guidance to importers by issuing a Notice to Importers.

Contact

Gregory Cederwall
Trade and Export Controls Bureau
Global Affairs Canada
Ottawa, Ontario
K1A 0G2
Telephone: 343‑203‑4359