Vol. 148, No. 26 — December 17, 2014

Registration

SOR/2014-282 November 28, 2014

CUSTOMS ACT

Regulations Amending Certain Regulations Made under the Customs Act (CJFTA)

P.C. 2014-1303 November 27, 2014

Whereas the annexed Regulations give effect, in part, to a public announcement made on September 28, 2012 known as Customs Notice 12-027;

And whereas that Notice provides that the regulatory amendments giving effect to that announcement are to be effective October 1, 2012;

Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of Public Safety and Emergency Preparedness, pursuant to subsection 43.1(2) (see footnote a), section 164 (see footnote b) and paragraph 167.1(b) (see footnote c) of the Customs Act (see footnote d), makes the annexed Regulations Amending Certain Regulations Made under the Customs Act (CJFTA).

REGULATIONS AMENDING CERTAIN REGULATIONS MADE UNDER THE CUSTOMS ACT (CJFTA)

EXPORTERS’ AND PRODUCERS’ RECORDS REGULATIONS

1. The definition “advance ruling” in section 1 of the Exporters’ and Producers’ Records Regulations (see footnote 1) is replaced by the following:

“advance ruling” means an advance ruling referred to in Article 509 of NAFTA, Article 5.8 of CIFTA, Article E-09 of CCFTA, Article V.9 of CCRFTA, Article 28 of Annex C of CEFTA, Article 419 of CPFTA, Article 419 of CCOFTA or Article 5-9 of CJFTA. (décision anticipée)

FREE TRADE AGREEMENT ADVANCE RULINGS REGULATIONS

2. Paragraph 2(d) of the Free Trade Agreement Advance Rulings Regulations (see footnote 2) is replaced by the following:

3. (1) Subparagraph 14(a)(vi) of the Regulations is replaced by the following:

(2) The portion of paragraph 14(b) of the Regulations before subparagraph (i) is replaced by the following:

(3) Paragraph 14(b) of the Regulations is amended by striking out “or” at the end of subparagraph (v), by adding “or” at the end of subparagraph (vi) and by adding the following after subparagraph (vi):

(4) Paragraph 14(h) of the Regulations is amended by striking out “or” at the end of subparagraph (vi), by adding “or” at the end of subparagraph (vii) and by adding the following after subparagraph (vii):

CERTIFICATION OF ORIGIN OF GOODS EXPORTED TO A FREE TRADE PARTNER REGULATIONS

4. Paragraph 2(c) of the Certification of Origin of Goods Exported to a Free Trade Partner Regulations (see footnote 3) is replaced by the following:

5. Section 3 of the Regulations is amended by striking out “and” at the end of paragraph (b), by adding “and” at the end of paragraph (c) and by adding the following after paragraph (c):

TARIFF ITEM NOS. 9971.00.00 AND 9992.00.00 ACCOUNTING REGULATIONS

6. Paragraph 2(b) of the Tariff Item Nos. 9971.00.00 and 9992.00.00 Accounting Regulations (see footnote 4) is replaced by the following:

REFUND OF DUTIES REGULATIONS

7. The heading of Part 5.1 of the Refund of Duties Regulations (see footnote 5) is replaced by the following:

GOODS IMPORTED FROM COSTA RICA, AN EFTA STATE, PERU, COLOMBIA OR JORDAN

8. (1) The portion of section 23.1 of the Regulations before paragraph (a) is replaced by the following:

23.1 This Part applies to the granting of a refund under paragraph 74(1)(c.11) of the Act of duties paid on goods in respect of which no claim for preferential tariff treatment under CCRFTA, CEFTA, CPFTA, CCOFTA or CJFTA was made at the time the goods were accounted for under subsection 32(1), (3) or (5) of the Act and that were imported from, as the case may be,

(2) Section 23.1 of the Regulations is amended by striking out “or” at the end of paragraph (c), by adding “or” at the end of paragraph (d) and by adding the following after paragraph (d):

9. Paragraph 23.3(b) of the Regulations is replaced by the following:

COMING INTO FORCE

10. These Regulations are deemed to have come into force on October 1, 2012.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the regulations.)

Issues

In order for the Canada Border Services Agency (CBSA) to administer the customs procedures included in the Canada-Jordan Free Trade Agreement (CJFTA), minor technical amendments must be made to the Exporters’ and Producers’ Records Regulations, the Free Trade Agreement Advance Rulings Regulations, the Certification of Origin of Goods Exported to a Free Trade Partner Regulations, the Tariff Item Nos. 9971.00.00 and 9992.00.00 Accounting Regulations, and the Refund of Duties Regulations.

As part of the negotiations for this Free Trade Agreement (FTA), Canada and Jordan also agreed to procedures governing the verification of origin of goods claiming preferential treatment under the CJFTA. New regulations are necessary in order to codify into Canadian law the verification of origin procedures agreed to by Canada in the CJFTA.

Background

The Canada-Jordan Free Trade Agreement (CJFTA) was signed on June 28, 2009. The CJFTA came into force on October 1, 2012.

The amendments to the regulations and the new Regulations described below were publicly announced by the CBSA in a Customs Notice posted on September 28, 2012 (CN12-027).

The Customs Notice (CN12-027) can be viewed at the following Web address: http://www.cbsa-asfc.gc.ca/publications/cn-ad/cn12-027-eng.html.

Paragraph 167.1(b) of the Customs Act allows regulatory changes that have previously been the subject of a public announcement to have a retroactive effect; since the implementation date of the CJFTA, the CBSA has been administering these regulations as though the amendments announced in Customs Notice CN12-027 were already enacted.

The amendments described below simply finalize the process begun with the public announcements contained in the Customs Notices by formalizing processes that are already being administered. The amendments and the new Regulations described below will officially incorporate the CJFTA into Canada’s existing regulatory framework.

Objectives

This regulatory proposal is intended to incorporate the CJFTA into Canada’s existing regulatory framework by allowing customs procedures related to rules of origin to be administered in accordance with the terms of the CJFTA.

Description

In order to implement the CJFTA, minor amendments to a number of existing regulations made under the Customs Act are necessary.

The particulars of each of these amendments are discussed below.

Exporters’ and Producers’ Records Regulations

An advance ruling is a written ruling, issued before goods are imported. Advance rulings can consist of determinations related to a variety of issues, including such things as the tariff classification of the goods and the applicable rate of customs duty. The definition of “advance ruling” found at section 1 of the Exporters’ and Producers’ Records Regulations incorporates by reference specific Articles from the FTAs to which Canada is a signatory. These Articles describe the subject matter upon which applications for advance rulings under each of these FTAs can be based. Section 1 is being amended to incorporate Article 5-9 of the CJFTA into the definition of “advance ruling” applicable in the Exporters’ and Producers’ Records Regulations.

Free Trade Agreement Advance Rulings Regulations

Section 2 of the Free Trade Agreement Advance Rulings Regulations describes the classes of persons [e.g. importers and persons authorized to account for goods under paragraph 32(6)(a) or subsection 32(7) of the Customs Act] eligible to apply for an advance ruling with respect to goods proposed to be imported from one of Canada’s free trade partners. The classes of persons eligible to apply for an advance ruling are being expanded to include producers in Jordan of materials used in the production of goods produced in Jordan.

Section 14 of the Free Trade Agreement Advance Rulings Regulations enumerates the grounds upon which an advance ruling may be modified or revoked.

One such ground permits officers to modify or revoke advance rulings in circumstances where errors have been made in the application of the North American Free Trade Agreement (NAFTA), the Canada-Chile Free Trade Agreement (CCFTA), the Canada-Costa Rica Free Trade Agreement (CCRFTA), the Canada-Peru Free Trade Agreement (CPFTA), and the Canada-Colombia Free Trade Agreement (CCOFTA) with respect to goods that re-enter Canada after being exported for alteration or repair. This section is being amended to add the CJFTA to this list.

Section 14 also addresses situations where an advance ruling is not in accordance with an interpretation agreed to by Canada and its relevant free trade partner. This section is being amended to include a reference to goods exported from Jordan and to reference interpretations agreed to by Canada and Jordan with respect to the relevant provisions of the CJFTA.

Furthermore, section 14 is also being amended to address instances where an advance ruling can be modified or revoked in order to conform with a modification of the CJFTA.

Certification of Origin of Goods Exported to a Free Trade Partner Regulations

Section 97.1 of the Customs Act (the Act) addresses the Certificate of Origin that must be provided by exporters of goods to free trade partners who claim preferential tariff treatment under an FTA. The Certificate of Origin requirements that must be met in order to satisfy section 97.1 are described in the Certification of Origin of Goods Exported to a Free Trade Partner Regulations.

The Certification of Origin of Goods Exported to a Free Trade Partner Regulations are being amended to add Jordan to the list of free trade partners for whom the basis of a non-producing exporter’s Certificate of Origin, as required by subsection 97.1(1) of the Act, can be a certificate, completed and signed by the producer and provided voluntarily to the exporter, stating that the goods meet the applicable rules of origin.

These Regulations are also being amended to allow, in the case of goods exported to Jordan, Certificates of Origin to be completed in English, French, or Arabic.

Tariff Item Nos. 9971.00.00 and 9992.00.00 Accounting Regulations

Tariff item nos. 9971.00.00 and 9992.00.00 deal with goods that, regardless of their country of origin, have been returned to Canada after having been exported to one of Canada’s free trade partners [i.e. the United States, Mexico, Chile, Costa Rica, Israel or other Canada–Israel Free Trade Agreement (CIFTA) beneficiary, Peru, or Colombia].

These Regulations provide that proof of this exportation must be submitted when such goods are accounted for under section 32 of the Act. This amendment will add Jordan to the list of Canada’s free trade partners to whom these Regulations apply.

Refund of Duties Regulations

The amendments to the Refund of Duties Regulations will allow duties to be refunded in cases where a claim for preferential tariff treatment under the CJFTA was not made at the time the goods were initially accounted for under section 32 of the Customs Act.

New Regulations

CJFTA Verification of Origin Regulations

The new CJFTA Verification of Origin Regulations will implement the customs procedures associated with verifying the origin of goods for which preferential tariff treatment under the CJFTA has been claimed. These procedures can include, for example, the manner of conducting a verification of origin, the conditions surrounding a verification visit, and the circumstances in which preferential tariff treatment may be denied or withdrawn.

There will be no business or consumer impacts, or additional costs to the CBSA or to stakeholders, as a result of these regulatory amendments or the new CJFTA Verification of Origin Regulations.

“One-for-One” Rule

The “One-for-One” Rule does not apply to this proposal, as there is no change in administrative costs to business.

Small business lens

The small business lens does not apply to this proposal, as there are no costs to small business.

Consultation

Prior to launching the FTA negotiations, Canadian manufacturers, importers and exporters were consulted extensively and kept informed of developments throughout all these negotiations, including with respect to rules of origin issues. Negotiations began on February 20, 2008, and concluded during the third round of negotiations, held in Amman on August 24 and 25, 2008.

The regulatory proposal contained herein was announced by the CBSA in Customs Notice CN12-027. The Customs Notice provided opportunities for the public to review the proposed regulatory changes and provide comments to the CBSA. No comments were received.

Rationale

Canada’s free trade agreements are governed by a network of regulations (e.g. the Exporters’ and Producers’ Records Regulations and the other regulations listed above) that, taken together, implement into Canadian law the customs procedures negotiated as part of each FTA.

Consequently, with each new FTA implementation bill passed by the Canadian Parliament, a series of minor, technical amendments are needed in order to incorporate the new FTA into Canada’s existing regulatory framework.

Implementation, enforcement and service standards

The CBSA has updated its systems to account for the implementation in Canada of the CJFTA, and has informed importers of these amendments by way of Customs Notices. Since the implementation date of the CJFTA, the CBSA has been administering the regulations so as to grant importers the benefit of the appropriate preferential tariff treatment associated with the CJFTA. These amendments are therefore technical and housekeeping in nature and will have no impact on the continuing administration of these regulations.

Subsection 35.1(5) of the Customs Act provides for the denial or withdrawal of preferential tariff treatment in the event that the requirements set out in the regulations are not met. The CBSA will continue to monitor compliance with these regulations in the course of its regular administration of customs- and tariff-related legislation and regulations.

Contact

Caley Sayers
Trade and Anti-Dumping Programs Directorate
Canada Border Services Agency
150 Isabella Street, 11th Floor
Ottawa, Ontario
K1A 0G5