Federal Government plans unfair retroactive duties on iPods and other
TORONTO, May 23, 2013 /CNW/ - A coalition of Canadian importers says the
Canada Border Services Agency (CBSA) has misled dozens of Canadian
companies for years by inducing them to import MP3 players and other
goods into Canada duty-free, all the while planning to later collect
millions of dollars in back-duties on the goods, with interest.
"This is about government accountability and transparency, and CBSA is
demonstrating neither in this instance," according to Daniel Brock, a
lawyer representing the Canadian Importers 9948 Fair Treatment
Internal CBSA documents, released under Access to Information, detail a
government plan by the CBSA and the Department of Finance to apply
retroactive duties on MP3 players (iPods), music CDs, televisions and
monitors, computer speakers and other electronic goods, all of which
have been admitted into Canada duty free by the CBSA for more than a
The documents contradict recent statements by the federal government
reassuring Canadians that MP3 players and other electronics imports are
not subject to an "iPod tax".
"The federal government has said a "special tariff relief provision'
(Tariff 9948) allows these electronic goods to come into Canada without
duty," said Brock.
"In fact, CBSA is denying the tariff relief to MP3 players, music CDs,
televisions, television monitors, computer speakers and any other
electronic goods because the Agency says that Tariff 9948 does not
apply. But it is the story behind the CBSA action that raises
disturbing questions," said Brock.
The CBSA is relying on an obscure rule that importers must produce
"certificates" from retail consumers ("end-use certificates") or else
repay duty waived at the time of import.
However, CBSA internal documents suggest that the CBSA has intended all
along to tell importers they could import various electronic goods into
Canada duty free, using Tariff 9948 while at the same time planning to
deny the tariff relief later and collect the duty retroactively. In
some cases the CBSA expressly told importers that they didn't need
"We were shocked when the CBSA notified us that we had to pay millions
of dollars in retroactive duties on our television imports", says Jacob
Herzog, CEO of Curtis International, a Canadian-owned importation
company based in Etobicoke, Ontario.
"CBSA directed us through Advance Rulings to import duty-free. The
televisions were priced and sold based on this direction. We cannot
now collect millions of dollars from these television sales to pay
retroactive import duties," said Herzog.
"The Coalition companies all rely on CBSA to act fairly and provide us
with the information we need to respect the law and pay our fair share
of import duties," said Ken Buschlen, VP of Finance, Panasonic Canada
"CBSA issued us authorization to import products duty-free, but now it
appears that the CBSA intended to claw back the duties later. That is
plainly unfair," said Buschlen.
"The CBSA knew that importers like Sharp would not have and would not be
able to obtain certificates from Canadian consumers for electronic
goods," said Ernie Ubriaco, a Customs Consultant for Sharp Electronics
"But they told us to import the goods duty free anyway. Now they want
millions in back-duties. As an importer, it's hard to believe or make
sense of this," said Ubriaco.
The Coalition has requested a meeting with Finance Minister Jim Flaherty
to discuss its concerns about this unfair action of the CBSA.
The Coalition is asking the federal government to honour the original
CBSA rulings, to reverse the retroactive duties on Tariff 9948 imports,
and stop demands for end use certificates. Those certificates would
contain personal information about how the MP3 players and other
electronic goods are used by Canadian consumers.
SOURCE: Canadian Importers 9948 Fair Treatment Coalition
For further information:
Fasken Martineau LLP.