TORONTO, June 4, 2013 /CNW/ - Canadian importers say a secret plan by
Canada Border Services Agency (CBSA) to impose retroactive duties on
MP3 players (iPods) and other electronic goods is undermining an
essential government program that helps importers follow complex
"The problem goes beyond new taxes on iPods and other electronic goods,"
said Daniel Brock, a lawyer advising the Canadian Importers 9948 Fair
Treatment Coalition ("9948 Coalition"). "CBSA is contradicting its own
legally binding directions to Canadian importers. CBSA actions threaten
all importers who rely on CBSA Advance Rulings and look for certainty
and reliability in the administration of the Canadian border."
For more than 7 years, Canadian importers have relied on Advance Rulings
from CBSA that told them it was ok to import iPods, televisions and
television monitors, computer speakers, music CDs and other electronic
goods duty-free into Canada.
In 2012, without a change in the law or Regulations, and without
warning, CBSA suddenly demanded $16 million in back-duties on iPods and
other electronics from Canadian importers who had dutifully complied
with CBSA's original Advance Rulings.
"As a small importer in Canada, Coby trusts and relies on CBSA's
guidelines and approvals for our importing and overall business
activities," said Daniel Song, VP of Operations at Coby Electronics
"If this unfair 'look-back' liability on our previously approved
duty-free imports is not reversed, then the entire duty system becomes
suspect and future Advance Rulings questionable," said Song.
CBSA actively encourages Canadian importers to request Advance Rulings
on future imports of goods into Canada to clarify how the goods should
be classified and what duties should be paid.
"Sharp has to rely on Advance Rulings from the CBSA. It allows the
company to make decisions and set prices for its imported goods," said
Ernie Ubriaco, a consultant for Sharp Electronics of Canada. "What the
CBSA is doing is not only unfair, it changes the rules in mid-game and
makes it impossible for importers to plan or make sound business
decisions," said Ubriaco.
Once an Advance Ruling is issued by CBSA, it is legally binding.
Failure to follow an Advance Ruling can lead to penalties or the
seizure of imported goods.
Last year, CBSA issued more than 3 thousand Advance Rulings on all types
of goods imported into Canada for sale to consumers or for use by
"The Advance Rulings for Tariff Classification program was implemented
to provide certainty and predictability to importers, exporters, and
producers," said John Preston, President of Dominion Customs
Consultants. "It is an essential tool used by the trading community
allowing them to determine how goods will be treated by the CBSA when
imported into Canada," said Preston.
The 9948 Coalition has requested a meeting with Finance Minister Jim
Flaherty to discuss the concerns of Canadian importers about this
unfair retroactive enforcement action by the CBSA.
The 9948 Coalition is asking the federal government to honour the
original CBSA Advance Rulings, to reverse the retroactive duties on
Tariff 9948 imports, and stop demands for invasive 'end use'
certificates from Canadian consumers.
Highlights of Advance Rulings for
Tariff Classification Program
The CBSA describes the purpose of Advance Rulings for Tariff
Classification as follows:
Advance Rulings ensure that the tariff classification is deemed correct
by the CBSA, and the ruling is binding until it is revoked or amended;
Advance Rulings are meant to provide "consistent" guidance for importers
with respect to applications based on "facts and circumstances that are
identical in all material respects"
Advance Rulings provide certainty to the importer, or his or her
representative, as to how goods are to be classified and thereby
facilitates the documentation requirements for clearing goods at the
Advance Rulings must include "the tariff classification number and the
reasons why (the tariff classification) was selected" and,
There are situations where the CBSA will not issue a ruling, including
where it is not possible to determine all the material facts; and when
the request is hypothetical.
For additional information:
SOURCE: Canadian Importers 9948 Fair Treatment Coalition
For further information:
Fasken Martineau LLP.