Canadian Regulation of

Imports and Exports

Chapter 6

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General Protectionist Measures
• Absolute prohibition on the import of a
certain good
• Embargo – prohibition against the import
of goods originating in a certain country
• Restrictive licensing for certain imports
• Quotas or quantitative limits on certain
goods
• Customs tariffs applicable to various
goods
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 Export and Import Permits Act
1/ Import Control List:
- agricultural products
- textiles and apparel
- armaments
- steel products
- wild fauna and flora
- any good requested by an exporting
country i.e. short supply or
protected
- retaliation against foreign trade measure
- for information gathering

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 Export and Import Permits Act
2/ Administration:
- once goods on list, permit needed from
International Trade Canada (ITC) (EICB)
- only Canadian residents eligible
- if goods in short supply from other
country, export permit required first
- note: issuance of permits not subject to
judicial review
3/ Other Import Restrictions:
i) Food and drugs - Food and Drug Act
ii) wheat and grains - permit from
Canadian Wheat Board
iii) oil and gas - National Energy Board
iv) cultural property - Cultural Property
Import and Export Act

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 Canadian International Trade
Tribunal (CITT)
• Principal decision making body with respect
legislation affecting imports and exports
• Quasi-judicial
• Three main areas
– Taxpayer appeals from customs decisions of
Revenue Canada
– Inquiries into producers complaints of injury from
imports
– Policy issues on trade and tariffs for government

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 Import Quotas
• Milk, Poultry and Egg Marketing Boards
developed quotas to protect producers
• WTO rules say that such quotas must be
“tariffied”, i.e. replaced by an equivalent
tariff
• Other multi-lateral agreements have quota
provisions, e.g. wheat, coffee, beef, tin

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 Other Import Requirements
1/ Product Standards:
- national products standards apply to imports e.g. CSA, UL
- Standards Council of Canada - coordinates national, provincial standards
organizations
- accredits US testing or certifications organizations under NAFTA
- all food and drug products must comply with Food and Drug Act
- all hazardous and environmentally harmful products must comply with laws
2/ Packaging and Labelling:
Customs Tariff - Country of Origin – English or French

Consumer Products:
Consumer Packaging and Labelling Act:
i) name of product
ii) quantity in metric (volume, weight, number)
iii) producer or importer’s name and
address
iv) English and French
Textile Labelling:
i) manufacturer’s name and address
ii) generic name of textiles used
iii) country of origin

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 Procedure and Documentation for
Imports
All carriers must report the arrival of imported goods at the nearest
border point, accompanied by an invoice describing the
transaction and identifying both the vendor and the importing
party.
The following are determined:
3. Value for duty of the goods
4. Tariff classification of the goods
5. Origin of the goods
6. Applicable tariff rate

Then, after applying the appropriate tariff rate to the dutiable value of
the goods, customs adds any applicable sales taxes, anti-
dumping duties or countervailing duties and collects cost of
importing

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 Dutiable value of Goods
Six methods (hierarchical):
2. Transaction Value – actuals (75% of cases)
3. Transaction Value of Identical Goods
4. Transaction Value of Similar Goods
5. Deductive Value (reverse engineer from retail
price)
6. Computed Value (cost plus)
7. Residual Value (when all else fails pick a
method and use some judgment)
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 Tariff Classification
• Customs Co-operation Council (CCC) developed
the “Harmonized Commodity Description and
Coding System”
• All tariff items are listed in the Customs Tariff
and categorized as above.
• There are more than a thousand headings and
more than five thousand sub-headings
• Complex and intimidating, especially since in
any appeal the onus is on the importer to show
that the customs officer erred

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 Rules of Origin
Once classified, the tariff rate is now a function of
the country of origin of the goods.
The importer must provide evidence of the country
of origin upon entry of the goods into Canada.
Deciders: Minimum percentage of cost of
production
“Substantial Transformation”
“the country where the goods assumed
their final form.
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 Canadian Tariff Schedules
1. Most Favoured Nation Tariff – applies to all signatories
to GATT/WTO and anyone else we have extended that
privilege.
2. British Preferential Tariff – applies to goods imported
from various Commonwealth countries other than the
U.K. Specific tariffs apply to New Zealand, Australia
and Commonwealth Caribbean countries
3. United States-Mexico Tariff – NAFTA
4. General Preferential Tariff – assistance for developing
countries.
5. General Tariff – where no treaty or agreement exists
Surtaxes can also be applied in certain circumstances…
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 Canadian Trade Remedy
Legislation
Two primary remedies
2. Anti-dumping Duties
3. Countervailing Duties

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 Dumping
Dumping is selling a good in a foreign country at a
price below that at which it is sold in the
domestic market. (See Box 6.2, Page 174)
Anti-dumping duties are applied when goods are
being dumped and material injury has been
caused to the affected Canadian industry.
In general the amount of the duty should be that
amount which restores equity, compensates for
the injury

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 Material Injury
Material Injury means that some party has suffered
meaningful and measurable hurt as a direct result of
some other party’s actions
Factors in determining material injury
3. Are goods being dumped “like goods” to those already
produced in Canada?
4. Is there already production of “like goods”.
5. The complainant must represent all or a sufficient
proportion of the affected Canadian industry.
6. Injury causation standard
7. Future material injury must be proven in order to effect
ongoing anti-dumping duties.
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 Countervailing Duties
Countervailing duties are applied when the
goods being imported have been
subsidized by the country in which they
were produced
Both subsidy and material injury have to be
demonstrated.

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 Subsidy
Any financial or commercial benefit given to a
producer, manufacturer, grower, distributor,
importer, or exporter by any government.
But…

Not so clear in practice what is or is not a subsidy

and even then subsidies are not necessarily
prohibited in certain circumstances e.g. for
economic development

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 Safeguards
Temporary measures imposed where
serious injury may result to domestic
producers as a result of very large
increases in the amount of goods being
imported.

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Canadian Regulation of Exports
Export Controls:
Purpose: - to meet international commitments
re trade in military, strategic goods, nuclear
weapons
- to prevent supply of military and strategic
goods to countries that threaten Canada’s
security
- to encourage further processing of natural
resources in Canada
- to conserve strategic domestic supply

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 Export Controls
How System Works:
- Export and Import Permits Act
NOTE: - export permits are required if
goods:
1/ on Export Control List
2/ destined for country on Area Control
List
3/ of US origin
4/ cultural property
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 Export Control List
- anything on list requires export permit from ITC (EICB)
Note: U.S. exempt except # 5.
- 8 Groups:
1) Industrial Goods - dual purpose for civilian and military use (Wassenaar
Arrangement - replaced COCOM)
2) Munitions - goods and technologies specifically designed or modified for military
use (WA)

3) Atomic Energy - nuclear specific (NPT)

4) Nuclear Related/Dual-Use - goods that could be used for nuclear weapons (NPT)
- permits for 3,4 - Atomic Energy Control Board
5) Miscellaneous Goods - forest products logs, softwood lumber, pulpwood),
medical products, agricultural and food, US origin goods, automatic weapons
6) Missile Technology - goods related to systems capable of delivering chemical,
biological or nuclear weapons ( Missile Technology Control Regime)
7) Chemical and Biological Agents - any agents or dual-use equipment that could be
used for chemical or biological weapons (Australia Group, CWC)
8) Restricted Chemicals - any chemicals that could be used in production of illicit
drugs ( Chemical Action Task Force, UN)

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 Area Control List
- any goods to ACL countries requires
permit from DFAIT (EICB)
- countries under conflict or UN embargo
- Angola, Libya, Iraq, Myanmar

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 US Origin Goods
• - all strategic and non-strategic goods
• ACL plus Iran, Cuba, North Korea

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 Administration
- apply (form EXR-1042) to ITC
- documentation often required from
government of importing country:

i) International Import Certificate

ii) End-use Certificates and/or
Import Licence
iii) Delivery Verification Certificates
iv) End-use Statements -
- process time - 10 days to 6 weeks
- General Export Permits - allows export of specified goods to eligible
destinations without requiring export permit paperwork for each
shipment (limited availability)
- Individual Export Permit - allows specific shipment
- permits valid for 1-2 years depending on
group
Note: non-binding advance rulings available

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