Requests for additional information and documentation from government agencies are a daily occurrence among Customs Brokers and frequent importers. Health Canada, the Canada Border Services Agency (CBSA) and Environment and Climate Change Canada often request additional information and documentation. CBSA uses information obtained through Trade Verifications Audits for risk assessment, revenue assessment; and to promote voluntary compliance in the areas of Tariff Classification, Valuation and Origin.
The Government of Canada (GOC) also requests additional information to assess subjectivity to the Special Import Measures Act (SIMA), compliance with laws surrounding certain pest control products, ozone depleting substances, emissions, and other areas with specific compliance mandates when importing goods.
Since requests for additional information or documentation related to SIMA, Health Canada, and Environment and Climate Change can lead to costly duty and tax adjustments, interest, or penalties this article deals with requests specific to these three areas of concern for importers.
Issues with non-compliance
Goods imported without meeting specific requirements may be subject to fines. For example, late in 2017 a Canadian company was fined $ 265,000.000 by Environment and Climate Change Canada for non-compliance with importing a small amount of aerosol product containing ozone depleting substances.
Each year adjustments resulting from SIMA duties incorrectly declared or accounted for may result in hundreds of thousands of dollars in SIMA duties plus interest owing.
Since these amounts may not have been factored into selling prices or projected company costs these adjustments could result in unrecoverable losses for Canadian importers.
The best way to avoid costly adjustments, interest, fines, and penalties is of course to ensure compliance with all import laws and regulations of all government departments, international conventions and to check for additional costs such as excise duties, taxes or subjectivity to SIMA.
Your Livingston Service Coordinator can inform you of any additional documentation, information requirements, additional costs or specific import requirements if they are consulted and supplied with sufficient information about the goods, prior to the importation.
Requests for information or documentation after import
When a request is received for additional information or documentation relating to an importation, Livingston will reach out to clients for authorization to share information with the GOC as needed.
Although we normally have the documentation relating to the import, the GOC frequently requires additional specifications such as the chemical elements, dimensions, weight, recognized standards (CSA, AAMA, ASTM etc.) and end use in Canada.
SIMA requests for steel products are very common. The SIMA Directorate (CBSA Ottawa) needs to know if commodities meet the specific description of goods which are subject to SIMA, per the Measures in Force.
A Mill Test Report should be obtained with every import of steel, or articles of steel when goods may be subject to SIMA. It provides CBSA with the manufacturer, ASTM standards, dimensions, chemical and physical characteristics, so they can determine if the steel article is carbon or alloy, welded or seamless, galvanized, coated etc. as well as the applicable standards and if it’s subject to Anti-Dumping duty or other SIMA duties.
Screws (fasteners) from China are an example of one of the most commonly imported goods that are subject to SIMA duties, however there are also over 50 exclusions depending on specifications such as the size, finish, use, and trademark of the screws. For example, a description on a commercial invoice of “steel drywall screw” may be sufficient to initially import screws; but to avoid SIMA duties of 170% or more we also need to know the name of the exporter, manufacturer, and the type of points, diameters, lengths, thread finish, type of head, driver and finish.
Addressing requests for information
Health Canada, Environment Canada and CBSA requests are normally e-mailed to the Customs Broker and sometimes the importer to request additional information or documentation.
The e-mail will contain the transaction number of the importation, the importer name, the due date for document submission, the name of the requesting officer and often a reference to the reason for the request.
The GOC contacts Livingston through our Canadian Regulatory Affairs Department to ensure procedural compliance with all requests. Regulatory Affairs engages the importer’s Service Coordinator to send a request to the importer to inform the importer of the request, and in the case of SIMA, authorization to exchange information directly with CBSA. Importers are also given the option to deal directly with the officer and submit all information on their own.
Requests are normally due within ten business days, but some have been due in as few as three days.
Immediate action must be take on these requests to ensure that there is enough time to contact all necessary parties for documentation, then transmit the documents to Livingston where they are properly formatted into a single PDF, then sent for review by Canadian Regulatory Affairs before being submitted to the requesting officer.
In some cases, the importer must contact vendors, exporters, foreign manufacturers, engineers and project managers to obtain the required documents. Importers may also face delays such as different time zones, unavailable employees, corporate red-tape, language and technology barriers. For this reason, Canadian Regulatory Affairs marks all requests as highly important and time sensitive.
Records are kept of all documents submitted. If an immediate response from an officer is received, clients are contacted to advise them of the outcome of the review.
If CBSA requests an adjustment, importers and Livingston will be notified by CBSA. In the case of SIMA duties owing, importers have 30 days in which to pay to avoid interest. Importers who chose to appeal the decision have 90 days from the date of the decision.
Contact your Livingston Client Service Representative for additional information on any of the above-mentioned subjects.