The Deputy Prime Minister and Minister of Finance, and the Minister of Small Business, Export Promotion and International Trade, on December 22, 2020 welcomed the signing of a memorandum of understanding (MOU) between Canada and the United Kingdom, which lays out commitments each country will take to ensure continued preferential tariff treatment for goods from the date CETA ceases to apply to the United Kingdom until the Canada-United Kingdom Trade Continuity Agreement (Canada-UK TCA) is ratified and implemented
Canada Border Service Agency (CBSA) has issued Customs Notice 20-38, Withdrawal of Entitlement to the Canada–European Union Tariff (CEUT) Tariff Treatment for goods originating from the United Kingdom
Effective January 1, 2021, the United Kingdom and certain associated territories will no longer be covered by the Canada-EU Comprehensive Economic and Trade Agreement by virtue of Brexit. This means that eligibility for the Canada-European Union Tariff (CEUT) preferential tariff treatment is withdrawn for goods originating from the United Kingdom and certain associated territories, as set out below. Such goods must now be accounted for under the Most-Favoured-Nation (MFN) tariff treatment.
This withdrawal of eligibility for the CEUT preferential tariff applies to the United Kingdom, the Channel Islands, Gibraltar, and the Isle of Man. As of January 1, 2021, goods that are exported from the Sovereign Base Areas of Akrotiri and Dhekelia to Canada shall be declared as being exported from Cyprus.
Importers of goods originating from the United Kingdom, Channel Islands, Gibraltar and Isle of Man, that are eligible for the CEUT preferential tariff treatment and that are in-transit to Canada before January 1, 2021, may claim the CEUT preferential tariff treatment.
Importers should have in their possession proof that the goods were in-transit. Such proof may include, but is not limited to, the following documentation: commercial invoices, sales orders, purchase orders, shipping documents (specifically the through bill of lading), report of entry documents, and cargo control documents.
The through bill of lading must indicate that the goods started their uninterrupted journey to a consignee in Canada before January 1, 2021. Documentary proof may be requested at any time by a Canada Border Services Agency officer. To claim the CEUT preferential tariff treatment for goods that are in-transit, importers must enter code “31” in the Tariff Treatment Field No. 14 of the B3-3, Canada Customs Coding Form.
CBSA also issued Customs Notice 20-39 Implementation of the United Kingdom Trade Continuity Remission Order, 2021
The Governor General in Council, on recommendation of the Minister of Finance, has issued the United Kingdom Trade Continuity Remission Order, 2021 #20-1135. The United Kingdom Trade Continuity Remission Order (the Order) provides the tariff benefits of the Canada-United Kingdom Trade Continuity Agreement (CUKTCA) as if it were in force as of January 1, 2021. It does so by remitting the difference between the Most-Favoured-Nation Tariff rate of customs duty and the rate of customs duty that would apply under the Comprehensive Economic and Trade Agreement (CETA). This replicates the tariff benefits that would have applied to eligible imports from the United Kingdom (UK) and certain associated territories under the CUKTCA as the tariffs and rules of origin are equivalent under the two agreements. The CETA is referenced because those preferential tariffs and rules of origin already exist in domestic law.
This remission applies to goods imported on or after January 1, 2021, until the day on which the CUKTCA enters into force. Effective January 1, 2021 importers of qualifying goods may cite the United Kingdom Trade Continuity Remission Order, 2021 #20-1135, in order to benefit from the remission of duties.
To do so, importers must complete Form B3-3, Canada Customs Coding Form, as follows:
- In Field No. 14, “Tariff Treatment”, enter the Most-Favoured-Nation (MFN) tariff treatment, code “02”
- In Field No. 26, “Special Authority”, enter OIC #20-1135
Importers are responsible for obtaining documentation in support of a claim for remission under the Order. The Canada Border Services Agency (CBSA) will accept documentation from exporters in the UK in support of an importer’s claim for remission.
For more information on the CETA tariff treatment and the associated rules of origin, please consult the CETA Rules of Origin Regulations and Memorandum D11-5-15 Canada–European Union Comprehensive Economic and Trade Agreement (CETA) Rules of Origin.
Additional information on the Canada-UK Trade Continuity Agreement (CUKTCA)