Modernized Canada-Israel Free Trade Agreement – Minor Processing Operations

September 10, 2019 – On September 1, 2019 the modernized Canada-Israel Free Trade Agreement (CIFTA) officially entered into Force. The original agreement came into force on January 1, 1997.

The amended agreement includes additional countries beyond that of the United States, where CIFTA-eligible goods may undergo minor processing prior to entering Canada and continue to qualify as originating goods.

On August 28, 2019 the Canada Border Services Agency (CBSA) issued Customs Notice 19-18 Amendments to the Canada-Israel Free Trade Agreement – Minor Processing Operations, providing details on this portion of the amended agreement.

Article 3.12 of the agreement –Direct Shipment and Shipment Through a Non-Party states in part that, except for goods of chapters 50 through 63, goods shall maintain their originating status when minor processing is performed in non-Party countries which have a separate Free Trade Agreement with Canada or Israel.

In the original agreement, only the United States was a non-Party in which CIFTA-eligible goods could undergo minor processing operations and maintain their originating status.

Annex 3.12 of the amended agreement provides the expanded the list of non-Parties which have entered separately into a free trade agreement to include:

  • the Member States of the European Free Trade Association;
  • the Member States of the European Union
  • the Hashemite Kingdom of Jordan;
  • Mexico;
  • the United States of America.

Minor Processing Operations are defined in Article 3.6 of the Agreement as:

  • (a) mere dilution with water or any other substance that does not materially alter the characteristics of the good;
  • (b) cleaning, including removal of rust, grease, paint or any other coating;
  • (c) applying any preservative or decorative coating, including any lubricant, protective encapsulation, preservative or decorative paint, or metallic coating;
  • (d) trimming, filing or cutting off small amounts of excess material;
  • (e) packing, repacking, labelling or relabeling of the good for transport, storage or sale; and
  • (f) repairs or alterations, washing, laundering or sterilizing.

A Declaration of Minor Processing (Form E669) must be completed for CIFTA-eligible goods that have undergone minor processing in the territory of a non-Party prior to entering Canada.

In addition, the CBSA has issued Customs Notice 19-19 advising the of the amendment of the Custom Tariff which includes duty rate reductions to duty free status and a change to the CIAT tariff treatment for 847 tariff items.

A full list of the affected tariff classifications is available here.

The text of the modernized Canada-Israel Free Trade Agreement is available here.

Please contact your Livingston account representative should you have any questions.