2007 HS Classification changes – one more value-added
service for clients of Universal Logistics
On January 1, 2007, the Canada Border Services Agency (CBSA) implemented one of the most extensive revisions to the Harmonized Commodity Description and Coding System (HS), based on changes issued by the World Customs Organization.
These revisions affect thousands of individual tariff classifications. Some revisions are a direct one-to-one change, while others are a one-to-many change, i.e. one classification number has been redefined into two or more new classifications.
Following the issuing of the revised 2007 Customs Tariff by the CBSA on October 13, 2006, we created a dedicated team of our employees to handle the necessary conversion of tens of thousands of product database lines for our clients, one more value-added service offered by Universal Logistics. We are making every effort to make the transition as seamless as possible for our clients. You may be contacted if additional information is required to determine an applicable tariff classification.
The 2006 Customs Tariff contained 8,500 lines and 19,000 classifications. Five thousand of the 19,000 classifications have been impacted by the 2007 tariff. The 2007 tariff added 2,000 items, and 3,200 items from 2006 were deleted.
These changes represent the amendments to the Nomenclature appended to the International Convention on the Harmonized Commodity Description and Coding System (HS Convention), which entered into force on January 1, 2007.
The main sources of the amendments, the third set of major revisions since the Harmonized System was introduced in 1983, are:
- Technological progress;
- Change in trade patterns;
- Clarification of texts to ensure uniform application;
- Adaptation of the Nomenclature to reflect trade practice; and
- Amendments related to the social and environmental fields, i.e., new subheadings to facilitate the monitoring and control of :
- certain species of fish;
- products of bamboo (INBAR (FAO))
- pesticides (Rotterdam Convention)
- ozone-depleting substances (Montreal Protocol)
- products containing asbestos
To check the status of your database conversion, please contact Brian Rowe, General Manager - Customs Consulting Services.
To avoid penalty, duty is payable on shipments of goods if NAFTA Certificates for 2006 have not been replaced with valid 2007 Certificates. If you claim preferential treatment without a valid NAFTA Certificate, the shipment is subject to an AMPS (Administrative Monetary Penalty System) transactional penalty of $1,000 for a first infraction and escalating penalties for repeat infractions.
If a Certificate is obtained post import, a claim to recover the duties paid may be presented to the Canada Border Services Agency (CBSA) for up to one year after import. Duty is refundable, penalties are not.
If you are not compliant and don’t have the time to do the necessary follow-up with your vendors and CBSA submissions, take advantage of our NAFTA Management Service. For more information, please contact Brian Rowe.
Are you compliant with strict wood packaging regulations?
Under new wood packaging regulations (ISPM No. 15), which became fully enforced on July 5, 2006, all shipments entering North America that contain non-compliant wood packaging materials will be refused entry and the entire shipment ordered returned to origin. If ocean LCL shipments are involved, the entire container will be refused entry, not just the non-compliant portion.
Treated wood packaging imported into Canada must be marked with the appropriate ISPM stamp or accompanied by a Phytosanitary Certificate attesting to the treatment (note, a fumigation certificate alone is not valid). However, the Phytosanitary Certificate is valid for Canada only. Any shipments moving through the USA for destination to Canada must be fully compliant with the U.S. regulation, i.e. all treated wood packaging materials must contain the ISPM stamp. Any non-compliant wood packaging found by the U.S. Department of Agriculture Animal and Plant Health Inspection Service (USDA-APHIS) will be refused entry and ordered re-exported back to the country of origin even though the goods are not destined for the USA.
Universal's recommendation: Have all wood packaging materials (pallets, crates, dunnage, etc.) treated and stamped in accordance with ISPM No. 15. This is the best way to avoid any documentation issues related to improper Phytosanitary or fumigation certificates, while making sure your shipment is compliant with world-wide regulations.
Examples of ISPM stamps:
The ISPM stamp includes the International Plant Protection Convention (IPPC) logo and the appropriate code, e.g. XX-000-YY.
The XX represents the International Standards Organization two letter country code for the country in which the wood packaging is produced; the 000 represents the official certification number issued by the National Plant Protection Organization to the facility producing the compliant wood packaging; the YY represents the treatment carried out (e.g. HT for heat treated wood or MB for methyl bromide treated wood).
In addition to having the wood stamped, the Bill of Lading should also contain the stamp information. For example, "Wood packing marked in accordance with ISPM No. 15 per IPPC stamp CN-001-HT".
Following are links to ISPM No. 15 Wood Packaging Regulations for Canada and the USA:
For more information, please contact Brian Rowe or David Lychek, Manager – Ocean Services, or call (905) 882-4880.
Security Compliance Loans available from Export Development Canada
If you are a Canadian company shipping to the USA and qualify for C-TPAT registration, Export Development Canada's (EDC’s) Security Compliance Loan may assist you to finance the upgrades required to meet security standards.
The EDC can provide a 3-year term loan for up to 85% of the specific costs identified, to maximum of $150,000, to finance C-TPAT registration.
- Maintain cash flow: The loan provides you with the ability to finance the cost of these upgrades.
- Business growth: Compete and secure U.S. opportunities that now require suppliers to have obtained security clearance.
- Faster and smoother shipments: Border clearance times are reduced, and your goods have access to the FAST lanes at the Canada/U.S. border.
- Reduced risk of theft: Improved security to your place of work protects your establishment.
To apply for the loan, you must:
- Be a registered Canadian company
- Be an Importer of Record into the United States or a Canadian Highway Carrier
- Have been in business for at least 3 years
- Agree to work with an EDC-approved advisory service to conduct a security gap analysis required as part of the loan application
More information on EDC Security Compliance loans.
U.S. Customs - E-Manifest Mandatory at specific ports
Effective January 25, 2007, E-Manifest became mandatory for truck carriers into the USA, under U.S. Customs Automated Commercial Environment (ACE) at all ports in Washington and Arizona,
Pembina, Neche, Walhalla, Maida, Hannah, Sarles and Hansboro, North Dakota.
The remaining U.S. ports have been divided into five groups and will be phased-in in the following order:
||All ports of entry in the States of Michigan, Texas, California,
New Mexico and New York
||All ports in Vermont and Alaska
||All ports in Maine, Idaho and Montana
||All remaining ports in North Dakota
||All ports in Minnesota
More information on ACE and E-Manifest.
Closure of Toronto Sufferance Truck Terminal
The Toronto Sufferance Truck Terminal (TSTT) office at Kennedy Road and Hwy 401 in Scarborough closed on November 30, 2006.
Effective December 1, Customs services in the greater Toronto area were available at alternate CBSA offices only. The last remaining Customs Sufferance Warehouse in the GTA is Interport Sufferance Terminal (Dixie Road/401).
Canada invests over $430M for smart, secure borders
The Canadian government is investing $431.6M over the next five years to reinforce smart, secure borders. This funding will allow three key initiatives under the Security and Prosperity Partnership of North America (SPP): eManifest, Business Resumption and Partners in Protection to move forward.
The $396M investment in eManifest will provide the CBSA with electronic data that allows for 100 percent automated risk assessment before shipments reach the border. Highway and rail carriers will be required to submit electronically and pre-arrival all cargo, crew and conveyance information. This will allow the CBSA to have the right information at the right time in order to make informed decisions.
An investment of $24M will allow the CBSA to further harmonize and strengthen its business resumption planning with the United States, a necessary step to ensure trade keeps moving across the border in the event of an emergency.
Finally, border security will be further enhanced with an investment of $11.6M to strengthen the Partners in Protection (PIP) program .The PIP program will expand to maximize benefits for members and become harmonized with a similar program in the United States called the Customs-Trade Partnership Against Terrorism (C-TPAT).
For more information, go to the CBSA web site.