CARM: What all importers need to know about CARM

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Customs compliance priorities announced for 2018

     Tariffs

Your chances of being selected by the Canada Border Services Agency (CSA) for trade compliance verification in 2018 are higher if you import products on the following list of priorities.

The list identifies products that are of concern, which due to misclassification, have led to a loss of revenue for the CBSA.  Non-compliant companies will have to pay retroactive duties and, potentially, Administrative Monetary Penalties.  

See below for more details on each new commodity added for 2018:

Mineral Waters and Aerated Waters (new)
Harmonized System Number(s): Heading 22.01

  • The risk identified is that imported goods could be incorrectly classified as mineral waters and aerated waters within Heading 22.01, instead of being properly classified elsewhere within the same chapter, and potentially be subject to a duty rate up to 11%.
  • This verification priority was released in July 2017.
  • Results are not yet available.

Gloves (new)
Harmonized System Number(s): Headings 39.26 and 42.03

  • The risk identified is that imported goods could be incorrectly classified as gloves within Headings 39.26 and 42.03, instead of being properly classified within Chapter 61 or 62, and potentially be subject to higher duty rates up to 18%.
  • This verification priority was released in July 2017.
  • Results are not yet available.

Pebbles, Limestone and Granules (new)
Harmonized System Number(s): Heading 25.17

  • The risk identified is that imported goods could be incorrectly classified as pebbles, limestone and granules within Heading 25.17, instead of being properly classified within Heading 68.02, and potentially be subject to a duty rate of 6.5%.
  • This verification priority was released in July 2017.
  • Results are not yet available.

Spent Fowl (new)
Harmonized System Number(s): Headings 02.07, 16.01 and 16.02

  • The risk identified is that imported goods could be incorrectly classified as spent fowl within Headings 02.07, 16.01 and 16.02, instead of being properly classified under tariff items subject to tariff rate quotas (TRQs) within the same chapters, and potentially be subject to very high duty rates.
  • This verification priority was released in July 2017.
  • Results are not yet available.

Safety Headgear (Round 3)
Harmonized System Number(s): Subheading 6506.10

  • The risk identified is that safety headgear could be incorrectly classified under duty-free tariff items, whereas the goods could potentially be properly classified as other safety headgear under tariff item 6506.10.90, which attracts a duty rate of 8.5%.
  • This verification priority was released in December 2011 and $126K was assessed in revenue, as 8 out of 8 cases were found to be in error.
  • A second round of verifications was released in May 2013 and $214K was assessed in revenue, as 15 out of 20 cases were found to be in error.
  • The results of the first two rounds show that the vast majority of the goods that were found to be misclassified were properly re-classified under tariff item 6506.10.90 of the Customs Tariff.
  • A third round of verifications was released in July 2017.
  • Results are not yet available.

Bags (new)
Harmonized System Number(s): Heading 42.02

  • The risk identified is that imported goods could be incorrectly classified as bags within Heading 42.02, instead of being properly classified elsewhere within the same heading, and potentially be subject to duty rates up to 11%.
  • This verification priority was released in October 2017.
  • Results are not yet available.

Import Permit Numbers (new)
Harmonized System Number(s): Chapters 2 and 4

  • The risk identified is that imported goods could be classified under “within access commitment” tariff items within Chapter 2 (meat of bovine animals and poultry) and Chapter 4 (dairy products), without the required import permit number on the declaration.
  • Those chapters include goods that are subject to tariff rate quotas (TRQs) under Canada’s supply management system.
  • TRQ goods imported without the required import permit number are properly classified under “over access commitment” tariff items and are subject to very high duty rates.
  • This verification priority was released in October 2017.
  • Results are not yet available.

For more information, contact Brian Rowe, Director – Customs Compliance & Regulatory Affairs.

Quick Tip #20
True or false? AMPS penalties only apply to import shipments

Answer: False. Canadian exports are subject to about 17 AMPS (Administrative Monetary Penalty System) infractions.

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