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D17-1-5 - Importing Commercial Goods

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Memorandum D17-1-5

Ottawa, June 16, 2000

SECTION 2 - RELEASE

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GENERAL INFORMATION

71. Customs and other government departments or agencies may require certificates, licences, permits, or other documentation for imported goods depending on the commodity. These documents must be provided to customs before goods can be released.

72. If the Department of Foreign Affairs and International Trade requires a permit, the permit data can be transmitted electronically by the Foreign Affairs and Customs Automated Permit System (EXCAPS).

73. Customs monitors all release and accounting documents for quality. Importers and customs brokers must comply with the statutory or regulatory provisions on release documents (interim accounting) to the same extent as at final accounting.

Cash

74. Cash clients must provide hard copy (paper) documentation to customs. Requirements for the completion of the various release documents can be found in Memorandum D17-1-10, Coding of Customs Accounting Documents.

Account Security

75. Goods may be released before duties and taxes are paid, if security for release prior to payment has been posted with customs, as long as final accounting is provided within a prescribed time limit. Refer to Section 3 - Accounting for customs accounting requirements.

76. Importers and brokers may supply release information in paper format or electronically using the Accelerated Commercial Release Operations Support System (ACROSS), the Customs Automated Data Exchange System (CADEX) communication line, or by a Value Added Network (VAN) provided they meet the eligibility requirements. The Inland Alternate Service Program allows clients to provide customs documentation to the processing office by facsimile or by Electronic Data Interchange (EDI).

77. Customs wants to facilitate the release of goods whenever possible and will not delay release requests due to minor errors in the paperwork. The customs inspector still has the right, however, to ask for information needed to make sure the goods comply with legislation.

Business Number

78. To ensure that goods are released quickly, importers or brokers should arrange for an importer/exporter account with customs before a shipment arrives at the border or point of entry. If the Business Number (BN) indicated on interim release or final accounting documentation is rejected by the customs system as "invalid," the documentation will be returned to the importer or broker and the goods will not be allowed to enter Canada.

79. The name used on all release and accounting documents must correspond with the name under which the company registered for its customs program account. Clients with only one RM account who provide hard copy documents do not have to specify the account identifier on release and accounting documents. Clients with more than one RM account must enter all 15 characters of their BN on all documents.

80. The letters RM should not be included as part of the account number on accounting documents. The number should appear as below:

1234567890001

81. If an importer or broker has more than one RM account but has not specified which one, customs will release the shipment and issue Form Y50, Reject Document Control, to the importer or broker. The importer or broker must ensure that the full BN is provided with a corrected release package prior to submitting the final accounting documentation or it will be rejected. Time limits are not protected.

Verification

82. Data is verified at the time of customs release to ensure it meets government requirements. Incorrect or incomplete release documents will be returned for correction with a Form Y50, indicating the reasons for rejection. For release information provided through EDI, customs will transmit this form to the importer or broker. The goods will not be released until customs receives the corrected documents or data. A sample of this form is contained in Appendix 2A.

83. The coding and format of Form B3, Canada Customs Coding Form, used to account for commercial goods, must be in accordance with Memorandum D17-1-10, Coding of Customs Accounting Documents. Accounting data transmitted electronically must comply with these requirements in the format set out in the CADEX Participants Requirements Document. The information shown on Form B3 must agree with the information on the release documentation.

RELEASE OPTIONS

84. For information on importing:

(a) Commercial goods valued at less than $1,600, refer to Memorandum D17-1-2, Low Value Commercial Goods.

(b) Commercial goods by mail, refer to Memorandum D5-1-1, Customs International Mail Processing System.

(c) Commercial goods into Canada temporarily, refer to Memoranda D8-1-4, Temporary Admission Permit - Form E29B, and D8-1-7, Use of A.T.A. Carnets for the Temporary Admission of Goods.

85. For commercial goods valued over $1600, see below.

Form B3, Canada Customs Coding Form, Type C

86. To have the goods released at the same time as presenting accounting documents, an importer or broker should use Form B3, type C, to pay the duties and taxes. The following documentation must be provided to customs:

(a) one copy of a completed Form B3* ;

(*One additional copy of Form B3 is required when an importer or broker presents release documentation to a customs non-automated office. Once the duties and taxes have been paid, this copy will be stamped "duty paid" and returned as a receipt.)

(b) commercial invoices;

(c) cargo control documents (this document is provided by the carrier transporting the goods into Canada); and

(d) the required permits, certificates, or licences.

87. A sample of Form B3 is contained in Section 3 - Accounting, Appendix 3A.

Form B3, Canada Customs Coding Form, Type D

88. If all of the data is not available, Form B3, type D interim accounting document may be submitted to customs. Enough information should be included for the customs inspector to determine the tariff classification and value for duty of the goods.

89. Customs requires a security deposit in addition to the estimated duties owing on the goods. The deposit must be equal to 10% of the value for duty of the goods and at least $100, but not more than $1,000. The supporting documents are the same as for Form B3, type C.

Form B3, Canada Customs Coding Form, Ex-Warehouse

90. Goods removed from a bonded warehouse for use in Canada must be documented on an Ex-Warehouse Form B3. Refer to Memorandum D17-1-10 for information on which Ex-Warehouse type applies to the goods. The supporting documents are the same as for Form B3, type C.

Form C6, Permission for Special Purposes

91. The Regional Director of Customs Border Services may authorize a Form C6 in certain cases, such as to allow an importer or broker to open a parcel in a warehouse to get documents out that are needed to release goods. However, in the case of release of goods prior to payment of duties, Form C6 can only be used under the following circumstances:

(a) To allow raw leaf tobacco to be delivered directly to a licensed packer or licensed manufacturer to determine the standard weight prior to preparation of the final accounting;

(b) To allow imported spirits to be delivered directly to a distillery to determine the quantity and strength prior to preparation of the final accounting; and

(c) To allow release of imported bulk cargoes which have to be weighed or gauged prior to preparation of the final accounting documentation.

92. The importer should state on the form why permission is required before submitting it to the local customs office.

Release on Minimum Documentation (RMD)

93. An importer or broker who wants goods released before final accounting must provide the following interim accounting information to customs:

(a) A cargo control document - two copies for paper releases (the Customs Delivery Authority copy and the Long Room copy); and

(b) A commercial invoice, such as a Canada Customs Invoice or a document such as a bill of sale containing the following information (two copies for paper release):

(1) Name and business number of the importer;

(2) Name of the exporter;

(3) Unit of measure and quantity of goods;

(4) Value of the goods and currency of settlement;

(5) Detailed description of the goods including the 10-digit Harmonized System (HS) code for the commodity that reflects either the highest value invoice line or a reasonable representation of the goods within the shipment. When multiple page paper invoices are presented, the HS code must also be shown on the first page with a notation indicating the corresponding page and line of the commodity to which this HS code applies. Importers and brokers are encouraged to use bar-coded format, if available;

(6) Country of origin of the goods;

(7) Number of invoice pages;

(8) Transaction number (in bar-coded format as outlined in Memorandum D17-1-10). If the transaction number is not machine-readable, the package will be rejected. The requirement for the bar-coded format does not apply to goods released through a sub-agent at a non-terminal customs office; and

(9) Permits, licences, and certificates required by other government departments.

94. The documents must be submitted to customs in the following order:

(a) Carrier/warehouse keeper documents (Customs Delivery Authority copy of the cargo control document);

(b) Other government department permits, licences, certificates;

(c) Customs documentation (release information sheet* (optional), Long Room copy of the cargo control document, invoice, and supporting documentation);

(d) Importer or broker documentation (release information sheet* or invoices).

(e) Importer or broker documentation (release information sheet* or invoices).

(*A sample of a release information sheet with instructions for completion is contained in Appendix 2B.)

Frequent Importer Release System (FIRST)

95. FIRST was designed for companies importing low risk shipments on a regular basis. The goods must be consigned to one importer under one transaction number. FIRST allows an expedited release since the importer and the commodity have been pre-approved by customs.

Application

96. FIRST applications must be submitted to the Customs Program Support Division in the region where the goods will be imported. If the goods are to be imported into more than one region, one application may be submitted to the region where the majority of the importations will occur, with a list of the other regions.

97. Importers with FIRST privileges in one customs region who want to operate under the program in other regions should submit an application to the region where the original approval was granted.

98. If a business structure changes and a new Business Number is required, the company must submit a new application to operate under FIRST to customs. The application must include a FIRST lead sheet to be used for all FIRST releases regardless of where the goods are imported. The lead sheet indicates the transaction number, FIRST service option, the BN, and the pattern number assigned by customs. A sample application for FIRST privileges and an example of a FIRST lead sheet with instructions for completion is contained in Appendix 2C.

99. If goods imported under FIRST are controlled or regulated by the Canadian Food Inspection Agency (CFIA), customs will forward the application to them and they will contact the importer to determine the conditions for handling the permits, licences, certificates, or other documentation. This must be done before customs approval.

100. If a company is approved for FIRST, customs will send them a letter of confirmation and issue a FIRST pattern number.

Note: FIRST authorization is linked to the Business Number. If for any reason the Business Number changes, the importer should submit a new application to operate under FIRST. A new pattern number and bar codes will be required.

Processing

101. The release package prepared by the exporter or shipper will consist of:

(a) The original bar-coded lead sheet with invoice information included; or

(b) The original bar-coded lead sheet with completed invoices attached; and

(c) A copy of the lead sheet and invoices, which customs will stamp and return to the carrier as receipt of the release decision.

102. When the goods arrive in Canada, the carrier gives customs the lead sheet and invoices. The officer enters the bar-coded information from the lead sheet into ACROSS.

103. If the goods are released, the carrier receives a stamped copy of the lead sheet and invoices from customs as confirmation of the release decision and can then deliver the goods to the importer. Customs stamps the original documentation and returns it to the importer or broker. If the goods are not released, customs will refer the carrier to the importer or broker, or else to the secondary processing area for examination of the goods.

104. The FIRST release decision will appear on the release notification report generated the next business day by the customs office where the goods were released. CADEX and Release Notification System clients are notified electronically of the release decision.

105. CADEX participants must submit the original date-stamped lead sheet and invoices to the office where the goods were released by the end of the next business day.

106. The importer or broker presents or transmits the confirming accounting information within the applicable time frames. Non-CADEX clients must submit the original date-stamped lead sheet with the confirming Form B3.

Prearrival Review System (PARS)

107. PARS allows importers and brokers to submit release information to customs for review and processing before the goods arrive in Canada. This speeds up the release or referral for examination process when the carrier arrives in Canada with the goods. The release information can be submitted in either paper format or electronically. PARS includes the processing of goods that require permits, licences, or certificates. PARS procedures are available for goods imported by different modes of transport:

(a) PARS - goods arriving by highway and cleared at the border;

(b) RAIL PARS - goods arriving by rail;

(c) MARINE PARS - marine freight;

(d) AIR PARS - air freight; and

(e) IN PARS - goods cleared at an inland highway sufferance warehouse.

108. Customs and the CFIA have developed PARS procedures for certain agricultural products regulated or controlled by that agency. A list of these goods is contained in Appendix 2D. A list of CFIA and customs contacts is contained in Appendix 2E.

Processing

109. The exporter or carrier provides information on the goods to be imported to the importer or customs broker by facsimile or EDI.

110. A cargo control number must be included in the information provided on PARS shipments cleared at highway border locations. An invoice with a bar-coded cargo control number in the top right-hand corner is an example of the documentation that may be provided to the importer or broker by the exporter or carrier. If multiple invoices cover one shipment consigned to one importer, only one bar code is necessary. The invoice pages should be clearly marked, for example, page 1 of 3, page 2 of 3, and page 3 of 3. Appendix 2F contains information on PARS bar codes.

111. The same cargo control number, in bar-coded format, must also appear on the carrier's documentation; for example, an invoice or bill of lading that will be presented to customs at the border to obtain release of the goods.

112. The carrier must provide the importer or broker with a cargo control document with a cargo control number for goods cleared at non-highway border locations. The carrier may also provide the importer or broker with other available customs documents such as an invoice.

113. The importer or broker must submit the PARS release package to customs a minimum of one hour and maximum of ten calendar days before the goods arrive in Canada. The ACROSS Participants Requirements Document contains information on how to submit PARS release information through EDI.

Goods Arrival

114. The customs officer reviews the PARS release information, and updates ACROSS with a recommendation whether to release or refer the goods when they arrive in Canada.

115. The carrier or warehouse operator advises customs when the goods arrive. For highway border clearances, the carrier gives customs an invoice or bill of lading with a bar-coded cargo control number. When the goods are released, the customs officer will date stamp this document and return it to the carrier as proof of customs clearance and receipt of delivery.

116. For non-highway border clearances, the carrier or warehouse operator transmits the cargo control number to customs by the Release Notification System (RNS). The RNS Participants Requirements Document contains further information on the RNS. Copies of this document can be obtained by writing to the Manager, Electronic Commerce Unit, Ottawa ON K1A 0L5.

117. If customs releases the goods, the carrier will deliver them to the importer. Goods not released are referred to a customs officer for examination. When PARS shipments do not arrive within the prescribed time limits, paper permits, licences, or certificates are returned to the importer or customs broker. Releases for paper PARS will appear the next business day on the release notification report produced at the customs office where the goods were released. CADEX and RNS clients are notified electronically of the release decision for both paper and EDI PARS.

118. Appendix 2G contains information concerning the order and number of copies for a PARS release package.

Goods Controlled by the CFIA

119. The importer or broker submits the release package, which includes facsimile copies of required certificates, permits, and licences, to the Import Primary Contact (IPC) of the CFIA. The package can be given directly to the IPC if it is located at the point of importation, and sent by facsimile when it is not. The importer or broker must present the Agri-PARS release package a minimum of four hours and maximum of ten days before the goods are scheduled to arrive in Canada. For certain commodities, the maximum time is less than 10 days. Importers and brokers can find out the maximum time for their particular commodity by contacting either their local customs office or the CFIA.

120. If the CFIA recommends release of the goods, the IPC keeps copies of the certificates, permits, and licences, and stamps the invoice with the CFIA stamp. Depending on local procedures, the IPC either submits the reviewed release package to customs for further processing or returns it to the importer or broker, who submits it to customs. If the release package is unacceptable, the CFIA attaches a reject form to the package and returns it to the importer or broker for correction.

Electronic Transmission for RMD or PARS

121. The Participants Requirements Document (PRD) will help to determine the most suitable method for a company to transmit information electronically. A copy of this document may be obtained by writing to the Manager, Electronic Commerce Unit.

122. Participants must:

(a) Be CADEX clients;

(b) Comply with the requirements outlined in the ACROSS PRD;

(c) Indicate a CADEX identifier on the first page of the customs copy of the invoice near the transaction number, or on a release information sheet accompanying the release package. An example of a release information sheet with instructions for completion is contained in Appendix 2B;

(d) Present release documents in a gold wrapper (marked LVS if the goods are valued at less than $1,600); and

(e) Provide RMD appraisal quality invoice data at the time of release or within five business days of release if using EDI release procedures.

(f) Provide RMD appraisal quality invoice data at the time of release or within five business days of release if using EDI release procedures.

Note: If the documentation to support final accounting is not available at time of release, the release package should not be submitted as a CADEX release. A non-CADEX RMD may be presented and final accounting submitted on a hard copy Form B3.

Short-Shipped Goods

123. Shortages occur when the quantity of goods reported to customs is different from what is received by the importer or broker. There are two shortage situations:

(a) Entered to Arrive (ETA) Shortages occur when the total number of packages reported does not match the number of packages received by the consignee or importer.

(b) Value Included (VI) occurs when the number of articles reported as contained in a package does not match what is actually inside.

124. The ETA and VI release options cannot be processed as short-shipped goods when:

(a) The importer/customs broker is aware that the entire quantity of the goods reported on the invoice will not be in the shipment when it arrives in Canada;

(b) The customs inspector finds that the quantity reported to be inside the package does not match the quantity found during examination of the goods;

(c) The goods are reported to be on back-order; or

(d) The goods are bonded warehouse shortages. Refer to Memorandum D4-1-2, Customs Bonded Warehouses Regulations.

Note: Only the goods that were actually shipped will be documented on the RMD package. The remaining goods will be processed separately when they arrive.

Processing

125. If a shortage is found in the shipment after release but before final accounting, the importer or broker has two options:

(a) Account for the total quantity and have the balance of the goods released as an ETA or VI when they arrive; or

(b) Provide customs with evidence of the shortage with the final accounting document and account for only those goods on hand. When the remaining goods arrive, they should not be reported as a shortage but standard release procedures will apply.

Note: If the importer or customs broker is a CADEX participant, the final accounting document will be transmitted as usual for the total quantity received. If payment is to be made for only the goods received, the evidence of shortage must be presented at the office where the goods were released so that it can be verified and attached to the original release record.

126. When goods are released as an ETA or VI, the accounting time limits will start on the date of release of the first shipment.

127. If the shortage is discovered after final accounting, either the balance of the short-shipped goods may be released as an ETA or VI, or a claim may be made for a refund if the goods are not expected to be delivered later. To obtain a refund, a claim must be submitted along with evidence of the shortage, to any customs office in the region where the goods were released. Memorandum D6-2-2, Refund of Duties, contains further information on refund procedures.

Documentation

128. The documents required so that short-shipped goods can be released as Entered to Arrive (ETA) are:

(a) One copy of the documentation supporting the claim for the shortage;

(b) One copy of a new cargo control document showing the number of pieces short-shipped and a reference to;

(c) The cargo control number of the original shipment in the description field. When more than one carrier is involved, a loading sheet from the original carrier is required to substantiate the shortage;

(d) Two copies of the invoices covering the original shipment. This invoice should contain the following information:

(1) Importer/exporter account number or business number of the importer;

(2) Transaction number of the original shipment;

(3) Notation "ETA Shortage";

(4) Original customs release office; and

(e) Documents in a gold wrapper if CADEX.

129. The documents required for short-shipped goods to be released as a Value Included (VI) transaction are:

(a) Two copies of the original documentation to support the claim for the shortage;

(b) One copy of a new cargo control document; and

(c) Two copies of an invoice containing an accurate description of the short-shipped goods. This invoice should contain the following information:

(1) Importer/exporter account number or BN of the importer;

(2) Transaction number of the original shipment (a new transaction number is not acceptable);

(3) A notation "VI Shortage";

(4) Customs office where the goods were released; and

(5) Invoice page and line number for the original transaction relating to the short-shipped goods.

Known Short Shipments

130. A commodity invoiced as a single transaction may have to be imported in separate loads due to the nature of the shipment. For example, certain machinery and equipment, and large systems such as an oil rig, must be shipped in multiple loads over a period of time. In these cases, the entire quantity of goods will be accounted for when the first shipment arrives, and the remainder will be processed upon importation as ETA. All of the ETA shipments have to be processed within 12 months from the date of accounting of the first shipment.

131. Before the goods arrive, a written request must be submitted to the chief or superintendent at the customs office where the first shipment will be imported. The request should include the following information:

(a) Reason for shortage;

(b) Name and BN of the importer;

(c) Name of the exporter;

(d) Unit of measure and quantity of goods;

(e) Value of the goods;

(f) Detailed description of the goods;

(g) Country of origin;

(h) Number of ETAs; and

(i) Estimated date(s) of arrival including the completion date.

132. If the request is approved, customs will send a letter of authorization to the importer or broker and retain the information pending the arrival of the first shipment and all ETAs.

133. For the first shipment, the importer or customs broker can present a paper PARS with the letter of authorization to the designated customs office before the goods arrive or present a copy of the letter with either a paper RMD or a Form B3 after the goods arrive.

Documents

134. The documents required for this type of ETA release are:

(a) A copy of the letter of authorization;

(b) A new cargo control document; and

(c) Two copies of the invoice(s) covering the original shipment containing the following information:

(1) Importer/exporter account number or BN of the importer;

(2) Transaction number of the original shipment;

(3) Name of the original customs release office;

(4) Notation "ETA Shortage"; and

(5) Actual quantity being released.

135. Following normal ETA processing in ACROSS, customs will retain a copy of the ETA release package. When an ETA is processed at a customs office other than the original office of release, the customs copy of the ETA release package will be forwarded to the original office of release.

SPLIT SHIPMENTS AIR MODE

136. In the case of a split shipment, the duties payable on the total quantity must be accounted for and the remaining portion released as ETA goods. The same procedures will apply as for the ETA procedures outlined earlier in this Memorandum, except that the carrier must submit the original cargo waybill stamped "split shipment" to customs to support the release of the subsequent shipments. Memorandum D3-2-2, Air Cargo - Import Movements, contains the reporting requirements for split shipments arriving by air.

HOURS OF RELEASE

Regular Office Hours

137. Requests for release of goods must be submitted to customs during authorized hours of commercial service in time to allow processing and examination of the goods. Memorandum D1-1-1, List of Customs Offices, shows the hours of business at customs offices across Canada. If the release is requested outside the authorized hours of service, special service charges may apply. Memorandum D1-2-1, Special Services, contains additional information concerning hours of service and special service charges.

138. Release requests may be transmitted electronically 24 hours a day, seven days a week.

After Hours

139. Documentation requirements for goods released outside business hours are the same as for authorized hours. When it is not possible to provide a transaction number in bar-coded format at time of release, release may be obtained if an index card (4 × 6 inches) is provided containing the following information:

(a) Importer name;

(b) Importer/exporter account number or business number;

(c) Name of customs broker (if applicable); and

(d) Name of sub-agent (identified as the sub-agent, if applicable), and account security number.

140. At the time of release, the customs copy of the release documents must indicate the account security number of the importer or broker who will account for the release transaction. Importers and brokers should ensure that the transaction number is affixed to the release documents being held at the customs office by 11:00 a.m. the next business day after release.

INLAND ALTERNATE SERVICE

141. Under the Inland Alternate Service Program, a number of small customs offices receive inland commercial services from nearby larger offices, referred to as "hubs." Local importers and brokers provide documentation to customs for processing at the hub by facsimile or by Electronic Data Interchange (EDI) transmission.


Last updated: 2002-05-09	Top of page	Important notices

Memorandum D17-1-5

SECTION 2 - RELEASE

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