Memorandum D8-3-7
Locator Code 159B

In Brief

Ottawa, January 29, 1999

SUBJECT

TARIFF ITEM NO. 9928.00.00 AND
THE PRINTED MATERIAL FOR FOREIGN
CARRIERS REMISSION ORDER

This Memorandum has been revised to correct the special authorization code for the Printed Material for Foreign Carriers Remission Orderto read 95-1202.

Memorandum D8-3-7
Locator Code 159B

Ottawa, October 9, 1998

SUBJECT

TARIFF ITEM NO. 9928.00.00 AND
THE PRINTED MATERIAL FOR FOREIGN
CARRIERS REMISSION ORDER

This Memorandum outlines the conditions under which printed material imported for use by foreign airlines qualifies for duty-free entry and relief from the goods and services tax/harmonized sales tax (GST/HST). The customs duty relief, previously provided by the Printed Material for Foreign Carriers Remission Order, has now moved to tariff item No. 9928.00.00 of the schedule to the Customs Tariff. However, the Order was amended to retain the same GST/HST relief.

TABLE OF CONTENTS

• Guidelines and General Information
  • Goods and Services Tax/Harmonized Sales Tax (GST/HST)
  • Corrections and Re-Determinations
  • Failure to Comply
  • Audit, Examination, or Verification
  • Interest and Penalties
  • Additional Information
  • Appendix A - Customs Tariff, tariff item No. 9928.00.00
  • Appendix B - Printed Material for Foreign Carriers Remission Order

GUIDELINES ANDGENERAL INFORMATION

1. The Deputy Minister of National Revenue is satisfied that the following foreign countries grant a privilege similar to that contained in tariff item no. 9928.00.00 and the Printed Material for Foreign Carriers Remission Orderto airlines registered in Canada. The airlines registered in these countries may be extended the benefits of the tariff item and the Order:

Antigua
Argentina
Australia
Austria
Barbados
Belgium
Brazil
Bulgaria
Chile
China (People's Republic of)
Costa Rica
Cuba
Czech Republic
Denmark
Dominican Republic
El Salvador
Egypt
Fiji
Finland
France
Germany (Federal Republic of)
Greece
Guatemala
Haiti
Hong Kong
Hungary
Iceland
Indonesia
Ireland
Israel
Italy
Ivory Coast
Jamaica
Japan
Jordan
Korea (Republic of)
Malaysia
Mexico
Morocco
Netherlands
New Zealand
Nicaragua
Norway
Pakistan
Panama
Peru
Philippines
Poland
Portugal
Romania
Russia
St. Kitts and Nevis
Saint Lucia
Saudi Arabia
Singapore
Slovak Republic
Spain
Sweden
Switzerland
Taiwan
Thailand
Trinidad and Tobago
Turkey
Ukraine
United Kingdom
United States of America
Venezuela
Yugoslavia

2. A remission or refund may not be granted for customs penalties paid on imported goods.

3. The term "other advertising material" refers to products made of paper and does not include such items as golf bags, flight bags, umbrellas, glasses, calculators, pens, and T-shirts.

4. Legal Note 3 to Chapter 99 requires imported goods that qualify under a tariff item in Chapter 99 to be classified under a dual tariff classification system. Legal Note 3 reads as follows:

Goods may be classified under a tariff item in this Chapter and be entitled to the Most-Favoured-Nation Tariff or a preferential tariff rate of customs duty under this Chapter that applies to those goods according to the tariff treatment applicable to their country of origin only after classification under a tariff item in Chapters 1 to 97 has been determined and the conditions of any Chapter 99 provision and any applicable regulations or orders in relation thereto have been met.

5. Accordingly, the regular ten-digit classification number applicable to the goods under Chapters 1 to 97 must appear in field 27 of Form B3, Canada Customs Coding Form. The first four digits of the appropriate Chapter 99 tariff item, in this case 9928, appear in field 28 of Form B3.

Goods and Services Tax/Harmonized Sales Tax (GST/HST)

6. The Printed Material for Foreign Carriers Remission Orderhas been amended to retain the same GST/HST relief.

7. All customs documents relating to goods for which remission has been claimed according to this Order are to bear the number of this Order in Council, in the "Special Authority" field, in the following format: 95-1202.

Corrections and Re-Determinations

8. In accordance with subsection 32.2(2) of the Customs Act, the importer is obligated to make a correction to declarations of tariff classification, value for duty, and origin within 90 days after the importer has reason to believe that the original declaration is incorrect. For example, if the importer realizes that the airline is not entitled to use the provisions of tariff item no. 9928.00.00, the goods are no longer in compliance with a tariff item condition and the importer is obligated to adjust the accounting declaration for the goods.

9. To correct a declaration, Form B2,Canada Customs - Adjustment Request, should be submitted to the appropriate regional customs office and any customs duties and taxes owing paid. A correction shall be treated for the purposes of the Customs Actas if it were a re-determination under paragraph 59(1)(a) of the Customs Act.

10. The obligation to make a correction in respect of imported goods ends four years after the goods are accounted for under subsection 32(1), (3), or (5) of the Customs Act.

11. For more information on the filing of corrections, refer to Memorandum D11-6-6, Self-Adjustments to Declarations of Origin, Tariff Classification, Value for Duty, and Diversion of Goods.

Failure to Comply

12. If the goods no longer qualify under tariff item No. 9928.00.00, they will also fail to comply with the terms of the Printed Material for Foreign Carriers Remission Order.Under subsection 118(1) of the Customs Tariff,within 90 days after the date of failure to comply, the importer must report the failure to comply to a customs officer and pay an amount equal to the amount of duties, in this case the GST/HST, that were relieved.When filing Form B2, the importer must ensure that the "Special Authority" field is left blank.

13. Importers can submit Form B2 under a dual authority, in this case subsections 32.2(2) of the Customs Actand 118(1) of the Customs Tariff.

Audit, Examination, or Verification

14. If as a result of an audit, examination, or verification by the Department, goods are found to have been declared incorrectly, the customs duties payable on the goods will be subject to a re-determination or further re-determination under paragraph 59(1)(a) or (b) of the Customs Act,whichever is applicable.

15. Under subsection 118(1) of the Customs Tariff, where the importer has failed to comply with the terms of the Remission Order, an amount equal to the duties relieved will be owing. In this case, the GST/HST and any other excise taxes normally assessed against the printed material will be owing.

Interest and Penalties

16. In accordance with subsection 33.4(1) of the Customs Act, the importer is liable to pay interest against any outstanding customs duty amount owed to the Department, from the day following the original date of accounting until the amount is paid in full. The interest will be calculated at the specified rate beginning on the first day after the date the importer became liable to pay the customs duties. For example, where it is determined that the goods were imported incorrectly under tariff item No. 9928.00.00 for the reason mentioned in paragraph 3, the importer is obligated to pay interest on the customs duty amount owing from the day following the date of release until the amount owing is paid.

17. Under subsection 123(2) of the Customs Tariff, interest at the specified rate is also owing against any duties owed to the Department for the period beginning on the day that the goods were no longer in compliance with the terms of the Remission Order and ending on the day the amount is paid in full. However, under subsection 123(4) no interest will be incurred if the importer pays the amount owing within 90 days of the date of failure to comply. Continuing with the example in paragraph 10, if the GST/HST and any excise taxes owing on the printed material are paid within 90 days, no interest will be charged on that portion of the amount owing. If the GST/HST and any other excise taxes are not paid until after 90 days, interest will be charged as of the date of failure to comply.

18. As per subsection 109.11(2) of the Customs Act,every person who fails to comply with section 32.2 of the Customs Actor subsection 118(1) of the Customs Tariff, is liable to pay a penalty of 5% of the duties owing plus an amount equal to 1% of the duties owing multiplied by the number of complete months, not exceeding 12 months, until the amount is paid in full. Continuing with the example in paragraph 11, if the importer submits Form B2 to adjust the accounting declaration for the goods, to pay the customs duty and interest owing, and to pay an amount equivalent to the GST/HST and any other excise taxes relieved, within 90 days of the original date of accounting, no penalty will be applied. If the importer does not submit Form B2 until 95 days from the original date of accounting, the importer may be subject to a penalty of 5% of the duties owing plus 1% of the duties owing multiplied by three months.

19. Furthermore, where the importer again fails within three years of the original infraction under subsection 109.11(2) to comply with section 32.2 of the Customs Act, as per subsection 109.11(3) of the Customs Act, the penalty owing will be 10% of the duties owing plus an amount equal to 2% of the duties owing multiplied by the number of complete months, not exceeding 20 months, until the amount is paid in full.

20. Memorandum D11-6-5, Interest and Penalty Provisions: Determinations/Re-Determinations, Appraisals/Re-Appraisals, and Duty Relief, provides additional information on interest and penalty provisions.

Additional Information

21. For further information or assistance regarding tariff item No. 9928.00.00, please contact:

22. For GST information, please contact:

APPENDIX A

CUSTOMS TARIFF

The tariff item No. 9928.00.00 reads as follows:

9928.00.00 The following printed material, imported by or on behalf of an airline registered in a foreign country, for use exclusively in the promotion and operation of air services provided by that airline, on condition that the country of that airline grants a similar privilege to airlines registered in Canada:

Folders, brochures, advertising calendars, maps, posters, tour shells and displays;
Window transparencies (decals), signs and placards;
Unframed photographs;
Price lists, tariffs, bulletins, manuals and tariff publications;
Timetables;
Ticket forms, miscellaneous charge orders and air waybills;
Baggage tags, tapes and labels;
Cargo tags, tapes and labels;
Printed blank forms, envelopes, postcards and letterheads;
Technical and instructional materials; and
Other advertising material distributed without charge for promotional use.

APPENDIX B

PRINTED MATERIAL FOR
FOREIGN CARRIERS REMISSION ORDER

ORDER RESPECTING THE REMISSION OF THE
TAX IMPOSED UNDER DIVISION III OF PART IX
OF THE EXCISE TAX ACTON PRINTED MATERIAL
IMPORTED FOR USE BY FOREIGN CARRIERS

Short Title

1. This Order may be cited as the Printed Material for Foreign Carriers Remission Order.

Interpretation

2. In this Order,

"printed material" means the goods described in the annexed schedule;
"foreign carrier" means an airline registered in a foreign country;
"Canadian carrier" means an airline registered in Canada.

Remission

3. Remission is hereby granted of the tax paid or payable under Division III of Part IX of the Excise Tax Acton printed material imported into Canada by or on behalf of a foreign carrier for use exclusively in the promotion and operation of air services provided by that carrier on condition that, at the time of importation, the country of the foreign carrier grants a similar privilege to Canadian carriers.

SCHEDULE

(1) folders, brochures, advertising calendars, maps, posters, tour shells, displays

(2) window transparencies (decals), signs, placards

(3) unframed photographs

(4) price lists, tariffs, bulletins, manuals, tariff publications

(5) time tables

(6) ticket forms, miscellaneous charge orders, air waybills

(7) baggage tags, tapes and labels

(8) cargo tags, tapes and labels

(9) printed blank forms, envelopes, post cards and letterheads

(10) technical and instructional materials

(11) other advertising material distributed without charge for promotional use.

REFERENCES

ISSUING OFFICE -

Trade Incentives Program
Remissions Policy Unit

LEGISLATIVE REFERENCES -

Financial Administration Act, section 17
Order in Council P.C. 1980/1674, June 19, 1980,
   as amended by SI/91-12, as revoked by Order in
   Council P.C. 1995-1201, July 26, 1995, as replaced
   by Order in Council P.C. 1995-1202, July 26, 1995,
   as amended by Order in Council P.C. 1997-1998,
   December 29, 1997.
Customs Tariff, tariff item No. 9928.00.00

HEADQUARTERS FILE -

6564-33

SUPERSEDED MEMORANDA "D" -

D8-3-7, January 1, 1991

OTHER REFERENCES -

D11-6-5
D11-6-6