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Import Regulatory / Legal

Basics for Getting Started

There are some basic regulatory requirements that are likely to affect you when starting your business. Requirements include registering your business name, obtaining a business license and paying taxes.

For more information on basic regulatory requirements, visit Small Business BC’s website at: http://www.smallbusinessbc.ca

Acts and Regulations

The following information should help you understand the main features of the primary regulations governing importing, and is not meant in any way to provide a legal interpretation.

Business Number (BN)
All Canadian individuals or businesses importing or exporting on a commercial basis must get a Business Number in order to account for their goods. Foreign-based or non-resident importers must also get a BN.

Import Permits
Under the Export and Import Permits Act, some goods and some destinations of goods require that an importer first receive a Federal import permit from the Department of Foreign Affairs and International Trade .

The Export and Import Controls Bureau under DFAIT is responsible for assisting importers to determine if import permits are required. They also publish brochures and Notices to Importers that are freely available on request. Importing goods that are on the Import Control List to Canada for commercial or personal purposes is controlled by a series of quotas and import licenses.

A permit may be issued when a proper application is received and presented to DFAIT. The permit issued is required by the Canada Border Service Agency at the time of importation. Importers may also have to follow other rules such as those administered by the Canada Border Service Agency.

How to obtain an import permit
You can obtain an “Import Permit Application” from the Export and Import Controls Bureau. You can also obtain a permit from any of the custom brokers who are online with DFAIT’s computer system and have the authority to issue import permits on their behalf.

Permit fees
A fee of $15 to $31 according to the total value of the goods of the permit, for each import permit issued at the Export and Import Controls Bureau.

A fee of $10 to $26 according to the total value of the goods of the permit will be levied for each import permit delivered at customs brokers installations.

Processing Time
Routine import permit applications are processed within 24 hours of receipt. If your import permit application lacks the necessary supporting documentation or if quota limitations have been exceeded, you will be notified within two weeks of receipt.

Tariff Treatment - Origin - Imported Goods
The Canadian Customs Tariff includes 11 separate tariff treatments. Goods imported into Canada may be subject to one of these 11 separate tariff treatments. These treatments have been established as the result of trade agreements (such as NAFTA) negotiated with Canada’s trading partners. Some treatments have been established unilaterally for various reasons, such as granting preferential duty treatment to developing countries.

Goods imported from the few countries that are not members of the General Agreement on Tariffs and Trade (GATT), or from countries with which Canada has no other trade agreements, are subject to a 35 percent duty under the General Tariff. Goods imported into Canada from all other countries are subject to the Most Favoured Nation Tariff.

Rules of origin are used to see if goods qualify for a particular tariff treatment. For goods to be said to originate in a country, a minimum value usually has to be added to those goods in that country.

Imported goods have to be classified correctly to see if they are covered under the tariff schemes. To apply the rule of origin for preferential NAFTA treatment, the Canada Border Services Agency must also approve the tariff classification of the materials used in the production of the imported goods.

To get the benefits of a particular tariff treatment, imported goods must also meet certification and direct shipment conditions.

Records for Imported Goods
This regulation applies to importers of commercial or casual goods, holders of sufferance and bonded warehouse licenses, duty free shop licenses and duty relief certificates. The Customs Act governs the administration and enforcement of custom laws. The Act specifies the reporting requirements for import and export.

Under the Customs Act, every person who imports goods for sale or for any industrial, occupational, commercial, institutional, or any other use shall keep records for those goods at the place of business for a specified amount of time designated by the Minister.

Free Trade Agreements

Canada is a member of a several free trade agreements, which you as an importer, will need to be familiar with if you intend on doing business with the member countries. These agreements include the North American Free Trade Agreement, the Canada-Chile Free Trade Agreement and Canada - Israel Free Trade Agreement.

North American Free Trade Agreement (NAFTA)
NAFTA came into force on January 1,1994. By 2003, the agreement eliminated tariffs among Canada, Mexico and the United States on nearly all-qualifying goods. Under NAFTA, a tariff-reduction schedule was worked out for trade with the U.S. and Mexico whereby tariffs would be reduced over a five-year and ten-year period respectively from the implementation date.

Most of Mexico’s non-tariff barriers, such as import licenses will also be eliminated during this period.

The key provisions of NAFTA are: Elimination of Tariffs, National Treatment, Secure Market Access, Dispute Settlement, Government Procurement, Business Travel and Intellectual Property. A number of documents explaining the agreement are available from DFAIT. Contact Canada Revenue Agency and Canada Border Services Agency for more answers to specific tax and customs-related questions.

Canada-Chile Free Trade Agreement (CCFTA)
Legislation to implement the Canada-Chile Free Trade Agreement entered into force on July 5,1997. The trade agreement’s key features are as follows: Immediate duty-free access for 85 percent of Canadian exports and the elimination of Chile’s 11 percent import duty on almost all remaining industrial and resource-based goods over 5 years; much better access for a range of agricultural goods; the Double Taxation Agreement was signed in November 1999 went into effect January 1, 2000; creation of a dispute resolution commission; side agreements on environment and labour; and the mutual elimination of anti-dumping duties within a maximum of six years.

Canada - Israel Free Trade Agreement (CIFTA)
The Canada - Israel Free Trade Agreement (CIFTA) was adopted on December 30, 1996, and came into force on January 1, 1997.

The main elements of the Agreement are: Tariffs have been removed from the vast majority of industrial products of Canadian or Israeli origin beginning January1 1997; duty-free access or low duties have been applied to a variety of agricultural and fisheries products exported by both countries; creation of a dispute resolution commission.

Trade Agreements Information
For general information on free trade agreements, visit DFAIT’s website.

Inspection

To ensure that prohibited and controlled goods are not illegally imported into, or exported out of, the country, some government departments prohibit certain goods from entering or leaving
Canada. Certain goods are controlled, meaning that permits, certificates, labelling or authorizations from a federal department are needed before the goods can be released by the Canada Border Services Agency, which holds them until the importer or exporter meets all the requirements. For more information, you may contact the Customs office.

Here are main items for which inspection requires:

Food
Canadian Food Inspection Agency delivers inspection and related services for importers to contribute to a safe and wholesome food supply and facilitate trade in food, animals, plants and their products.

Drugs
The Food and Drugs Act and Regulations set requirements for the production and sale of food and drug products. The Act governs the manufacturing, producing, marketing, labelling, importing and exporting of foods and drugs. The Act contains provisions for inspection and enforcement, and contravention of the Act can result in fines and imprisonment.

Explosive Goods
CANMET’s Explosive Regulatory Division is responsible for administering Canada’s Explosives Act and Regulations. This is done through a system of licences and permits supported by a compliance inspection program. The Division’s principal thrust is public and worker safety throughout Canada.

Hazardous Wastes
The Canadian Environmental Protection Act (CEPA) establishes the procedures for applying for, and receiving permission to, export, import or transit hazardous waste, whether destined for disposal or recycling. Any person who intends to export out of Canada or import into Canada or transit through Canada hazardous wastes, whether destined for disposal or recycling.

Packaging and Labelling

The Consumer Packaging and Labelling Act is applicable to any person who is a retailer, manufacturer, processor or producer of a product, or a person who is engaged in the business of importing, packing or selling any product.

Under the Consumer Packaging and Labelling Act, the Competition Bureau administers the packaging and labelling of non-food products at all levels of trade. This Act also contains a prohibition against labels on pre-packaged products containing any false or misleading information.

With a few exceptions, all packaged products sold to the public are required to carry the following information on the label: Basic information under The Act; common or generic name of product in English and French; net contents by weight, volume, count or measure in metric unit (type size of declaration in direct relation to size of package); and name and address of a responsible party - manufacturer, packager or retailer.

For more information, go to the following website for the Guide to the Consumer
Packaging and Labelling Act and Regulations:
http://strategis.ic.gc.ca/epic/internet/incbbc.nsf/vwGeneratedInterE/cp01144e.html

Labelling Assessment Tools
The Labelling Assessment Tools are intended to help you meet the labelling requirements of federal legislation.

Clothing and Textile – CA Number
A CA Number is a five-digit identification number preceded by the letters “CA”. Under the Regulations, most consumer textile articles offered for sale in Canada, including clothing, carpets, upholstered furniture coverings, bedding, fabrics sold by the meter and other household textiles must bear a label with information on fibre content and dealer identity. Fibre content information must be provided in English and French.

The Competition Bureau maintains a database of all CA identification numbers with a corresponding business name and address. The public may access information from this database by contacting the Competition Bureau’s Information Centre, or by visiting the Bureau’s website.

Food - See Inspection section.

Non-Food
Under the Consumer Packaging and Labelling Act, non-food products at all levels of trade should meet the following three mandatory labelling requirements: (1) product identity; (2) product net quantity; (3) dealer’s name and principal place of business. This information must be included in both official languages except the dealer’s name and address, which can appear in either language.

Standards Council of Canada
The Standards Council of Canada is a federal Crown corporation that promotes efficient and effective voluntary standardization in Canada. Through its publications and Internet site the SCC provides information about standards in Canada and around the world. It is also the enquiry point for Canada for the North American Free Trade Agreement (NAFTA) and World Trade Organization (WTO).

CSA International
CSA International is an independent, Canadian-based, not-for profit organization that focuses on improving public safety and helping manufacturers become more competitive in global markets. Services are provided through three operating divisions: Standards Development, Certification & Testing, and Quality Management.

The Association has over 1500 publications in the electrical/electronic, communications, quality management systems, environmental, construction, and health and safety fields. Standards are available in book form, diskette, or on the new CD-ROM CSA Standards Browser.