Customs Bonded Warehouse Program

Act: Customs Tariff, S.C. 1997.e.36 as amended by 1998, c. 19, 1999, c.17
Regulation: Customs Bonded Warehouses Regulations, SOR/96-46, as amended by sor/99-106

To Whom Does This Apply?

Anyone wishing to operate a customs bonded warehouse.

Summary

Customs bonded warehouses are Canada Border Services Agency (CBSA) licensed and regulated facilities operated by the private sector where goods can be stored duty free and tax free (generally for up to four years) until they are exported or are consumed domestically.

Importers who use these warehouses must:

• have a duly completed bonded application, Form E401;
• have a site plan;
• pay an annual license fee;
• post a security deposit.
   
  Licensees have to keep inventory-related records of receipt, removal, transfer and alteration of goods. They also have to provide specified facilities, equipment and personnel. Licensees also have to meet appropriate operational standards.

Most goods waiting to be exported or for CBSA release can be stored in these warehouses for up to four years, although certain goods can be stored for up to 15 years. The warehouses defer total duties and taxes payable until the goods are either consumed domestically, exported, or the time limits noted above have expired.

What Are the Benefits?

Importers who use these warehouses enjoy one or more of the following advantages:

• on-site storage;
• just-in-time delivery;
• less of their cash tied up in duties and taxes.

There are roughly 675 customs bonded warehouses across Canada. All goods in these warehouses have to be entered on a B3, Canada Customs Coding Document and be accounted for when they are removed. Many customs bonded warehouses hold ships stores, which have been authorized for duty free sale or transfer to ships or aircraft (see Related Programs).

Are There Any Requirements?

Customs bonded warehouse operators have to let the CBSA see their warehoused goods and have to make their records available. They must keep records on goods for six years after the goods are removed from the warehouse.

Are There Any Restrictions?

Certain restrictions apply to certain products. The provincial liquor boards have to authorize alcohol storage. Imported tobacco can be taken from a warehouse and either:

• sold to foreign diplomats in Canada;
• sold for export;
• moved to a duty free shop;
• transferred as ship stores.

CBSA customs bonded warehouses are licensed under Section 91 of the Customs Tariff. The Act governs the issuing of licenses for the operation of any place  as a bonded warehouse. Such warehouses store goods that have not been released or are destined for exportation. The Customs Bonded Warehouses Regulations specify the requirements for the licensing and operation of bonded warehouses.

If you require personal assistance contact the Customs Client Services Office closest to you (see Related Reading: Customs Offices - Supplement or from Canada Border Service Agency's Web site for a list of addresses).

DISCLAIMER
Information contained in this section is of a general nature only and is not intended to constitute advice for any specific fact situation. For particular questions, the users are invited to contact their lawyer. For additional information, see contact(s) listed below.

Quebec Contact(s):
See National Contact.

---

National Contact(s):
Border Information Service - BIS
Canada Border Services Agency
Telephone: 204-983-3500 or 506-636-5064
Toll-free (information): 1-800-461-9999
Web site: http://www.cbsa.gc.ca/menu-eng.html