Duty Deferral Program - Duties Relief

Act: Customs Tariff, S.C. 1997, c. 36 as amended by 1998, c.19, 1999, c.17.
Regulation: Duties Relief Regulations, SOR/96-44, as amended by SOR/98-55

To Whom Does This Apply?

The program is available to businesses who import goods into Canada or receive goods that were imported into Canada which have been, or will be, exported from Canada.

It may apply to importers, manufacturers, processors, exporters, customs brokers, and manufacturing and trade associations with an interest in international trade.

When more than one person is eligible to claim a relief of duty, the Canada Border Services Agency (CBSA) needs waivers from the other eligible claimants before it can process your claim.

Summary

The Duties Relief Program relieves the payment of duties on imported goods that will eventually be re-exported either in the same condition or after being used, consumed or expended in the processing of other goods. Relief of the GST is also available, under certain circumstances.

As of 1 January 1996, Duty Deferral Programs , Duty Drawback Program D7-4-2, Duties Relief Program D7-4-1 and Customs Bonded Warehouse Program D7-4-4 were consolidated and streamlined to help improve the competitiveness of Canadian businesses of all sizes, by allowing as much up-front relief of duties as possible to ease cash flow pressures.

Are There Any Conditions?

The Customs Tariff provides relief against the imposition of certain duties. Under section 89 of the Tariff and under the Duties Relief Regulations, you may be eligible for a relief of duties if you have complied with the following conditions.
The goods have been:

• released and subsequently exported in the same condition in which they were imported;
• released and processed in Canada and subsequently exported;
• released and directly consumed or expended in the processing in Canada of goods subsequently exported;
• released and the same quantity of domestic or imported goods of the same class is processed in Canada and subsequently exported;
• released and the same quantity of domestic or imported goods of the same class is directly consumed or expended in the processing in Canada of goods subsequently exported.

Are There Any Restrictions?

You must be able to maintain sufficient records which will allow the CBSA to conduct a verification of the goods imported under the program and the goods must be for eventual exportation. If you maintain inadequate records, the CBSA may impose sanctions.

To participate in the program, you must return Duties Relief Application (Form K90) to a CBSA Customs Client Services office. When it is approved, a unique certificate number will be issued to you. This number is applied, at the time of importation, to imported goods you have determined qualify for the program. The certificate number can also be applied to domestic purchases of imported goods from other program participants, when they are intended for export. You must pay duty on any goods which no longer qualify for relief.

Are There Any Exceptions?

No relief is available for goods that are damaged before being exported.

Are There Any Exclusions?

Tobacco products are excluded from these regulations.

Are There Any Restrictions?

In cases where the eligible goods are exported to the U.S. on or after 1 January 1996, or to Mexico on or after 1 January 2001, the NAFTA agreement may restrict the amount of relief granted (for more information, consult D7-4-3).

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).

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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.

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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