Memorandum D4-1-5

In Brief

Ottawa, May 14, 1999

Subject

Storage of goods regulations

1. The attached Memorandum supersedes Memorandum D4-1-5 dated July 24, 1989.

2. The changes can be summarized as follows:

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Locator Code 874A

Memorandum D4-1-5

Ottawa, May 14, 1999

Subject

Storage of goods regulations

This Memorandum outlines the procedures to be followed by customs in storing goods pending clearance or disposal.

TABLE OF CONTENTS

• Regulations 2
• Guidelines and General Information 6
  • General 6
  • Place of Safekeeping 6
  • Types of Warehouses 6
  • Highway Frontier Examining Warehouse 6
  • Queen's Warehouse 7
  • Sufferance Warehouse 7
  • Bonded Warehouse 7
  • Security of Held Goods 8
  • Storage of Firearms and Other Weapons 9
  • Storage Charges 9
  • Customs Office and Highway Frontier Examining Warehouse 9
  • Queen's Warehouse 9
  • Form E44, Customs Notice - Unclaimed Goods 10
  • Time Limits for Issuing Form E44 11
  • Processing by Revenue Canada 12
  • Transfer of Goods 13
  • Procedures for Claiming Goods Prior to Forfeiture 13
  • Additional Information 15
  • Appendix A - Form E44, Customs Notice - Unclaimed Goods
  • Appendix B - Form E45, Inventory Control Log for Seized, Forfeited, Detained, Abandoned, and Unclaimed Goods

REGULATIONS

REGULATIONS RESPECTING THE STORAGE OF GOODS

Short Title

1. These Regulations may be cited as the Storage of Goods Regulations.

Interpretation

2. In these Regulations,

"Act" means the Customs Act; (Loi)

"business day" means any day on which the customs office is open and accepts delivery or removal of commercial goods; (jour ouvrable)

"commercial goods" means goods for sale for any commercial, industrial, occupational, institutional or other similar use that are imported into Canada or exported from Canada; (marchandises commerciales)

"place of safekeeping" means a place designated by the Minister of National Revenue pursuant to section 37 of the Act for the safekeeping of goods; (lieu du dépôt)

"strike" has the same meaning as in the Public Service Staff Relations Act. (grève)

Class of Goods

2.1 Tobacco products are hereby prescribed as a class of goods for the purposes of section 39.1 of the Act.

Time Limit for Removal of Goods Left at a
Customs Office

3.(1) Subject to subsections (2) to (4), where goods in a customs office have not been removed from the customs office within 40 days after the day the goods were reported under section 12 of the Act, the goods may, at the end of that limitation period, be deposited in a place of safekeeping as provided for in subsection 37(1) of the Act.

(2) Where perishable goods in a customs office have not been removed therefrom within four days after the day on which they are reported under section 12 of the Act, the goods may be deposited in a place of safekeeping as provided in subsection 37(1) of the Act.

(3) Where goods in a customs office are prescribed substances within the meaning of the Atomic Energy Control Act or prescribed items within the meaning of the Atomic Energy Control Regulations, and the goods have not been removed from the customs office within 14 days after the day on which the goods are reported under section 12 of the Act, the goods may be deposited in a place of safekeeping as provided in subsection 37(1) of the Act.

(4) Where tobacco products in a customs office have not been removed from the customs office within 14 days after the day they were reported under section 12 of the Act, the tobacco products, at the end of that limitation period, are forfeit.

Storage Charges for Commercial Goods Left at a
Customs Office

4.(1) Subject to subsection (2), commercial goods left at a customs office in accordance with paragraph 19(1)(e) of the Act are subject to the storage charges set out in the schedule, beginning on the fourth business day after the day on which the commercial goods were left at the customs office.

(2) No storage charges are payable pursuant to subsection (1) on

Time Limit for Removal of Goods From a
Place of Safekeeping

5.(1) For the purposes of subsection 39(1) of the Act and subject to subsections (2) and (3), goods that have not been removed from a place of safekeeping within 30 days after they were deposited therein are, at the termination of that period of time, forfeit.

(2) For the purposes of subsection 39(1) of the Act, perishable goods that have not been removed from a place of safekeeping within 24 hours after they were deposited therein are, at the termination of that period of time, forfeit.

(3) For the purposes of subsection 39(1) of the Act, goods that are prescribed substances within the meaning of the Atomic Energy Control Act or prescribed items within the meaning of the Atomic Energy Control Regulations and that have not been removed from a place of safekeeping within 24 hours after they were deposited therein are, at the termination of that period of time, forfeit.

Storage Charges for Goods Deposited in a
Place of Safekeeping

6.(1) Subject to subsection (2), the storage charges set out in the schedule shall be paid for goods deposited in a place of safekeeping operated by Her Majesty in right of Canada.

(2) No storage charges are payable on goods deposited in a place of safekeeping operated by Her Majesty in right of Canada if

SCHEDULE(sections 4 and 6)

Item	Column I Item Description of Goods	Column II Storage Charges
1.	Any automobile, truck or other vehicle and any self-propelled machinery	$10 per day or part thereof
2.	Any shipment of goods other than goods described in item 1	$0.45 per 50 kg or part thereof per day or part thereof, with a minimum charge of $5 per day

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GUIDELINES AND GENERAL INFORMATION

GENERAL

1.  The following locations have been designated as customs offices pursuant to section 5 of the Customs Act:

PLACE OF SAFEKEEPING

2. The following locations may be designated as a place of safekeeping pursuant to section 37 of the Customs Act:

TYPES OF WAREHOUSES

Highway Frontier Examining Warehouse

3. A highway frontier examining warehouse is one where goods, which are not moving inland by a bonded carrier to a sufferance warehouse, are held before they are released by Revenue Canada.  These warehouses have been established at most points of importation adjacent to the Canada-United States international boundary and are operated by Revenue Canada.  Goods which have been placed in a highway frontier examining warehouse must not be removed by the carrier until authorized to do so by customs.

4. Truck drivers may park vehicles overnight in customs detention yards if space permits.  Loaded vehicles using detention yards for day or night parking will be sealed by customs when they arrive.

Queen's Warehouse

5. A Queen's warehouse is one that is used to store seized, forfeited, detained, abandoned, and unclaimed goods before they are released or disposed of by Revenue Canada pursuant to the Act.  These warehouses are operated by Revenue Canada.

Sufferance Warehouse

6. Sufferance warehouses are privately owned and operated facilities licensed by the Department for the control, short-term storage, and examination of in-bond goods until they are released by Revenue Canada or exported from Canada.  More information concerning sufferance warehouses can be found in Memorandum D4-1-4, Customs Sufferance Warehouses.

Bonded Warehouse

7. Bonded warehouses are used for the long-term storage of imported goods.  Specific time limits can be found in Memorandum D4-1-0, Customs Bonded Warehouses Regulations, in the schedule to section 19 of the Regulations.  Duties and taxes only become payable when the goods are entered into the domestic market.  There are two types of bonded warehouses:

8. Further information concerning bonded warehouses can be found in Memoranda D4-1-0, D4-1-2, Customs Bonded Warehouses Regulations, and D7-4-1, Duty Deferral Program.

SECURITY OF HELD GOODS

9. Customs officials must exercise care in the handling of goods and vehicles stored in customs offices, highway frontier examining warehouses, Queen's warehouses, and customs detention yards.

10. The chief officer of customs at the location where the goods are stored is responsible for ensuring that the appropriate measures are taken to safeguard them against damage or loss.  An inventory control log should be maintained so that an accurate record of held goods is available.  Appendix B contains further information on the inventory control log.  Goods that have been seized, forfeited, detained, abandoned, or unclaimed under the Act should only be stored in secure areas, separate from other goods.  The chief officer must ensure that the secure area is strictly controlled.  These controls should include the number and placement of keys and access to the held goods and their records.

11. The Crown Liability Act and the Claims Regulations provide for the payment of damage claims resulting from negligence, a wrongful act, or a breach of duty on the part of employees of the Crown.  The Regional Accounting Unit should be contacted regarding procedures for handling damage or loss claims.

12. Goods that are not moved to a Queen's warehouse should be checked regularly to ensure they remain on hand and are disposed of as soon as possible after the applicable retention period for that type of goods.

STORAGE OF FIREARMS AND OTHER WEAPONS

13. Pursuant to section 3(1) of the Public Agents Firearms Regulations, customs must store firearms in a container, receptacle, vault, safe, or room that is kept securely locked and that is constructed so that it cannot readily be broken open or into.

14. Further information concerning firearms and other weapons can be found in Memorandum D19-13-2, Customs Tariff - Criminal Code - Importation of Offensive Weapons.

STORAGE CHARGES

Customs Office and Highway Frontier Examining Warehouse

15. Commercial goods held in a customs office or a highway frontier examining warehouse are subject to the storage charges set out in the Schedule to the Storage of Goods Regulations, beginning on the fourth business day after the day the goods were left.  The only exception is goods that fall under the circumstances outlined in subsection 4(2) of the Regulations.

16. Goods will not be released until the storage charges are paid, unless the importer or broker has release prior to payment privileges. Form K21, Cash Receipt, will be issued as a receipt of payment for storage charges.  Where the goods have been listed on Form E44, Customs Notice - Unclaimed Goods, the applicable number from that form should be shown on Form K21.

Queen's Warehouse

17. Commercial goods stored in a Queen's warehouse are subject to the storage charges set out in the Schedule to the Storage of Goods Regulations, beginning on the day they are moved there.  The only exception is goods that fall under the circumstances outlined in subsection 6(2) of the Storage of Goods Regulations.  Storage charges will apply up to the time the goods are removed from the warehouse.

18. Form K21, indicating the weight of the shipment, the storage period, the amount of storage charges, and the applicable number from Form E44 will be issued as a receipt of payment for storage charges.  Where required, the goods will be referred for examination in the usual manner.

Form E44, Customs Notice - Unclaimed Goods

19. If goods are stored beyond the time limits specified and no extension has been granted under subsection 37(2) of the Act, Revenue Canada will issue Form E44.  The main purpose of Form E44 is to notify the importer and carrier that goods have been left unclaimed in a customs office, highway frontier examining warehouse, sufferance warehouse, or bonded warehouse, and that the goods must be claimed within 30 days of the date Form E44 is issued or they will become forfeit to the Crown.  Once the goods become forfeit to the Crown, they are subject to disposal and can no longer be claimed by the importer or owner.  A sample of Form E44 with completion instructions can be found in Appendix A.

20. When an importer signs a certificate of abandonment for warehoused goods on Form K24, Non-Monetary General Receipt, the goods should be listed on Form E44 unless they are scheduled for immediate disposal.  In the latter case, there is no need to complete Form E44 as control exists with Form K24.  Abandoned goods do not need to be kept for 30 days, as the goods become the property of the Crown when the abandonment certificate is signed.

21. Goods listed on Form E44 can either remain in the warehouse where they are initially stored or be transferred to a Queen's warehouse or other location designated by the chief officer of customs.

22. Form E44 may also be used as a control document for other goods scheduled for disposal, for example, abandoned, seized, or forfeited goods.

23. Goods seized under the authority of the Customs Act or the Excise Act should only be listed on Form E44 after all legislated time frames for appeals and third-party claims have expired, or when a customs adjudicator advises that the goods are ready for disposal.

24. A copy of Form E44 will not be sent to the importer or carrier when it covers seized or abandoned goods, or travellers' goods held temporarily by Revenue Canada.

Time Limits for Issuing Form E44

25. The time limits for issuing Form E44 vary depending on where the goods are stored.  In addition, the importer or broker can apply to Revenue Canada to have the goods held for an extended period of time.  For further information on obtaining an extension, refer to Memorandum D4-1-7, Extension of Time Limits for Removing Goods From Customs Warehouses.

26. For a customs office, highway frontier examining warehouse, or sufferance warehouse, Form E44 will be issued if the goods are on hand beyond 40 days from the date the goods were first reported under section 12 of the Act.

27. For a bonded warehouse, Form E44 will be issued if the goods are on hand beyond the time limit set out in the Bonded Warehouses Regulations for those particular goods.  For further information, refer to Memoranda D4-1-0 and D4-1-7.

28. Revenue Canada will issue Form E44 within five business days of the date that the warehouse operators supply a list of goods left unclaimed in their warehouses.  The list of unclaimed goods must contain the following: importer's name and address, quantity and description of goods, date of arrival of the goods in Canada, and cargo control number.

29. Goods that have been granted an extension will only be listed on Form E44 after the extension period has expired.

Processing by Revenue Canada

30. Form E44 will be numbered consecutively from the beginning of each fiscal year by the issuing office.

31. Form E44 should be cross-referenced with any previous documentation for the goods in order to maintain an audit trail.  As well, goods listed on Form E44 should be marked with the corresponding E44 number, as well as the total number of pieces in the shipment.  If the goods cannot be marked, a tag may be used.

32. Once completed, Form E44 should be listed on Form E45, Inventory Control Log for Seized, Forfeited, Detained, Abandoned, and Unclaimed Goods.  A sample of Form E45 with completion instructions can be found in Appendix B.  The information contained in the log will serve to maintain an audit trail from the date of receipt to the release/disposal date.  The information can also be used to track unclaimed list numbers and expiry dates for disposal action, and to initiate follow-up action should Form E44 be lost.

33. Where Form E44 covers unclaimed goods, it will be distributed as follows:

Note: No further notification will be given to either the importer or the carrier prior to disposal of the goods.

TRANSFER OF GOODS

34. When goods are transferred from the warehouse of initial storage, a list of goods will be prepared in duplicate by Revenue Canada.  The warehouse operator will check off each item and initial both copies of the list.  The original will be retained by Revenue Canada and the duplicate will be given to the warehouse keeper as a receipt.

35. When goods are transferred to an auctioneer, the list will be prepared in triplicate and one copy given to the auctioneer.  In these instances, the importer's name or address should not appear on the list.  As an alternative, goods can be identified by the unclaimed list number.

36. When goods are transferred to a Queen's warehouse, they will be examined by Revenue Canada in the presence of the carrier so that an amount can be established for any damage or loss resulting during the transfer of goods.

PROCEDURES FOR CLAIMING GOODS PRIOR TO FORFEITURE

37. Goods must be claimed within 30 days of the date Form E44 is issued.  Unclaimed goods on hand beyond 30 days become forfeit and subject to disposal, in accordance with section 142 of the Customs Act.

38. Goods must be claimed at the customs office where they are being held.

39. Revenue Canada will require the following from the importer or owner before releasing the goods:

Note: Goods that were left unclaimed in a bonded warehouse and listed on Form E44 cannot be re-entered into a bonded warehouse, but must be exported or entered for consumption.

40. Revenue Canada will require the following before releasing goods listed on Form E44 from a Queen's warehouse:

41. When only a portion of the shipment is being claimed, the import or export documentation or an attachment must indicate the number of pieces being claimed, as well as the total number in the original shipment, for example, entry No. ___/16 of 20.

ADDITIONAL INFORMATION

42. The date of abandonment or the date of forfeiture, in the case of unclaimed goods, is the date the Crown becomes responsible for all costs accruing against the goods.  Although sections 36 and 39 of the Act make the owner or importer liable for reasonable disposal expenses where the goods are not sold, the Department may be required to pay such expenses pending the finalization of any collection action against the owner or importer.

43. Information concerning prescribed items and substances within the meaning of the Atomic Energy Control Regulations can be found in Memorandum D19-2-1, Atomic Energy Control Act and Regulations.

APPENDIX A

FORM E 44, CUSTOMS NOTICE - UNCLAIMED GOODS

[You can view this form in PDF format]

FORM E 44, CUSTOMS NOTICE - UNCLAIMED GOODS

Field N^o 1 - the name and address of the importer

Field N^o 2 - the next consecutive unclaimed list number for the customs office issuing Form E44

Field N^o 3 - the name and code number of the customs office issuing Form E44

Field N^o 4 - the date the form is issued

Field N^o 5 - the date the goods arrived in Canada, if known

Field N^o 6 - the type of document the goods were originally recorded on, e.g., Form K24, Non-Monetary General Receipt, or cargo control document and the number, if applicable

Field N^o 7 - the quantity taken from the original document or from a physical examination of the goods

Field N^o 8 - the value of the goods as per available commercial documentation

Field N^o 9 - a brief description of the goods taken from the original document or from a physical examination of the goods

Field N^o 10 - a telephone number and the complete address for the location where the goods are stored

Field N^o 11 - the date and complete address for the location when the goods are transferred to a concentration point

Field N^o 12 - the date the goods are entered into the customs warehouse

Field N^o 13 - see the Schedule to the Regulations

Field N^o 14 - goods and services tax/harmonized sales tax applicable on customs storage charges

Field N^o 15 - the cost to the Department for moving the goods to the customs warehouse, if applicable

Field N^o 16 - the number of Form K21, Cash Receipt, issued as a receipt for the storage charges

Field N^o 17 - the final disposal action for the goods, i.e., importation, donation, destruction, sale. Where goods are donated to a charitable organization or destroyed, use space provided for the appropriate certificate.

APPENDIX B

FORM E45, INVENTORY CONTROL LOG FOR SEIZED, FORFEITED, DETAINED, ABANDONED, AND UNCLAIMED GOODS

[You can view this form in PDF format]

INSTRUCTIONS FOR THE COMPLETION OF FORM E45, INVENTORY CONTROL LOG FOR SEIZED, FORFEITED, DETAINED, ABANDONED, AND UNCLAIMED GOODS

Field N^o 1 - Item no. - the next consecutive number, followed by the year (i.e., 152-98)

Field N^o 2 - Receipt date - when the goods arrive, the Revenue Canada employee must indicate the receipt date.

Field N^o 3 - Original document - the original document, the reference number (i.e., K19, K24) or the customs cargo control document and its number, if necessary

Field N^o 4 - Quantity - the quantity indicated on the original document or after the goods were actually examined

Field N^o 5 - Unit of issue - the unit of issue code (e.g., ea, pg, bx)

Field N^o 6 - Description - a brief description of the goods as indicated on the original document or after the goods were actually examined

Field N^o 7 - Owner - the name of the owner whose goods are detained or seized.  If the identity of the owner cannot be established, indicate "unknown - goods found" in this field.

Field N^o 8 - Form E44 number - the unclaimed goods list number assigned to Form E44

Field N^o 9 - Date of Form E44 - the date Form E44 was issued

Field N^o 10 - Expiry date of Form E44 - the date the goods were forfeited, i.e., 30 days after the date of Form E44

Field N^o 11 - Goods received from (location) - the full address of the location the goods were received from

Field N^o 12 - Status of goods - indicate the current status of the goods, i.e., partial payment, goods being appealed, paid in full, cleared through customs, disposed of (donated, destroyed, sold).  If the goods must be transferred to a location until they are destroyed, this log can be used as a transfer file.

Field N^o 13 - Release/disposal date - indicate the release or disposal date.

Field N^o 14 - Revenue Canada employee name - the name and badge number (if necessary) of the Revenue Canada supervisor who approved or verified the information in the log.

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REFERENCES

ISSUING OFFICE -

Import Process Division

LEGISLATIVE REFERENCES -

Customs Act, sections 5, 12, 19, 36, 37, 38, 39, and 142

HEADQUARTERS FILE -

N/A

SUPERSEDED MEMORANDA "D" -

D4-1-5, July 24, 1989

OTHER REFERENCES -

D4-1-0, D4-1-2, D4-1-4, D4-1-6, D4-1-7, D7-4-1, D19-2-1, D19-13-2

SERVICES PROVIDED BY THE DEPARTMENT ARE AVAILABLE IN BOTH OFFICIAL LANGUAGES.

THIS MEMORANDUM IS ISSUED UNDER THE AUTHORITY OF THE DEPUTY MINISTER OF NATIONAL REVENUE.