Customs Notice 18-17

Ottawa, 

Revised on 

What’s New: Update on Refunds

This update provides information on the implementation of the Surtax on the Importation of Certain Steel Goods Refund Order (Refund Order), SOR/2019-129, which came into effect on May 9, 2019.

As per the Refund Order, and in keeping with the World Trade Organization Agreement on Safeguards, all provisional safeguard surtaxes assessed on the goods listed below released by the CBSA since October 25, 2018 through April 28, 2019, inclusive, will be refunded as final safeguard measures were not imposed on these goods:

  • concrete reinforcing bar, energy tubular products, hot-rolled sheet, pre-painted steel, and wire rod; and
  • heavy plate and stainless steel wire originating in Colombia, Korea, Panama and Peru.

The CBSA will automatically process refunds without the need for importers to submit a B2 – Canada Customs – Adjustment Request. Where required, the CBSA may ask importers to submit supporting documentation to ensure the proper amount is refunded.

Update on April 16, 2019

On , the Canadian International Trade Tribunal (CITT) published its report following its inquiry into safeguard measures on seven categories of steel goods.

As provided in the Order imposing provisional safeguards, where the CITT recommends final safeguards, provisional safeguards remain in effect for 200 days from when they came into effect.

  • The CITT has recommended final safeguards on imports of heavy plate and stainless steel wire; as such, provisional safeguards on these goods will remain in effect up to and including .

In accordance with Canadian law, where the CITT does not recommend final safeguards, provisional safeguards remain in effect for 200 days from when the Order imposing provisional safeguards was made.

  • The CITT has not recommended final safeguards on imports of concrete reinforcing bar, energy tubular products, hot-rolled sheet, pre-painted steel and wire rod; as such, provisional safeguards on these goods will remain in effect up to and including .

The Government is reviewing the CITT’s recommendations and further announcements will be made in due course, including with respect to surtax assessed on goods subject to provisional safeguards.

Until the provisional safeguards on the respective goods expire, importers must continue to obtain shipment-specific import permits or pay surtaxes for the importation of those products.

Order Imposing a Surtax on the Importation of Certain Steel Goods:

  • Heavy plate
  • Concrete reinforcing bar
  • Energy tubular products
  • Hot-rolled sheet
  • Pre-painted steel
  • Stainless steel wire
  • Wire rod

1. This notice provides information on the implementation of the Order Imposing a Surtax on the Importation of Certain Steel Goods (the Order), which came into force .

2. The Order was subsequently amended through the Order Amending the Order Imposing a Surtax on the Importation of Certain Steel Goods SOR/2019-35, which came into force on .

3. The Order and Amending Order are collectively referred to as the Order throughout this Customs Notice which reflects both orders.

4. The Order applies to certain steel goods (goods) imported from all countries except for the exclusions listed below:

  • a) goods originating in Canada.
  • b) goods originating in and imported from the U.S., Chile, and Israel or another CIFTA beneficiary.
  • c) goods, specifically heavy plate, concrete reinforcing bar, hot-rolled sheet, pre-painted steel and stainless steel wire, originating in and imported from Mexico.
  • d) goods originating in and imported from developing countries which are beneficiaries to the General Preferential Tariff (GPT) with one exception: concrete reinforcing bar originating in and imported from Vietnam are not exempt. A list of GPT beneficiaries is included in Appendix A.
  • Note: For goods to be eligible for the exclusions identified above, with the exception of goods of Canadian origin, they must both originate in and be imported from the same country.

5. Importers of goods that were in transit to Canada before  (i.e., began their physical journey to Canada) can claim remission of the provisional safeguard surtaxes payable at the time of importation, or claim remission if the surtax has already been paid, by citing special authority number 18-1610 in field 26 of their B3-3 Canada Customs Coding Form or Form B2, Canada Customs – Adjustment Request respectively. For further details, please see the Corrections, Re-Determinations, and Refunds section of this Customs Notice.

6. The origin of the goods is determined in accordance with the rules of origin set out in the Determination of Country of Origin for the Purposes of Marking Goods (NAFTA Countries) Regulations or the Determination of Country of Origin for the Purpose of Marking Goods (Non-NAFTA Countries) Regulations, as the case may be.

Application

7. Importers should refer to Schedule 1 and 2 of the Order to determine if the goods meet the product description of goods subject to the safeguard surtax.

8. As per the Order, a 25% safeguard surtax is applicable to imported goods that exceed the tariff rate quota (TRQ) for each class of goods set out in the Order. For information on TRQ availability refer to the Global Affairs Canada website.

9. Importers may request shipment-specific import permits (specific permits) from Global Affairs Canada, which will be valid for 14 days. Goods for which an importer obtained a specific permit, valid at the time of accounting, are exempt from the applicable safeguard surtax. Imports of goods that do not have a specific permit, or are in excess of the quantity of a specific import permit at the time of accounting, are subject to the safeguard surtax.

10. For information on conditions to satisfy when requesting specific permits, please refer to the Notice to Importers on the Global Affairs Canada website. For general information about the permit application process and associated billing system, please refer to the Global Affairs Canada website: Import Controls and Import Permit.

11. The 25% safeguard surtax is applied on the value for duty of goods determined in accordance with sections 47 to 55 of the Customs Act.

12. Absent a specific permit, the safeguard surtax applies to all goods including those released from a Customs Bonded Warehouse or Sufferance Warehouse on or after  when the Order came into force.

13. Canada’s Duties Relief Program and Duty Drawback Program continue to be available to importers for duties relief, including safeguard surtaxes, paid or owed by businesses that meet the requirements of these programs.

Proof of Origin/ Required Documentation

14. The burden of proof that goods do not originate from an applicable country as defined in the Order lies with the importer.

15. Proof of origin may be in the form of a commercial invoice, a Canada Customs Invoice, a Form A – Certificate of Origin, an Exporter’s Statement of Origin, a Certificate of Origin pursuant to a Free Trade Agreement, or any other acceptable documentation that clearly indicates the country of origin of the goods.

16. To confirm whether imported goods are subject to the safeguard surtax, the CBSA may require importers to provide the following documentation:

  • Specific permit
  • Purchase invoice or order
  • Bill of lading
  • Mill certificate
  • Product literature and technical specifications
  • Any other document to substantiate whether the goods are subject to the safeguard surtax

Completing the B3-3 Canada Customs Coding Form

17. The following instructions and examples demonstrate how the B3 should be completed for importations of goods subject to provisional safeguards.

blank B3

 
Field Instructions
22 Provide as much detail as possible. Where the goods are subject to provisional safeguards, state the specific product (heavy plate, concrete reinforcing bar, energy tubular products, hot-rolled sheet, pre-painted steel, stainless steel wire, or wire rod). Where the goods are exempt, include information explaining why they are exempt.
23 Indicate the weight in kilograms.
26 Provide the specific permit number if applicable. If a permit has not been obtained leave blank.

Note: Imported goods will not be exempt from the safeguard surtax unless the permit number is entered into this field at the time of accounting.

27 Provide the goods’ 10 digit classification number.
29 For the quantity field, indicate the total weight of the goods. Use field 30 to indicate whether this is in kilograms.
30 Specify unit of measure in kilograms (KGM).
32 SIMA code 51 is used if the safeguard surtax or SIMA duties are payable. Otherwise, leave this field blank. Note: If you entered a specific permit number in field 26, then field 32 should remain blank, as the safeguard surtax is not payable.
35 GST rate is 5%.
37 Provide the value for duty of the imported goods in Canadian dollars.
39 This field is used for both SIMA duties and the amount of safeguard surtax.

The safeguard surtax is calculated at the value for duty (Field 37) x 25%.

Where SIMA duties are also applicable, the SIMA duties and amount of safeguard surtax will be added together and entered in this field.

Leave field 39 blank if there is no safeguard surtax or SIMA duties payable.

41 Value for tax = VFD + Safeguard surtax + SIMA duties (if applicable).
42 The GST is value for tax times 5%.

Example 1: Safeguard surtax not payable (specific permit obtained) – no other applicable duties

Example 1: Safeguard surtax not payable

  • The specific permit number is entered in field 26. (Note: Imported goods will not be exempt from the safeguard surtax unless the permit number is entered into this field at the time of accounting.)
  • The SIMA Code (Field 32) is left blank, as the goods are exempt from the safeguard surtax.

Example 2: Safeguard Surtax payable – No other applicable duties

Example 2: Safeguard surtax payable

  • No specific permit was obtained so the import is subject to the safeguard surtax.
  • The SIMA Code (Field 32) is entered as 51, as the safeguard surtax is payable.
  • The amount of safeguard surtax is calculated as follows: $44,200.00 (VFD) x 0.25 (25% safeguard surtax) = $11,050.00 (safeguard surtax payable).
  • The value for tax is $44,200.00 (VFD) + $11,050.00 (safeguard surtax) = $55,250.00

Example 3: Safeguard Surtax payable in addition to SIMA duties

Example 3: Safeguard surtax payable in addition to SIMA duties

  • The SIMA Code (Field 32) is entered as 51, as the safeguard surtax is payable.
  • The amount of the safeguard surtax is: $44,200.00 (VFD) x 0.25 (25% safeguard surtax) = $11,050.00 (safeguard surtax payable).
  • For this example, there are $2000.00 in SIMA duties.
  • Amount to enter in Field 39: $11,050.00 (safeguard surtax) + $2000.00 (SIMA duties) = $13,050.00.
  • The value for tax is $44,200.00 (VFD) + $11,050.00 (amount of safeguard surtax) + 2000.00 (SIMA duties) = $57,250.00

Example 4: Safeguard Surtax partially payable (specific permit obtained but part of importation exceeds TRQ)

Example 4: Safeguard surtax partially payable

  • Where the quantity of imported goods exceeds the corresponding quantity of a specific permit, and the safeguard surtax is applicable to the exceeding quantity of goods, two lines need be completed: Line 1 where the goods are covered by a specific permit (Note: In this situation the SIMA Code (Field 32) is left blank as the goods are exempt from the safeguard surtax); Line 2 where the goods are not covered by a specific permit (Note: In this situation the SIMA Code (Field 32) is entered as 51 as the goods are not exempt from the safeguard surtax.

18. For further information on the applicability of SIMA (anti-dumping) duties see the SIMA website, Measures in Force section.

19. Refer to Memorandum D17-1-10, Coding of Customs Accounting Documents for additional information on completing Form B3-3.

Corrections, Re-Determinations, and Refunds

20. Corrections to original declarations and requests for re-determinations or further re-determinations, and applications for a refund are to be made in the prescribed form and manner under the relevant provisions of the Customs Act, in accordance with the procedures outlined in Memorandum D11-6-7, as well as Memorandum D11-6-6, “Reason to Believe” and Self-Adjustments to Declarations of Origin, Tariff Classification, and Value for Duty, and Memorandum D6-2-3, Refund of Duties.

21. Where an overpayment of safeguard surtax has been identified on a commercial importation, Form B2, Canada Customs – Adjustment Request may be filed in a regional CBSA office requesting a refund of the overpaid amount under section 74(1)(g) of the Customs Act. If accounting information is being self-adjusted for a safeguard surtax refund or safeguard surtax payable to the CBSA, refer to Memorandum D17-2-1, The Coding, Submission and Processing of Form B2 Canada Customs Adjustment Request, for additional information on completing Form B2. Note that Customs Self Assessment (CSA) clients must use this process when seeking an adjustment of the safeguard surtax.

22. Refund requests for overpayments of SIMA duties must be filed on a separate B2 form. For more information on SIMA redeterminations, refer to Memorandum D14-1-3, Re-determinations and Appeals Under the Special Import Measures Act.

23. As per the Surtax on the Importation of Certain Steel Goods Refund Order (Refund Order), SOR/2019-129, which came into effect on May 9, 2019, all provisional safeguard surtaxes assessed on the goods listed below released by the CBSA since October 25, 2018 through April 28, 2019, inclusive, will be refunded as final safeguard measures were not imposed on these goods:

  • concrete reinforcing bar, energy tubular products, hot-rolled sheet, pre-painted steel, and wire rod; and
  • heavy plate and stainless steel wire originating in Colombia, Korea, Panama and Peru.

The CBSA will automatically process refunds without the need for importers to submit a B2 – Canada Customs – Adjustment Request. Where required, the CBSA may ask importers to submit supporting documentation to ensure the proper amount is refunded.

Enquiries regarding the provisional safeguard surtax refund process and the status of refunds can be directed to CBSA Trade Programs after August 1, 2019.

24. Accounting documents are reviewed by the CBSA to ensure that the correct amount of safeguard surtax was self-assessed by the importer. The CBSA may review the origin, tariff classification, value for duty and/or applicability of the safeguard surtax or SIMA duties on its own initiative or in response to a correction. In so doing, as with customs duties and taxes, the CBSA may assess any undeclared amount of safeguard surtax.

25. For information on the remission of safeguard surtax paid on goods that were in transit to Canada before  (i.e., began their physical journey to Canada), please see Customs Notice 18-24, Provisional Safeguards – In-transit Steel Goods Remission Order.

26. Determinations, re-determinations or further re-determinations made by a CBSA officer may be reviewed under and in accordance with the Customs Act.

Examinations and Verifications

27. Importations may be subject to examination at the time of accounting and to post-release verification for compliance with the Tariff Classification, Valuation, Origin and Marking programs, and any other applicable provisions administered by the CBSA. If non-compliance is encountered by the CBSA, the safeguard surtax, SIMA duties and taxes, as well as penalties and interest will be assessed, where applicable.

Additional Information

28. Refer to Memorandum D16-1-1, Information pertaining to the application, collection, and adjustment of a surtax, for additional information concerning the administration and enforcement of safeguard surtax orders under sections 53(2), 55(1), 60, 63(1), 68(1), 77.1(2), or 77.6(2) or 78(1) of the Customs Tariff.

29. For more information on the administration of the safeguard surtax orders, within Canada call the Border Information Service at 1-800-461-9999. From outside Canada call 204-983-3500 or 506-636-5064. Long distance charges will apply. Agents are available Monday to Friday (08:00 – 16:00 local time / except holidays). TTY is also available within Canada: 1-866-335-3237.

Appendix A

Developing countries (beneficiaries of the GPT) that are not subject to the safeguard surtax.
1 Afghanistan 37 Gambia 73 Paraguay
2 Angola 38 Georgia 74 Philippines
3 Anguilla 39 Ghana 75 Pitcairn
4 Armenia 40 Guatemala 76 Rwanda
5 Ascension Island 41 Guinea 77 Saint Helena and Dependencies
6 Bangladesh 42 Guinea-Bissau 78 Samoa
7 Belize 43 Guyana 79 Sao Tome and Principe
8 Benin 44 Haiti 80 Senegal
9 Bhutan 45 Honduras 81 Sierra Leone
10 Bolivia 46 Iraq 82 Solomon Islands
11 British Indian Ocean Territory 47 Kenya 83 Somalia
12 Burkina Faso 48 Kiribati 84 South Sudan
13 Burma 49 Kyrgyzstan 85 Sri Lanka
14 Burundi 50 Laos 86 Sudan
15 Cambodia 51 Lesotho 87 Swaziland
16 Cameroon 52 Liberia 88 Syria
17 Canary Islands 53 Madagascar 89 Tajikistan
18 Cape Verde 54 Malawi 90 Tanzania
19 Central African Republic 55 Mali 91 Timor-Leste
20 Ceuta and Melilla 56 Marshall Islands 92 Togo
21 Chad 57 Mauritania 93 Tokelau Islands
22 Christmas Island 58 Micronesia 94 Tonga
23 Cocos (Keeling) Islands 59 Moldova 95 Tristan Da Cunha
24 Comoros 60 Mongolia 96 Turkmenistan
25 Congo 61 Montserrat 97 Tuvalu
26 Cook Islands 62 Morocco 98 Uganda
27 Côte d’Ivoire 63 Mozambique 99 Ukraine
28 Democratic Republic of Congo 64 Naura 100 Uzbekistan
29 Djibouti 65 Nepal 101 Vanuatu
30 Egypt 66 Nicaragua 102 Vietnam*
31 El Salvador 67 Niger 103 Virgin Islands, British
32 Eritrea 68 Nigeria 104 Yemen
33 Ethiopia 69 Niue 105 Zambia
34 Falkland Islands 70 Norfolk Island 106 Zimbabwe
35 Fiji 71 Pakistan
36 French Southern and
Antarctic Territories
72 Papua New Guinea
Source: Canada Border Services Agency, Customs Tariff 2019 – List of Countries and Applicable Tariff Treatments

* The safeguard surtax is only applicable to imports of concrete reinforcing bar originating in and imported from Vietnam.

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