Ten Laval companies attended the session, in which trainer Louise Chevanelle discussed customs problems associated with importing goods into Canada.
The purpose of the training was to explain all the customs procedures that apply to imports. A few of them caught my attention because they are not well known. Today I’d like to talk about some of the underestimated pitfalls that Canadian importers should watch out for.
Did you know that… (more…)
On October 30, the LTIBC held a training session led by Louise Chevanelle on the Duty Drawback Program.
This program, which may appear stringent and forbidding to some, met with resounding approval from our Laval businesses (10 were represented, all agreed that this training will help them reduce duty, 50% felt they would get money immediately after the training, and 20% will get back more than $ 10,000). I’d like to briefly recap how it works and how it can save you money. (more…)
As a result of the 31% decline in imports flowing through the U.S. border between Q3 2008 and Q3 2009, customs duties collected by the U.S. Customs and Border Protection (CBP) also fell. As CBP assistant commissioner Thomas Winkowski explained in his speech titled “U.S. Canada Border Issues and Priorities,”1 since the agency is self-financed, the decrease in revenues led to 950 job cuts. These jobs have yet to be recovered and with the uncertain U.S. economic recovery, it doesn’t look like they will come back any time soon. As a result, the CBP is desperate to increase revenues. If U.S. imports don’t pick up, it will have to boost fines and customs duties. Therefore, expect CBP employees to be increasingly vigilant and demanding.
What this means is that as an exporter, you will have to be ready to respond to inspection and information requests. A growing number of Quebec firms are receiving a “Notice of Action” from the CBP, requesting, for example, documentation concerning the North American content of goods exported in the last four years. The CBP may also inform any export company that it will visit its facilities to make sure the firm’s warehouse separates North American from international goods.
Due to the broad-based decline in global trade, which has been going on for a few years now and affecting customs revenues everywhere in the world, it’s safe to assume that other countries will also be tightening their controls. It is therefore a good idea for Quebec companies to manage their customs and logistics procedures very carefully. Unfortunately, not everyone does, as we learned from our MDEIE colleagues following last year’s coaching program on customs compliance and logistics offered together with the Institut international de logistique de Montréal (IILM). The fact is that many Quebec companies need to tighten up their customs and logistics procedures.
Here are some examples of the problems they came upon:
- A company imports a product from Asia. Its supplier provides the HS codes and states that the product is duty-free. However, no one ever checked whether this was in fact the case.
- A company obtains supplies abroad according to Incoterm DDU and all the delivery charges and duties are included on its invoice. Despite this, the company allows the vendor to choose the transport method, route, timeline, customs classification and customs broker, and the company making the purchase ultimately pays the bill. Furthermore, the company is a registered importer that is fully responsible for the customs declaration issued by a broker it did not choose.
- A company always reuses the same declaration with the name and signature of a person who no longer works for the company.
- The CBP audits a company that must find all the documents to justify the Bill of Materials for products exported to the U.S. in the last four years.
These examples show just how easy it is to overlook certain crucial aspects of customs and logistics procedures. Through carelessness or lack of knowledge, many companies expose themselves to growing risks of major mistakes and fines. It is now more important than ever to review your procedures and make the necessary corrections to avoid errors that could have very damaging consequences for the company.
You can still register for our supply chain and logistics coaching-training program. Remember, the workshop starts on February 15 and you won’t be able to enrol after it begins.
The MDEIE is also holding a free training session on exporting to the U.S., customs compliance and logistics on Thursday, February 10, at World Trade Centre Montréal.
Feel free to contact us for more information on these two activities and on customs in general.
1 Speech delivered during the Can /Am Border Trade Alliance Conference in September 2009 in Washington D.C.
Bruno Séguin
When you do international business, it is your responsibility to make sure your customs broker uses the correct Harmonized System (HS) code for your declaration. For the past two years, I’ve noticed that too often companies think their customs broker will do the job for them. This mistake could cost you money and reduce your credibility with your international customers. To avoid this type of mistake, I suggest you do your homework and make sure you perfectly understand the meaning of the HS code you use to export. After all, you’re the expert when it comes to your product. Some basic information on how to find the HS code is exposed below.
The HS is the international standard for reporting goods to customs and other government agencies. It is a numeric language that is used by more than 190 countries worldwide. The classification determines a product’s rate of duty, its import and export admissibility, and whether or not it should be physically examined. The HS was created and is administered by the Brussels-based World Customs Organization (WCO). The first 6 digits of an HS code indicate the same product description for all 190 countries, but that does not mean that the rates of customs duties are the same. There are over 5,000 groups of 6-digit codes.
The HS code is also used to establish the basic rules of various trade agreements such as NAFTA. You might find it difficult to complete the form if you don’t know the coding of your merchandise.
It is important to note that the HS is constantly evolving. The last version was updated in 2007 and the next reform of the Harmonized System will be issued in January 2012. The main reasons for those changes are due to new trade partners and the evolution of new technologies.
If you are interested to know your HS code I recommend that you take a look at the following links:
Canadian Export Classification, 2009
The United States International Trade Commission
When you know your HS code, the website of the WCO publishes the tariff for more than 105 countries.
Please take note that this information comes from the website of Formation en Douanes Louise Chevanelle inc. If you are interested in knowing more about the U.S. and international customs do not hesitate to contact me. If enough companies show interest, we will consider providing training sessions.
Caroline Bouchard
The Christmas season is fast approaching and your marketing department has already chosen the corporate gifts to send to your best customers in the U.S without thinking how the gifts will be shipped.
The worst corporate gifts are food and alcoholic beverages, clothing or textile articles.
To export chocolates, candies and maple syrup to the U.S., you must be registered with the FDA (Food & Drug Administration). The producer, packer and your customer also need to be registered. You will need to make a special statement (prior notice) to the U.S. Department.For alcoholic beverages (spirits, wine or cider), you need to make a report to the Alcohol, Tobacco & Firearms department for special labelling and additional taxes.
For clothing and textile goods, you should check the label and verify that there isn’t any quota that could block your shipment.
For watches and clocks, the U.S. requires that movement, watch casing and bracelet to be marked separately from their country of origin. In addition, you need to enter their value separately because the rates of duties vary depending on movement, watch casing and battery.
The best way to send your corporate gifts is by mail (except tobacco and alcohol) addressed to your client at their home address. Any American citizen can receive a gift worth less than $100 without paying duties or taxes. If you send a gift by courier companies or directly on behalf of the company abroad, you should use a division in the commercial sector.
Please take note that this information comes from the website of Formation en Douanes Louise Chevanelle inc.
If you are interested in knowing more about the U.S. and international customs do not hesitate to contact me. If enough companies show interest, we will consider providing training sessions.
Caroline Bouchard
