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Update to Customs Notice 18-17 – Refund of Provisional Safeguard Surtax

CN 18-17, Provisional Safeguard Measures Imposed on the Importation of Certain Steel Goods

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:

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 April 3, 2019, 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.

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 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:

  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 October 25, 2018.
  2. The Order was subsequently amended through the Order Amending the Order Imposing a Surtax on the Importation of Certain Steel GoodsSOR/2019-35, which came into force on February 2, 2019.
  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:
  5. 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.
  6. Importers of goods that were in transit to Canada before October 25, 2018 (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 Formor Form B2, Canada Customs – Adjustment Requestrespectively. For further details, please see the Corrections, Re-Determinations, and Refunds section of this Customs Notice.
  7. 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) Regulationsor the Determination of Country of Origin for the Purpose of Marking Goods (Non-NAFTA Countries) Regulations, as the case may be.

Application

  1. 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.
  2. 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.
  3. 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.
  4. For information on conditions to satisfy when requesting specific permits, please refer to the Notice to Importerson 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.
  5. 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.
  6. 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 October 25, 2018 when the Order came into force.
  7. Canada’s Duties Relief Programand Duty DrawbackProgram 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

  1. The burden of proof that goods do not originate from an applicable country as defined in the Order lies with the importer.
  2. 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.
  3. To confirm whether imported goods are subject to the safeguard surtax, the CBSA may require importers to provide the following documentation:

Completing the B3-3 Canada Customs Coding Form

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