Proposed Amendments to the Duty Free Shop Regulations

Customs Notice 14-031

Ottawa, December 11, 2014

1. This customs notice announces regulatory amendments proposed by the Canada Border Services Agency (CBSA) following extensive consultations with external stakeholders. These amendments are designed to streamline the CBSA’s Duty Free Shop (DFS) program, as well as reduce costs and the administrative burden on both the duty free shop industry and the CBSA. It is further proposed that these regulatory amendments come into force on December 11, 2014, on the condition that the Governor in Council makes them.

Proposed Regulatory Changes

2. It is proposed that:

  • (a) the requirement for applicants to have sufficient financial resources, as set out in paragraphs 3(6)(c) and (d), be repealed. This information is currently being collected as part of the application process for a new DFS in order to demonstrate the applicant’s ability to sustain a successful business and to ensure that the collection of any applicable duties and taxes is feasible. Meeting this requirement comes at a cost to both the Agency and the proposed licensee and yet the risk that a licensee fails to pay any applicable duties and taxes as a result of inventory shortages is already mitigated by the requirement for the licensee to post financial security against its inventory;
  • (b) the validity period of a DFS licence, as set out in paragraph 6(2), be lengthened from 5 to 10 years. Risk assessments will continue on a regular basis and the CBSA will maintain the authority to suspend or cancel a licence, as required, but the work associated with the license renewal process will be reduced by half and licensees will have more certainty in their business planning;
  • (c) the requirement to provide or make available public washroom facilities and public telephones that are accessible to disabled persons as set out in paragraphs 13(1)(a) and (b), be repealed. This requirement falls outside of the CBSA’s mandate and is provided for in the applicable federal or provincial building codes;
  • (d) the requirement to store and mark goods received in a DFS in the manner specified in paragraph 14(a), be repealed. In today’s reality of electronic inventory management, there is no longer a requirement for a physical separation of the goods in order for the CBSA to readily ensure an accurate count. The requirement for all goods to be held in a designated area until accounted for or approved by the CBSA for entry into the DFS inventory will be maintained; and 
  • (e) the requirement to immediately notify the CBSA of the receipt of goods as set out in paragraph 16(1)(b), be repealed. The requirement to present the CBSA with arrival notification and/or a completed Form B116, Canada Customs Duty Free Shop Accounting Document within five business days of the arrival of the goods at the DFS will be maintained, and no goods can be removed from the warehouse until the required documentation has been approved and stamped by the CBSA.

3. The CBSA will pursue these required regulatory amendments in accordance with section 167.1 of the Customs Act.

Additional Information

4. For more information, 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.

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