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Memorandum D9-1-11
Ottawa, July 2, 1998
SUBJECT
IMPORTATION OF USED OR
SECOND-HAND MOTOR VEHICLES
This memorandum provides information regarding the application of tariff item No. 9897.00.00 to the Customs Tariffas it relates to the importation of used or second-hand motor vehicle.
Legislation
Tariff item No. 9897.00.00 of the Customs Tariffprohibits the importation of:
Used or second-hand motor vehicles of all kinds, manufactured prior to the calendar year in which importation into Canada is sought to be made, other than motor vehicles
(a) imported under tariff item Nos. 9801.10.00, 9807.00.00, 9808.00.00, 9809.00.00 or 9810.00.00;
(b) imported by a settler on the settler's first arrival but not entitled to be classified under tariff item No. 9807.00.00;
(c) forfeited or confiscated for any offence under the Customs laws, or the laws of any province of Canada;
(d) left by bequest;
(e) imported from the United States;
(f) entitled to the benefit of the United States Tariff, the Mexico Tariff or the Mexico-United States Tariff and imported from Mexico
(i) in the 2009 or 2010 calendar year, if the motor vehicles are not less than ten years old,
(ii) in the 2011 or 2012 calendar year, if the motor vehicles are not less than eight years old,
(iii) in the 2013 or 2014 calendar year, if the motor vehicles are not less than six years old,
(iv) in the 2015 or 2016 calendar year, if the motor vehicles are not less than four years old,
(v) in the 2017 or 2018 calendar year, if the motor vehicles are not less than two years old, or
(vi) on or after January 1, 2019;
Statutory Instrument
USED OR SECOND-HAND MOTOR
VEHICLES REGULATIONS
Application
1. These Regulations apply to a used or second-hand motor vehicle that is manufactured before the calendar year in which importation of the vehicle is sought to be made, if the vehicle
(a) has machinery or apparatus permanently mounted thereon and is imported for
(i) use in exploratory or discovery work in connection with oil or natural gas wells or for the development, maintenance, testing, depletion or production of a well up to and including the wellhead assembly, or
(ii) drilling for water;
when a similarly-equipped vehicle is not readily available in Canada;
(b) is received by a resident of Canada as a gift from a relative or friend who resides outside of Canada and the vehicle is to be used for personal purposes and not for any commercial purpose;
(c) is imported by a non-resident for permanent use by the non-resident at a summer or vacation residence occupied by the non-resident in Canada;
(d) is imported by a citizen of another country who is not a resident of Canada and who is employed in a defence establishment of the government of that country in Canada or who is on official military service in Canada;
(e) is imported in accordance with the Non-residents' Temporary Importation of Baggage and Conveyances Regulations;
(f) is imported by a contractor engaged in the construction and maintenance of a leased base established in the Province of Newfoundland by the Government of the United States for use by the contractor in the construction and maintenance of those bases;
(g) is a diesel-powered self-propelled dump truck that is mounted on rubber-tired wheels or on rubber-tired wheels and half-tracks and has a rated capacity, by struck volume, of not less than 7.2 cubic metres and, by payload weight, of not less than 15 tonnes and was imported for off-highway use to carry minerals or other excavated materials at a mine, quarry, gravel or sand pit or at a construction site;
(h) is imported by a former resident of Canada returning to resume residence in Canada who
(i) immediately before returning to Canada, had been a resident of another country for at least 12 consecutive months,
(ii) has been continuously absent from Canada for at least six months and, during the period of continuous absence, owned the motor vehicle for at least six months, or
(iii) had emigrated from Canada or had been assigned to extended duty in another country and has been compelled to return to Canada on account of illness, unemployment, educational needs or on account of other personal reasons of a similar nature;
(i) is imported by a resident of Canada returning to Canada who
(i) immediately before returning to Canada, had been continuously absent from Canada for at least 12 consecutive months,
(ii) has been continuously absent from Canada for at least six months and, during the period of continuous absence, owned the motor vehicle for at least six months, or
(iii) had been assigned to extended duty in another country and has been compelled to return to Canada on account of illness, unemployment, educational needs or on account of other personal reasons of a similar nature;
(j) is not less than 15 years old;
(k) is manufactured before January 1st of the model year of the vehicle but imported after that date and before December 31st of that year;
(l) imported as a formula or sports racing car and may not be licensed for use on a public highway;
(m) is imported by a resident of Canada who acquired the vehicle outside of Canada as a replacement for another motor vehicle owned by the resident that was damaged, in an accident that occurred outside of Canada, to such an extent that repair was impracticable;
(n) is a vehicle in respect of which the Foreign Aircraft Servicing Equipment Remission Order, 1992applies upon its importation;
(o) is imported temporarily and in respect of which a temporary entry remission order, or any other that permits temporary entry for commercial purposes, applies upon its importation;
(p) is forfeited pursuant to the Controlled Drugs and Substances Act;
(q) is imported temporarily under tariff item No. 9802.00.00 or 9803.00.00;
(r) is goods in respect of which sections 4 and 7 of the Akwesasne Residents Remission Orderapply upon its importation; or
(s) is imported by its original purchaser and
(i) the vehicle is imported for the personal use of the original purchaser or the original purchaser's household,
(ii) the vehicle is not imported for use in a business, in a manufacturing establishment or as equipment to be used by a contractor, and
(iii) the bill of sale for the vehicle does not specify that the vehicle has been used as a demonstration vehicle or by a car rental agency.
Exclusion
2. All motor vehicles referred to in section 1 are excluded from the application of tariff item No. 9897.00.00.
Repeal
3. The Used or Second-hand Motor Vehicles Regulationsare repealed.
Coming Into Force
4. These Regulations come into force on January 1, 1998.
Guidelines and general information
Importations From the United States
1. The vehicle age restrictions on vehicles imported from the United States were reduced over a four-year period beginning on January 1, 1989, until they were eliminated on January 1, 1993.
2. To be considered as imported from the United States, a motor vehicle must have been shipped to Canada directly from the United States and, prior to its entry into Canada, the vehicle must have been entered into the trade or commerce of the United States.
3. Acceptable evidence to substantiate that the vehicle had entered into the trade or commerce of the United States is:
(a) a copy of the United States customs accounting document respecting the vehicle's entry for consumption into the United States, or
(b) a copy of the United States registration for the vehicle.
4. Motor vehicles imported into Canada from a third country via the United States shall not be considered to have been imported from the United States.
5. Motor vehicles delivered to Canada from a foreign trade zone or other customs-bonded facility in the United States, without first having been entered for consumption in the United States, shall not be considered to have been imported from the United States.
Importations From Other Countries
6. Used or second-hand vehicles imported into Canada directly from countries other than the United States remain subject to prohibition on their importation, except where exempted by the Used or Second-Hand Motor Vehicle Regulations.
Motor Vehicles of Canadian Origin
7. Importations from the United States of motor vehicles, built in Canada and entered into the commerce of the United States under the provisions of the Auto Pact, are considered as U.S.-used or second-hand motor vehicles. Consequently, the provisions for Canadian goods returned in the Customs Tariffare not applicable to these vehicles. Tariff item No. 9897.00.00 is applicable in these cases where the vehicles do not meet the age restrictions specified in the tariff item or are not exempted by the Used or Second-Hand Motor Vehicle Regulations.
8. Seized motor vehicles, which originated in Canada or were once duty paid into Canada, and are subsequently purchased at auctions in the United States, may be imported under tariff item No. 9813.00.00 or 9814.00.00, provided they are returned without having been advanced in value, improved in condition, or combined with other articles abroad. In these circumstances, the prohibition on used or second-hand motor vehicles will not be applied.
Determination of Vehicle Age
9. For the purposes of tariff item No. 9897.00.00, the age of a motor vehicle is determined by the month and year during which work was completed on the vehicle at the place of main assembly. For example, a vehicle manufactured in May 1983 would be considered to be 15 years old on May 1, 1998. Information concerning the date of manufacture is provided on the manufacturer's compliance label which, under the Motor Vehicle Safety Actand Regulations, must be affixed to all buses manufactured subsequent to January 1, 1971, and to all vehicles less than 15 years old.
10. The "model year" of vehicles is not a sufficient factor in determining the age of imported used or second-hand vehicles. For example, a "1983" vehicle manufactured in June 1983 would not be admissible until June 1, 1998, and a "1984" vehicle manufactured in September 1983 would not be admissible until September 1, 1998.
Payment of Duties and Taxes
11. Used or second-hand motor vehicles are subject to the payment of applicable customs duty, the goods and services tax, and other taxes imposed under the Excise Tax Act.
12. The rate of duty applicable to used motor vehicles imported from the United States will depend upon the origin of the vehicle. Vehicles of United States origin will be subject to the United States Tariff rate. Vehicles which originated in other countries and which are not entitled to the benefit of the United States Tariff will be subject to the Most-Favoured-Nation Tariff rate when imported from the United States.
13. All vehicles, regardless of their origin, remain subject to the goods and services tax and other taxes imposed under the Excise Tax Act.
Used or Second-Hand Motor Vehicle Regulations
14. Paragraph 1(h) of the Regulations is to be interpreted so that subparagraphs 1(h) (i), (ii), and (iii) are independent from each other.
15. Paragraph 1(i) of the Regulations is to be interpreted so that subparagraphs 1(i) (i), (ii), and (iii) are independent from each other.
16. Paragraph 1(s) is to be interpreted to mean a vehicle which was purchased new by its original owner but imported in a year which was subsequent to the year of purchase.
Motor Vehicle Safety Act(Transport Canada)
17. The Department assists Transport Canada with the administration of the Motor Vehicle Safety Actand Regulations, as outlined in Memorandum D19-12-1, ImportationofMotor Vehicles. The current Motor Vehicle Safety Actrequires vehicles to comply to Canadian safety standards at time of importation and be so certified by the original manufacturer. Many new and used vehicles do not comply and are prohibited entry even though, in the case of used vehicles, the age-related prohibition is being phased out under the Canada-U.S. Free Trade Agreement. The onus rests with the purchaser/importer to determine the compliance status of the vehicle being imported into Canada.
18. For information on Transport Canada's requirements on the importation of wrecked vehicles, please refer to Memorandum D19-12-1.
19. For additional information, on Transport Canada's requirements, importers should contact:
Road Safety and Motor Vehicle
Regulation Directorate
Transport Canada
8th floor
Tower C, Place de Ville
330 Sparks Street
Ottawa ON K1A 0N5
Telephone: (613) 998-8616
(toll free: 1-800-333-0371)
Facsimile: (613) 998-4831
20. Importers with damaged motor vehicles may claim that tariff item No. 9897.00.00 does not apply to their vehicle and that it should be classified as parts; however, a motor vehicle may be classified as parts only if damage to the vehicle has rendered it completely useless and it cannot be repaired for use as a motor vehicle. Damage must be substantial and evidence must be produced to establish that the vehicle cannot be rebuilt for road use.
21. All damaged used and second-hand motor vehicles, which are imported for parts, are to be classified under tariff item No. 8708.99.99 (classification No. 8708.99.99.90) as parts and accessories of a motor vehicle. In the event that such an importation includes an air conditioner specifically designed for use in a motor vehicle, the $100 excise tax is applicable.
22. The onus rests with importers to substantiate that motor vehicles are damaged to the extent that it would not be practical to repair them for highway use. Should customs officers not be satisfied that the vehicles are substantially damaged as to render them no longer repairable from a practical point of view for highway use, they may request additional documentation from importers. Such additional documentation can take the form of a signed declaration by a licenced automotive mechanic or a provincial vehicle inspector attesting to the fact that it is not practical to have the motor vehicle repaired for highway use. If an importer fails to comply with such a request, the vehicle in question is to be classified as a motor vehicle and be subject to tariff item No. 9897.00.00. In such cases, the importer should be advised of the re-determination and appeal provisions of sections 59 to 68 inclusive of the Customs Act.
23. Importers should be requested to sign the following declaration in those cases where the customs officer is satisfied that the vehicles may be imported for use as parts.
I do solemnly declare that these vehicles are damaged substantially to the extent that they cannot, from a practical point of view, be rebuilt for road use. I further certify that they are imported for the salvaging of parts only, and that the vehicles will never be made roadworthy for highway use.
(Signature)
24. With respect to motor vehicles imported for scrap, they are to be classified under tariff item No. 7204.49.00 as waste and scrap iron or steel. Prior to importation, they must be rendered unusable as either a vehicle or parts by one of five processes outlined in the Explanatory Notes to the Harmonized Commodity Description and Coding System [see Volume 3 waste and scrap, point A(2)].
25. Under no circumstances will a person be issued a Vehicule Import Form, Form 13-0132, for a damaged vehicle imported for use as parts or scrap. Further, such vehicles cannot be repaired for highway use in Canada.
26. Requests for the importation of vehicles specified in subparagraphs 1(a) (i) and (ii) of the Regulations are to be referred to your district Trade Administration Services offices or Trade Policy and Interpretation Directorate at Headquarters, where availability of similarly equipped vehicles in Canada will be ascertained.
27. Paragraph 1(k) of the Regulations relates to the current model year that identifies such model. For example, a 1998 model manufactured in 1997 will be admissible in the entire calendar year of 1998.
28. Used and second-hand motor vehicles entered as a gift from a friend or relative as specified in these Regulations require the following declaration:
I do solemnly declare that the motor vehicle described in this accounting document is a gift to me, for my own personal use and not for any commercial purpose, by
(Name) (Address)
and that no money or valuable consideration of any kind has been or will be given by me or by any other person on my behalf for the said motor vehicle.
(Signature)
29. In addition to the classes of vehicles exempted from the provisions of tariff item No. 9897.00.00 by Order in Council, the prohibition does not apply to a vehicle, the design or construction of which limits it to off-highway use. Examples of items that are not subject to tariff item No. 9897.00.00 are: golf carts, fork-lift trucks, warehouse trucks, go-karts, and snowmobiles.
Foreign Government Surplus Vehicles
30. Foreign government surplus vehicles, particularly four-wheel and six-wheel drive trucks, although manufactured before January 1 of the year in which importation is sought to be made, may appear to be in new and unused condition with very little mileage accumulated from their place of manufacture to their military vehicle depot or dump and to the premises of a surplus dealer. While vehicles of this class may reasonably be regarded as new and unused, they are, nonetheless, second-hand because of having passed from the manufacturer's or dealer's hands into the possession of the United States Government, and, in the majority of cases, into the hands of war-surplus dealers before being acquired by Canadians for importation into Canada.
31. It should be carefully noted that new and unused motor vehicles, which are purchased from someone other than the manufacturer or a licensed motor vehicle dealer, are classed as second-hand and are also subject to tariff item No. 9897.00.00.
Akwesasne Residents
32. Paragraph 1(r) of the Regulations exempts used and second-hand vehicles which are eligible for a remission of duty pursuant to sections 4 and 7 to the Akwesasne Residents' Remission Order. Such vehicles must have been imported for personal use from the United States by an Akwesasne resident.
33. At the time of importation, such vehicles must be both reported pursuant to section 12 of the Customs Actand be accounted for pursuant to section 32 of the Customs Actat the Cornwall Customs Office. They must also comply with Canadian safety standards outlined in the Motor Vehicle Safety Actand Regulations.
Customs Procedures
34. Where any doubt exists as to the applicability of tariff item No. 9897.00.00, the question should be referred immediately to the regional customs office with full particulars concerning the vehicle, including an illustration if available, and complete information as to its proposed usage, before the accounting document is permitted to be passed.
REFERENCES
ISSUING OFFICE -
Nomenclature and Tariff Treatment Policy Division
LEGISLATIVE REFERENCES -
Customs Tariff, tariff item No. 9897.00.00
HEADQUARTERS FILE -
HS 9897.00
SUPERSEDED MEMORANDA "D" -
D9-1-11, February 7, 1992
OTHER REFERENCES -
D19-12-1
