The origin of goods helps determine the rate of duty payable on imported items. Origin is represented by a tariff treatment (a two-digit code declared on the Customs Coding Form, B3-3).
Many tariff treatments lower the rate of duty normally payable on imported goods. This is done through free trade agreements or other preferential treatments. The declared tariff treatment and the tariff classification establish the applicable customs duty rate on goods.
Goods may be entitled to a tariff treatment if they meet specific requirements, such as:
- rules of origin,
- proof of origin requirements,
- shipping requirements, and
- a term or condition contained in, or made following, an agreement.
Origin of goods for the purpose of tariff treatments are dealt with in:
- Customs Tariff Act, sections 16 to 18 and 24 (rules of origin and shipping requirements)
- Customs Act, section 35.1
- Proof of Origin of Imported Goods Regulations
Rules of Origin and Shipping Requirements
The CBSA uses rules of origin to determine which goods are entitled to a particular tariff treatment. The rules of origin set out how much production must occur in Canada or in another country for the goods to be considered "originating in" that foreign country and entitled to a specific tariff treatment. This ensures that zero or reduced duty rates are only applied to countries with a Canadian trade agreement.
Goods must be classified according to the Harmonized Commodity Description and Coding System so that the rules of origin can be properly applied. Each tariff treatment is linked to certain rules of origin.
All claims for a preferential tariff treatment must also meet the shipping requirements (such as direct shipment, transit and transhipment) for that tariff treatment. The shipping provisions identify the requirements that the goods must meet while coming to Canada. For instance, the goods must remain under customs control at all times and not undergo any production other than unloading, reloading or splitting up of loads, or operations required to keep the goods in acceptable condition (such as refrigeration, repacking, etc.).
Rules of origin and shipping requirements are included in Canada's trade agreements and relevant legislation and regulations. For more information, refer to D Memoranda D11 series.
Proof of Origin
Claims for preferential tariff treatment must be supported by the proof of origin required in the Proof of Origin of Imported Goods Regulations. Depending on the goods and tariff treatment, this may be a certificate of origin or an exporter's statement of origin.
The foreign exporter must confirm that the goods meet the rules of origin to qualify for the tariff treatment. The importer must have valid proof of origin at the time of accounting. This may not be required for the goods to be released, but the importer must provide this to the CBSA upon request.
Memorandum D11-4-2, Proof of Origin of Imported Goods contains information on the requirements for claiming tariff treatments based on proof of origin. The importer must have the proof of origin to claim the tariff treatment provided by a free trade agreement. Exceptions are listed in Memorandum D11-4-14, Certificate of Origin Under Free Trade Agreements.
Applicable Tariff Treatments
Consult the latest Customs Tariff for the most recent List of Countries and Applicable Tariff Treatments.
The following are unilateral tariff treatments (that is, Canada receives no mutual benefit from the countries affected):
- the General Preferential Tariff (GPT),
- the Least Developed Country Tariff (LDCT), and
- the Commonwealth Caribbean Countries Tariff (CCCT).
The Australia Tariff (AUT) and New Zealand Tariff (NT) recognize the trade relationship between those countries and Canada. There is no trade agreement with those countries.
The importer must keep complete records for six years from the import date to support their tariff treatment claim and make them available for review upon request. Refer to Memorandum D17-1-21, Maintenance of Records and Books in Canada by Importers for more information.
The burden of proof relating to the origin of any goods lies with the importer. Refer to Paragraph 152(3)(a) of the Customs Act for more information.
An exporter or a producer that signs a proof of origin must maintain a copy of the proof of origin for five years after signing.
If a tariff treatment is not declared correctly, an adjustment declaration may be necessary. For more information, refer to Memorandum D11-6-6, Self-Adjustments to Declarations of Origin, Tariff Classification, Value for Duty and Diversion of Goods.
Advance Rulings and National Customs Rulings Programs
Advance Rulings (AR) are legally-binding, written responses providing a determination on the origin of goods to be imported in the future. The advance ruling also provides the applicable tariff treatment for the goods.
Memorandum D11-4-16, provides more information on Origin Advance Rulings.
Memorandum D11-11-3, provides more information on Tariff Classification Advance Rulings.
National Customs Rulings (NCR) provide an origin ruling for goods to be imported in the future that are not subject to one of Canada's free trade agreements. An importer, foreign exporter or producer may apply for an NCR.
Memorandum D11-11-1, provides more information on National Customs Rulings.
The CBSA issues ARs and NCRs within 120 days of receipt of all necessary and complete information.
For more information, contact the Border Information Service.
Hours: Monday to Friday, 8 a.m. to 4 p.m. ET, except holidays
Within Canada: 1-800-461-9999
Outside Canada: 204-983-3500 or 506-636-5064. Long distance charges will apply.
TTY is also available within Canada: 1-866-335-3237.
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