Implementation of the Canada-United States-Mexico Agreement (CUSMA) De Minimis Thresholds with Respect to Customs Duties and Taxes for Courier Imports
Customs Notice 20-18

Ottawa, May 02, 2020

1. Further to Customs Notice 20-14, Implementation of the Canada-United States-Mexico Agreement (CUSMA), dated , this notice provides information related to the implementation of the CUSMA de minimis thresholds with respect to the application of customs duties and taxes on goods imported into Canada and transported by courier from the United States or Mexico.

2. Under CUSMA, Canada has agreed to maintain a de minimis threshold of at least CAD$150.00 for customs duties, and CAD$40.00 for taxes, at the time or point of importation of goods shipped by courier from the United States or Mexico. There are otherwise no changes to Canada’s existing de minimis framework. Accordingly, postal shipments from the U.S. or Mexico, as well as any courier or postal shipments from any other country, will continue to have a customs duty and tax remission threshold value of up to CAD$20.00. Please note that the new thresholds will apply as of the date the CUSMA enters into force and, for greater clarity, time of importation means the time of release.

Implementation of the CUSMA de minimis threshold

3. The CUSMA customs duty and taxation de minimis commitments are being implemented through changes to the Excise Tax Act and the Courier Imports Remission Order.

4. The Excise Tax Act is being amended by clause 39 of Bill C-4, Canada–United States–Mexico Agreement Implementation Act, on the date CUSMA enters into force.

5. The Courier Imports Remission Order is also being amended and this amendment will also enter into effect on the date the CUSMA enters into force.

The Courier Imports Remission Order upon CUSMA entry into force

6. As defined in the Courier Imports Remission Order (CIRO) “courier means a commercial carrier that is engaged in scheduled international transportation of shipments of goods other than goods imported by mail”.

7. Upon entry into force of the CUSMA, the following provisions will apply to imported goods that are transported by courier into Canada:

8. In order to qualify for the CAD$40.00 or CAD$150.00 de minimis thresholds set out in the CUSMA, the goods do not need to originate according to the CUSMA Chapter 4, Rules of Origin, but rather be imported from the United States or Mexico. If the goods were not produced in the United States or Mexico, they must have entered into the commerce of either the United States or Mexico prior to being imported into Canada in order to benefit from the CUSMA de minimis relief. For greater certainty, goods that are shipped from a non-CUSMA country and transit or are trans-shipped through the United States or Mexico, without having entered the commerce of the CUSMA partners, would not be entitled to the CAD$40.00 or CAD$150.00 de minimis thresholds.

Exceptions: Goods for which the relief does not apply

9. As per Section 3 “Application” and the definition of “goods” of the CIRO, as well as sections 7 and 7.01 of Schedule VII to the Excise Tax Act, certain types of commercial transactions and imported goods, despite being transported by courier, are not eligible for remission of customs duties and/or taxes (e.g., alcohol and tobacco products). The treatment of these transactions and goods is not affected by the CUSMA and will remain the same after the CUSMA enters into force. For more information, please refer to the corresponding sections of the CIRO and the Excise Tax Act and applicable regulations.

10. In order for courier shipments to receive the benefit of the CIRO, or the benefit of non-taxable status under Schedule VII to the Excise Tax Act, both as amended upon CUSMA’s entry into force, the value for duty must reflect all items that are part of an order by a customer and that are imported, even if the goods are shipped separately at different times or from different warehouses. It is not permitted to divide an order into several packages so that each individual shipment has a value for duty not exceeding CAD$20.00 from any country or CAD$40.00 from the United States or Mexico.

11. As well, the CIRO does not apply to postal importations. The Postal Imports Remission Order will continue to apply to goods imported by mail from any country and is not being amended – it will thus continue to establish a threshold of a value for duty not exceeding CAD$20.00. For more information regarding the Postal Imports Remission Order, please see Memorandum D8-2-2, Postal Imports Remission Order.

How to claim the benefits of the CIRO

Report

12. Section 12(1) of the Customs Act requires that all imported goods be reported to the Canada Border Services Agency (CBSA). Section 12(3) of the Customs Act outlines by whom the reporting must be completed and is further detailed in Memorandum D3-1-1, Policy Respecting the Importation and Transportation of Goods.

Release

13. Courier Low Value Shipment (CLVS) Program participants may claim the CIRO or the benefit of non-taxable status under Schedule VII to the Excise Tax Act when requesting the release of eligible goods, by presenting to the CBSA with a Cargo/Release List (Consist Sheet) as per the information found in Memorandum D8-2-16, Courier Imports Remission or Memorandum D17-4-0, Courier Low Value Shipment Program. Memorandum D8-2-16 will be updated with information pertaining to the CUSMA commitments prior to the time that the CUSMA enters into force.

14. In order to claim the CIRO (including the CUSMA de minimis) or the benefit of non-taxable status under Schedule VII to the Excise Tax Act, the additional separation of the CIRO categories on the Cargo/Release List is required as follows:

15. Couriers that are not a CLVS Program participant may claim the CIRO or the benefit of non-taxable status under Schedule VII to the Excise Tax Act when requesting the release of eligible goods, by presenting a Cargo Control Document to the CBSA. A Cargo Control Document is a manifest or other control document that acts as the record of a shipment entering Canada. Further information regarding the Cargo Control Document can be found in Memorandum D3-1-1, Policy Respecting the Importation and Transportation of Goods.

16. When claiming the CIRO or the benefit of non-taxable status under Schedule VII to the Excise Tax Act for imported goods transported by courier, the Cargo Control Document presented to the CBSA in the release of goods must clearly state, among other data requirements:

(1)For goods imported by courier from any country other than the United States or Mexico:

(2)For goods imported by courier from the United States or Mexico

Note:

17. Further information regarding the reporting and release procedures can be found in Memorandum D17-1-2, Reporting and Accounting for Low Value Commercial Goods (Not Exceeding CAD$2,500).

Goods that are restricted, controlled, or regulated by another government department or agency

18. In order to enable the CBSA to ensure the health, safety and security of Canadians, importers must present the Agency with a separate Release on Minimum Document interim accounting (see Memorandum D17-1-4, Release of Commercial Goods) or a final accounting (including the required permits, licenses or certificates for each shipment if required) to affect the release of the goods that are controlled, prohibited or regulated by another government department or agency. Such goods may still be eligible under CIRO or the benefit of non-taxable status under Schedule VII to the Excise Tax Act. For further information regarding the accounting requirements of such goods, please see the section of this notice entitled, “Goods for which accounting is required under the CIRO”.

Accounting

Goods for which accounting is not required under the CIRO

19. Imported goods transported by courier from any country, having a value for duty not exceeding CAD$20.00 and eligible under the CIRO or non-taxable status under Section 7 of Schedule VII to the Excise Tax Act, do not require accounting*.

20. Imported goods transported by courier from the United States or Mexico, having a value for duty not exceeding CAD$40.00, and eligible under the CIRO or non-taxable status under Section 7.01 of Schedule VII to the Excise Tax Act, do not require accounting*.

21. As a reminder, it is not permitted to divide an order into several packages so that each individual shipment has a value for duty not exceeding CAD$20.00 from any country or CAD$40.00 from the United States or Mexico.

22. *Imported goods transported by courier with a value for duty not exceeding CAD$20.00 from any country or CAD$40.00 from the United States or Mexico that are restricted, controlled, or regulated by another government department or agency, may qualify under the CIRO or non-taxable status under Schedule VII to the Excise Tax Act, however they must be accounted for.

Goods for which accounting is required under the CIRO

Courier Low Value Shipment (CLVS) Program participants

23. Additional steps are required to those outlined Memorandum D17-1-10, Coding of Customs Accounting Documents for processing (taxable) CIRO shipments utilizing Consolidated Accounting Documents. Refer to Appendix J, Form B3, Type F - Coding Instructions for Consolidated Accounting Documents of Memorandum D17-1-10 for additional information.

24. As per the memorandum, consolidated accounting may be separated by (c) Special Authority Shipments. Imported goods transported by courier from the United States or Mexico, having a value for duty of CAD$40.01 to $150.00, and eligible under the CIRO (free of customs duties but tax applicable) must be accounted for and any applicable taxes shall be paid. The following additional information is considered essential for such goods

Note:

25. The CIRO Order in Council number 85-2955 must continue to be quoted on the supporting documentation including qualifying details where accounting is not required, as it is today.

26. Imported goods transported by courier with a value for duty exceeding CAD$20.00 from any country other than the United States or Mexico, or exceeding CAD$150.00 from the United States or Mexico will continue to require accounting, as per the current CLVS Program procedures.

Couriers that are not a CLVS Program participant

27. Imported goods transported by courier from any country except from the United States or Mexico, having a value for duty CAD$20.01 or greater are not eligible under the CIRO or the benefit of non-taxable status under Section 7.01 of Schedule VII to the Excise Tax Act. Such goods must be accounted for and any applicable duties and taxes shall be paid. Goods released outside of the CLVS program must be accounted for by the importer/owner of the goods. Further information regarding the accounting process can be found in Memorandum D17-1-10, Coding of Customs Accounting Documents.

28. Imported goods transported by courier from the United States or Mexico, having a value for duty of CAD $40.01 to $150.00, and eligible under the CIRO (free of customs duty but tax applicable) must be accounted for and any applicable taxes shall be paid. It is not permitted to divide an order into several packages so that each individual shipment from the United States or Mexico has a value for duty not exceeding CAD$150.00. Goods released outside of the CLVS program must be accounted for by the importer/owner of the goods. When claiming the CIRO, the Form B3-3, Canada Customs Coding Form must indicate, among all other data requirements:

29. Further information regarding the accounting process can be found in Memorandum D17-1-10, Coding of Customs Accounting Documents.

30. Imported goods transported by courier with a value for duty not exceeding CAD$20.00 from any country, or CAD$0 to $40.00 or CAD$40.01 to $150.00 from the United States or Mexico, that are restricted, controlled, or regulated by another government department or agency, may qualify under the CIRO or the benefit of non-taxable status under Schedule VII to the Excise Tax Act, however they must be accounted for, including any applicable certificates, licences, permits, or other documents required by other government departments or agencies for each good.

31. When claiming the CIRO for such goods, the Form B3-3, Canada Customs Coding Form, must indicate, among all other data requirements:

32. Further information regarding the other government departments or agencies can be found in the series Memoranda D19 - Acts and Regulations of Other Government Departments.

33. Imported goods transported by courier from the United States or Mexico, having a value for duty of CAD$150.01 or greater are not eligible under the CIRO or the benefit of non-taxable status under Sections 7 or 7.01 of Schedule VII to the Excise Tax Act. Such goods must be accounted for and any applicable duties and taxes shall be paid. Goods released outside of the CLVS program must be accounted for by the importer/owner of the goods. Further information regarding the accounting process can be found in Memorandum D17-1-10, Coding of Customs Accounting Documents.

Compliance Verification Activities

34. All goods for which the CIRO or the benefit of non-taxable status under Schedule VII to the Excise Tax Act is claimed may be subject to CBSA compliance verification activities. The CBSA may request for further documentation to substantiate the data reported or declared to the CSBA for the purposes of claiming this benefit. Such documentation may include: a Canada Customs Invoice, Commercial Invoice, etc.

Additional Information

35. For more information, please call the Border Information Service line from within Canada at 1-800-461-9999 or from abroad at 204-983-3500 or 506-636-5064. Long distance charges may apply. Agents are available Monday to Friday (08:00 to 16:00 local time /except holidays). TTY is also available within Canada at 1-866-335-3237.

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