Guide for self-assessing Special Import Measures Act duties
Properly describing the imported goods
As an importer, you must properly describe the goods that you are importing, whether the information is submitted in paper or electronic format. Customs Memorandum D17-1-1 explains the normal customs requirements. However, these requirements are often not enough for SIMA purposes. Consult the "Information Required on Customs Documents" section on the Measures in Force for specific information required for each SIMA measure, as well as Memorandum D14-1-7 for more general information.
When importing goods subject to SIMA duties using a Commercial Accounting Declaration (CAD) via the CBSA Assessment and Revenue Management (CARM) portal, you must provide a more detailed product description. If you are claiming that the imported good is excluded from SIMA duties, a complete description must also be provided. Without proper and complete information, you may receive an incorrect assessment.
Using necessary SIMA Fields in CARM
While the CARM system will automatically calculate the amount of SIMA duties payable based on information provided, it is still your responsibility to verify that the amounts assessed are correct and, if necessary, self-declare correct amounts. Note that, self-assessments can only be made for higher amounts.
In addition to the general requirements outlined in the Guide to Importing Commercial Goods into Canada, in order to ensure that the CARM system correctly calculates the amount of SIMA duties owing, the required SIMA-specific fields are:
- SIMA invoice price (the exporter’s selling price to the importer or importer’s purchase price, whichever is less, in accordance with SIMA sections 24 and 25. This may come from the bill of sale)
- SIMA invoice price currency (currency in which the sales were transacted)
- SIMA export value deduction (allowable export charges to be deducted from the invoice price, in accordance with SIMA sections 24-28)
- SIMA quantity (amount imported)
- SIMA unit of measure (UOM) if applicable to the Measure in Force (MIF) (such as kilograms, tonnes, units, etc.)
- SIMA date of sale (the date goods were sold to the importer)
- SIMA exporter ID if specific normal values, etc. apply (see the appropriate MIF page)
- Model ID if specific normal values, etc. are applicable
- MIF code (the applicable measure in force, see the appropriate MIF page)
- Incoterms® (standard terms identifying the roles and responsibilities of sellers and buyers) and
- Whether security (surety) is used on the shipment
The importance of these fields are described in greater detail in the section on Calculating and paying the proper amount of SIMA duties in this Guide.
The Self-Declare SIMA checkbox is to be used to self-declare SIMA duties higher than those calculated by CARM. Improper completion of the CAD, particularly for SIMA-specific fields, will result in incorrect calculations of SIMA duties in CARM.
Importers and brokers should refer to the Get Started with CARM guide and CARM Client Portal (CCP) Onboarding Documentation for more information on using CARM.
Using the proper SIMA Code
CARM will generally assign the SIMA code on CADs. However, when populating pre-CARM entries into CARM, or when accounting for CLVS goods on a Type F CAD (see Memorandum D17-4-0: Courier Low Value Shipment Program and Memorandum D17-1-10: Coding of Customs Accounting Documents), you may be required to self-declare the SIMA code on the CAD.
SIMA codes are two-digit numbers. The first digit is from 1 to 5 and represents the type of assessment (see Chart 1 below). The second digit is from 0 to 2 and represents the form of payment (see Chart 2 below). Importers may be assessed an administrative monetary penalty if they fail to provide the required code for any goods subject to SIMA. Please refer to the SIMA Administrative Monetary Penalty System (AMPS) for more information on the matter.
| First number | Explanation |
|---|---|
| 1 | Goods, although the same classification, are especially exempted from a Canadian International Trade Tribunal (CITT) injury finding or from a Surtax Order under the Customs Tariff. |
| 2 | Goods are subject to an undertaking under SIMA. |
| 3 | Goods are subject to provisional duty. |
| 4 | Goods are subject to a CITT injury finding, but no SIMA duty is payable. |
| 5 | Goods are subject to a CITT injury finding and/or a Surtax Order and SIMA duties and/or amount of surtax are payable. |
| Second number | Explanation |
|---|---|
| 0 | No liability. |
| 1 | Cash payment (which includes credit card, debit, etc.). |
| 2 | Surety (issued by a financial institution or acceptable bonding company). Surety can only be used for provisional duty or during the time of an expedited review. |
As an example, code 51 indicates that the goods are subject to an injury finding and/or a Surtax Order, that the SIMA duties and/or the amount of surtax are payable and they are being paid in cash (which includes any accepted cash payment method, i.e. credit card, debit, etc.).
| SIMA code | Explanation |
|---|---|
| 10 | Use to identify non-subject goods when goods are of the same classification as goods that are subject to a CITT finding. Use individual lines on the CAD to separate goods of the same classification from goods that are subject to a CITT finding. |
| 20 | Use for goods covered by an undertaking. |
| 30 | Use for goods where the provisional duty assessment is nil. |
| 31 | Use for goods where the provisional duty assessment is covered by cash. |
| 32 | Use for goods where the provisional duty assessment is covered by a SIMA surety. |
| 40 | Use for subject goods where the SIMA duty assessment is nil. |
| 50 | Use for subject goods where the SIMA duty assessment is covered by a valid OIC number (which must be entered in the Special Authority Field of the CAD). |
| 51 | Use for goods where the SIMA duty assessment and/or the surtax amount is covered by cash. |
| 52 | Use for subject goods under an expedited review where the SIMA duty assessment is covered by a SIMA surety. |
Maintaining proper records
Every person who imports goods into Canada must keep proper records. Generally, the records must be kept in Canada and be detailed enough to allow a CBSA officer to verify that the information submitted is correct and to determine that the correct amount of duty was paid.
When importing goods subject to SIMA duties, importers must keep proper records to allow for the verification of the following:
- date of sale
- description of the goods
- date and location of release
- commercial invoice
- purchase order
- proof of payment, including credits and adjustments and
- any other information as requested in a written notice, such as an importer notice
Calculating and paying the proper amount of SIMA duties
To understand the calculation of your duty liability, you need to know certain terms used in the calculation, such as normal value, export price, anti-dumping duties, countervailing duties, and provisional duties. SIMA duties payable are to be recorded in Canadian dollars on the CAD.
Normal values
The normal value is generally the selling price of the good in the country where it was produced or exported. In some situations, normal values are based on the costs of production plus a reasonable amount for administrative, selling, and all other costs plus a reasonable amount for profit.
Normal values are calculated based on confidential information submitted by exporters and manufacturers in foreign countries. As a result, these values are often considered confidential and are not always publicly available. Information regarding the normal values of subject goods should be obtained from exporters. Related information may be made available to importers on a need-to-know basis in accordance with the provisions of Memorandum D14-1-2: Disclosure of Normal Values, Export Prices, and Amounts of Subsidy Established Under the Special Import Measures Act to Importers. This memorandum allows the CBSA to:
- Provide normal values so that you may obtain release of a shipment, or account for goods previously released
- Provide normal values when goods that you have purchased are in-transit and
- Inform you if a price offered by the exporter will result in SIMA duties
Requests for normal values and potential duty liabilities are to be made in writing and accompanied by a proof of purchase, proof that the goods are in-transit, or proof of the price offered by the exporter.
The normal value is often expressed in the exporting country's currency, or in U.S. dollars, which means that you have to convert it to Canadian dollars to determine any duty you may owe (see Converting currency below).
Normal values are assigned on the basis of the Measure in Force Code (MIF Code), SIMA Exporter ID, and Model ID, each of which will be published on the relevant Measure in Force.
If there is no normal value for the product you are importing, often because there is not enough information or the exporter or manufacturer did not provide a complete answer to the request for information during the investigation, a ministerial specification will be used. This is usually a set percentage that is applied to the export price. This percentage varies for each case and is based on available information. The use of a ministerial specification generally results in a higher assessment. The CBSA also uses a ministerial specification if it receives insufficient or incomplete information by importers or their brokers, such as if the MIF Code, Exporter ID, or Model ID are not filled correctly.
Export price
The export price is generally the exporter's selling price reduced by any export charges that are included in the price, such as freight and insurance. This export price is determined using the commercial invoice and subtracting any identified export charges. In some circumstances, the export price may be calculated under a ministerial specification.
On the CAD, the Export Price is taken to be the difference between the SIMA Invoice Price minus the SIMA Export Value Deduction, with certain calculations performed on the basis of Incoterms®. SIMA Invoice Price is the exporter’s sale price or your purchase price for the goods, whichever is less. Particularly when the invoice is not in Canadian dollars ($CAN), that invoice price is converted into Canadian dollars using the Date of Sale. See the section on Converting currency for more details on this conversion.
SIMA Export Value Deductions are intended to apply to every additional charge that is included in the Invoice Price but which pertain specifically to the export of the good from the foreign exporter, and not to the good itself. For example, if the exporter is billing you for costs from the point of direct shipment such as packing, inland shipping, wharfage, warehousing, export permits/royalties, customs broker fees, etc., and these costs are in the SIMA Invoice Price, then these should be deducted because SIMA duties should be calculated only on the basis of the goods themselves.
This is also why Incoterms® are important, because Incoterms® describes where, when and how the relative responsibilities of the exporter, any customs brokers, and you as the importer are divided. Incoterms® are used in some circumstances to calculate and/or verify the Export Value Deduction.
Memorandum D14-1-7 gives more detail as to the means by which Invoice Price and Export Value Deductions are to be determined.
Calculating anti-dumping duty (margin of dumping)
Anti-dumping duties are to be equal to the margin of dumping, which is the difference between the normal value and the export price:
Normal value - Export price = Anti-dumping duty (or margin of dumping)
These duties are calculated on a per unit basis, i.e. per kilogram, per ton, per bushel, etc. If the export price is equal to or greater than the normal value per unit, then no anti-dumping duty is payable. This is why the SIMA Quantity and SIMA Unit of Measure (UOM) is important, and note that the appropriate UOM in particular should match the UOM of the SIMA Measure as described on the Measures in Force. Two examples are provided below.
Example #1: Anti-dumping duty payable
Invoice price: $2.30
Less declared freight included in price: $0.10
Equals export price: $2.20
Normal value: $2.50
Amount of anti-dumping duty owing: $0.30
Example #2: No anti-dumping duty payable
Invoice price: $2.80
Less declared freight included in price: $0.10
Equals export price: $2.70
Normal value: $2.50
Amount of anti-dumping duty owing: $0.00
Alternatively, if there are no specific normal values and no new model rates are applicable, the amount of anti-dumping duty will be calculated based on the use of the ministerial specification as explained above. The amount of anti-dumping duty owing is calculated by multiplying the export price by a set percentage. The dumping ministerial specifications can be found in the Duty Liability (Anti-dumping duties) section on the Measures in Force.
Example: Anti-dumping duty payable based on ministerial specification
Export price: $100
Set Percentage: 50%
Amount of anti-dumping duty owing: $50
Calculating countervailing duty
The countervailing duty is equal to the amount of subsidy on the product. If imported goods are subject to countervailing duties, there is always an amount payable. This is because countervailing duty is a set amount, usually on a per unit basis (i.e. per kilogram, per ton, per bushel, etc.). This is why the SIMA Quantity and SIMA Unit of Measure (UOM) is important, and note that the appropriate UOM in particular should match the UOM of the SIMA Measure as described on the Measures in Force. The countervailing duties amount can be found in the Duty Liability (Countervailing duties) section on the Measures in Force. Any export subsidies which are identified and included in countervailing duties are not to be included in the margin of dumping or calculation of anti-dumping duties.
Example: Countervailing duty payable
Units imported: 100
Countervailing duty rate: $2 per unit
Total countervailing duty owing: $200
Provisional duties
Generally, provisional duties are applicable on importations of subject goods during the provisional period, which begins on the date the CBSA makes a preliminary determination of dumping or subsidizing and ends on the earlier of the date that the CBSA causes the investigation to be terminated or the date the CITT issues its final decision on injury. These duties are based on estimates and only apply during the provisional period. Because these duties are temporary they cannot be appealed.
However, if in making a preliminary determination, the CBSA determines that the estimated margin of dumping of, or the estimated amount of subsidy on, the goods of a particular exporter is insignificant, the dumping and/or subsidy investigation will continue but provisional duties will not be imposed on goods of the same description imported into Canada during the provisional period. A margin of dumping of less than 2% of the export price and an amount of subsidy on the goods of less than 1% of the export price are normally considered insignificant.
If, within 90 days after making a preliminary determination, the CBSA determines that, in respect of any goods of a particular exporter, the goods have not been dumped or subsidized, or the margin of dumping or the amount of subsidy is insignificant, or if the CITT finds that the imports were not causing injury to the Canadian industry, any provisional duty paid or surety posted will be refunded.
If the CBSA makes a final determination that the goods have been dumped or subsidized, and the CITT finds that the imports are causing injury, the amount of provisional duty owing or paid is reviewed by the CBSA to determine the final amount of duty owing. An importer may appeal the final reviewed amount of duty by following the instructions provided. Where the importer has not paid provisional duty or posted surety within the prescribed time, interest applies to the provisional duties owing. The same rules apply to provisional duty outstanding or refunded as the rules for customs duties. The interest calculated on amounts owing or returned are determined under the Customs Act. The rate of interest used is set in the Interest Rate for Customs Purposes Regulations. Use the online Customs Interest Calculation Program.
Extension of duties: Circumvention
Where the CBSA makes a decision setting out a finding of circumvention, the CBSA will notify the CITT who will in turn modify the finding or order to include the circumventing goods and thereby extend SIMA duties to those goods. Once the CITT modifies the order or finding, anti-dumping or countervailing duty is payable on all dumped or subsidized goods of the same description imported on or after the day the anti-circumvention investigation was initiated, and on all shipments of the goods released after the date of the Tribunal's order amending the order or finding. These duties are applicable until such time as the order or finding is amended or rescinded or it expires.
If there are no exporter-specific normal values and/or amounts of subsidy applicable to the goods when they are imported, a ministerial specification will be used as explained above.
Converting currency
The amount of SIMA duty to be paid must be calculated and reported in Canadian dollars. Therefore, the normal value must be converted to Canadian dollars. If the export price is not in Canadian dollars, you will have to convert it to Canadian dollars as well. To do this, you have to use the exchange rate from the date the goods were sold. If you do not know the date of sale, use the date the goods were shipped to Canada.
The CARM system will perform the currency conversion into Canadian Dollars if you provide an accurate SIMA Invoice Price Currency and SIMA Date of Sale in CARM. In addition, you can get exchange rates by contacting your regional CBSA office or by calling the automated Border Information Service (BIS) at 1-800-461-9999. The BIS provides exchange rates, by recorded messages, for the seven common currencies from the last 60 days, or provides an option to speak directly to a CBSA officer for information on other currency exchange rates.
Payment
Provisional duty may be paid by cash or guaranteed by posting a surety bond. Cash payment includes payment by credit or debit card. If you chose to post a surety bond, it must be sufficient to cover the amount of provisional duty payable. If surety is used for the purpose of paying provisional duties, it must be reported on the CAD as a checkbox. To learn more about procedures for the release of goods subject to provisional duty, refer to the D14-1-7 Memorandum.
Anti-dumping and countervailing duties must be paid when accounting for a shipment. Payments are made in the same way and within the prescribed time as Customs duties are paid.
The Customs Act applies, with any modifications that the circumstances require, with respect to the accounting and payment of anti-dumping and countervailing duties. As such, failure to pay duties within the prescribed times will result in the application of the interest provisions of the Act. The rate of interest used is set in the Interest Rate for Customs Purposes Regulations. Use the online Customs Interest Calculation Program.
What to do if you make a mistake or pay too much duty
You can correct errors in two ways:
- Upward adjustments can be made by directly modifying the information submitted to CBSA through a self-adjustment
- Appealing the amount of SIMA duties paid on a specific transaction by requesting a Re-determination
Both types of changes are made by submitting a request for a SIMA re-determination through the CARM Client Portal (CCP) referencing the original CAD number and line on the CAD.
For more information on the re-determination request, please refer to: Guide for appealing a duty assessment or to the D14-1-3 Memorandum.
For more information on Self-adjustments, please refer to the D11-6-6 Memorandum.
The CBSA's role in duty assessment
The CBSA is responsible for providing you with the information you need to properly fulfill your importing responsibilities. The CBSA is also responsible for monitoring importations of goods subject to SIMA duties to ensure full compliance with the law. This includes ensuring that importers and their agents fulfill all of the responsibilities identified above.
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