Vol. 146, No. 1 — January 4, 2012
Registration
SOR/2011-303 December 12, 2011
EXPORT AND IMPORT PERMITS ACT
Order Amending the Allocation Methods Order — Hatching Eggs, Live Broilers, Eggs and Egg Products
The Minister of Foreign Affairs, pursuant to paragraph 6.2(2)(a) (see footnote a) of the Export and Import Permits Act (see footnote b), hereby makes the annexed Order Amending the Allocation Methods Order — Hatching Eggs, Live Broilers, Eggs and Egg Products.
Ottawa, December 5, 2011
JOHN BAIRD
Minister of Foreign Affairs
ORDER AMENDING THE ALLOCATION METHODS ORDER — HATCHING EGGS,
LIVE BROILERS, EGGS AND EGG PRODUCTS
AMENDMENT
1. Items 2 and 3 of the schedule to the Allocation Methods Order — Hatching Eggs, Live Broilers, Eggs and Egg Products (see footnote 1) are replaced by the following:
2. Hatching eggs, for broilers, of fowls of the species Gallus domesticus, that are classified under tariff item No. 0407.11.11 in the List of Tariff Provisions set out in the schedule to the Customs Tariff.
3. Eggs of fowls of the species Gallus domesticus, in the shell, fresh, preserved or cooked (other than hatching eggs for broilers), that are classified under tariff item No. 0407.11.91, 0407.21.10 or 0407.90.11 in the List of Tariff Provisions set out in the schedule to the Customs Tariff.
COMING INTO FORCE
2. This Order comes into force on January 1, 2012.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the orders.)
Issue and objectives
Canada and over 160 countries are contracting parties to the International Convention on the Harmonized Commodity Description and Coding System, which governs the Harmonized Commodity Description and Coding System (generally referred to as “Harmonized System” or simply “HS”). The HS is an international product nomenclature developed by the World Customs Organization (WCO) that contributes to the harmonization of customs and trade procedures. It is used extensively by governments, international organizations and the private sector for a range of purposes, including internal taxes, trade policies, monitoring of controlled products, rules of origin, freight tariffs, transport statistics, price monitoring, quota controls, compilation of national accounts, and economic analysis. The HS guides the numbering and description of approximately 8 500 tariff items in the Schedule to Canada’s Customs Tariff.
The WCO (through the HS Review Committee that represents contracting parties) updates the HS codes every five or six years to reflect developments in technology and trade patterns. The current round of amendments is set to take effect on January 1, 2012. As a contracting party, Canada is required to adopt these amendments. Accordingly, Canada incorporated these amendments through the Order Amending the Schedule to the Customs Tariff (Harmonized System, 2012) [SOR/2011-191], which was made on September 22, 2011, and is set to enter into force on January 1, 2012.
The present ministerial orders, consequential to Order 2011-191, amend nine regulations made under the Export and Import Permits Act (EIPA), namely, the Allocation Methods Order — Hatching Eggs, Live Broilers, Eggs and Egg Products; the Allocation Method Order — Turkey and Turkey Products; and the following General Import Permits: No. 1 — Dairy Products for Personal Use; No. 2 — Chickens and Chicken Products for Personal Use; No. 3 — Wheat and Wheat Products and Barley and Barley Products for Personal Use; No. 7 — Turkeys and Turkey Products for Personal Use; No. 8 — Eggs for Personal Use; No. 20 — Wheat and Wheat Products and Barley and Barley Products; and No. 100 — Eligible Agriculture Goods. These 9 regulations cite 18 of the Customs Tariff’s item numbers that were changed by Order 2011-191. The amendments are required in order to align the codes in the EIPA regulations with those in the Schedule to the Customs Tariff and would enter into force on January 1, 2012.
Description and rationale
These amendments are technical in nature, implementing for January 1, 2012, the changes to codes in the EIPA regulations consequential to the Order Amending the Schedule to the Customs Tariff (Harmonized System Conversion, 2012) [SOR/2011-191]. As with Order 2011-191, the present amendments involve no changes in tariff or import policies, and the amendments are revenue neutral and tariff rate neutral.
Eighteen codes in nine EIPA regulations are affected, including codes for commodities subject to tariff rate quotas (TRQs). Under these TRQs — which implement commitments made under the North American Free Trade Agreement and the World Trade Organization agreements — imports up to a predetermined quantity (i.e. until the import access quantity has been reached) are subject to low “within access commitment” rates of duty, while imports over this limit are subject to higher “over access commitment” rates of duty. The present amendments align the EIPA regulations with the amended Customs Tariff on January 1, 2012, ensure the proper administration of import controls on the implicated commodities according to the terms of Canada’s TRQ commitments, and avoid the following risks:
- If the HS codes amended in the Customs Tariff are not similarly updated in the General Import Permits No. 1, No. 2, No. 3, No. 7 and No. 8, it would force Canadian citizens who are legitimately importing small quantities of affected controlled goods for personal use to be subject to the “over access” rates of duty instead of the lower “within access” rate.
- If the General Import Permit No. 20 — Wheat and Wheat Products and Barley and Barley Products is not modified to align with the new Customs Tariff on January 1, 2012, all imports of wheat and barley would be subject to the “over access” rates of duty. This would represent an effective price increase of between 21% and 95% and would have significant negative economic consequences for wheat and barley importers, who could then resort to legal action against the Government of Canada.
- If the General Import PermitNo. 100 — Eligible Agriculture Goods (i.e. the permit that applies to all “over access” imports) is not properly amended, affected controlled commodities that would otherwise be imported at the “over access” rates of duty would be prevented from entering the country.
- If the two Allocation Methods Orders (AMOs) in question (i.e. the AMO for eggs and the AMO for turkey) are not amended to refer to the new HS codes, it would cause a range of difficulties/frictions in the administration of the TRQs for eggs and turkey (e.g. delays in processing applications for permits and delays at the border).
Consultation
The Canada Border Services Agency represents Canada on the WCO Harmonized System Review Committee and has consulted on an ongoing basis with relevant Canadian stakeholders during the WCO process leading to the adoption of the Order Amending the Schedule to the Customs Tariff (Harmonized System Conversion, 2012) [SOR/2011-191]. Given that the present ministerial orders are consequential to Order 2011-191, which implements the 2012 Harmonized System updates and modifies Canada’s tariff codes accordingly, no additional consultations were required.
Implementation, enforcement and service standards
The Canada Border Services Agency is responsible for the administration of and compliance with customs and tariff legislation and regulations. In the course of its administration of the code changes implemented through the Order Amending the Schedule to the Customs Tariff (Harmonized System Conversion, 2012) [SOR/2011-191], the Agency will inform the importing community.
Foreign Affairs and International Trade Canada (DFAIT) is responsible for the administration of the Export and Import Permits Act (EIPA) and its related regulations, as well as the administration of the TRQs for controlled commodities under these regulations. In the course of its administration of the TRQs and regulations, DFAIT will inform industry as required.
Contact
Ms. Katharine Funtek
Director
Trade Controls Policy Division (TIC)
Trade Controls and Technical Barriers Bureau
Foreign Affairs and International Trade Canada
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 613-996-0640
Footnote a
S.C. 1994, c. 47, s. 106
Footnote b
R.S., c. E-19
Footnote 1
SOR/95-197