Vol. 146, No. 1 — January 4, 2012
Registration
SOR/2011-321 December 16, 2011
EXPORT AND IMPORT PERMITS ACT
Order Amending the Import Control List
P.C. 2011-1672 December 15, 2011
His Excellency the Governor General in Council, on the recommendation of the Minister of Foreign Affairs, pursuant to section 6 (see footnote a) of the Export and Import Permits Act (see footnote b), hereby makes the annexed Order Amending the Import Control List.
ORDER AMENDING THE IMPORT CONTROL LIST
AMENDMENTS
1. Item 95 of the Import Control List (see footnote 1) is replaced by the following:
95. Hatching eggs, for broilers, of fowls of the species Gallus domesticus, that are classified under tariff item No. 0407.11.11 or 0407.11.12 in the List of Tariff Provisions set out in the schedule to the Customs Tariff.
2. Item 99 of the List is replaced by the following:
99. Fat of fowls (not rendered or otherwise extracted) of the species Gallus domesticus, fresh, chilled or frozen, salted, in brine, dried or smoked, that is classified under tariff item No. 0209.90.10 or 0209.90.20 in the List of Tariff Provisions set out in the schedule to the Customs Tariff.
3. Item 108 of the List is replaced by the following:
108. Turkey fat (not rendered or otherwise extracted), fresh, chilled or frozen, salted, in brine, dried or smoked, that is classified under tariff item No. 0209.90.30 or 0209.90.40 in the List of Tariff Provisions set out in the schedule to the Customs Tariff.
4. Item 117.1 of the List is replaced by the following:
117.1 Cream, neither concentrated nor containing added sugar or other sweetening matter, of a fat content, by weight, exceeding 6 per cent, that is classified under tariff item No. 0401.40.10 0401.40.20, 0401.50.10 or 0401.50.20 in the List of Tariff Provisions set out in the schedule to the Customs Tariff.
5. Item 135 of the List is replaced by the following:
135. 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, 0407.11.92, 0407.21.10, 0407.21.20, 0407.90.11 or 0407.90.12 in the List of Tariff Provisions set out in the schedule to the Customs Tariff.
6. Item 161 of the List is replaced by the following:
161. Wheat and meslin that are classified under tariff item No. 1001.11.10, 1001.11.20, 1001.19.10, 1001.19.20, 1001.91.10, 1001.91.20, 1001.99.10 or 1001.99.20 in the List of Tariff Provisions set out in the schedule to the Customs Tariff.
7. Item 182 of the List is replaced by the following:
182. Barley that is classified under tariff item No. 1003.10.11, 1003.10.12, 1003.10.91, 1003.10.92, 1003.90.11, 1003.90.12, 1003.90.91 or 1003.90.92 in the List of Tariff Provisions set out in the schedule to the Customs Tariff.
COMING INTO FORCE
8. This Order comes into force on January 1, 2012.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Order.)
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 adopted on September 22, 2011, and is set to enter into force on January 1, 2012.
The present Order, consequential to Order 2011-191, amends the Import Control List (ICL). This regulation, made under the Export and Import Permits Act (EIPA), cites 18 of the Customs Tariff’sitem numbers that were changed by Order 2011-191. The amendments are required in order to align the codes on the ICL with those on 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 on the ICLconsequential to the Order Amending the Schedule to the Customs Tariff (Harmonized System Conversion, 2012) [SOR/2011-191]. As with Order 2011-191, the present amendment involves no changes in tariff or import policies, and the amendments are revenue neutral and tariff rate neutral.
Eighteen codes on the ICL are affected, including codes for commodities subject to tariff rate quotas (TRQs). Under these TRQs — which implement commitments made under NAFTA and the World Trade Organization (WTO) 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 to align the ICL with the amended Customs Tariff on January 1, 2012, would ensure that a range of serious economic, legal, and political risks are avoided.
- If the HS code for an import-controlled commodity had been amended on the Schedule to the Customs Tariff and this change had not been reflected on the ICL, all imports of that commodity would be subject to the “over access” rates of duty (until such time as the ICL could be aligned with the Customs Tariff). This would have significant negative economic consequences. For example, it is estimated that a three-month delay in the implementation of the required changes to the ICLwould cost importers of cream $4.3 to $7.2 million, importers of broiler hatching eggs $9.9 to $22.4 million, and importers of other eggs $1.8 to $3.5 million.
- If importers that have allocations under one of Canada’s TRQs are forced to pay “over access” duty rates (or if they face unusual difficulties or delays bringing their imports into Canada), they could resort to legal actions against the Government of Canada.
- If Canada’s trading partners experience difficulties (delays or additional costs) accessing the Canadian market according to the terms of Canada’s international obligations (e.g. under NAFTA and the WTO), they could initiate trade disputes against Canada. In particular, failure to make the changes to the ICL on January 1, 2012, could negatively affect trade relations with the United States, during an already difficult period: the financial crisis combined with the continued economic challenges and political tensions in the U.S. have underscored the difficult climate from a trade perspective.
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 Order is 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, including the ICL, as well as the administration of the TRQs for controlled commodities under these regulations.
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. 1991, c. 28, s. 3
Footnote b
R.S., c. E-19
Footnote 1
C.R.C., c. 604; SOR/89-251