HOW TO PLAN A CUSTOMS COMPLIANCE PROGRAM

HOW TO PLAN A CUSTOMS COMPLIANCE PROGRAM OUTLINE FOR A PRESENTATION TO MEMBERS OF CANADIAN SOCIETY OF CUSTOMS BROKERS EDUCATIONAL SEMINAR HELD AT MILL...
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HOW TO PLAN A CUSTOMS COMPLIANCE PROGRAM OUTLINE FOR A PRESENTATION TO MEMBERS OF CANADIAN SOCIETY OF CUSTOMS BROKERS EDUCATIONAL SEMINAR HELD AT MILLER THOMSON LLP, VANCOUVER, B.C. JANUARY 19, 2012

Daniel L. Kiselbach, Partner International Trade, Customs and Commodity Tax Group Miller Thomson LLP 604.643.1263 [email protected]

HOW TO PLAN A CUSTOMS COMPLIANCE PROGRAM1 I.

INTRODUCTION

The range and type of businesses engaged in the importation and exportation of goods to and from Canada is almost infinite.

Businesses range in size from small sole

proprietorships to large multinational corporations.

Businesses may be resident in

Canada or non-residents. Goods may be imported from or exported to countries worldwide. The types of goods can range from consumer products, to bulk commodities, to strategic goods that may have a military purpose. The laws and policies regulating those businesses are also wide-ranging. Changes are made to customs requirements on a regular basis. This may present challenges to customs compliance managers who must keep current with applicable laws and policies. Custom compliance begins with the identification and understanding of applicable laws and policies. It is implemented through the establishment of procedures and controls. It is maintained through monitoring and self-audits. Customs compliance is about risk management and being commercially effective. A compliance system can make the difference between having a reliable supply chain in a profitable business or an unreliable supply chain plagued with delays and penalties. The following pages will provide observations respecting how to plan a customs compliance program. II.

DESIRABLE FEATURES OF A COMPLIANCE PLAN

A good customs compliance program should meet the following priorities: 1.

Effectiveness: a system should be able to make accurate and useable information available to the manager and to custom authorities in a timely way. This is critical in times where regulatory investigations, verifications, audits or enforcement activity takes place. Being able to access documents and correct information in a timely way signals that the business is being run in a compliant manner.

1

Daniel Kiselbach is a partner in the International Trade, Customs and Commodity Tax Group of Miller Thomson LLP in Vancouver, B.C. Comments and suggestions respecting this outline are welcomed. This article should not be used or construed as legal advice.

-22.

Efficiency:

a system should provide information in the most productive and

economical manner (e.g., using electronic rather than paper processes when possible). The advantages to using electronic processes may be self-evident. Electronic documents and information may be easier to store, easier to access and retrieve, and may be easier to send to Canada Border Services Agency (CBSA) in response to verification or audit questionnaires. 3.

Confidentiality:

a system should protect information from unauthorized

disclosure. Unauthorized disclosure may be a big concern for certain clients who wish to protect such things as: (a) the cost of goods; (b) the profit margin on goods; (c) supplier’s names and locations; (d) purchaser’s names; (e) ingredients in goods; and (e) method of fabrication of goods. 4.

Integrity: a system should provide true, accurate and complete declarations and reports. As Wyatt Earp said: “Fast is fine but accuracy is everything”.2 True, accurate and complete declarations are required at the time of customs accounting. It is also absolutely critical to be true, accurate and complete when dealing with a CBSA verification or other audits. The provision of inaccurate information can quickly dampen the rapport that a business has with a verification officer or auditor.

5.

Availability: a system should be able to provide information now and for the required record retention period. For example, the Exporters’ and Producers Records Regulations3 and the Imported Goods Regulations4 set out 6 year records retention periods.

6.

Ability to Address All Regulations: a system should ensure that the requirements of all laws, regulations and contractual arrangements are met. Where a business has global operations it is necessary to keep track of the customs compliance requirements for each country. This may be a challenge for companies with customs transactions occurring on a world-wide basis. In such case, it may be

2

Quotations Book: http://quotationsbook.com/quote/33310/

3

SOR/97-71, as amended.

4

SORA/86-1011, as amended.

-3necessary to work with local customs brokers to identify customs requirements and to monitor customs compliance. 7.

Reliability: a system should provide reliable information. A system that it prone to, for example, intermittent breakdowns, can lead to disaster especially if the breakdowns occur at peak business periods or while a CBSA verification or other audit is underway. 5

III.

PRIORITY COMPLIANCE ISSUES

Canada’s greatest trading partner, the United States, has just experienced the worst recovery from a recession since the Great Depression.6 At this time importers and exporters may wish to reduce budgets for items that are not perceived as revenueproducing.

Budget limitations may make customs compliance more challenging.

Compliance managers or customs brokers may be forced to identify immediate priorities. In such cases it may be most effective and efficient to identify the issues that may most commonly arise and which may present the most risk if the business was the subject of a CBSA verification or audit. The following is a list of potential priorities: 1.

Valuation: establish the method for determining how to value goods. Some importers have been surprised that post-importation adjustments must be made to the value for duty of goods.7

CBSA has announced valuation verification

priorities for 2012 including: car, bus and lorry tire industry, video recording apparatus, pumps for liquids, jewellery and fresh cut flowers.8

5

See considerations identified in Daniel L. Kiselbach & Dalton Albrecht, “Customs Audits, Verifications and Voluntary Disclosures in Canada”, July 2011, 6(7/8), Global Trade & Customs Journal 339 and Price Waterhouse Coopers, Global (E–Invoicing & E–Archiving) (Price Waterhouse Coopers, Belgium) 2006, pages 28 and 29.

6

Peter Ferrara, Forbes January 12, 2012: http://www.forbes.com/sites/peterferrara/2012/01/12/the-worst-economic-recovery-since-thegreat-depression/

7

Post-Importation Payments or Fees “Subsequent Proceeds”: http://www.cbsa.gc.ca/publications/dm-md/d13/d13-4-13-eng.html 8 Canada Border Services Agency, Appendix “A” document titled Trade Compliance PostRelease Verifications – January 2012.

-42.

Classification: establish the method to determine how to classify goods. CBSA has announced classification verification priorities for 2012 including: specially defined mixtures, pet toys, seaweed, steel T posts and fresh cut flowers.

3.

Origin: establish the method for determining the origin of goods. CBSA has announced origin verification priorities for 2012 including: vegetable fats and oils, pumps for liquids and cocoa powder.

4.

Anti-dumping and countervailing duties: determine whether or not goods are subject to anti-dumping or countervailing duty or other special levies. Recently, for example, importers have been surprised by CBSA assessments of duty on aluminium extrusions on the grounds that they were “subject goods”. That is, subject to a Canadian International Trade Tribunal Order imposing anti-dumping duty on aluminium extrusions. Some of these assessment have been for millions of dollars.

5.

Program eligibility: determine, for example, whether or not goods are eligible for preferential tariff treatment under a free trade agreement for duty relief. The CBSA has been conducting verifications of claims for preferential tariff treatment under the North American Free Trade Agreement (NAFTA).

A common

compliance problem is the making of NAFTA claims in the absence of NAFTA Certificates of Origin. Another common issue is the failure to track the inputs into a finished good in order to ensure that the finished good meets the regional value content required of a specific rule of origin under NAFTA. 6.

Special levies or taxes: determine whether or not goods are subject to a special import or export charge, manufacturing processing fee, value added tax or other levy. For example, in a person who exports softwood lumber may be required to account for charges under the Softwood Lumber Products Export Charge Act, 2006.9 Persons who imports goods into the U.S. might be required to file a Certificate of Non-Reimbursement within 12 months of the date of the original accounting, failing which U.S. Customs and Border Protection may assess additional duties on the product.

9

Softwood Lumber Products Export Charge Act, 2006 S.C. 2006, c. 13.

-57.

Certification requirements: determine whether or not the goods must meet country-specific or international safety, environmental or other standards. For example, new Canadian and American legislation imposes product safety requirements, including the potential for testing.10

8.

Export controls, embargos: determine whether or not goods are subject to export controls and regulations. For example, Canada’s Export Control List, which is included in A Guide to Canada’s Export Controls, identifies specific goods and technology that are controlled for export from Canada to other countries.11

9.

Import controls: determine whether or not goods are subject to import controls or regulations. For example, there are certain requirements and permit procedures for goods on Canada’s Import Control List. Carbon steel, specialty steel and textiles, and clothing products are subject to permit requirements.12

10.

Permits: determine whether or not a permit is required in order to import or export the goods.

For example, permits may be required in connection with the

importation or exportation of dangerous goods, explosives, hazardous waste and hazardous recyclable material.13 11.

Unique country-specific requirements:

determine whether or not there are

unique considerations applicable to particular countries (e.g., Brazil customs authorities may have a particular interest respecting the declaration of the weight of goods).

10

Canada Consumer Product Safety Act, S.C. 2010, c. 21 and Daniel L. Kiselbach, “Selling consumer Products Into Canada: What Manufacturers, Importers, distributors and Retailers Need To Know” November 30, 2011, Vol. 1(21) North American Free Trade & Investment Report (Thomson Reuters, Toronto).

11

See Foreign Affairs and International Trade Canada, “A Guide To Canada’s Export Controls, 2009”: http://www.international.gc.ca/controls-controles/abouta_propos/expor/guide.aspx?view=d See Canada Border Services Agency Memorandum D19-10-2 Export and Import Permits Act (Importations): http://www.cbsa.gc.ca/publications/dm-md/d19/d19-10-2-eng.pdf See Canada Border Services Agency Memorandum D19-13-5 Transportation of Dangerous Goods: http://www.cbsa.gc.ca/publications/dm-md/d19/d19-13-5-eng.html; Administration of Explosives Act and Regulations: http://www.cbsa.gc.ca/publications/dm-md/d19/d19-6-1eng.html; and Import and Export of Hazardous Waste and Hazardous Recyclable Material: http://www.cbsa.gc.ca/publications/dm-md/d19/d19-7-3-eng.html

12

13

-6IV.

BEST COMPLIANCE PRACTICES

Customs compliance planning may also include the following: 1.

The establishment of good lines of communication with the CBSA officers responsible for the administration and enforcement of programs that apply to the business.

Global customs managers may need to establish a rapport with

customs authorities in various countries. For example, there may be a program manager responsible for a particular customs program (for example, duties relief under the Exporters of Processing Services).14

Further, contacts should be

established with officers and with other government authorities (e.g., Environment Canada for the transportation of hazardous recyclable materials or the Export Controls Division of Foreign Affairs and International Trade Canada for export controls established pursuant to Canada’s Export Control List). 2.

Understanding any country-specific laws and policies that affect goods or technology that will be imported or exported. For example, the exports of all goods and technology as defined in Item 5400 on Canada’s Export Control List, regardless of their nature and destination, require permits.15

3.

Conducting regular periodic self-audits to determine compliance levels. Compliance audits may focus on the high risk priorities and may follow the methodology set out by CBSA verification officers or other auditors responsible for the administration and enforcement of particular programs (e.g., the Export Controls Division).

4.

Creating a compliance committee involving a compliance manager and representatives for the regions or countries in which the company or group of companies does business. The responsibility of the compliance manager may include the following: (a)

Identify applicable customs laws and policies.

14

Canada Border Services Agency Memorandum D7-4-1 Duties Relief Program Rhttp://cbsaasfc.gc.ca/publications/dm-md/d7/d7-4-1-eng.pdf

15

Government of Canada, Export Control Handbook (Export Controls Division, (Foreign Affairs and International Trade Canada, 2011) p. 11 “C.2 Important note on U.S.- Origin Goods”.

-7(b)

Establish business systems and controls to ensure that those requirements are met.

(c)

Establish a customs compliance team, including representatives of the importer or exporter and its service providers. For example, an importer may create a centralized electronic information and document sharing system via cloud computing. In this way the importer can obtain up-todate information respecting the status of purchase orders, shipment date, reports (such as advance reporting of goods by carriers), permits (for example any import or export permit) and declarations from filed forms (such as B3 Canada Customs Coding Forms filed by customs brokers).

(d)

Establish contact with the officials responsible for the administration and enforcement of applicable laws and policies.

(e) 5.

Monitor compliance.

Create a customs compliance and procedures manual which sets out a record of past decisions and current procedures. A compliance manual is to record the decisions made in respect of transactions that may be the subject of verification and the procedures which should be followed to ensure that the business is compliant. Attached as Appendix “B” is an outline of examples of what might be contained in a compliance manual. Obviously, each business must tailor its compliance manual to take into account business-specific requirements.

V.

PLANNING FOR VERIFICATION AND AUDIT COMPLIANCE

Canada has established a self-reporting and self-assessing customs scheme. To some extent, self-reporting and self-assessing schemes rely upon the honesty and integrity of the declarations provided by importers and exporters.

However, officers conduct

verifications and audits to: (a)

audit or verify compliance;

(b)

correct non-compliance;

(c)

assess or re-assess duties, taxes and charges; and

(d)

assess interest, penalties and other consequences for non-compliance.

-8A customs verification or audit can be a confusing, difficult and time-consuming experience in the absence of compliance planning.

Disorganized, incomplete or

inaccurate responses to customs authorities may lead to findings of non-compliance and assessments of duty, penalties and interest. With compliance planning, an importer or exporter may stand a better chance of obtaining a successful verification or audit result. Some steps that importers or exporters can take in order to plan for verification and audit compliance include the following: (a)

Ensure that a business representative is responsible for receiving and responding to correspondence, verification letters, Detailed Adjustment Statements and other similar customs related documents in a timely way. Many audits result in the assessment of Administrative Monetary Penalties for failure to respond to the requests issued by CBSA officers.

(b)

If a CBSA verification officer conducts a verification or an auditor conducts an audit, ensure that only one person is responsible for communicating with the verification officer or auditor. Also ensure that all other relevant personnel are advised of the purpose of the verification or audit and the identity of the business point person.

(c)

Ensure that the business leaders understand the consequences for failing to respond to CBSA correspondence, verification questionnaires, Detailed Adjustment Statements and the like.

(d)

Obtain the resources (internal staff, customs brokers, consultants, legal counsel) necessary to deal with requests that are issued by the CBSA. For example, the CBSA may issue a verification questionnaire relating to 25 sample transactions. The CBSA officer may request relevant supply documents including the purchase orders and B3 Canada Customs Coding Forms. The CBSA officer may also request related documents such as royalty agreements in order to verify whether or not royalty payments should be included in the value for duty. It may be necessary

-9to obtain assistance from persons within the verification team in order to comply with the request.16 VI.

SUMMARY

This outline has provided information respecting how to plan a customs compliance program. Desirable features of a customs compliance system include: effectiveness, efficiency, reliability, confidentiality, integrity, availability, the ability to address all regulatory requirements. Customs managers may find it more effective and efficient to identify high-risk or most common substantive issues.

In addition, best compliance

planning practices include establishing a rapport with relevant government officials and setting up a compliance team. Further, compliance planning should include measures for dealing with a CBSA verification or other audit. It takes time to plan for customs compliance. However, the reward is the improvement of business operations and cost savings.

After all, business leaders like to avoid penalties, protracted audits and

appeals.

16

Supra, note 5, pages 28 and 29.

APPENDIX “B” GLOBAL COMPLIANCE MANUAL EXAMPLES (i)

Primary Import Requirements

The following checklist sets out primary import requirements which the importer and customs broker can review in order to ensure that someone is identified as having responsibility for compliance with the requirements: Importer

1.

Determine the value for duty

2.

Determine the classification number and the applicable rate of duty

3.

Determine the country of origin

4.

Determine whether a free trade agreement applies (e.g., NAFTA)

5.

Determine whether the goods are subject to import taxes

6.

Determine whether the goods are subject to special levies

7.

Determine whether the goods are subject to antidumping or countervailing duties

8.

Determine what labelling and marking requirements apply

9.

Determine what product standards apply

10.

Determine what other governmental requirements apply

11.

Determine what documents are required for a final accounting package

12.

Maintain all required documents and records for record retention period

13.

Determine whether corrections, refunds, or duty relief applications should be made and at what time

Customs Broker

-2(ii)

Commercial Invoice Checklist

The following is a checklist of information for a commercial invoice: Importer

1.

Vendor (the person who is the seller, indicating the name of address of: (a) the person selling the goods to the purchaser; or (b) the person consigning the goods

2.

Date of direct shipment

3.

Other References (such as the commercial invoice number or the purchase order number)

4.

Consignee name and address of the person

5.

Purchaser’s name and address

6.

Country of trans-shipment

7.

Country of origin of goods

8.

Transportation mode and the place of shipment

9.

Conditions of sales and terms of payment (terms and conditions of the agreement made by the vendor and purchaser)

10.

Currency of settlement (currency in which the payment is made)

11.

Number of packages

12.

Specification of the commodities. (Including: (i) kind of packages, e.g. cases or cartons, (ii) marks and numbers (the descriptive marks and numbers imprinted on the packaged goods.)

Customs Broker

-3-

Importer

13.

Quantity (quantity of each item in the appropriate unit of measure)

14.

Unit price (price per article, item amount)

15.

Total (the total price paid or payable in the currency of settlement)

16.

Total weight (net and gross weight)

17.

Invoice total (total value or price paid or payable for goods)

18.

Other country-specific requirements

(iii)

Customs Broker

Accounting Information - Checklist

The following checklist sets out basic accounting information requirements: Importer

1.

Importer’s name and import/export account

2.

Description of the goods

3.

Direct shipment date

4.

Tariff treatment or tariff agreement

5.

Country of origin

6.

Tariff classification

7.

Value for duty

8.

Appropriate duty or tax rates

9.

The calculation of duties owing

Customs Broker

-4(iv)

Records

The following is a checklist of documents that must be kept: 1.

Documents with respect to origin

2.

Documents with respect to marking

3.

Documents with respect to purchase

4.

Documents with respect to importation

5.

Documents with respect to the cost of goods

6.

Documents with respect to the value of goods

7.

Documents with respect to the payment for goods

8.

Documents with respect to the disposal of goods

9.

Documents respecting any advice or ruling received from customs authorities

(v)

Selecting the Valuation Method

The following chart refers to the alternative valuation methods which must be considered in a consecutive manner: 1.

Transaction value

2.

Transaction value method of identical goods

3.

Transaction value method of similar goods

4.

Deductive method of valuation

5.

Computed method of valuation

6.

Residual method of valuation

(vi)

Using the Transaction Value for Related Party Transactions

The following checklist sets out considerations that may be applicable where there are related party transactions involving a global company or group:

-5-

1.

Determine whether vendor of a good is related to the importer

2.

Evidence that the relationship between the vendor and importer did not influence the price paid or payable in respect of the goods (a)

examine how the price was determined

(b)

obtain benchmark prices for identical or similar goods via third party transfer pricing study or otherwise showing that the price is not significantly different from a price that would have been charged to an unrelated purchaser, or

(c)

obtain evidence that the transaction value of the goods meets one of the OECD requirements or “test values”: (i)

the transaction value of identical goods or similar goods in a sale of those goods for export between a vendor and a purchaser who are not related to each other at the time of sale

(ii)

the deductive value of identical goods or similar goods, or

(iii) the computed value of identical goods or similar goods 3.

(vii)

In obtaining evidence that the transaction value accords with a test value, have evidence of the following criteria (a)

the goods to which the test value relates must be exported at the same time or substantially the same time as the goods being appraised

(b)

the test value used must be the value for duty of the goods to which it relates

Determining the Transaction Value

The following chart sets out elements relating to the determination of the value for duty of goods under the transaction value method:

-6-

1.

Determine the price paid or payable for the goods including all direct and indirect payments to the vendor or on its behalf

2.

Add, if applicable, the amounts noted from paragraphs 1 to 6 below (if they are not already included in (a) above) (a)

commissions incurred by the purchaser (selling commissions)

(b)

packing costs (domestic and export packing

(c)

the value of assists (goods or services supplied free or at a reduced cost by the purchaser in connection with the production and sale for export of the imported goods). This will require the determination of the following:

(i)

the value of the assist;

(ii)

the method of allocation/apportionment of the value of the assist;

$

(iii) any transportation and costs associated with sending the assist to the place where it is used in the production of the imported goods; and (iv) the supplier of the assist. (d)

royalties and licence fees paid on condition of the import of the good

(e)

subsequent proceeds, accruing to the vendor.

(f)

transportation, insurance and associated costs up to and at the point of direct shipment. SUBTOTAL: $

$

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3.

(viii)

Deductions, if applicable (if included in (a) above: (a)

transportation, insurance and associated costs from the point of direct shipment

(b)

construction, erection, assembly costs, etc. after importation

(c)

import duties and taxes

SUBTOTAL

$

VALUE FOR DUTY

$

Determining Whether Interest Charges may be Excluded From Value

The General Agreement on Tariffs and Trade (“GATT”) issued Decision 3.1 on April 26, 1984 dealing with interest under financing arrangements and the following checklist outlines conditions which apply in order to avoid interest charges for a deferred payment from the price paid or payable: 1.

The charges are distinguished from the price actually paid or payable for the goods

2.

The financing arrangement was made in writing

3.

When required, that: (a)

the goods are sold at the price declared, as the price actually paid or payable

(b)

the claimed rate of interest does not exceed the level for transactions in the country where, and at the time when the finance was provided

4.

There is evidence that the importer could have bought the goods without incurring a financing charge

5.

The financing arrangement was not a condition of the sale of goods

-8-

(ix)

Information for Determining the Tariff Classification of Goods

The following is a checklist of the type of information required in order to classify goods: 1.

Purchase orders, commercial invoices, sales brochures, samples or other descriptive information

2.

A description of the composition of the goods

3.

A description of the manufacturing process relating to the goods

4.

Information with respect to the recommended function or purpose of the goods

5.

A description of any mechanical function

6.

A description of how any parts are integrated into a complete machine or article

7.

A complete list of parts

8.

A description of how each part or accessory is integrated into a complete unit (if applicable)

(x)

Method for Determining the Tariff Classification of Goods

The following is a checklist of considerations relevant to the classification of goods: 1.

Obtain descriptions and depictions of the goods, including their composition, function and use

2.

For functional units (such as a machine, a mill or a factory) obtain a description of how each part and accessory is integrated into a functional unit

3.

Determine the classification by reviewing the item and the description of goods and review the applicable aspects of the Harmonized System (a)

first considering the section

(b)

then the chapter

(c)

then the heading

(d)

then the subheading

-9-

(e) 4.

tariff item

The determination of the tariff classification should be confirmed through the application of the following: (a) the General Rules of Interpretation of the Harmonized System

5.

6.

(b)

the legal notes

(c)

the explanatory notes

(d)

the supplementary notes

Reference should be made to the following sources of information relating to classification: (a)

rulings or advice

(b)

classification opinions

(c)

tribunal or court decisions

(d)

policies

(e)

notices

(f)

remission orders

Establish a rating guide with respect to previous classifications of similar goods and review and update it on a periodic basis

(xi)

Origin/Preferential Tariff Treatment

1.

Copies of advice received in relation to the validity of the certificates of origin.

2.

Information in relation to the tracking of fungible materials originating from free trade territory and non-free trade territories showing that the use of nonoriginating materials does not affect the eligibility of finished goods produced from those materials.

3.

The identification of goods in relation to which preferential tariff treatment has been claimed.

4.

Obtain valid certificates of origin.

- 10 (xii)

Export Controls

The following is a checklist relating to export controls: 1.

Determine if export controls apply to goods or technology destined to specific end users or countries

2.

Determine whether or not the export of such goods may take place under the authority of a permit

3.

Determine whether any actions constitute “deemed exports” of goods

4.

Obtain permits

(xiii)

Duties Drawback

The following is a checklist of considerations for drawbacks: 1.

Determine whether or not goods are eligible for a drawback

2.

Complete a drawback claim and file it, together with supporting documentation. Supporting documents include the following:

(xiv)

(a)

any export sales invoice

(b)

a bill of lading or other shipping document

(c)

certificate of importation, sale or transfer if drawback applicant is not the importer

(d)

satisfactory evidence of duties paid

(e)

evidence that the drawback claim is being filed within the applicable time period

Duties Relief

The following is a checklist of considerations: 1.

Determine whether or not the goods qualify for duties relief and in particular: (a)

whether the imported goods are being exported in the same condition

- 11 -

(b)

whether the goods are used to produce other goods for export

2.

Apply for duties relief

3.

Obtain a copy of the duties relief certification or licence

4.

Document how the conditions of duty relief have been met and in particular how the goods imported relate to the goods claimed

5.

The extent to which the goods that are exported to the United States or Mexico are subject to restrictions under NAFTA

6.

Keep documentation for the applicable period after the relief was granted, and include records containing information concerning such matters as:

(xv)

(a)

the importation of the commercial goods

(b)

the processing of the commercial goods

(c)

the amount of relief granted on the commercial goods

(d)

the sale or transfer, between goods to whom certificates have been issued, of commercial goods

(e)

the payment of amounts equal to the amount of duties on the commercial goods that have been diverted

(f)

the inventory of the commercial goods

Labelling and Marking

The following is a checklist of considerations: 1.

Determine whether imported goods comply with marking requirements at the time of importation

2.

Determine whether goods comply with labelling requirements such as the following: (a)

labelling standards for foods, drugs and cosmetics

(b)

labelling requirements for hazardous products

- 12 -

(xvi)

Product Standards

The following is a checklist of considerations: 1.

Determine whether there are any country-specific standards respecting the goods

2.

Determine whether or not the goods meet existing standards

3.

Determine whether or not the goods must be certified as meeting applicable standards

4.

Determine whether or not the goods must adhere to countryspecific standards relating to units of measurement