Customs Issues and Procedure Part 4.pptx

Important Dates
▶ Assignment 3/21/2024
▶ Midterm 3/27/2024
▶ Final 4/5/2024
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Area Control List
(ACL)
▶ The Area Control List (ACL)
is a tool used by the
Government of Canada to
manage and control the
export, transfer, and
brokering of certain goods
and technology to specific
countries or regions. The
ACL is part of Canada's
Export and Import Permits
Act (EIPA) and is maintained
by Global Affairs Canada.

Area Control List
(ACL)
▶ The ACL categorizes countries or
regions into different groups based on
various factors such as security
concerns, human rights issues, or
international agreements. Goods and
technology destined for countries on
the ACL may require export permits,
and the Canadian government closely
regulates these transactions to ensure
compliance with domestic and
international laws and regulations.
Businesses and individuals involved in
exporting goods or technology from
Canada must consult the ACL to
determine if their exports require a
permit. Failure to obtain the necessary
permits for exports to countries on the
ACL can result in legal consequences
and penalties. Additionally, the ACL is
periodically reviewed and updated to
reflect changes in international
relations, security concerns, or other
relevant factors.

Environment and
Climate Change
Canada (ECCC)
▶ ECCC is the lead agency
responsible for implementing the
Convention on International Trade
in Endangered Species of Wild
Fauna and Flora (CITES).
Environment and Climate Change
Canada (ECCC) is the federal
department within the Canadian
government that deals with
environmental matters, including
the regulation of international trade
in endangered species through
CITES. ECCC works in
collaboration with other federal
agencies, such as the Canadian
Wildlife Service, to ensure
compliance with CITES regulations
and to protect endangered species
from overexploitation due to

Environment and
Climate Change
Canada (ECCC)
▶ CITES is an international treaty
aimed at regulating and monitoring
the trade in endangered species to
ensure their survival. It establishes
controls on the international trade
of certain plants and animals listed
in its appendices, which are divided
into three categories based on the
level of protection needed.
ECCC plays a crucial role in
Canada's efforts to enforce CITES
regulations, including issuing
permits for the import, export, and
re-export of CITES-listed species,
monitoring trade activities, and
collaborating with other countries
and international organizations to
combat wildlife trafficking and
protect endangered species.

Environment and
Climate Change
Canada (ECCC)
▶ The mandate of Environment
and Climate Change Canada
(ECCC) is to preserve and
enhance the quality of the
natural environment, conserve
Canada’s renewable resources,
conserve and protect Canada’s
water resources, forecast
weather and environmental
change, enforce rules relating to
boundary waters, and
coordinate environmental
policies and programs for the
federal government. It has a
broad mandate that
encompasses various aspects
of environmental conservation
and protection. The key
elements of ECCC's mandate

Environment and
Climate Change
Canada (ECCC)
• Preserving and enhancing the quality of
the natural environment: ECCC is
tasked with developing policies,
regulations, and programs aimed at
protecting and improving Canada's
natural environment, including
biodiversity conservation, habitat
preservation, and pollution prevention.
• Conserving Canada’s renewable
resources: ECCC works to sustainably
manage and conserve Canada's
renewable resources, such as forests,
wildlife, and fisheries, to ensure their
long-term health and productivity.
• Conserving and protecting Canada’s
water resources: ECCC is responsible
for managing and protecting Canada's
water resources, including lakes, rivers,
and oceans, through water quality
monitoring, pollution prevention
initiatives, and the enforcement of
regulations related to water

Environment and
Climate Change
Canada (ECCC)
• Forecasting weather and environmental change:
ECCC operates the national meteorological
service, providing weather forecasts, warnings,
and information to Canadians to help them make
informed decisions and mitigate the impacts of
severe weather events. ECCC also conducts
research on climate change and its impacts on
the environment and society.
• Enforcing rules relating to boundary waters:
ECCC administers and enforces regulations and
agreements related to boundary waters shared
with the United States, such as the Great Lakes
and other transboundary water bodies, to ensure
their protection and sustainable management.
• Coordinating environmental policies and
programs for the federal government: ECCC
plays a central role in coordinating environmental
policies and programs across federal
departments and agencies, as well as
collaborating with provincial, territorial, and
Indigenous governments, stakeholders, and
international partners to address environmental
challenges and achieve common goals.
Overall, ECCC's mandate reflects the Canadian
government's commitment to environmental
stewardship, sustainability, and the protection of
natural resources for present and future generations.

Registrar of Imported
Vehicles (RIV)
▶ Transport Canada has
contracted with another party
to establish and operate a
national program of vehicle
inspection, certification, and
registration, known as the
Registrar of Imported Vehicles
(RIV). Transport Canada
oversees the Registrar of
Imported Vehicles (RIV)
program, which is responsible
for inspecting, certifying, and
registering vehicles imported
into Canada. The RIV program
ensures that vehicles imported
from other countries meet
Canadian safety and
environmental standards
before they can be legally

Registrar of Imported
Vehicles (RIV)
▶ Under the RIV program, vehicle
owners are required to have their
imported vehicles inspected by an
authorized inspection center to
verify compliance with Canadian
standards. Once the vehicle
passes inspection, it can be
registered and licensed for use in
Canada.
The RIV program plays a crucial
role in ensuring the safety and
environmental compatibility of
imported vehicles, as well as
maintaining the integrity of
Canada's transportation system.
Transport Canada works closely
with the RIV program to enforce
regulations and standards related
to vehicle imports, contributing to
road safety and environmental

The Consumer
Packaging and
Labelling Act
▶ The Consumer Packaging and
Labelling Act applies to any
person who is a retailer,
manufacturer, processor, or
producer of a product or a
person who is engaged in the
business of importing, packing,
or selling any product. The
CPLA is a federal legislation that
regulates the packaging,
labelling, sale, importation, and
advertising of consumer
products in Canada. It applies to
various entities involved in the
production, distribution, and sale
of consumer products, including
retailers, manufacturers,
processors, producers,
importers, and packagers.

The Consumer
Packaging and
Labelling Act
▶ Under the CPLA, these entities are
responsible for ensuring that consumer
products comply with specific packaging
and labelling requirements, including
the provision of accurate and adequate
information to consumers regarding the
contents, composition, origin, and safe
use of the products. The CPLA aims to
protect consumers from deceptive or
misleading packaging and labelling
practices and to promote fair and
transparent trade practices in the
marketplace.
Entities subject to the CPLA must
adhere to its provisions and may face
penalties for non-compliance, including
fines and enforcement actions by
regulatory authorities such as the
Competition Bureau and Health
Canada. By regulating consumer
packaging and labelling, the CPLA
helps to safeguard consumer rights and

Terminal Learning
Objectives
▶ Describe the various tariff
treatments and their
corresponding codes.
▶ Find the list of countries and their
applicable tariff treatments in the
Customs Tariff
▶ Differentiate between a direct
shipment and a transshipment.
▶ Explain the rules of origin and their
importance.
▶ Calculate the regional value
content and when to apply the de
minimis rule.
▶ List the countries with specific tariff
treatments.

TARIFF TREATMENT
▶ A tariff treatment determines
the rate of duty that is
applied to imported goods
and is determined by the
terms of a particular trade
agreement. A trade
agreement is a legal
agreement between two or
more countries that provides
benefits to all signatories.
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TARIFF TREATMENT
▶ As well as reducing the rate of duty
on imported goods, a trade
agreement may also include
provisions on:
• government procurement—that is,
suppliers in one country can bid on
government contracts in countries
with which there is a trade
agreement;
• professional services—for example,
surveying and engineering—
performed in one country by a
resident of another;
• intellectual property, such as patents
and copyright;
• labour that would allow a resident of
one country to work in a country with
which there is a trade agreement;
• regulations regarding investment in
electricity, pipelines, and natural
gas; and
• environmental obligations, such as
those related to endangered

TARIFF TREATMENT
▶ The tariff treatment of
imported goods is identified
by one of the codes shown in
Table 5.1. These codes must
be indicated on the Form B3,
Canada Customs Coding
Form accounting document
presented to CBSA.

TARIFF TREATMENT
▶ In order to determine the tariff
treatment or treatments that can
apply to goods from a specific
country, you must consult the List
of Countries and Applicable Tariff
Treatments,1 included in the
schedule to the Customs Tariff.2
As an example, look for Italy on
the list in Figure 5.1.
If you follow the alphabetical list
under the heading “Country
Name” to Italy, you will see an “X”
in the column under Most-
Favoured-Nation (MFN) tariff
treatment and under “Other” it
shows CEUT. This means that
Italy is entitled to MFN tariff
treatment and the tariff treatment
under the Canada –European
Union Comprehensive Economic
and Trade Agreement.

DIRECT SHIPMENT
AND TRANSHIPMENT
▶ Direct shipment and transhipment,
which are both defined in the
Customs Tariff, must be
considered when determining the
origin, and ultimately the tariff
treatment, of imported goods.
Direct shipment occurs when
goods are shipped directly to a
consignee (the party and place
where the goods are shipped) in
Canada on a through bill of lading.
Goods may pass through another
country on their way to Canada,
but the journey must be
uninterrupted. The transfer of
goods from one carrier to another
carrier is not considered an
interruption of the journey.
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TARIFF TREATMENT
▶ Cost of production are any
specific costs that are
included in the cost to
manufacture the goods,
including:
• materials (but not including
any duties or taxes paid on
imported materials used to
manufacture the finished
goods),
• labour, and
• factory overhead.
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TARIFF TREATMENT
▶ The cost of production does not
include:
• any duties and taxes paid or payable on
imported materials used to
manufacture the finished goods;
• outside packing and expenses related
thereto, required for the
transportation of the goods;
• gross profit of the manufacturer or
exporter and the profit or
remuneration of any person dealing in
the article in its finished manufactured
condition;
• royalties;
• customs or excise duty or tax paid or
payable on imported materials,
carriage, insurance, and other
charges from the place of production
or manufacture in the country of
origin to the port of shipment; and
• any other costs or charges incurred or
to be incurred subsequent to the
completion of the manufacture of the
goods.

RULES OF ORIGIN
▶ In order to be eligible to use a particular
tariff treatment, the imported goods must
originate in a country that is a signatory to
a particular trade agreement.
Section 16(1) of the Customs Tariff
provides the following definition of
“originate”:
Subject to any regulations made under
subsection (2), for the purposes of this
Act, goods originate in a country if the
whole of the value of the goods is
produced in that country.
This means that unless section 16(2)
states otherwise, goods originate in a
particular country if the entire value of the
goods is derived from production in that
country.
Specific rules of origin are used to
determine the origin of goods under
specific tariff treatments. Before using
these rules, it is important to have first
determined the correct tariff classification
of the goods.
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REGIONAL VALUE
CONTENT
▶ When reading the specific rules of origin
for a particular tariff treatment, one
frequently encounters the term “Regional
Value Content (RVC).” RVC is always
expressed as a percentage.
There are two formulas used to determine
RVC. One uses the Transaction Value
(TV) method of the finished good and the
other uses the Net Cost (NC) method of
the finished good. The NC is the total cost
minus sales promotion marketing, after-
sales service costs, royalties, shipping
and packing costs, and non-allowable
interest costs included in the total cost.
The formula for the RVC when using the
TV method is:
In some cases, the specific rule of origin
will indicate that, using the TV method,
the RVC must be at least 60 percent for
the goods to be considered as originating.

DE MINIMIS RULE
▶ Certain tariff treatments allow the de
minimis rule to be used when determining
the country of origin. The de minimis rule
excludes a certain percentage of non-
originating parts and materials from
having to meet the tariff-shift rule. The
percentage allowed for de minimis varies
between tariff treatments and can vary
within a tariff treatment according to the
tariff item of the finished good.
For example, look again at the rule for
finished goods under heading 72.01.
Imagine that the finished pig iron you are
importing from the United States (US) is
valued at Cdn$10,000.00 and contains a
small amount of ferro-nickel. Because
ferro-nickel is also classified in chapter
72, the same chapter as pig iron, the
specific rule of origin does not apply.
However, if the ferro-nickel was valued at
less than a certain percentage of the
finished item, the pig iron would still
originate using the de minimis rule. In
most cases under CUSMA, the de
minimis allowed is 10 percent, which
means that in order to originate, the value
of the ferro-nickel would have to be
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SPECIFIC TARIFF
TREATMENTS AND
THE GENERAL
TARIFF
▶ As well as determining the tariff
classification number, you must
also be able to determine the
correct tariff treatment because
it is the tariff treatment, in
combi-nation with the tariff
classification number, that
determines the rate of duty.

MOST-FAVOURED-
NATION TARIFF
TREATMENT
▶ Countries that are entitled to use the
MFN tariff treatment are those that
are signatories to the General
Agreement on Tariffs and Trade, or
GATT. Goods originate in a country
that is a beneficiary of the MFN tariff
if:
• not less than 50 percent of the cost of
production of the goods is incurred
by the industry of one or more
countries that are beneficiaries of
the MFN tariff, or by the industry of
Canada; and
• the goods were finished in a country
that is a beneficiary of the MFN tariff
in the form in which they are
imported into Canada.
The goods must be shipped directly
to Canada from a country that is an

PROOF OF ORIGIN
▶ To claim the benefits of the MFN
tariff treatment, the owner or
importer of the goods must provide:
• a Canada Customs Invoice (CCI),
completed in English or French by
the importer or owner, that indicates
that the goods originate in the
applicable beneficiary country;
• where the CCI does not indicate that
the goods originate in the applicable
beneficiary country, a commercial
invoice, completed in English or
French by the vendor or the
transferee in the country of export,
that indicates that the goods
originate in the applicable
beneficiary country; or
• any other documentation, completed in
English or French, that indicates that
the goods originate in the applicable
beneficiary country.
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NEW ZEALAND AND
AUSTRALIA TARIFF
TREATMENTS
▶ There is no trade agreement between
Australia and Canada, nor New Zealand and
Canada, but the New Zealand and Australia
tariff treatments recognize the trade
relationship between these countries and
Canada.
Goods originate in Australia if not less than
50 percent of the cost of pro-duction of the
goods is incurred by the industry of Australia
or Canada or both and the goods were
finished in Australia in the form in which they
are imported into Canada.
Goods are entitled to the Australian tariff
(AUT) treatment only if the goods are
shipped directly to Canada, with or without
transshipment, from Australia. Goods
originate in New Zealand if not less than 50
percent of the cost of pro-duction of the
goods is incurred by the industry of New
Zealand or Canada or both and the goods
were finished in New Zealand in the form in
which they are imported into Canada. Goods
are entitled to the New Zealand tariff (NZT)
treatment only if the goods are shipped

PROOF OF ORIGIN
▶ In order to claim the benefits of
the Australian or New Zealand
tariff treatments, the owner or
importer of the goods must
provide:
• a CCI, completed in English or
French by the importer or owner,
that indicates that the goods
originate in the applicable
beneficiary country;
• where the CCI does not indicate that
the goods originate in the
applicable beneficiary country, a
commercial invoice, completed in
English or French by the vendor
or the transferee in the country of
export, that indicates that the
goods originate in the applicable
beneficiary country; or
• any other documentation, completed
in English or French, that
indicates that the goods originate

COMMONWEALTH
CARIBBEAN
COUNTRIES TARIFF
TREATMENT
▶ The Commonwealth Caribbean
Countries Tariff Treatment refers to
preferential trade arrangements
between Canada and certain countries
in the Caribbean region that are
members of the Commonwealth. These
arrangements are aimed at promoting
trade and economic development by
providing reduced or zero tariffs on
eligible goods traded between Canada
and the participating Caribbean
countries.
Under these tariff treatment programs,
eligible goods originating from
Commonwealth Caribbean countries
may benefit from reduced or duty-free
access to the Canadian market. This
preferential treatment is typically
granted through bilateral or regional
trade agreements negotiated between
Canada and the Caribbean countries

COMMONWEALTH
CARIBBEAN
COUNTRIES TARIFF
TREATMENT
▶ The specific details of the tariff treatment,
including eligible products, tariff rates,
rules of origin, and other conditions, are
outlined in the respective trade
agreements or arrangements. These
agreements may also include provisions
related to trade facilitation, technical
assistance, and capacity building to
support the implementation and
utilization of preferential trade
arrangements.
By offering preferential tariff treatment to
Commonwealth Caribbean countries,
Canada aims to foster closer economic
ties, stimulate trade and investment, and
contribute to the overall development
and prosperity of the region. These
arrangements also provide Canadian
consumers with access to a wider variety
of products and promote competitiveness
and diversification in both Canadian and

COMMONWEALTH
CARIBBEAN
COUNTRIES TARIFF
TREATMENT
▶ This tariff treatment is known as
CCCT or Caribcan. To use the
CCCT rates of duty, goods
must:
• meet the CCCT rules of origin;
and
• be shipped directly to Canada,
with or without transshipment,
from a beneficiary country
PROOF OF ORIGIN
All originating goods must be
documented on either a Form
A—Certificate of Origin or an
exporter’s statement of origin.

LEAST DEVELOPED
COUNTRY TARIFF
TREATMENT
▶ The Least Developed Country (LDC)
Tariff Treatment refers to preferential
trade arrangements provided by
developed countries to the least
developed countries, as classified by
the United Nations. These
arrangements aim to promote
economic development, alleviate
poverty, and integrate LDCs into the
global trading system by granting them
preferential access to the markets of
developed countries.
Under these tariff treatment programs,
eligible goods originating from least
developed countries may benefit from
reduced or zero tariffs when exported
to the markets of developed countries
that offer such preferences. This
preferential treatment is typically
granted unilaterally by developed
countries as part of their broader
efforts to support the economic
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LEAST DEVELOPED
COUNTRY TARIFF
TREATMENT
▶ The specific details of the tariff treatment,
including eligible products, tariff rates, rules
of origin, and other conditions, vary
depending on the preferences extended by
each developed country. Some countries
may offer preferential access to their
markets for all products originating from
LDCs, while others may have specific
arrangements or limitations based on
product categories or other factors.
The provision of preferential tariff treatment
to LDCs reflects the commitment of
developed countries to promote inclusive
and sustainable development and to
support the integration of LDCs into the
global economy. These arrangements help
to stimulate trade, attract investment,
create employment opportunities, and
enhance the productive capacity of LDCs,
ultimately contributing to poverty reduction
and improved standards of living in these
countries. Additionally, they provide
developed countries with opportunities for
enhanced cooperation and partnership with

LEAST DEVELOPED
COUNTRY TARIFF
TREATMENT
▶ The General Preferential Tariff (GPT)
treatment and the Least Developed
Country Tariff (LDCT) treatment are closely
related. Goods from countries entitled to
use the LDCT may also use the GPT. To
use the LDCT rates of duty, goods must:
• meet the LDCT rules of origin; • be finished in
an LDCT beneficiary country in the form in
which they were imported into Canada; and
• be shipped directly to Canada, with or without
transshipment from a least developed
country.
PROOF OF ORIGIN
Other than for originating goods found in
chapters 50 to 63 of the Customs Tariff,
either a Form A—Certificate of Origin or an
exporter’s statement of origin may be
submitted as proof of origin. For originating
goods of chapters 50 to 63 (textile and
apparel goods), Form
B255, Certificate of Origin—Textile and Apparel
Goods Originating in a Least Developed
Country must be submitted as proof of

GENERAL
PREFERENTIAL
TARIFF TREATMENT
▶ The General Preferential Tariff
(GPT) Treatment is a trade policy
measure employed by many
developed countries to grant
preferential tariff rates to eligible
goods imported from certain
developing or least developed
countries. The goal of GPT
treatment is to support the economic
development of beneficiary
countries by providing them with
improved market access to the
markets of developed countries.
Under the GPT treatment, eligible
goods originating from beneficiary
countries enjoy reduced or zero
tariffs when exported to the markets
of the country offering such
preferences. These tariff
preferences are typically unilateral

GENERAL
PREFERENTIAL
TARIFF TREATMENT
▶ The specific criteria for
determining eligibility for GPT
treatment, as well as the
extent of tariff preferences
granted, vary from country to
country. Generally, beneficiary
countries are categorized
based on their level of
development, with least
developed countries (LDCs)
often receiving the most
favorable treatment. However,
some developed countries
may also extend GPT
treatment to certain
developing countries that meet
specific criteria related to
economic performance, trade

GENERAL
PREFERENTIAL
TARIFF TREATMENT
▶ The GPT treatment is typically
implemented through legislation or
regulations in the granting country's
trade policy framework. It may cover a
wide range of products or be limited to
specific sectors or industries.
Additionally, some countries periodically
review and update their lists of
beneficiary countries and eligible
products to reflect changes in economic
conditions, trade relations, and
development priorities.
By providing preferential tariff treatment
to eligible countries, the GPT system
aims to promote economic growth,
reduce poverty, and enhance the
integration of developing countries into
the global economy. It also contributes
to fostering trade, investment, and
economic cooperation between
developed and developing countries,
thereby supporting broader efforts to

GENERAL
PREFERENTIAL
TARIFF TREATMENT
▶ Implemented in July 1974, the GPT
treatment was to have been in effect for a
period of ten years and has been
extended several times. Effective January
1, 2015, a major change was made and
74 of the 175 beneficiary countries were
removed from the list of countries entitled
to this tariff treatment. This was because
these countries were no longer
considered developing countries. To use
the GPT rates of duty, goods must:
• meet the GPT rules of origin;
• be finished in the GPT beneficiary country in
the form in which they were imported into
Canada; and
• be shipped directly to Canada, with or
without transshipment, from a beneficiary
country.
PROOF OF ORIGIN
All originating goods must be documented
on either Form A—Certificate of Origin or
an exporter’s statement of origin

US TARIFF
TREATMENT AND
MEXICO TARIFF
TREATMENT
▶ The United States and Mexico each have their own
tariff treatment policies, which dictate how they
impose tariffs on imports from other countries.
Here's an overview of each country's approach:
United States Tariff Treatment:
• The United States has various tariff treatment
programs, including:
o Most Favored Nation (MFN) Tariff: Under the MFN
principle, the United States generally applies the
same tariff rates to imports from all its trading
partners that are members of the World Trade
Organization (WTO). This means that tariffs are
not preferentially lowered for specific countries,
except under certain trade agreements or special
arrangements.
o Free Trade Agreements (FTAs): The United States
has negotiated numerous FTAs with other
countries and regions, such as the North American
Free Trade Agreement (NAFTA, replaced by the
United States-Mexico-Canada Agreement or
USMCA), the Dominican Republic-Central America
Free Trade Agreement (CAFTA-DR), and bilateral
agreements with countries like South Korea and
Australia. These FTAs typically involve preferential
tariff treatment for certain goods traded between
the participating countries, often reducing or

US TARIFF
TREATMENT AND
MEXICO TARIFF
TREATMENT
▶ The United States and Mexico each have
their own tariff treatment policies, which
dictate how they impose tariffs on imports
from other countries. Here's an overview of
each country's approach:
United States Tariff Treatment:
• The United States has various tariff treatment
programs, including:
o Generalized System of Preferences (GSP):
The GSP program allows certain developing
countries to export specified products to the
United States duty-free or at reduced rates.
However, eligibility for GSP benefits is subject
to criteria related to economic development,
trade policies, and other factors.
o Section 232 and Section 301 Tariffs: The
United States has imposed additional tariffs
on certain imports under Section 232 of the
Trade Expansion Act of 1962 (for national
security reasons) and Section 301 of the
Trade Act of 1974 (in response to unfair trade
practices). These tariffs are not based on
traditional tariff treatment principles and are

US TARIFF
TREATMENT AND
MEXICO TARIFF
TREATMENT
▶ The United States and Mexico each have
their own tariff treatment policies, which
dictate how they impose tariffs on imports
from other countries. Here's an overview of
each country's approach:
Mexico Tariff Treatment:
• Similar to the United States, Mexico also
employs various tariff treatment policies,
including:
o Free Trade Agreements (FTAs): Mexico is
party to numerous FTAs, including
NAFTA/USMCA, CAFTA-DR, and
agreements with the European Union,
Japan, and other countries. These
agreements provide preferential tariff
treatment for certain goods traded between
Mexico and its FTA partners, typically
reducing or eliminating tariffs on eligible
products.
o Special Tariff Programs: Mexico may have
special tariff programs or preferences for
specific industries or sectors, aimed at
promoting domestic production, attracting

US TARIFF
TREATMENT AND
MEXICO TARIFF
TREATMENT
▶ Overall, both the United
States and Mexico utilize a
combination of MFN tariffs,
free trade agreements, and
other special tariff programs
to manage their trade
relationships with other
countries and promote their
respective economic
interests.

Exporting with the U.S.-
Mexico-Canada
Agreement

GENERAL
PREFERENTIAL
TARIFF TREATMENT
▶ The General Preferential Tariff (GPT)
treatment is a trade policy mechanism
used by countries to provide
preferential tariff rates to goods
imported from developing countries or
territories. It is designed to support the
economic development and integration
of developing countries into the global
trading system by granting them
reduced tariffs on their exports to more
developed economies.
Overall, the General Preferential Tariff
treatment is a trade policy tool aimed at
promoting economic development and
integration for developing countries by
granting them preferential access to
export markets through reduced tariff
rates. By providing incentives for trade
and investment, the GPT treatment
contributes to poverty reduction,
economic diversification, and global
prosperity.

GENERAL
PREFERENTIAL
TARIFF TREATMENT
▶ In other words, if the goods
imported from the US are casual
goods and are marked “made in
the United States,” the UST may
be used. The rules of origin do
not have to be consulted.
Casual goods are goods other
than goods imported for sale or
for any industrial, occupational,
commercial, institutional, or
other like use, for example, a
television set purchased for the
home.
Goods that qualify for one of the
NAFTA tariff treatments must
fall under one of the following
six origin criteria.

GENERAL
PREFERENTIAL
TARIFF TREATMENT
▶ Here's how the General Preferential
Tariff treatment typically works:
• Reduced Tariff Rates: Under the
GPT treatment, importing countries
grant lower tariff rates or duty-free
access to goods originating from
eligible developing countries. These
reduced rates are often lower than
the Most Favored Nation (MFN)
rates applied to imports from other
countries.
• Eligibility Criteria: Eligibility for the
GPT treatment is usually based on
the classification of countries as
developing or least developed
according to criteria such as income
level, economic structure, and
development indicators. Countries
meeting these criteria are granted

GENERAL
PREFERENTIAL
TARIFF TREATMENT
▶ Here's how the General Preferential
Tariff treatment typically works:
• List of Beneficiary Countries:
Importing countries typically
maintain a list of beneficiary
countries or territories eligible for the
GPT treatment. This list may be
periodically reviewed and updated
based on changes in the economic
status of countries and evolving
trade relationships.
• Expiration and Renewal: The GPT
treatment may have expiration dates
specified in trade agreements or
legislation. Importing countries may
periodically review and renew their
GPT schemes, taking into account
changes in trade dynamics,
development needs, and

GENERAL
PREFERENTIAL
TARIFF TREATMENT
▶ Here's how the General Preferential Tariff
treatment typically works:
• Compliance and Monitoring: Beneficiary
countries must comply with certain
conditions or requirements to maintain
eligibility for the GPT treatment. These
conditions may include commitments
related to trade, development, labor
standards, environmental protection, and
good governance. Importing countries
may conduct periodic reviews or
assessments to ensure compliance with
these requirements.
• Benefits for Exporting Countries: The
GPT treatment provides significant
benefits for exporting countries by
improving their access to export markets,
reducing trade barriers, and enhancing
competitiveness. It helps stimulate
economic growth, create jobs, attract
investment, and promote sustainable
development in beneficiary countries.

USMCA vs NAFTA,
explained with a toy car

CRITERION A
▶ Criterion A indicates that the good is
“wholly obtained or produced
entirely” in the territory of one or
more of the CUSMA countries.
Simply purchasing the good in one
of the CUSMA countries does not
satisfy criterion A or any other
criterion. Examples are:
• mineral goods extracted in Canada,
Mexico, or the US;
• vegetables harvested in Canada,
Mexico, or the US;
• live animals born and raised in
Canada, Mexico, or the US; and
• goods produced in Canada, Mexico, or
the US exclusively from any goods
“wholly obtained or produced.”
Although criterion A is the most
straightforward criterion, it is the one
most often misused. You should be
aware that goods such as
machinery and electronic items

CRITERION B
▶ Criterion B is for goods that
are produced entirely in
Canada, the US, or Mexico
and satisfy one of the
specific rules of origin. The
rule of origin could include a
change in tariff classification
(from the parts or materials
to the finished good), an
RVC requirement, or a
combination of the two.

CRITERION C
▶ In order to qualify under
criterion C, the goods must
be produced entirely in the
territory of one or more of the
CUSMA countries using only
originating materials. Some
of the materials may be
originating because they
have undergone a tariff
and/or an RVC change.

CRITERION D
▶ Criterion D is reserved for
goods that have been
produced in one or more of
the CUSMA countries, but
the required rule of origin
cannot be met because
certain non-originating
materials do not undergo the
required change in tariff.
However, the goods do meet
an RVC requirement of 60
percent when the TV method
is used or 50 percent when
the NC method is used.

PROOF OF ORIGIN
▶ Under CUSMA, proof of origin is
not a prescribed format; there is
no actual certificate to complete.
Instead, CUSMA requires a
“certification of origin,” which is
a set of minimum data
requirements. The data set
requirements are outlined in
Annex 5-A in the Origin
Procedures chapter (chapter 5)
of the CUSMA text.
The certification of origin may be
placed on any document and be
completed by the producer,
exporter, or importer. It may be
completed in English, French, or
Spanish. If presented to CBSA
in Spanish, they may request
translation

CANADA – ISRAEL
AGREEMENT TARIFF
▶ The Canada-Israel Free Trade
Agreement (CIFTA) is a bilateral trade
agreement between Canada and Israel
aimed at promoting trade and
investment between the two countries
by reducing or eliminating tariffs on
goods traded between them. Under the
CIFTA, both Canada and Israel agreed
to liberalize trade in various sectors and
provide preferential tariff treatment to
each other's products.
Overall, the Canada-Israel Free Trade
Agreement tariff provisions contribute to
strengthening economic ties between
Canada and Israel by reducing trade
barriers, promoting market access, and
facilitating greater trade flows between
the two countries. By providing
preferential tariff treatment to each
other's products, the agreement helps to
create opportunities for businesses to
expand their exports and contribute to
economic growth and prosperity in both
Canada and Israel.

CANADA – ISRAEL
AGREEMENT TARIFF
▶ Countries that are entitled to use the
Canada – Israel Agreement Tariff
(CIAT) are Israel and any territories
to which the laws of Israel apply.
These include the West Bank and
the Gaza Strip. The Canada – Israel
Free Trade Agreement (CIFTA) was
implemented on January 1, 1997.
CIFTA rules of origin are used to
determine whether goods originate
under this trade agreement.
PROOF OF ORIGIN
Once it has been determined that
the goods qualify under CIFTA, the
exporter, producer, or manufacturer
must complete a certificate of origin.
For CIFTA goods exported from
Canada, the certificate of origin can
be completed by the exporter,
producer, or manufacturer in
Canada. The certificate of origin for
CIFTA goods may be completed in

CHILE TARIFF
TREATMENT
▶ Chile has engaged in various
trade agreements that affect its
tariff treatment.
Overall, Chile's tariff treatment
reflects its commitment to
liberalizing trade and promoting
economic integration with its
trading partners. By reducing
trade barriers through FTAs,
preferential tariff rates, and
adherence to WTO rules, Chile
aims to enhance market access,
stimulate economic growth, and
expand opportunities for
domestic businesses to engage
in international trade.

CHILE TARIFF
TREATMENT
▶ Canada and Chile are signatories to
the Canada – Chile Free Trade
Agreement (CCFTA), implemented on
July 5, 1997. Originating goods are
entitled to use the Chile tariff (CT)
treatment. CCFTA rules of origin are
used to determine whether goods
originate under this trade agreement.
PROOF OF ORIGIN
A certificate of origin must be
completed for goods qualifying under
the CCFTA rates of duty. For imported
goods, it is completed by the exporter,
producer, or manufacturer and for
qualifying goods exported from
Canada, it must be completed by the
exporter, producer, or manufacturer in
Canada. The certificate of origin for
CCFTA goods may be completed in
English, French, or Spanish. Specific
origin or preference criteria, similar to
those required on the NAFTA
Certificate of Origin, must be noted

COSTA RICA TARIFF
TREATMENT
▶ Canada and Costa Rica are
signatories to the Canada – Costa
Rica Free Trade Agreement
(CCRFTA), implemented on November
1, 2002. Originating goods are entitled
to use the Costa Rica tariff (CRT)
treatment. CCRFTA rules of origin are
used to determine if goods originate
under this trade agreement.
PROOF OF ORIGIN
A certificate of origin must be
completed for goods qualifying under
the CCRFTA rates of duty. For
imported goods, it is completed by the
exporter, producer, or manufacturer
and for qualifying goods exported from
Canada, it must be completed by the
exporter, producer, or manufacturer in
Canada. The certificate of origin may
be completed in English, French, or
Spanish. Specific origin criteria must
be noted when completing the
certificate of origin. There are four

PERU TARIFF
▶ The Canada-Peru Free Trade
Agreement (CPFTA) is a bilateral
trade agreement between Canada
and Peru aimed at promoting
trade and investment between the
two countries by reducing or
eliminating tariffs and other trade
barriers.
The Canada-Peru Free Trade
Agreement aims to enhance
economic cooperation, promote
sustainable development, and
create new opportunities for
businesses and workers in both
countries. By reducing trade
barriers and fostering a more
open and predictable trading
environment, the agreement
seeks to stimulate economic
growth, increase bilateral trade
and investment, and improve the
welfare of citizens in Canada and

PERU TARIFF
▶ The Canada – Peru Free Trade
Agreement was signed on May
29, 2008, and came into force
on August 1, 2009.
PROOF OF ORIGIN
The required proof of origin is
the Form BSF267, Canada –
Peru Certificate of Origin. This
form can be completed in
English, French, or Spanish.
Specific rules of origin, based on
the tariff classification of the
goods, are used to determine
origin.

EUROPEAN FREE
TRADE
ASSOCIATION
▶ The European Free Trade Association
(EFTA) is an intergovernmental
organization established with the goal
of promoting free trade and economic
cooperation among its member states.
Unlike the European Union (EU),
which aims for deeper political and
economic integration, EFTA focuses
primarily on facilitating trade and
economic relations among its member
countries while allowing them to
maintain their sovereignty.
The European Free Trade Association
plays a crucial role in promoting free
trade and economic cooperation
among its member countries and with
other regions of the world. By
facilitating trade and reducing trade
barriers, EFTA contributes to
economic growth, prosperity, and
development in Europe and beyond.

EUROPEAN FREE
TRADE
ASSOCIATION
▶ The European Free Trade
Association (EFTA), implemented
on July 1, 2009, includes Iceland,
Norway, Switzerland, and
Liechtenstein.
PROOF OF ORIGIN
The required proof of origin is a
statement, referred to as an Origin
Declaration. It can be provided on
an invoice or other supporting
document that describes the
originating product in sufficient
detail to enable its identification.
The declaration must be signed
by the exporter in the EFTA
country of export. Specific rules of
origin, based on the tariff
classification of the goods, are
used to determine origin.

COLOMBIA TARIFF
▶ The Canada-Colombia Free
Trade Agreement (CCOFTA) is a
bilateral trade agreement between
Canada and Colombia aimed at
promoting trade and investment
between the two countries by
reducing or eliminating tariffs and
other trade barriers.
The Canada-Colombia Free
Trade Agreement aims to
enhance economic cooperation,
promote sustainable
development, and create new
opportunities for businesses and
workers in both countries. By
reducing trade barriers and
fostering a more open and
predictable trading environment,
the agreement seeks to stimulate
economic growth, increase
bilateral trade and investment,
and improve the welfare of

COLOMBIA TARIFF
▶ The Canada–Colombia Free
Trade Agreement entered
into force on August 1, 2011.
PROOF OF ORIGIN
The required proof of origin
is Form BSF459, Canada –
Colombia Certificate of
Origin. This form can be
completed in English,
French, or Spanish. Specific
rules of origin, based on the
tariff classification of the
goods, are used to determine
origin.

JORDAN TARIFF
▶ The Canada–Jordan Free
into force on October 1,
2012.
PROOF OF ORIGIN
Jordan Certificate of Origin.
This form can be completed
in English, French, or Arabic.
Specific rules of origin,
based on the tariff
classification of the goods,
are used to deter-mine
origin.

PANAMA TARIFF
▶ The Canada – Panama Free
into force on April 1, 2013.
PROOF OF ORIGIN
Panama Certificate of Origin.
This form can be completed
in English, French, or
Spanish. Specific rules of
are used to determine origin.

HONDURAS TARIFF
▶ The Canada–Honduras
Free Trade Agreement
entered into force on
October 1, 2014.
PROOF OF ORIGIN
The required proof of
origin is Form BSF747,
Canada–Honduras
Certificate of Origin. This
form can be completed in
English, French, or
Spanish. Specific rules of
are used to determine
origin.

KOREA TARIFF
▶ The Canada – Korea Free
into force on January 1,
2015.
PROOF OF ORIGIN
is Form BSF760, Canada–
Korea Certificate of Origin.
Canada and Korea may
request that the certificate of
origin for a good imported
into Canada or Korea,
respectively, be completed
in, or translated into, its
language. Specific rules of

CANADIAN
EUROPEAN UNION
TARIFF
▶ The Canada – European Union
Comprehensive Economic and
Trade Agreement (CETA) came into
force on September 21, 2017. The
agreement is known as “CETA”, and
the Customs Tariff refers to the tariff
treatment as the CEUT.
PROOF OF ORIGIN
statement, referred to as an origin
declaration. It may be completed in
several languages, given the
number of countries included in
CETA. The origin declaration may
be provided on an invoice or other
document that describes the
originating product in sufficient detail
to enable its identification. Specific
rules of origin, based on the tariff
classification of the goods, are used
to determine origin.

CANADIAN
EUROPEAN UNION
TARIFF
▶ Key aspects of the Canadian-
European Union tariff provisions
under CETA include:
• Tariff Reduction and Elimination:
CETA provides for the gradual
reduction or elimination of tariffs on
a wide range of goods traded
between Canada and the EU. Over
time, tariffs on many products are
being phased out, leading to
increased market access and lower
costs for exporters and importers in
both Canada and the EU.
• Preferential Tariff Rates: Once fully
implemented, CETA grants
preferential tariff rates to goods
imported from Canada and the EU.
These rates are typically lower than
the Most Favored Nation (MFN)
rates applied to imports from

CANADIAN
EUROPEAN UNION
TARIFF
▶ Key aspects of the Canadian-European
Union tariff provisions under CETA
include:
• Rules of Origin: To qualify for
preferential tariff treatment under CETA,
goods must meet specific rules of origin
criteria. These criteria ensure that the
goods originate from within Canada or
the EU or meet other specified
requirements to be eligible for
preferential tariffs. Rules of origin help
prevent third-party countries from taking
advantage of the agreement by re-
exporting goods through Canada or the
EU.
• Trade in Services: CETA also includes
provisions for liberalizing trade in
services between Canada and the EU.
This involves commitments to remove
or reduce barriers to the cross-border
supply of services, as well as provisions
for the temporary movement of

CANADIAN
EUROPEAN UNION
TARIFF
European Union tariff provisions under
CETA include:
• Investment Protection: CETA includes
provisions to protect and promote
investment between Canada and the
EU. This includes guarantees of fair
and equitable treatment for investors,
protection against expropriation
without compensation, and
mechanisms for resolving investment
disputes.
• Intellectual Property Rights: CETA
contains provisions to protect
intellectual property rights, including
patents, trademarks, copyrights, and
trade secrets. These provisions aim to
facilitate trade and investment by
providing a predictable and secure
environment for intellectual property
owners.

CANADIAN
EUROPEAN UNION
TARIFF
European Union tariff provisions
under CETA include:
• Dispute Settlement Mechanism:
CETA includes a dispute
settlement mechanism to
resolve disputes between
Canada and the EU related to
the interpretation or
implementation of the
agreement. This mechanism
provides a framework for
consultations and mediation to
address concerns and ensure
compliance with the
agreement's provisions.

UKRAINE TARIFF
▶ The Canada–Ukraine Free
into force on August 1, 2017.
PROOF OF ORIGIN
is an origin declaration. It
may be completed in
English, French, or
Ukrainian. Specific rules of

COMPREHENSIVE
AND PROGRESSIVE
TRANS-PACIFIC
PARTNERSHIP
TARIFF
▶ The Comprehensive and Progressive
Agreement for Trans-Pacific Partnership
(CPTPP) came into force on December
30, 2018, for Canada, Australia, Japan,
Mexico, New Zealand, and Singapore.
Vietnam entered on January 14, 2019,
and the CPTPP will come into force for
Brunei, Chile, Malaysia, and Peru at a
later date.
PROOF OF ORIGIN
statement, referred to as an origin
declaration. It may be completed in
several languages, given the number of
countries included in CPTPP. The origin
declaration may be provided on an
invoice or other document that describes
the originating product in sufficient detail
to enable its identification. Specific rules
of origin, based on the tariff classification

GENERAL TARIFF
▶ The general tariff is not a
tariff treatment. Goods that
originate in countries that are
not included in the List of
Countries and Applicable
Tariff Treatments or that
originate in a country
included on this list but do
not meet the requirements
for another tariff treatment,
including MFN, are subject to
the general tariff rate of duty.
The rate of duty under the
general tariff is 35 percent,
and the code used on the
import document to indicate
use of this tariff is “3”.

GENERAL TARIFF
▶ Key characteristics of general
tariffs include:
• Uniformity: General tariffs are
usually applied uniformly to all
imported goods, regardless of
their country of origin or the type
of product. This uniformity
simplifies the administration of
customs duties and ensures a
level playing field for domestic
and foreign producers.
• Revenue Generation: General
tariffs are often used as a source
of revenue for the government.
Import duties collected from the
application of general tariffs
contribute to government budgets
and can be used to fund public
services, infrastructure projects,
and other government

GENERAL TARIFF
▶ Key characteristics of general tariffs
include:
• Protectionism: In some cases,
general tariffs may be used to
provide protection to domestic
industries from foreign competition.
By imposing tariffs on imported
goods, governments can make
foreign products relatively more
expensive compared to domestic
alternatives, thereby protecting
domestic industries from being
undercut by cheaper imports.
• Trade Policy Tool: General tariffs
can also serve as a tool of trade
policy, allowing governments to
influence trade flows and address
trade imbalances. Governments
may adjust tariff rates strategically to
promote certain industries,
encourage exports, or address
unfair trade practices by other

GENERAL TARIFF
▶ Key characteristics of general tariffs
include:
• Tariff Schedule: General tariffs are
typically outlined in a country's tariff
schedule, which specifies the
applicable tariff rates for different
categories of goods. Tariff
schedules may be periodically
updated through legislative changes
or international trade negotiations.
• Trade Liberalization: With the rise of
globalization and the proliferation of
free trade agreements, many
countries have reduced their general
tariff rates as part of efforts to
liberalize trade and promote
economic integration. Lowering
general tariffs can stimulate trade,
boost economic growth, and
increase consumer welfare by
providing access to a wider variety
of goods at lower prices.

GENERAL TARIFF
▶ Overall, general tariffs play a
significant role in
international trade by
influencing the cost, volume,
and pattern of trade flows
between countries. While
they can serve various
economic and political
objectives, their impact on
trade and economic welfare
depends on factors such as
their level, structure, and
application within a country's
overall trade policy
framework. This Photo by Unknown Author is licensed under CC BY-SA

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