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Second Round of Canada-EU Economic and Trade Negotiations Starts
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International Trade Minister Stockwell Day announced that officials from Canada and the European Union will meet this week in Brussels for a second round of negotiations toward a comprehensive economic and trade agreement.
"Our government is pursuing an ambitious trade agenda, and negotiating an economic agreement with the EU is a priority," said Minister Day. "As the Canada-EU joint economic study showed, this economic partnership could increase Canadian GDP by $12 billion annually, and bilateral two-way trade could increase by $38 billion. There is no doubt that such an agreement represents tremendous opportunities for Canadian companies looking at expanding their activities in the European market."
Canada and the EU had a successful first round of negotiations in October 2009. Significant progress was achieved in areas such as goods and services, government procurement, regulatory cooperation and dispute settlement.
The EU is already Canada's second-largest trade and investment partner, and the relationship holds great potential for growth. An agreement could benefit many sectors of the Canadian economy, including aerospace, chemicals, aluminum, wood products, fish and seafood, automotive vehicles and parts, agricultural products (e.g. beef, pork and wheat), transportation, engineering and computer services.
Canada and the EU have agreed to a very ambitious schedule for negotiations. After this round in Brussels, three additional rounds are planned by fall 2010. The next round is scheduled to take place the week of April 19 in Ottawa.
Canada's exports of goods and services to the EU reached nearly $32.9 billion in the first three quarters of 2009. Imports of goods and services from the EU were close to $39.7 billion in the same period.
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Canada Proposes New Import Requirements for Aquatic Animals
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The Canadian Food Inspection Agency is proposing to amend Canada's Health of Animals Regulations and the Reportable Diseases Regulations to implement a national aquatic animal health program. Among other things, the amendments would add aquatic animals and diseases of national and international significance to the current regulatory framework for terrestrial animals, thereby ensuring that aquatic animals that pose a disease risk meet international disease management requirements. These changes would require CFIA to be informed of the presence of listed diseases and implement controls to prevent these diseases from being introduced into or spread within Canada.
Canada does not currently have a comprehensive national programme to protect domestic animal populations from either the introduction of serious diseases or the spread of those diseases within Canada. Current regulations address the import and movement within and between provinces of wild and cultured salmonid species (salmon and trout) but there is no control at the federal level on the import or movement of crustaceans, molluscs or finfish species other than salmonids for disease control purposes.
Interested parties may submit comments on the proposed regulations by March 4, 2010.
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New Initiative to Help Canadian Businesses Expand to Developing Countries
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Last week, the Department of Foreign Affairs and International Trade announced the creation of a $20 million program to support Canadian businesses that want to invest responsibly in developing countries. Effective immediately, Investment Cooperation (INC) replaces the Canadian International Development Agency's Industrial Cooperation (CIDA-INC) program.
"This program will make it easier for innovative Canadian companies to contribute to economic growth and poverty reduction in developing countries," said International Trade minister Stockwell Day. "This will create jobs both at home and abroad."
Program applicants and clients must demonstrate adherence to strict international corporate social responsibility (CSR) standards in order to receive funding.
Applications will be processed more quickly than under the previous CIDA-INC program to ensure timely review and approvals. A service standard of 40 working days from submission of a completed application to approval has been introduced. Other changes include the expansion of the program to projects in most countries eligible for international development assistance, including China, Mexico, Malaysia and Thailand.
Companies that wish to apply for funding or pre-qualify online under the INC program may visit Investment Cooperation Program (INC) here.
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GHY E-Newsletter Issue #5 January · 2010
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Importer Security Filing (ISF)
GHY is ready for the future. Are you?
As part of the ongoing efforts by U.S. Customs and Border Protection (CBP) to improve security and transparency, importers and carriers bringing cargo into the U.S. on maritime vessels are now required to provide additional data to CBP (see below for the latest reminders about implementation of the ISF program).
Two additional data sets are required in the case of carriers and ten additional data sets by importers. The new importer transmission, called the Importer Security Filing (ISF), is separate from the carrier's manifest and the broker's entry.
The importer is now responsible to contact CBP 24 hours prior to the vessel being loaded with the required ISF data elements before the vessel is loaded at port of origin.
GHY's ISF Solution
GHY has partnered with South Ranch, Inc., an industry-leading software development company based in Niagara Falls, New York to make available to clients SmartBorder ISF, a web-based application that is the ideal solution for any organization required to submit additional data elements under the new CBP importer security filing rules.
 Importer Security Filing Features
· ISF is an internet-based application built on state-of-the-art Microsoft.net technologies for maximum speed, reliability and ease of use.
· Integration with profiles (profiles, transaction parties, product lists) and with the entry - will drop fields into the entry from ISF.
· Portal customization allows for streamlined procedures.
· Data validations - prevent rejects and transmission errors.
· One screen Importer Security Filing with quick views (last 25, 50 ISF's, etc).
· Comprehensive reporting for compliance verification.
· Full B2B EDI capabilities including export data for tracking & scheduled events.
· Secure address exchange & multi-level passwords/user permissions.
Find Out More
GHY's website provides a fact sheet on ISF as well as a preview (Screenshots of ISF Dashboard and Detail Screen). For more information on how GHY can help you manage your ISF (10+2) Import Security Filings online or to arrange an on-line demonstration contact us today at 1 800 572-2734 and ask for Vicki DeLuca.
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 Important Reminders About ISF/10+2
"Full Enforcement" Begins January 26, 2010
The following are reminders to ISF filers issued by CBP pertaining to recent or upcoming changes:
1. On January 26, 2009, the filing requirements for Importer Security Filing became mandatory. CBP expects all filers to be filing ISF data for any ocean shipment entering the U.S. While CBP has provided a one year flexible enforcement period to allow filers to work through various problems and to come into compliance with these requirements, the end of that time frame is fast approaching (i.e., January 26, 2010). Please be sure ISF data is filed for every applicable ocean shipment that you are importing into the U.S.
2. There has been an increase in calls regarding 'NO BILL ON FILE' messages. While CBP understands that many bills of lading may be associated with a single shipment, AMS only allows for the possibility of one or two bills being associated with a shipment. In the instance of one bill of lading referencing a shipment, the bill is generally referred to as a straight, simple, or regular bill. In the instance of two bills of lading referencing a shipment, there will be both a master bill and a house bill, of which the house bill is the lowest bill level. There cannot be a master bill with no house and there cannot be a house bill with no master. Again, if there is only one bill in AMS, it would be a simple bill.
For an ISF filer to receive a 'BILL ON FILE' message, the bill(s) of lading submitted in the ISF must be at the lowest bill level and must match the bill(s) of lading submitted in AMS. A match is made when the bill type(s) (i.e. master, house, or simple) and the bill number(s) submitted in the ISF match exactly to the bill type(s) and bill number(s) submitted in AMS for manifest purposes. A bill that is improperly submitted in the ISF will not receive a 'BILL ON FILE' message.
3. While bonds are not currently required for ISF, CBP would like to emphasize that the bond data must be submitted properly beginning January 26, 2010. A bond type 9 (single transaction bond) may only be used with a bond activity code 16 (ISF bond) for a stand alone ISF. A bond type 9 may NOT be submitted with a bond activity code 01 for a stand alone ISF. Any stand alone ISF with the 01/9 combination will be rejected beginning January 26, 2010.
4. The unified ABI documents (Entry Summary with ISF, Cargo Release with ISF, and FTZ with ISF) are no longer available on the ISF Transaction Sets page. They can be found in the appropriate ABI Chapters of the CATAIR, including Entry Summary, Cargo Release, and Foreign Trade Zone. A link to the ABI Chapters webpage can be found on the ISF Transaction Sets page until further notice. All future changes of these documents will be reflected directly in the ABI CATAIR.
Note: A helpful FAQ about ISF issued by the National Customs Brokers and Forwarders Association of America, Inc. (NCBFAA) is now available from our website here.
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USITC Issues Report on First Sale Rule
Late last month the U.S. International Trade Commission (USITC) issued on its much-anticipated report on the use of the First Sale Rule. The First Sale Rule was judicially established more than 20 years ago and is used by many U.S. importers to legally lower import duties, particularly on products subject to high duties like textiles, apparel and footwear.
 U.S. CBP tried to eliminate the First Sale Rule in 2008 but was forced to withdraw the proposed revocation in the face of considerable opposition from industry and an unusually rapid response from lawmakers. As a result, Congress directed CBP to postpone any action on the First Sale Rule until at least January 1, 2011.
Congress also imposed a year-long reporting requirement on importers using First Sale, and the USITC report analyses the information gathered as a result. This report found that only US$38.5 billion or 2.4 percent of the US$1.63 trillion in total U.S. imports during the year ending August 31, 2009 were valued using the First Sale Rule. Roughly 86.4 percent of total U.S. imports during the period of review were valued using the transaction value method and 2.7 percent of those imports were valued using the First Sale Rule. The transaction value method is based on the price actually paid or payable by a buyer for a good plus adjustments for certain fees such as commissions, packing, royalties and licensing fees. The use of First Sale is only allowed when the transaction value method is the valuation method appropriate to an importation.
Machinery and computers of HS Chapter 84 accounted for 15.5 percent or US$6 billion of the US$38.5 billion in total imports valued using the First Sale Rule during the year ending August 31, 2009. Electrical machinery of Chapter 85 ranked second with a 13.8 percent share (US$5,322 million), followed by woven apparel of Chapter 62 (5.1 percent or US$1,965 million), knitted apparel of Chapter 61 (4.9 percent or US$1,897 million) and mineral fuels of Chapter 27 (4.1 percent or US$1,588 million). The top products in terms of the share of total chapter imports held by First Sale imports were fruits and nuts of Chapter 8 (First Sale imports accounted for 10.7 percent of total Chapter 8 imports), articles of leather of Chapter 42 (9.7 percent share) and beverages of Chapter 22 (8.2 percent share). About 6.1 percent of all woven apparel, 5.9 percent of all footwear and 5.5 percent of all knitted clothing entered during the period of review were valued using the First Sale Rule.
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Congress Approves One-Year GSP Extension, Fails to Consider Legislation to Suspend Duties on Broad Range of Products
Congress typically considers every two years legislation to provide duty-free or reduced duty treatment to a range of products that are not produced in the United States. Traditionally, provisions included in these so-called miscellaneous trade bills must be non-controversial, must not apply to goods that compete with domestic products and must not result in a significant loss of revenue to the U.S. Treasury. To ensure that such eligibility criteria are met, each provision is introduced as a stand-alone bill and put through an extensive vetting process, including a public notice and comment period and cost analysis, before being compiled into a single package.
 Congress was supposed to approve an MTB in 2009 but this goal was not achieved, partly as a result of an unusually crowded legislative year that included a historic economic stimulus package, climate change legislation and comprehensive health care reform. House Ways and Means Trade Subcommittee Chairman Sander Levin (Democrat-Michigan) and Republican Ranking Member Kevin Brady (Texas) introduced on 16 December 2009 an MTB package that was developed in 2008 and has therefore been fully vetted by all relevant government agencies. The Senate has also been working on its own version of an MTB but a final package has not yet been introduced. As a result of these delays, many duty suspensions affecting a range of products - mostly chemicals but also an array of fibres, yarns, footwear and other miscellaneous products - expired at the end of 2009. Importers of affected goods could therefore face higher duties this year. Congress could potentially provide retroactive duty-free treatment to entries of many of these products if it approves an MTB in 2010.
Congress was able to approve in December legislation that extended for one year the Generalized System of Preferences and existing trade preferences for imports from Colombia, Ecuador and Peru. Congressional leaders decided to move forward with a one-year extension of GSP in order to put pressure on the House and Senate to act on broad-ranging trade preference reform this year. Such reform may include the potential broadening of the benefits included in trade preference programs to cover apparel and other imports from least-developed countries that do not currently benefit from duty-free treatment in the United States and the simplification of the rules of origin that must be met to qualify for duty-free treatment. Moreover, there has been talk of adopting more stringent GSP graduation requirements that could result in the removal of Brazil, India and other advanced developing countries from this program.
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New Procedures for Goods Released Under Courier LVS Program But Not Delivered
Effective February
13, 2010 new procedures will come into effect for goods released under
the Courier LVS Program that are not delivered to the importer or
owner. This would apply, for example, to situations where a courier
company attempts to deliver a package and it is refused by the
consignee.
 Under the new procedures, imported goods that are
released under the Courier LVS program but are not delivered to the
importer or owner will have to be accounted for under section 32 of the
Customs Act. In the past no
accounting was required pursuant to subsection 7(4) of the Accounting
for Imported Goods and Payment of Duties Regulations as long as the
goods were exported or destroyed under customs supervision. Due to a
review of the Regulations by the Parliamentary Standing Joint Committee
for the Scrutiny of Regulations several years ago, this provision of
the Regulations is being repealed.
While the goods will have to
be accounted for, no duties and taxes will have to be paid, provided
the goods are exported or destroyed under customs supervision by the
courier company pursuant to Subsection 18(1) of the Customs Act.
The
required accounting will have to be presented to the CBSA through the
consolidated B3 "F" type entry process for the Courier LVS Program. A
new Tariff code 0016 has been created for purposes of accounting for
non-delivered shipments under the under the Courier LVS Program. The
Customs Notice sets out two options for completing the "F" type entry
in order to account for the non-delivered goods. Only one or the other
of these options may be used, not both.
Where the courier
company is not the entity responsible for accounting for the
non-delivered goods, the courier company will be required to inform the
appropriate importer or customs broker in a timely manner that the
goods were not delivered and were or will be exported or destroyed to
allow the importer or customs broker to account for the goods in the
proper manner. The courier company must maintain the proof of export or
destruction.
Importers are cautioned that even though they may
refuse delivery of a Courier LVS shipment, they are ultimately
responsible for proper accounting for the shipment. It is not uncommon
for importers to refuse a Courier LVS shipment, only to receive an
invoice from their customs broker for services rendered in order to
account for the goods and pay the appropriate duties and taxes. This is
because the courier company assigns the shipment to the customs broker
designated by the importer to account for its Courier LVS shipments and
the customs broker is sometimes not aware that the shipment has been
refused. While they should have been doing so in the past, pursuant to
the Customs Notice, it is clear that courier companies have a
responsibility to ensure that the customs broker is advised when a
shipment is refused. However, as importers are ultimately liable for
accounting, they should be ensuring that whenever they refuse a
shipment, their customs broker is aware.
For more information, please consult Customs Notice 09-008 and/or correspondence from the CBSA available on our website.
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 Finding time to follow the latest international trade
developments and programs of Customs agencies on both sides of the border
relevant to your business can be challenging, so we hope you find this
issue of our Tradelines e-newsletter to be a helpful resource in this respect. As
always, we'd greatly appreciate any opinions, comments and suggestions you may
have to help us improve this information resource, so please don't hesitate to
let us know what you think.
If you haven't already, we'd like to take this opportunity to invite you to
check out our Tradelines E-News weblog where you can
find current stories updated daily about business events and developments that
are important to Canadian importers and exporters. Sign up for our RSS feed and
get automatic updates to your favourite reader as soon as they're posted. As well, you can now follow GHY on Twitter for the latest information, updates and links to articles of interest.
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