Rules of Origin Respecting the General Preferential Tariff and Least Developed Country Tariff
Memorandum D11-4-4

Ottawa, October 16, 2017

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In Brief

  • 1. This memorandum has been updated to reflect the amendments to the General Preferential Tariff and Least Developed Country Tariff Rules of Origin Regulations (the Regulations).
  • 2. The Regulations, as amended, allows for more apparel products imported from least developed countries into Canada, to benefit from duty-free treatment.
  • 3. The Regulations, as amended:
    • a) Introduces and defines the new term “FTA partner country” under section 1;
    • b) Introduces new Least Developed Country Tariff (LDCT) rules of origin under new subsections 2(4.1) and 2(5.1);
    • c) Introduces new Part A3 to Schedule  1; and
    • d) Incorporates consequential amendments to subsections 2(3) and 2(7), and to Part A1 of Schedule 1, as a result of the new LDCT rules of origin in subsections 2(4.1) and 2(5.1).
  • 4. The editing revisions made in this memorandum do not affect or change any of the existing policies or procedures.

This memorandum outlines the guidelines for the determination of the origin of goods for purposes of the General Preferential Tariff (GPT) and Least Developed Country Tariff (LDCT) treatments, enacted pursuant to the Customs Tariff.

Legislation

Customs Act
Customs Tariff
General Preferential Tariff and Least Developed Country Tariff Rules of Origin Regulations
Proof of Origin of Imported Goods Regulations
Determination of Country of Origin for the Purpose of Marking Goods (Non-NAFTA Countries) Regulations
Temporary Storage Period Regulations
Haiti Deemed Direct Shipment (General Preferential Tariff and Least Developed Country Tariff) Regulations

Guidelines and General Information

1. GPT and LDCT beneficiary countries are identified in the Customs Tariff Schedule .

2. All countries entitled to the LDCT treatment as indicated in the Customs Tariff Schedule , are also beneficiaries of the GPT.

Definitions

3. The "Interpretation" section of the General Preferential Tariff and Least Developed Country Tariff Rules of Origin Regulations (the Regulations) contains definitions that are important in understanding the administration of the Regulations. For purposes of this memorandum, the following terms are also important:

Ex-factory price
Means the total value of: (a) materials; (b) parts; (c) factory overhead; (d) labour; (e) any other reasonable costs incurred during the normal manufacturing process, e.g. duties and taxes paid on materials imported into a beneficiary country and not refunded when the goods were exported; and (f) a reasonable profit. [Note: Any costs incurred subsequent to the goods leaving the factory, such as freight, loading, temporary storage, are not included in the ex-factory price calculation.]
HS
Means the Harmonized Commodity Description and Coding System that is used for the classification of goods.
Paragraph
Means a subset of a subsection to the Regulations (for example: paragraph 2(1)(a) is one of the definitions used to determine if a good originates from a GPT or LDCT beneficiary country).
Section
Means a portion of the Regulations (for example: Section 4 pertains to Direct Shipment).
Subsection
Means a subset of a section to the Regulations (for example subsection 2(1) defines goods as wholly obtained or produced).

Product Coverage

4. The applicable GPT rates of duty appear in the Customs Tariff Schedule . Goods for which a GPT rate is not indicated are not entitled to a GPT rate of duty but rather are subject to an alternate tariff treatment, usually the Most-Favoured-Nation Tariff (MFN). In addition, handicrafts from GPT beneficiary countries that meet the criteria outlined in Memorandum D10-15-13, Handicrafts, may benefit from duty-free treatment.

5. The applicable LDCT rates of duty accorded to goods are identified in the Customs Tariff Schedule . Where an LDCT rate is not indicated, the goods in question are not entitled to the LDCT treatment, but rather are usually subject to the alternate GPT or MFN treatment.

Methods of Determining Country of Origin

General

6. The country of origin of goods imported from a GPT or LDCT beneficiary is determined using the rules of origin set out in sections 2 through 4 of the Regulations.

Rules of Origin for GPT

7. To determine if goods are entitled to the GPT, only subsections 2(1), 2(2) and 2(8), in addition to sections 1, 3 and 4 of the Regulations may be applied.

GPT – Application of Subsection 2(1)

8. A good is "wholly obtained or produced" in a GPT beneficiary if it meets one of the definitions set out in subsection 2(1) of the Regulations. "Wholly obtained" does not mean a good purchased in a GPT beneficiary. Goods, which are "wholly obtained or produced" in a GPT beneficiary, must not contain any foreign materials or parts from outside that GPT beneficiary.

Example: Sugar cane grown and harvested in Pakistan would meet the definition of paragraph 2(1)(b) of the Regulations.

Example: Leather belts are produced in Egypt. They are made from leather wholly produced from cattle born and raised in Egypt. Therefore the belts are wholly produced in Egypt by the application of paragraph 2(1)(j).

GPT – Application of Subsections 2(2) and 2(8)

9. To qualify for the GPT treatment by the application of subsection 2(2) of the Regulations, a maximum 40% of the ex-factory price of the good as packed for shipment to Canada, may originate outside a GPT beneficiary or Canada. (i.e. at least 60% of the ex-factory price of the good as packed for shipment to Canada must originate in one or more GPT beneficiary countries or Canada.)

Example: A radio receiver subassembly is produced in Cambodia from imported parts. The receiver subassembly is then exported to the Philippines, where it is manufactured with other imported materials into a finished radio. As both countries are GPT beneficiary countries, the value of the materials and work done in Cambodia may be added to the work done in the Philippines to determine whether the radio meets the 60% originating content requirement.

Example: Insulated wire is manufactured in Bolivia. The materials used include steel from Canada, rubber from Côte d’Ivoire, and Bolivian materials and labour costs. To determine whether the wire meets the qualifying content requirement, the value of the Canadian steel may be added to the content originating from the GPT beneficiary countries.

10. The GPT 60% qualifying content may be cumulated from various GPT beneficiary countries or Canada in accordance with subsection 2(8) of the Regulations. However, any parts, materials or inputs used in the production of the goods that have entered the commerce of any country other than a GPT beneficiary country or Canada lose their GPT status, and as such, their value would count towards non-qualifying content.

11. To calculate the qualifying content, all GPT beneficiary countries are regarded as one single area. All value-added and manufacturing processes performed in the area may be integrated to meet the qualifying content requirement. Any Canadian content used in the production of the goods is also regarded as content from the GPT beneficiary country where the goods originate.

12. The goods must be finished in the GPT beneficiary country in the form in which they are imported into Canada.

Rules of Origin for LDCT

13. To determine if goods are entitled to the LDCT, only subsections 2(1), 2(3) through 2(7) and 2(9), in addition to sections 1, 3 and 4 of the Regulations may be applied.

14. The goods must be finished in a least developed country (LDC) in the form in which they are imported into Canada.

LDCT – Application of Subsection 2(1)

15. Where any good is identified in the Customs Tariff Schedule as being accorded the LDCT, subsection 2(1) of the Regulations may be applied to determine if the goods qualify for the LDCT. A good is “wholly obtained or produced” in an LDC if it meets one of the definitions set out in subsection 2(1) of the Regulations.

16. Goods, which are wholly obtained or produced in an LDC under this subsection, must not contain any foreign materials or parts from outside that LDC. In addition, "wholly obtained" does not mean a good purchased in an LDC.

Example: Fish caught in Haiti would meet the definition of paragraph 2(1)(e) of the Regulations.

Example: Cotton is harvested in Burundi. The cotton is spun into yarn and then woven into blankets in Burundi. The blankets are wholly produced in Burundi by the application of paragraph 2(1)(j) of the Regulations.

17. When goods of HS Chapters 50-63 are determined to originate by the application of the subsection 2(1), of the Regulations, Criteria G would be quoted in Field 6 of the Certificate of Origin – Textile and Apparel Goods Originating in a Least Developed Country (Form B255)

LDCT – Application of Subsections 2(3) and 2(9)

18. Where any good, with certain exceptions, is identified in the Customs Tariff Schedule as being accorded the LDCT, subsection 2(3) may be applied to determine if the good qualifies for the LDCT. Exception: this subsection may not be used to determine the origin of goods set out in Parts A1, A3 or B of Schedule 1 to the Regulations.

19. When determining if goods are entitled to the LDCT by the application of subsection 2(3) of the Regulations, exporters must ensure that the value of all materials, parts or products, including such materials, parts or products as threads, linings, interfacing, trims, zippers, buttons or fasteners which originate outside Canada or an LDC, or in an undetermined location, is no more than 60% of the ex-factory price of the goods as packed for shipment to Canada. (i.e. at least 40% of the ex-factory price of the goods as packed for shipment to Canada must originate in one or more LDCs or Canada).

20. In accordance with subsection 2(9) of the Regulations, for purposes of applying subsection 2(3), the value of any materials, parts or products used in the manufacture or production of the goods may include a value of up to 20% of the ex-factory price of the goods, as packed for shipment to Canada from a country set out in Schedule 2 of the Regulations.

21.  To calculate the qualifying content, all LDCs are regarded as one single area. All value-added and manufacturing processes performed in the area may be integrated to meet the qualifying content requirement. Any Canadian content used in the production of the goods is also regarded as content from the LDC where the goods originate. However, any parts, materials or inputs used in the production of the goods that have entered the commerce of any country other than an LDCT beneficiary country or Canada lose their LDCT status, and as such, their value would count towards non-qualifying content.

Example: Wool of Yemen is combined with spandex of Hong Kong and sewing thread of India to manufacture wool socks in Yemen. Under this subsection, a textile or apparel good may contain parts and materials originating outside an LDC, a country set out in Schedule 2 of the Regulations or Canada and valued at no more that 60% of the ex-factory price of the good as packed for shipment to Canada. The wool of Yemen origin represents 35% of the ex-factory price. The sewing thread of India and spandex of Hong Kong represents an additional 7%. This subsection permits inputs from countries set out in Schedule 2 of the Regulations, such as Hong Kong and India, to be included in the 40% originating parts and materials requirement. The 35% input of wool from Yemen combined with the 7% sewing thread and spandex inputs from the countries set out in Schedule 2 of the Regulations exceed the 40% minimum input requirement under this subsection. The socks therefore qualify for the LDCT.

22. The exporter has the option of certifying the originating status of any good referred to in paragraph 18 of this memorandum under subsection 2(1) or 2(3) of the Regulations.

23. When goods of HS Chapters 50-63 are determined to originate by the application of subsection 2(3) of the Regulations, Criteria A would be quoted in Field 6 of the Certificate of Origin – Textile and Apparel Goods Originating in a Least Developed Country (Form B255).

LDCT – Application of Paragraph 2(4)(a)

24. Paragraph 2(4)(a) of the Regulations may only be used to determine if “apparel goods” as set out in Parts A1 and A2 of Schedule 1 to the Regulations are entitled to the LDCT.

25. To be entitled to the LDCT, such “apparel goods” must be assembled in an LDC. The fabric used in the assembly of such “apparel goods” must be cut in that LDC or in Canada.

26. Furthermore, the fabric, or parts knit to shape, must be produced in an LDC or in Canada from yarns spun or extruded in an LDC, a country set out in Schedule 2 of the Regulations or in Canada. The yarns must not undergo further processing outside an LDC, a country set out in Schedule 2 of the Regulations or Canada, and the fabric (or parts knit to shape) must not undergo further processing outside an LDC or Canada.

Example: Dresses or skirts manufactured in Mali will qualify as originating and be eligible for duty-free LDCT treatment provided that the dresses or skirts are assembled in Mali from fabric that has been cut in Mali or Canada. The fabric must be produced in an LDC or in Canada from yarns that originate in an LDC, a country set out in Schedule 2 of the Regulations or in Canada, and the yarns and fabric have not undergone any further processing outside an LDC or Canada. As well, the yarns must have not undergone any further processing outside a country set out in Schedule 2 of the Regulations.

27. When goods of Parts A1 and A2 of Schedule 1 to the Regulations are determined to originate by the application of paragraph 2(4)(a) of the Regulations, Criteria D would be quoted in Field 6 of the Certificate of Origin – Textile and Apparel Goods Originating in a Least Developed Country (Form B255).

28. Where “apparel goods” are classified under a tariff item set out in Part  A2 of Schedule 1 to the Regulations the exporter has the option of certifying the goods under subsections 2(1), 2(3) or 2(4) of the Regulations.

LDCT – Application of Paragraph 2(4)(b) and Subsection 2(5)

29. Paragraph 2(4)(b) of the Regulations may only be used to determine if “apparel goods” as set out in Parts A1 and A2 of Schedule 1 to the Regulations are entitled to the LDCT.

30. To be entitled to the LDCT, such “apparel goods” must be assembled in an LDC. The fabric used in the assembly of such “apparel goods” must be cut in that LDC or in Canada.

31. Furthermore, the fabric or parts knit to shape, must be produced in a country set out in Schedule 2 of the Regulations from yarns spun or extruded in an LDC, a country set out in Schedule 2 of the Regulations or in Canada. The yarns, fabric or parts knit to shape, must not undergo any further processing outside an LDC, a country set out in Schedule 2 of the Regulations or Canada.

32. Finally, the value of any materials, including packing, that are used in the manufacture of the goods, that originate outside the LDC in which the goods are assembled must not be more than 75% of the ex-factory price of the goods as packed for shipment to Canada. However, any materials used in the production of the goods that have entered the commerce of any country other than an LDCT beneficiary country or Canada lose their LDCT status, and as such, their value would count towards non-qualifying content.

33. For purposes of paragraph 32 of this memorandum and pursuant to subsection 2(5) of the Regulations, any materials used in the manufacture or production of the good that originate in Canada are deemed to have originated in the LDC where the goods are assembled.

Example: Those same dresses or skirts manufactured in Mali will qualify and be eligible for duty-free LDCT treatment provided that the dresses or skirts are assembled in Mali and the fabric used in the manufacture of the dresses or skirts is produced in a country set out in Schedule 2 of the Regulations from yarns spun or extruded in an LDC, a country set out in Schedule 2 of the Regulations or in Canada. The yarns and fabric cannot undergo further processing outside an LDC, a country set out in Schedule 2 of the Regulations or Canada. When using fabric manufactured in a country set out in Schedule 2 of the Regulations, the value of any materials, including packing, which does not originate in the LDC where the dresses or skirts are assembled (or in Canada) must not exceed 75% of the ex-factory price of the goods as packed for shipment to Canada.

34. When goods of Parts A1 and A2 of Schedule 1 to the Regulations are determined to originate by the application of paragraph 2(4)(b) of the Regulations, Criteria E would be quoted in Field 6 of the Certificate of Origin – Textile and Apparel Goods Originating in a Least Developed Country (Form B255).

35. Where “apparel goods” are classified under a tariff item set out in Part A2 of Schedule 1 to the Regulations,the exporter has the option of certifying the goods under subsections 2(1), 2(3) or 2(4) of the Regulations.

LDCT – Application of Paragraph 2(4.1)(a)

36. Paragraph 2(4.1)(a) of the Regulations may only be used to determine if “apparel goods” as set out in Part A3 of Schedule 1 to the Regulations are entitled to the LDCT.

37. To be entitled to the LDCT, such “apparel goods” must be assembled in an LDC. The fabric used in the assembly of such “apparel goods” must be cut in an LDC, a country set out in Schedule 2 of the Regulations, a Free Trade Agreement (FTA) partner country or in Canada.

38. Furthermore, the fabric, or parts knit to shape, must be produced in an LDC or in Canada from yarns spun or extruded in an LDC, a country set out in Schedule 2 of the Regulations, an FTA partner country or in Canada. The yarns must not undergo further processing outside an LDC, a country set out in Schedule 2 of the Regulations, an FTA partner country, or Canada, and the fabric (or parts knit to shape) must not undergo further processing outside an LDC or Canada.

Example: T-shirts manufactured in Nepal will qualify as originating and be eligible for duty-free LDCT treatment provided that the T-shirts are assembled in Nepal from fabric that has been cut in an LDC, a country set out in Schedule 2 of the Regulations, an FTA partner country or Canada. The fabric must be produced in an LDC or in Canada from yarns that originate in an LDC, a country set out in Schedule 2 of the Regulations, an FTA partner country or in Canada and the yarns and fabric must not have undergone any further processing outside an LDC or Canada. As well, the yarns must not have undergone any further processing outside a country set out in Schedule 2 of the Regulations or an FTA partner country.

39. When goods of Parts A3 of Schedule 1 to the Regulations are determined to originate by the application of paragraph 2(4.1)(a) of the Regulations, Criteria H would be quoted in Field 6 of the Certificate of Origin – Textile and Apparel Goods Originating in a Least Developed Country (Form B255).

LDCT – Application of Paragraph 2(4.1)(b) and Subsection 2(5.1)

40. Paragraph 2(4.1)(b) of the Regulations may only be used to determine if “apparel goods” as set out in Parts A3 of Schedule 1 to the Regulations are entitled to the LDCT.

41. To be entitled to the LDCT, such “apparel goods” must be assembled in an LDC. The fabric used in the assembly of such “apparel goods” must be cut in an LDC, a country set out in Schedule 2 of the Regulations, an FTA partner country or in Canada.

42. Furthermore, the fabric or parts knit to shape, must be produced in a country set out in Schedule 2 of the Regulations or an FTA partner country from yarns spun or extruded in an LDC, a country set out in Schedule 2 of the Regulations, an FTA partner country or in Canada. The yarns and fabric, or parts knit to shape, must not undergo any further processing outside an LDC, a country set out in Schedule 2 of the Regulations, an FTA partner country or Canada.

43. Finally, the value of any materials, including packing, that are used in the manufacture of the goods, that originate outside the LDC in which the goods are assembled, must not be more than 75% of the ex-factory price of the goods as packed for shipment to Canada. However, any materials used in the production of the goods that have entered the commerce of any country other than an LDCT beneficiary country or Canada lose their LDCT status, and as such, their value would count towards non-qualifying content.

44. For purposes of paragraph 43 of this memorandum and pursuant to subsection 2(5.1) of the Regulations, any materials used in the manufacture or production of the good that originate in an FTA partner country or in Canada are deemed to have originated in the LDC where the goods are assembled.

Example: Those same T-shirts manufactured in Nepal will qualify and be eligible for duty-free LDCT treatment provided that the T-shirts are assembled in Nepal and the fabric used in the manufacture of the T-shirts is produced in a country set out in Schedule 2 of the Regulations or an FTA partner country from yarns spun or extruded in an LDC, a country set out in Schedule 2 of the Regulations, an FTA partner country or Canada. The yarns and fabric cannot undergo further processing outside an LDC, a country set out in Schedule 2 of the Regulations, an FTA partner country or Canada. When using fabric manufactured in a country set out in Schedule 2 of the Regulations or an FTA partner country, the value of any materials, including packing, which does not originate in the LDC where the T-shirts are assembled (or in an FTA partner country or in Canada) must not exceed 75% of the ex-factory price of the goods as packed for shipment to Canada.

49. When goods of Part B of Schedule 1 to the Regulations are determined to originate by the application of subsection 2(6) of the Regulations, Criteria F would be quoted in Field 6 of the Certificate of Origin – Textile and Apparel Goods Originating in a Least Developed Country (Form B255).

50. The exporter has the option of certifying “made-up textile goods” of Part B of Schedule 1 to the Regulations under subsection 2(1) or 2(6) of the Regulations.

LDCT – Application of Subsection 2(7)

51. When determining if goods set out in Part A1 or A2 of Schedule 1 to the Regulations are entitled to the LDCT by the application of paragraph 2(4)(a) or 2(4)(b) of the Regulations, only the fabric or parts knit to shape that determines the tariff classification of the good shall be considered. Any materials, parts or products such as threads, linings, interfacing, trims, zippers, buttons or fasteners may be disregarded. In the case where subparagraph 2(4)(b)(ii) of the Regulations is applied, exporters must ensure that the value of all materials, parts or products that originate outside Canada, or the LDC in which the goods are assembled, is no more than 75% of the ex-factory price of the goods as packed for shipment to Canada.

52. When determining if goods set out in Part A3 of Schedule 1 to the Regulations are entitled to the LDCT by the application of paragraph 2(4.1)(a) or 2(4.1)(b) of the Regulations, only the fabric or parts knit to shape that determines the tariff classification of the good shall be considered. Any materials, parts or products such as threads, linings, interfacing, trims, zippers, buttons or fasteners may be disregarded. In the case where subparagraph 2(4.1)(b)(ii) of the Regulations is applied, exporters must ensure that the value of all materials, parts or products that originate outside Canada, an FTA partner country or the LDC in which the goods are assembled, is no more than 75% of the ex-factory price of the goods as packed for shipment to Canada.

53. When determining if goods set out in Part B of Schedule 1 to the Regulations are entitled to the LDCT by the application of subsection 2(6) of the Regulations, only the fabric or parts knit to shape that determines the tariff classification of the good shall be considered. Any materials, parts or products such as threads, linings, interfacing, trims, zippers, buttons or fasteners may be disregarded.

Certification Requirements – Commercial Goods

General

54. Section 4 of the Proof of Origin of Imported Goods Regulations, also found in Memorandum D11-4-2, Proof of Origin of Imported Goods, outlines the requirements for the GPT and LDCT proof of origin. The exporter of the goods located in the GPT or LDCT beneficiary in which the goods were finished must complete the proof of origin.

55. The proof of origin is not required to be an original. In all cases, proof of origin must cross-reference the applicable invoice number(s). The invoice must list the goods for which the preferential treatment is claimed separately from the non-preference receiving goods. However, separate invoices are not required.

Proof of Origin – GPT

56. For all originating goods from GPT beneficiary countries, Form A – Certificate of Origin (refer to Appendix A) or the Exporter’s Statement of Origin (refer to Appendix B) may be submitted as proof of origin. In most cases, exporters should find the Exporter’s Statement of Origin easier to complete and provide than the alternate Form A. See paragraphs 59 to 64 of this memorandum for further information regarding these documents.

Proof of Origin – LDCT

57. Except for originating goods of HS Chapters 50-63, either Form A – Certificate of Origin or the Exporter’s Statement of Origin may be submitted as proof of origin. In most cases, exporters should find the Exporter’s Statement of Origin easier to complete and provide than the alternate Form A. See paragraphs 59 to 64 of this memorandum for further information regarding these documents.

58. For originating textile and apparel goods of HS Chapters 50-63 the Certificate of Origin – Textile and Apparel Goods Originating in a Least Developed Country (Form B255) must be submitted as proof of origin. See paragraphs 65 and 66 of this memorandum for further information regarding this certificate.

Form A – Certificate of Origin

59. A copy of the Generalized System of Preferences, Form A – Certificate of Origin, and the completion instructions are found in Appendix A.

60. Canada no longer requires Form A to be stamped and signed by an authority designated by the beneficiary country. Therefore, Form A no longer needs to be an original and Field No. 11 may be left blank.

61. A consignee in Canada must be identified in Field No. 2 of the Form A, to ensure that the exporter in the beneficiary or LDC certified the origin of the goods according to Canadian rules of origin. The consignee is the person or company, whether it is the importer, agent, or other party in Canada, to which goods are shipped under a Through Bill of Lading (TBL) and is so named in the bill. Where 100% of the value of the goods originates in the beneficiary or LDC, a consignee in Canada does not need to be indicated in Field No. 2 of the Form A.

62. For the GPT and LDCT, the origin criterion in Field No. 8 of Form A must be one of the following:

Exporter's Statement of Origin

63. A copy of the Exporter’s Statement of Origin is set out in Appendix B. It must be completed and signed by the exporter in the beneficiary or LDC in which the goods were finished. The statement may be written out on a Form CI1, Canada Customs Invoice, or a commercial invoice or provided as a separate document. The information required in the statement must be provided in its entirety for goods to qualify for the GPT or LDCT.

64. If the statement is provided as a separate document from the invoice, the statement must reference the applicable invoice number(s). If the statement is for multiple invoices, the invoice numbers must be identified within the statement. A statement with an attached list of invoice numbers will not be acceptable.

Certificate of Origin – Textile and Apparel Goods Originating in a Least Developed Country (Form B255)

65. The Certificate of Origin – Textile and Apparel Goods Originating in a Least Developed Country (Form B255) must be completed by the exporter of the goods in the LDC in which the goods were finished in the form they are imported into Canada.

66. The applicable origin criteria for apparel goods and other made-up textile articles are set out in the Applicable Origin Criteria for Textile and Apparel Goods table:

Goods Origin Criteria
  "A" subsection 2(3) "D" paragraph 2(4)(a) "E" paragraph 2(4)(b) "F" subsection 2(6) "G" subsection 2(1) "H" paragraph 2(4.1)(a) "G" paragraph 2(4.1)(b)

Goods of HS Chapters 50-63 which are not listed in Schedule  1 of the Regulations

v       v    

Goods as set out in Schedule  1 to the Regulations:

A1 Apparel Goods   v v     v  
A2 Apparel Goods v v v   v    
A3 Apparel Goods           v v
B Other Made-up Textile Articles       v v    

Certification Requirements – Casual Goods

67. Section 4 of the Proof of Origin of Imported Goods Regulations, also found in Memorandum D11-4-2, outlines the requirements for the GPT and LDCT proof of origin for casual goods. Where casual goods are:

Obligations Regarding Importations

68. According to section 4 of the Proof of Origin of Imported Goods Regulations, to claim the GPT or LDCT benefits, importers must make a declaration that they have in their possession the required proof of origin; a Form A – Certificate of Origin or an Exporter’s Statement of Origin. For LDC-originating textile and apparel goods of HS Chapters 50-63, importers must make a declaration that they have in their possession the Certificate of Origin – Textile and Apparel Goods Originating in a Least Developed Country (Form B255).

69. The importer makes this declaration on Form B3-3, Canada Customs Coding Form, by inserting Code 9 for GPT or Code 8 for LDCT in Field No. 14, “Tariff Treatment.” Also, the importer declaration field on Form B3-3 must be completed with the signature of the importer. For further instructions concerning Form B3-3, please refer to Memorandum D17-1-10, Coding of Customs Accounting Documents.

70. The proof of origin must be presented to the Canada Border Services Agency (CBSA) upon request. Failure to do so will result in the application of either the MFN treatment or other appropriate tariff treatment and the application of Administrative Monetary Penalty C152, “Importer or owner of goods failed to furnish the proof of origin upon request.”

71. When requested by the CBSA to present the proof of origin, the importer may be required to provide a complete and accurate translation in English or French.

72. An importer may be requested to submit further documentation to substantiate the origin of the goods, such as bills of materials and purchase orders.

False Declarations

73. The making or assenting to the making of a false declaration in a statement made verbally or in writing to the CBSA is an offence under section 153 of the Customs Actand may be subject to sanctions under section 160 of that Act.

Shipping Requirements

74. The goods must be shipped directly on a TBL to a consignee in Canada from the beneficiary or LDC in which the goods were certified. Evidence in the form of a TBL (or a copy) showing that the goods have been shipped directly to a consignee in Canada must be presented to the CBSA upon request. An importer may be requested to submit further documentation to substantiate the TBL, such as sales order, report of entry documents, and cargo control documents.

75. The TBL is a contract to convey goods from one point to another. It is to ensure the direct shipment of goods from the country of origin to a consignee in Canada. The TBL is one single document that is issued prior to the goods beginning their journey when the carrier assumes care, custody, and control of the goods. It usually contains the following information:

76. In the case of consolidated freight, where the TBL is a lengthy document covering unrelated goods, the importer may present the cargo receipt from the carrier (or a copy) in lieu of the TBL. The CBSA may request that the TBL be presented as final verification that the goods have been shipped directly to Canada.

77. On a case-by-case basis, an amended TBL may be accepted as proof of direct shipment where documentation errors have occurred and the amended TBL corrects an error in the original document. In such cases, the carrier must provide proof that the amended TBL reflects the actual movement of the goods as contracted when the goods began their journey. Documentation presented must clearly indicate the actual movement of the goods.

78. Air cargo is usually transhipped in the air carrier’s home country even if no transhipment is shown on the house air waybill. Therefore, where goods are transported via air freight, the house air waybill is acceptable as a TBL.

Consignee

79. To fulfil the direct shipment requirement, goods must be shipped to a consignee in Canada. The consignee is the person or company, whether the importer, agent, or other party in Canada, to which goods are shipped under a TBL and is so named in the bill. In circumstances where goods are consigned “to order,” the TBL is acceptable as evidence of direct shipment as long as the party within Canada to whom the goods are shipped is identified on the TBL, usually in the “Notify Party” field.

Transhipment

80.  Transhipment through an intermediate country is permitted provided the conditions prescribed by section 18 of the Customs Tariffand section 2 of the Temporary Storage Period Regulations are met, as follows:

81. Transhipment is the act of taking cargo out of one conveyance and loading it into another conveyance. It also includes the act of taking cargo out of one conveyance and reloading it into the same conveyance. The landing of an airplane for refuelling or docking of a ship to take on additional cargo does not constitute transhipment if the goods in question are not unloaded from the conveyance.

82. Some exceptions exist where goods may be entitled to alternative shipping requirements. For more information, please refer to Memorandum D11-4-9, Goods Originating in Mexico, Deemed to be Directly Shipped to Canada for the Purposes of the General Preferential Tariff (GPT), Memorandum D11-4-10, Instructions Pertaining to the China Direct Shipment Condition Exemption Order, or Memorandum D11-4-28, Haiti Goods Deemed to be Directly Shipped to Canada for the Purposes of the General Preferential Tariff (GPT) and the Least Developed Country Tariff (LDCT).

Marking

83.  Where goods are required to be marked, they are to be marked with the country of origin in accordance with the Determination of Country of Origin for the Purpose of Marking Goods (Non-NAFTA Countries) Regulations. Further information concerning the marking of goods is set out in Memorandum D11-3-1, Marking of Imported Goods.

Refunds

84. Where the GPT or the LDCT treatment is not claimed at time of importation as a result of an error, involuntary omission, proof of origin not available at time of importation, or any other circumstances, an application for a refund may be submitted under paragraph 74(1)(e) of the Customs Act. An application for a refund of duties must be filed on Form B2, Canada Customs – Adjustment Request, within four years from the date of accounting at a customs office in the region where the goods were accounted for under the Customs Act. Refer to Memorandum D6-2-3, Refund of Duties, for more information.

Additional Information

85. For more information, within Canada call the Border Information Service at 1-800-461-9999. From outside Canada call 204-983-3500 or 506-636-5064. Long distance charges will apply. Agents are available Monday to Friday (08:00 – 16:00 local time / except holidays). TTY is also available within Canada: 1-866-335-3237.

Appendix A

Form A – Certificate of Origin [ PDF, 84 KB ]

Instructions on the Completion of Form A – Certificate of Origin

General Preferential Tariff (GPT)

If the 60% ex-factory price is not satisfied, or is not supported by adequate documentation, the goods are not eligible for the GPT and a Form A should not be issued for such goods.

Least Developed Country Tariff (LDCT)

If the 40% ex-factory price is not satisfied, or is not supported by adequate documentation, the goods are not eligible for the LDCT and a Form A should not be issued for such goods.

In order for a Form A to be accepted by the CBSA, it must be properly completed, as follows:

Field No. 1 – Complete with the name, address, and country of the actual manufacturer or exporter of the goods. Please do not identify a trading house, freight forwarder, export broker, etc. The manufacturer or exporter must be located in the GPT or LDCT beneficiary country in which the goods are being certified.

Field No. 2 – Identify the consignee (name and address) in Canada.

Field No. 3 – The CBSA does not consider this a mandatory field, but you may indicate the shipping details, as far as known when Form A is completed.

Field No. 4 – This field is usually left blank. However, if Form A is issued after the goods have already been shipped, stamp or write “Issued Retrospectively.”

Field No. 5 – This field is not mandatory for goods exported to Canada. It is usually used to itemize goods if Form A covers two or more categories of goods (for example, items 1, 2, 3 or items a, b, c).

Field No. 6 – If the goods are crated or otherwise packaged, indicate the quantity of packages or crates. Also indicate any markings on the crates that will be useful in cross-referencing Form A to the Through Bill of Lading so that the CBSA officers can establish that the form covers the goods that are physically imported.

Field No. 7 – Describe the goods fully. Indicate makes, models, styles, serial numbers, or any other relevant description. It is in the exporter’s interest to give as full a description as possible. The CBSA will not accept a Form A that cannot be matched with the imported goods due to a vague description. It is also helpful to show the Harmonized System subheading of the goods in this field.

Field No. 8 – The origin criterion shown must be one of the following:

P means 100% of the goods produced in the GPT or LDCT beneficiary country in question;

F for GPT, means, at least 60% of the ex-factory price is produced in the GPT beneficiary country;

F for LDCT, means, at least 40% of the ex-factory price is produced in the LDCT beneficiary country. The existing 40% of the ex-factory price of the goods as packed for shipment to Canada may also include a value of up to 20% of the ex-factory price of the goods from countries set out in Schedule 2 of the Regulations;

G for GPT, means at least 60% of the ex-factory price was cumulatively produced in more than one GPT beneficiary country or Canada;

G for LDCT, means at least 40% of the ex-factory price was cumulatively produced in more than one LDCT beneficiary country or Canada. The existing 40% of the ex-factory price of the goods as packed for shipment to Canada may also include a value of up to 20% of the ex-factory price of the goods from countries set out in Schedule 2 of the Regulations.

If any criterion other than P, G, or F is shown for goods exported to Canada, it will be assumed that the goods do not satisfy the Canadian GPT or LDCT rules of origin and they will not receive any tariff preference.

Field No. 9 – Give the weight or other quantity of the goods. The best unit of measure to use when completing this field is the unit of measure given for the particular goods in the Customs Tariff (e.g. number, pairs, dozens, kilograms, litres).

Field No. 10 – Cross-reference Form A to the commercial invoice. This helps the CBSA match the form with the invoice, but it also ensures that the signing officer has verified the ex-factory price of the proper goods.

Field No. 11 – This field may be left blank. As of , Canada no longer requires Form A to be certified by a designated authority in the GPT or LDCT beneficiary country.

Field No. 12 – This is the exporter’s declaration that Form A is accurate and that the goods do meet the GPT or LDCT rules of origin. Proof of origin must be completed by the exporter of the goods in the GPT or LDCT beneficiary country in which the goods were finished. The individual completing the Form A on behalf of the company must be knowledgeable regarding the origin of the goods and have access to cost of production information, should a verification be requested.

Appendix B

Exporter’s Statement of Origin

I certify that the goods described in this invoice or in the attached invoice No. (No.) were produced in the beneficiary country of (country) and that at least (percentage) % of the ex-factory price of the goods originates in the beneficiary country/countries of (country).

Name and title
Corporation name and address
Telephone and fax numbers
Signature and date (day/month/year)

Appendix C

Chart 1 – LDC Tariff Treatment and Proof of Origin Requirements [ PDF, 40 KB ]

References

Issuing office:
Trade and Anti-dumping Programs Directorate
Headquarters file:
4570-3, 4573-2
Legislative references:

Customs Act
Customs Tariff
General Preferential Tariff and Least Developed Country Tariff Rules of Origin Regulations
Proof of Origin of Imported Goods Regulations
Determination of Country of Origin for the Purpose of Marking Goods (Non-NAFTA Countries) Regulations
Temporary Storage Period Regulations
Haiti Deemed Direct Shipment (General Preferential Tariff and Least Developed Country Tariff) Regulations

Other references:
D6-2-3, D10-15-13, D11-3-1, D11-4-2, D11-4-9, D11-4-10, D11-4-28, D17-1-10
Superseded memorandum D:
D11-4-4 dated March 9, 2015
Date modified: