CITT TIGHTENS EVIDENTIARY REQUIREMENTS FOR FREIGHT DEDUCTIONS
Transaction value has traditionally been used to value imported goods to Canada in approximately 95% of cases.
An important deduction available to importers when using transaction value is for transportation costs incurred from
the place of direct shipment to Canada.
In Korhani of Canada Inc. v. CBSA
(AP-2022-030), the Canadian International Trade Tribunal (“CITT”) serves notice that it supports the CBSA’s position
that transportation cost deductions must be supported by objective documentation evidencing the actual
transportation costs, such as payment records or shipping invoices.
The proposed changes may have major implications for how most goods are imported to Canada are valued and change how the terms “sold for export to Canada” and “purchaser in Canada” are defined – two bedrock definitions under the “Transaction Value” method.
These changes will likely have significant financial consequences for many importers, and for non-resident importers (“NRIs”) specifically!
The Consultation Period on these draft regulations closes June 26, 2023.
On September 21, 2017 the Canadian-European Union "Comprehensive Economic and Trade Agreement" or "CETA" came into force.
Some businesses may erroneously believe that this means they can ship anything they want beween Canada and the EU without paying any duties. While the reality is a little more complicated, CETA still represents a tremendous achievement for Canada, and provides Canadians with greater access to the massive EU marketplace of 500 million people!
Read the Statement by the Canadian Minister of International Trade here.
Like many areas of law, in customs valuation there are cases that represent so-called high and low water marks – cases that represent the extremes of possible outcomes, given a set of facts. Every once in a while, a case comes along that moves these marks around – often surprising practitioners. The recent case of Skechers USA Canada Inc. v. CBSA is one of those cases, and the decision of the Canadian International Trade Tribunal (the “CITT”) has caught the attention of many practitioners.
