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Customs Warehouses: Confusing Licensing Rules

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One of the least understood areas of CBSA administrative policy are the rules surrounding the operation and licensing of customs warehouses. These warehouses (of which there are several types) allow goods brought into Canada to be stored within the country while deferring the payment of applicable duties and taxes in respect of their import until they are ‘released’. The rules in this area are administratively complex, and expert legal advice should be considered for any business looking to use or operate a customs warehouse.

Types of Warehouses

There are two main types of customs warehouses: Customs Sufferance Warehouses (“CSW”) and Customs Bonded Warehouses (“CBW”). Both allow the deferral of duties and taxes in respect of the goods stored within, but the main difference is the amount of time goods are allowed to remain in the warehouse (known as “in bond”) as well as the type of goods that are allowed to be stored.

Generally speaking, CSWs are for short-term (usually perishable) goods. The Customs Sufferance Warehouses Regulations (SOR/86-1065) provide the following time limits that goods can remain in bond before they are reverted or forfeited to CBSA custody:

  1. Perishable Goods – 4 Days;
  2. Prescribed Substances (i.e. radioactive isotopes) – 14 Days;
  3. Firearms, tobacco, and other restricted goods – 14 Days;
  4. Spirits – 21 Days; and
  5. All Other Goods – 40 Days.

Within CSWs, there are several subtypes of warehouse (grouped under class A, B, C, S, and PS warehouses) which relate to the source of the goods (rail, air, marine, highway, etc.) as well as the contents. Each class of warehouse can be further broken down into subclasses which each have specific requirements with respect to the facility, including container storage equipment, distance to the nearest CBSA office, and other operational features.

By contrast, CBWs are for long-term storage. The Customs Bonded Warehouses Regulations (SOR/96-46) provide the following time limits for goods that can remain in bond until they are reverted or forfeited to CBSA custody:

  1. Spare Parts (for aircraft, oceanic cables, and related parts and equipment not for domestic consumption) – 15 Years;
  2. Beer and Wine – 5 Years;
  3. Goods for display at conventions, exhibitions and/or trade shows – 90 Days; and
  4. All Other Goods – 4 Years.

In keeping with their purpose as long-term storage warehouses, the goods stored in CBWs are also prohibited from being further manufactured/altered/manipulated. However, there are exceptions for a narrow range of activities, namely for inspection, testing, or packing/unpacking, among others. Failure to abide by these rules is grounds for the cancellation of the CBW licence.

Licensing Process

The licencing process for both CSWs and CBWs is similarly complicated. Applications require specific forms in respect of the class and subclass of warehouse, as well as detailed site plans for new or newly renovated warehouses to ensure that they meet CBSA’s technical standards for storage, security, and safety. There is also a financial security component which requires the applicant to post significant security calculated as a function of the value of the goods stored among other factors. Changes of ownership and changes of control are particularly complicated.


The licensing of a Customs Warehouse is a complicated area with many moving parts, many of which are counter-intuitive. Upfront legal advice and assistance through the licensing process is usually always advisable.

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