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NFR? Limits on Import of Unlicensed Natural Health Products

Posted by on in Customs & Trade Blog
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In the world of “natural health products” (“NHPs”), “NFR” is all the rage.   It is commonly believed that the NFR exception allows virtually any NHP to be imported to Canada, provided each importation is transacted in no more than a 90-day supply.

The key words here are “commonly believed”.   You might also say “commonly misunderstood” – and here is why.

How NFR is Supposed to Work

Under the current Health Canada Policy on importation of health products for personal use in Canada (see GUI-0116, hereafter, “Health Canada’s Personal Importation Policy”) the lesser of a single course of treatment or a 90-day supply of NHP or other non-prescription drug (“NPD”) is allowed to be imported to Canada without licence if brought for “personal use” (commonly (mis)described as “not for resale”). Under the normal rules – and for all commercial importations (see below for what that means) – all NHPs and NPDs being imported to Canada must be licensed. The licensing process is an arduous one, which tests for both product safety (it will not harm the person taking it) and product efficacy (it actually does what it says it does).

Seen in this light, Health Canada’s Personal Importation Policy is a hugely beneficial program, aimed at Canadians wanting to gain the benefit of unlicensed NHPs and NPDs, where for their own personal use.

How the NFR Program is Sometimes Used Commercially

What we now see in Canada is the commercialization of Health Canada’s Personal Importation Policy, with many US-based businesses selling into Canada on an unlicensed basis, relying on the “NFR” exception despite a degree of commercialization attached (e.g., payment of commissions to Canadian distributors on sales; marketing these unlicensed products, including on Canadian websites of associated or subsidiary corporations; or otherwise profiting from the sales).

Don’t get us wrong – it may be possible to legally structure sales into Canada under Health Canada’s Personal Importation Policy, and to profit from these sales. But the way it is currently being done generally does not pass muster.

CBSA Detention Powers

The Canada Border Services Agency (“CBSA”) – which is the Canadian equivalent of the U.S. Customs and Border Protection (“CBP”) – may detain goods under the authority of the Canadian Customs Act (sections 101 and 102) and refer them to Health Canada for an admissibility recommendation, either as a result of specific information or because border services officers find suspected contraventions of Health Canada's legislation. CBSA describes its own views of its search and detention powers in paragraphs 31 and 50-53 of Customs Memorandum D19-9-1.

Importing NHPs commercially, without a product licence, would generally be viewed as a contravention of the Food and Drugs Act and subsection 4(1) of the Natural Health Products Regulations (SOR/2003-196), and could bring these seizure and detention powers into play.   In the past, easy trigger points for these types of seizure have included supplies in excess of 90 days, and the inclusion of “marketing” or “advertising” materials (however innocuous) with these shipments.

Health Canada outlines the following indicators of “commercialization”:

  • Selling it or giving the NHP/NPD to someone else
  • Advertising its sale
  • Exporting it out of the country
  • Using the NHP/NPD to treat someone else

Businesses finding themselves wanting to avail themselves of Health Canada’s Personal Importation Policy should get the legal advice necessary to ensure that their sales structures are properly compliant.

Do you require assistance in this area?  If so, please click here.

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