Tax & Trade Blog
Online Purchase Destroyed Due to Missing Import Permit
A sad and unfortunate situation for an online shopper in Australia highlights the importance of import and export permits and licenses in international trade.
While the purchaser in this particular situation was engaged in a B2C transaction, import and export permits and licenses are often required in B2B transactions, and can give rise to seizure and confiscation of goods being imported or exported from Canada in a variety of different contexts.
In this case, the purchaser was in Australia and paid over AUD $26,000 for an alligator-skin handbag – ordered online from a boutique in France. When the handbag arrived in Australia, it was seized by customs officials and subsequently destroyed – all because it lacked the proper import permit!
Like Canada, Australia allows alligator products to be imported but required import permits (because these products are controlled under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES)). While the purchaser had obtained an export permit from the European Union, she did not have the required CITES import permit for Australia, leading to the customs seizure.
Although no further action was taken against the purchaser, it should be noted that certain customs offences may be punishable (in Canada) by large fines and possible imprisonment.
By way of commentary, all purchasers of goods for import to Canada or for export from Canada need to be aware of potential export and import licenses required.
While some classes of goods will obviously require permits (e.g., military grade goods, good for use in the nuclear industry), it may be a surprise to importers and exporters what other non-military and non-nuclear commercial goods may also require import and export licenses. These would include, for example, many food and agricultural products, cultural goods, certain wood products, and even certain furniture items!
The situation above also highlights the importance of knowing not only the general class of goods being imported and exported (e.g., handbags) but also the composition of those goods (e.g., alligator skin). Items that appear to be innocuous may in fact be subject to permitting requirements or restrictions depending on the materials they are made of.
Further, a number of federal government departments and agencies have separate regulations, permits, or other requirements in relation to goods falling under their areas of responsibility (and for some goods, this may involve more than one department or agency).
Importing and exporting goods in the commercial context often requires legal planning and advice in advance. When the value of goods is great, or the timing of the transaction is particularly important, there is no substitute for legal advice, and pre-planning for the required import and export permits!
Time for the processing and issuance of an import or export permit also needs to be built into the planning for the B2B transaction.
Do you require assistance in this area? If so, contact us here.