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SETTLER’S EFFECT RULES WHEN MOVING TO CANADA

PERSONAL AND HOUSEHOLD GOODS CAN BE IMPORTED DUTY-FREE WHEN IMMIGRATING

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Canada allows newcomers to Canada to import personal belongings duty-free under the "Settler's Effects" tariff classification, HS Code No. 9807.00.00 (the “Settler’s Effects HS Code”). However, the Canada Border Services Agency (“CBSA”) maintains strict policies with respect to using the Settler’s Effects HS Code.

This Customs Report provides a high-level overview of those CBSA policies. Persons preparing to settle in Canada are recommended to seek advice on the specifics of the rules from Experienced Customs Counsel, based on their particular circumstances.

Settlers & Qualifying Goods

To use the Settler’s Effects HS Code, a person must fit the definition of a “Settler”, which is defined as any person entering Canada with the intention of establishing, for the first time, a residence for at least 12 months – except for an individual arriving solely to study, or an individual arriving solely to work for a period of under 36 months.

(Note: persons who previously lived in Canada and are now moving back to Canada are subject to different rules.)

A Settler may only use the Settler’s Effects HS Code for personal or household goods which meet three conditions : the Settler must have already (1) owned, (2) possessed, and (3) used the goods abroad, prior to importing them to Canada. This means the Settler must have acquired the legal right to the goods, have physically possessed the goods, and have already “put the goods into an action or service for a purpose for which they were designed or intended”.

When arriving at the border, Settlers must present a detailed list of all goods they plan to import under the Settler’s Effects HS Code, including identifying information and approximate financial value of each individual item. Alternatively, Settlers may prepare a Form B4 (Personal Effects Accounting Document) to list their goods. The CBSA has published some guidance on how specific items should be described (e.g., jewellery).

Crucially, Settler’s documentation must separate goods accompanying the Settler from those to follow on a later date. If a Settler fails to specifically list the goods to follow on a later date on their original paperwork, those subsequent shipments permanently lose their duty-free eligibility and will be subject to regular duties.

Additionally, goods imported under the Settler’s Effects HS Code that are sold or disposed of within 12 months of their physical arrival in Canada will retroactively incur the applicable duties based on their value at the time of sale.

Takeaways

Canada allows Settlers to import personal belongings duty-free under the Settler’s Effects HS Code – but only in accordance with strict conditions and with specific documentation. Those immigrating to Canada are encouraged to contact Experienced Customs Counsel to navigate these rules correctly!

For help with Settler’s Effects matters, please click here.