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Notice to Importers

Item 125.2 - Milk Protein Substances with a Milk Protein Content Of 85% or More By Weight, Calculated on the Dry Matter, that do not Originate in a NAFTA Country, Chile, Costa Rica, or Israel

Serial No. 812
Date: January 26, 2012

Table of Contents

1.0 Purpose

1.1 The purposes of this Notice are:

  • a) to inform importers of the Minister’s policies and practices respecting the administration of the 10,000,000 kilogram (kg) per year tariff rate quota (TRQ) for milk protein substances (MPS) with a milk protein content of 85% or more by weight, calculated on the dry matter, that do not originate in a NAFTA country, Chile, Costa Rica, or Israel. It should be read in conjunction with the Import Allocation Regulations and the Import Permit Regulations. Where elements of the present Notice augment these Regulations, those elements are to be read as expressions of the Minister’s normal practices and procedures;

  • b) to inform importers of the 10,000,000 kg TRQ for MPS for the period of April 1, 2012 to March 31, 2013:
    1. 7,000,000 kg is reserved for eligible historical end users, as defined in section 6.1(a);
    2. 1,500,000 kg is reserved for eligible new entrant end users, as defined in section 6.1(b)
    3. 1,000,000 kg is reserved for eligible historical non-end users, as defined in section 6.1(c); and
    4.  500,000 kg is reserved for eligible new entrant non-end users, as defined in section 6.1(d);

  • c) to invite applications for the 8,000,000 kg TRQ available for allocation to eligible historical importers for the period of April 1, 2012 to March 31, 2013;

  • d) to invite applications for the 2,000,000 kg TRQ available for allocation to eligible new entrants for the period of April 1, 2012 to March 31, 2013;

  • e) to inform importers of the 10,000,000 kg TRQ for MPS for the period of April 1, 2013 onward:
    1. 7,500,000 kg will be reserved for eligible historical end users, as defined in section 6.1(a);
    2. 2,000,000 kg will be reserved for eligible new entrant end users, as defined in section 6.1(b);
    3. 500,000 kg will be reserved for eligible new entrant non-end users, as defined in section 6.1(d)

2.0 Coverage

2.1 This Notice replaces Notice to Importers No. 787 dated January 27, 2011. It refers to Item 125.2 of the Import Control List, milk protein substances, that are classified under tariff items No. 3504.00.11 or 3504.00.12 in the List of Tariff Provisions set out in the schedule to the Customs Tariff; namely milk protein substances with a milk protein content of 85% or more by weight, calculated on the dry matter, that do not originate in a NAFTA country, Chile, Costa Rica, or Israel.

2.2 This Notice should be read in conjunction with Notice to Importers No. 803 dated October 14, 2011, which describes the Minister’s policies and practices concerning supplemental imports of dairy products.

2.3 Importers who require a determination as to whether the tariff classification of the product they intend to import is within the scope of this Notice are to contact the Canada Border Services Agency (CBSA), Trade Programs and CARM Directorate at 613-957-1468, fax: 613-952-3971.

3.0 Duration

3.1 This Notice will remain valid until March 31, 2013.

4.0 Authority

4.1 Under the authority of paragraph 5(1)(e) and section 6.2 of the Export and Import Permits Act (EIPA), Item 125.2 was placed on the Import Control List on September 8, 2008, in order to implement a change in Canada’s World Trade Organization obligations subsequent to a re-negotiation of a tariff concession outlined in an intergovernmental arrangement.

4.2 Under TRQs, imports are subject to low “within access commitment” rates of duty up to a predetermined limit (i.e., until the import access quantity has been reached); imports over this limit are subject to higher “over access commitment” rates of duty. Under section 6.2 of the EIPA, the Minister may: a) determine an import access quantity allowed entry at the low rate of duty; b) establish a method of allocating the import access quantity; and c) issue an import allocation to any resident of Canada that applies for an allocation, subject to the regulations and any terms and conditions the Minister may specify in the allocation. Also pursuant to section 6.2 of the EIPA, the Minister may consent to the transfer of import allocations. Having established an import access quantity, the Minister shall, under subsection 8.3(1) of the EIPA, issue import permits to allocation holders that apply for permits, up to the limit of that quantity, subject to compliance and application of regulations made under section 12 of the EIPA. These permits shall entitle the goods to which they apply to be subject to the low “within access commitment” rates of duty. Subsection 8.3(3) allows the Minister to issue permits in excess of the access quantity.

4.3 Pursuant to subsection 6 (f) of the Import Allocation Regulations, when deciding whether to issue an import allocation or whether to consent to a transfer, the Minister shall take into account whether the import allocation holder has furnished false or misleading information in connection with any reports required by the Act or the regulations made under the Act or by any condition of an import allocation or import permit during the 12-month period preceding the period in respect of which the import allocation or transfer is to apply.

4.4 Pursuant to subsection 10.(1) of the EIPA, the Minister may amend, suspend, cancel or re-instate any permit or import allocation issued or granted under the Act.

5.0 Size of the TRQ for MPS

5.1 The TRQ for MPS is set at 10,000,000 kg.

6.0 Allocation of the TRQ for MPS for the Period of April 1, 2012 to March 31, 2013

6.1 For the period of April 1, 2012 to March 31, 2013, the TRQ for MPS will be allocated to four groups, as set out in section 1.1 of this Notice. For the purposes of this Notice:

a) eligible historical end users are defined as residents of Canada that imported this product in each of 2006, 2007 and 2008, and that can demonstrate a requirement for these products in their formulations for products manufactured in their own facilities;

b) eligible new entrant end users are defined as residents of Canada that can demonstrate a requirement for these products in their formulations for products manufactured in their own facilities;

c) eligible historical non-end users are defined as residents of Canada that imported this product in each of 2006, 2007 and 2008, and that purchase and take ownership of these products; and

d) eligible new entrant non-end users are defined as residents of Canada that purchase and take ownership of these products.

Applicants are eligible for a TRQ allocation within only one pool. Applicants must be able to substantiate that they meet the relevant criteria.

6.2 For the period of April 1, 2012 to March 31, 2013:

a) 7,000,000 kg of the TRQ will be allocated to eligible historical end users, as defined in section 6.1(a) of this Notice. Applicants must provide the ratio (percentage) of milk protein contained in the product they intend to import. Allocations will be made on a pro-rata share basis of an applicant’s historical imports averaged over 2006 to 2008, inclusive, or on the basis of actual need if the amount requested is lower than the applicant’s pro-rata share. Eligible historical end users will be informed of their pro-rata share

b) 1,500,000 kg of the TRQ will be allocated to eligible new entrant end users, as defined in section 6.1(b) of this Notice. Applicants must provide the ratio (percentage) of milk protein contained in the product they intend to import. Allocations will be made on an equal-share basis, or on the basis of actual need if the amount requested is lower than an equal share;

c) 1,000,000 kg of the TRQ will be allocated to eligible historical non-end users, as defined in section 6.1(c) of this Notice. Allocations will be made on a pro-rata share basis of an applicant’s historical imports averaged over 2006 to 2008, inclusive, or on the basis of actual need if the amount requested is lower than the applicant’s pro-rata share. Eligible historical non-end users will be informed of their pro-rata share;

d) 500,000 kg of the TRQ be will allocated to eligible new entrant non-end users, as defined in section 6.1(d) of this Notice. Allocations will be made on an equal- share basis, or on the basis of actual need if the amount requested is lower than an equal share.

6.3 Any quota that remains unallocated in any of the four pools will be reallocated:

a) first, to historical end users on a pro-rata share basis, or on the basis of actual need, if the quantity requested is less than the pro-rata share;

b) second, if any quantities remain, to new entrant end users on an equal-share basis, or on the basis of actual need, if the quantity requested is less than the equal share;

c) third, if any quantities still remain, to non-end users on an equal-share basis, or on the basis of actual need if the quantity requested is less than the equal share

6.4 Applicants that qualify as end users are invited to provide the following information by completing and returning the application form in Appendix 3 of this Notice, in support of their application:

a) company profile, including any affiliations (see Appendix 4, "Information Concerning Related Persons");

b) ratio (percentage) of milk protein contained in the product to be imported;

c) description of MPS for which an allocation is being requested;

d) quantity requested; and

e) description of product(s) being manufactured and ratio of MPS to be used in their production (i.e., product formulation).

6.5 Eligible historical allocation holders may choose to remain in the historical group or to transfer permanently to another pool if they meet the relevant eligibility requirements. On request, the Trade Controls Policy Division will advise a historical importer of his or her prospective share under the other pools.

6.6 Under no circumstances will utilization of permits for one quota year be allowed in the next quota year. Import permits will not be extended beyond the thirty days utilization period.

7.0 Under-utilization Penalty and Return Policy

7.1 A quota holder that uses less than 95 per cent of his/her allocation in any one year may receive an allocation in the next year which reflects the actual level of use.

7.2 A quota holder shall not normally be allowed to transfer quota, however, the Minister may allow the transfer of import allocations. All requests for the transfer of import allocations must be referred to the Trade Controls Policy Division, for consideration. No transfer will be valid unless approved by the Minister. A quota holder that transfers all or part of his/her allocation in any one year may have his/her allocation permanently reduced by that amount in the next quota yea.

7.3 Quota holders may return to the Trade Controls Policy Division any unused quota issued to them on or before November 1 within the quota year. Quota returned to the Trade Controls Policy Division on or before the stated deadline will not be considered as unused quota for purposes of applying the under-utilization policy in section 7.1.

7.4 Returned quota will be made available:

a) first, to historical end users on a pro-rata share basis, or on the basis of actual need, if the quantity requested is less than the pro-rata share;.

b) second, if any quantities remain, to new entrant end users on an equal-share basis, or on the basis of actual need, if the quantity requested is less than the equal share.

c) third, if any quantities still remain, to non-end users on an equal-share basis, or on the basis of actual need if the quantity requested is less than the equal share.

7.5 A quota holder that returns quota in two consecutive years, may have his/her allocation permanently reduced in the next quota year by the lesser of the amounts returned in the previous two consecutive years.

8.0 Related Persons

8.1 For the purpose of this Notice, where two or more applicants are related persons, only one of the applicants shall be eligible for an allocation. To determine which persons are related, an applicant for an allocation is asked to provide a brief profile of the company in part 10 of the application, which should include a list of "related persons" (see Appendix 4, "Information Concerning Related Persons").

8.2 In the case of separate applications from related applicants involving a parent company and one or more subsidiaries, only the application nominated by the parent company will be considered. If the parent company does not make such a nomination in writing, it shall be made by Foreign Affairs and International Trade Canada (DFAIT).

9.0 Supplementary Imports

9.1 The Minister may, at his discretion, authorize imports of MPS in excess of the 10,000,000 kg per year import access quantity, in particular when the importation of these products are required to meet Canadian market needs.

9.2 Requests for authorization for supplementary imports should be made in accordance with Notice to Importers No. 803 and may be submitted to Mr. Hugues Leroux at the address indicated in section 10.2 below. In deciding whether to issue a supplemental permit, the Minister will consider, amongst other criteria, the availability of like or substitutable products on the Canadian market.

10.0 Application for Shares of the MPS TRQ for the Period of April 1 2012 to March 31, 2013

10.1 Applicants are to provide full details in support of their request for an allocation, using the application form attached in Appendix 3. Applications for a share of the TRQ for MPS for the period of April 1, 2012 to March 31, 2013, must be postmarked on or before March 20, 2012.

10.2 Applications sent by MAIL or by COURIER should be addressed to:

Mr. Hugues Leroux
Trade Controls Policy Division (TIC)
Foreign Affairs and International Trade Canada
125 Sussex Drive
Ottawa, Ontario
K1A 0G2

10.3 Applications sent by facsimile will not be accepted. Only original applications will be accepted. In order to facilitate the allocation process, however, applicants are encouraged to provide a copy of the original application by fax or by e-mail.

10.4 Applications postmarked after March 20, 2012, will not normally be considered.. Claims of lost application forms will not normally be considered without acceptable proof that they were sent (e.g., courier receipt).

10.5 Unless otherwise specified by the applicant, officials of DFAIT communicate with an EIPA authorization applicant in the official language of Canada which the applicant has utilized on his/her application.

11.0 Import Permit Issuance

11.1 Import permits are issued, normally, pursuant to an import authorization and are required for each shipment of milk protein substances with a milk protein content of 85% or more by weight, calculated on the dry matter, falling within tariff Nos. 3504.00.11 or 3504.00.12 in the List of Tariff Provisions set out in the Schedule to the Customs Tariff. Importers may either invoke General Import Permit (GIP) No. 100 - Eligible Agricultural Goods, a copy of which is available on request, or present an import permit issued to their firm for that shipment ("specific import permit") in order to clear customs. Those citing the GIP will be authorized to import unlimited quantities of milk protein substances with a milk protein content of 85% or more by weight, calculated on the dry matter, but such imports will be subject to the higher "over-access commitment" rate of duty. Those presenting a "specific import permit" to the Canada Border Services Agency at the time of final accounting may enter their shipments at the lower "within access commitment" rate of duty. Note: "specific import permits" will not be issued for shipments already imported into Canada under the authority of GIP No. 100, regardless of the importer's import allocation.

11.2 In accordance with the Import Permit Regulations, the procedures for receiving applications for import permits are as follows:

a) When requesting an import permit, applicants are to complete Form EXT-1466, "Application for Permit" (a copy of which is attached as Appendix 1).

b) A description of the process of applying for a permit is attached as Appendix 2, including information about fees, the monthly billing system and information required from applicants. All import permits are issued either (i) through an on-line automated system in the offices of customs brokers in major centres across Canada or (ii) in the offices of Foreign Affairs and International Trade Canada;

12.0 Name on the Permits

12.1 Please note that the name on the specific import permit must match exactly the name of the importer on Canada Border Services Agency's B3 Customs entry and related documents at time of final accounting. Where the name on the import permit and the name of the importer on the B3 is not the same entity, the permit will be declared invalid. It is incumbent on the party granted an import authorization to ensure that applications for permits are made in the name of the importer of record. Questions about the proper procedures to fill out Customs entry documents should be addressed to local Canada Border Services Agency's officials.

13.0 Permit Fees

13.1 A fee will be levied for each permit or certificate issued in accordance with the Export and Import Permits and Certificates Fees Order (Notice to Importers No. 508 dated May 16, 1995).

14.0 Further Information

14.1 Enquiries about import allocations may be addressed to:

Mr. Hugues Leroux
Tel:  613-996-2594
Fax: 613-996-0612
e-mail: hugues.leroux@international.gc.ca
(Address as indicated in paragraph 10.2)

14.2 Enquiries about permit issuance and utilization of import allocations may be addressed to:

Mrs. Adèle Brisson
Tel:  613-995-8104
Fax: 613-996-0612
e-mail: adele.brisson@international.gc.ca
(Address as indicated in paragraph 10.2

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