Serial No. 821
Date: November 20, 2012
1.1 The purposes of this Notice are:
a) to inform importers of the Minister’s policies and practices respecting the administration of the 4,345,000 kilogram (kg) tariff rate quota (TRQ) for products of natural milk constituents. It should be read 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; and
b) to invite applications for quota shares of the 4,345,000 kilogram natural milk constituents TRQ available for allocation for the period January 1 to December 31, 2013.
2.1 This Notice replaces Notice to Importers No. 808 dated October 18, 2011. It refers to Item 125 of the Import Control List (ICL), products of natural milk constituents that are classified under tariff items No. 0404.90.10 or 0404.90.20 in the list of tariff provisions set out in the schedule to the Customs Tariff; namely products consisting of natural milk constituents, whether or not containing added sugar or other sweetening matter. Milk protein concentrate and blends of natural milk constituents are the major products covered by this tariff item number.
2.2 This Notice should be read in conjunction with the most recent Notice to Importers governing the administration of supplementary imports for dairy products which is available on the Foreign Affairs and International Trade Canada (DFAIT) Internet site: Controlled Products - Agriculture - Dairy Products (http://www.international.gc.ca/controls-controles/prod/agri/dairy-laitiers/index.aspx?lang=eng).
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.
3.1 This Notice will remain valid until December 31, 2013.
4.1 Each of the products covered by this Notice was added to the ICL pursuant to paragraphs 5(1)(a),(b), (d) and (e) and sections 5.3 and 6 of the Export and Import Permits Act (EIPA) in order to implement a Canadian commitment under the World Trade Organization (WTO) Agreement on Agriculture.
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), while 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 who 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 who 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 lower 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, import allocation or other authorization issued or granted under the Act.
5.1 The products of natural milk constituents TRQ for 2013 is set at 4,345,000 kilograms.
6.1 The TRQ for products of natural milk constituents will be allocated to eligible applicants on the basis of their requirements and to the extent of availability, as described below.
6.2 Allocations will be made first to users of milk protein concentrate that can demonstrate a requirement for this product in their manufacturing operations and product formulations. Applicants must provide the ratio (percentage) of protein contained in the product they intend to import. To the extent that requirements exceed the TRQ, allocations will be made on a modified equal-share basis (i.e., on the basis of actual need if the amount requested is lower than an equal share).
6.3 Once the requirements of companies using milk protein concentrate have been met, the balance of the TRQ, if any, will be allocated to processors and further processors that can demonstrate a requirement for other products of natural milk constituents (e.g., blends of products of natural milk constituents) in their manufacturing operations and product formulations. To the extent that requirements exceed the TRQ, allocations will be made on a modified equal-share basis (i.e., on the basis of actual need if the amount requested is lower than an equal share).
6.4 Applicants are invited to provide the following information by completing and returning the application form in Appendix 1 of this Notice, in support of their application:
7.1.1 An allocation holder with a utilization rate less than 95% in the previous quota year may have its allocation adjusted downward by an under-utilization penalty for the new quota year.1
7.1.2 For allocation holders that under-utilized in the previous quota year, allocations in the new quota year will be reduced by the percentage of the allocation not utilized in the previous quota year.2
7.1.3 Allocation holders that under-utilized during the previous quota year will be advised of the applicable under-utilization penalty before the allocations are finalized for the new quota year.
7.2.1 Allocation holders may return any portion of the balance of their allocation no later than September 1 of the quota year. Any portion of an allocation that is returned by this date will be considered as having been used for purposes of administering the under-utilization policy in 7.1.1.
7.2.2 Returned TRQ quantities, if available, will be reallocated on an equal-share basis to eligible applicants who demonstrate, by September 1, 2013, additional quota requirements for their manufacturing operations.
8.1 For the purpose of this Notice, where two or more applicants are related persons, they shall be eligible for only one allocation. To determine which persons are related, an applicant for an allocation is asked to provide a brief profile of the company in part 17 of the application, which should include a list of related persons (see Appendix 2, 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 DFAIT.
9.1 The Minister may, at his discretion, authorize imports of products of natural milk constituents in excess of the 4,345,000 kg import access quantity, in particular when the importation of these products is required to meet Canadian market needs.
9.2 Requests for authorization for supplementary imports may be submitted to Mr. Hugues Leroux at the address indicated in section 10.2 below. In deciding whether to issue a supplementary permit, the Minister will consider, amongst other criteria, the availability of like or directly substitutable products in the Canadian market.
10.1 Applicants are to provide full details in support of their request for an allocation, using the application form attached in Appendix 1. Applications for a share of the products of natural milk constituents TRQ in 2013 must be postmarked on or before December 14, 2012.
10.2 Applications sent by MAIL or by COURIER should be addressed to:
Mr. Hugues Leroux
Trade Controls Policy Division
Foreign Affairs and International Trade Canada
125 Sussex Drive
10.3 Applications sent by facsimile will not be accepted. Only original applications will be accepted.
10.4 Applications postmarked after December 14, 2012 will not be considered. Claims of lost applications will not normally be considered without acceptable proof that they were sent before the deadline (e.g., courier receipt).
10.5 Unless otherwise specified by the applicant, DFAIT communicates with an EIPA authorization applicant in the official language of Canada which the applicant has utilized on its application.
11.1 Import permits are issued, normally, pursuant to an import authorization and are required for each shipment of products of natural milk constituents falling within tariff Nos. 0404.90.10 or 0404.90.20 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 products of natural milk constituents, 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 the GIP, 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 an applicant submits a completed Form EXT-1466, Application for Permit (a copy of which is attached as Appendix 3).
b) A description of the process of applying for a permit is attached as Appendix 4, 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 DFAIT.
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.
13.1 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).
14.1 Enquiries about import allocations may be addressed to:
Mr. Hugues Leroux
(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
(Address as indicated in paragraph 10.2)
14.3 A copy of this Notice and related information are available on the DFAIT Internet site: Notice to Importers - Products of Natural Milk Constituents (Item 125 on the Import Control List) (http://www.international.gc.ca/controls-controles/prod/agri/dairy-laitiers/notices-avis/821.aspx?lang=eng).
Utilization Rate (%) = (Actual Level of Use (kg) / Total Allocation Granted (kg)) X 100%
Actual Level of Use (kg) = Permits Used (kg) + Returns (kg)
Total Allocation Granted (kg) = Initial Allocation (kg) + Reallocation of returns (kg)
Underutilization Penalty (kg) = Pre-penalty Allocation (kg) X Underutilization Rate (%)
“Pre-penalty Allocation (kg)” is the allocation that the allocation holder would have been eligible for in the new quota year, if the allocation holder had not under-utilized in the previous quota year.
Underutilization Rate (%) = 100% - Utilization Rate (%)