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Notice to Importers

Dairy Products - Supplementary Imports (Items 117 to 134 and 141 to 160 on the Import Control List)

Serial No. 823
Date: February 19, 2013

This Notice replaces Notice to Importers No. 803 dated October 14, 2011, and will remain in effect until further notice.

This Notice is provided pursuant to the authority of the Export and Import Permits Act (EIPA) and its corresponding regulations.

In Brief

Imports of dairy products into Canada are subject to import controls under Canada’s Export and Import Permits Act (EIPA).  Accordingly, an import permit is required for shipments of dairy products to enter Canada.  Import permits for shipments of dairy products destined to the Canadian market are issued to allocation holders under Canada’s tariff rate quota (TRQ) for dairy products, which is administered by Foreign Affairs and International Trade Canada (DFAIT). 

The Minister may, at his discretion, authorize imports of dairy products apart from the import access quantity, particularly if he judges that the importation of these products is required to meet Canadian market needs.

This Notice to Importers sets out the policies and practices pertaining to supplemental imports of dairy products.  This Notice also explains how to apply for supplemental import permits.

Table of Contents

1. Purpose

1.1. The purpose of this Notice is:

  • to set out the policies and practices pertaining to the authorization of supplementary imports of  dairy products;
  • to explain how to apply for import permits for imports of dairy products.

1.2. The present Notice should be read in conjunction with the Notices to Importers for dairy products, which set out the policies and practices pertaining to the administration of the dairy products TRQ. These Notices are available on the DFAIT website at Controlled Products - Agriculture - Dairy Products (http://www.international.gc.ca/controls-controles/prod/agri/dairy-laitiers/index.aspx?lang=eng).

2. General Information

2.1. In accordance with its commitments under the World Trade Organization (WTO), Canada has in place a TRQs for imports of dairy products.

2.2. Under Canadian TRQs, in any given year, a predetermined quantity of imports of a good controlled under the EIPA can enter Canada at a lower rate of duty, while imports over this quantity are subject to higher rates of duty. The TRQs therefore have three components: an import access quantity negotiated with Canada’s international trade partners; a within access commitment rate of duty that applies to imports within the access level quantities; and a higher, over access commitment rate of duty for imports over the access level quantities.

2.3. Subsection 8.3 (3) of the EIPA allows the Minister to issue permits apart from the access quantity. In exercising his discretion under subsection 8.3 (3), the Minister takes into consideration whether the importation of these products is required to meet Canadian market needs.

2.4. The within and over access rates of duty that apply to imports of dairy products can be found in Canada’s Customs Tariff.

2.5. Pursuant to the EIPA and its corresponding regulations, when deciding whether to authorize a request for supplemental imports, the Minister will take into account whether the applicant 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 a supplemental import authorization, import allocation, or import permit during the 12-month period preceding the period in respect of which the supplemental import authorization is to apply. The Minister may attach conditions to supplemental authorizations and/or to supplemental import permits, and may amend, suspend, cancel or re-instate supplemental import authorizations and supplemental import permits.

3. Products Covered

3.1. This Notice pertains to items 117 to 134 and 141 to 160 of the Import Control List (ICL). Appendix 1 provides a detailed list of the products covered and their associated EIPA products codes.

3.2. Importers who require a determination as to whether the product they intend to import is within the scope of this Notice are encouraged to obtain an advanced tariff classification ruling from the appropriate regional client service office of the Canada Border Services Agency (CBSA).

4. Authorization of Supplementary Imports

4.1. Applications for an authorization for supplementary imports should follow the applicable procedures set out in this Notice.  In all cases, the appropriate EIPA commodity codes must be used (see Appendix 1).

4.2 The various categories of authorization for supplementary imports, each subject to different policies and procedures, are outlined below in Sections 5 to 7.

5. Authorization to Import Dairy Products Under the Import for Re-Export Program (IREP)

5.1. This program is limited to Canadian processors.

5.1.1. Applicants approved for participation in the program for a given year must comply with program terms and conditions, permit conditions, as well as reporting requirements. Normally, failure to comply with program terms and conditions, permit conditions as well as reporting requirements, or failure to provide updated and accurate information, could result in the application of sanctions as set out in Section 5.8.

5.2. An IREP participant:

  • a. must be the importer of record of those products;
  • b. must be the sole processor of those products; and
  • c. must subsequently re-export the associated processed product as the exporter of record.

5.2.1. As the importer of record, the name of the IREP participant should correspond to the importer name on customs release documentation (e.g. B3, section 1), and the IREP participant owns the imported dairy products. As the exporter of record, the name of the IREP participant should correspond to the importer name on foreign customs release documentation (e.g. US Entry Summary, box 26).

5.2.2. Diversion of product imported under the IREP to the Canadian market is prohibited. Specifically, the transfer or sale of products imported under the IREP, or of finished goods containing products imported under the IREP, within Canada or to a Canadian resident or company is prohibited.

5.3. The IREP Authorization Year

5.3.1. The IREP authorization year extends from June 1 to May 31 inclusive.

5.4. Application Process

5.4.1. To be eligible to continue to participate in the IREP, IREP participants must apply for an authorization for supplemental imports each authorization year. IREP participants must submit their applications to DFAIT no later than the 31st of March immediately preceding the start of the IREP year for their continued participation to be approved by June 1st. A new applicant may submit an application at any point during the authorization year.

5.4.2. Should an IREP participant wish to modify any information in its original application (including, but not limited to, a change in a recipe or additional products), an amendment request must be submitted for approval by DFAIT prior to implementation of the change by the IREP participant.

5.4.3. Applications for an authorization to import fluid milk under the IREP must additionally submit a usage plan for each type of dairy product, including bi-products, being manufactured from the imported fluid milk.

5.4.4. The application form and related documents are included in Appendix 2. They must be submitted electronically to the DFAIT IREP mailbox (irep@international.gc.ca).

5.4.5. Applicants and/or IREP participants will be apprised in writing of the result of their application.

5.5. Permit Conditions

5.5.1 IREP participants will be eligible to receive import permits subject to certain conditions, including:

5.5.2 IREP participants must export all products imported under the IREP within 180 calendar days of the date of entry indicated on the associated supplemental import permit.

5.5.3 IREP permits issued in a given authorization year will be valid only for that authorization year.

5.6. Reporting requirements

5.6.1. Monthly export reports: IREP participants must submit, electronically, monthly export reports for all IREP product exports in a given month (including a nil report if applicable) to DFAIT (irep@international.gc.ca) by the end of the following month. These reports must be prepared in the prescribed format using the template in Appendix 2. All fields in the template must be filled for each export shipment. DFAIT may at any time request supporting export documentation for any reported shipment (see section 5.7.1.).

5.6.2. Bi-monthly inventory reports: IREP participants must submit, electronically, bi-monthly inventory reports. These reports must be prepared in one of the prescribed format using the template in Appendix 2. The inventory report must be an account, on the first day of the month (starting August 1 of the authorization year), of any product imported under the IREP and any intermediary, finished product or product in the processing phase containing the product imported under the IREP, that has not yet been exported. It must include quantities at the manufacturing facility and, if applicable, quantities stored offsite.

5.6.3. Only products manufactured with inputs imported under the IREP are eligible to be reported under the IREP. Products manufactured using controlled inputs imported under the TRQ or obtained from other sources are not eligible to be reported under the IREP, and products exported prior to the import of a corresponding quantity of controlled inputs under the IREP are not eligible to be reported as exports under the IREP. An IREP participant who submits erroneous reports may be subject to sanctions (see section 5.8.).

5.6.4. IREP participants must provide a declaration, using the template in Appendix 2, from their CEO, stating that all products imported under the IREP during the authorization year have been exported in accordance with all program terms and conditions, permit conditions, and that reporting requirements were met. This letter should only be submitted once it has been determined that all of these criteria have been fulfilled. This letter may not be submitted prior to May 31 of the relevant authorization year, but must be provided no later than December 31 of the following authorization year.

5.7 Additional information

5.7.1. IREP participants must retain, for a period of seven years, and provide to DFAIT on demand, copies of the following documents:

  • a. Purchase documents for the imported product:
    • Purchase orders and commercial invoices
    • Proof of payment (e.g., banking records)
    • Descriptive literature which indicates the imported product’s composition
    • If available, classification rulings issued by the CBSA related to the imported product
  • b. Import documents:
    Copies of complete release and accounting packages submitted to the CBSA. Packages include:
    • Cargo control documents (e.g., Bill of Lading)
    • CBSA Form B3
    • Commercial invoice
    • Any required permits, licenses, or certificates (e.g., Canadian Food Inspection Agency [CFIA] inspection certificate)
  • c. Export documents:
    • Transportation documents related to the exportation of the finished product (e.g., Bill of Lading, freight invoices)
    • Accounting documents related to the sale of exported product (e.g., Letter of intent from foreign customer, Purchase Order, sales contracts, commercial invoices, proof of payment)
    • Any required permits, licenses, or certificates (e.g., CFIA inspection certificate)
    • Copies of the importing country’s Customs documentation, completed and certified by a Customs officer of the country to which the goods were exported, which fully describes the goods (e.g. US Entry Summary for exports to the United States)
    • For export destinations other than the United States, a copy of CBSA’s B13A export declaration
  • d. Documents concerning processing of imported products:
    • Recipes
    • Packaging and labeling for product(s) exported under the IREP
    • Production records to allow tracking of imported product(s), including inventory levels, quantities of raw materials used and quantities of finished product(s)
    • Descriptive literature related to manufacturing processes and products manufactured
  • e. Imported Fluid Milk - Additional Company Documents:
    • A record of the volume of imported fluid milk, by tanker, including the butterfat content, the protein content and the other-solids-non-fat content of fluid milk upon delivery to the plant
    • A monthly usage production report, signed by the company's production manager or quality assurance manager, that identifies the specific production lots manufactured using imported fluid milk

5.7.2. DFAIT may request additional information, and may also request that an independent public accountant (or an accountant named by DFAIT) certify information provided to it by the IREP participant.

5.7.3. IREP participants may be subject to unannounced onsite verification by DFAIT. In accordance with section 10.2 of the EIPA, DFAIT inspectors may, at all reasonable times, have access to facilities, warehouses and any other location where IREP products may be processed or stored. Accordingly, IREP participants are required to cooperate fully in the event of an inspection, audit or examination.

5.8. Sanctions

5.8.1. Failure to comply with any term or condition of the IREP or any of its reporting requirements will normally result in suspension from participation in the IREP, cancellation of import permits, reduction of an IREP participant's TRQ allocation(s) and/or prosecution for offences against the EIPA. An IREP participant that is suspended from participation in the IREP is not eligible to receive IREP import permits.

5.8.2. If an IREP participant fails to comply with any term or condition of the IREP or any of its reporting requirements on multiple occasions, that IREP participant may be suspended from participation in the IREP for the remainder of the authorization year.

5.8.3. Should DFAIT's reconciliation of an IREP participant’s imports and exports under the IREP indicate that product imported by that IREP participant under the IREP has been in Canada for more than 180 calendar days, the IREP participant will normally be suspended from the program until DFAIT determines that the situation has been rectified and that the IREP participant is in compliance with program terms and conditions.

5.8.4. Should there be unresolved discrepancies in the information provided by an IREP participant, that IREP participant may be suspended from the program until DFAIT determines that the situation has been rectified and that the IREP participant is in compliance with program terms and conditions.

6. To import dairy products for the purpose of test marketing

6.1. An authorization for supplementary imports may be issued to facilitate test marketing in the Canadian market of new products that are, for example, unique or are produced with unique processes and require a substantial capital investment for their production.

6.2. Normally, authorization for supplementary imports for purposes of test marketing will be issued only for products that are marketed directly to consumers.

6.3. Companies that intend to conduct test marketing of a specific product may be required to plan the activity using their annual TRQ allocations. Applicants who have been issued an import allocation may be required to have exhausted this allocation before an authorization for supplementary imports may be issued. An import allocation will be considered exhausted only if all permits issued have been used and the allocation balance is zero.

6.4. Applications made on company letterhead should contain the following information:

  • A description of the product and related production processes, indicating the unique features of same;
  • A description of a proposed test marketing program, identifying test market areas, market channels, timing, promotion plans and marketing costs, product quantities required for the proposed test marketing program, and an analysis showing the minimum test market results required to decide in favour of the capital investment in Canadian production facilities; and
  • A detailed outline of the resulting minimum capital investment and job creation; proposed financing required to produce the product (e.g., facilities, equipment, production capacity); and the time required to bring such facilities on line from the time a DFAIT decision to approve a test marketing program is made.

6.5. Companies are required to commence production in Canada as soon as is feasible after the successful completion of the test marketing program.

6.6. Imports pursuant to an authorization issued under this provision shall be used only for the prescribed products to be test marketed, for the prescribed test marketing period, and for the approved quantities.

6.7. Once these quantities or the period have been exhausted, a further authorization for supplementary imports may be issued only for the same product, in quantities sufficient to continue serving the test marketing areas during a period reasonably required for the construction of the domestic production facilities. Once such facilities have been established, no further authorization for supplementary imports will be issued for either the test marketed product or for required raw materials. An applicant may submit only one test marketing application for a given product.

6.8. Successful applicants will be required to provide monthly statistics on the sales of imported products by test area. Failure to submit these statistics may result in suspension of import authorizations under this provision.

7. Other Situations

7.1. Other applications for authorization for supplementary imports due to extraordinary or unusual circumstances will be evaluated on their individual merits. In deciding whether or not to authorize supplementary imports, the Minister will consider, amongst other criteria, the availability of like or substitutable products in the Canadian market.

8. Import Permits

8.1. Types of Permits

8.1.2. An import permit issued by the Government of Canada is required for every shipment of dairy products covered by this Notice to enter Canada. For a given shipment, importers may either present a shipment-specific import permit or invoke the appropriate General Import Permit (GIP).

8.2. Shipment-specific Import Permits

8.2.1. Shipment-specific import permits are normally issued on demand, by DFAIT on behalf of the Government of Canada, to import authorization holders up to the amount of their import authorization. Shipments entering Canada under a shipment-specific import permit can normally do so at the within access rate of duty.

8.2.2. To claim the within access rate of duty for a shipment, the importer must present the shipment-specific import permit to CBSA at the time of final accounting.

8.2.3. For a shipment-specific import permit to be considered valid, the name on the permit must match exactly the name of the importer on CBSA’s B3 Customs entry and related documents at time of final accounting. Furthermore, the quantity on the permit must be the same as the net quantity on the Customs invoice. It is incumbent on the party granted the permit to ensure that a permit application is made in the name of the importer of record and includes the correct weight. Questions about the proper procedures to fill out customs entry documents should be addressed to local CBSA officials.

8.3. General Import Permits

8.3.1. The GIP that applies for dairy products is General Import Permit No. 100 – Eligible Agricultural Goods. There is no limit to the quantities of dairy products that can enter Canada under the GIP; however, such imports will be subject to the higher over access rate of duty.

8.3.2. It should be noted that shipment-specific import permits will not be issued for shipments already imported into Canada under the authority of the GIP, regardless of the importer's allocation.

8.4. How to Apply for a Permit

8.4.1. Information about the permit application process, including information about fees, the monthly billing system, and information required from applicants, is available on the DFAIT website: Applying for an Import Permit (http://www.international.gc.ca/controls-controles/about-a_propos/impor/permits-licences.aspx?lang=eng)

8.4.2.  Importers that wish to apply for an import permit are required to submit Form EXT1466, "Application for Permit", which can be obtain on the DFAIT website (a paper copy will be provided upon request): Application for Import/Export Permit (PDF*, 95 KB)

9. Contact Us

9.1.    Names and direct phone numbers for TRQ manager(s), permit officer(s), and the Help Desk are available on the DFAIT website: Contact Us

9.2. For directory assistance, you may call 613-944-0773.

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