Notice to Importers
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 (Item 125.2 on the Import Control List)
Serial No. 834
Date: February 6, 2013
This Notice replaces Notice to Importers No. 812 dated January 26, 2012, 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.
Imports of 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 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 MPS to enter Canada. Import permits for shipments of MPS destined to the Canadian market are issued to allocation holders under Canada’s tariff rate quota (TRQ) for MPS, which is administered by Foreign Affairs and International Trade Canada (DFAIT).
The access quantity for the MPS TRQ is 10,000,000 kg. The allocation period for the MPS TRQ extends from April 1 to March 31, inclusive.
This Notice to Importers sets out the policies and practices pertaining to the administration of the TRQ, including the allocation, underutilization, return, and transfer policies. This Notice also explains how to apply for import permits.
Table of Contents
- 1. Purpose
- 2. General Information
- 3. Products Covered
- 4. Allocation Policy
- 5. Related Persons
- 6. How to Apply for an Allocation
- 7. Under-Utilization and Return Policies
- 8. Transfer Policy
- 9. Supplemental Imports
- 10. Import Permits
- 11. Contact Us
1.1. The purpose of this Notice is:
- to set out the policies and practices pertaining to the administration of Canada’s TRQ for MPS;
- to invite applications for allocations under the TRQ for the next quota year; and
- to explain how to apply for import permits for imports of MPS.
2. General Information
2.1.1. In accordance with its commitments under the World Trade Organization (WTO), Canada has in place a TRQ for imports of MPS.
2.1.2. 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 up to the access level; and a higher, over access commitment rate of duty for imports over the access level.
2.1.3. The within and over access rates of duty that apply to imports of MPS can be found in Canada’s Customs Tariff.
2.1.4. Pursuant to the EIPA and its corresponding 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. Furthermore, when issuing import permits to allocation holders the Minister may attach conditions to import allocations and/or to import permits, and may amend, suspend, cancel or re-instate import permits and allocations.
2.1.5. Failure by an applicant to provide any information requested by DFAIT, or failure to comply with any condition of an allocation or permit issued pursuant to the EIPA may result in the rejection of the application for a share of the MPS TRQ, the reduction or cancellation of an allocation issued pursuant to the EIPA, or the cancellation of associated permits.
2.2. Access Quantity
2.2.1. The access level for the MPS TRQ negotiated under the WTO is 10,000,000 kilograms.
2.3. Allocation Period
2.3.1. The quota allocation year for the MPS TRQ extends from April 1 to March 31, inclusive.
3. Products Covered
3.1. This Notice pertains to Item 125.2 of the Import Control List (ICL), namely MPS falling under heading Nos. 3504.00.11 and 3504.00.12 in the list of tariff provisions set out in the Schedule to the Customs Tariff.
3.2. Importers who require a determination as to whether the product they intend to import is eligible under the MPS TRQ are encouraged to obtain an advanced tariff classification ruling from the appropriate regional client service office of the Canada Border Services Agency (CBSA).
4. Allocation Policy
4.1. The MPS TRQ is allocated to three groups:
- eligible historical end users;
- eligible new entrant end users and
- eligible non-end users.
For the purposes of this Notice:
- eligible historical end users are defined as residents of Canada that imported a product covered by this Notice 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;
- 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; and
- eligible non-end users are defined as residents of Canada that purchase and take ownership of products covered by this Notice.
4.2. 7,500,000 kg of the TRQ will be allocated to eligible historical end users. 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 basis of an applicant’s historical imports averaged over 2006 to 2008, inclusive, as adjusted since (e.g., for under-utilization), 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.
4.3. 2,000,000 kg of the TRQ will be allocated to eligible new entrant end users. 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.
4.4. 500,000 kg of the TRQ be will allocated to eligible non-end users. 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.
4.5. Applicants are eligible for a TRQ allocation within only one pool. Applicants must be able to substantiate that they meet the relevant criteria.
4.6. Any quota that remains unallocated in any of the three pools will be reallocated:
- first, to historical end users on a pro-rata basis, or on the basis of actual need, if the quantity requested is less than the pro-rata share;
- 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;
- 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
5. Related Persons
5.1. 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 1, "Information Concerning Related Persons").
5.2. 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 determined by DFAIT.
6. How to Apply for an Allocation
6.1. Applicants who wish to apply for an allocation under the MPS TRQ are invited to submit their application form (see Appendix 2) no later than the 7th of March immediately preceding the opening of the quota year.
6.2. Applications sent by MAIL or COURIER should be addressed to the MPS quota manager at DFAIT. The name and mailing address of the MPS quota manager can be obtained on the DFAIT website, under Contact Us (http://www.international.gc.ca/controls-controles/contact-contactez.aspx?lang=eng).
6.3. 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.
6.4. Applications postmarked after the 7th of March immediately preceding the opening of the quota year, or in a format other than that required, 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).
7. Under-Utilization and Return Policies
7.1. Under-utilization Policy
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.Footnote 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.Footnote 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. Return Policy
7.2.1. Allocation holders may return any portion of the balance of their allocation no later than November 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.
7.2.2. Returned quota available for reallocation during the quota year will be offered:
- first, to historical end users on a pro-rata basis, or on the basis of actual need, if the quantity requested is less than the pro-rata share;
- 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.
- 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.
7.2.3. 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. Transfer Policy
8.1. The Minister may allow the transfer of allocations between allocation holders. All requests for transfer of allocations must be referred to DFAIT for consideration.
9. Supplemental Imports
14.1. The Minister may, at his discretion, authorize imports of MPS in excess of the import access quantity. The Notice to Importers No. 830 - Items 117 to 134 and 141 to 160 - Dairy Products on the Import Control List: Supplementary Import Permits explains the administration of supplemental imports. The Notice is available on the DFAIT website at Notice to Importers - 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 (Item 125.2 on the Import Control List).
10. Import Permits
10.1. Types of Permits
10.1.1. An import permit issued by the Government of Canada is required for every shipment of MPS 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).
10.2. Shipment-Specific Import Permits
10.2.1. Shipment-specific import permits are normally issued on demand to allocation holders up to the amount of their allocation under Canada’s MPS TRQ. Shipments entering Canada under a shipment-specific import permit can normally do so at the within access rate of duty.
10.2.2. 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.
10.2.3. 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.
10.3. General Import Permits
10.3.1. The GIP that applies for MPS is General Import Permit No. 100 – Eligible Agricultural Goods. There is no limit to the quantities of MPS that can enter Canada under the GIP; however, such imports will be subject to the higher over access rate of duty.
10.3.2. 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.
10.4. How to Apply for a Permit
14.4.1. 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).
14.4.2. 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).
11. Contact Us
11.1. Names and direct phone numbers for TRQ manager(s), permit officer(s), and the Help Desk are available on the DFAIT website: Contact Us (http://www.international.gc.ca/controls-controles/contact-contactez.aspx?lang=eng)
11.2. For directory assistance, you may call 613-944-0773.
- Footnote 1
The utilization rate (%) will be calculated for every allocation holder as follows:
Utilization Rate (%) = (Actual Level of Use (kg) / Total Allocation Granted (kg)) X 100%
Actual Level of Use (kg) = Permits Used (kg) + Returns (kg) + Transfers Out (kg)
Total Allocation Granted (kg) = Initial Allocation (kg) + Transfers In (kg) + Reallocation of returns (kg)
- Footnote 2
The under-utilization penalty will be calculated as follows:
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 (%)
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