Notice to Importers

Specialty Creams (Item 117.1 on the Import Control List)

Serial No. 835
Date: June 17 , 2013

This Notice replaces Notice to Importers No. 813 dated June 11, 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.

In Brief

Imports of specialty creams , namely sterilized creams, minimum 23% butterfat, in cans of a volume not exceeding 200 ml., are subject to import controls under Canada’s Export and Import Permits Act (EIPA).  Accordingly, an import permit is required for shipments of specialty creams to enter Canada.  Import permits for shipments of specialty creams destined to the Canadian market are issued to allocation holders under Canada’s tariff rate quota (TRQ) for specialty creams, which is administered by Foreign Affairs and International Trade Canada (DFAIT). 

The access quantity for the specialty creams TRQ is 394,000 kg. The allocation period for the specialty creams TRQ extends from August 1 to July 31, inclusive. 

This Notice to Importers sets out the policies and practices pertaining to the administration of the TRQ, including the allocation, under-utilization, return, and transfer policies.  This Notice also explains how to apply for import permits.

Table of Contents


1. Purpose

1.1.    The purpose of this Notice is:

  • a. to set out the policies and practices pertaining to the administration of Canada’s TRQ for specialty creams;
  • b. to invite applications for allocations under the TRQ for the next quota year; and
  • c. to explain how to apply for import permits for imports of specialty creams.

2. General Information

2.1. Background

2.1.1. In accordance with its commitments under the World Trade Organization (WTO), Canada has in place a TRQ for imports of specialty creams.

2.1.2. Under Canadian TRQs, in any given year, a predetermined quantity of imports of a good controlled under the EIPA may 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 specialty creams 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 specialty creams 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 specialty creams TRQ negotiated under the WTO is 394,000 kilograms.

2.3. Allocation Period

2.3.1. The quota allocation year for the specialty creams TRQ extends from August 1 to July  31, inclusive.

3. Products Covered

3.1. This Notice pertains to Item 117.1 of the Import Control List (ICL), namely specialty creams falling under heading Nos. 0401.40.10, 0401.50.10, 0401.40.20 and 0401.50.20 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 specialty creams 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 specialty creams TRQ is allocated:

  • a. First, to eligible applicants who have an established distribution line for sterilized cream, minimum 23% butterfat, in cans of a volume not exceeding 200 ml (sterilized cream). To be eligible, applicants must demonstrate sales of sterilized cream in Canada in the two calendar years immediately preceding the allocation year for which they are applying.  This will help ensure that specialty creams are available in areas where there is already an existing demand and that current distribution lines are not disrupted.  To the extent that requirements exceed the TRQ, allocations will be made on a pro-rata basis.

  • b. Second, once the requirements of those applicants described in section 4.1.a have been met, the balance of the TRQ, if any, shall be allocated to new applicants for sterilized creams (e.g. those without sales of sterilized cream in Canada in the two calendar years immediately preceding the allocation year for which they are applying) and those requesting other types of specialty creams (e.g. Devon cream).  To the extent that requirements exceed the remaining balance of the TRQ, allocations will be made on a pro-rata basis.

4.2. All applicants must provide the following information in support of their application:

  • a. Company profile, including any affiliations (see Appendix 1, Information Concerning Related Persons);
  • b. Type of specialty creams requested (e.g. sterilized cream, minimum 23% butterfat, in cans of a volume not exceeding 200 ml);
  • c. Quantity of specialty creams sold in Canada in the two calendar years immediately preceding the allocation year for which they are applying.

5.1. 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 must provide a “list of related persons” (see  definition of related persons set out in Appendix 1).

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 specialty creams TRQ are invited to submit their application form (see Appendix 2) no later than the 15th of July immediately preceding the opening of the quota year.

6.2. Applications sent by MAIL or COURIER should be addressed to the specialty creams quota manager at DFAIT. The name and mailing address of the specialty creams 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 15th of July 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 February 28 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 will be allocated, on a first-come, first-served basis, to eligible applicants making requests for additional TRQ allocation during the quota year.

8. Supplemental Imports

8.1. The Minister may, at his discretion, authorize imports of specialty creams apart from the import access quantity. The Notice to Importers Dairy Products - Supplementary Imports explains the administration of supplemental imports.  The Notice is 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)

9. Import Permits

9.1. Types of Permits

9.1.1 An import permit issued by DFAIT is required for every shipment of specialty creams 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).

9.2. Shipment-Specific Import Permits

9.2.1. Shipment-specific import permits are normally issued on demand to allocation holders up to the amount of their allocation under Canada’s specialty creams TRQ. Shipments entering Canada under a shipment-specific import permit can normally do so at the within access rate of duty.

9.2.2. 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.

9.2.3. 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 quantity. Questions about the proper procedures to fill out customs entry documents should be addressed to local CBSA officials.

9.3. General Import Permits

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

9.3.2. 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.

9.4. How to Apply for a Permit

9.4.1. 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).

9.4.2. 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 (http://www.international.gc.ca/controls-controles/assets/pdfs/forms/documents/EXT1466.pdf).

10. Contact Us

10.1.  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).

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

Footnotes

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%

  • Where: Actual Level of Use (kg) = Permits Used (kg) + Returns (kg) + Transfers Out (kg)
  • And: Total Allocation Granted (kg) = Initial Allocation (kg) + Reallocation of returns (kg) + Transfers In (kg)

Return to footnote 1 referrer

Footnote 2

The under-utilization penalty will be calculated as follows:

Underutilization Penalty (kg) = Pre-penalty Allocation (kg) X Underutilization Rate (%)

  • Where: “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.
  • And: Underutilization Rate (%) = 100% - Utilization Rate (%)

Return to first footnote 2 referrer