Notice to Importers

Eggs and Egg Products (Item 135 To 139 On The Import Control List)

Serial No. 848
Date: November 1, 2013

This Notice replaces Notice to Importers No. 828 dated October 19, 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 eggs and egg 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 eggs and egg products to enter Canada. Import permits for shipments of eggs and egg products destined to the Canadian market are issued to allocation holders under Canada’s tariff rate quota (TRQ) for eggs and egg products, which is administered by Foreign Affairs, Trade, and Development Canada (DFATD).

The access quantity for the eggs and egg products TRQ is 21,370,000 dozen or 2.988% of the previous year’s domestic production as determined by Agriculture and Agri-Food Canada, whichever is greater. The allocation period for the eggs and egg products TRQ extends from January 1 to December 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

1.1. The purpose of this Notice is:

  1. to set out the policies and practices pertaining to the administration of Canada’s TRQ for eggs and egg products;
  2. to invite applications for allocations under the TRQ for the next quota year; and
  3. to explain how to apply for import permits for imports of eggs and egg products.

2. General Information

2.1. Background

2.1.1. In accordance with its commitments under the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO), Canada has in place a TRQ for imports of eggs and egg products.

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 eggs and egg products 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, 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 DFATD or failure to comply with any condition of an authorization or permit issued pursuant to the EIPA may result in the rejection of the application for an allocation under the eggs and egg products TRQ, the reduction or cancellation of an authorization issued pursuant to the EIPA, or the cancellation of associated permits.

2.2. Access Quantity

2.2.1. The access level for the eggs and egg products TRQ negotiated under NAFTA is 2.988% of the previous year’s domestic egg production as determined by Agriculture and Agri-Food Canada. This amount is split among shell eggs (1.647%), frozen, liquid and further processed eggs (0.714%), and powdered eggs (0.627%).

2.2.2. The access level for the eggs and egg products TRQ negotiated under the WTO is 21,370,000 dozens (egg equivalent).

2.2.3. The access level for the eggs and egg products TRQ that applies in a given quota year is the greater of the NAFTA or WTO quantity. DFATD’s website will always present the TRQ access quantity that applies in a given year.

2.3. Allocation Period

2.3.1. The quota allocation year for the eggs and egg products TRQ extends from January 1 to December 31, inclusive.

2.3.2. Eligibility for an allocation, and the size of that allocation, will be assessed on the basis of each applicant’s activities in the egg and egg product industry during the reference period of October 1 to September 30 immediately preceding the new quota year. Applicants must be active in the eggs and egg products industry at the time of application, and must remain active throughout the quota year for which they are seeking an allocation.

3. Products Covered

3.1. This Notice pertains to items 135 to 139 of the Import Control List (ICL), namely eggs and egg products falling under heading Nos. 04.07, 04.08, 21.06 or 35.02 in the list of tariff provisions set out in the Schedule to the Canada's Customs Tariff. 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 eligible under the eggs and egg products 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 for Shell Eggs

4.1. The shell eggs portion of the TRQ is allocated to two groups.

  1. Traditional allocation holders; and
  2. Eligible federally-registered egg stations.

4.2. The allocation to the traditional group is calculated first. The quantity allocated to this group is equal to the quantity that was allocated to this group in the previous quota year, as adjusted since (e.g., for under-utilization). Eligible applicants will normally receive their full allocation from the previous year, as adjusted since (e.g., for under-utilization).

4.3. Eligible federally-registered egg stations may receive an allocation under the shell egg portion of the TRQ proportional to each station's market share, adjusted for surplus declarations. Each applicant’s market share for the new quota year will be calculated based on the number of eggs sold by that applicant during the relevant reference period divided by the total number of eggs sold by all applicants that receive an allocation in the new quota year.

4.4. Quota holders with allocations of more than three loads will be advised of their individual monthly import schedule. The bulk of shell egg imports will be scheduled to coincide with periods of peak demand in Canada.

4.5. Quota holders with an allocation of three loads or fewer are normally permitted to import at any time during the quota year following receipt of their allocation for that year.

4.6. In order to be granted an import permit for shell eggs, importers must, prior to importation, inform the Regional Office of the Canadian Food Inspection Agency (CFIA) in writing of the quantity of eggs expected to be imported, the date of importation and the identity of the federally registered establishment to which the eggs are to be delivered.

5. Allocation Policy for Egg Products (Frozen, Liquid and Further Processed Eggs)

5.1 The frozen, liquid and further processed egg portion of the TRQ is allocated to two groups:

  1. Traditional allocation holders; and
  2. Eligible applicants involved in the egg products industry as processors, wholesalers or distributors.

5.2. The allocation to the traditional group is calculated first. The quantity allocated to this group is equal to the quantity that was allocated to this group in the previous quota year, as adjusted since (e.g., for under-utilization). Eligible applicants will normally receive their full allocation from the previous year, as adjusted since (e.g., for under-utilization).

5.3. Eligible applicants involved in the egg products industry as processors, wholesalers or distributors may apply for a share of the frozen, liquid and further processed egg portion of the TRQ and receive an allocation proportional to each applicant’s market share. Each applicant’s market share for the new quota year will be calculated based on the quantity of egg products sold by that applicant during the relevant reference period divided by the total quantity of egg products sold by all applicants that receive an allocation in the new quota year.

5.4 The frozen, liquid and further processes egg allocations are normally issued in four quarterly instalments during the year.

5.5 Under the frozen, liquid and further processed egg portion of the TRQ, importers may have the option of importing, in addition to liquid or frozen eggs, shell eggs identified as breaking stock, provided they are directed to a registered processed egg station for breaking and that the importers fulfil the conditions set-out in section 6.3.

5.6 The frozen, liquid and further processed egg portion of the TRQ is expressed in kilograms. For purposes of administering the eggs and egg products TRQ, one dozen ungraded, nest-run or Grade C shell eggs is equal to 0.575 kilograms of frozen or liquid eggs.

6. Allocation Policy for Eggs for Breaking Purposes

6.1. The eggs for breaking purposes portion of the TRQ is allocated solely to registered processed egg stations. It is allocated in proportion to each station’s market share. Each applicant’s market share for the new quota year will be calculated based on the number of eggs sold by that applicant during the relevant reference period divided by the total number of eggs sold by all applicants that receive an allocation in the new quota year.

6.2. The eggs for breaking purposes allocations are normally issued in four quarterly instalments during the year.

6.3. In order to be granted an import permit for eggs for breaking purposes, importers must, prior to importation, inform the Regional Office of the CFIA in writing of the quantity of eggs expected to be imported, the date of importation and the identity of the federally registered establishment to which the eggs are to be delivered.

7. Allocation Policy for Egg Powder

7.1 The egg powder portion of the TRQ is allocated on an equal-share basis to federally-registered processed egg stations and further processors that use egg powder in their manufacturing and production formulations.

7.2 The egg powder allocations are normally issued in four quarterly instalments during the year.

8. Allocation Policy for Inedible Egg Products

8.1 Although import permits may be required for importing certain inedible egg products into Canada, there are no restrictions on the quantities that may be imported.

9. Related Applicants

9.1. Applicants for an allocation are required to provide a list of related persons. Applicants should consult Appendix 5 for the definition of related persons as it applies for the purpose of this Notice.

9.2. In the case of egg powder, related companies may apply for separate allocations, but no combination of such allocations will be permitted to exceed 25% of the total amount available for allocation unless the total of all applications is less than the access level.

10. How to Apply for an Allocation

10.1. Applicants who wish to apply for an allocation under the eggs and egg products TRQ are invited to submit their application form (see Appendix 2) and any other relevant documents, no later than the 5th of December immediately preceding the opening of the quota year.

10.2 An application for an allocation of the shell eggs, the egg products and/or the eggs for breaking purposes portion of the TRQ must be accompanied by a sworn affidavit certifying inter alia the firm's actual sales during the relevant reference period.

10.3 In addition to the requirement in section 10.2, all applicants for a share of the shell eggs, the egg products and/or the eggs for breaking purposes portion of the TRQ must provide an original verification of their application by an independent qualified person, such as an accountant. For the purpose of this Notice, an accountant is defined as a member in good standing of one of the three professional accounting bodies in Canada (C.A., C.G.A. or C.M.A.) who is registered with his/her provincial professional organization to provide accounting services and is independent from the applicant (i.e. is not an owner, or a partner of the company applying for an import allocation, and is not in an employee - employer relationship which involves the applicant).It should be noted that the eligibility of accountants to sign a letter supporting a request for allocation of import may varies from one province to another.

10.4 The affidavit and the verification letter must be in the exact format of the models attached to this Notice (see Appendices 3 and 4). Any changes to the wording of the prescribed affidavit or letter are permitted only if required by professional standards. In the event that changes are made, the applicant or the accountant must discuss these, in advance, with DFATD.

10.5. Applications sent by MAIL or COURIER should be addressed to the eggs and egg products quota manager at DFATD. The name and mailing address of the eggs and egg products quota manager can be obtained on the appropriate controlled product page on DFATD’s website, under Contact Us.

10.6. Applications sent by facsimile will not be accepted. Only original applications will be accepted.

10.7. Applications postmarked after the 5th of December immediately preceding the opening of the quota year, or in a format other than that required, will not be considered. Lost applications will not normally be considered without acceptable proof that they were sent before the deadline (e.g., courier receipt).

10.8. The declaration in the application form allows DFATD access to any information in the files of Agriculture and Agri-Food Canada or the CFIA pertaining to the applicant in relation to the application for an import allocation or to subsequent applications for, or concerning the use of, import permits. Normally, applicants are informed of any such requests for information.

11. Under-Utilization and Return Policies

11.1. Under-Utilization Policy

11.1.1. An allocation holder with a utilization rate less than 90% for shell eggs and less than 95% for egg products, eggs for breaking purposes and egg powder in the previous quota year may have its allocation adjusted downward by an under-utilization penalty for the new quota year.Footnote 1

11.1.2. 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

11.1.3. 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.

11.2. Return Policy

11.2.1. Allocation holders of egg products and/or eggs for breaking purposes 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 11.1.1.

11.2.2. Quantities returned no later than the return deadline will be used to accommodate requests for supplemental imports.

12. Transfer Policy

12.1. The Minister may allow the transfer of allocations between allocation holders. All requests for transfer of allocations must be referred to DFATD for consideration.

13. Supplemental Imports

13.1. The Minister may, at his discretion, authorize imports of eggs and egg products in excess of the import access quantity. The Notice to Importers Eggs and Egg Products - Supplementary Imports, explains the administration of supplemental imports for eggs and egg products. The Notice is available on the DFATD website under Controlled Products - Agriculture - Eggs and Egg Products.

14. Import Permits

14.1. Types of Permits

14.1.1. An import permit issued by DFATD is required for every shipment of eggs and egg 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).

14.2. Shipment-Specific Import Permits

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

14.2.2. 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.

14.2.3. 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 recipient of 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.

14.2.4. Individual allocations may be credited for shipments which are returned to the exporting country because of rejection by the CFIA. Importers wishing to avail themselves of this provision must submit to DFATD, within two weeks from the date of the rejection, the inspection certificate and related export documents showing that the shipment has been exported from Canada. These documents must bear the applicable import permit number. No credit will be made after the end of the quota year.

14.3. General Import Permits

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

14.3.2. 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.

14.4. 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 DFATD website: Applying for an Import Permit.

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 DFATD website (a paper copy will be provided upon request): Application for Import/Export Permit (PDF, 95 KB).

15. Contact Us

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

15.2. 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 (dozens/kg) / Total Allocation Granted (dozens/kg)) X 100%

Where:
Actual Level of Use (dozens/kg) = Permits Used (dozens/kg) + Returns (dozens/kg) + Transfers Out (dozens/kg)

And:
Total Allocation Granted (dozens/kg) = Initial Allocation (dozens/kg) + Transfers In (dozens/kg)

Return to footnote 1 referrer

Footnote 2

The under-utilization penalty will be calculated as follows:

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

Where:
“Pre-penalty Allocation (dozens/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