Notice to Exporters

Textiles and clothing tariff preference level

Serial No. 101
Date: September 2, 1997

Table of Contents

1.0 Purpose

1.1 The purpose of this Notice to Exporters is to set out the conditions which apply to Certificates of Eligibility for access to Tariff Preference Levels, in counection with exports of certain NAFTA-specified textiles, apparel and made-up goods.

2.0 Definitions In this Notice

2.1 "Certificate of Eligibility" means the Minister's certification that a quota holder's goods qualify for preferential treatment pursuant to the North American Free Trade Agreement (NAFTA); the Minister makes such qualification conditional on the quota holders maintenance of records which allow the Ministers auditors to identify the origin of materials used in the manufacture of goods eligible for access to tariff preference level;

2.2 "The Department" means the Trade Controls Policy Division, within the Department of Foreign Affairs and International Trade.

2.3 "Goods" means NAFTA-specified textile, apparel and made-up goods which do not meet the NAFTA Rules of Origin specifications for classification as "originating" products;

2.4 "The Minister" means the Minister of Foreign Affairs;

2.5 "Quota" means the Ministers allocation to an exporter to enable access to a Certificate of Eligibility for access to Tariff Preference Levels;

2.6 "Quota Holder" means an exporter to whom the Minister has allocated a quota.

2.7 "Significant change in control or ownership of the quota holder" means assignment of assets or consolidation of previously unrelated quota quantities to an extent which the Minister deems to be significant, unless the change is accompanied with assurances acceptable to the Minister that the quota holder's employment levels would not decrease;

2.8 "Tariff Preference Level", or ATPL A means a NAFTA mechanism that provides for the application of a customs duty at a preferential rate to particular goods up to a specified quantity, and at a rate different from goods that exceed that quantity.

3.0 Quota

3.1 Quota is neither the property of nor an asset of a quota holder;

3.2 The Minister allocates quota subject to conditions expressed in this Notice and Notice to Exporters No. 70 dated December 1993;

3.3 Quota expires at the end of the calendar year for which it was allocated;

3.4 A quota holder may use quota only in connection with exportation of the quota holder's goods for which the Minister allocated quota;

3.5 Only the quota holder may export with benefit of quota;

4.0 Transfer of Quota

4.1 A quota holder may not sell or otherwise transfer quota to another person;

4.2 When the Minister has reasonable grounds to believe that a quota holder has sold or attempted to sell quota, the Minister may cancel that quota holder's remaining quota;

4.3 When the Minister has reasonable grounds to believe that a quota holder has sold or attempted to sell quota, in subsequent years the Minister may refuse to allocate quota to that quota holder;

4.4 A quota holder may obtain advice from the Department, at the address given below, respecting the possible effects of significant changes in control of ownership or control of the quota holder;

4.5 The quota holder shall inform the Minister in writing when a quota holder intends to wind up or when the quota holder intends to make significant changes in its ownership or control;

4.6 When a quota holder notifies the Minister respecting a significant change in its ownership or control, and after reviewing such changes the Minister may allow the quota holder to retain the quota or the Minister may withdraw the quota from the quota holder and may reallocate the quota to other qualified exporters;

4.7 When a quota holder winds up or ceases to operate, any quota remaining in the quota holder's account shall revert to the Minister for reallocation to other qualified exporters;

5.0 Banking of Access

5.1 While TPL is allocated on a "use it or lose it" basis, it is understood that events beyond the quota holder's control may impact on the ability to utilize TPL on an individual basis. Quota holder's who do not expect to use their full allocation may return to the Department, on or before the close of business on September 30, up to 25% of their original allocation. This amount will then be redistributed at such a time and in such a manner as the Minister sees fit. Any amount so returned to the Department will, normally, form part of the exporters allocation for the following year. (See Annex A.)

Deputy Director
Trade Controls Policy Division
Export and Import Controls Bureau
Department of Foreign Affairs and International Trade
P.O. Box 481, Station "A"
Ottawa, Ontario
K1N 9K6

Telephone: 613-996-3711
Facsimile: 613-995-5137

Annex A - Impact of Banking Quota