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Textiles and clothing

Administration of the North American free trade agreement (NAFTA) relating to exports of textiles, apparel and made-up goods to the United States and the application of the tariff preference levels

TPL Bonus Allocation

Notice to Exporters
Export and Import Permits Act

Serial No. 134
Date: September 24, 2001

Table of Contents

1.0 Purpose

1.1 This Notice advises exporters of policies relating to the allocation of wool and non-wool apparel TPL under-utilized from the previous calendar year.

2.0 Duration

2.1 This Notice shall remain valid until further notice.

3.0 Authority

3.1 Tariff Preference Level or "TPL" means the special provisions set out in Annex 300-B, Appendix 6, Part B of the NAFTA, that provide for the application of a customs duty at a preferential rate to non-originating goods up to a specified quantity, as adjusted under the Agreement, measured in square metre equivalents (SME), and at a rate different from goods that exceed that quantity. The Minister of Foreign Affairs issues Certificates of Eligibility for TPL in accordance with the Issuance of Certificates Regulations which are, in turn, made under authority of the Export and Import Permits Act (EIPA). The Minister allocates TPL quantities or "quota" to qualified applicants in accordance with policy expressed in the present Notice and Notices to Exporters Nos. 111, 115 and 123.

3.2 The annual TPL levels for the export of non-originating apparel and made-up goods, as provided in the special provisions of Annex 300-B, Appendix 6, Part B of the NAFTA, from Canada to the United States are 5,325,413 SMEs for wool apparel and 88,326,463 SMEs for non-wool apparel.

3.3 Certificates of Eligibility for TPL are issued at the discretion of the Minister responsible for the EIPA; nothing in this or other Notices or other communications can be taken to guarantee the issuance of a Certificate. However, it is the Minister's intent normally to recognize TPL allocations in dispositions of applications for Certificates of Eligibility for TPL. Thus, the present Notice and other indications of policy referred to herein are presented as a guide to interested parties.

4.0 Wool and Non-wool Apparel TPL Bonus Allocation

4.1 As apparel TPL is allocated primarily on the basis of past utilization by current quota holders, a small percentage may be available each calendar year for reallocation (i.e., a "bonus" allocation) reflecting under-utilized TPL from the previous calendar year.

4.2 Depending on availability, qualifying quota holders may receive a bonus allocation each year of wool and non-wool apparel TPL equal to a percentage of their previous year's original allocation. Quota holders may qualify to receive such a bonus provided they hold less than 10% of the overall TPL level, they utilize 95% of their allocation, and they have not transferred-out TPL in the previous calendar year. The actual percentage will be adjusted annually to reflect the amount of TPL available each year.

4.3 Any remaining TPL not allocated pursuant to the method set out in paragraph 4.2, may be allocated on a pro rata basis to quota holders that transferred-in TPL in the preceding year. The pro rata allocation will be based on the volume less any unused amounts (e.g., returns to the Department and outstanding year-end balance) by the quota holder at the end of the previous calendar year.

4.4 There may be a minimum of 100 SMEs allocated as a bonus TPL to qualifying quota holders under paragraphs 4.2 and 4.3.

4.5 TPL bonus allocations affect companies' original allocations and as such will be subject to the TPL under-utilization provisions as outlined in Notice to Exporters No. 123, dated December 10, 1999. Companies that do not wish to receive TPL bonus allocations are asked to advise the Trade Control Policy Division, for which contact details are provided below, within 30 days of receipt of the allocations.

5.0 Inquiries

5.1 Inquiries concerning this Notice or other administrative policies relating to NAFTA may be addressed to:

Textiles and Clothing Section
Trade Controls Policy Division
Export and Import Controls Bureau
Department of Foreign Affairs and International Trade
Lester B. Pearson Building
125 Sussex Drive
Tower C, 4th floor
Ottawa, Ontario
K1A 0G2

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

5.2 A copy of this notice and other pertinent information are available on the following Internet site: ../notices