Notices to Exporters

NAFTA Cotton or Man-Made Fibre Apparel Exports: TPL Allocation Policy - Administration of the NAFTA Relating to Exports of Cotton or Man-Made Fibre Apparel and Made-Up Goods (Non-Wool Apparel) to the United States and the Application of the Tariff Preference Levels.

Serial No. 165
Date: May 22, 2009

1.0 Purpose

1.1 The purpose of this Notice is to outline the Minister's policy and practices respecting the allocation of cotton or man-made fibre apparel and made-up goods TPL. This Notice should be read in conjunction with the Export and Import Permits Act (EIPA). Where elements of the present Notice augment the EIPA and Regulations, those elements are to be read as expressions of the Minister's normal policies and procedures.

2.0 Coverage

2.1 This Notice replaces all references to cotton or man-made fibre apparel and made-up goods (non-wool apparel) in Notices to Exporters No.111, dated September 21, 1998; No.115 dated April 30, 1999; No.123 dated December 10, 1999; and No.134 dated September 24, 2001, regarding allocation and transfer policies. It refers to non-originating cotton or man-made fibre apparel and made-up goods (non-wool apparel) exported to the United States provided for in Annex 300-B, Appendix 6, Part B, paragraph 1 of the NAFTA.

3.0 Duration

3.1 This Notice, effective April 15, 2009, shall remain valid until further notice.

4.0 Authority

4.1 Tariff Preference Levels (TPL) are special NAFTA provisions set out in Annex 300-B, Appendix 6, Part B, of the NAFTA, that provide tariff preferences for imports and exports of non-originating textile and apparel goods up to a specified quantity. Section 9.1(a) of the Export and Import Permits Act (EIPA) authorizes the Minister to issue Certificates of Eligibility for TPL for the purpose of implementing an intergovernmental arrangement (e.g., NAFTA). The Minister allocates TPL quantities (in SMEs) to qualified applicants in accordance with the Issuance of Certificates Regulations and policy expressed in Notices to Exporters.

4.2 The annual TPL level for the export of non-originating cotton or man-made fibre apparel and made-up goods as provided in the special provisions of Annex 300-B, Appendix 6, Part B, paragraph 1(b) and Schedule 6.B.1 of the NAFTA, from Canada to the United States is 88,326,463 SME. Of this amount no more than 63,060,603 SME shall be made from fabrics which are knit or woven in non-Party (non-NAFTA country). If this level is reached, non-wool apparel TPL will apply only to apparel goods made from non-NAFTA yarns.

4.3 Certificates of Eligibility for TPL are issued at the discretion of the Minister under the authority of the EIPA. Nothing in this or other Notices or other communications can guarantee or be taken to guarantee the issuance of a Certificate of Eligibility. However, it is the Minister's intent to normally recognize TPL allocations in the disposition of applications for Certificates of Eligibility for TPL.

4.4 TPL allocations are not an asset of a TPL holder and there is no property value associated with a TPL allocation. All aspects of TPL utilization and all related activities are subject to verification. Pursuant to sub-section 10.(1) of the EIPA, the Minister may amend, suspend, cancel or re-instate any permit, certificate, allocation or other authorization issued or granted under the Act.

4.5 Exporters are advised to maintain records regarding the country of origin of the fabric or yarns (whichever is applicable) which are used is making the apparel goods, as well as, information on where the goods have been both cut (or knit to shape) and sewn or otherwise assembled, as they may be requested to present them upon or subsequent to export.

4.6 Applicants for an EIPA permit, allocation or other EIPA authorization have an obligation to keep for a period of six years all records that are necessary to determine whether the applicant has complied with the EIPA. Failure to keep records is an offence punishable under the EIPA.

5.0 Annual TPL Allocation Policy

5.1 Subject the EIPA, the EIPA regulations and related policies, a company that received a TPL allocation in one year may receive an allocation in the next year that reflects its actual level of TPL use. TPL cannot be carried over to the next year, nor borrowed from the next year. All unused TPL reverts to the Minister.

5.2 Cotton or man-made fibre apparel and made-up goods will be allocated to historical TPL holders on a basis of their historical allocations, as adjusted, if necessary (e.g. for under-utilization or return of TPL to the Minister). Any balance remaining in these TPL types will be allocated on a first-come, first-served basis.

6.0 Additional Information

6.1 Inquiries concerning TPL administration, as well as correspondence authorizing brokers to conduct services related to transfers, may be addressed to:

Foreign Affairs and International Trade Canada

Trade Controls Policy Division
Export and Import Controls Bureau
Textiles and Clothing Section (TICT)
125 Sussex Drive,
Ottawa, Ontario K1A 0G2

Telephone: 613-944-1805
Facsimile: 613-995-5137