The Role and Responsibilities of Being an Importer of Record in Canada – A Guide for Businesses Navigating Customs Clearance
Taking on the importer of record role in Canada comes with key obligations that businesses need to understand. As the legal owner of imported goods, the importer of record must comply with various regulations laid out by the Canada Border Services Agency (CBSA) and Revenue Canada Customs (RCC). Here’s an overview of what’s involved in being an importer of record in Canada.
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Know Who Qualifies as an Importer of Record
In Canada, the importer of record is the person or business whose name appears on the customs paperwork as the owner of the imported goods. They may not necessarily be the actual owner of the goods. For example, a retailer who orders products from an overseas supplier can be listed as the importer of record, even though they are not the producer.
To officially serve as the importer of record, an individual or business must have a Canada Revenue Agency (CRA) Business Number. Thisimporter of record number is used to identify the importer and process customs documents. Companies without a business number can hire a licensed customs broker to handle import transactions on their behalf.
Complying with Release, Accounting and Payment of Duties
One key responsibility of an importer of record in Canada is to get the imported goods released by CBSA upon arrival. The release process involves submitting the appropriate customs paperwork, including the cargo control document, commercial invoice and bill of lading.
The importer of record must also account for the imported goods when filing required reports with CBSA and Revenue Canada. Detailed records on the tariff classifications, values and quantities of imports must be maintained. Any duties and taxes owed must be paid within the set deadlines to avoid penalties.
Managing Licenses, Permits and Restricted Goods
Certain types of commodities cannot be freely imported into Canada. There are restrictions on goods like firearms, agriculture products, animals, textiles, steel and aluminum. An importer of record needs to ensure they have the necessary licenses and permits before attempting to import controlled or regulated goods.
Some banned goods like drugs, hate propaganda and obscene materials cannot be imported at all. Failing to comply with these rules could lead to goods seizure, fines or even criminal prosecution for the importer. Customs brokers can advise on these import regulations.
Meeting Labeling, Packaging and Standards Regulations
All consumer goods coming into Canada must meet labelling and packaging requirements laid out in the Consumer Packaging and Labelling Act. Labels cannot contain false or misleading information. Country of origin, identity, quantity and ingredients must be declared.
Imported products also need to conform to Health Canada and Canadian standards regulations. Things like natural health products, electronics and vehicles undergo strict assessments. The importer of record is accountable for ensuring their imports meet the prescribed safety, testing and quality standards.
Leveraging Free Trade Agreements
Canada has free trade agreements (FTAs) in force with a number of countries like the US, the EU, Australia, and South Korea. These FTAs eliminate most tariffs on goods traded between these partner countries. As the importer of record, a business must obtain and retain certificates of origin to qualify for the preferential duty rates under FTAs.
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Staying Up to Date on Customs Rules and Regulations
Import regulations and duty rates are constantly updated based on trade policies, bilateral relations and industry-specific changes. As the legally liable party, the importer of record must regularly check CBSA notices and bulletins to stay current on any new rules affecting their imports. Being unaware of new regulations is not an excuse for non-compliance.
Maintaining Accurate Records for Audit Purposes
Thorough record-keeping is crucial. Importers can be subject to CBSA audits to verify compliance. All documents related to customs transactions like invoices, origin certificates and import declarations need to be kept for at least four years. Proper documentation provides evidence and facilitates duty refunds or drawback claims too.
In summary, serving as an importer of record in Canada entails major accountability. Businesses must be ready to adhere to all laws and regulations governing imports. Partnersing with an experienced customs broker adds expertise and helps avoid costly compliance mistakes. Being the importer of record is a privilege that comes with significant legal obligations.
The Growing Volume of Imports into Canada
Imports into Canada have increased substantially over the past decade. According to Statistics Canada, the total value of imports grew from $381.3 billion in 2010 to $547.7 billion in 2020, a 43.7% increase. The volume of imports also rose by 33.6% during this period. This reflects Canada’s heavy reliance on imported consumer goods, machinery, automotive products, and oil. The COVID-19 pandemic did lead to a slight dip in total imports in 2020. However, the overall trajectory is projected to keep rising as the economy and import demand recover.
More Businesses Taking on Importer of Record Role
With import volumes on the rise, more Canadian businesses are taking on the importer of record responsibility. The exact number of importers of record is difficult to quantify. However, Statistics Canada estimates there were 1.23 million employer businesses in Canada in 2020. Many of these businesses import products regularly. In addition, over 135,000 new corporations were registered in Canada in 2021, representing potential new importers. The importer of record ensures the goods clear customs and that duties are paid correctly. Hence, their numbers are likely growing proportionally with Canada’s import growth.
Complex Regulations Increasing Reliance on Customs Brokers
As an importer of record, businesses must grapple with complex customs regulations that are constantly changing. Tariff classification, valuation, origin, licensing, and accounting for imports involve detailed compliance. According to the Canada Border Services Agency (CBSA), over 99% of importer accounts used third-party customs brokers to facilitate trade compliance and clearance in 2021. Brokers help navigate the paperwork and evolving rules. Their expertise assists importers to avoid penalties and delays.
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