COVID-19 Guidance for Importers and Exporters
As the global COVID-19 pandemic develops, it is becoming increasingly important to provide guidance for importers and exporters so that the global movement of goods is not hampered, and ensure that goods are not unnecessarily delayed at national borders.
In particular, trade in medical equipment, personal protective equipment, and other supplies relating to the epidemic is likely to increase in the following weeks, and its timely clearance through customs will be crucial to ensure goods are delivered to where they are needed most. This is especially true as many national customs authorities, including the Canada Border Services Agency (“CBSA”), will be implementing enhanced border measures.
The CBSA has recently issued three new Customs Notices to provide relief and greater certainty to importers during the COVID-19 crisis:
- Customs Notice 20-08 provides information on the relief of duty and taxes for goods imported by or on behalf of federal, provincial or municipal entities and required for an emergency, pursuant to the Goods for Emergency Use Remission Order (C.R.C., c. 768) and the application of Tariff Item No. 9993.00.00 of the Schedule to the Customs Tariff.
- Customs Notice 20-09: effective immediately, the 90 day period for submitting corrections following a CBSA trade compliance verification where errors were found has been automatically extended by 30 days, for a total of 120 days.
- Customs Notice 20-10: a 45 business days grace period for late accounting penalties applies to transactions released from March 11, 2020 to May 14, 2020, inclusively. Importers will not have to submit individual applications to have late accounting penalties waived for this period.
Notably, the CBSA has not yet addressed the matter of deferred payment of duties, taxes and fees. As matters develop over the coming weeks, the CBSA is likely to issue new notices addressing concerns as they arise.
The Canadian International Trade Tribunal (the “Tribunal”) has issued COVID-19 guidance applicable to parties wishing to challenge a determination by the CBSA. The Tribunal’s electronic filing system remains operational and scheduled filing deadlines are being maintained for the time being. The Tribunal has indicated it understands that parties may need extensions which are being considered on a case-by-case basis. All scheduled in-person appeal hearings are cancelled until April 14, 2020, and the Tribunal will coordinate with affected parties.
Those challenging or seeking to challenge trade or customs determinations by the CBSA or CITT should also be aware that the Federal Court has altered deadlines in response to COVID-19. It has suspended the running of all timelines under Orders and Directions of the Court made prior to March 18, 2020, as well as under the Federal Courts Rules, subsection 18.1(2) of the Federal Courts Act and paragraph 72(2)(c) of the Immigration and Refugee Protection Act until April 17, 2020 (the “Suspension Period”). All other statutory filing deadlines continue to apply. General Sittings falling within the Suspension Period have also been cancelled, and all previously scheduled hearings (including teleconferences)have been adjourned sine die. The Federal Court of Appeal has similarly suspended the running of timelines under the Federal Courts Rules, while mandatory deadlines to commence appeals and applications remain in force, although parties may seek extension of those deadlines if circumstances prevent timely filing.
US Customs and Border Protection (“CBP”) has published two recent messages to its trading partners through its Cargo Systems Messaging Service relating to COVID-19, including one concerning the potential deferral of duties, taxes, and fees:
- CSMS #42097586 advising that CBP will approve, on a case-by-case basis, additional days for payment of estimated duties, taxes, and fees, with further details to be provided.
- CSMS #42118616 advising that the Food and Drug Administration’s import operations remain functional and operational, with most import operations (other than the generation and mailing of hard-copy notices) not currently experiencing delays.
World Customs Organization
In addition, the World Customs Organization (“WCO”) has launched a special section of its website to address customs-related COVID-19 issues.
The WCO has also issued HS classification reference for COVID-19 medical supplies, which is a helpful resource for importers and exporters seeking appropriate Harmonized System tariff classification for diagnostic, personal protection, disinfectant, sterilization, other medical devices and consumables. This, too, should assist in facilitating the efficient cross-border movement of these goods around the world although it should be noted that the list is provided as an indicative list only, without legal authority. It is likely the classification reference will continue to be updated over the course of the crisis.
Finally, the WCO has recently issued an Urgent Notice advising of increased instances of trade in counterfeit medical supplies, including in particular face masks and hand sanitizers. A joint enforcement effort undertaken by the WCO in conjunction with Interpol, Europol and other customs administrations between March 3 and March 10, 2020 also yielded significant seizures of counterfeit medical supplies. In total, 37,258 counterfeit medical devices were seized, of which 34,137 were surgical masks.
In response to global shortages and the increase in counterfeit products, the WCO has also noted a trend in the introduction of export permits for increasingly in-demand critical medical equipment, including in particular personal protective equipment (such as gloves, face masks, and gowns). A number of jurisdictions have imposed these types of export controls and licencing frameworks, and accordingly importers and exporters alike should stay abreast of new authorization requirements for the trade in these goods.