Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



Rare Import Permit Judicial Review Contains Important Free Trade Language

On January 22, 2008, Canada's Federal Court determined that the Minister of International Trade has to make a determination whether goods were on the import control list (ICL) and then exercise his/her discretion on whether to allow retroactive amendments to import permits.

YM (Sales) Inc. (the "Applicant") brought a judicial review of the Minister of International Trade's decision to refuse to amend some 1,200 import permits in a situation where the Applicant was using an alternative course of action to solve a problem that had resulted when preferential NAFTA treatment was not available.  The short version of the story is that the Applicant made a mistake and tried to retroactively amend its import permits to obtain Tariff Preference Level (TPL) status for the imports in order to correct the error. The Minister of International Trade simply refused the attempt.  The mindset was that an application for retroactive amendments to import permits to obtain TPL status was presumptively invalid because the CBSA had found a mistake and issued Detailed Adjustment Statements (DAS). 

The Federal Court (which considers judicial reviews of decisions of the Minister of International Trade) determined that the Export and Import Permits Act (Canada) does not provide the Minister with express or implied authority to automatically reject and application for an amendment in respect of good that are the subject to a Canada Border Services Agency (CBSA) DAS even where there was negligence in the original application for an import permit or an incorrect claim of originating status.  This is important because mistakes happen.

In the part of the decision that the proper standard of review in a judicial review of the Minister of International Trade's decision is reasonableness, the Federal Court made the following interesting statements:

"The purpose of the legislation [the Export and Import Permits Act], as I apprehend it, is to implement the promises of free trade made in NAFTA.  These promises have been incorporated in law and the administration of import controls must respect the legal criteria while promoting the purposes of the Agreement.  This means less deference is owed to the decisions of the Minister if there is a question of whether those criteria are being observed.  Finally, it is said that the nature of the decision of the Minister is discretionary because the word "may" appears in the relevant sections of the EIPA.  One must, I think, analyze the power more precisely.  I do not think that the word "may" entitles the Minister to ignore the definition of eligibility for this apparel as set out in paragraph 85 of the [Import Control List].  To do so is to ignore the opportunity which these U.S. exporters should have to export to Canada, and this Canadian importer should have to import into Canada duty free, such apparel."

This is great language in support of free trade.  The Federal Court is clear to state that "[i]t is not for the Court ... to declare the Applicant entitled to import permits... [i]t is the Minister who has the power to make these decisions but they must be made with proper consideration of the facts before him."

The Federal Court determined it was not reasonable for the Minister to simply deny the retroactive amendments without first considering whether the goods were on the import control list.  The Federal Court set aside the Minister's decision and referred the matter back to the Minister. 

The Federal Court also determined that an administrative policy that is not published is not necessarily invalid.  However, an administrative policy that is not published may represent or constitute an improper fettering of discretion.

To read a copy of the Federal Court decision, please click on YM (Sales) Inc. v. Minister of International Trade and Attorney General of Canada (Docket T-351-05, decision January 22, 2008)

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