The Canada Border Services Agency (CBSA) is targeting stone and articles of stone in its 2011 national priorities for post-release trade compliance verifications. The H.S. tariff classification code that the CBSA has indicated correlates with the stone verification priority include harmonized system headings 25.15, 25.15, 25.16, 68.01, 68.02, tariff classification numbers 6803.00.90 and 6803.00.10.10.
The CBSA will select a number of importers of stone and articles of stone who will receive letters of an upcoming verification. Not all importers of stone and articles of stone will be selected. The focus of the verification will be tariff classification and tariff treatment (for example, if the importer claimed NAFTA treatment, the goods meet the rules of origin).
The questions that the CBSA ask include whether the H.S. tariff code used by the importer is correct. The CBSA will also look at whether the importer claimed the correct tariff treatment (which looks at origin of the stone (where the stone was taken from the ground)). If General Preferential Tariff (GPT) treatment is claimed, do the imported goods meet the criteria or should Most-Favoured Nation (MFN) tariff treatment have been claimed? If NAFTA treatment is claimed, do the stone/articles of stone meet the rules of origin.
If you are an importer of stone and articles of stone into Canada, this is a good time to review your tariff classification and tariff treatments. If you have not yet received a letter from the CBSA about an audit/verification, you may be entitled to make a voluntary disclosure should you find a mistake. If you are entitled to make a voluntary disclosure, you may save the amount that would be charged as penalties if the CBSA finds the mistakes during an audit/verification. In addition, if you make a voluntary disclosure of mistakes that result in an increase in customs duties payable, you save the interest from the date of the voluntary disclosure. In addition, based on my experience, the CBSA has a greater willingness to discuss reasonable payment arrangements when a person makes a voluntary disclosure and does not have the ability to pay the additional customs duties.
For more information, please contact Cyndee Todgham Cherniak, a Canadian customs lawyer, at 416-307-4168.