Customs and International Agreements: Matrix College

Customs and International Agreements
Matrix College
Canada Border Services Agency (CBSA)
www.cbsa.gc.ca
www.cbsa.gc.ca
An Overview of the Import Process

The following flowchart shows the basic steps and documents
Involved in a typical Import transportation.
1. The Purchase : 2. Purchase Order :

Locate International supplier. The buyer will issue
Negotiate transaction and payment Purchase Order for the
terms (Letter of Credit or other terms). Seller.
Set Contract Payment terms/ Incoterms.
www.cbsa.gc.ca

3. Packing List : 4. Transportation:

The Seller prepares order The buyer and Seller, depending on
and Issues the Packing List. Incoterms, Arrange for transport of goods.
5. Commercial Invoice: 6. Waybill(S):

Seller creates Commercial Invoice. Carrier(s) issues the transportation Waybill(s) as
Prepares Export documents required carriage contract of goods; Bill of Lading (B/L),
by originating country. Airway bill (AWB), Road (CMR), Rail (CIM)
www.cbsa.gc.ca

8. Documentation ;
Documents presented to customs.
 Commercial Invoice (Canada Customs Invoice)
7. Customs Clearance :
 Packing List
Arrange customs clearance.
Buyer / Seller responsibility  Copy of carrier waybill.
per Incoterms.  Certificate of Origin (if Required)
 Insurance Certificate
 Inspection Report
 Import Permits (if required).

www.cbsa.gc.ca

9. Customs Clearance ; 10. Goods Received ;

B3 Customs Coding Form Receiving Report
Presented for final accounting Inventory Report
/payment of duties and taxes. Payments Issued
NOTE: All Records Related to the Import Transaction Retained For

6 YEARS.
www.cbsa.gc.ca
www.cbsa.gc.ca
An Overview of the Export Process

Involved in a typical Export transportation.
1. The Purchase : 2. Purchase Order :

International Buyer orders the goods. The buyer will issue
Negotiate transaction and payment Purchase Order for the
terms (Letter of Credit or other terms). Seller.
Set Contract Payment terms/ Incoterms.
www.cbsa.gc.ca

3. Preparation of International 4. Transportation:

Order : The buyer and Seller,
 Packing List depending on Incoterms,
 Commercial Invoice Arrange for transport of goods.
www.cbsa.gc.ca

5. Export Documents
 Export Declaration B13a 6. Waybill(S):
 Commercial Invoice Carrier(s) issues the transportation Waybill(s) as
carriage contract of goods; Bill of Lading (B/L),
 Certificate of Origin
Airway bill (AWB), Road (CMR), Rail (CIM)
 Permits (If Required)
www.cbsa.gc.ca

9. Documentation ;
Documents for Foreign customs;
 Commercial Invoice
7. Notify Customs 8. Monitor Shipment  Packing List
Notify Canada Customs Track, monitor shipment  Carrier waybill.
within timeframe. deliver to destination.  Certificate of Origin (if required)
 Insurance Certificate
 Inspection Report
 Export Permits (if required).

www.cbsa.gc.ca

11. Goods Received ;

10. Customs Clearance ;
 Proof of Delivery
Final accounting and payment
 Payments Issues
of duties and taxes.
NOTE: All Records Related to the Export Transaction Retained For

6 YEARS.
www.cbsa.gc.ca
Import and Export Documentation

International commercial shipments require standardized
documentation to reflect the commercial transaction and
transportation terms for goods moving internationally.
Commercial Cargo moving to and from Canada is therefore

accompanied by some, if not all of the following documents;
 Bills of Lading
 Commercial Invoice (Canada Customs Invoice for import Goods)
 Packing List
 Certificate of Origin
 Export/Import Permits, if required
 Other forms, as required
www.cbsa.gc.ca

 Bill of Lading
A ‘‘Bill of lading’’ is a contract between the shipper and the

carrier.
It is Straight or Negociable;
Straight: is non-negociable – for goods assigned to a specific

person or company.
Negociable: goods have not yet been sold – they may be bought,
sold, traded in transit.
www.cbsa.gc.ca

 Bill of Lading
Four types:
1. Inland bill of lading: used for goods shipped over land
2. Through bill of lading: single bill of lading that covers both the
domestic and international transport of goods
3. Air waybill: covers both domestic and international flights that
transport goods
4. Ocean bill of lading: Can be used as a receipt for cargo or a
contract for transportation (straight or non-negociable).

www.cbsa.gc.ca

 Bill of Lading
Ocean bill of lading:

a) Bill of lading (BOL) issued
b) Bank issues a Letter of Credit (LC) by request of importer in favor of exporter
c) Importer pays for LC to obtain the BOL
d) Original BOL given to the steamship line
e) Steamship line advises terminal operator (Port of MTL) that goods are
steamship released – after the charges paid & BOL surrendered
f) Goods released by customs
g) Goods arrive at port of destination with original BOL presented to the owner
(purchaser) of the goods
www.cbsa.gc.ca

 Bill of Lading
www.cbsa.gc.ca

 Commercial Invoice (Canada Customs Invoice for import Goods)
The commercial invoice (CI) generally serves a dual purpose;
1) It enables exporters to collect monies owed
2) Assists importers in customs clearing the goods
The CI can be met by providing either one of the following options;
 A CI indicates the buyer and seller of the goods, the price paid
or payable for the goods and an accurate description of goods,
including quantity.
www.cbsa.gc.ca

Commercial Invoice (Canada Customs Invoice for import Goods)
 For imported goods entering Canada, a Canada Customs

Invoice (CCI, D1-4-1), form CI1, containing the balance of
information required.
 What is Canada Customs Invoice (CCI)?
If the CI is neither in English nor French or is not complete, the CBSA

will request for CCI. The guideline is Memorandum D1-4-1.
Accuracy in the Commercial Invoice is extremely important as

mistakes may lead to fines, excess duties, or penalties being
against the shipment.
www.cbsa.gc.ca

Commercial Invoice (Canada Customs Invoice for import Goods)
www.cbsa.gc.ca

Packing List (PL)
The packing list is a detailed listing of the contents of the shipment

and acts as a supporting documents.
The packing list may provide a means of quickly identifying

merchandise required for customs inspection, give a means of
determining description, accurate weights (Gross and Net),
measurements, Unit, quantity, and give a means for inspector to
unpack quickly to check a piece count of the contents.
As a supporting document, the packing list is essential in the event

of damage, to support an insurance claim.
www.cbsa.gc.ca

Packing List (PL)
www.cbsa.gc.ca

Certificate of Origin
 Imported Goods
Although it is not necessary to present the Certificate of Origin with

either the interim of final accounting documents, the importer must
be able to provide a copy of the Certificate to customs upon
request.
Failure to provide a Certificate of Origin will result in re-

determination of origin, and in most cases, a request by Customs
for any applicable duties and taxes.
www.cbsa.gc.ca

 Exported Goods
Certificate of Origin are completed when required by the

regulations governing the country of import.
 Responsibility of exporter to provide the certificate
 Does not have to be presented to CBSA except when requested,
must be in importer’s possession.

www.cbsa.gc.ca

 Exported Goods
 NAFTA /USMCA
The North American Free Trade Agreement (NAFTA) states

clearly that a NAFTA certificate of Origin is a required
documents for goods destined for NAFTA countries, namely,
Canada, Mexico and the U.S.A in order for such goods to
qualify for NAFTA rates of duty and tax.
www.cbsa.gc.ca

 Exported Goods
 Non-NAFTA/USMCA
For shipments destined for non-NAFTA countries, a Certificate

of Origin signed and stamped by the local Board of Trade
and/or the Consulate of Embassy of the country of import
may also be a requirement.
www.cbsa.gc.ca

Required for imports from countries entitled to reduced duty

under General Preferential Tariff (GPT).
Must be submitted:
 Time of release
 Time of accounting
 When filling a refund request
www.cbsa.gc.ca

List of Countries and Applicable Tariff Treatments
https://www.cbsa-asfc.gc.ca/trade-commerce/tariff-
tarif/2018/html/countries-pays-eng.html
 All countries on the list eligible for Most Favoured nation (MFN) tariff
treatment (ex. Afghanistan).
 Those eligible for General Preferential Tariff (GPT) (ex. Algeria).
 Those eligible for Least Developed Country (LDC) (ex. Angola)

www.cbsa.gc.ca

Export/Import Permits
The Department of Foreign Affairs and International Trade (DFAIT)

imposes restrictions on certain goods being imported into or
exported from Canada based on the nature of the goods or
particular country of destination or origin. These restrictions are set
out under the Export and Import Permits Act (EIPA).
Canada Customs assists in the administration and enforcement of

the EIPA on behalf of the Export and Import Permits Bureau of
Department of Foreign Affairs and International Trade Canada.
www.cbsa.gc.ca

The Department of Foreign Affairs and International Trade (DFAIT)

imposes restrictions on certain goods being imported into or
exported from Canada based on the nature of the goods or
particular country of destination or origin. These restrictions are set
out under the Export and Import Permits Act (EIPA).
Canada Customs assists in the administration and enforcement of

the EIPA on behalf of the Export and Import Permits Bureau of
Department of Foreign Affairs and International Trade Canada.
www.cbsa.gc.ca

 Export Permit
The Export Permit is a document issued by the Special Trade

Relations Bureau of the Department of Foreign Affairs and
International Trade (DFAIT) granting an exporter permission to
export certain restricted foods, or to export any goods to certain
restricted countries of destination.
The EIPA, the Export Control List (ECL) and the Area Control List are
the mechanisms by which Canada controls exports.
www.cbsa.gc.ca

 Export Permit
The Export permit requirements for shipments entering the U.S.A are
waived for all goods included on the Export Control List except for
group 3 and 4 as well as some goods from group 5.
Additionally, crude oil is not listed as a controlled substance;

however export permits would be a requirement for crude oil, or
any product being shipped to a country on the Area Control List.
www.cbsa.gc.ca

Group 1; Industrial Goods
This group comprises dual-purpose goods and technologies which

have both civilian and military applications.
Group 2; Munitions
The group comprises goods and technologies specially designed or

modified for military purposes.
Group 3; Atomic Energy
This group includes goods that are nuclear related.

www.cbsa.gc.ca

Group 4; Nuclear Non-proliferation list
This group includes goods that are nuclear related as well as dual-
purpose goods and technologies which have both civilian and
military applications that could be used in the proliferation of
nuclear explosive devices.
Group 5; Miscellaneous Goods List
This group covers the goods that are controlled in order to protect
natural resources and to fulfill Canada’s commitments to non-
strategic multilateral agreements; including forest products,
www.cbsa.gc.ca

endangered species, medical products, agriculture and food
products, US origin goods and automatic weapons.
Group 6; Missile Technology Control Regime (MTCR) list
Includes goods and technologies agreed upon by MTCR that could
be used in the proliferation of systems capable of delivering
chemical, biological weapons.
Group 7; Chemical and Biological Weapons Non-proliferation List

Any goods that could be used in the proliferation of chemical and
biological weapons.
Group 8; Chemicals for the Production of Illicit Drugs
www.cbsa.gc.ca

 Revenue Canada Export Declarations (B-13a)
The B-13a is an Export Declaration to be completed on all

shipments leaving Canada if their value exceeds $2,000.00.
Since Canada obtains information on US-bound exports directly

from US import data, exporters do not have to report goods
destined for USA, Purerto Rico, or the US virgin Islands, unless the
goods are controlled, prohibited or regulated.
However, exporters are required to file an export declaration

(B-13a) prior to export for all non-USA shipments.
www.cbsa.gc.ca

 Revenue Canada Export Declarations (B-13a)
https://www.cbsa-asfc.gc.ca/export/reporting-declaration-
eng.html#s4
In terms of the timeframes required to report exports, effective Spring

2003, export declarations must be made either 48 hours or two hours
in advance, depending on the mode of transport, as follows;
1. Mail, Aircraft or Rail shipments: at least two hours before loading

2. Vessel shipments; at least 48 hours before goods are loaded
3. Any other mode, exports of animals, perishables, time-sensitive
or bulk goods; immediately prior to export.

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Customs and International Agreements

An Overview of the Import Process

1. The Purchase : 2. Purchase Order :

An Overview of the Import Process

3. Packing List : 4. Transportation:

5. Commercial Invoice: 6. Waybill(S):

An Overview of the Import Process

per Incoterms.  Certificate of Origin (if Required)

 Import Permits (if required).

An Overview of the Import Process

9. Customs Clearance ; 10. Goods Received ;

NOTE: All Records Related to the Import Transaction Retained For

An Overview of the Export Process

1. The Purchase : 2. Purchase Order :

An Overview of the Export Process

3. Preparation of International 4. Transportation:

An Overview of the Export Process

An Overview of the Export Process

 Export Permits (if required).

An Overview of the Export Process

11. Goods Received ;

NOTE: All Records Related to the Export Transaction Retained For

Import and Export Documentation

Commercial Cargo moving to and from Canada is therefore

Import and Export Documentation

A ‘‘Bill of lading’’ is a contract between the shipper and the

Straight: is non-negociable – for goods assigned to a specific

Import and Export Documentation

1. Inland bill of lading: used for goods shipped over land

domestic and international transport of goods

3. Air waybill: covers both domestic and international flights that

4. Ocean bill of lading: Can be used as a receipt for cargo or a

contract for transportation (straight or non-negociable).

Import and Export Documentation

Ocean bill of lading:

Import and Export Documentation

Import and Export Documentation

The commercial invoice (CI) generally serves a dual purpose;

1) It enables exporters to collect monies owed

2) Assists importers in customs clearing the goods

The CI can be met by providing either one of the following options;

Import and Export Documentation

 For imported goods entering Canada, a Canada Customs

 What is Canada Customs Invoice (CCI)?

If the CI is neither in English nor French or is not complete, the CBSA

Accuracy in the Commercial Invoice is extremely important as

Import and Export Documentation

Import and Export Documentation

The packing list is a detailed listing of the contents of the shipment

The packing list may provide a means of quickly identifying

As a supporting document, the packing list is essential in the event

Import and Export Documentation

Import and Export Documentation

Although it is not necessary to present the Certificate of Origin with

Failure to provide a Certificate of Origin will result in re-

Import and Export Documentation

Certificate of Origin are completed when required by the

 Responsibility of exporter to provide the certificate

 Does not have to be presented to CBSA except when requested,

must be in importer’s possession.

Import and Export Documentation

The North American Free Trade Agreement (NAFTA) states

Import and Export Documentation