TradeLane

It’s that time of year where you get out the fall or winter jacket as the temperatures begin to drop. Well at least they do in Canada. There is almost nothing better than reaching into one of the pockets and finding a 10 or 20 dollar bill. The thoughts race through your mind as you gaze upon your new found treasure. Ahh found money.

Maybe I could buy something nice for someone….

Maybe I could place a bet on my favorite team….Or better still the underdog….

Maybe I could save it for a rainy day…Nah that’s just way too sensible.

Found money can turn up in the most unlikely places. The Canadian Customs Tariff has a whole chapter dedicated to found money, but most people never think to look there. Chapter 99 is titled “Special Classifications – Commercial”. What exactly does that mean? Housed in Chapter 99 are Harmonized System (H.S.) classifications that are tied to certain conditions; for the most part a specific end use. Goods imported into Canada that are normally dutiable may have an applicable Chapter 99 classification that would render them duty free provided they meet the criteria of the Chapter 99 classification.

As seasons change, so does the make-up of your product line. If you are an apparel company, last season’s shorts and tee shirts can turn into next season's flannel underwear and parkas. Maybe you work for a technology company and the cases you make for last season’s hot phone have become less in demand since the new model came out.

So, what happens to all that unsold merchandise? Do you recycle it? Do you throw it in the dumpster in the warehouse? Does it get used for kindling at your company’s annual fall cookout? Bottom line, are you recovering any import duty on that unused merchandise that you are destroying? There’s an ‘app’ for that. Apply for Duty Drawback privileges on destroyed merchandise.

As a part of U.S. Customs and Border Protection’s (CBP) commitment to educate the Trade Community, Informed Compliance Publications (ICP’s) provide guidance around complex import regulations. On July 9^th 2014, CBP issued a draft revision to the ICP entitled “Bona Fide Sales & Sales for Exportation to the United States”. This ICP is key in outlining the requirements to appraise imported merchandise using the First Sale for Export value. In this early draft, CBP is proposing significant changes to this 2005 publication.

It is important to understand how these changes may influence an importer’s First Sale for Export program structure and is a great opportunity to evaluate its risks and rewards. Please remember that the ICP update is draft of the proposed language at this date. Some of those proposed changes highlight and reiterate the following: