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classification

Customs Tariff – Legal Notes and Explanatory Notes

LEGAL  NOTES
Essentially, legal notes are consolidated notes that outline conditions that apply to all goods that are to be found within a given Section or Chapter.  These critical notes appear at the beginning of each Section and Chapter within the tariff.
            A precise interpretation of the heading or subheading cannot be made without using the Legal and Explanatory notes.

 

Four Levels of Legal Notes
1)      Section
        2)    Chapter
3)      Sub-Heading
4)      Supplementary 
         Form part of the Customs Tariff legislation
         Distinct from the Explanatory Notes, which are instructive only
         Essential tool in the classification process
         Located at beginning of Sections and Chapters
         There are both International and National notes.

 

Inclusions:      what goods are covered in a particular section, chapter, or heading; including conditions to qualify.

 

Exclusions:     list goods which are excluded from a section, chapter, or heading; & directs us to the appropriate section, chapter, or heading.

 

Definitions:    defines terms for HS/Tariff purposes.

 

Directions:      specify how a commodity is to be classified.

 

Parts:  provisions for the classification of parts within a particular section, chapter, or heading.

 

HS EXPLANATORY NOTES
Available for order from WCO
         Same sequence/structure as the HS
         Reprint Section/Chapter Notes
         Give direction as to goods covered
§         Define/explain terminology
§         Lists of goods
§         Exclusions and inclusions
§         Technical descriptions (appearance, properties, etc.)
§         Methods of production or uses

 

5 LEVELS
1)   General Content of the Section          Section XVI
2)      General Notes to the Chapter             Chapter 84
3)      To the Heading                                   84.07
4)      To the Subheading                              8407.10
5)      Canadian Notes

 

TO SUBHEADING (6 DIGIT)
         Tool to assist in classification
         Indicated if (+) at end of exp.. note to heading
         More detail: specific to subheading
         Example:                     17.01(+)
                                                            1701.11           

 

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How to find a Canada Customs Broker

Quite often I get asked to recommend a Customs Broker. Unfortunately, Due to my position, I cannot recommend any Customs brokers. However, I hope today to be able to help you decide how to select one. Ultimately, it is a personal decision. There are large brokerages and there are small mom & pop style brokers out there.

What is a Customs Broker?  They are someone you authorize to act as your agent and transact business on your behalf…instead of dealing directly with the Customs. As per the CBSA, they can assist with

  • Registering for a Business Number (BN), Importer/Exporter Account
  • Providing assistance in cases involving the Special Import Measures Act (SIMA)
  • Submitting refund/adjustment requests (B2)
  • Preparing release (interim accounting) documentation
  • Preparing final accounting documentation
  • Remitting payment of duties and taxes to the Receiver General of Canada

They provide a lot in the way of services but be aware that while a Customs Broker can help you with the customs clearance process, you are ultimately responsible as the importer of record, and liable for all duties and taxes and any penalties or resulting enforcement action.
Once you select a customs broker, you will need to sign written authorization to allow the broker to represent you.

One option is to hire the broker who represents or already services your supplier. You may be able to receive a preferred rate this way. If you import on a regular basis you can also request a volume discount from many brokerages. I would recommend shopping around and letting them bid on your business if this is the case.
Personally, if I was to look for a licensed broker I would look for one that was a member of the CSCB (Canadian Society of Customs Brokers), was reasonably priced, gave great service and had strong relationships with shippers, freight forwarders, couriers, warehouses and of course Customs.

The CSCB has a great page on their website titled “What is a Customs Brokers and why do you need one?”
linked here
You can also search for a customs broker by name, city or province here
But as always there are a lot to choose from.  Happy Hunting!

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