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Customs Canada Duty

My Rant Oct 23rd 2011 – Why I became a Customs Officer

Why become a Customs Officer?

I don’t know about other officers…but I know why I did…if you don’t mind I would like to share with you my thoughts.

My journey to become a Customs Officer started with the realization that I felt most fulfilled when I helped other people. Perhaps it’s genetic…I don’t know…my parents also devoted their lives to help others to the chagrin of my grandparents. Both sides sacrificed a lot to give my mother and father the best education and life possible only to have them declare their path to be one not focused on material wealth but one of religion and helping mankind.

Now I love to help people, but don’t get me wrong…I hate to help people under the duress of obligation. I love to help people because…I want to…not because I have to. It is more kind in my opinion to do something nice for someone because you want to, with no benefit to yourself other than self satisfaction. I know, I know, not exactly altruistic. But it’s the truth.

I get such a sense of satisfaction and fulfillment by going above and beyond for people that can never repay me. It’s not the same when someone does you a favour hoping for some kind of reciprocal behaviour.

That’s why random acts of kindness blow people away. They don’t expect it.

Unfortunately at Customs, this is precisely often the case….Nobody expects kindness.

The public says they expect professionalism and service. But what they really prepare themselves for is gruffness. They expect harshness. They expect rebuke. They expect disgruntled unionized public servants feeding off the trough of taxpayer dollars. Too often they return home as weary travellers only to be met by long line ups, grilling questions, and surly attitude.

I can sympathize with my colleagues though as sometimes dealing with person after person can be trying even on the most patient of us who wear the uniform. If Mother Teresa was poked in the forehead hundreds of times a day for 30+ years I’d suspect even she might not be remembered as the figurehead for peace, love and service to mankind….OK maybe Mother Teresa…but I think you get my drift.

It’s not an easy situation. People are cranky and tired after a long flight. People are annoyed and frustrated sitting in line on a bridge for hours with screaming kids in the back seat. Importers and brokers want their goods yesterday and everyone thinks that as a citizen or taxpayer they should not be subject to questioning, delay, scrutiny, entering or shipping their own personal effects into their own country.

Many people erroneously believe that their Charter rights are being violated. But in truth the Supreme Court of Canada has upheld the Customs process.

According to the decision in R v. Simmons, “The degree of personal privacy reasonably expected at customs is lower than in most other situations. Sovereign states have the right to control both who and what enters their boundaries. Consequently, travellers seeking to cross national boundaries fully expect to be subject to a screening process. Physical searches of luggage and of the person are accepted aspects of the search process where there are grounds for suspecting that a person has made a false declaration and is transporting prohibited goods.”[1]

Further more, the decision goes on to say…

“Persons entering Canada, whether or not they are citizens, are placed in a unique legal situation at the point at which they enter the country. They expect to submit to a certain degree of inspection of their baggage, and in some cases, their person. Their situation is distinguishable from one where an individual is stopped or detained in the course of his activities within Canada.”[2]

What about if you want to lawyer up?

“The purpose of the right to counsel is to ensure that the individual is treated fairly in the criminal process and, in particular, to prevent the individual from incriminating himself. In a border search the issue is not one of self‑incrimination. A search at the border is part of the process of entering the country and is not part of the criminal process. The right to counsel will arise only where a searched person is placed under custody as part of the criminal process. This does not mean, however, that no right to counsel can ever arise in searches which occur at ports of entry. Where the purpose of the detention, interrogation, or search arises in criminal proceedings, as distinct from those concerning entry into the country, the Charter protection against unreasonable search and seizure and the right to counsel will apply.”

So my point is yes you do have charter rights…but within the process of crossing a border, and those rights are not the same as they would be domestically once you have entered the country…citizen or not…unless you are being pursued criminally.

So yes it’s not easy having people become indignant at the first question.

Could things be done better, more efficiently? For sure they could. But front line officers don’t make those decisions. We don’t decide how many officers we should staff on a given day or how many new recruits we need to replace the ones that are retiring. We also don’t write policy. Currently there is a hiring freeze and cuts to our budget due to the current fiscal policy to save as much money during these difficult economic times.

I wish the public understood that like most law enforcement officers, as a Customs officer, a gatekeeper to the country and our home…in order to do my job well…I believe… that I must work on a balance of possibilities and not probabilities. You’re probably an upstanding resident of Canada but there’s a possibility that you are not and therefore I need to make that determination in order to safe guard this country and the people that call it home.

Customs officers on the other hand could turn it down a notch and realize that not everyone is a criminal or lying. I’m a proponent of Pareto’s law or the 80/20 principle. For the purposes of my rant, I believe that 80% of people are compliant to the rules and regulations. 80% are hard working honest people. But the other 20% will be in various levels of non compliance from the failure to mention a trinket purchased for a nominal sum, the drug mule, to the terrorist bent on the destruction of western societies.

So instead of viewing every person with suspicion…I urge my coworkers to hone their ability to detect this 20% and save the hard line for them and not for the family coming back from Disney.

I urge my fellow officers to let the “spirit of the law” dictate their discretion. This world is not black and white. It is filled with shades of grey. Policy is not legislation and you are not a robot. You are…I hope a sentient being, a human being and a Canadian.

As a Border Services Officer we are empowered by the law to make “unfettered” decisions and to exercise our discretion. So stop and consider what is behind the legislation. What was the intention? If you follow the spirit of the law then you will be aligned with the purpose behind the legislation; and you cannot go wrong.

One of our agency mandates right now is to focus on “Service excellence” or Client Service. I believe this means more than just meeting our service standards. I believe this to mean, in broader terms, to serve Canada by serving Canadians. How do we do that? By helping the public adhere to the policies and regulation, by educating and outreach, and by behaving and treating the public in a respectful, fair and professional manner.

Berating a member of the public achieves nothing but to anger them and nurture negative sentiment. Refusing to help and throwing the proverbial book at the smallest unintentional infraction is not what the spirit of the law intended. We were given powers of discretion for a reason. You are also a human being with a heart. Use it!

Our responsibilities are paramount to the economic prosperity and safety of Canadians. We are mandated to facilitate the free flow of people and goods. This is vital to our economy in this day and age of globalization.

We also need to keep the wrong people out and let the right people in.

Without immigration this country cannot remain competitive or support its growing aging population. Canadian are not having enough children. Who will pay for all the services we need when we are old? Who’s going to pay the taxes? Who’s going to fund healthcare? CPP may not even be around in 20 years.

We need educated law abiding new immigrants who are willing to come to Canada and start a new life and be part of the economy. We need immigrants who will invest in this country by creating businesses and jobs. We need skilled workers to come to Canada and help fill the void in occupations where we have known shortages.

But I digress. My intention was to write this post to explain why I chose to become a Customs Officer and then I started ranting. Sorry. I guess I feel passionate about this stuff.

I became a Customs Officer to make a difference and serve my country.

It makes me happy when I know that I have helped someone, really helped someone, and not just given directions to the washrooms or to stand in this or that line. I enjoy many aspects of the job too, not all, but many. The rush of finding concealed narcotics fulfills my enforcement side and guiding and educating the public on how to import their goods equally satisfies my desire to help others.

This job is great if you like interacting with the public. This job is also rewarding if you excel in the area of critical analysis and have good work ethic….you will find the contraband.

If you don’t like people and you don’t like to dig…this job is not for you.

This job truly encompasses the old police motto of “serve an protect”. That is what we do. I feel the same joy whether I find GHB (narcotic known for being used as a date rape drug) knowing a little more is off the street, or I help teach some mom and pop small business importer how to clear their first shipment.

Our new motto by the way is “Protectio, Servitium, Integritas” or “Protection, Service and Integrity”.

Our values are “Respect, Integrity and Professionalism”.

As you may have noticed, Integrity is in both the motto and one of the values and I am not going to comment on whether we live up to this but it is definitely a goal worth striving for, and I hope, I implore, my fellow officers will join me in striving to uphold this.

And to the public, I say, try to understand what we have deal with everyday. Try to understand that some of us chose this profession because we care. Not because we didn’t have a choice or we wanted some cushy government job. Try to understand the scope of our responsibility and how we are mandated with encouraging Canada’s prosperity and ensuring its safety.

Recently I have seen quite a few colleagues retire and it saddens me. In some ways this is a thankless job. And after 35 years, a plaque and a handshake, you’re out the door and a few months later it’s like you never worked there. People forget you and the big wheel keeps on turning.

Many officers end up embittered about how this or that happened to them over the course of their career and never recover. Why does this happen? I think it’s because they are so over invested in their jobs that the smallest thing is blown out of proportion. So then they react negatively completely out of proportion to the issue. They lash back at coworkers, management, the agency or even the public; ending in discipline or being sidelined from career advancement. The result then is that sooner or later they feel stabbed in the back by the system, agency or management. After a while they stop caring. They come into work just to collect their pay cheque and they start counting the days to retirement.

Sometimes the complaints these types of officers have is legitimate. But if you let it get to you, it will do you no good. This job has to be done for its own sake and for Canadians. You have to find your own motivation to come in each day to do the best job that you can.

My martial arts master once said, “…most people are not good at everything. Some students will excel at punching, some at kicking, some at throwing and some at grappling etc…so take something you enjoy like punching and cultivate it and make it yours. The end result will be that it will transfer over to other skills because the principle behind them is all the same; Circle Flow Harmony.”

I try to carry this philosophy with me on the job. I don’t let things get to me. When I’m frustrated about something, I focus on what I enjoy and love and it miraculously expands. It carries over into everything else I do.

When I am finished my shift for the day, I go home. I spend time with family and friends, I blog :) and each day before I start my shift I pray to God and ask for help in being the best officer I can and for the ability to help someone.

One day, my day will come and it will be time for me to move on.

When that day comes I will leave knowing I did my part, and I did my best. I will not leave angry. I will leave with the satisfaction that I made a difference in my own way; which is why I became a Customs officer in the first place.

Thanks for reading.

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CI

 

 


[1] R. v. Simmons, [1988] 2 SCR 495

[2] R. v. Simmons, [1988] 2 SCR 495

[3] R. v. Simmons, [1988] 2 SCR 495

 


Canada Customs Duty and Taxes and Classification of Goods – Canada Customs Duty

Customs Duty is basically a tax or tariff on foreign goods being imported. The amount of duty on a particular commodity is based on the H.S. Code and the Tariff Treament applicable.

The H.S. Code is set under the Harmonized Description and Coding System as developed and agreed upon by the World Customs Organization. Almost all countries of the trading world belong to the WCO and the first 6 digits of the code are universal. The remaining 4 digits of a total of 10 digits that make up the HS Code can be unique from country to country. These codes, duty rates and tariff treatments available are listed in the Customs Tariff linked here for Canada.

The Customs Tariff identifies commodities by sections, 21 in all. Each of these sections is divided by chapters. Chapters are numbered 1-99 and have a heading based on type of goods or material/composition. i.e Section I is titled “Live Animals; Animal Products” and within Section I are chapters 1-5, chapter 1 being titled “Live Animals”, chapter 2 “Meat and edible meat offal”, and so on…

The key to classifying your goods correctly is to follow the “General Rules for Interpretation of the Harmonized System“. There are 6 universal agreed upon rules and 3 Canadian additions. You can read about the GRI linked here for more detail.
The most important rule in my opinion and one that many people get wrong is Rule number 1. That is …”classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided such heading or notes do not otherwise require, according to the following provisions…(goes on to rule 2).

The basic meaning of this rule is that you must classify according to the headings if one exists…the most accurate being the correct choice. So for example, if you purchased a hand made wool carpet while on vacation and had it shipped back to Canada and wanted to figure out how much duty would be owing on the item, you would not classify it as wool, or wool fabric. It would also be incorrect to try and classify it as just as wool carpet. A quick look of the headings under Chapter 57 for Carpets and Other Textile floor coverings would result in seeing that the chapter distingushes between “machine knotted” and “other” carpets when it comes to those made of wool. Thus, the correct description of which a heading exists is “carpets, or wool or fine animal hair, other” and the corresponding HS code would be 5701.10.90.00 with a duty rate (for the Most Favoured Nation Tariff 02) of 13%. Now, if the purchased carpet was manufactured in country that qualified for a Tariff Treatment like GPT (general preferntial tariff 09) i.e. Pakistan and you had either a certificate of origin or statement from the exporter in the prescribed format, then the duty rate is usually lower. So make sure to check to see if your goods qualify for a lower rate. It is suprising how many seasoned importers and brokers make this basic mistake.

Classifying correctly is key to paying the correct amount of duty and to avoid administrative monetary penalties (AMPS) or worse, seizure action of your goods and even criminal charges if the value for duty evaded surpass specific thresholds. In the event that you cannot find a classification that fits, you should request an Advanced Ruling. Here is the link on how to make such a request and here is a link for advanced rulings that have already been made. Check there before you request one.

The second key part to assessing duties and taxes is to understand Tariff Treatments (TT). The roughly 200 countries that are members of the WCO are assigned different TT by Canada. Canada also has trade agreements in place with specific countries that qualify for a lower rate of duty to no duty at all. I.e. with US and Mexico, Canada has NAFTA (North American Free Trade Agreement) which has eliminated duty on goods imported within the 3 countries. Canada also has free trade agreements with Israel, Costa Rica, Peru, Chile, Panama, Jordan, and European Free trade association (Iceland, Lichtenstein, Norway, and Switzerland). Just because there is a free trade agreement does not mean that all duties are eliminated. Some agreements cover only specific commodities and can be phased in over a period of time. A list of our free trade agreements and the details and what they cover is linked here.

Goods from countries with no free trade agreements with Canada but are a member of the World Trade Organization, by default, qualify for Tariff Treatment 02 or the Most Favoured Nation tariff (MFN). However, some goods from these countries can qualify for other Tariff Treatments which carry a lower rate of duty than MFN. For example TT 09 – GPT or General Preferential Tariff, can on certain commodities reduce the duty by a few percent or completely to zero. It varies from commodity to commodity. Linked here is page from the CBSA website with guides and forms for Tariff Treatments and Free Trade Agreements. And linked here is the list of countries and the applicable tariff treatments.

*Please note that goods that have import restrictions to Canada usually do not qualify for reduced duty rates under any TT and usually default to MFN and often require permits and have high duty or excise taxes associated. i.e Steel products, dairy, textiles, meat, etc.
*Also please note the requirements of the forementioned link for how origin of goods are determined and the required certificate of origin or statement from the exporter used as supporting proof to use a TT with a lower duty rate of the goods qualify.

So once you’ve figure out what HS classification code is correct, the origin of the goods and then what tariff treatment or free trade agreement applies you should usually use the ad valorum method of declaring the value to Customs…which is the final purchase price/cost not including freight/shipping charges (only from the where the goods left the foreign country and arrived in Canada). I.e.  Wool Hand knotted Carpets from Pakistan so TT 02 would have 13% duty associated but you have a certificate of origin from Pakistan so the goods qualify for TT 09 at lower duty rate of 10%. A savings of 3%! Which can add up if you are a commercial importer…but even if this a one time import, 3% can make a difference as Sales taxes are calculated based on what you purchased the goods for plus duty. So if the carpet was $1000, then duty would be $100 under TT 09 GPT and sales tax (GST/HST) is assessed on $1100.

If this is a personal importation than PST could also apply depending on province of residence. In Ontario and B.C. where the HST has come into force, the cost would be Duty and HST. If the import is a commercial import than only duty and GST would apply.

The only other tax that may an importer may incurr is Excise duty or tax. This is usually associated with Alcohol and tobacco. Check out this link here for the excise rates. Also, on importations of vehicle there is a $100 tax if your car has airconditioning and a green levy tax if its a gas guzzler…check out my previous post on importing vehicles for the details.

I hope this post helps clarify the duties and taxes on imported good to Canada. If you have any questions please post, tweet or email me.

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