Commercial Information Circulars

24-hour hotline : 23 922 922

e-mail address : enquiry@tid.gov.hk

Ref : EIC 191/1/2

21 December 2007

Dear Sirs,

Commercial Information Circular No. 528/2007

Canada : Proposal to Implement an Outward Processing Initiative

The Canadian Government has recently announced in the Canada Gazette its intention to implement an outward processing initiative to encourage the use of Canadian textiles in the manufacture of apparel in developing economies that is eligible for the General Preferential Tariff (GPT) treatment. A copy (pdf format) of the relevant Gazette notice is appended to this circular for reference.

DETAILS

2. The proposed outward processing initiative is part of the package of measures taken by the Canadian Government to help the Canadian textile and apparel industries since 2005. According to the Gazette notice, the initiative is based on the principle that textiles produced in Canada would be exported to a developing country or territory that is eligible for the GPT treatment, including Hong Kong and Mainland China, for incorporation into apparel that would then be imported into Canada. A remission would be granted on all, or a portion of, the customs duties paid or payable under the Canada's Customs Tariff for the imported apparel produced in whole or in part from textiles produced in Canada, subject to the following conditions:

• the apparel is produced in and shipped directly from the same GPT beneficiary to which the textiles produced in Canada were exported;
  
  

• in instances where textiles produced in Canada contain imported materials, (a) the value of the imported materials, with the exception of natural fibres, accounts for less than 50% of the value of the textiles produced in Canada, and (b) the imported materials are sufficiently transformed in Canada as to result in a change in tariff classification;

• no other form of relief, refund or drawback of the customs duties paid or payable has already been granted;

• the textiles produced in Canada are exported on or after the date the initiative takes effect and the apparel is imported within two years of the exportation from Canada of the incorporated textiles produced in Canada; and

• the importer has submitted a duty remission application to the Canada Border Services Agency (CBSA) within one year of the importation of the apparel and filed such evidence as may be required to determine eligibility.

The remission of customs duties would be in an amount equal to the lesser of (a) the value of the textiles produced in Canada and incorporated into the imported apparel, or (b) the customs duties paid or payable on the imported apparel.

3. Comments and enquiries on the overall initiative and on the administration of the proposed initiative should be submitted respectively to the Canadian Department of Finance and the CBSA by 15 January 2008.

ENQUIRIES

4. For enquiries concerning the content of this circular, please contact the undersigned at 2398 5401.

Yours faithfully,


(Ms Amanda KWONG)
for Director-General of Trade and Industry