Commercial Information Circulars

24-hour hotline : 23 922 922

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

Ref : EIC 191/1/2

12 November 2008

Dear Sirs,

Commercial Information Circular No. 557/2008

Canada : Outward Processing Remission Order (Textiles and Apparel)

The Canada Border Services Agency (CBSA) issued the memorandum D8-2-6 dated 8 October 2008 outlining and explaining the conditions under which a remission may be granted under the Outward Processing Remission Order (Textiles and Apparel) [Remission Order]. The Remission Order was published by the Canadian Government in the Canada Gazette, Part II of 14 May 2008 and came into force on 1 May 2008. A copy (pdf format) of the Remission Order is appended to this circular for reference.

DETAILS

1.  
2. The trade was informed via Commercial Information Circular No. 528/2007 that the Canadian Department of Finance proposed to implement an outward processing initiative, by means of a customs duty remission order, to encourage the use of Canadian textiles in the manufacture of apparel.
    
3. In accordance with the Remission Order and the CBSA's memorandum D8-2-6, subject to conditions in below paragraph 6, remission is granted of the customs duties paid or payable on the importation of apparel produced in a country or territory that is a beneficiary of the General Preferential Tariff (GPT) in the List of Countries and Applicable Tariff Treatments set out in the schedule to the Customs Tariff of Canada in whole or in part from textiles produced in Canada and shipped directly to that country or territory from Canada, without undergoing further processing outside that country or territory, and then shipped directly to Canada from that country or territory. (Hong Kong and Mainland China are two of the beneficiaries of the GPT in the List.)
    
4. If the textiles produced in Canada contain imported materials, remission shall be granted if (a) the imported materials are sufficiently transformed to undergo a change in tariff classification or to be considered bleached for the purpose of tariff classification; and (b) the value for duty of the imported materials, determined in accordance with Sections 48 to 53 of the Customs Act of Canada, is less than 50% of the value of the textiles produced in Canada. 
    
5. Remission is granted in an amount equal to the lesser of (a) the value of the textiles produced in Canada and incorporated in the imported apparel, and (b) the customs duties paid or payable on the imported apparel.
    
6. Remission is granted on the following conditions: 

1. that no other claim for relief, refund or drawback under the Customs Tariff of Canada has been, or may be, granted in respect of any customs duties paid or payable with respect to the goods on which the remission is claimed;
    
2. that the textiles produced in Canada are exported on or after 1 May 2008;
    
3. that the apparel is imported within two years after the day on which the textiles produced in Canada, which were incorporated in the apparel, are exported;
    
4. that a claim for remission is made by the importer to the Canadian Minister of Public Safety and Emergency Preparedness within two years after the day on which the apparel is imported into Canada; and 
    
5. that the importer provides the CBSA with any evidence or information that demonstrates that the importer is entitled to the remission.

The CBSA has set out in the memorandum D8-2-6 other administrative provisions related to the outward processing initiative including definitions, Goods and Services Tax treatment of apparel, documentation, and records and proof. The memorandum is available at http://www.cbsa-asfc.gc.ca/publications/dm-md/d8/d8-2-6-eng.pdf.

ENQUIRIES

7. For enquiries concerning the content of this circular, please contact the undersigned at 2398 5682.

Yours faithfully,

(Miss Bonny CHAO)

for Director-General of Trade and Industry