The Canadian International Trade Tribunal decision in
Frito-Lay v.President of the CBSA, AP-2010-002
(December 21, 2012), reasons January 8, 2013, teaches Canadian
importers and the CBSA a number of important lessons. Three are of
particular importance: (1) burden of proof, (2) jurisdiction of the
CITT in cases of the President's failure to respond without
delay to requests for further re-determination, and (3)
limitation periods applicable to claims of NAFTA tariff
The President challenged the importer's appeal (trial de
novo) on the basis that a spreadsheet of data presented in
support of the appeal summarizing impacted importations contained
errors and was therefore not reliable. While the CITT has recently
(Jockey Canada) made clear that the burden of proof, other
than that an importation took place, rests with the importer, the
CITT flexibly accepted that clerical errors had either been
corrected by the importer or were of no substantive importance to
the appeal, and found the President's complaints to constitute
bald assertions. The President was not able to take advantage of
the burden of proof argument in this case.
The jurisdiction of the CITT was challenged by the President on
the basis that the appeals before the CITT had not been the subject
of Presidential decisions. However, the CITT noted the obligation
of the President to respond (with rationale) to requests for
re-determination without delay had not been fulfilled.
What may constitute reasonable delay will vary from case to case,
but here the CITT found the delay caused the President to have made
"non-decisions" or "negative decisions" that
were subject to appeal to the CITT.
Finally, the limitation period for seeking refunds based on
NAFTA tariff preference, unlike that applicable to customs
valuation or tariff classification correction, is regrettably one
year. The CITT distinguished refunds allowed for this limited
one-year period with importer self-corrections under the
Customs Act that must be made covering a much longer
period. In the latter case, the CITT noted that the importer
is obliged to correct errors of tariff treatment (or customs
valuation or tariff classification) within 90 days of having reason
to believe the error was made, and that the corrections are to be
applied to the past 4 years of entries (subject to a shorter
period prescribed by CBSA policy in certain circumstances). In the
Frito-Lay case, the goods were entered duty free (MFN
tariff treatment), that is without tariff preference, on the basis
of incorrectly declared tariff classification. The Tribunal upheld
the mandatory correction on a duty free basis – while the
corrected tariff classification attracted customs duties on an MFN
basis, the importer was entitled to rely on (non-challenged, as it
happened) NAFTA certificates of origin, claiming and amending the
tariff treatment from non-tariff preference (MFN) to a tariff
preference (NAFTA), much to the chagrin of the President who had
claimed that a one year limitation applied and that duties (MFN)
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While that agreement mandated export measures on Canadian softwood lumber exports destined for the United States, it also protected those lumber exports from the potential imposition of onerous import measures by the U.S.
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