On September 18, 2015, the Canadian International Trade Tribunal
(CITT) released three decisions concurrently1
(collectively referred to as the Bri-Chem trilogy) that instruct
the Canada Border Services Agency (CBSA) to apply past CITT
decisions interpreting the Customs Act to resolve disputes on the
tariff classification, origin and value for duty of imported
The CITT granted the appeals by the importers in the Bri-Chem
trilogy on the basis of its previous decision in Frito-Lay and
ordered the CBSA to refund duties it improperly assessed on the
appellant importers. Of greater significance is the CITT's
finding that the CBSA engaged in an abuse of process by
deliberately disregarding the CITT's 2013 decision in
Frito-Lay. A full discussion of the Bri-Chem trilogy and its
ramifications for importers is available on the Bennett Jones
The Gap, the Trap and the Binding Spring).
Here is what the importing community needs to know about the
An importer required to correct a
tariff classification error that gives rise to dutiability can
concurrently correct its tariff treatment declaration to claim
duty-free treatment under a free trade agreement. If the goods
qualify for duty-free treatment under a free trade agreement, the
CBSA is not entitled to disallow a tariff treatment claim that
maintains the originally declared duty-free status of the imported
goods (the Frito-Lay Rule).
The CITT's abuse of process
finding increases the significance and value of CITT decisions in
the resolution of disputes between importers and the CBSA. Unless
the CBSA successfully appeals the Bri-Chem trilogy to the Federal
Court of Appeal, it will be bound to apply past CITT decisions
involving the same questions of law or mixed fact and law to
The CITT sent a strong signal that
importers who were denied the benefit of the Frito-Lay Rule by the
CBSA may be able to obtain refunds for duties improperly paid to
That the CBSA is bound by the CITT's decisions is a welcome
statement of law and greatly increases the value of past CITT
decisions and certainty in the importing community. But careful
analysis is required to determine whether or not a given statement
has precedential value. Importers and their service providers are
well advised to consult with Canadian trade law counsel, who are
trained in the deconstruction of decisions to distill precedents
that can reliably inform decisions around customs declarations and
the resolution of disputes with the CBSA at an early stage.
Importers should take note of the CITT's stated concerns in
the Bri-Chem trilogy that other importers were improperly denied
the benefit of the Frito-Lay Rule but did not pursue appeals.
Importers who were denied the benefit of the Frito-Lay Rule after
January 8, 2013, should consider applying for extensions of time to
appeal and recover duties improperly paid to the CBSA. While an
importer is normally required to file appeals under the Customs Act
within 90 days of the date of the decision, there are rules that
allow for an extension of time to file an appeal.
1 Bri-Chem v. President of the Canada Border Services
Agency, AP-2014-017 (Bri-Chem); Evergreen Ecological Services Inc.
v. President of the Canada Border Services Agency, AP-2014-027
(Evergreen) and Southern Pacific Resource Corp. v. President of the
Canada Border Services Agency, AP-2014-028 (Southern
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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.
On September 29, 2016, the Supreme Court of Canada issued its first tariff classification decision since Canada signed the International Convention on the Harmonized Commodity Description and Coding System in 1998.
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