Canada: The Bri-Chem Trilogy: Federal Court Affirms Tribunal

Last Updated: November 3 2016
Article by Darrel Pearson

On November 16, 2015, we described important substantive and procedural issues that would be addressed by the Federal Court of Appeal (FCA) in an appeal from a decision of the Canadian International Trade Tribunal (CITT). Almost a full year later, on October 21, 2106, the FCA affirmed the decisions of the CITT both in respect of the substantive customs issue, whether or not an importer may claim duty neutral relief under NAFTA more than one year from the date of accounting when its zero-rated tariff classification is re-determined by the Canada Border Services Agency (CBSA) as a positive duty-rated tariff classification, and the procedural issue, the nature and application of the doctrine of precedent in the context of appeals from determinations of the President of the CBSA heard and decided by the CITT. The FCA deferred to the expertise of the CITT, particularly given its expertise and the fact-infused nature of the matters before it.

Two important principles were established by the FCA in the rendering of its decision in  the Bri-Chem Trilogy.

1. CBSA has re-determined the tariff classification and assessed duty on the basis of a positive rate of duty applicable to the re-determined tariff classification:

The Customs Act establishes a one-year limitation period for claims of tariff relief under NAFTA that give rise to a refund. The NAFTA signatories sought finality in terms of access to tariff relief; when importers fail to declare that their goods are NAFTA eligible at the time of accounting and as a result are obliged to pay duty, they are one-year time-limited to amend their declaration of tariff treatment in order to obtain a refund. (The CBSA may re-assess tariff treatment and the importer is obliged to self-correct tariff treatment within four years of accounting when it has incorrectly claimed the benefit of tariff treatment, including that arising from application of NAFTA.) But the Customs Act is silent as to the application of a limitation period applicable to amendments of tariff treatment that are duty neutral, thereby creating a "gap" that was adjudicated by the CITT and then the FCA. The CBSA's position was that the refund provision, though not directly on point, should be interpreted in a fashion that limits the duty neutral amendment period to one year. The CITT determined that this position could not be sustained in law, and the FCA agreed that the CITT's decision was reasonable.

This means that, subject to further appeal and/or legislative amendment of the limitation period, importers may rely on the ratio of the Bri-Chem Trilogy to amend entries that have been re-determined for tariff classification by the CBSA if they have originally declared tariff classification that is zero-duty rated. Decisions of the FCA may be appealed to the Supreme Court of Canada (SCC) with leave. Leave is granted when, for example, the appeal raised issues of national importance. The SCC has heard only three cases involving customs or trade law, and recently the SCC heard a case involving the application of the rules of tariff classification. It is highly unlikely that the SCC would entertain another customs case at this time. The CBSA may ask that the Government amend the Customs Act to limit the period within which duty neutral amendments may be made on the basis of NAFTA tariff relief. If it does so, it is not clear whether or not it will seek to do so retroactively.

Accordingly, the matter may not end here.

2. That the President of the CBSA must follow decisions of the CITT except in very limited circumstances:

In allowing the appeals in the Bri-Chem Trilogy, the CITT took issue with the behaviour of the CBSA that resulted in the importers/appellants having to re-litigate legal issues, on virtually the same facts, that had been adjudicated and determined by the CITT in an earlier case, Frito-Lay. The position taken by the CITT was that it had determined the legal issue of the application of the limitation period in Frito-Lay. The CBSA disregarded and/or disagreed with the CITT decision and, rather than pursuing an appeal of Frito-Lay in the FCA, of which it had a right, the President of the CBSA filed and withdrew an appeal, and continued to apply the law as it had before the CITT decided Frito-Lay. The policy of the CBSA is not entirely clear, but ostensibly is that the CITT is not a supervising court relative to the President's decisions, or the CITT does not have to follow its own decisions and therefore this relieves the President of any obligation to do so, or decisions of the CITT apply only to the importations that were before it on appeal, and not to the importations by other importers or even the same importer/appellant.

The CITT concluded that the President had abused the appellate process. While the FCA did not adopt the reasons of the CITT for this conclusion, it agreed that the CITT's decisions were reasonable. It similarly concluded that the President had abused the process though for more "nuanced" reasons. According to the FCA, the President was compelled to follow earlier decisions of the CITT, including that in Frito-Lay (absent an appeal reversing it) except in very limited circumstances. Following is a summary of the principles of precedent set out by the FCA in this case:

  1. A tribunal, like the CITT, should try to follow its earlier decisions, but is not bound by them—a tribunal panel may reasonably disagree with another of its panels subject to sound administration that calls for certainty, predictability and finality which matter, in particular, in a customs context;
  2. A tribunal is constrained by decisions of its reviewing courts, in this case the CITT by the FCA;
  3. The actions of the President, an administrator, are regulated by the CITT, and the President must follow decisions of the CITT—certainty, predictability and finality matter;
  4. The principle of tribunal pre-eminence matters as well: tribunals bind administrators that are subject to their jurisdiction and subject only to later orders of reviewing courts.

These guiding principles are subject to important exceptions pursuant to which the administrator, the President of the CBSA, may act:

  1. The President may follow a different course based on a distinction of the facts as between the CITT precedent and the case before the President;
  2. In certain circumstances, the President should be permitted to act upon what the President views, bona fides, as a serious flaw in the CITT's precedent in order that a serious error not persist perpetually—but the President must, in such a case, identify and articulate clearly the flaw in the CITT's precedent and why it is, in the President's view, clearly wrong;
  3. In the words of the FCA: "The flaw must have significance based on all of the circumstances known to the administrator, including the probable impact of the flaw on future cases and the prejudice that will be caused to the administrator's mandate, the parties it regulates, or both". This involves much more than playing a game of "roulette" in which the President places the same/similar facts and the same legal arguments before the CITT, or slightly modifies or supplements the earlier presented arguments, and tries his luck a second time.

The FCA discussed other means available to expedite resolution of disagreement between the President and the CITT, including requesting the CITT state a case of law, jurisdiction, practice or procedure to the FCA, pursuing an appeal to the FCA from the CITT's decision with which the President disagrees (the FCA admonished the CBSA for failure to pursue its appeal in Frito-Lay, noting the higher tactical burden the discontinuance placed on the President to demonstrate good faith and rationale for why Frito-Lay had not been followed or distinguished), referring the matter to the CITT for a decision, or having the law amended.

The FCA's decision in the Bri-Chem Trilogy should be very welcome to the importing community, professionals who guide it, and the CBSA, whose jurisdiction is today better and more clearly defined.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Darrel Pearson
Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions