Canada: The Canada-Ukraine Free Trade Agreement Is Now In Effect: What Questions Should Importers/Exporters Ask?

Last Updated: August 2 2017
Article by Cyndee Todgham Cherniak

On August 1, 2017, the Canada-Ukraine Free Trade Agreement ("CUFTA") enters into effect. The CUFTA is a trade in goods agreement (that is, it does not cover services and investment). Canada has agreed to reduce most customs duty rates to "free" or 0% immediately upon implementation on goods that meet the rules of origin.  Pursuant to Chapter 2 of the Canada-Ukraine FTA, each party shall reduce or eliminate customs duties on goods originating in either party in accordance with the tariff elimination schedules in Annex 2-B.  In Article 1 of Annex 2-B, Canada agrees to eliminate customs duties on all goods in Chapters 1-97 of the Harmonized System that provides for Most-Favoured-Nation rate of duty, with the exception of any goods Canada has listed in Annex 2-B (which is a short list).  We have prepared a chart that sets out H.S. Chapters and which Chapters become duty-free immediately upon implementation.

Some of the Ukraine-origin goods that Canadian importers may look forward to importing on a duty free basis are:

  • Ukrainian beer;
  • Ukrainian vodka;
  • Ukrainian chocolate;
  • Pysanka/pysanky;
  • Table cloths;
  • Ceramics;
  • Clothes;
  • Toys;
  • Copper; and
  • Walking sticks.

Some of the Canadian-origin goods that Canadian exporters may look forward to exporting are:

  • grain,
  • canola;
  • beef,
  • pork;
  • fish;
  • wines/ice wines;
  • maple syrup;
  • softwood lumber;
  • animal feed;
  • medications;
  • cosmetics and skin care;
  • cars;
  • mining equipment;
  • semi-trailers;
  • air compressors;
  • tires;
  • asphalt;
  • plastics; and
  • etc.

The rules of origin in CUFTA are important in determining whether a good is Ukraine-origin or Canadian origin.  Just because a good is shipped from Ukraine does not mean that it is originating for the purposes of the CUFTA.  It is necessary to carefully review Chapter 3 of the CUFTA regarding rules of origin and origin procedures.

Another area where there may be significant business between Ukraine and Canada is in the area of e-commerce.  Chapter 8 of CUFTA addresses e-commerce.  Canada and Ukraine have both agreed to not apply a customs duty, fee or charge on a product delivered electronically (which is defined to mean "delivered through telecommunications, alone or in conjunction with other information and communication technologies").

What questions should Canadian importers be asking prior to exporting to Ukraine?

Canadian importers should get ready to take advantage of the CUFTA benefits. It is time to start asking questions, such as:

  1. What goods do I currently import from Ukraine?
  2. What new goods would I like to import from Ukraine?
  3. Do those goods that I currently import or would like to import from Ukraine meet the rules of origin in the CUFTA?
  4. What is the H.S. classification of the good to be imported from Ukraine? (You need the answer to this question in order to review Canada's commitments for duty elimination/duty reduction)?
  5. Are the goods that I import/wish to import within Canada's Schedule of duty elimination/duty reductions commitments in CUFTA? (If the answer is yes, then the goods may not be duty free immediately, if the answer is no, you still must ask questions about origin before knowing if the goods are duty-free immediately upon implementation)
  6. What is the rule of origin in CUFTA applicable to that good based on that H.S. classification number?
  7. Do the goods originate in Ukraine according to the CUFTA rules of origin? (you may need more information or assistance from customs counsel to answer this question)
  8. What is the applicable duty rate of the goods?
  9. Who within my organization must update computerized records and databases so that customs documentation will be correct after provisional implementation?
  10. What changes need to be made within our computerized record keeping programs and databases?
  11. Has there been a meeting with the customs broker and freight forwarded to make sure that they have updated computerized records and databases?
  12. Do I have the necessary Certifications of Origin from suppliers of Ukrainian-origin goods?
  13. What is the value for duty for customs purposes of the goods to be imported? (This would be a good time to revisit the issue and consider whether kits comprise Ukrainian-origin goods and non-Ukraine origin goods)?
  14. What documentation do I need before I can import this good?
  15. Do I require other governmental certification approvals for the goods I import/plan to import from Ukraine?
  16. Are there any sanitary or phyto-sanitary requirements?
  17. Are there any Canadian labelling or marking requirements for the goods?
  18. What record keeping requirement do I have to implement under Canadian law to maintain CUFTA benefits that I claim?
  19. Do I require quota to import the goods?
  20. Are the goods subject to antidumping or countervailing duties (applies to some steel products)?
  21. Are any of the persons with whom I want to do business subject to economic sanctions pursuant to the Special Economic Measures (Ukraine) Regulations?
  22. Are there other restrictions on doing business with Ukraine (including Crimea) pursuant to the Special Economic Measures (Ukraine) Regulations?

There are many other important questions to ask – hopefully this gets you started asking questions.

What questions should Canadian importers be asking prior to exporting to Ukraine?

Canadian exporters should get ready to take advantage of the CUFTA benefits. It is time to start asking questions, such as:

  1. Are any of the persons with whom I want to do business subject to economic sanctions pursuant to the Special Economic Measures (Ukraine) Regulations?
  2. Are there other restrictions on doing business with Ukraine (including Crimea) pursuant to the Special Economic Measures (Ukraine) Regulations?
  3. Are the goods that I wish to sell to Ukraine likely to be re-exported to Russia?
  4. Can I get an end-use certificate setting out who is buying the goods, where the goods will be used and for what purpose the goods will be used?
  5. What goods do I currently export to Ukraine?
  6. What new goods would I like to export to Ukraine?
  7. Do those goods that I currently export to or would like to export to Ukraine meet the rules of origin in the CUFTA?
  8. Do the goods have U.S-origin components? Do I need an export permit to export the goods to Ukraine?
  9. What is the H.S. classification of the good to be exported to Ukraine?
  10. Are the goods that I export/wish to export within Ukraine's Schedule of duty elimination/duty reductions commitments in CUFTA?
  11. What is the rule of origin in CUFTA applicable to that good based on that H.S. classification number?
  12. Do the goods originate in Canada according to the CUFTA rules of origin? (you may need more information or assistance from customs counsel to answer this question)
  13. What is the applicable duty rate of the goods?
  14. Who within my organization must update computerized records and databases so that customs documentation will be correct after provisional implementation?
  15. Do I need to provide an export declaration to the Canada Border Services Agency when I sell to Ukraine?
  16. What changes need to be made within our computerized record keeping programs and databases?
  17. Has there been a meeting with the customs broker and freight forwarded to make sure that they have updated computerized records and databases?
  18. Can I make the necessary Certifications of Origin or get certifications of origin if I am a resupplier?
  19. What is the value for duty for customs purposes of the goods to be exported?
  20. What documentation do I need before I can export this good?
  21. What record keeping requirement do I have to implement under Canadian law to maintain CUFTA benefits that I claim?
  22. Are the goods subject to a quota restriction in Ukraine?

There are many other important questions to ask – hopefully this gets you started asking questions.

What questions should Ukrainian exporters be asking prior to exporting to Canada?

Ukrainian exporters should get ready to take advantage of the CUFTA benefits. It is time to start asking questions, such as:

  1. Are the goods that I want to export to Canada originating in Ukraine according to CUFTA rules of origin?
  2. Can I provide a certification of origin with respect to the goods?
  3. What is the tariff classification number under Canada's Customs Tariff for the goods I will ship to Canada?
  4. Do I have to register for Canadian GST/HST purposes?
  5. Do I have to register to collect any provincial sales taxes (will I sell into British Columbia, Manitoba or Saskatchewan)?
  6. What Incoterm should I use with respect to shipments to Canada (if I do not want to get into the Canadian tax system)?
  7. Do my goods meet Canada's regulatory standards or do my goods meet mutual recognition requirements in the CUFTA?
  8. Do I need testing certificates or are the standards certified by the manufacturer?
  9. Do my goods meet Canada's labeling requirements?
  10. What paperwork is required for the importer to easily import the goods into Canada?
  11. Does Canada impose any import restrictions with respect to the goods?
  12. What do I need to do to ensure that the Canada Border Services Agency will release the goods in a timely manner?
  13. What is the Partners in Protection Program? Are there steps I can take to become an approved exporter in a FAST program so my goods will be considered to be low risk?
  14. What volume of goods do I expect to export to Canada – should I operate in Canada via a branch office or a Canadian subsidiary?
  15. Are there Canadian income tax consequences to my normal way of selling into markets?
  16. Should I register my trademarks in Canada?
  17. How can I protect my intellectual property in Canada?
  18. Do Canada's consumer protection laws apply to my goods?
  19. What reporting requirements are there for goods in Canada with respect to recalls in Canada and outside Canada?
  20. Will sales representatives who wish to travel to Canada need to obtain a visa?

There are many other important questions to ask – hopefully this gets you started asking questions.

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 Mondaq.com.

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

Authors
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
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
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

Mondaq.com (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 www.mondaq.com

To Use Mondaq.com 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.

Disclaimer

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.

General

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