Import News

Forms and Deposits for Temporary Imports

Save Time and Money on Goods Temporarily Imported into Canada

Goods imported into Canada for no more than 12 months are classified as temporary imports. Importers can apply for an extension of the 12 month period.

For example, Disney ships truckloads of equipment into Canada for its Disney on Ice shows. Even though the ice rink materials, costumes and props are not for sale in Canada, these show goods are treated as temporary imports for which a security deposit is payable.

The customs broker or importer must post security that covers the full amount of both duties and taxes payable for the temporary imports. Bonds, cash, certified cheques and travellers cheques can be used for used to pay the security deposit.

Depending on the type of temporary good, Canada Border Services Agency (CBSA) refunds all or part of the security deposit when temporary imports leave Canada.

Types of Temporary Imports

Duty and tax treatment for the security deposit depends on the type of temporary import. Below are examples of different types of temporary imports.

  • Show goods
  • Trial use goods
  • Exhibit goods
  • Musical instruments for a live show
  • Lecture material, tapes, slides and videos
  • Emergency use goods
  • Goods to be repaired in Canada
  • Commercial samples.

Bon Jovi Scenario for Temporarily Imported Goods

Before American rock star Bon Jovi plays in Calgary on July 14, his band’s musical instruments are subject to specific duty and tax treatment before temporary entry into Canada.

Each of Bon Jovi’s musical instruments will be assigned a harmonized system code (HSC) under Canada’s Customs Tariff. For example, the tariff classification for the multiple-keyboard electric organ played by band member David Bryan is HSC 9207.10.00.12. In addition to that original classification code, the first 4 digits for temporary imports (9993) must also be specified on import documentation.

Under the North American Free Trade Agreement (NAFTA), the 6% tariff for imported keyboards is waived. However, Bon Jovi enterprises will have to pay the 5% Goods and Services Tax (GST) as a security deposit. The GST deposit will be fully refunded after the musical instruments are re-exported to the U.S.

Temporary Admission Permit E29B

The security deposit is accompanied by CBSA form E29B, titled Temporary Admission Permit. This document records details about the importer, customs broker as well as the temporary import’s destination in Canada.

Another key E29B field to be completed is the temporary import’s use in Canada, such as “musical instrument for live show per D8-1-1” or “goods for repair per D8-1-1”. CBSA D Memo D8-1-1 defines rules for full or partial refund of taxes for goods temporarily imported into Canada.

To calculate the amount of security deposit, users can fill in up to 5 lines on the E29B form. Each line starts with the temporary import item’s quantity, weight, description (including model and serial numbers) and tariff classification code. The amount of any duty and tax required is calculated line by line, and then totaled.

To prove that the value of the temporary import is correct, a commercial invoice must accompany the E29B form.

Form E29B must be submitted to Canada Customs at the port of exit before a CBSA officer can:

  • Complete the bottom acquittal portion of the form
  • Refund the security deposit for the temporary import.

Admission Temporaire/Temporary Admission (A.T.A.) Carnet

Bon Jovi Enterprises may be using a multi-purpose temporary entry document called the A.T.A. Carnet. This international customs document can be used for goods that will be temporarily imported into a number of different countries before the carnet’s expiry date.

Bon Jovi’s touring company could use just one carnet to cover temporarily imported tour equipment and band musical instruments when the rock group visits several different countries in a short period of time.

The carnet serves two purposes. The document:

  • Replaces the E29B
  • Guarantees that duty and taxes will be paid.

Duty and taxes on temporary imports become payable if the items are not exported out of the host country by the carnet’s expiry date.

Canadian Rules for A.T.A. Carnet

Canada is a participating country where customs officials treat carnets as acceptable temporary import permits, and therefore the CBSA would accept a carnet when Bon Jovi’s concert supplies cross the border.

Often the issuing party for the carnet is the local chamber of commerce. Chambers of commerce in different countries may have unique requirements when users apply for A.T.A. carnets.

The Canadian Chamber of Commerce requires that a carnet is only issued after the exporter pays a security deposit equal to 40% of the temporary import item’s value.

A carnet does have some limitations. For one, Canadian customs officials will insist on an E29B form and not accept an A.T.A. carnet for goods temporarily exported to Canada for repair.

 

US Versus South Africa – Top Export and Import Products

In this analysis, top American exports to South Africa are scored against South Africa’s imports to the U.S.

The U.S. shipped US$4.5 billion worth of exports to South Africa in 2015, down 31.3% from 2014. Over that same period, America consumed $5.9 billion in South African imported goods, down 41% from the prior year.

The end result was a $1.4 billion trade deficit for the U.S. with its South African trading partner. That is actually a big improvement over America’s $3.5 deficit with South Africa for 2014.

Top US Exports to South Africa

Below are the leading American exports delivered in South Africa in 2015, sorted by dollar value.

Within brackets is the harmonized tariff schedule (HTS) code for each product classification. The percentage to total U.S. exports is also shown inside brackets.

  1. Civilian aircraft and parts (HTS code 8800000000) … US$323.7 million (7.3% of total)
  2. Dump trucks (8704105050) … $73.8 million (1.7%)
  3. Calcined petroleum coke (2713120000) … $72.9 million (1.6%)
  4. Tunneling machinery parts including rock cutters (8431499027) … $57.2 million (1.3%)
  5. Carbon black feedstock (2707999010) … $51.6 million (1.2%)
  6. Reception and transmission equipment (8517620050) … $51.1 million (1.1%)
  7. Bituminous coal (2701120010) … $46.6 million (1.02%)
  8. Road tractors for semi-trailers (8701200015) … $45.58 million (1%)
  9. Vehicle parts and accessories (8708998175) … $41.7 million (0.93%)
  10. Small automobiles (8703330045) … $38.6 million (0.86%).

America’s number one export to South Africa confirms its global trade advantage in the civilian aircraft industry. The U.S. also adapts its exports to meet the needs of the South African mining industry, exporting tunneling machinery as well as dump trucks and tractors for off-highway transportation.

Top US Imports from South Africa

The following products are goods with the highest total dollar value that the U.S. imports from South Africa.

Three of the leading South African imports are platinum group metals (platinum, rhodium and palladium). Also among the top 10 imported goods from South Africa are medium-size vehicles with different engine sizes.

  1. Platinum sponge (HTS code 7110110020) … US$767.7 million (13.1% of total)
  2. Medium-size automobiles (8703230064) … $699.2 million (11.9%)
  3. Medium-size automobiles, smaller engine (8703230062) … $618.9 million (10.5%)
  4. Non-industrial diamonds, processed (7102390050) … $533.2 million (9.1%)
  5. Rhodium (7110310000) … $345.3 million (5.9%)
  6. Palladium (7110210000) … $166 million (2.8%)
  7. Unsaturated acyclic hydrocarbons (2901295000) … $117.2 million (2%)
  8. Slag over 40% titanium (2620995000) … $115.1 million (2%)
  9. Non-industrial diamonds, unworked (7102310000) … $112.3 million (1.9%)
  10. Ferrochromium over 4% carbon (7202410000) … $96.1 million (1.6%).

South Africa has competitive advantages in mining metals and minerals over its American trade partner. The value of imports from South Africa’s automotive industry also outperform U.S. vehicle exports.

US Exports Leading Up to World Cup

Sales of U.S. exports to South Africa fell to $1.06 billion for the first 3 months of 2016. That amount is a 13.1% decline from the period ending March 31, 2015.

The following exported American products were among the top 10 in 2015; below they are sorted starting with American exports posting the highest percentage gains.

  1. Small automobiles … US$10.4 million (up 530.1% from 2015)
  2. Civilian aircraft and parts … $94.1 million (up 74.1% from 2015)
  3. Calcined petroleum coke … $17.3 million (up 1.9%)
  4. Road tractors for semi-trailers … $1.6 million (down 94.8%)
  5. Vehicle parts and accessories … $6.2 million (down 70%)
  6. Tunneling machinery parts including rock cutters … $9 million (down 57%)
  7. Reception and transmission equipment … $8.2 million (down 27.9%)
  8. Bituminous coal … nil (same as first quarter 2015)
  9. Carbon black feedstock … nil (down 100%)
  10. Dump trucks … nil (down 100%).

U.S. sales of small automobiles to South Africa rebounded in the first quarter of 2016. America continues to exploit its competitive advantage in the aircraft industry.

South African Imports Leading Up to World Cup

America increased its consumption of imports from South Africa by 32.1% to $1.65 billion during the first quarter of 2016.

The following list reveals which top 10 imports had the greatest effect in driving up the overall value of South African goods imported into the U.S.

  1. Ferrochromium with over 4% carbon … US$56.7 million (up 427.8% from 2015)
  2. Platinum sponge … $178.2 million (up 274.2%)
  3. Palladium … $62.7 million (up 205.1%)
  4. Slag with over 40% titanium … $32.1 million (up 52.2%)
  5. Non-industrial diamonds, processed … $176.2 million (up 12.3%)
  6. Medium-size automobiles, smaller engine … $154.2 million (up 4.6%)
  7. Unsaturated acyclic hydrocarbons … $24.8 million (up 198.4%)
  8. Non-industrial diamonds, unworked … $55.2 million (up 191.3%)
  9. Rhodium … $135.3 million (up 187.4%)
  10. Medium-size automobiles … $145.3 million (down 8.7%).

Specialized metals imported from South Africa showed robust triple-digit gains to the end of March.

It remains to be seen whether South Africa beats out the United States during the June 11 to July 11 FIFA World Cup.

What is clear is that South Africa is exploiting its competitive advantage over America in international trade, building on a $600 million trade surplus during the first 3 months of 2016.