Guide for self-assessing SIMA duties
This guide is intended to help importers and their brokers fulfill their responsibilities when they import goods that are subject to duties under the Special Import Measures Act (SIMA). Please consult the What you should know about dumping and subsidy investigations for more information on the SIMA processes.
How do I know if SIMA duties apply to the goods I import?
The Measures in Force Web page lists all the goods that are subject to Anti-dumping or Countervailing Measures. This page includes the product descriptions, exclusions, dates for which duties are applicable and other information that will help you determine whether your imported goods are subject to SIMA duties.
What are my responsibilities as an importer of goods subject to SIMA duties?
The responsibilities for importers of goods subject to SIMA duties are in addition to the regular Customs responsibilities. More information on the Customs responsibilities can be found in the Step-by-Step Guide to Importing Commercial Goods into Canada.
Importers of SIMA goods are also responsible for:
- Properly describing the imported goods;
- Using the proper SIMA code;
- Maintaining proper records, in Canada, for your imports of goods subject to SIMA; and
- Calculating and paying the proper amount of SIMA duty at the time of accounting.
If you are using the services of an agent or broker, make sure your representative has the information necessary to fulfill your responsibilities.
Properly describing the imported goods
As an importer, you must properly describe the goods that you are importing, whether the information is submitted in paper or electronic format. Customs Memorandum D17-1-1 explains the normal customs requirements. However, these requirements are often not enough for SIMA purposes. Consult the "Information Required on Customs Documents" section on the Measure in Force Web page for specific information required for each SIMA measure.
When importing goods subject to SIMA duties, you must provide a more detailed product description. If you are claiming that the imported good is excluded from SIMA duties, a complete description must also be provided. Without proper and complete information, you may receive an incorrect assessment.
The product description is reported in field 22 of the Canada Customs Coding Form B3 (B3). Your complete product description should also be provided on the commercial or Canada Customs Invoice, or in the description section of the Accelerated Commercial Release Operating System (ACROSS).
Using the proper SIMA Code
The SIMA code is to be reported in field 32 on the B3 and in field 26 on the Canada Customs Adjustment Request Form B2 (B2 Form). SIMA codes are two-digit numbers. The first digit is from 1 to 5 and represents the type of assessment (see Chart 1 below). The second digit is from 0 to 2 and represents the form of payment (see Chart 2 below). Importers may be assessed an administrative monetary penalty if they fail to provide the required code for any goods subject to SIMA. Please refer to the SIMA Administrative Monetary Penalty System (AMPS) Web page for more information on the matter.
Chart 1 - The first digit is the assessment type:
|1||Goods, although the same classification, are especially exempted from a Canadian International Trade Tribunal (CITT) injury finding or from a Surtax Order under the Customs Tariff.|
|2||Goods are subject to an undertaking under SIMA.|
|3||Goods are subject to provisional duty.|
|4||Goods are subject to a CITT injury finding, but no SIMA duty is payable.|
|5||Goods are subject to a CITT injury finding and/or a Surtax Order and SIMA duties and/or amount of surtax are payable.|
Chart 2 - The second digit indicates the payment type:
|1||Cash payment (which includes credit card, debit, etc.).|
|2||Security Bond (issued by a financial institution or acceptable bonding company). Bonds can only be used for provisional duty or during the time of an expedited review.|
As an example, code 51 indicates that the goods are subject to an injury finding and/or a Surtax Order, that the SIMA duties and/or the amount of surtax are payable and they are being paid in cash (which includes any accepted cash payment method, i.e. credit card, debit, etc.).
Chart 3 – Valid SIMA codes:
|10||Use to identify non-subject goods when goods are of the same classification as goods that are subject to a CITT finding. Split the lines of the Form B3 to separate goods of the same classification from goods that are subject to a CITT finding.|
|20||Use for goods covered by an undertaking.|
|30||Use for goods where the provisional duty assessment is nil.|
|31||Use for goods where the provisional duty assessment is covered by cash.|
|32||Use for goods where the provisional duty assessment is covered by a SIMA bond.|
|40||Use for subject goods where the SIMA duty assessment is nil.|
|50||Use for subject goods where the SIMA duty assessment is covered by a valid OIC number (which must be entered in field no. 26 of the Form B3 or field no. 20 of the B2 Form).|
|51||Use for goods where the SIMA duty assessment and/or the surtax amount is covered by cash.|
|52||Use for subject goods under an expedited review where the SIMA duty assessment is covered by a SIMA bond.|
Maintaining proper records
Every person who imports goods into Canada must keep proper records. Generally, the records must be kept in Canada and be detailed enough to allow a CBSA officer to verify that the information submitted is correct and to determine that the correct amount of duty was paid.
When importing goods subject to SIMA duties, importers must keep proper records to allow for the verification of the following:
- date of sale;
- description of the goods;
- date and location of release;
- commercial invoice;
- purchase order;
- proof of payment, including credits and adjustments; and
- any other information as requested in a written notice, such as an importer notice.
Calculating and paying the proper amount of SIMA duties
Before you calculate your duty liability, you need to understand certain terms used in the calculation, such as normal value, export price, anti-dumping duties, countervailing duties, and provisional duties. SIMA duties payable are to be recorded in Canadian dollars in field 39 on the B3 form.
The normal value is generally the selling price of the good in the country where it was produced or exported. In some situations, normal values are based on the costs of production plus a reasonable amount for administrative, selling, and all other costs plus a reasonable amount for profit.
Normal values are calculated based on confidential information submitted by exporters and manufacturers in foreign countries. As a result, these values are often considered confidential and are not always publicly available. Information regarding the normal values of subject goods should be obtained from exporters. Related information may be made available to importers on a need-to-know basis in accordance with the provisions of Memorandum D14-1-2, Disclosure of Normal Values, Export Prices, and Amounts of Subsidy Established Under the Special Import Measures Act to Importers. This memorandum allows the CBSA to:
- Provide normal values so that you may obtain release of a shipment, or account for goods previously released;
- Provide normal values when goods that you have purchased are in-transit; and
- Inform you if a price offered by the exporter will result in SIMA duties.
Requests for normal values and potential duty liabilities are to be made in writing and accompanied by a proof of purchase, proof that the goods are in-transit, or proof of the price offered by the exporter.
The normal value is often expressed in the exporting country's currency, or in U.S. dollars, which means that you have to convert it to Canadian dollars to determine any duty you may owe (see Converting Currency below).
If there is no normal value for the product you are importing, often because there is not enough information or the exporter or manufacturer did not provide a complete answer to the request for information during the investigation, a ministerial specification will be used. This is usually a set percentage that is applied to the export price. This percentage varies for each case and is based on available information. The use of a ministerial specification generally results in a higher assessment. The CBSA also uses a ministerial specification if it receives insufficient or incomplete information by importers or their brokers.
The export price is generally the exporter's selling price reduced by any export charges that are included in the price, such as freight and insurance. This export price is determined using the commercial invoice and subtracting any identified export charges.
In some circumstances, the export price may be calculated under a ministerial specification. This is generally a set amount or a set percentage of the commercial invoice price and varies for each investigation. These export prices, when applicable, may be obtained by referring to the Duty Liability section of the Measures in Force Web page.
Calculating anti-dumping duty (margin of dumping)
In cases where the foreign manufacturer and exporter have submitted completed responses to the request for information during investigations and the CBSA has issued normal values for their goods, the proper amount of anti-dumping duty to pay is calculated based on the formula:
Normal value - Export price = Anti-dumping duty (or margin of dumping)
These duties are calculated on a per unit basis, i.e. per kilogram, per ton, per bushel, etc. If the export price is equal to the normal value, or is more than the normal value, no anti-dumping duty is payable. Two examples are provided below.
Invoice price: $2.30
Less declared freight included in price: $0.10
Equals export price: $2.20
Normal value: $2.50
Amount of anti-dumping duty owing: $0.30
Invoice price: $2.80
Less declared freight included in price: $0.10
Equals export price: $2.70
Normal value: $2.50
Amount of anti-dumping duty owing: $0.00
Alternatively, if there are no specific normal values, the amount of anti-dumping duty will be calculated based on the use of the ministerial specification as explained above. The amount of anti-dumping duty owing is calculated by multiplying the export price by a set percentage. The dumping ministerial specifications can be found in the Duty Liability (Anti-dumping duties) section on the Measure in Force Web page.
Export price: $100
Set Percentage: 50%
Amount of anti-dumping duty owing: $50
Calculating countervailing duty
The countervailing duty is equal to the amount of subsidy on the product. If imported goods are subject to countervailing duties, there is always an amount payable. This is because countervailing duty is a set amount, usually on a per unit basis (i.e. per kilogram, per ton, per bushel, etc.). The countervailing duties amount can be found in the Duty Liability (Countervailing duties) section on the Measure in Force Web page.
Units imported: 100
Countervailing duty rate: $2 per unit
Total countervailing duty owing: $200
Generally, provisional duties are applicable on importations of subject goods during the provisional period, which begins on the date the CBSA makes a preliminary determination of dumping or subsidizing and ends on the earlier of the date that the CBSA causes the investigation to be terminated or the date the CITT issues its final decision on injury. These duties are based on estimates and only apply during the provisional period. Because these duties are temporary they cannot be appealed.
However, if in making a preliminary determination, the CBSA determines that the estimated margin of dumping of, or the estimated amount of subsidy on, the goods is insignificant, the dumping and/or subsidy investigation will continue but provisional duties will not be imposed on goods of the same description imported into Canada during the provisional period. A margin of dumping less than 2% of the export price and an amount of subsidy of the goods less than 1% of the export price are normally considered insignificant.
If the CBSA makes a final determination that the goods have been dumped or subsidized, and the CITT finds that the imports are causing injury, the amount of provisional duty owing or paid is reviewed by the CBSA to determine the final amount of duty owing. An importer may appeal the final reviewed amount of duty by following the instructions provided on the Web page.
If the CBSA determines that the goods are not dumped or subsidized, or if the CITT finds that the imports were not causing injury to the Canadian industry, all provisional duty will be refunded.
Where the importer has not paid provisional duty or posted security within the prescribed time, interest applies to the provisional duties owing. The same rules apply to provisional duty outstanding or refunded as the rules for customs duties. The interest calculated on amounts owing or returned are determined under the Customs Act. The rate of interest used is set in the Interest Rate for Customs Purposes Regulations. An Interest Rates Table for customs purposes can be found online.
The amount of SIMA duty to be paid must be calculated and reported in Canadian dollars. Therefore, the normal value must be converted to Canadian dollars. If the export price is not in Canadian dollars, you will have to convert it to Canadian dollars as well. To do this, you have to use the exchange rate from the date the goods were sold. If you do not know the date of sale, use the date the goods were shipped to Canada.
You can get exchanges rates by contacting your regional CBSA office or by calling the automated Border Information Service (BIS) at 1-800-461-9999. The BIS provides exchange rates, by recorded messages, for the seven common currencies from the last 60 days, or provides an option to speak directly to a CBSA officer for information on other currency exchange rates
Provisional duty may be paid by cash or guaranteed by posting a security bond. Cash payment includes payment by credit or debit card. If you chose to post a security bond, it must be sufficient to cover the amount of provisional duty payable. To learn more about procedures for the release of goods subject to provisional duty, refer to the D14-1-7 Memorandum.
Anti-dumping and countervailing duties must be paid when accounting for a shipment. Payments are made in the same way and within the prescribed time as Customs duties are paid.
The Customs Act applies, with any modifications that the circumstances require, with respect to the accounting and payment of anti-dumping and countervailing duties. As such, failure to pay duties within the prescribed times will result in the application of the interest provisions of the Act. The rate of interest used is set in the Interest Rate for Customs Purposes Regulations. An Interest Rates Table for customs purposes can be found on the CBSA Web site.
What if I make a mistake or pay too much duty?
You can correct errors in two ways:
- By adjusting the information you submitted to CBSA yourself (Self-Adjustment); or
- By appealing the amount of SIMA duties paid on a specific transaction (Requesting a Re-determination).
Both types of changes are made by completing and submitting a B2 Form.
For more information on the Re-determination request, please refer to: How do I appeal the duty I have been assessed? or to the D14-1-3 Memorandum.
For more information on Self-adjustments, please refer to the D11-6-6 Memorandum.
What is the CBSA's role in duty assessment?
The CBSA is responsible for providing you with the assistance you need to properly fulfill your importing responsibilities. The CBSA is also responsible for monitoring importations of goods subject to SIMA duties to ensure full compliance with the law. This includes ensuring that importers and their agents fulfill all of the responsibilities identified above.
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