Tariff Preference Levels
Memorandum D11-4-22
ISSN 2369-2391
Ottawa, October 28, 2020
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In brief
This memorandum has been amended to include information regarding the Canada-United States-Mexico Agreement (CUSMA) Tariff Preference Levels. Also, minor amendments have been made to the Appendix C- Canada–Costa Rica Free Trade Agreement (CCRFTA) Tariff Preference Levels as a result of the repeal of the Costa Rica Free Trade Zone regulations, as well as other non-consequential technical amendments.
This memorandum contains the remission orders that implement the Tariff Preference Level (TPL) mechanisms of the North American Free Trade Agreement (NAFTA), the Canada–Chile Free Trade Agreement (CCFTA), Canada–Costa Rica Free Trade Agreement (CCRFTA), Canada–Honduras Free Trade Agreement (CHFTA) and Canada-United States-Mexico Agreement (CUSMA). It also contains administrative guidelines and other general information concerning the orders.
Under the terms of the above noted free trade agreements (FTA), preferential tariff treatment is granted to specified quantities of certain yarns, fabrics, apparel, and textile articles that do not meet the rules of origin of the agreement. These provisions constitute a trade mechanism known as a “Tariff Preference Level.” The preferential rate of duty under these FTAs’ TPL mechanisms is the rate that would apply to the goods if they were originating goods under the applicable agreement.
Legislation
Statutory instruments
- Imports of Certain Textile and Apparel Goods From Mexico or the United States Customs Duty Remission Order
- Imports of Certain Textile and Apparel Goods From Chile Customs Duty Remission Order
- Imports of Certain Textile and Apparel Goods From Costa Rica Customs Duty Remission Order
- Imports of Certain Textile and Apparel Goods from Honduras Customs Duty Remission Order
Regulations
- NAFTA Rules of Origin Regulations
- CCFTA Rules of Origin Regulations
- CCRFTA Rules of Origin Regulations
- CHFTA Rules of Origin Regulations
- CUSMA Rules of Origin Regulations
Guidelines and general information
General
1. TPL mechanisms of NAFTA, CCFTA, CCRFTA, CHFTA and CUSMA provide rates of duty, equivalent to those of originating goods, to specified quantities of certain non-originating textile and apparel goods traded between the parties to each respective agreement, on condition that the goods have undergone specified manufacturing processes in the territory of one of the parties to the agreement (refer to Appendices A, B, C, D, and E). The remission orders discussed in this memorandum implement in part the TPL mechanisms for goods imported into Canada. In particular, the orders specify the goods which may be eligible for TPL treatment, the rates of duty that apply under the TPL program, the manufacturing processes goods are required to undergo in the territory of the parties to each agreement, and the documentation needed to support a request for remission.
2. The TPL remission orders also specify that the quantities of goods eligible for TPL treatment are the quantities set out in the relevant schedules of the FTAs identified in paragraph 1. The annual TPL quantities are found in Appendices A, B, C, D, and E. TPL utilization reports can be viewed on the website of Global Affairs Canada.
Note: Despite the wording of the TPL remission order, the Imports of Certain Textile and Apparel Goods From Mexico or the United States Customs Duty Remission Order, no TPL quantity has been agreed upon for goods imported into Canada from the United States that fall within the definition of “fabric and made- up goods” in section 1 of the Order, other than for goods in Chapter 60 or, for the purposes of the CUSMA, heading 63.03 of the Harmonized System (HS).
3. Any request for NAFTA TPL treatment will be considered for goods imported from the United States or Mexico prior to the CUSMA entry into force date of , provided TPL quantities are available.
Tariff treatments
4. The NAFTA and CUSMA TPL rate of customs duty is the United States tariff rate, for goods imported from the United States, or the Mexico tariff rate, for goods imported from Mexico. The CCFTA TPL rate of customs duty is the Chile tariff rate. The CCRFTA TPL rate of customs duty is the Costa Rica tariff rate. The CHFTA TPL rate of customs duty is the Honduras tariff rate. Importations of goods that exceed the annual quantitative limit provided under a NAFTA TPL, CCFTA TPL, CCRFTA TPL, CHFTA TPL, or CUSMA TPL are subject to the Most-Favoured-Nation (MFN) tariff treatment.
Certification requirements: Exporter's certification of non-originating textile goods
5. In order to receive a TPL benefit, the Exporter’s Certification of Non-originating Textile Goods (Certification) must be in the importer’s possession at the time of release of the goods, or at any other time when the importer declares on the customs documentation that they are in possession of this Certification. The importer is certifying that the goods meet the requirements set out in Appendix 6 of Annex 300-B to Chapter Three of NAFTA, Appendix 5.1 of Annex C-00-B to Chapter C of CCFTA, Appendix III.1.6.1 of Annex III.1 to Chapter III of CCRFTA, Section 5 of Annex 3.1 to Chapter 3 of CHFTA, or Section C of Annex 6-A to Chapter 6 of CUSMA.
Note: Certification requirements are found in the respective countries’ Remission Orders found in “Legislation – Statutory instrument” section of this memorandum.
6. The completed Certification may be provided on a separate sheet attached to the invoice, or it may be a statement written directly on the invoice. It is not mandatory to include the Certification with the release or accounting documentation, but it must be available for presentation to the Canada Border Services Agency (CBSA) upon request.
Note: The number of the invoice to which the Certification refers must be included on the Certification.
7. Certification may be completed in English, French, or Spanish. Where the Certification is in Spanish and the CBSA requests to see it, the CBSA may make a further request to the importer to provide an English or French translation of the Certification. If such further request is made, the CBSA will allow a reasonable period of time for the importer to obtain the translation.
Note: The importer is not required to obtain an English or French translation of a Spanish Certification until and unless such a further request is made.
8. Since goods qualifying under the TPL provisions are not originating goods under the NAFTA Rules of Origin Regulations, CCFTA Rules of Origin Regulations, CCRFTA Rules of Origin Regulations, CHFTA Rules of Origin Regulations, or CUSMA Rules of Origin Regulations, these cannot be certified as originating on a NAFTA Certificate of Origin, CCFTA Certificate of Origin, CCRFTA Certificate of Origin, CHFTA Certificate of Origin or CUSMA Certification of Origin.
Import permit requirements
9. All TPL-eligible imports require an import permit issued by the Trade Controls Bureau at Global Affairs Canada or via customs brokers authorized by the Trade Controls Bureau.
10. In order to receive a TPL benefit, the importer must possess an appropriate import permit specifying TPL entitlement for the goods. This import permit must be available for presentation to the CBSA upon request.
11. Global Affairs Canada/Customs Automated Permit System (EXCAPS) provides for the electronic transmission of permit information directly from Global Affairs Canada to the CBSA. This eliminates the requirement for importers to present paper permits to the CBSA (except at non-terminal offices) when required under the Export and Import Permit Act. Global Affairs Canada will issue a transaction record to the importer or broker to serve as a receipt showing that the permit has been issued. Importers using non-terminal offices will be required to present a copy of the transaction record to substantiate that a permit has been issued by Global Affairs Canada. Please refer to CBSA Memorandum D19-10-2, Administration of the Export and Import Permits Act (Importations) for the most current information on the transmission of permit information between Global Affairs Canada and CBSA.
12. The transaction number assigned to the importation must be recorded on the import permit, and the import permit number must be recorded on the customs documentation.
13. An import permit becomes valid when the permit information has been transmitted electronically by Global Affairs Canada to the CBSA office where goods are to be released.
14. Where a TPL permit has not been obtained by the date of accounting, the goods will be subject to the MFN Tariff Treatment.
Goods imported from Mexico: Certificate of eligibility
15. To obtain a TPL import permit for Mexican goods, an importer must first obtain a Certificate of Eligibility from the exporter. The exporter will have obtained this Certificate of Eligibility from the Mexican government. The importer must forward the Mexican Certificate of Eligibility number to Global Affairs Canada with the application for a TPL import permit. The Certificate of Eligibility must be available for presentation to the CBSA upon request.
16. The Certificate of Eligibility is not a requirement for obtaining a TPL import permit for goods imported from the United States, Chile, Costa Rica or Honduras.
17. To obtain a certificate of eligibility, Mexican exporters are asked to contact Trade Services Mexico (Secretaria de Economia Mexico).
Canada Customs Coding Form and invoice requirements
18. The importer must enter the appropriate Order in Council number in field 26 on the Canada Customs Coding Form in order to request TPL treatment at the time goods are accounted for. The relevant Order in Council numbers are:
- NAFTA and CUSMA 98-1456
- CCFTA 98-1455
- CCRFTA 02-1863
- CHFTA 14-983
19. The importer must also enter code 10 in field 14 on the Canada Customs Coding Form for goods imported from the United States; code 11 for goods imported from Mexico; code 14 for goods imported from Chile; code 21 for goods imported from Costa Rica; and code 29 for goods imported from Honduras. In so doing, the importer is declaring that he is in possession of an Exporter’s Certification of Non-originating Textile Goods.
Note: Certification requirements are found in the respective countries’ remission orders found in “Legislation – Statutory Instruments” section of this memorandum.
20. An invoice that covers both goods for which a preferential tariff treatment will be claimed through the use of TPLs and goods for which such treatment is not being claimed should be clearly and distinctively identified on the invoice. However, a separate invoice for the goods receiving the preferential tariff treatment is not required.
Review and evaluation
21. The CBSA will deny a request for NAFTA, CCFTA, CCRFTA, CHFTA, or CUSMA TPL treatment made at the time goods are accounted for if it is determined that the conditions of the applicable remission order have not been met – for example, if the required documentation has not been provided. A denial of TPL treatment, at the time goods are accounted for, will be made under subsection 115(2) of the Customs Tariff.
22. Although goods qualifying for preferential tariff treatment under the TPL remission orders are not considered originating goods, and as such cannot be certified as originating on the relevant FTA Certificate of Origin, the documentation and associated production required to be entitled to the TPL is subject to verification under the Export and Import Permits Act.
Refunds
23. A request for TPL treatment may be made after goods have been accounted for, by requesting a refund of the duties paid. However, before a request for a refund can be made, a TPL import permit must be obtained. Global Affairs Canada may issue import permits for qualifying TPL goods after these have been imported, if the applicable quota for the year of importation has not been exceeded, and, where the goods are imported from Mexico, a Certificate of Eligibility has been obtained from the exporter.
24. A request for TPL treatment by way of a refund is made by submitting a completed Canada Customs Adjustment Request to a CBSA office in the region where the goods were accounted for. Fields 14 and 20 on the Canada Customs Adjustment Request must be completed as indicated in paragraphs 18 and 19. Subsection 115(3) of the Customs Tariff must be indicated in the Justification for Request (field 37) to request the refund. The adjustment request must include the import permit, the Exporter’s Certification of Non-originating Textile Goods, and, if the goods are imported from Mexico, the Certificate of Eligibility.
Note: Certification requirements are found in the respective countries’ remission orders found in “Legislation: Statutory Instruments” section of this memorandum.
Additional information
25. For more information, call contact the CBSA Border Information Service (BIS):
Calls within Canada & the United States (toll free): 1-800-461-9999
Calls outside Canada & the United States (long distance charges apply):
1-204-983-3550 or 1-506-636-5064
TTY: 1-866-335-3237
Contact Us online (webform)
Contact Us at the CBSA website
The following types of goods entering Canada may be eligible for TPL benefits under NAFTA.
| HS classification | Description | Process | From | Quantity |
|---|---|---|---|---|
| Spun yarns | ||||
| 52.05-52.07 | cotton yarns | spun in Mexico or the USA from non-originating fibres | 52.01-52.03 |
from Mexico: 1,000,000 kg from the USA: 1,000,000 kg |
| 55.09-55.11 | man-made yarns | spun in Mexico or the USA from non-originating fibres | 55.01-55-07 | |
| Fabric and made-up goods | ||||
| 52-55 (excluding goods containing 36% or more by weight of wool or fine animal hair), 58, 60 and 63 |
cotton or man-made fibre fabrics or made-up textile goods | woven or knit in Mexico or the USA from non-originating yarn or knit from yarn spun in Mexico or the USA from non-originating fibres | NIL |
from Mexico: 7,000,000 SMEs from the USA: 2,000,000 SMEs |
| 9404.90 | finished and cut and sewn or otherwise assembled from fabrics [see next column] produced or obtained outside the NAFTA territories | 5208.11-5208.29, 5209.11-5209.29, 5210.11-5210.29, 5211.11-5211.29, 5212.11, 5212.12, 5212.21, 5212.22, 5407.41, 5407.51, 5407.71, 5407.81, 5407.91, 5408.21, 5408.31, 5512.11, 5512.21, 5512.91, 5513.11-5513.19, 5514.11-5514.19, 5516.11, 5516.21, 5516.31, 5516.41, 5516.91 | ||
| Apparel | ||||
| 61, 62 | cotton or man-made fibre apparel or wool apparel | Cut (or knit to shape) and sewn or otherwise assembled in Mexico or the USA from non-originating yarn or fabric | NIL |
cotton or man-made fibre
apparel from: |
|
The quantities shown are those set out in Schedules 6.B.1, 6.B.2, and 6.B.3 to Appendix 6 of Annex 300-B of the NAFTA. The 2,000,000 SMEs from the United States are limited to goods of Chapter 60 of the HS. |
||||
The following types of goods entering Canada may be eligible for TPL benefits under CCFTA.
| HS classification | Description | Process | From | Quantity |
|---|---|---|---|---|
| Spun yarns | ||||
| 52.05-52.07 | cotton yarns | spun in Chile from non-originating fibres | 52.01-52.03 | 500,000 kg |
| 55.09-55.11 | man-made yarns | spun in Chile from non-originating fibres | 55.01-55-07 | |
| Fabric and made-up goods | ||||
| 52-55 (excluding goods containing 36% or more by weight of wool or fine animal hair), 58, 60 and 63 | cotton or man-made fibre fabrics or made-up textile goods | woven or knit in Chile from non-originating yarn or knit from yarn spun in Chile from non-originating fibres | NIL | cotton or man-made fibre fabrics and made-up goods: 1,000,000 SMEs |
| 9404.90 | finished and cut and sewn or otherwise assembled from fabrics [see next column] produced or obtained outside the CCFTA territories |
5208.11-5208.29, |
||
| 51-55 (containing 36% or more by weight of wool or fine animal hair), 58, 60 and 63 | wool fabric and made-up textile goods | woven or knit in Chile from non-originating yarn or knit from yarn spun in Chile from non-originating fibres | NIL | wool fabrics and made-up goods: 250,000 SMEs |
| Apparel | ||||
| 61, 62 | cotton or man-made fibre apparel or wool apparel | Cut (or knit to shape) and sewn or otherwise assembled in Chile from non-originating yarn or fabric | NIL |
cotton or man-made fibre apparel: 2,252,324 SMEs |
|
The quantities shown are those set out in the Schedules 5.B.1, 5.B.2 and 5.B.3 to Appendix 5.1 of Annex C-00-B of the CCFTA. The TPLs for apparel were increased annually by two per cent for six consecutive years beginning . |
||||
The following types of goods entering Canada may be eligible for TPL benefits under CCRFTA.
| HS classification | Description | Process | From | Quantity |
|---|---|---|---|---|
| Spun yarns | ||||
| 52.05-52.07 | cotton yarns | spun in Costa Rica from non-originating fibres | 52.01-52.03 | 150,000 kg |
| 55.09-55.11 | man-made yarns | spun in Costa Rica from non-originating fibres | 55.01-55-07 | |
| Fabric and made-up goods | ||||
| 52-55 (excluding goods containing 36% or more by weight of wool or fine animal hair), 58, 60 and 63 | cotton or man-made fibre fabrics or made-up textile goods | woven or knit in Costa Rica from non-originating yarn or knit from yarn spun in Costa Rica from non-originating fibres | NIL | cotton or man-made fibre fabrics and made-up goods: 1,000,000 SMEs |
| 9404.90 | finished and cut and sewn or otherwise assembled from fabrics [see next column] produced or obtained outside the CCRFTA territories |
5208.11-5208.29, |
||
| 51-55 (containing 36% or more by weight of wool or fine animal hair), 58, 60 and 63 | wool fabric and made-up textile goods | woven or knit in Costa Rica from non-originating yarn or knit from yarn spun in Costa Rica from non-originating fibres | NIL | wool fabrics and made-up goods: 250,000 SMEs |
| Apparel | ||||
| 61, 62 | cotton or man-made fibre apparel or wool apparel | Cut (or knit to shape) and sewn or otherwise assembled in Costa Rica from non-originating yarn or fabric | NIL | 1,379,570 SMEs |
|
The quantities shown are those set out in the Schedules 6.B.1, 6.B.2 and 6.B.3 to Appendix III.1.6.1 of Annex III.1 of the CCRFTA. The TPLs for apparel were increased annually by two per cent for three consecutive years beginning one year after entry into force of the CCRFTA (). |
||||
The following types of goods entering Canada may be eligible for TPL benefits under CHFTA.
| HS classification | Description | Process | Quantity |
|---|---|---|---|
|
51-55, 58, 60 and 63 |
wool, cotton or man-made fibre fabrics or made-up textile goods |
woven or knit in Honduras from non-originating yarn or knit from yarn spun in Honduras from non-originating fibres or filaments |
fabric or made-up textile goods: 1,000,000 SMEs |
| 9404.90 | finished and cut and sewn or otherwise assembled in Honduras from fabric or yarn produced or obtained outside the CHFTA territories | ||
| 61, 62 | apparel | cut (or knit to shape) and sewn or otherwise assembled in Honduras from non-originating fabric or yarn | apparel goods: 4,000,000 SMEs |
|
The quantities shown are those set out in Section 5 of Annex 3.1 to Chapter 3 of CHFTA. |
|||
The following types of goods entering Canada may be eligible for TPL benefits under CUSMA.
| HS classification | Description | Process | From | Quantity |
|---|---|---|---|---|
| Spun yarns | ||||
| 52.05-52.07 | cotton yarns | spun in Mexico or the USA from non-originating fibres | 52.01-52.03 | from Mexico: 1,000,000 kg from the USA: 1,000,000 kgNIL |
| 55.09-55.11 | man-made yarns | spun in Mexico or the USA from non-originating fibres | 55.01-55-07 | |
| 56.05 | metalized yarn | formed in the USA from non-originating fibres | NIL | |
| Fabric and made-up goods | ||||
| 52-55 (excluding goods containing 36% or more by weight of wool or fine animal hair), 58, 60 and 63 | cotton or man-made fibre fabrics or made-up textile goods | woven or knit in Mexico or the USA from non-originating yarn or originating yarn produced from non-originating fibre, or knit from yarn spun in Mexico or the USA from non-originating fibres | NIL | from Mexico: 7,000,000 SMEs from the USA: 15,000,000 SMEs |
| 9404.90 | finished and cut and sewn or otherwise assembled from fabrics [see next column] produced or obtained outside the CUSMA territories |
5208.11-5208.29, |
||
| Apparel | ||||
| 61, 62, and 96.19 | cotton or man-made fibre apparel or wool apparel | Cut (or knit to shape) and sewn or otherwise assembled in Mexico or the USA from non-originating yarn or fabric | NIL | cotton or man-made fibre apparel from: Mexico: 6,000,000 SMEs USA: 20,000,000 SMEs wool apparel from: Mexico: 250,000 SMEs USA: 700,000 SMEs |
|
The quantities shown are those set out in Appendix 1, 2, and 3 to Annex 6-A of the CUSMA. The 15,000,000 SMEs from the United States are limited to goods of Chapter 60 or heading 63.03 of the HS. |
||||
References
- Issuing office
- Trade and Anti-dumping Programs Directorate
- Headquarters file
- 4571-11-20
- Legislative references
- Imports of Certain Textile and Apparel Goods From Mexico or the United States Customs Duty Remission Order
Imports of Certain Textile and Apparel Goods From Chile Customs Duty Remission Order
Imports of Certain Textile and Apparel Goods From Costa Rica Customs Duty Remission Order
Imports of Certain Textile and Apparel Goods from Honduras Customs Duty Remission Order
NAFTA Rules of Origin Regulations
CCFTA Rules of Origin Regulations
CCRFTA Rules of Origin Regulations
CHFTA Rules of Origin Regulations
CUSMA Rules of Origin Regulations
Customs Tariff
Export and Import Permit Act - Other references
- D19-10-2
Global Affairs Canada
North American Free Trade Agreement (NAFTA)
Canada-Chile Free Trade Agreement (CCFTA),
Canada-Costa Rica Free Trade Agreement (CCRFTA)
Canada-Honduras Free Trade Agreement (CHFTA)
Canada-United States-Mexico Agreement (CUSMA)
Canada Customs Coding Form
Canada Customs Adjustment Request - Superseded memorandum D
- D11-4-22 dated
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