Notice to Importers

Dairy – World Trade Organization (WTO) Cheese Tariff Rate Quota (TRQ) (Items 141 to 157 on the Import Control List)

Serial No.: 906
Date: October 1, 2017

This Notice replaces Notice to Importers No. 890 dated September 30, 2016, and will remain in effect until further notice. 

This Notice to Importers is provided pursuant to the authority of the Export and Import Permits Act (EIPA) and its corresponding regulations.

In Brief

Imports of cheese into Canada are subject to import controls under Canada’s EIPA. Accordingly, an import permit issued by Global affairs Canada is required for shipment of cheese to enter Canada. Import permits for shipments of cheese destined to the Canadian market are issued to traditional allocation holders under Canada’s World Trade Organization (WTO) tariff rate quota (TRQ) for all types of cheese, which is administered by Global Affairs Canada.

The access quantity for the WTO cheese TRQ is 20,411,866 is split into two reserves, one for cheese originating from the European Union (EU) and one for non-EU origin cheeses. Pursuant to Canada’s commitment under the Canada-EU Comprehensive Economic and Trade Agreement (CETA), Canada committed to reallocate 800,000 kilograms from the non-EU reserve to the EU reserve. Consequently, 14,271,831 kilograms is reserved for EU-origin cheeses and 6,140,035 kilograms is reserved for non-EU origin cheeses. 

1.0 Purpose

1.1 The purpose of this Notice is:

1. to set out the policies and practices pertaining to the administration of Canada’s WTO TRQ for cheeses of all types; and
2. to inform importers of the Minister’s policy, effective January 1, 2018, that individual allocations (including related parties) will normally be capped at 20 percent of the TRQ.

2.0 Products Covered

2.1 This Notice pertains to items 141 to 157 of the Import Control List (ICL), namely cheese of all types falling under tariff item No. 0406 in the list of tariff provisions set out in the schedule to the Customs Tariff.

2.2 This Notice should be read in conjunction with Notice to Importers No. 850 dated November 8, 2013, which explains the administration of supplementary imports for dairy products.

2.3 Importers who require a determination as to whether the product they intend to import is eligible under the WTO cheese TRQ are encouraged to obtain an advance tariff classification ruling from the appropriate regional client service office of the Canada Border Services Agency (CBSA).

3.0 General Information

3.1 Each of the products covered by this Notice was added to the ICL pursuant to paragraphs 5(1)(a), (b), (d) and (e) and sections 5.3 and 6 of the Export and Import Permits Act (EIPA) in order to implement a Canadian commitment under the WTO Agreement on Agriculture.

3.2 Under TRQs, imports are subject to low “within access commitment” rates of duty up to a predetermined limit (i.e., until the import access quantity has been reached); imports over this limit are subject to higher “over access commitment” rates of duty. Under section 6.2 of the EIPA, the Minister may: a) determine an import access quantity allowed entry at the low rate of duty; b) establish a method of allocating the import access quantity; and c) issue an import allocation to any resident of Canada that applies for an allocation, subject to the regulations and any terms and conditions the Minister may specify in the allocation.  Also pursuant to section 6.2 of the EIPA, the Minister may consent to the transfer of import allocations.  Having established an import access quantity, the Minister shall, under subsection 8.3(1) of the EIPA, issue import permits to allocation holders that apply for permits, up to the limit of that quantity, subject to compliance and application of regulations made under section 12 of the EIPA.  These permits shall entitle the goods to which they apply to be subject to the low “within access commitment” rates of duty.  Subsection 8.3(3) allows the Minister to issue permits in excess of the access quantity.

3.3 Pursuant to subsection 6 (f) of the Import Allocation Regulations, when deciding whether to issue an import allocation or whether to consent to a transfer, the Minister shall take into account whether the import allocation holder has furnished false or misleading information in connection with any reports required by the Act or the regulations made under the Act or by any condition of an import allocation or import permit during the 12-month period preceding the period in respect of which the import allocation or transfer is to apply.

3.4 Pursuant to subsection 10.(1) of the EIPA, the Minister may amend, suspend, cancel or re-instate any permit or import allocation issued or granted under the Act.

4.0 Access Quantity

4.1 The WTO TRQ for cheeses of all types is set at 20,411,866 kilograms.

5.0 Allocation of the TRQ

5.1 The WTO cheese TRQ is allocated every calendar year to traditional import allocation holders on the basis of their historical import quota as adjusted since, if necessary, for any under-utilization as governed by the Allocation Methods Order — Cheese and Cheese Products, Ice Cream, Yogurt, Powdered Buttermilk and Concentrated Milk (SOR/95-196).

5.2 Allocations to individual eligible applicants will normally be capped at a maximum 20 percent of the WTO cheese TRQ.

6.0 EU and Non-EU reserves

6.1 Under the provisions of a December 1995 Agreement signed between Canada and the European Union (EU) and the Comprehensive Economic and Trade Agreement (CETA, between Canada and the EU, 69.9% of the WTO cheese TRQ, namely 14,271,831 kg, is allocated to cheese imports from the Member States of the EU. The EU currently has twenty-eight Member States: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom.  The remaining 30.1%, namely 6,140,035 kg, is allocated to cheese imports from non-EU sources.

6.2 In order to respect the ratio established under the Canada-EU Agreement and CETA, import allocation transfers between EU and non-EU sources of supply normally will not be authorized.

7.0 Under-utilization

7.1 A company that uses less than 95% of its allocation in any one year may receive an allocation in the next year which reflects the actual level of use. Those companies affected will be advised prior to the final allocation of the TRQ.

8.0 Activity test for traditional allocation holders to retain their import allocation

8.1 On November 3, 1994, the government announced that traditional holders of cheese import allocations would retain their allocation, subject to demonstrating, through an annual activity test, their active involvement in the cheese trade. Since import allocations are and always have been a privilege granted by the Minister responsible for the EIPA, the Minister is exercising his discretion on the matter by ensuring that current allocation holders continue to contribute to employment and value added activity in the Canadian food sector.

9.0 Related Persons

9.1 For the purpose of this Notice, where two or more applicants are related persons, they shall be eligible for only one allocation.  To determine which persons are related, an applicant for an allocation is asked to provide a brief profile of the company in part 12 of the application, which should include a list of "related persons" (see Appendix 4, “Information Concerning Related Persons”).

9.2 In the case of separate applications from related applicants involving a parent company and one or more subsidiaries, only the application nominated by the parent company will be considered.  If the parent company does not make such a nomination in writing, it shall be made by the Global Affairs Canada.

10.0 Transferability of import allocations

10.1 Under the EIPA, the Minister may allow the transfer of import allocations between import allocation holders. All requests for the transfer of import allocations must be referred to the Trade Controls Policy Division for consideration.

11.0 Import Permit Issuance

11.1 Import permits are required for each shipment of cheeses of all types falling within tariff item No. 0406 of the Customs Tariff.  Importers may either invoke General Import Permit (GIP) No. 100 , or may present an import permit issued to their firm for that shipment ("specific import permit"), in order to clear Canada Customs.  The "specific import permit" must also be presented to the Canada Border Services Agency (CBSA) at the time of accounting for the shipment to be eligible for the “within access commitment” rate of duty.  Shipments imported without a "specific import permit" (i.e., under the GIP) will be subject to classification under tariff item No. 0406, for which the duty rate is 245.5% (and a minimum dollar amount which varies on a per kilogram basis depending on the type of cheese imported).

Note: Specific import permits will not normally be issued retroactively for shipments that have already been imported into Canada, including under the authority of a GIP, regardless of the importer’s allocation.

11.2 In accordance with the Import Permits Regulations, the procedures for receiving applications for import permits are as follows:

1. When requesting an import permit an applicant must submit a completed Form EXT-1466, “Application for Permit” (a copy of which is attached as Appendix 1).
2. A description of the process of applying for a permit is attached as Appendix 2, including information about fees, the monthly billing system and information required from applicants.  All import permits are issued either (i) through an on-line automated system in the offices of customs brokers in major centres across Canada or (ii) in the offices of Global Affairs Canada.

12.0 Permit fees

12.1 A fee will be levied for each permit or certificate issued in accordance to the Export and Import Permits and Certificates Fees Order (Notice to Importers No. 508 dated May 16, 1995).

13.0 Contact Us

13.1 Enquiries about import allocations may be addressed to:

Hugues Leroux
Tel: 343-203-4370
Fax: 613-996-0612
Email:  dairy-laitier@international.gc.ca
(Address listed in paragraph 10.3 above)

13.2 Enquiries about permit issuance and utilization of import allocations may be addressed to:

Lorena Faundez
Tel: 343-203-4369
Fax: 613-996-0612
Email: Lorena.Faundez@international.gc.ca