Turkey and Turkey Products - CPTPP Tariff Rate Quota (TRQ) (Items 105 to 113 on the Import Control List)

Serial No. 917

Date: November 26, 2018

This Notice to Importers is provided pursuant to Section 6.2 of the Export and Import Permits Act (EIPA) and will remain in effect until further notice.

In brief

Imports of turkey and turkey products into Canada are subject to import controls under Canada’s EIPA.  Accordingly, an import permit is required for shipments of turkey and turkey products to enter Canada.

Under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, Canada agreed to establish a tariff rate quota (TRQ) of 3,983,000 eviscerated kilograms for turkey.

The allocation period for this TRQ extends from December 30, 2018 to April 30, 2019, inclusive. Import permits for shipments of turkey and turkey products destined to the Canadian market are issued to allocation holders under Canada’s TRQ for turkey and turkey products, which is administered by Global Affairs Canada.

This Notice to Importers sets out the policies and practices pertaining to the administration of this TRQ, including the allocation, underutilization, return and transfer policies.  This Notice also explains how to apply for import permits.

Summary of key dates and access quantity for the 2018-2019 allocation year

• TRQ Year: December 30 to April 30
• Access Quantity: 242,917 eviscerated kilograms
• Start of Application Period: November 26, 2018
• Application Deadline: December 12, 2018
• Reference Period for assessing applicant’s eligibility for an allocation: September 1 ,2017 to August 31, 2018
• Opening of the TRQ for imports: December 30, 2018
• Date for Returning Unutilized Quota: March 1, 2019 (no later than 12:00h, Eastern Time)

1. Purpose

1.1. The purpose of this Notice is to:

• set out the policies and practices pertaining to the administration of the CPTPP TRQ for turkey and turkey products;
• invite applications for allocations under the TRQ for the next quota year; and
• explain how to apply for import permits for imports of turkey and turkey products.

2. Definitions

“Turkey and turkey products” means a product that is included Items 105 to 113 of the Import Control List (ICL).

“Processor” means an establishment that carries on activities that involve the slaughtering of turkey, cutting up of eviscerated turkey, de-boning of eviscerated or cut up turkey, or further processing of turkey meat in federally or provincially registered Canadian plants owned and operated by the applicant. Further processing activities such as, but not limited to, the manufacturing of such products as patties, nuggets, fingers, rolls or roasts produced from turkey meat in addition to marinating, smoking or drying, coating or seasoning turkey meat are permitted processing activities.  Only processed products on the ICL are eligible. (Refer to Appendix 4)

• For clarity, distribution sales by processors, i.e., where they do not process the product bought and sold, must be excluded.
• Additionally, turkey and turkey products bought and sold for the export market, non-import controlled product turkey and turkey products, non-arm’s length sales, sales at the retail level to consumers, live turkeys, and products bought from or sold to other distributors must all be excluded.

“Distributor” means an establishment that buys turkey and turkey products and re-sells it to other businesses.  Distributors use warehouses and trucks in carrying on its trade (either the renting or purchasing of warehousing and transportation services is considered to meet this criterion

• For clarity, commission brokers do not meet the distributor definition and are not eligible for an allocation under the TRQ. For purposes of this Notice, commission brokers procure or sell on behalf of others without taking ownership of or financial responsibility of the turkey. 
• Retailers also do not meet the distributor definition and are not eligible for an allocation under the TRQ.  For purposes of this Notice, a retailer is an establishment that is primarily engaged in retailing food, and which buys turkey and turkey products and sells it directly to final consumers.
• Turkey and turkey products bought and sold for the export market, non-ICL turkey and turkey products, non-arm’s length sales, sales at the retail level to consumers, live turkeys, and products bought from or sold to other distributors must all be excluded.

“Market share” means an applicant’s level of activity in the turkey sector in relation to the total activities of the other eligible applicants within the group of the TRQ.

“Equal share” means each applicant receives the same allocation level based on the quantity of TRQ available divided by the number of eligible applicants within the group of the TRQ.

“Reference period” means the period of time used to measure an applicant’s activity in the processing or distribution of turkey in Canada. For the purpose of this Notice, the reference period is from September 1 to August 31 immediately preceding the applicable allocation year.

“Accountant” means a member in good standing of one of the professional accounting bodies in Canada, who is registered with his/her provincial professional organization to provide accounting services and is independent from the applicant (i.e., is not an owner, a partner, a director, or an employee of the company applying for an import allocation).

3. General information

3.1. Background

3.1.1. . In accordance with its commitments under the CPTPP, Canada has established a TRQ for imports of turkey and turkey products.

3.1.2. Under Canadian TRQs, in any given year, a predetermined quantity of imports of a good controlled under the EIPA can enter Canada at a lower rate of duty, while imports over this quantity are subject to higher rates of duty. The TRQs therefore have three components: an import access quantity negotiated with Canada’s international trade partners; a within access commitment rate of duty that applies to imports up to the access level; and a higher, over access commitment rate of duty for imports over the access level.

3.1.3. The within and over access rates of duty that apply to imports of turkey and turkey products can be found in Canada’s Customs Tariff.

3.1.4. Pursuant to the EIPA and its corresponding 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. Furthermore, the Minister may attach conditions to import allocations and/or to import permits, and may amend, suspend, cancel or re-instate import permits and allocations.

3.1.5. Failure by an applicant to provide any information requested by Global Affairs Canada under the EIPA or failure to comply with any condition of an authorization or permit issued pursuant to the EIPA may result in the rejection of the application for an allocation under the turkey and turkey products TRQ, the reduction or cancellation of an authorization issued pursuant to the EIPA, or the cancellation of associated permits.

3.2. Access quantity

3.2.1. The access quantity for the CPTPP turkey and turkey products TRQ will be phased in over nineteen years.  The phase-in table can found in the text of the CPTPP under section 23 of 2-D, entitled Canada Appendix A Tariff Rate Quotas.

3.2.2. The 2018-2019 access level for the CPTPP turkey and turkey products TRQ is 242,917 eviscerated kg.

3.3. Allocation period

3.3.1. The quota allocation year for the CPTPP turkey and turkey products TRQ extends from December 30 to April 30, inclusive.

3.3.2. Eligibility for an allocation will be assessed on the basis of each applicant’s processing or distribution activities during the reference period of September 1 to August 31 immediately preceding the new quota year. An applicant must be a resident of Canada and active regularly in the Canadian turkey sector during the reference period and the allocation year.

3.3.3 Being active regularly during the reference period and the allocation year is normally understood to mean monthly activity.

4. Products covered

4.1. This Notice pertains to Items 105 to 113 of the Import Control List (ICL), namely turkey and turkey products falling under heading Nos. 01.05, 02.07, 02.09, 02.10, 16.01 and 16.02 in the list of tariff provisions set out in the Schedule to the Customs Tariff.

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

5. Allocation policy

5.1 The TRQ that is available for a given year is allocated in the following way: 

• 85 percent of the TRQ is allocated to the processor group on a market share basis; and
• 15 percent of the TRQ is allocated to the distributor group on an equal share basis.

5.2. An eligible processor applicants’ market share is calculated on the basis of the kilograms of turkey processed and subsequently sold by the applicant during the reference period in relation to the total market calculated within the processor group of eligible applicants.

5.3. Eligible applicants are eligible to apply under only one group during any given allocation year under the CPTPP turkey and turkey products TRQ.

5.4. 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, applicants are required to provide a list of “related persons”. A definition of related persons may be found in Appendix 5.

5.5. 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 eligible. If the parent company does not make such a nomination in writing, it shall be made by Global Affairs Canada.

5.6. In order to ensure that allocations are issued in economically viable quantities, applicants whose market share calculation does not result in a minimum 20,000 kg allocation will normally not be issued an allocation.  Applicants are to specify the minimum volume they are willing to accept. Should an applicant’s market share calculation result in a volume lower than the specified volume, no allocation will be issued.

5.7. All import allocations expire at the end of each allocation year and all applicants interested in receiving an import allocation must reapply each year.

5.8. Applicants must be able to substantiate that they meet the all criteria throughout the entire reference period covered by their application.

6. How to apply for an allocation

6.1. Applicants who wish to apply for an allocation under this TRQ are invited to submit their completed application form and any other relevant documents no later than December 12 immediately preceding the opening of the allocation year.

6.2. All applicants for an allocation are required to include as part of their application:

• a completed application form; and
• a sworn affidavit;

6.3. Processor applicants are also required to include as part of their application a letter from an independent qualified professional (normally an accountant) verifying the information included in the application.

6.4. All appendices to the application should be in the exact format of the models attached to this Notice. Any changes to the wording of the appendices will normally not be permitted. Any change to the appendices should be discussed and submitted in advance to be validated by Global Affairs Canada.

6.5. The information that the applicant provides will be considered when allocating the TRQ. Global Affairs Canada retains the right to request additional information. Applicants may be required to provide evidence of their activities. Accountants may be asked to explain the procedures used in greater detail and may be asked to provide Global Affairs Canada with copies of all working documents. Any costs associated with a request for additional information will be borne by the applicant. Failure to provide information requested may result in the application being deemed incomplete.

6.6. The declaration in the application form allows Global Affairs Canada and its representative access to any information pertaining to the applicant in relation to the application for an import allocation or to subsequent applications for, or concerning the use of, import permits that is in the files of Agriculture and Agri-Food Canada or the Canadian Food Inspection Agency. Normally, applicants are informed of any such requests for information.

6.7. Section 18 of the EIPA forbids any person to knowingly induce, aid or abet any other person to contravene any of the provisions of the EIPA. Such contraventions by an applicant or its accountant may lead to prosecution for offenses under the EIPA.

6.8. Applicants are invited to send their applications by E-MAIL to the Turkey Mailbox. Applicants sending their application by e-mail should be prepared to present the original version of their application upon Global Affairs Canada’s request. Failure to do so may lead to the cancellation of any allocation issued pursuant to the application and/or the cancellation of associated permits.

6.9. Applications sent by MAIL or COURIER should be addressed to the quota manager of the Turkey TRQ at Global Affairs Canada. The mailing address of the Trade Controls Policy Division can be obtained on the Global Affairs Canada website, under Contact Us.

6.10. For legibility reasons, applications sent by facsimile will not be accepted.

6.11. Applications postmarked after the deadline immediately preceding the opening of the allocation year, or in a format other than that required, will normally not be considered. Lost applications will not normally be considered without acceptable proof that they were sent before the deadline (e.g., courier receipt).

7. Under-utilization and return policies

7.1. Under-utilization policy

7.1.1. An allocation holder with a utilization rate less than 90% in the previous quota year may have its allocation adjusted downward by an under-utilization penalty for the new quota year.^{Footnote 1}

7.1.2. For allocation holders that under-utilized in the previous quota year, allocations in the new quota year will be reduced by the percentage of the allocation not utilized in the previous quota year.^{Footnote 2}

7.1.3. Allocation holders that under-utilized during the previous quota year will be advised of the applicable under-utilization penalty before the allocations are finalized for the new quota year.

7.2. Return policy

7.2.1. Allocation holders may return any portion of the balance of their allocation no later than March 1st of the 2018-2019 quota year. Any portion of an allocation that is returned by this date will be considered as having been used for purposes of administering the under-utilization policy in 7.1.1.

7.3. Reallocation

7.3.1. Returned quantities will normally be made available seven days after the return deadline to eligible allocation holders who have not returned any unused quantity of their allocation. The reallocated quantity will be in proportion of the applicant’s allocation, or on demand if quantities still remain after the first offer.

8. Transfer policy

8.1. The Minister may allow the transfer of allocations between allocation holders. All requests for allocation transfer must be referred to Global Affairs Canada for consideration. Requests must be made by way of the CPTPP Poultry and Eggs - Import Allocation Transfer Request form.

9. Import permits

9.1. Types of permits

9.1.1. An import permit issued by Global Affairs Canada is required for every shipment of product covered by this Notice to enter Canada. For a given shipment, importers may either present a shipment-specific import permit or invoke the appropriate General Import Permit (GIP).

9.1.2. Products imported directly into a bonded warehouse do not require either a specific import permit or a GIP. However, an import permit is required to move goods out of a bonded warehouse for consumption in Canada.

9.2. Shipment-specific import permits

9.2.1. Shipment-specific import permits are normally issued on demand to allocation holders up to the amount of their allocation under this TRQ. Shipments entering Canada under a shipment-specific import permit can normally do so at the within access rate of duty as long as there is sufficient quota remaining.

9.2.2. To claim the within access rate of duty for a shipment, the importer must present the shipment-specific import permit to CBSA at the time of final accounting.

9.2.3. For a shipment-specific import permit to be considered valid, the name on the permit must match exactly the name of the importer on CBSA’s B3-3 Canada Customs Coding Form and related documents at time of final accounting. Furthermore, the quantity on the permit must be the same as the net quantity on the Customs invoice. It is incumbent on the recipient of the permit to ensure that a permit application is made in the name of the importer of record and includes the correct quantity. Questions about the proper procedures to fill out customs entry documents should be addressed to local CBSA officials.

9.2.4. Shipment-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.

9.3. General import permits

9.3.1. The GIP that applies for turkey and turkey products is General Import Permit (GIP) No. 100 – Eligible Agricultural Goods. There is no limit to the quantities of turkey and turkey products that can enter Canada under the GIP; however, such imports will be subject to the higher over access rate of duty.

9.4 How to apply for a permit

9.4.1 Information about the permit application process, including information about fees, the monthly billing system, information required from applicants and the permit application form, is available on the Global Affairs Canada website: Applying for an Import Permit.

9.5. Quantity to report on shipment-specific import permit

9.5.1. Turkey and turkey product quantities reported on a shipment-specific import permit must be declared in eviscerated equivalent. The list of conversion factors by commodity code is available in Appendix 4.

9.5.2. Turkey products that are partially deboned are considered to be boneless for import control purposes and the corresponding boneless EIPA turkey codes must be used when requesting import permits. As an example, fresh turkey breasts that have been partially deboned so that only the keel bone or cartilage remaining will be considered boneless for import control purposes. In this case, a corresponding EIPA code that could be provided on the related application could be 0207.26.10.00.7240. Importers who are unsure as to whether the product they intend to import is considered bone-in or boneless should obtain guidance from Global Affairs Canada.

10. Contact us

10.1. Names and direct phone numbers for quota manager(s), permit officer(s), and the Help Desk are available on the Global Affairs Canada website: Contact Us.

10.2. For directory assistance, you may call 343-203-6820.

Appendices

Appendix 1 – Application for a share of the CPTPP turkey and turkey product TRQ

Application form | PDF 167 KB

Appendix 2 – Accountant’s letter for Applicants Requesting an Allocation under the Processor or the Distribution Pool

Accountant's Letterhead

To: Global Affairs Canada
Re: [Applicant name]
[Applicant File Number]

At the request of [applicant’s name] and as required by Notice to Importers - Turkey and turkey Products – CPTPP TRQ (the Notice). I performed the following procedures in connection with [applicant’s name] application form for an import allocation of the turkey and turkey products CPTPP TRQ for the next quota year ("the application").

I enquired of [applicant’s name] and confirmed that the company will continue to do business as a [processor] or [distributor] as outlined in the Notice. For distributors, in particular, [applicant name] uses both (1) trucks and (2) one or more warehouses in carrying on its business as a turkey distributor.

Procedures performed and findings

1. I read the application and the Notice.

2. I inspected purchase invoices and/or the summary sheets listing these invoices (provided they show detail information of these invoices) of [applicant name] covering purchases made in the reference period of September 1 to August 31 immediately preceding the new quota year having a total of [quantity] kilograms in eviscerated equivalent weight and a total of [amount] dollars of turkey for:

1. the name and address of the seller;
2. the weight of the turkey purchased;
3. the type of turkey purchased; and,
4. the cost (being an amount greater than nil) of the turkey purchased.

The following exceptions, including exceptions to arms-length transactions, were found:

3. I compared the type of turkey described in the purchase invoices and/or summary sheets listing these invoices, inspected above, to the types permitted in the Import Control List detailed in Appendix 4 of the Notice and found that the type of turkey described was of a type included in the Import Control List.

4. I compared the total dollar amount of each of the purchase invoices inspected and/or summary sheets listing these invoices to cancelled cheques (or other banking records or cash disbursement documentation) and found them to be in agreement.

The following exceptions were found:

5. I inspected sales invoices and/or summary sheets listing these invoices (provided they show detail information of these invoices) of [applicant name] covering the reference period of September 1 to August 31 immediately preceding the new quota year having a total of [quantity] kilograms in eviscerated equivalent weight and a total of [amount] dollars of turkey for:

1. the name and address of the purchaser;
2. the weight of the turkey sold;
3. the type of turkey sold; and,
4. the selling price (being an amount greater than nil) of the turkey sold.

The following exceptions were found:

6. I enquired of [name and title of individual responsible for the application] whether the sales invoices inspected and/or summary sheets listing these invoices, inspected above, excluded sales of turkey at the retail to consumer level. [Name of individual responsible for the application] responded that sales of turkey at the retail to consumer level were excluded from such sales invoices and/or summary sheets listing these invoices.

The following exceptions were found:

7. I compared the total dollar amount of each of the sales invoices inspected and/or summary sheets listing these invoices to cash receipts (or other relevant documentation indicating that full payment had been received) and found them to be in agreement.

The following exceptions were found:

8. I examined, and where necessary, recalculated the conversion of purchases and subsequent sales of turkey as reported in [applicant name's] purchases and sales journal, respectively, during the reference period of September 1 to August 31 immediately preceding the new quota year, into eviscerated equivalent kilograms, as described in the application, based on the formulas set out in Appendix 4 of the Notice. The calculations were mathematically correct.

The following exceptions were found:

9. I enquired of [name and title of individual responsible for the application] whether all related applicants and all related persons as defined in Appendix 5 to the Notice were described in the application. [Name of individual responsible for the application] responded that all such related applicants and all such related persons were described in the application.

The following exceptions were found:

10. I compared the name, address and percentage of share ownership of all shareholders owning 5% or more of the total voting shares as described in the [applicant name's] register of share ownership to the application and found them to be in agreement.

The following exceptions were found:

11. For applications involving the processor pool (market share) I enquired of [name of individual responsible for the application] as to whether the purchases and sales invoices verified that they involved only product that was bought by the applicant for processing and excluded (1) all export and distribution sales, (2) all products with meat from spent fowl or old roosters as an ingredient and (3) all non-ICL products, as required by Global Affaires Canada policy.

The following exceptions were found:

12. For applications including the distributor pool (equal share) I enquired of [name of individual responsible for the application] as to whether the purchases and sales verified were bought by the applicant for distribution and excluded (1) all export sales, (2) purchases from and sales to other distributor, (3) live turkeys, (4) all products with meat from spent fowl or old roosters as an ingredient and (5) all non-ICL products, as required by the Global Affairs Canada policy.

The following exceptions were found:

These procedures do not constitute an audit of the application and therefore I express no opinion on the application.

This letter is for use solely in connection with [applicant name] application for a turkey and turkey products CPTPP TRQ allocation.

I am a professional member in good standing of an institute, society or association of accountants incorporated by or under an Act of the Legislature of this province, whose normal professional activities include the performance of independent audits of financial statements, and am qualified to express an opinion on financial statements for third party use.

City: _____________________________

Date: _____________________________

Name of partner: _____________________________ 

Membership Number with National Professional Organization:
________________________________________

Membership Number with Provincial Professional Organization:
________________________________________

Province: ________________________________________

Appendix 3 – Affidavit by Applicants Requesting an Allocation under the Processor or the Distributor Pool

I [NAME OF PERSON], A RESIDENT OF THE COUNTY OR MUNICIPALITY OF __________________, IN THE PROVINCE OF __________________ MAKE OATH AND SAY AS FOLLOWS:

1. I am employed by [applicant name] as [job title].
2. The information contained in this affidavit pertains to [applicant name] application form for an import allocation for the [processor] or [distributor] portion of the turkey and turkey products CPTPP TRQ for the period that extends from December 30 to April 30, inclusive (“the application”).
3. [Applicant name] does and will continue to do business throughout the next quota year as a [processor] or [distributor] as outlined in Notice to Importers - Turkey and Turkey Products – CPTPP TRQ (the Notice). For distributors, in particular [applicant name] uses both (1) trucks; and (2) one or more warehouses in carrying on its business as a turkey distributor.
4. I reviewed [applicant name] purchase invoices covering purchases made in the reference period of September 1 to August 31 immediately preceding the new quota year, having a total of [quantity] kilograms in eviscerated equivalent weight and a total of [amount] dollars of turkey.
5. I compared the type of turkey described in the purchase invoices noted in (4) above to the products listed in the Import Control List (ICL) detailed in Appendix 4 of the Notice and found that the type of turkey described in the purchase invoices corresponded to the products listed in the ICL.
6. I compared the total dollar amount of each of the purchase invoices outlined above to cancelled cheques (or other banking records or cash disbursement documentation) and found them to be in agreement.
7. I reviewed sales invoices of [applicant name] covering the reference period of September 1 to August 31 immediately preceding the new quota year having a total of [quantity] kilograms in eviscerated equivalent weight and a total of [amount] dollars of turkey.
8. I confirm that the sales invoices outlined above excluded (1) all sales of turkey at the retail level to consumers and (2) all export sales as required by Global Affairs Canada policy.
9. I compared the total dollar amount of each of the sales invoices to cash receipts (or other financial documents indicating that full payment had been received) and found them to be in agreement.
10. I examined and, where necessary, recalculated the conversion of purchases and subsequent sales of turkey as reported in [applicant name] purchases and sales journals for the reference period of September 1 to August 31 immediately preceding the new quota year into eviscerated equivalent kilograms, as described in the application, based on the formulas set out in appendix 4 of the Notice. I confirm that the calculations were mathematically correct.
11. I confirm that all related applicants and all related persons as defined in Appendix 5 to the Notice were described in the application.
12. I confirm that the name, address and percentage of share ownership of all shareholders owning 5% or more of the total voting shares as described in [applicant name] register of share ownership matches that listed in the application.
13. I agree that any information provided by me or my firm to Global Affairs Canada in support of my firm's application for an allocation of the next year turkey and turkey products CPTPP TRQ is subject to review by an independent public accountant (or an accountant named by Global Affairs Canada) if and as required by Global Affairs Canada, and that all costs related to such work by the accountant shall be borne by [applicant name].
14. I understand that the information provided by me in this affidavit will be used to assess [applicant name] application for an allocation of the next year turkey and turkey products CPTPP TRQ. I realize that section 17 of the Export and Import Permits Act (EIPA)forbids any person from furnishing false or misleading information and forbids knowingly making any misrepresentation pursuant to the EIPA. I am aware that section 18 of the EIPA forbids any person from knowingly inducing, aiding or abetting any other person in contravening any of the provisions of the EIPA.
15. For processor pool applications: I confirm that the purchase invoices noted in (4) above involved only product that was bought for processing and excluded (1) all export and distribution sales, (2) all non-ICL products and (3) all products with meat from spent fowl or old roosters as an ingredient.
16. For distributor pool applications: I confirm that the purchase invoices noted in (3) above involve only product that was bought for distribution and excluded (1) all export sales, (2) all purchases from and sales to other distributors, (3) live turkeys, (4) all non-ICL products and (5) all products with meat from spent fowl or old roosters as an ingredient.
17. I confirm that all information provided in the application is accurate and complete.

Sworn before me at the City of ________________________________ in the province of ________________________________, on the date of ________________________________

________________________________________ 
Notary Public, Justice of the Peace or Commissioner of Oaths  

________________________________________ 
Signature and printed or typed name of swearer.

Appendix 4 – List of EIPA commodity codes for turkey and turkey products

Appendix 5 – Information concerning related persons

1. For the purposes of this Notice to Importers, persons are related to each other and are related persons if they are:

• relatives of one another;
• corporation and
• a person who controls the corporation,
• any person who is a member of a related group that controls the corporation,
• any person who is a relative of any person who controls the corporation, or
• any person who is a relative of any person who is a member of a related group that controls the corporation; or
• two corporations
• controlled by the same person, related group, or unrelated group,
• one of which is controlled by one person and that person is a relative of a person who controls the other corporation,
• one of which is controlled by one person and that person is a member of a related group that controls the other corporation,
• one of which is controlled by one person and that person is a relative of any member of a related group that controls the other corporation,
• one of which is controlled by one person and that person is a relative of each member of an unrelated group that controls the other corporation,
• one of which is controlled by a related group, a member of which is also a member of another related group that controls the other corporation,
• one of which is controlled by a related group, a member of which is a relative of any member of another related group that controls the other corporation, or
• one of which is controlled by a related group, each member of which is a relative of at least one member of another related group that controls the other corporation.

2. Notwithstanding section 1, for the purposes of this Notice to Importers, persons shall normally be deemed related to each other and to be related persons if they are not dealing with each other at arm's length in respect of the import, purchase and/or sale of the products covered by this Notice.
3. (1) For the purposes of this Notice to Importers:

• “arm’s length” means the relationship that exists between parties that are self-interested, who are seeking to maximize their respective positions, and who act severally and independently from each other - it is a question of fact whether persons not related to one another within the meaning of section 1 of this appendix were at a particular time dealing with each other at arm's length;
• “common connection” may be evidenced by, for example:
• a provision in a formal agreement,
• conduct, or
• a business or family relationship;
• “economically dependent” means a state when the ongoing operations of a corporation depends upon the majority of its business volume coming from one source;
• “person” means an individual or a corporation;
• “related group” means two or more persons that have a common connection;
• “relative(s)” are persons connected by blood, marriage, common-law partnership, adoption or affinity regardless of age or relationship;
• “unrelated group” means two or more persons that have no common connection.

3. (2) For the purposes of this Notice to Importers:

• “control” means ownership of such a number of shares as carries with it the right to a majority of the votes in the election of the board of directors.
• In addition to this definition, the following also applies
• (i) ownership of more than one-third of the shares and less than a majority of the shares of a corporation may be presumed to constitute control of that corporation unless it can be established that the corporation is not controlled in fact by the owner of those shares
• (ii) a person who has an option or a right under a contract, in equity or otherwise, in any capacity, to shares in a corporation, or to acquire shares in a corporation, or to control the voting rights of shares in a corporation may be presumed to control that corporation unless it can be established that the corporation is not controlled in fact by the person who has this option or right;
• (iii) where any person, related group, or unrelated group owns a large debt of a corporation which may become payable on demand or a substantial investment in retractable preferred shares that person, related group, or unrelated group may be presumed to control that corporation unless it can be established that the corporation is not controlled in fact by the owner(s) of that debt or retractable preferred shares
• (iv) where a corporation has commercial activities, contractual agreements, or arrangements with any person, related group, or unrelated group that could make this corporation economically dependent on this person, related group, or unrelated group, then that person, related group, or unrelated group may be presumed to control that corporation unless it can be established that the corporation is not controlled in fact by the person, related group, or unrelated group that has commercial activities, contractual agreements or arrangements with that corporation
• (v) where any person, related group, or unrelated group possesses unique expertise or experience that is critical for the ongoing operations of a corporation that person, related group, or unrelated group may be presumed to control that corporation unless it can be established that the corporation is not controlled in fact by the person, related group, or unrelated group that possesses the unique expertise or experience
• “control in fact” means an ability to change or determine the composition of the board of directors or an ability to direct the business and affairs of the corporation.

4. For the purposes of this Notice to Importers:

• (a) where two corporations are related to the same third corporation within the meaning of this Notice to Importers, they are related to each other;
• (b) a corporation can be controlled or controlled in fact by a person, related group, or unrelated group notwithstanding that the corporation is also controlled by another person, related group, or unrelated group;
• (c) a person can be considered to be related to himself, herself, or itself for the purpose of establishing that persons are related to each other and are “related persons”.