Sugar-containing Products for Export to the United States (WTO) - Serial No. 1091

Date: July 26, 2022

Updated in December 2022

This Notice sets out the policies and practices pertaining to the administration of Sugar-Containing Products referred to in subparagraph 2(b) of Article 3.A.5. of Annex 3-A of Chapter 3 of the Canada-United States-Mexico Agreement (CUSMA).

This Notice is provided pursuant to the authority of the Export and Import Permits Act (EIPA) and its corresponding regulations, and remains in effect until further notice.

Definitions
Eligibility criteria
Calculation of Allocations
Calculation of allocations - 2022
Calculation of allocations – 2023 and onwards
Returns, under-utilization and chronic return penalties, and reallocation of allocations
Exports under your WTO-SCP allocation
Related links

Definitions

Sugar-containing Products (SCPs) means a product that is included in Item 5203 (a) on the Export Control List (ECL), namely goods listed in subparagraph 2(b) of Article 3.A.5. of Annex 3-A of Chapter 3 of the Canada-United States-Mexico Agreement (CUSMA).

See the list of EIPA commodity codes for WTO SCPs. Any commodity code not listed therein is not eligible for preferential treatment under this TRQ.

WTO-SCP TRQ means the SCP TRQ of the United States as provided for in Additional U.S. Note 6 to chapter 17 of the Schedule of the United States annexed to the Marrakesh Protocol to the General Agreement on Tariffs and Trade 1994, and referred to in subparagraph 2(b) of Article 3.A.5. of Annex 3-A of Chapter 3 of CUSMA.

Eligibility criteria

You are eligible for an allocation if you are a:

Resident of Canada
- your head office is in Canada or you operate a branch office in Canada; and
Producer of SCPs
- you were active in the production of SCPs during the reference period, you are active in the production of SCPs at the time of application, and you will remain active in the production of SCPs during the quota year.
  - Note: Active involvement means the production of SCPs in your own facility and includes continuing to contribute to employment and value-added activities in Canada.

Calculation of allocations

Main pool:

Calculation of allocations - 2022

As an existing allocation holder, you are eligible to receive an allocation equivalent to your WTO SCP 2021-2022 utilization, pro-rated to 99% of the total quantity.
As an existing allocation holder, you can request a minimum allocation of 197,500 kg. This is to ensure fairness with maximum quota allocation amounts that may be available to new entrants. Total allocations may be pro-rated to accommodate this.

Calculation of allocations – 2023 and onwards

For quota year 2023-2024 onwards, you will receive an allocation equivalent to your previous year’s utilization, as adjusted for penalties. If needed, allocations may be pro-rated (maximum 1%) in order to maintain the new entrant’s pool.

New entrant’s pool:

A new entrant’s pool, equivalent to 1% of the total quota quantity, is created and maintained. As a new entrant, you may receive up to a maximum of 197,500kg under this policy, depending on the total number of new entrants in each quota year.
- Any remaining quantity in the new entrant’s pool is available, on a first-come, first-served basis to allocation holders that have used at least 80% of their allocation, upon submission of a written application to Sugar-Sucre@international.gc.ca, along with an invoice, purchase order, or other documentation, demonstrating a need for additional quota.

Returns, under-utilization and chronic return penalties, and reallocation of allocations

Returns: You may return any portion of your allocation to the Department in writing by the prescribed return date.
Note: Returned quantities will be made available on a first-come, first-served basis to current allocation holders as follows:
- As an allocation holder, if you have not returned any quota and have used at least 80% of your initial allocation during the quota year, you may request additional quota by submitting a written application to Sugar-Sucre@international.gc.ca, along with an invoice, purchase order, or other documentation, demonstrating a need for additional quota.
- As an allocation holder, if you have returned quota, you can recuperate all or part of the returned quantity, regardless of your rate of utilization, subject to quota availability, by submitting a written application to Sugar-Sucre@international.gc.ca, along with documentation demonstrating a need for additional quota. If your application exceeds the returned quantity, you must satisfy all requirements for allocation holders that have not returned any quota, including a utilization rate of 80% or more.
Under-utilization penalty: If you use less than 90% of your initial allocation, your allocation will normally be adjusted downwards in the next quota year to reflect your actual utilization.
- Note: Any portion of your allocation that you return in accordance with the return policy will be considered “utilized” for the purpose of the under-utilization penalty policy.
Chronic return penalty: If you have an average rate of return over 25% during the two previous consecutive years, your allocation will normally be adjusted downward in the next quota year by 30% of your average returns during those two previous consecutive years.
Re-allocation policy: You may receive an additional quantity, based on any accumulated quantities from under-utilization and chronic return penalties, on an equal share basis, if you are not subject to an under-utilization or chronic return penalty based on the previous quota year(s) and if you request an increase in your application.

Exports under your WTO-SCP allocation

Any person that receives an allocation under this TRQ is responsible for ensuring their compliance with the EIPA, its regulations and applicable notices including this notice.

To use an allocation, you must request and obtain a shipment specific export permit from Global Affairs Canada for each shipment that you send to the United States. Permits issued for the export of SCPs covered by this Notice can only be used to export SCPs to the United States included in Item 5203 (a) and counted toward the WTO-SCP TRQ, and which are included in the WTO-SCP commodity handbook, according to the quantity and tariff classification indicated on the permit. Any other use of this allocation may constitute an offence under the EIPA.

When declaring shipments of these goods under this TRQ to the U.S. authorities, you must ensure that they are correctly classified and accounted for only against the WTO-SCP TRQ.

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