Glossary

Looking for a term or acronym you're not familiar with? Find it in this glossary! If there is a term we're missing, let us know at [email protected].
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Term
Definition
Qualified Officer

A qualified officer is the individual who meets the requirements of section 3 of the Customs Brokers Licensing Regulations governing residency, citizenship, age and character, and the knowledge and experience qualifications set out in section 4 of the Regulations, and who the license holder identifies as the qualified officer.

Provisional Duty

Provisional duty is duty levied under the Special Import Measures Act when a preliminary decision is issued by the Canadian International Trade Tribunal (CITT) on the dumping or subsidizing of imported goods.

Program Account Manager (PAM)

Under CARM, the Program Account Manager (PAM) is the designated individual that has the ability to modify program registration information, grant access to employees as either Editors or Readers, and create, view and edit all the transaction information within a program.

Process

Process includes the adjustment, alterations, assembly, maintenance, manufacture, production, modification, overhaul, packaging, repackaging, repair or testing of the goods.

Privy Council

The Privy Council was established under the Constitution Act, 1867, to advise the Crown. Currently, it is the Privy Council's job to advise the Prime Minister. It also facilitates the functioning of Cabinet and the Public Service.

Prior Notice

The Food and Drug Administration (FDA) must receive Prior Notice (PN) for all food imported or offered for import into the US. Advance notice allows the Food and Drug Act (FDA), aided by the US Customs Border Patrol (CBP), to target inspections more effectively and helps protect the US food supply against terrorist acts and other public health emergencies.

Primary Inspection Line (PIL)

The Primary Inspection Line (PIL) is the point at which a person or carrier entering Canada makes a report of his or her person and goods.

Price per Unit

The price per unit is the price at which the greatest number of units are sold.

Price Paid or Payable

The price paid or payable is the total of all payments that are owed and will be made directly or indirectly by the purchaser to, or for the benefit of, the vendor.

Prepackaged Products

The Consumer Packaging and Labelling Act (CPLA) defines “prepackaged products” as any product that is packaged in a container in such a manner that it is ordinarily sold to, used, or purchased by the consumer without being re-packaged.

Precursor Chemicals

Precursor chemicals are chemicals that are essential to the production of a controlled substance. Precursor chemicals have a wide legitimate use in the production of consumer goods such as pharmaceuticals, fragrances, flavouring agents, petroleum products, fertilizers and paints. However, some drugs commonly used in cold and decongestant medicines are precursor chemicals that are used to produce methamphetamine.

Pre-Authorized Debit (PAD)

A convenient way to pay bills and make other payments automatically. Instead of sending a payment, the funds are automatically withdrawn from your bank account with your prior authorized consent.

Pre-Arrival Review System (PARS)

The Pre-Arrival Review System (PARS) is a release option that allows importers and brokers to present release documents prior to the arrival of the goods. If all is in order, the goods will be released when they arrive in Canada at a designated port of release.

Pre-Arrival Processing System (PAPS)

In the United States, the Pre-Arrival Processing System (PAPS) is a release mechanism that utilizes Shipment Control Numbers or a PAPS Number to expedite the release of commercial shipments. With PAPS, the carrier provides the US customs broker with required release information prior to departing Canada for the US.

Pre-Approval Programs

Pre-Approval programs facilitate the movement of low-risk people and goods.

Postal Imports Remission Order (PIRO)

Goods that are under the Postal Imports Remission Order (PIRO) are those that are of a value not exceeding $20 CAD per item, and are not subject to the payment of duties and taxes. Goods that are not eligible under the PIRO include: alcoholic beverages, cigars, cigarettes and other tobacco products, and books, periodicals and magazines where the supplier is not a Goods and Services Tax (GST) registrant.

Point of Entry (POE)

A seaport, airport or land border crossing where people and merchandise can enter or leave Canada.

Place of Supply Rules

The Place of Supply Rules determine whether a supply is made in Canada and whether it is made in or outside of a participating province. The tax rate of a supply is determined by the province or territory in which the supply is made. This is referred to as the place of supply.

Place of Safe-Keeping

A place of safe-keeping means a place designated by the Minister pursuant to Section 37 of the Customs Act for the safe-keeping of the goods.

Place of Report

A place of report is the export reporting office closest to where the goods are loaded onto the conveyance for export and can be inspected before beginning their continuous movement from Canada.

Place of Exit

The place of exit means the location in Canada from which exports leave the country.

PKI

PKI is a public key based cryptography that encrypts (puts into a secret code) all data transmitted to and from the end-user workstation to the EICS system. It is a mechanism whereby the bureau can guarantee that only authorized users are gaining access to the system and that all of the information exchanged is secure.

Person

A "person", according to the Customs Act, means an individual, a partnership, a corporation, a trust, the estate of a deceased individual or a body that is a society, a union, a club, an association, a commission or other organization of any kind.

Penalty Reinvestment Agreement (PRA)

The Penalty Reinvestment Agreement (PRA) is a mechanism by which the amount of a penalty under AMPS can be reduced. A PRA is granted through the ministerial review process, which a client may initiate by making a request for a decision of the Minister under section 129 of the Customs Act. For the purpose of this policy, the completed PRA application form submitted by the client will be considered by the Canada Border Services Agency (CBSA) as a request for a Minister's decision under section 129 of the Customs Act.

Partners in Protection (PIP)

Partners in Protection (PIP) is a program that enlists the cooperation of private industry to enhance border and trade chain security, combat organized crime and terrorism, and help detect and prevent contraband smuggling.

Participating Government Agency (PGA)

A Participating Government Agency (PGA) is an Other Government Department (OGD) whose programs are compatible with the Integrated Import Declaration (IID).

Overage

An overage is any excess in the number of pieces transmitted in the same shipment and found by the carrier post arrival. For example, a carrier reports 100 packages in a conveyance but during the offload of the goods into the bonded warehouse discovers that the conveyance has 110 packages, 10 packages are an overage and must be declared to CBSA. 

Other Government Department (OGD)

Section 101 of the Customs Act gives the Canada Border Services Agency (CBSA) the authority to detain goods on behalf of Other Government Deparments (OGD). An OGD is any other government department or agency within the Canadian government.

Originate

Originate means to qualify under the rules of origin set out in a trade agreement.

Order in Council (OIC)

An order in council is a legal instrument, made by the Governor in Council pursuant to a statutory authority or, less frequently, the royal prerogative, that serves notice of a decision taken by the executive arm of government.

Off-setting

The amount owing for each importer account shown on the Statement of Account (SOA) is a net of the debits and credits associated with that importer’s Business Number. This calculation is known as off-setting. The fundamental principle of off-setting relies on financial management best practice where a disbursement is not issued to a recipient who has outstanding debt. Credits are applied to accounts to reduce the balance owing. In Release 2 of CARM, there will be new offsetting options as follows:

  • Account (BN15) Level Offsetting (default)
  • Intra-Program Offsetting: offsetting across an entire CBSA program even when more than one program account is involved.
  • Inter-Program Offsetting: offsetting across the entire legal entity regardless of the program type. This means that a client’s carrier account might offset with a warehouse account, or any other account within the same legal entity.
Obsolete Goods

Obsolete or surplus goods are goods that are:

(a) found to be obsolete or surplus

(i) in the case of imported goods, by their importer or owner, or

(ii) in any other case, by their manufacturer, producer or owner;

(b) not used in Canada;

(c) destroyed in such manner as the Minister of Public Safety may direct; and

(d) not damaged before their destruction.

Nudge

An alert issued by the CBSA on the portal when there is an issue to be addressed in regards to the financial security status for the account.

Nuclear-Related Dual-use

Goods found on the Nuclear-Related Dual-use List mean the goods may have both a nuclear and non-nuclear use.

Notice of Penalty Assessment (NPA)

Once an officer has decided that a penalty is warranted, a Notice of Penalty Assessment (NPA) is issued. The NPA will include the penalty assessment date, the contravention and penalty details, correction and redress (appeal) information, and payment and interest information.

Normal Value

Normal value is the net price at which the goods in question are sold in the country of export to unrelated purchasers.

Non-Restricted Firearms

Non-restricted firearms are all controlled firearms that are not classified as either restricted or prohibited. Generally, this category includes most hunting rifles and shotguns that have not been modified to the extent that they fall under the restricted or prohibited category.

Non-Exempt Break Bulk Cargo

Non-exempt break bulk cargo is break bulk cargo for which data must be transmitted at least 24 hours prior to the loading of the goods on board the vessel.

Non-Automated CBSA Office

A non-automated office is an office where electronic services and computer terminals are not available for the electronic transmission and exchange of cargo, release and accounting data.

No Declaration Required Number

When exporters are not required to report their exports to the Canada Border Services Agency (CBSA), they must provide the carrier with a No Declaration Required Number (NDR number). Appendix A of D20-1-1 contains the full listing of all 16 “No Declaration Required” numbers and scenarios. 

NEXUS

NEXUS is a joint customs and immigration program for frequent travellers, implemented by both the Canadian and US governments. The NEXUS program is designed to simplify border crossings for pre-approved, low-risk travellers.

New Zealand Trade Agreement (NZT)

Goods originate in New Zealand if not less than 50 per cent of the cost of production of the goods is incurred by the industry of New Zealand or Canada or both and the goods were finished in New Zealand in the form in which they are imported into Canada.

Goods are entitled to the New Zealand Tariff (NZ) only if the goods are shipped directly to Canada, with or without transhipment, from New Zealand.

Net Weight

Net weight is the weight of the goods excluding the packaging or the container.

Net Cost Method

Under the net cost method, one must begin with all the costs of producing the goods, and then subtract any costs that are specifically excluded. Excluded costs are sales promotion and marketing, royalties, shipping and packing costs, after-sales service, and non-allowable interest costs.

National Treatment

National Treatment is the principle that addresses the issue of international discrimination between foreigners and domestic interests once the border has been crossed. It ensures that once goods have entered, they will be treated no less favourably than goods of domestic origin. It does not imply that one must treat incoming goods the same way they are treated in the exporting country.

National Targeting Center (NTC)

The National Targeting Center (NTC) was established as a stand-alone entity in the Office of Field Operations with greater responsibility for US Customs Border Patrol (CBP) passenger and cargo targeting operations at the port of entry. The NTC is a 24/7 operation that makes extensive use of intelligence materials and law enforcement data, allowing analysts and targeting officers to make tactical decisions at all points along the travel continuum.

National Import Service Centre (NISC)

The Canadian Food Inspection Agency (CFIA), in cooperation with the Canada Border Services Agency (CBSA), operates the National Import Service Centre (NISC). For goods that require specific documentation, such as an import permit, a CFIA officer at the National Import Service Centre will review the documentation before advising CBSA if the goods may be released.

National Customs Ruling (NCR)

A National Customs Ruling (NCR) is a written statement by the Canada Border Services Agency (CBSA) to an importer or its agent outlining how provisions of existing CBSA legislation will be applied to an importation of a specific commodity.

Mutatis Mutandis

"Mutatis mutandis" means all things being equal, and that respective differences must be considered.

Multi-Program Verification (MPV)

A Multi-Program Verification (MPV) is:

  • traditionally referred to as Compliance Assessment Review (CAR), and
  • involves the on-site, multiple program verification of a client’s compliance.

MPVs assess an importer’s overall level of compliance of imported goods over an extended period of time.

Most-Favoured-Nation Tariff (MFN)

Countries that are entitled to use the Most Favoured Nation (MFN) Tariff treatment are those that are signatories to the General Agreement on Tariffs and Trade (GATT).

Montreal Protocol on Substances that Deplete the Ozone Layer

The 1987 Montreal Protocol on Substances That Deplete the Ozone Layer is an international treaty designed to protect the ozone layer by phasing out the production of substances responsible for ozone depletion.

Mexico Tariff (MT)

The Mexico Tariff (MT) is a preferential tariff treatment extended to goods originating in Mexico and that satisfy the Canada US Mexico Agreement (CUSMA) origin requirements.

Memorandum of Understanding (MOU)

A memorandum of understanding is a written description of what two or more parties agree to do as part of an administrative arrangement. A memorandum of understanding is not legally binding.

Measures in Force

Measures in Force is a list of the Anti-dumping and Countervailing Measures in force at the beginning of each month. This list is extremely important as it contains all the information necessary to calculate duty under the Special Import Measures Act.

Marking (of Imported Goods)

The marking of certain goods, identified under section 19 of the Customs Tariff, must be marked indicating country of origin. Marking refers to country of origin and should not be confused with labelling that refers to consumer packaging and labelling.

Margin of Dumping

The margin of dumping is the amount by which the normal value exceeds the exporter’s export price for the goods. The anti-dumping duty assessed is equal to the margin of dumping.

Manifest

A manifest acts as the initial record of a shipment's arrival into Canada and enables the Canada Customs Border Services Agency (CBSA) to control the movement of goods being imported and exported.

Mail

Mail is a letter or parcel transported through the services of the Canada Post Corporation.

List of Countries and Applicable Tariff Treatments

The List of Countries and Applicable Tariff Treatments contains an alphabetical list of countries and territories that are beneficiaries of the Most-Favoured-Nation tariff treatment (MFN) as well as any other tariff treatments.

Liquidation

Liquidation occurs when US Customs Border Patrol’s (CBP) assessment of the rate and amount of duty is complete.  The estimated duties are either confirmed as correct, or not.

Licensed Customs Broker (LCB)

A licensed customs broker is an individual, partnership, or corporation, licensed by the Canada Border Services Agency (CBSA) in accordance with the Customs Broker Licensing Regulations, who acts as agent to transact business with the CBSA on behalf of the importer or owner. While in most cases, any authorized agent can transact business with the CBSA, only a licensed customs broker can account for goods and pay duties and taxes subject to section 32 of the Customs Act, as agent for the importer or owner, unless the person does so on a casual basis without compensation, charge or fee.

Letter of Credit

A letter of credit is a guarantee of payment. It is a commitment by a financial institution to pay an agreed amount to a vendor under precise terms and conditions.

Letter of Authorization

Request to change the importer name or business number must be accompanied by a letter of authorization from the importer/broker explaining the reason for the change. When the broker presents the letter, it must indicate that the incorrect importer has been advised of the change.

Lesser of Two Duties

To determine the amount of customs duties subject to claim under the Drawback Program or to determine the amount of customs duties deferrable under the Duties Relief Program, companies must establish two duty amounts:

  • (a) the amount of customs duties paid or owed on imported goods entering Canada;
  • (b) the amount of customs duties paid on the goods entering the other Canada US Mexico Agreement (CUSMA)  country.
  • Note: The duties paid on the goods entering the other CUSMA country must be determined from that country's customs documentation and be converted to Canadian dollars (refer to section, "Satisfactory Evidence"). Examples of the calculations required for drawbacks and duties relief are contained in Appendix A of D7-4-3.
Legislative Reference

Legislative reference refers to the legal authority that allows the correction to be made, for example: 32.2(6) of the Customs Act.

Legislation

Legislation are written laws (Acts) made by Parliament, provincial legislatures, or by a person or body that has law-making authority.

Least Developed Country Tariff (LDCT)

The Least Developed Country Tariff (LDCT) is a tariff treatment accorded to countries identified by the United Nations as requiring special attention due to their economic status.

Lead Sheet

A lead sheet is a form used to indicate the exception for filing a paper entry instead of filing an electronic entry to the Canada Border Services Agency (CBSA).

Law

A “law” can refer to the following:

  • a rule of conduct or procedure established by custom, agreement, or authority;
  • a legal system;
  • a set of rules or principles dealing with a specific area of a legal system; and
  • any written or positive rule or collection of rules prescribed under the authority of the state or nation.
Last In, First Out (LIFO) - Fungible Goods

The  Last In, First Out (LIFO) method means that the origin of fungible materials last received in inventory is considered to be the origin of fungible materials first withdrawn from inventory. In other words, the origin of the goods that are placed last in inventory is the origin for the goods that are removed first from inventory.

Kimberley Process Certification Scheme

The aim of the Kimberley Process Certification Scheme was to stop military groups from using the trade of rough diamonds to finance their military supplies. The Kimberley Process encourages participating countries to exchange diamonds only with other Kimberley Process nations. When diamonds arrive at the border of a Kimberley Process nation, government officials are better able to approve or reject the shipments based on the use of well-sealed containers accompanied by Kimberley Process Certificates (KPC).

Item 5504

Item 5504 covers “strategic goods and technology” and includes certain global navigation satellite systems, propulsion and space-related equipment, payloads, ground control stations, chemiluminescent compounds, radiation-hardened micro-electronic circuits, nuclear weapons test design and equipment, as well as related software and technology. An individual export permit is required on all of these types of goods that fall under this item depending on their destination as stated in the legislation.

Item 5400

Item 5400 states, "All goods that originate in the United States, unless they are included elsewhere in this List, whether in bond or cleared by Canada Border Services Agency, other than goods that have been further processed or manufactured outside the United States so as to result in a substantial change in value, form or use of the goods or in the production of new goods (all destinations other than the United States)." This means the exports of goods and technology that are destined for any country on Canada's Area Control List (Cuba, North Korea, Iran and Syria) require an individual export permit issued by Global Affairs Canada. For the exports of goods and technology, with a final destination other than a country on Canada's Area Control List, General Export Permit 12 can be utilized.

International Federation of Customs Brokers Associations (IFCBA)

The International Federation of Customs Brokers Associations (IFCBA) was established in 1990 as a permanent international forum for customs brokers and an international business network where the industry could discuss common challenges and interests. It also works to bring about improved customs policies and practices world wide.

Internal Revenue Service (IRS)

The Internal Revenue Service (IRS) is the bureau of the Department of the Treasury in the US and is the US government agency responsible for tax collection and tax law enforcement.

Intermediary

An intermediary is a third party that offers services, or a link, between two parties.

Interim Accounting

Interim accounting is a method of accounting for goods that includes the release of goods. Subsection 32(2) of the Customs Act makes it possible to grant the release of goods before the final accounting. Release is granted on condition that certain requirements are met, that a final accounting will be presented and that duties and taxes will be paid. Security must be posted in order to utilize the interim accounting process. Duties and taxes must be paid no later than the last working day of the month of the final accounting.

Interactive Advance Passenger Information (IAPI) Initiative

The Interactive Advance Passenger Information (IAPI) initiative supports the perimeter security initiatives under the Canada-United States declaration entitled Beyond the Border: A Shared Vision for Perimeter Security and Economic Competitiveness (Action Plan). The Action Plan aims to, amongst other things, address threats earlier in the travel continuum, to enhance Canada's security and to facilitate the flow of legitimate goods and people into Canada.

Inter Alia

The term "inter alia" means among other things, and that the classification is not restricted to what is listed.

Integrated Import Declaration (IID)

A service option (IID_SO911) used to transmit data electronically under the Single Window Initiative.  This streamlines the sharing of commercial import data between the Government of Canada and the import community.  Along with the CBSA, there are nine participating government departments and agencies representing 38 government programs.

Input Tax Credit

An Input Tax Credit (ITC) is a credit that Goods and Services Tax/Harmonized Sales Tax (GST/HST) registrants may claim to recover the GST/HST they paid for goods or services they acquired, imported into Canada, or brought into a participating province for use, consumption, or supply in the course of their commercial activities.

Injury

Injury can be reduced prices, lost sales, lost market share, decreased profits, or other such difficulties.

Individual Import Permit (IIP)

An Individual Import Permit (IIP) is required for any item on the Import Control List (ICL). The ICL includes many products such as firearms, weapons, Chemical Weapons Convention items, certain carbon steel products, specialty steel products, textiles and apparel items and a wide range of agricultural products.

Individual Export Permit (IEP)

An Individual Export Permit (IEP) allows the export of goods and technology to specified consignees in a single country.

Indictable Offence

An indictable offence is a serious offence. If one is convicted of an indictable offence, they can be exposed to severe penalties.

In-Transit

In-transit is the movement of goods from a point in the United States to another point in the United States through Canada, as well as the movement of goods from a point in Canada to another point in Canada through the United States in rail and highway modes.

In Bond

In bond means that the carrier reports their arrival at the PIL but the release of goods takes place elsewhere, usually a warehouse.

Importer Self Assessment (ISA)

Importer Self Assessment (ISA) is a voluntary approach to trade compliance in the US. The program provides the opportunity for importers who have made a commitment of resources to assume responsibility for monitoring their own compliance in exchange for benefits.

Importer

An individual or business that imports commercial goods into Canada. The importer is responsible for the payment of all duties and taxes to the CBSA; the accuracy of the information presented to the CBSA; payment of any fines or penalties resulting from missing or inaccurate information; and for providing any necessary import permits and special certificates required.

Imported

Imported goods are goods that have entered Canada but are not authorized to be removed from a customs office, sufferance warehouse, bonded warehouse or duty free shop.

Import Permit

An import permit is a permit issued by Global Affairs Canada (GAC) when goods that are subject to import control do not qualify under the terms of a General Import Permit.

Import Control List (ICL)

The Import Control List is a list of goods whose import has been deemed necessary to control. Goods on this list generally require an import permit in order for them to be imported. However, in some cases, the goods will be allowed entry into Canada without an import permit but at a duty rate that is very high.

House of Commons

The Canadian House of Commons is composed of 308 members. Each member is elected and represents a specific geographical area, known as an electoral district. Most members are affiliated with a political party. Legally, after an election, the Governor General has the duty of choosing, among the elected members, a person to be named Prime Minister, regardless of that person’s political affiliation. The individual chosen is almost always the head of the political party having elected the largest number of its members to the House of Commons. This person, the Prime Minister, then goes on to form the Cabinet.

Homogeneous Goods

Homogeneous goods are goods that closely resemble each other in respect of their component material and characteristics, and are intended for the same purpose.

High Value Shipments (HVS)

High value shipments (HVS) are those valued at $3,300.00 CDN or more.

Heading - HS Classification Number

The heading of a harmonized system (HS) classification number is comprised of the first 4 digits of the HS classification number.

Harmonized System (HS)

The Harmonized System (HS) is an international goods classification system used to classify imported and exported goods.

Harmonized Sales Tax (HST)

The Harmonized Sales Tax (HST) is a combination of the Goods and Services Tax (GST) and provincial sales tax (PST) of participating provinces.

Hand-Carried Goods

Hand-carried goods are goods that will be released after they have been accounted for and all duties with respect to them have been paid under subsection 32(1) of the Customs Act if:

(a) the goods are or will be in the actual possession of a person arriving in Canada, or

(b) the goods form or will form part of a person's baggage and the person and the baggage arrive or will arrive in Canada on board the same conveyance.

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