Canada’s import ban formerly Bill S-121 has been broadened to include a prohibition on the importation of goods produced in whole or in part by forced or compulsory labour, including child labour. This prohibition took effect through amendments to the Customs tariff that all imported goods must be classified according to schedule, based on the World Customs Organization Harmonized Commodity Description and Coding System. In Canada, this is included in Chapter 98 in the Prohibition Provisions under tariff item 9897.00.00.
Typically, importers are responsible for determining whether the goods they intend to import are prohibited. However, the import ban follows the goods, which means distributors, re-sellers, and other intermediaries in Canada—as well as end users—carry some risk.
Canada Border Services Agency (CBSA) Enforcement
CBSA has wide-ranging powers under the Customs Act to enforce the import ban. Liability and risk related to the import ban extends to any owner of imported goods. In practice, this may mean that the most significant risk ultimately rests with end users of imported goods, particularly in cases where the importer is a non-resident of Canada or simply an intermediary or trading company.
How to Determine your Risk
If your company imports the goods or is a stakeholder, you are at some level of risk. The potential legal exposure will depend on the kinds of goods you import or use, and from where those goods are sourced. Importers should carefully review their supply chain and import partners to identify where and how goods are produced, and the entities involved in producing those goods.
Contractual Responsibility
Importers should determine in advance who will be contractually responsible for commercial losses in the event imported goods are detained, delayed, or even seized by the CBSA. Importers should also consider ways to mitigate risk by reviewing their supplier and import partner relationships. In the event of a CBSA audit, businesses will need access to information that may be held by others in their supply chain.
Many companies may still need to do more work to meet the regulatory reporting requirements regarding their supply chains, effective on May 31, 2024. All importers must make sure their goods are not produced wholly or in part with forced labor and are prohibited from importation.
For further guidance refer to Memorandum D9-1-6. Looking for more information about preparation or in need of a logistics partner for your supply chain? Reach out to Mohawk Global.
By Clarissa Chiclana