Increasing the Low Value Shipment (LVS) Threshold

Transcription

1 Increasing the Low Value Shipment (LVS) Threshold For Information Border Commercial Consultative Committee (BCCC) Meeting June 6, 2012 Ottawa, ON 1

2 Background On December 7, 2011, Prime Minister Harper and U.S. President Obama announced a Canada-US Action Plan in support of the February 2011 Declaration of a Shared Vision for Perimeter Security and Economic Competitiveness. One of the initiatives under the Canada-US Action Plan is to increase the LVS threshold from $1600 to $2500 in order to enhance our trade relationship with the US and to ensure conformity between the two countries. The threshold level for both countries will be the same. Raising the threshold was necessary to alleviate some of the challenges and to be in line with Canada s commitment to facilitate the free flow of goods by harmonizing procedures with the U.S. 2

3 LVS Threshold Consultation History Consultations and Communications have occurred in various forms with internal/external partners and stakeholders over the past decade. The following are a few examples: 2003: Canadian Courier & Messenger Association (CCMA) (now Canadian Courier & Logistics Association (CCLA)) requested that the threshold be increased from $ $ : CCMA requested that threshold be increased from $ $2000 USD ($2200 CDN) November 2011: Announcement of the upcoming LVS threshold increase during the Perimeter Vision meeting December 7, 2011: Announcement of the Canada US Border Action Plan (Announced and released by the Prime Minister Harper and US President Obama: Department of Finance and Canada Border Services Agency officials working together to amend the Proof of Origin of Imported Goods Regulations to increase value threshold to $2500) February 2, 2012: members from CPC, USCBP and USPS were notified of the LVS threshold increase from $1600 to $2500 via conference call February 10, 2012: Consultation with CBSA Legal Services Unit February 28, 2012: Beyond the Border Bi-National Town Hall Niagara Falls, New York February 29, 2012: Beyond the Border Bi-National Town Hall Toronto, Ontario 3

4 Regulatory Change Objectives Increased savings for importers -Decrease the number of transactional release requests / accounting documents to be presented to the CBSA. Simplified release process -In excess of 1 million additional shipments could be cleared and processed in a consolidated, simplified and expedited manner through the CBSA Courier LVS Program. Decreased penalties imposed on importers - LVS shipments must be accounted for by the 24 th day of the month following release of the goods, instead of within five business days for non-lvs commercial shipments. As additional importers will benefit from this delayed accounting fewer late accounting, penalties should be imposed. Potential savings for the CBSA -While there will be a decrease in the number of transactional release requests to be processed, an increase to the Courier LVS Program volume is expected. -More commercial shipments will be processed through the postal stream without custom broker intervention, thereby greatly expediting the release process for these shipments. Enhanced trade relationship -An increased threshold would align Canada with the US level. -Encourage Small to Medium Enterprise (SME) to import goods from outside of Canada. 4

5 What this means The majority of goods affected by the increase to the LVS threshold are expected to be imported through the Courier LVS Program. Transactional release requests will no longer need to be presented to the CBSA in order to obtain release of the goods for goods valued at less than $2500. Final accounting will be done in a consolidated fashion through the Courier LVS Program F -type B3 entries for goods valued at less than $2500 Facilitates the processing of commercial shipments valued at less than $2500 in the Postal stream. 5

6 Stakeholders Increasing the LVS threshold will affect the following stakeholders: Couriers participating in the Courier LVS Program; Customs brokers that are responsible for accounting LVS goods; Commercial importers whose goods are imported through the CBSA regular commercial import process; Commercial importers whose goods are processed in the Postal stream. 6

7 Implementation and Next Steps In order to provide stakeholders with time to prepare, a CBSA Communiqué regarding the impending increase to the LVS will be released shortly. However, its implementation date cannot be confirmed until a joint Canada/US announcement is made. A Customs Notice (CN) is tentatively expected to be issued in the interim of the Regulatory amendment although not yet firm, July 1, 2012 is the projected release date for the CN. However, it is possible that the CN will only be issued on, or closer to the date of the official announcement. The increase to the LVS threshold will require the CBSA, as well as affected stakeholders, to update their systems. Stakeholders are expected to begin experiencing the benefits of the increase in the LVS threshold as soon as the initiative is implemented and system changes have been made. Within two years of implementation, the applicable Regulations and corresponding D-memos will be amended. 7

8 Comments and Concerns While the outcome of the increase is anticipated to be positive and have a relieving effect, the implementation may require a period of adjustment for all parties. In light of system change requirements and the short timeline for the implementation, ongoing corroboration on the part of both the CBSA and stakeholders will be needed to ensure compliance of the new regulation during this adjustment period. Your comments and / or concerns are welcomed. 8