Lawyer’s Blog
Lawyer’s Blog
Is GPT dead? A reflexion following the ContainerWest Manufacturing decision of the CITT
After reading the recently rendered Canadian International Trade Tribunal (CITT) decision in ContainerWest Manufacturing Ltd. v. President of the CBSA (AP-2014-025), setting aside for a moment the apparent insatiable appetite of Canadian authorities for supplementary duty collection in response to generally falling tariff rates and revenues derived therefrom, it was a true surprise to learn that one of its agencies regularly bends the rules when it’s convenient to do so in the administration of the Canadian tariff.
Quickly, the issue in this case revolved around the incapacity of an importer to provide what is called a through bill of lading for containers it had imported into Canada directly from China and thus entitle them to GPT preferential tariffs. According to the Canada Border Services Agency (CBSA), only a through bill of lading would justify such entitlement “according to the law”. Apparently the underlying reason for this is that it would be too onerous and costly a burden on the agency to administer and police this tariff otherwise. But what about the burden and costly pursuit of duty collection against ContainerWest all the way to the court might you ask? Let’s just say that economy of taxpayers’ money is an argument too often used when it’s convenient for the tax collector.
Getting back to our case summary, ContainerWest was told that without through bills of lading they would lose GPT entitlements and pay supplementary tariffs on past imports that were unequivocally destined for Canada, a fact undisputed by CBSA by the way. But what was really troublesome to learn in this case was that CBSA has a secret administrative policy of waving the through bill of lading requirement for another tariff, the Most Favoured Nation (MFN).
In other words, when the time comes to collect duties from importers who don’t obey the strict letter of the law for GPT tariffs, the Agency sees no moral problem pulling obscure quotations from legal books of statutory interpretation. But when that same law would create an embarrassment in failing to grant MFN treatment to our WTO trading partners, CBSA has no hesitation tossing aside the law in one secret administrative policy swoop. How convenient.
Surely CBSA could have extended the same courtesy to ContainerWest but chose not to. Why? Did we already mention a certain insatiable appetite somewhere else in this text? The CITT noted this apparent injustice and made similar remarks, perhaps with more subtlety. But the fact remains: GPT preferences are subject to a higher standard of law obedience it seems than the MFN tariff, in the Agency’s view.
And so we learn it is ok for CBSA to “bend” the rules but not when it would serve to benefit the importers. The bottom line? Well, those who are counting on their GPT entitlements to save a few dollars should be pulling drawers and look to see if they are hiding supplementary duty collection risks. Count on the Agency to celebrate their recent court win and get some return on investment. But why don’t importers finally get together and voice their common interest in making GPT a friendlier tariff? Some might even say keep it alive. After all, our dear government took a first hit at that preferential tariff earlier this year when it revoked entitlement to 72 previously eligible countries no less. Now chasing after specific transportation documents seems to serve as their latest attempt to kill the GPT. If that’s the case, why not get rid of it altogether?
Tuesday, September 1, 2015