Single Window Initiative (SWI) Integrated Import Declaration (IID)

The Canadian Food Inspection Agency recently issued the following reminder to all importers:

“UPDATED LINK

As many commercial importers and customs brokers are aware, the Canadian Food Inspection Agency (CFIA) has been encouraging its clients to submit their release requests through the Single Window Initiative (SWI) Integrated Import Declaration (IID) when declaring CFIA regulated imports to the Canada Border Services Agency (CBSA).

Soon, the SW IID will be the only electronic declaration option for commercial importers and customs brokers who declare CFIA regulated imports. It will replace the EDI Other Government Department (OGD) Pre-Arrival Review System (PARS) and the OGD Release on Minimum Documentation (RMD) legacy systems.

While many CFIA clients are already using the SW IID, we strongly encourage that all CFIA regulated commercial importers and customs brokers make the switch to the updated import declaration system as soon as possible.

To learn more about the SW IID and its benefits, read our notice to industry.”

This reminder is connected to an article published in DRC’s blog in March 2019 titled: “Canadian Confirmation of Sale (COS) for CFIA”

Dumping

The term dumping has been thrown around the various trade media as of late, but what exactly is dumping?  In terms of international trade, the Merriam-Webster dictionary defines dumping as “the selling of goods in quantity at below market price.” In this blog post we will breakdown the general concept of dumping a little further, but without going into the specifics of the various forms of dumping, such as price to price dumping and price cost dumping.

Dumping involves two aspects.  The first, the exporter, or a group of exporters working together, is selling a product, to an importer at a price that is lower that what the exporter would sell in their domestic market or would cost the exporter to produce the product.  The second aspect of dumping is the quantity of goods that is sold.  Dumping involves the repeated selling of large quantity of goods.  These two aspects in conjunction would eventually grant the exporter(s) the ability to control a percentage or a segment of the foreign market.  Dumping is a form of price discrimination.  Price discrimination occurs in many forms, but they all involve selling the same product at different prices to different groups of consumers.  Regarding international trade dumping, customers of the importing country are being favoured by being able to purchase a commodity at a lower than market price. This reduced price ensures that the importer continues to purchase from that exporter to continue customer patronage and maintain a competitive selling advantage.

This sounds great for the bottom-line customers, however, there are two main drawbacks regarding dumping.  Dumping leaves little room for other international exporters and domestic businesses the ability to compete against that exporter.  Then, once the exporter has a good grasp on that foreign market and other businesses are no longer able to successfully compete or seen as a threat, the exporter can now control the supply, quality and price in the future of that commodity, thus having a monopoly on the market.

With so much attention and unfavorable press, one would think that the practice of dumping would be prohibited.   The World Trade Organization (WTO), the only organization that has the authority to deal with rules of trade between countries does not prohibit dumping, nor does it act against exporters accused of dumping.  The WTO does however monitor and regulate what measures a country can and cannot take when they believe that an exporter is dumping product in their country.  Unless a country can prove that exporter is dumping product and causing harm to domestic industries there is often no recourse against dumping.

As a result of these factors, most countries are not a fan of dumping, and aim to prevent it as opposed to combatting it. Usually, when a country enters a free trade agreement with other countries, there is a stipulation surrounding dumping and the imposing of tariffs and quotas to exporters to be proactive against dumping.  Taking this proactive approach has been more successful to combat dumping, as for a country to prove that dumping is occurring is a costly and time-consuming activity.

So why would an exporting country risk industry backlash and financial recourse if dumping is proven?  In the short term, dumping can benefit the exporting country with job creation and sustainability of employment.  As the exporter continues to increase their market share in the importing country, individuals will be able to maintain their employment, as well new jobs being created as the exporter foreign market share increases.  On the flip side, in the importing country, dumping has the ability to promote innovation in domestic industries as well as other international competitors, in their quest to remain current and competitive.  Domestic companies are going to need to get creative and find additional ways to keep or recoup their share of their domestic market and grow internationally.

In conclusion dumping is a complex issue with many factors, and numerous arguments can be made to be in favour of or to oppose dumping depending on your position or role.  There are valid points that an exporter can make, as well as importers, government and even the consumer.

DRC Trading Standards: Section 10 – Dealer Duties

For the fresh fruit and vegetable industry, Section 10 (Dealer Duties) of the DRC Trading Standards is considered the default practice for making a timely and proper claim. It is important to recognize that these are the guidelines which must be followed when the shippers/sellers and receivers/buyers have not established their own specifications for such actions.  Numbers 1 – 3 of Section 10 outline the procedures a receiver must follow when a load is received in deteriorated condition while 4 -7 state a shipper’s responsibilities prior to and while loading the shipment.

Numbers 1 – 3

A receiver who wants to reject a load received in deteriorated condition must request a government inspection (unless there is an agreement for a private survey) within 8 working hours, exclusive of Sundays and holidays. Within 3 hours of receipt of the inspection report, the receiver must share the results of the inspection report and advise the shipper/seller that they reject the product.

If the intention is to keep the product, the inspection results must be shared within 24 hours and every reasonable effort to market that product as soon as is practicable under the circumstances must be undertaken.

Once a receiver has secured evidence of a breach of contract or that the load failed to meet DRC Good Arrival Guidelines, the receiver has the right to claim damages. Unless the shipper/seller and the receiver/buyer renegotiate a new way to handle the product (such as consignment or repacking), a receiver who is in possession of a damaged load is only entitled to claim damages. This section also requires the receiver to secure a dump certificate if more than 5% of the load is going to be dumped. This differs from Section 9 which requires an inspection showing that the product has no commercial value when dumping more than 5% of the load. What these two sections indicate is that both of these documents (ie: dump certificate and inspection demonstrating no commercial value) are needed to back up a receiver’s claim.

Numbers 4 – 7

The shipper must load the product in such a way that it will meet contract terms or DRC Good Arrival Guidelines under normal transit time and temperature at the named destination. Some of these procedures include properly securing the load, ensuring appropriate air circulation and temperature compatibility when there are multiple commodities within a single shipment. DRC Transportation Standards cover in detail the responsibilities of the shipper and the carrier at point of loading.

Born of NAFTA to a growing global presence

Between 1995 and 1999, NAFTA provided the table to discuss a unified set of rules and regulations as well as a private dispute resolution mechanism for the fresh fruits and vegetables sector. In 2000 the DRC was born from a vision shared by produce industry leaders and government in Canada, the United States and Mexico that included:

  • a unified system for fruit and vegetable trade that would avoid trade irritants and facilitate effective trade dispute resolution,
  • a strengthened North American trading block for fresh fruits and vegetables, and
  • each country having a dispute resolution system, a licensing and inspection regime and backed by an insolvency tool.

While a dispute resolution system existed in the US under the PACA, the pre-NAFTA regulatory system that prevailed in Canada, through the Canada Agricultural Products Act (CAP Act), proved to be ineffective in resolving most disputes and included no provision to address payment in situations of insolvency. Mexico did not have licencing requirements and government quality destination inspections like the ones existing in the US and Canada.

When DRC opened for business, members were located primarily in NAFTA countries until a membership option was opened for those trading partners dealing with NAFTA countries. Fast forward nearly twenty years and today members are found in 17 countries with South America and Europe mainly representing those countries. For Canadians a DRC membership is more than good business, it is the law. For those outside of Canada, DRC membership offers enhanced financial protection, education and a proven alternative dispute resolution mechanism that works. As DRC looks to the future, efforts to grow membership beyond continental North America will continue to expand by participating in trade shows and other initiatives outside of North America.

NAFTA provided the foundation for DRC and now we have a global presence where NAFTA no longer limits DRC’s outreach. Members represent the entire supply chain, with buyers accounting for 58%, suppliers 32% and all other segments representing the remaining 10%.

 

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