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The CSCB has received additional information from Transport Canada regarding the pre-clearance process. This information takes the form of CSCB questions, provided by members, and responses from Transport Canada. The CSCB has asked additional questions and these, and Transport Canada’s responses, are in bold.

Please note that the message sent yesterday from the CSCB regarding the pre-clearance process made reference to ... “process allows dealers, purchasing specific vehicles from specific manufacturers, to more easily import vehicles from the United States.”  The process referred to in this sentence is the current pre-clearance process.

CSCB: They [our members] have many questions about the changes, but are also very concerned with the change this has made to their own business practices.

Transport Canada:  There have not been any changes to TC’s Pre-Clearance process. The only recent development is the decision of several US OEM’s to reduce their administrative burdens by reducing their pool of qualified Canadian importers of their products. In some cases they have decided to establish a Canadian arm for their business. Some have selected qualified dealers who are capable of ensuring that all vehicles entering Canada are compliant and continue to be. Many have decided to associate themselves with a few select “Designated Importers” who are essentially their Canadian representative. These DI’s are now responsible for the OEM’s business in Canada and will place orders for products and then sell these products to the retailers who previously were on Appendix G. The whole process is being implemented gradually as OEM’s advise their current retailers that they must now deal with the DI and they are advising TC to remove the retailers from Appendix G. To be replaced with the DI’s.

CSCB: What administrative burden did U.S. OEM’s have?

TC:  For example but not limited to, OEM’s were being asked for the same compliance information sometimes 1,400 times, individual requests from each importer for each new vehicle being introduced to the market. TC would then have to receive/review the same info. The information must be provided by the importer, hence the repetition.

CSCB: Is TC encouraging OEM’s to appoint “designated importers”?

CSCB: No. The OEM’s discussed options of them being responsible for compliance; however this is not supported by the MVSA nor the regulations and therefore was not a suitable approach.

1.  CSCB: Will those who are currently on the pre-clearance list be removed, leaving only the four “designated importers”?

TC:  As noted above, only when the OEM directs us to do so and only once the retailers currently on Appendix G have been advised by the OEM of their decision and plans. Please note not all OEM’s are actively pursuing the same path as noted above.

CSCB: Will TC allow other “designated importers” to be added to the pre-clearance list? YES

TC: If so, is there a limit to how many? NO

CSCB: What are the qualifications to become a “designated importer”? The requirements of an importer equate to the same for a DI.

TC: Is there any reason a customs broker could not become a “designated importer”? See above.

2.  CSCB:  Do these changes apply only to RV or to all vehicles?

TC:  It applies to all vehicle types but the largest change will be in the RV and trailer classes of vehicles where OEM’s had previously relied on their retail partners to be responsible for compliance, which was not working to their nor TC’s satisfaction.

CSCB: Why didn’t TC pursue compliance issues with the non-compliant Canadian importers?

TC: We did to no avail. Hence why the OEM’s decided to go down this path.

3.  CSCB:  Can dealers/importers of other than RVs be added to the pre-clearance list?

TC:  Nothing has changed here. This is always initially determined by the OEM on who they want representing them and subsequently approved by TC upon satisfying the requirements of Appendix G.

CSCB: Please confirm that if an OEM does not have a “designated importer” they can still be shown on the pre-clearance list, if approved by TC.

TC:  OEM’s who decide to either set up a Canadian division, either directly or by a partnership with a company such as a DI, are selecting individuals who can uphold their responsibilities under the MVSA and its regulations. Their previous importers will be removed from Appendix G, upon notice from the OEM.

Some OEM’s may select a different route (Canadian division) or stay as is. It is their call. TC only gets involved if the importer is not capable of meeting the requirements as stated previously.

4.  CSCB:  There is a specific situation where a U.S. non-resident importer purchases new vehicles overseas. These vehicles meet Canadian standards and both the non-resident importer and the Canadian dealer are on the pre-clearance list.  These vehicles do not enter the commerce of the U.S. but land in the U.S. and travel through the U.S. to Canada on a TIB. The non-resident importer is shown on the B3 and the Canadian dealer is shown on the Form 1. How will this practice be affected?

TC:  The pre-clearance list was introduced to facilitate the importation between a qualified importer (i.e. one who has the technical ability to monitor compliance to the applicable standards under the Motor Vehicle Safety Act) and a qualified manufacturer (i.e. one who has the engineering capacity to design and consistently manufacture Canadian compliant vehicles). The situation you describe would not be a pre-clearance candidate since the relationship is between the importer and an entity other than the vehicle manufacturer.

CSCB: You have indicated that this is not a pre-clearance candidate/situation. However, this is a real scenario involving parties that are on the pre-clearance list and take advantage of the pre-clearance process. How will this change for them?

TC:  Each and every importer in TC’s CAFS database are subject to a 5 year maintenance audit and as such at that time if they are not deemed capable of being on Appendix G, they would be given the opportunity to comply and if not capable, would be eventually removed. This is not something new and has been going on since Appendix G was implemented.

5.  CCSB:  We understand that importers who import in excess of 2500 units per year do not have to complete Form 1. Is this correct?

TC:  Only if those importers are on Appendix F. Appendix G importers still need to complete a Form 1 as always.

6.  CSCB:   With respect to Form 1, it appears that Section 16 is completed for vehicles that don’t have to go through the RIV program and that Section 17 is for those that do. Does this mean that those who remain on the pre-clearance option will only ever complete Section 16?

TC:  What determines which section of Form 1 is how the vehicle was purchased (retail) and to what specification (CMVSS or FMVSS) it was built to, not whether it was a pre-clearance vehicle or not.

7.  CSCB:  Does residency of the importer ever determine whether or not Section 16 of Section 17 of the Form 1 is completed?

TC:  The importer must be Canadian. See response to #6.

CSCB: Can you clarify how this response relates to question 6?

TC: The residency is not a determining factor in whether Box 16 or 17 is completed. Was the vehicle purchased at the retail level in the US (FMVSS)? If so, it must flow via the RIV process.

Questions and comments can be sent to the CSCB at cscb@cscb.ca