When you travel, it doesn't matter which English speaking country you are in. You could be in Canada, Britain, Scotland, South Africa, Australia or New Zealand. Everybody might be referring to the same thing but everyone uses a different word or phrase. Terminology, language, dialect, regional slang, pronunciation — many factors enter into the equation and influence the way we describe people, places and things.

The same concept often applies when a Customs broker is trying to process a Customs clearance on behalf of their client. Through trade names, item numbers or industry jargon, the product description on the commercial or Canada Customs Invoice (CCI) makes sense to the shipper and consignee, but is either too vague or lacks sufficient information for the Customs Broker. The main reason your Customs Broker needs to contact you or the shipper is for further details about the product description.

Why Is Correct Product Descriptions Important?

The main reason your Customs Broker needs this information is to identify the correct tariff classification for each item. For a quick read on the importance of the tariff classification, refer to our previous post. In addition, every product line on the CCI or commercial invoice needs to be classified, entered and transmitted to Customs. Generally, all shipments containing less than 100 product lines must be transmitted electronically in order to request a Customs clearance from Canada Customs. Yes, you read correctly...the information must be transmitted and accepted by Customs before the shipment can physically enter Canada. As you can well imagine, the window in which to perform this function could be very small if a truck driver is quickly approaching the Canadian border.

Ultimately, the Importer of Record (IOR), generally the Canadian purchaser, is responsible for all trade data submitted to a Customs agency on their behalf and is also liable for any errors or omissions. This could lead to fines, penalties and interest fees under the Administrative Monetary Penalty System (AMPS) if the goods are incorrectly identified or classified due to an unclear or vague product description.

Here's a hot-off-the-press real life example. This morning I had a client call me as her shipment was held up with a courier. The problem was that the product description was listed as "wine" on the Bill of Lading (BOL). Turns out the goods are actually "wine stoppers" which, incidentally, carry a much lower duty rate than alcohol.

What Information Do You Provide To Your Customs Broker?

In order to cover all the possibilities I would have to give you a 100 page booklet as every chapter of the Customs tariff requests specific information. To keep it to the basics, the key areas are:

  • A clear literal description of the item (i.e. wooden chair with upholstered seat)
  • The chief materials from which the item is made (i.e. wood, plastic, steel, rubber, etc. If you import garments, you'll need the fabric content)
  • The end use (if known) (i.e. used in the manufacture of __________)

Learn From The Experts

The PCB Learning Center has in-class seminars and on-demand videos that can help you become a better importer. You can learn how to classify your product and be compliant with Customs with many different courses offered by PCB.

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About Author
Annette Rowan
B.Com, LL.B, CCS, CTCS

Annette Rowan is the Trade Advisory Consultant with Pacific Customs Brokers Ltd, with over 10 years in the international customs trade industry. Combined with a Bachelor of Commerce degree (International Finance) from the University of Alberta, and a Bachelor of Laws degree (International Trade) from the University of Victoria, Annette works on behalf of importers to research and interpret complicated customs laws, rules, and regulations. She also currently holds a Certified Trade Compliance Specialist designation through the Canadian Society of Customs Brokers. When Annette is not working or researching, she enjoys spending time with her husband, 2 kids, and Brutus - the dog. She also manages a small forest of jungle cacti and is a gardening enthusiast.

While we strive for accuracy in all our communications, as the Importer of Record it is incumbent upon your company to ensure that you are aware of the requirements under the new regulations so that you maintain compliance as always.