1997, c. 36

Customs Tariff

31. Subsection 2(1) of the Customs Tariff is amended by adding the following in alphabetical order:

``Canada-Cost a Rica Free Trade Agreement''
« Accord de libre-échange Canada-Costa Rica »

``Canada-Costa Rica Free Trade Agreement'' has the same meaning as ``Agreement'' in subsection 2(1) of the Canada-Costa Rica Free Trade Agreement Implementation Act;

``Costa Rica''
« Costa Rica »

``Costa Rica'' means the territory and air space, and the maritime areas, including the seabed and subsoil adjacent to the outer limit of the territorial sea, over which it exercises, in accordance with international law and its domestic law, sovereign rights with respect to the natural resources of such areas;

32. Section 5 of the Act is replaced by the following:

Goods imported from a NAFTA country, Chile or Costa Rica

5. For the purposes of this Act, goods are imported from a NAFTA country, from Chile or from Costa Rica if they are shipped directly to Canada from the NAFTA country, from Chile or from Costa Rica, as the case may be.

33. Paragraph 14(2)(c) of the Act is replaced by the following:

    (c) by way of compensation for any action taken under subsection 55(1), section 60 or subsection 63(1), 69(2), 70(2), 71(2), 71.1(2), 72(1), 75(1), 76(1) or 76.1(1) or under subsection 5(3), (3.2) or (4.1) of the Export and Import Permits Act.

34. (1) Paragraph 16(2)(a) of the Act is replaced by the following:

    (a) respecting the origin of goods, including regulations

      (i) deeming goods, the whole or a portion of which is produced outside a country, to originate in that country for the purposes of this Act or any other Act of Parliament, subject to such conditions as are specified in the regulations,

      (ii) deeming goods, the whole or a portion of which is produced within a geographic area of a country, not to originate in that country for the purposes of this Act or any other Act of Parliament and not to be entitled to the preferential tariff treatment otherwise applicable under this Act, subject to such conditions as are specified in the regulations, and

      (iii) for determining when goods originate in a country for the purposes of this Act or any other Act of Parliament; and

(2) Section 16 of the Act is amended by adding the following after subsection (2):

Definition of ``geographic area''

(2.1) In subsections (2) and 49.1(4), ``geographic area'' means any area specified by the Minister of National Revenue after consultation with the Minister for International Trade.

(3) Subsection 16(4) of the Act is amended by striking out the word ``and'' at the end of paragraph (a), by adding the word ``and'' at the end of paragraph (b) and by adding the following after paragraph (b):

    (c) Chapters III and IV of the Canada-Costa Rica Free Trade Agreement and any other matters agreed on from time to time by the parties to that Agreement for the purposes of that Agreement.

35. Paragraph 24(1)(b) of the Act is replaced by the following:

    (b) the goods are entitled to that tariff treatment in accordance with regulations made under section 16 or an order made under paragraph 31(1)(a), 34(1)(a), 38(1)(a) or 42(1)(a), subsection 45(13) or 49(2) or section 48.

36. Section 27 of the Act is replaced by the following:

Abbreviations

27. For the purposes of the List of Tariff Provisions and the ``F'' Staging List, the abbreviations ``UST'', ``MT'', ``MUST'', ``CT'', ``CRT'', ``CIAT'', ``GPT'', ``LDCT'', ``CCCT'', ``AUT'' and ``NZT'' refer, respectively, to ``United States Tariff'', ``Mexico Tariff'', ``Mexico-United States Tariff'', ``Chile Tariff'', ``Costa Rica Tariff'', ``Canada-Israel Agreement Tariff'', ``General Preferential Tariff'', ``Least Developed Country Tariff'', ``Commonwealth Caribbean Countries Tariff'', ``Australia Tariff'' and ``New Zealand Tariff''.

37. The Act is amended by adding the following after section 49:

Costa Rica Tariff

Application of CRT

49.1 (1) Subject to section 24, goods that originate in Costa Rica are entitled to the Costa Rica Tariff rates of customs duty.

``A'' final rate

(2) If ``A'' is set out in the column entitled ``Preferential Tariff'' in the List of Tariff Provisions following the abbreviation ``CRT'' in relation to goods entitled to the Costa Rica Tariff, the Costa Rica Tariff rate of customs duty that applies to those goods is the final rate of ``Free''.

``F'' staging for CRT

(3) If ``F'' is set out in the column entitled ``Preferential Tariff'' in the List of Tariff Provisions following the abbreviation ``CRT'' in relation to goods entitled to the Costa Rica Tariff, the Costa Rica Tariff rate of customs duty that applies to those goods is the initial rate, reduced as provided in the ``F'' Staging List.

``M'' Staging for CRT

(4) If ``M'' is set out in the column entitled ``Preferential Tariff'' in the List of Tariff Provisions following the abbreviation ``CRT'' in relation to goods entitled to the Costa Rica Tariff, the Costa Rica Tariff rate of customs duty that applies to those goods is the initial rate, reduced to a final rate of ``Free'' when the Minister is satisfied that Costa Rica has eliminated all business income tax exemptions and other export subsidies in respect of goods produced wholly or partially within a geographic area, as defined in subsection 16(2.1).

Staging for CRT

(5) If ``N'', ``O'' or ``P'' is set out in the column entitled ``Preferential Tariff'' in the List of Tariff Provisions following the abbreviation ``CRT'' in relation to goods entitled to the Costa Rica Tariff, the Costa Rica Tariff rate of customs duty that applies to those goods is the initial rate, reduced

    (a) if ``N'' is set out,

      (i) effective on the coming into force of this subsection, to four fifths of the initial rate,

      (ii) effective on January 1, 2003, to three fifths of the initial rate,

      (iii) effective on January 1, 2004, to two fifths of the initial rate,

      (iv) effective on January 1, 2005, to one fifth of the initial rate, and

      (v) effective on January 1, 2006, to the final rate of ``Free'';

    (b) if ``O'' is set out,

      (i) effective on the coming into force of this subsection, to seven eighths of the initial rate,

      (ii) effective on January 1, 2003, to six eighths of the initial rate,

      (iii) effective on January 1, 2004, to five eighths of the initial rate,

      (iv) effective on January 1, 2005, to four eighths of the initial rate,

      (v) effective on January 1, 2006, to three eighths of the initial rate,

      (vi) effective on January 1, 2007, to two eighths of the initial rate,

      (vii) effective on January 1, 2008, to one eighth of the initial rate, and

      (viii) effective on January 1, 2009, to the final rate of ``Free''; and

    (c) if ``P'' is set out,

      (i) effective on January 1, 2003, to eight ninths of the initial rate,

      (ii) effective on January 1, 2004, to seven ninths of the initial rate,

      (iii) effective on January 1, 2005, to six ninths of the initial rate,

      (iv) effective on January 1, 2006, to five ninths of the initial rate,

      (v) effective on January 1, 2007, to four ninths of the initial rate,

      (vi) effective on January 1, 2008, to three ninths of the initial rate,

      (vii) effective on January 1, 2009, to two ninths of the initial rate,

      (viii) effective on January 1, 2010, to one ninth of the initial rate, and

      (ix) effective on January 1, 2011, to the final rate of ``Free''.

Rounding of specific rates

(6) If a reduction under subsection (3) or (5) results in a specific rate of customs duty that includes a fraction of one tenth of a cent, the rate shall be rounded down to the nearest one tenth of a cent.

Rounding of amounts

(7) If a reduction under subsection (3) or (5) results in a rate of customs duty that includes a fraction of one per cent other than 0.5, the resulting percentage shall be rounded down to the nearest percentage that divides evenly by 0.5.

Elimination of rates of less than two per cent

(8) If a reduction under subsection (3) or (5) results in a rate of customs duty that is a percentage of less than two per cent, the rate shall be further reduced to ``Free'' immediately.

Extension of Costa Rica Tariff

49.2 Notwithstanding any other provision of this Act and for the purpose of giving effect to Appendix III.1.6.1 of Annex III.1 of the Canada-Costa Rica Free Trade Agreement, the Minister may, by order, amend the schedule to extend entitlement to the Costa Rica Tariff to any imported goods under such conditions as are specified in the order.

Limits on reduction of duty

49.3 (1) The Governor in Council may, on the recommendation of the Minister, by order, specify limits on the aggregate quantity of goods of tariff item Nos.

1701.91.00, 1701.99.00, 1702.90.11, 1702.90.12, 1702.90.13, 1702.90.14, 1702.90.15, 1702.90.16, 1702.90.17, 1702.90.18 and 1702.90.30 that are entitled to the Costa Rica Tariff, and the limits apply during the periods and subject to the conditions that may be specified in the order.

Ceases to have effect

(2) This section ceases to have effect on December 31, 2010.

Reduction of rate: ``M'' Staging

49.4 The Governor in Council may, on the recommendation of the Minister, by order, amend the List of Tariff Provisions and the ``F'' Staging List to reduce, subject to the conditions specified in the order, the initial rate for goods of a tariff item entitled to the Costa Rica Tariff in respect of which ``M'' is set out in the column entitled ``Preferential Tariff'' in the List of Tariff Provisions following the abbreviation ``CRT'' in that tariff item.

38. The Act is amended by adding the following after section 71:

Bilateral Emergency Measures - Costa Rica

Non-applicati on

71.1 (1) This section does not apply in respect of textile and apparel goods set out in Appendix III.1.1.1 of Annex III.1 of the Canada-Costa Rica Free Trade Agreement.

Order by Governor in Council

(2) Subject to subsections (3) and (4), if at any time it appears to the satisfaction of the Governor in Council, as a result of an inquiry made by the Canadian International Trade Tribunal under subsection 19.013(2) of the Canadian International Trade Tribunal Act or further to a complaint filed under subsection 23(1.07) of that Act, that goods that are entitled to the Costa Rica Tariff are, as a result of that entitlement, being imported in such increased quantities and under such conditions as to alone constitute a principal cause of serious injury, or a threat of serious injury, to domestic producers of like or directly competitive goods, the Governor in Council may, on the recommendation of the Minister, by order

    (a) suspend, during the period that the order is in effect, any reduction of the rate of customs duty with respect to those goods that would otherwise be made after that time by virtue of section 49.1;

    (b) in respect of goods on which a customs duty is imposed on a seasonal basis, make those goods subject to a temporary duty, in addition to any other duty specified in this Act or in any other Act of Parliament relating to customs, at a rate set out in the order, but that rate, when added to the rate of customs duty set out in the List of Tariff Provisions that is in effect in respect of those goods at that time, may not exceed the Most-Favoured-Nation Tariff rate of customs duty that was in effect in respect of those goods immediately before the coming into force of this subsection; and

    (c) in respect of goods other than goods referred to in paragraph (b), make those goods subject to a temporary duty, in addition to any other duty specified in this Act or in any other Act of Parliament relating to customs, at a rate set out in the order, but that rate, when added to the rate of customs duty specified in the Costa Rica Tariff that is in effect in respect of those goods at that time, may not exceed the lesser of

      (i) the Most-Favoured-Nation Tariff rate of customs duty that was in effect in respect of those goods immediately before the coming into force of this subsection, and

      (ii) the Most-Favoured-Nation Tariff rate of customs duty that is in effect in respect of those goods at the time the order is made.

Terms and conditions

(3) An order under subsection (2)

    (a) may not be made more than twice during the period beginning on the coming into force of this subsection and ending on the date that is seven years after the coming into force of this subsection in respect of goods of a particular kind and, if made during that period, remains in effect for the period, not exceeding three years, specified in the order; and

    (b) may be made after the date that is seven years after the coming into force of this subsection only if it is based on an agreement between the Government of Canada and the Government of the Republic of Costa Rica relating to the application of subsection (2).

Application of measures a second time

(4) A measure referred to in an order made under subsection (2) may be applied a second time if

    (a) the period of time that has elapsed since the initial application of the measure ended is equal to at least one half the initial period of application;

    (b) the rate of duty for the first year of the second action is not greater than the rate that would be in effect in accordance with the Schedule of Canada referred to in Annex III.3.1 of the Canada-Costa Rica Free Trade Agreement, entitled ``Tariff Elimination'', at the time the first action was imposed; and

    (c) the rate of duty applicable to any subsequent year is reduced in equal steps such that the duty rate in the final year of the action is equivalent to the rate provided for in the Schedule of Canada referred to in Annex III.3.1 of the Canada-Costa Rica Free Trade Agreement, entitled ``Tariff Elimination'', for that year.

Rate of duty when order ceases to have effect

(5) If an order made under subsection (2) ceases to have effect in a particular calendar year,

    (a) the rate of customs duty applicable to the goods after the order ceases to have effect and until December 31 of that year is the rate that would otherwise have been applicable one year after the making of the order, as reduced in accordance with section 49.1; and

    (b) the rate of customs duty applicable to the goods beginning on January 1 of the following year is the rate specified by the Minister under subsection (6).

Specification of applicable rate

(6) For the purposes of subsection (5), the Minister shall, by order, specify that the rate referred to in paragraph (5)(b) is

    (a) the rate of customs duty that would have been applicable on January 1 of the year following the year in which the order ceases to have effect, if the rate of customs duty had been reduced in accordance with section 49.1, reduced for subsequent years in accordance with that section; or

    (b) the rate of customs duty that would have been applicable one year after the making of the order, reduced in equal annual stages beginning on January 1 of the year following the year in which the order ceases to have effect and ending on the day on which the rate of customs duty for the goods would otherwise be reduced to the final rate in accordance with section 49.1.

Definition of ``principal cause''

(7) In this section, ``principal cause'' means, in respect of a serious injury or threat of serious injury, an important cause that is not less important than any other cause of the serious injury or threat.

Reference to customs duty in effect

(8) For the purposes of paragraph (2)(b), the Most-Favoured-Nation Tariff rate of customs duty in effect in respect of a fresh fruit or vegetable is

    (a) in respect of a fresh vegetable, the rate of customs duty applicable to that vegetable set out in the applicable tariff item referred to in Supplementary Note 2(b) in Chapter 7 of the List of Tariff Provisions; and

    (b) in respect of a fresh fruit, the rate of customs duty applicable to that fruit set out in the applicable tariff item referred to in Supplementary Note 4(b) in Chapter 8 of the List of Tariff Provisions.