Overview

The Canada-Colombia Free Trade Agreement (the “CCOFTA”) was signed by Canada and the Republic of Colombia on November 21, 2008. However, as implementing legislation was required to give effect to the CCOFTA, the Government of Canada enacted Bill C-2, the Canada-Colombia Free Trade Agreement Implementation Act (the “Act”). It received Royal Assent on June 29, 2010, and came into force on August 15, 2011.

The Act also implements two related agreements: (a) an Act on the Environment Between Canada and the Republic of Colombia and (b) the Agreement on Labour Cooperation between Canada and the Republic of Colombia. The former seeks to ensure that each party enforces its environmental laws. The latter seeks to ensure that each party implements and enforces basic labour rights.

In order to properly implement the CCOFTA, the Act amends several Canadian statutes, including the Canadian International Trade Tribunal Act, the Customs Act, the Customs Tariff, and the Export and Import Permits Act. Each of these amendments is briefly described below.

Canadian International Trade Tribunal Act

Sections 16-22 of the Act amend the Canadian International Trade Tribunal Act in order to authorize the Canadian International Trade Tribunal (“CITT”) to conduct an inquiry regarding whether goods that are entitled to the benefit of the preferential tariff are, as a result of that entitlement, being imported in such increased quantities and under such conditions that they alone constitute a principal cause of serious injury or threat to domestic producers of like or directly competitive goods. Based on its findings, the CITT may recommend safeguard measures (i.e. emergency measures); the amendments extend this procedure to goods that are entitled to the benefit of the new preferential tariff treatment for Colombia (the “Colombia Tariff”).

The Customs Act

Sections 25-29 of the Act amend the Customs Act to include references to Colombia and the new Colombia Tariff Treatment. For example, it amends the Customs Act to permit: (a) the denial of the Colombia Tariff in the case of false representations, (b) advance rulings on on issues that will affect the calculation of tariffs (i.e. tariff classification, applicable rate of duties, etc.), and (c) refunds for tariffs paid on Colombian goods that were entitled to benefit from the Colombia Tariff but no such treatment was requested at the time they were declared.

The Customs Tariff

Sections 30-42 of the Act amend the Customs Tariff to reflect the new Colombia Tariff. In particular, Section 35 of the Act adds Section 49.01 to the Customs Tariff, which describes the Colombia Tariff.

Under the Colombia Tariff, almost all customs duties (except for a few agricultural goods) will eventually be eliminated. Some duties were eliminated immediately once the Act came into force. Other duties are to be eliminated over time in accordance with agreed upon phase-out schedules. Some will be phased out within two years, some will be phased out within six years, and some will be phased out within sixteen years.

The Customs Tariff has also been amended to permit a temporary extension of tariffs and/or safeguard (emergency) measures.

Export and Import Permits Act

Sections 44-46 of the Act amend the Export and Import Permits Act to allow Colombian goods to be excluded from any order that adds such goods to the Import Control List. According to Subsection 5(3), where at any time it appears to the satisfaction of the Governor in Council, on a report of the Minister made pursuant to an inquiry made by the CITT, that goods of any kind are being imported or are likely to be imported into Canada at such prices, in such quantities and under such conditions as to cause or threaten serious injury to domestic producers of like or directly competitive goods, the foreign goods may be included on the Import Control List, for the purpose of limiting the importation of such goods to the extent and for the period that in the opinion of the Governor in Council is necessary to prevent or remedy the injury. The authorization to extend such as order appears in Subsection 5(3.2).

The Act amends Subsection 5(3.4) to permit an order made under Subsection 5(3) or 5(3.2) to exclude goods imported from Colombia if it appears to the satisfaction of the Governor in Council, based on a report from the CITT, that the quantity of those goods being imported is not the principal cause of serious injury or threat of serious injury to domestic producers of like or directly competitive goods.

Earlier this month, the Codex Alimentarius Commission (“Codex”) adopted guidelines allowing the labeling of genetically modified (“GM”) food products at its annual Codex summit in Geneva, Switzerland. However, this recent development may not result in sweeping changes for Canadians. While it may indirectly affect Canadian food producers who export GM food products to other countries, the labeling of such food products in Canada is unlikely to occur in the foreseeable future.

The Codex was created in 1963 by the World Health Organization (“WHO”) and the Food and Agriculture Organization (“FAO”) to develop food standards, guidelines and related texts such as codes of practice under the Joint FAO/WHO Food Standards Program. The main purposes of this program are protecting the health of consumers and ensuring fair trade practices in the food trade, and promoting coordination of all food standards work undertaken by international governmental and non-governmental organizations. Therefore, the Codex has a sometimes contradictory mandate to protect the health of consumers while also facilitating international trade.

In 1993, the Codex Committee on Food Labeling (“CCFL”) began work on developing labeling guidelines for GM food products. However, several countries strongly opposed these guidelines. The United States was one of the strongest opponents of labeling for GM food products and was supported by several other countries, including Canada.

After eighteen years of disagreement, the CCFL finally adopted labeling guidelines for GM food products at its 39th session held in Quebec City, from May 9-13, 2011. The United States, Canada, Mexico, Argentina, Costa Rica and Australia blocked proposals for mandatory GM labeling but ultimately agreed to a much weaker version, which permitted the voluntary adoption of GM food product labeling. As stated above, these GM Guidelines were formally adopted at the annual Codex summit in Geneva, Switzerland, in July 2011.

These guidelines were referred to as the Proposed Draft Compilation of Codex Texts Relevant to Labelling of Foods Derived from Modern Biotechnology (the “GM Guidelines”). A copy of the CCFL report adopting the GM Guidelines is available in English, French, and Spanish on the Codex website.

The GM Guidelines do not specifically endorse the labeling of GM food products but this can be implied from the language. For example, the GM Guidelines refer to the following considerations:

Different approaches regarding labelling of foods derived from modern biotechnology are used. Any approach implemented by Codex members should be consistent with already adopted Codex provisions. This document is not intended to suggest or imply that foods derived from modern biotechnology are necessarily different from other foods simply due to their method of production.

Clearly, the GM Guidelines suggest that countries may implement one of the many different approaches regarding the labeling of GM food products, provided that they are consistent with already adopted Codex provisions.

The current list of official Codex standards includes Principles for the Risk Analysis of Foods Derived from Modern Biotechnology (CAC/GL 44-2003), which is available on the Codex website. Paragraphs 18 and 19 state as follows:

18. Risk managers should take into account the uncertainties identified in the risk assessment and implement
appropriate measures to manage these uncertainties.

19. Risk management measures may include, as appropriate, food labelling conditions for marketing approvals and
post-market monitoring.

Therefore, countries should be able to implement GM labeling requirements for the purposes of risk management.

As stated above, the GM Guidelines are considered voluntary so countries such as the United States and Canada are unlikely to adopt mandatory labeling requirements. Currently, Health Canada requires GM food products to be evaluated for food safety but does not require them to be labeled in a manner that discloses its genetically modified nature.

The most significant benefit of the GM Guidelines will be its expected effect on World Trade Organization (“WTO”) trade disputes. The WTO agreement on sanitary and phytosanitary measures (the “SPS Agreement”) states that “to harmonize sanitary and phytosanitary measures on as wide a basis as possible, Members shall base their sanitary or phytosanitary measures on international standards, guidelines or recommendations”. The SPS Agreement names the Codex as the relevant standard-setting organization for food safety.

As a result, member countries who choose to adopt mandatory GM labeling requirements should avoid any WTO challenge based on the claim that such requirements restrict international trade.

The Canada Consumer Product Safety Act, S.C. 2010, c. 21 (the “Act”) came into force on June 20, 2011. It is intended to protect the public by addressing or preventing dangers to human health or safety that are posed by consumer products in Canada, including those that are imported from other countries.

The Act applies to imports of consumer products for personal use as well as for commercial purposes. However, certain provisions (such as the requirement to report incidents and to maintain records) apply only to the manufacturing, importing, advertising or sale of consumer products for commercial purposes. A brief overview of the Act is provided below.

Meaning of Consumer Product

According to Section 2 of the Act, the term “consumer product” means a product, including its components, parts or accessories, that may reasonably be expected to be obtained by an individual to be used for non-commercial purposes, including for domestic, recreational and sports purposes, and includes its packaging. Section 4 of the Act outlines the consumer products to which it does not apply:

1. The Act does not apply to products listed in Schedule 1 of the Act. Schedule 1 includes products that are covered under other legislation such as food, cosmetics, medical devices, drugs, natural health products, pest control products, fertilizers and vehicles.
2. The Act does not apply to tobacco products as defined in Section 2 of the Tobacco Act, except with respect to their propensity to ignite.
3. The Act does not apply to natural health products as defined in Subsection 1(1) of the Natural Health Products Regulations made under the Food and Drugs Act.

Specific Prohibitions

The Act prohibits specific conduct relating to the manufacturing, importing, advertising or sale of certain consumer products. These prohibitions include the following:

1. No manufacturer or importer may manufacture, import, advertise or sell a consumer product that: (a) is a danger to human health or safety; (b) is the subject of a recall order or the subject of a voluntary recall in Canada because the product is a danger to human health or safety; or (c) is the subject of a remedial measure imposed by the Minister of Health (the “Minister”) that the manufacturer or importer has failed to carry out. [Section 7]
2. No person shall advertise or sell a consumer product that they know: (a) is a danger to human health or safety; (b) is the subject of a recall order or the subject of a voluntary recall in Canada because the product is a danger to human health or safety; or (c) is the subject of a remedial measure imposed by the Minister that the manufacturer or importer has failed to carry out. [Section 8]
3. No person shall package or label a consumer product: (a) in a manner — including one that is false, misleading or deceptive — that may reasonably be expected to create an erroneous impression regarding the fact that it is not a danger to human health or safety; or (b) in a manner that is false, misleading or deceptive regarding its certification related to its safety or its compliance with a safety standard or the regulations. [Section 9]
4. No person shall advertise or sell a consumer product that they know is advertised, packaged or labelled in a manner prohibited by the Act. [Section 10]
5. No person shall manufacture, import, advertise or sell a consumer product listed in Schedule 2 of the Act. Schedule 2 contains products that are deemed dangerous to human health and safety; it includes products such as urea formaldehyde-based thermal insulation and polycarbonate baby bottles that contain bisphenol A. [Section 5]
6. No person shall manufacture, import, advertise or sell a consumer product that does not meet the requirements set out in the regulations. [Section 6]
7. No person shall knowingly provide the Minister with false or misleading information in relation to a matter under the Act or the regulations. [Section 11]

Requirement to Report Incidents

According to Section 14 of the Act, a person who manufactures, imports or sells a consumer product for commercial purposes is required to provide information to the Minister and to the product’s supplier (if applicable) concerning consumer product safety incidents or product defects that result, or could reasonably be expected to result, in death or harmful health effects. All available information must be provided within two days after the day on which they become aware of the incident. The manufacturer of the consumer product, or if the manufacturer carries on business outside Canada, the importer, must also provide the Minister with a written report within 10 days after the day on which they become aware of the incident or within the period that the Minister specifies by written notice.

Requirement to Maintain Records

According to Section 13 of the Act, any person who manufactures, imports, advertises, sells or tests a consumer product for commercial purposes must prepare and maintain certain documents, so that unsafe products can be traced back to their source. A person who imports a consumer product for commercial purposes must provide the Minister with these required documents no later than at the time of the product’s importation.

These documents must be retained for six years after the end of the year to which they relate, or for any other period that may be required by the regulations. However, the Minister may exempt a person from the requirement to keep documents in Canada if he or she considers it unnecessary or impractical for the person to keep them in Canada.

Tests, Studies, and Compilation of Information

According to Section 12 of the Act, the Minister can order any person who manufactures or imports a consumer product for commercial purposes to conduct tests or studies, compile any necessary information, and provide any necessary documentation considered to verify compliance or prevent non-compliance with the Act or the regulations.

On May 24, 2011, the Government of Canada announced that targeted sanctions would be imposed against members of the current Syrian regime under the Special Economic Measures Act, S.C. 1992, c. 17.  The Special Economic Measures (Syria) Regulations (the “Regulations”) were enacted in order to respond to the gravity of the situation in Syria, which in the Governor in Council’s opinion constitutes a grave breach of international peace and security that has resulted or is likely to result in a serious international crisis.

The Regulations impose restrictions on dealings with designated persons.  According to Section 1, the term “designated person” means a person who is in Syria, or is a national of Syria who does not ordinarily reside in Canada, and whose name is listed in the Schedule. According to Section 2, a person whose name is listed in the Schedule is a person in respect of whom the Governor in Council, on the recommendation of the Minister of Foreign Affairs, is satisfied that there are reasonable grounds to believe is:

1. A former or current senior official of the Government of Syria;
2. An associate or family member of a person set out in paragraph (1);
3. An entity owned or controlled by, or acting on behalf of, a person set out in paragraph (1) or (2); or
4. An entity owned or controlled by, or acting on behalf of, the Government of Syria.

The Schedule lists the following entities:

1. General Intelligence Directorate;
2. Presidential Guard;
3. Political Security Directorate;
4. Syrian Military Intelligence;
5. Syrian Air Force Intelligence; and
6. Syrian Ministry of Defence; and
7. Syrian Ministry of the Interior.

The Schedule also lists the following individuals:

1. Bashar al-Assad;
2. Farouk al-Shaara;
3. Adil Safar;
4. Ali Habib Mahmoud;
5. Maher al-Assad;
6. Ali Mamlouk;
7. Muhammad Ibrahim al-Shaar;
8. Atif Najib;
9. Hafez Makhlouf;
10. Mohammad Dib Zaytun;
11. Amjad Abbas;
12. Rami Makhluf;
13. Abd-al-Farah Qudsiyah;
14. Jamil Hassan;
15. Rustom Ghazali;
16. Fawwaz al-Assad;
17. Mudhir al-Assad;
18. Asif Shawkat;
19. Hisham Ikhtiyar;
20. Muhammad Nasif Khayrbik;
21. Mohamed Hamcho;
22. Iyad Makhlouf;
23. Bassam Al Hassan;
24. Dawud Rajiha; and
25. Ihab Makhlouf.

According to Section 3 of the Regulations, it is prohibited for any person in Canada and any Canadian outside Canada to:

1. Deal in any property, wherever situated, held by or on behalf of a designated person;
2. Enter into or facilitate any transaction related to a dealing referred to in paragraph (1);
3. Provide any financial or related service in respect of a dealing referred to in paragraph (1);
4. Make any goods, wherever situated, available to a designated person; or
5. Provide any financial or related service to or for the benefit of a designated person.

According to Section 4 of the Regulations, it is also prohibited for any person in Canada and any Canadian outside Canada to do anything that causes, assists or promotes or is intended to cause, assist or promote any act or thing prohibited by Section 3.

Section 9 provides for certain exceptions, which include the following:

1. Humanitarian efforts and goods, such as food and medical supplies or equipment;
2. Stabilization and reconstruction assistance and activities;
3. Democratization and development assistance;
4. Financial or other support provided by the Government of Canada; and
5. Payments made by or on behalf of designated persons pursuant to contracts entered into prior to the coming into force of this person’s designation.

A separate Special Economic Measures (Syria) Permit Authorization Order made pursuant to Subsection 4(4) of the Special Economic Measures Act authorizes the Minister of Foreign Affairs to issue to any person in Canada and any Canadian outside Canada a permit to carry out a specified activity or transaction, or any class of activity or transaction, with a designated person that is otherwise restricted or prohibited pursuant to the Regulations.

I am happy to report that my customs and trade law blog is now live.