The Canada Border Services Agency (CBSA) recently released amendments to the Valuation for Duty Regulations (VFD Regulations) that are intended to ensure that, where an importer “arranges” to resell goods to a Canadian customer prior to importing the goods into Canada, the value for duty of the goods is based on the selling price to the Canadian customer. These changes, which are not yet in force, are intended to address a perceived regulatory gap that, in the CBSA’s view, benefits non-resident businesses by allowing them to pay less customs duty than Canadian resident importers. The CBSA published these changes on May 27, 2023, and is accepting comments until June 26, 2023.

If these regulatory changes are implemented as currently drafted, they could significantly impact a wide range of businesses, including both Canadian and non-resident importers. As a result, importers should review the expanded definitions and assess how these changes may affect their existing sales structures and supply chain management, and adjust for potential increases in duties. It is important for importers to carefully consider the impact of these changes on prospective importations, since the CBSA will continue to conduct post-importation verifications to enforce compliance.

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