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REGULATORY IMPACT
ANALYSIS STATEMENT

(This statement is not part of the Order.)

Description

Canada and 155 other countries are signatories to the International Convention on the Harmonized Commodity Description and Coding System ("the Harmonized System"), which governs the numbering and description of the approximately 8,700 tariff items in the Customs Tariff. The World Customs Organization, which is the international body that oversees the Harmonized System, periodically updates it to reflect changing technology and patterns of trade. The current round of amendments to the Harmonized System is to take effect on January 1, 2007. As a signatory to the Harmonized System Convention, Canada has a commitment to incorporate these amendments into its Customs Tariff as of that date.

The Order amends the Schedule to the Customs Tariff to implement the changes to the Harmonized System scheduled to be implemented effective January 1, 2007. It is technical in nature, including renumbering and redescribing tariff items to ensure that the rates of duty to which goods are subject on January 1, 2007 are identical to the rates to which they would have been subject in the absence of amendments to the Harmonized System.

Alternatives

No practical alternative was envisaged. The amendments are neutral from an economic and fiscal policy perspective. Canada has undertaken international obligations to make such changes.

Benefits and Costs

This Order involves no changes in tariff policy. An internationally harmonized system of description for goods benefits both Canadian importers and exporters by minimizing the costs of complying with Customs laws, both in Canada and abroad. These amendments are revenue neutral.

Consultation

The Canada Border Services Agency conducted consultations with relevant Canadian industry during the discussions at the World Customs Organization to ensure that the recommended amendments to the Harmonized System reflected industry's interests and concerns.

Compliance and Enforcement

As the Canada Border Services Agency is responsible for administering the Customs Tariff, it will be responsible for enforcing compliance with these amendments.

Contacts

Diane Kelloway
International Trade Policy Division
Department of Finance
Ottawa, Ontario
K1A 0G5
Telephone: (613) 996-6470

Tom MacDonald
International Nomenclature Development
Canada Border Services Agency
Ottawa, Ontario
K1A 0L5
Telephone: (613) 941-2146

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