Customs Bonded Warehouses Regulations (SOR/96-46)

Short Title

1 These Regulations may be cited as the Customs Bonded Warehouses Regulations.

Interpretation

2 In these Regulations,

applicant

applicant means a person who applies for a licence; (demandeur)

beer

beer means beer or malt liquor as defined in section 4 of the Excise Act; (bière)

bonded warehouse

bonded warehouse means a place that is licensed as a bonded warehouse by the Minister of Public Safety and Emergency Preparedness under subsection 91(1) of the Customs Tariff; (entrepôt de stockage)

bulk

bulk has the same meaning as in section 2 of the Excise Act, 2001; (en vrac)

chief officer of customs

chief officer of customs, with respect to a bonded warehouse or a proposed bonded warehouse, means the manager of the customs office or customs offices that serve the area in which the bonded warehouse is located or is proposed to be located; (agent en chef des douanes)

cigar

cigar has the same meaning as in section 2 of the Excise Act, 2001; (cigare)

Department

Department[Repealed, SOR/2003-241, s. 1]

excise bonding warehouse

excise bonding warehouse[Repealed, SOR/2003-241, s. 1]

intoxicating liquor

intoxicating liquor has the same meaning as in subsection 2(1) of the Importation of Intoxicating Liquors Act; (boissons enivrantes)

licence

licence means a licence to operate a place as a bonded warehouse; (agrément)

licensee

licensee means a person who is the operator of a bonded warehouse and to whom a licence has been issued; (exploitant)

manufactured tobacco

manufactured tobacco has the same meaning as in section 2 of the Excise Act, 2001; (tabac fabriqué)

Minister

Minister[Repealed, SOR/2015-70, s. 1]

packaged

packaged has the same meaning as in section 2 of the Excise Act, 2001; (emballé)

preserving

preserving means the preserving of goods by the application of preservative, including lubricants, protective encapsulation and preservation paint, and, if the condition of the goods is not changed, by other means such as freezing, drying and freeze-drying; (préservation)

stamped

stamped has the same meaning as in section 2 of the Excise Act, 2001; (estampillé)

vaping product

vaping product has the same meaning as in section 2 of the Excise Act, 2001. (produit de vapotage)

PART ILicensing of Bonded Warehouses

Issuance of Licence

• 3 (1) Subject to subsection (4), the Minister of Public Safety and Emergency Preparedness may issue a licence to any person who

  • (a) makes an application in accordance with subsection (2); and

  • (b) provides such security as may be required under subsection 91(4) of the Customs Tariff and in accordance with section 4.

  • (c) [Repealed, SOR/2015-70, s. 2]

• (2) Any person who wishes to apply for a licence in respect of a proposed bonded warehouse shall submit a completed application in the prescribed form, together with a detailed plan of the proposed bonded warehouse, to the chief officer of customs.

• (3) The plan referred to in subsection (2) must indicate

  • (a) whether the place proposed to be operated as a bonded warehouse exists or is to be constructed;

  • (b) the type of construction of the place, whether or not it already exists; and

  • (c) the area, within the place, that is to be used for the storage of goods.

• (4) The Minister of Public Safety and Emergency Preparedness shall not issue a licence to an applicant unless

  • (a) the applicant is of good character;

  • (b) the site of the proposed bonded warehouse is within an area served by a customs office;

  • (c) the applicant has sufficient financial resources

    • (i) to meet the requirements set out in sections 11 and 12, and

    • (ii) to lease or purchase the place proposed to be operated as a bonded warehouse;

  • (d) the applicant will provide conditions suitable for the safekeeping of goods; and

  • (e) the Canada Border Services Agency is able to provide customs services with respect to the proposed bonded warehouse.

• (5) The terms and conditions under which a licence may be issued include the extent to which and circumstances in which, in accordance with section 20, goods may be manipulated, unpacked, packed, altered or combined with other goods while in bonded warehouses.

Security

4 For the purposes of subsection 91(4) of the Customs Tariff, security shall be deposited with the chief officer of customs and shall be in the form of

• (a) cash;

• (b) a certified cheque;

• (c) a transferable bond issued by the Government of Canada; or

• (d) a bond issued by

  • (i) a company that is licensed or otherwise authorized under the laws of Canada or of a province to carry on the fidelity or surety class of insurance business and that is recommended to the Treasury Board by the Office of the Superintendent of Financial Institutions as a company whose bonds may be accepted by the Government of Canada,

  • (ii) a member of the Canadian Payments Association referred to in section 4 of the Canadian Payments Association Act,

  • (iii) a corporation that accepts deposits insured by the Canada Deposit Insurance Corporation or the Régie de l’assurance-dépôts du Québec to the maximum amounts permitted by the statutes under which those institutions were established,

  • (iv) a credit union as defined in subsection 137(6) of the Income Tax Act, or

  • (v) a corporation that accepts deposits from the public, if repayment of the deposits is guaranteed by Her Majesty in right of a province.

5 [Repealed, SOR/2015-70, s. 3]

Amendment of Licence

6 The Minister of Public Safety and Emergency Preparedness may amend a licence only where the name of the licensee has been changed legally.

Cancellation or Suspension of Licences

7 The Minister of Public Safety and Emergency Preparedness may cancel a licence where the licensee

• (a) no longer owns or leases the place that is licensed as a bonded warehouse;

• (b) makes a request in writing to that Minister that the licence be cancelled; or

• (c) is bankrupt.

• 8 (1) Subject to section 9, the Minister of Public Safety and Emergency Preparedness may suspend or cancel a licence where the licensee

  • (a) is the subject of a receivership in respect of the licensee’s debts;

  • (b) fails to comply with any Act of Parliament, or any regulation made pursuant to an Act of Parliament, that prohibits, controls or regulates the importation or exportation of goods;

  • (c) has, in the course of operating the bonded warehouse, acted dishonestly in business dealings with customs brokers, importers, carriers, Her Majesty or servants of Her Majesty;

  • (d) has not met any of the requirements set out in sections 11 and 12; or

  • (e) has been incompetent in the operation of the bonded warehouse.

• (2) Subject to section 9, the Minister of Public Safety and Emergency Preparedness may cancel a licence where

  • (a) the volume of goods being received in the bonded warehouse is no longer sufficient to warrant the continued operation of the bonded warehouse;

  • (b) there is no longer a need for a bonded warehouse in the area in which the bonded warehouse is located;

  • (c) the Canada Border Services Agency is no longer able to provide customs services with respect to the bonded warehouse;

  • (d) the licensee manipulates, unpacks, packs, alters or combines the goods with other goods while in the bonded warehouse other than in accordance with the terms and conditions set out in the licence; or

  • (e) the licensee contravenes section 20.

• (3) Where a licence is suspended, an officer may lock and seal the bonded warehouse and keep it locked and sealed during the period of suspension.

• 9 (1) The Minister of Public Safety and Emergency Preparedness shall, immediately after suspending a licence, give the licensee a notice that confirms the suspension and that provides all relevant information concerning the grounds for the suspension.

• (2) The licensee may, within 90 days after the day on which the licence is suspended, make representations to the Minister of Public Safety and Emergency Preparedness regarding why the licence should be reinstated.

• (3) The Minister of Public Safety and Emergency Preparedness shall, before cancelling a licence under section 8, give the licensee 90 days’ notice of the proposed cancellation and provide the licensee with all relevant information concerning the grounds for the proposed cancellation.

• (4) The licensee may, within 90 days after the day on which the notice referred to in subsection (3) is given, make representations to the Minister of Public Safety and Emergency Preparedness regarding why the licence should not be cancelled.

Reinstatement of Licences

10 The Minister of Public Safety and Emergency Preparedness may reinstate a suspended licence where the cause for the suspension no longer exists.

PART IIOperation of Bonded Warehouses

Facilities, Equipment and Personnel

• 11 (1) Every licensee shall provide at the bonded warehouse in respect of which the licence was issued

  • (a) such facilities, equipment and personnel as are sufficient to control access to the bonded warehouse premises and provide secure storage of the goods in it, including

    • (i) doors and other building components of sturdy construction,

    • (ii) secure locks on doors and windows,

    • (iii) signs that indicate the security requirements applicable to the premises, and

    • (iv) where the bonded warehouse will be used for the storage of designated goods, such additional facilities and equipment as may be required to ensure the secure storage of those goods;

  • (b) adequate space for the examination of goods by officers;

  • (c) the personnel and equipment necessary to ensure that the goods to be examined by an officer are made available to the officer for examination; and

  • (d) the personnel necessary to furnish information, for audit purposes, to an officer with respect to the bonded warehouse operations and inventory system.

• (2) Where a bonded warehouse forms only part of a building, the licensee shall, if so requested by the chief officer of customs, keep the bonded warehouse separate from the remainder of the building by a partition or other structure.

Operation and Maintenance Standards

• 12 (1) Every licensee shall ensure that the goods received in the bonded warehouse are

  • (a) stored safely and securely in the area designated for that purpose in the plan referred to in subsection 3(2); and

  • (b) identified in such a manner so as to enable an officer to locate the goods and check them against the appropriate documentation.

• (2) No person, other than the licensee, an employee of the licensee or an employee of a carrier engaged in the delivery of goods to or the removal of goods from the bonded warehouse, shall enter any place in it where goods are stored, without the written authorization or the attendance of an officer.

• (3) Every licensee of a bonded warehouse shall have in place

  • (a) procedures to maintain the security of, and restrict access to, the bonded warehouse; and

  • (b) procedures to ensure that personnel working in the bonded warehouse are aware of and follow the procedures referred to in paragraph (a).

• (4) A bonded warehouse may be locked and sealed by an officer where the chief officer of customs requests that the bonded warehouse be locked and sealed, for the purpose of verifying the goods received or the warehouse documentation.

Restrictions on Goods

13 No licensee shall receive in or transfer from a bonded warehouse in a province intoxicating liquor unless the licensee has obtained written approval to receive or transfer the intoxicating liquor from the board, commission or agency authorized by the laws of that province to sell or authorize the sale of intoxicating liquor in that province.

14 No licensee shall receive the following domestic products into a bonded warehouse:

• (a) cigars;

• (b) packaged raw leaf tobacco;

• (c) manufactured tobacco that is not stamped;

• (d) non-duty paid packaged or bulk spirits;

• (e) non-duty paid packaged or bulk wine;

• (f) non-duty paid specially denatured alcohol; and

• (g) vaping products that are not stamped.

15 No licensee shall receive into or remove from a bonded warehouse, imported tobacco products, or imported packaged spirits or wine, unless they are to be removed from the warehouse for sale to a foreign diplomat in Canada, export from Canada, sale to a duty free shop or use as ships’ stores and, in the case of spirits or wine, supply to an air carrier that is licensed under section 69 or 73 of the Canada Transportation Act to operate an international service within the meaning of subsection 55(1) of that Act.

16 No licensee shall receive the following imported products into a bonded warehouse, unless they are to be removed from the warehouse for export from Canada:

• (a) bulk spirits;

• (b) bulk wine; and

• (c) specially denatured alcohol.

16.1 No licensee shall receive into or remove from a bonded warehouse imported vaping products unless they are to be removed from the warehouse for sale to a foreign diplomat in Canada or export from Canada.

Receipt of Goods

17 Every licensee shall

• (a) acknowledge receipt of imported goods into the bonded warehouse in respect of which their licence was issued by endorsing

  • (i) the transportation document presented to the licensee by the carrier, and

  • (ii) the form that is referred to in subsection 19(2) of the Customs Act and is presented to the licensee by the importer or owner of the goods; and

• (b) acknowledge the receipt of any other goods that have been received in the bonded warehouse by completing the delivery document in the manner described in the prescribed form.

Prescribed Class of Goods and Period of Time

18 For the purposes of subsections 37(2) and 39.1(2) of the Customs Act, tobacco products, packaged spirits and vaping products are a prescribed class of goods and are forfeit if they have not been removed from the bonded warehouse within five years of the day on which the goods are described in the form prescribed under subsection 19(2) of that Act.

Time Limits

19 For the purposes of subsection 37(2) of the Customs Act, the prescribed time in respect of goods referred to in column I of the schedule is the time set out in column II, which time begins on the day on which the goods are described in the form prescribed under subsection 19(2) of that Act.

Manipulation, Alteration and Combination of Goods

20 Every licensee shall ensure that goods are not manipulated, altered or combined with other goods while in the bonded warehouse except for the purpose of or in the course of

• (a) disassembling or reassembling goods that have been assembled or disassembled for packing, handling or transportation;

• (b) displaying;

• (c) inspecting;

• (d) marking, labelling, tagging or ticketing;

• (e) packing, unpacking, packaging or repackaging;

• (f) removing from the warehouse, for the sole purpose of soliciting orders for goods or services, a small quantity of material, or a portion, a piece or an individual object, that represents the goods;

• (g) storing;

• (h) testing; or

• (i) any of the following that do not materially alter the characteristics of the goods:

  • (i) cleaning,

  • (ii) complying with any applicable law of Canada or of a province,

  • (iii) diluting,

  • (iv) normal maintenance and servicing,

  • (v) preserving,

  • (vi) separating defective goods from prime quality goods,

  • (vii) sorting or grading, and

  • (viii) trimming, filing, slitting or cutting.

Transfer and Removal of Goods

21 Where there is a transfer of ownership of goods stored in a bonded warehouse, the importer or owner of the goods shall submit a transfer document in the prescribed form to an officer at the customs office where the goods were described under subsection 19(2) of the Customs Act.

22 Where the importer or owner of goods stored in a bonded warehouse wants the goods removed from the bonded warehouse in smaller units than those described under subsection 19(2) of the Customs Act, the importer or owner shall submit to the chief officer of customs

• (a) where the goods are to be released, an amended accounting in the prescribed form; or

• (b) where the goods are not to be released, an amended description in the prescribed form.