Direct shipment rules for preferential tariffs

Summary#

These are the final Direct Shipment (Most-Favoured-Nation Tariff, General Preferential Tariff, General Preferential Tariff Plus, Least Developed Country Tariff, Commonwealth Caribbean Countries Tariff, Australia Tariff and New Zealand Tariff) Regulations (SOR/2023-212). They set the documentary conditions for when imported goods count as shipped directly from a beneficiary country for preferential tariff programs. The rules come into force on January 1, 2025.

What it does#

• Defines a "beneficiary country" as a country or territory that benefits from the listed preferential tariffs.
• Sets two ways goods shipped without passing through another country can be treated as direct shipments:
  • they are shipped on a through bill of lading, or
  • if there is no through bill of lading, the importer must provide documentary evidence of the shipping route and all points of shipment and transhipment when an officer asks.
• Sets requirements for goods that pass through another country: the importer must provide documentary evidence of the shipping route and a copy of customs control documents showing the goods stayed under customs control while in that other country, when requested by an officer.
• Repeals the Mexico Deemed Direct Shipment (General Preferential Tariff) Regulations.
• Comes into force on January 1, 2025.

Who's affected#

• Importers who claim preferential tariff treatment under programs covered by these regulations (for example, the Most‑Favoured‑Nation and General Preferential Tariffs).
• Customs brokers and freight forwarders who prepare or hold shipping and customs control documents.
• Carriers and exporters in beneficiary countries who issue or rely on through bills of lading or other shipping paperwork.
• Canada Border Services Agency officers who check documentary proof.
  If it is unclear whether a specific shipment or business is affected, the regulations set out the documentary tests that will determine that.

Why it matters#

• Preferential tariff rates often depend on proving goods were shipped directly from a beneficiary country. These rules clarify exactly what paperwork can prove that.
• If goods pass through a third country, importers must be able to show they stayed under customs control there to keep preferential treatment.
• The repeal of the Mexico-specific rule means a single, written standard will apply instead of separate rules.
• The change becomes binding on January 1, 2025, so businesses that rely on preferential tariffs should check their shipping and record-keeping now to meet the new documentary requirements.