Import Brokerage in Canada: Reduced or Eliminated Duties on Goods for SIMA

On August 1st, 2017 the Canada-Ukraine Free Trade Agreement went into effect. The agreement, which was signed by Prime Minister Justin Trudeau during his first official visit to Ukraine in July 2017, provides reduced or eliminated duties on goods moved through an import brokerage in Canada from Ukraine.

It took six years of negotiations between Canada and Ukraine before the final text was approved, detailing which goods would qualify for the reduced and eliminated duties, how long these reductions will take to become fully in effect, and how to prove that said goods originated from Ukraine.

The 3 Stages of Duty Reduction

The Free Trade Agreement details which products from Ukraine qualify for the reductions and outlines the three stages in which these reductions will take place. Depending on the goods to be imported, these stages include:

  1. Elimination of all duties effective as soon as the agreement went into effect.
  2. Reduction of duties by 50% over two years to end with the complete elimination of said duties by year two.
  3. Reduction of duties by 25% a year over four years to end with the complete elimination of said duties by year four.

Immediate Elimination of Duties

Effective as of August 1st, 2017 duties for the goods listed under staging category 0 in the Schedule of Ukraine. For Canada, these goods include those listed under Chapters 1 through 97 of the Harmonized System not listed in the Schedule of Canada. 

Reduction of Duties Over Two Years

According to the Canada-Ukraine Free Trade Agreement, goods listed under staging category 1 will undergo a two part reduction in duties. Effective immediately these goods will have a 50% reduction in duties, followed by complete duty elimination on January 1st of year two.

Reduction of Duties Over Four Years

The third level of duty reduction for goods include items listed under staging category 3 and will occur over the next four years. Starting as of August 1st, duties shall be reduced by 25% of the base rate. In year two, duties will be at 50% of the base rate and in the third year this reduces by an additional 25%. Finally, on January 1st of the fourth year, the duty will be eliminated.

An Import Brokerage in Canada can help

In order for your goods to qualify for these reduced or eliminated duties, you must provide adequate proof of origin. Argo Customs, an import brokerage in Canada, employs brokers who can speak Ukrainian and are happy to assist in understanding how the Free Trade Agreement impacts you.

We have offices in both Ukraine and Canada. For more information, please sign up for a business account online, or contact the experts at Argo Customs for a free consultation today.