Peter Zongora, Transport Canada, explains how exporting trailers to Canada is easier under the pre-clearance program that Canada has implemented.
Transport Canada has developed a two-phase program to remove unqualified importers from pre-clearance and then qualify and manage the remaining qualified pre-cleared importers through audits of these importers.
Peter Zongora, senior regulatory enforcement officer for Transport Canada, said the organization's duty is to monitor the industry to make sure vehicles comply with the Motor Vehicle Safety Act (MVSA), which requires that all imported vehicles comply with the applicable Canada Motor Vehicle Safety Standards (CMVSS), which involve 11 different classes of vehicles, includes trailers, and are the same standards as in the US (CFR 49 part 571) administered by the National Highway Traffic Safety Administration (NHTSA).
Transport Canada has jurisdiction only over the Canadian importer.
Zongora said there are three ways to commercially import vehicles: through normal channels case-by-case; the Appendix G pre-clearance program; and the Appendix F pre-clearance program for an importer of over 2500 vehicles per year.
Any importer can import on a case-by-case basis by providing the following information:
A list of VIN numbers included in the shipment.
Front, side, and rear photographs or drawings of the trailer models in the shipment showing the required lamp locations.
Photographs of the compliance label and tire label as affixed by the manufacturer to the trailers in the shipment.
Photographs of the tire and rim markings and evidence of conformity to the applicable sections of TSD 110 (Tire Selection and Rims for Motor Vehicles With a GVWR of 4536 KG or Less), and/or subsection S5.5 of TSD 120 (Tire Selection and Rims for Motor Vehicles With a GVWR of More Than 4536 KG).
“The pre-clearance program was invented by Transport Canada so we don't have to check each vehicle on a case-by-case basis,” he said. “We don't want to do that. We'd be swamped. It's reserved for qualified importers and manufacturers they are representing in Canada. Pre-clearance means that the Canadian importer is capable of self-certifying the vehicles resulting in less scrutiny through Customs.”
He said an audit of the pre-clearance list as it applies to trailers has revealed that there are too many non-qualified importers that are included in the pre-clearance program, unable to respond to compliance information requests, and unaware of responsibilities associated vehicle importation under federal legislation.
“Also through our monitoring, we found that a lot of US manufacturers are not qualified for pre-clearance,” he said. “This needs to be cleaned up. We're just tracking too many retailers in pre-clearance. They are unable to respond to compliance information. They don't know anything. They're retailers. Importers are also unaware of their responsibilities.”
Goals of each phase
He said the current scope of the clean-up is light- to medium-duty non-air-braked trailers and the RV industry (trailers and power units).
The goal of Phase 1 is to remove unqualified importers from pre-clearance. To do this, manufacturers check their pre-clearance listing at http://wwwapps.tc.gc.ca/saf-sec-sur/7/pcl-lir/Search.aspx and advise Transport Canada within 30 working days of their approach regarding nomination of a single importer — or a select few — to represent their company on the pre-clearance list.
Once Phase 1 is complete, Transport Canada will qualify and manage the remaining qualified pre-cleared importers through audits of these importers that will involve the submission of test documents, including tire and rim tests.
Benefits to retailers:
Retailers can focus on retailing. “You don't have to worry about rules because you will have one person or a few people who will be responsible for that. Retailers are not going to jail. They can focus on retail.”
No longer are subject to federal law. “They don't need to deal with government departments or problems with importation.”
No longer need to deal with Other Government Departments (OGDs), importation, brokers, etc.
Cuts down on red tape and administration by eliminating them from the process.
Benefits to manufacturers:
Leaves the Canadian side of your business with an expert in the Canadian system. “Your designated importer is going to take care of your Canadian operations for you.”
Assures compliance with Canadian rules and regulations because these qualified importers are good.
Protects against disruptions in the supply chain to the Canadian dealer network.
Protect proprietary information. “There will only be a few copies of your information instead of 50.”
How importers qualify for pre-clearance in Phase 1:
The two registration documents: the Foreign Manufacturers Registration Form and the Canadian Importer Registration Form.
On the US company letterhead, confirmation of the nomination of their Canadian importer, the date that the agreement goes into effect, confirmation that the importer will be responsible for all certification documents and compliance records and the issuance of Notice of Defect (recalls) on behalf of the OEM.
Authorization from the OEM directing Transport Canada to remove all current retail dealers associated with the manufacturer on Transport Canada's pre-clearance list and replacing them with their importer and detailing how the foreign manufacturer will advise their current pre-clearance companies of the change (dealer notification letter).
A list of the retail dealers to whom the importer will be distributing vehicles to in Canada (the pre-clearance importer should be a distributor).
“We think the only reason they need to be on the pre-clearance list is if they actually distribute vehicles. There's no need if you're just supplying vehicles for him to sell. He can use your designated importer if he's bringing them in for his own use. We're looking for the importer who is actually going to be distributing.”
Confirmation that the importer (with their import business number) will appear as the importer and as the purchaser on all Customs documents, including the Coding Form (B3), the Canada Customs invoice, and the Vehicle Import Form, Form 1 (OGD requirements).
A copy of the NVIS document that will be sent with each vehicle instead of US titling documents such as the MSO or the COO.
The name of the technical person employed with the importer that is responsible to ensure the compliance of the imported vehicles with all applicable aspects of the Motor Vehicle Safety Act.
OGD requirements: pay the taxes; and evidence is the issuance of the B3 form. Importer definition is the person that causes the goods to be imported — the purchaser. The importation documents must match: tax form (B3) and the invoice (CCI). TC requires that the CCI matches the Form 1 to establish the importer of record.
Options for nominating an importer include:
Setting up an arm of your company in Canada to handle vehicle importation. (May be the best/only option for larger OEMs.)
Pros: You are in control of Canadian business and it's easier to meet OGD requirements.
Setting up and training one of your distributors to do this. (May be the best option for small OEMs.)
Pro: less cost.
Cons: not as much control of your operations; cost of expertise; may not be able to meet the needs of OGDs.
Retaining the services of a professional importer. (May be the best option for medium-sized OEMs).
Pros: most cost effective; and already have expertise.
Cons: may not meet the requirements of OGDs; and may not be viable for larger companies.
New Boat/Boat-Trailer Bundles
Transport Canada has developed a position whereby boat importers that are also importing a boat trailer as a “bundled” package with the boat, do not have to be included in Transport Canada pre-clearance system, but may still import the trailers outside of the RIV program.
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