TPL, Apparel and you

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Tariff Preference levels (TPL) and You

Tariff Preference Levels (TPL) grant preferred tariff rates to specific quantities of certain types of textile articles that do not meet the standard Rules of Origin between NAFTA countries.
Similar agreements also apply between Canada and:
Costa Rica, and
Under the agreements listed above,and when trading between the same –  TPL’s provide equivalent free trade duty rates for limited quantities of certain textiles that do not otherwise meet the Rules of Origin requirements:
Some examples are:
– Yarn
– Fabrics
– Apparel
– Other textile articles

Some conditions do apply.  Most importantly

1)The goods must have undergone certain manufacturing steps within the borders of one of the included countries.
Specifically, apparel must be cut or knit to shape and sewn or otherwise assembled in one of the participating nations from fabric or yarn produced or obtained outside of the same nations.
2)The goods must also be accompanied by the required documentation to support the request for remission.
3)Annual limits also apply and can be viewed within the Department of Foreign Affairs, Trade and Development Canada.
Tariff Rates
The TPL duty rates are the standard Free Trade duty rate for the country that they are imported from.  For example, TPL goods that are imported to Canada from Costa Rica carry the CCRFTA rate.
Any goods imported in excess of the limits outlined in the Free Trade Agreements are imported under the Most-Favoured-Nation (MFN) Tariff rate.

How to receive the benefit

In order to receive the TPL benefit – The importer must be provided with an Exporter’s Certification of Non-Originating Textile Goods (Certification), and the certification must be listed on the importer’s declaration.

The declaration may be provided either separately, or simply be a statement directly written on the invoice.  If provided separate to the invoice, the invoice number must be quoted on certificate.

It is important that the importer retain the Certificate in their records, as it may be requested by CBSA at any point, including during an audit.

Declarations may be written in English, French or Spanish.
*it is important to note that the CBSA conducts business in English and French only, and may request a translation of documents provided in Spanish.

Import Permit Requirements

An authorized customs broker can assist you in getting the required import permits for your TPL eligible goods.
If the appropriate TPL permit has not been attained, the MFN Tariff rates will apply.

Goods Specifically from Mexico

Unlike goods from the US, Chile and Costa Rica, for goods originating from Mexico – the exporter is responsible for obtaining a Certificate of Eligibility from the Mexican government.  The standard TPL import permit must be forwarded along with the certificate.

Importance of obtaining a TPL in advance

Upon request or audit, the CBSA will deny TPL rates if the conditions mentioned above were not completed. This denial after the fact could cause additional rates of duty.
To help you navigate through the complex compliance landscape (and avoid the penalties that can come from non-compliance), Community Customs Brokers’s team of professionals can provide answers to these and many other pressing questions related to doing business in Canada as an Importer/Exporter.
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