The Government of Canada has issued over the years several conditional relief tariff items to reduce or eliminate the rates of duty that would otherwise apply to goods, provided the conditions of relief imposed under the tariff item are satisfied.
Such tariff items, formally known as “end-use” tariff items, include distinctive wording that relates the imported good to the specific condition that it must fulfill. Examples of the wording include “for use in”, “for use by”, “for use on”, “imported during the period” and several others.
The specified conditions must be satisfied by either the importer or by persons who purchase or otherwise acquire the imported goods.
In addition to the conditions specified in the text of the relevant tariff item, importers relying on conditional relief relating to the “use” of the good are subject to specific record keeping requirements.
Goods for which the benefits of a conditional relief tariff item were claimed that were subsequently used in a manner not complying with the relief conditions are considered to have been diverted from the required use.
Any non-qualifying use of goods when conditional relief was claimed constitutes a diversion. The obligation to correct a declaration, including due to diversion, lasts for four years from the date of accounting for the goods.
Any diversion of goods imported under a specific conditional relief provision must be reported promptly to avoid costly penalties.
For additional information: Memorandum D11-8-5 Conditional Relief Tariff Items
For iinformation on keeping of records regarding conditional relief tariff items see Memorandum D11-8-6