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Stopping In-Transit Fakes Beyond the Scope of New Anti-Counterfeit Bill, Industry Minister Says

Posted December 01, 2014

Appearing before the Senate Committee on Banking, Trade and Commerce last Thursday, Industry Minister James Moore dismissed complaints from the Obama administration about what it regards as a serious flaw in Bill C-8, the government’s proposed anti-counterfeiting legislation.
Counterfeit Goods
When asked about the issue in question, which is the bill’s explicit exemption for goods that are in transshipment, Moore stated that it was beyond the intended scope of the law. “The main objective for this bill is to protect the Canadian marketplace,” the minister said, adding that it was “a bit of a stretch for someone in the American administration — and I made this clear to them — to ask the government of Canada, Canadian taxpayers to act as a border filter for all goods that are destined for the U.S. market.”

Earlier this year, in a speech to the Canada-America Border Trade Alliance, Ambassador Bruce Heyman told the group that the U.S. was concerned about the exemption because of the safety threat it posed. “Given our highly integrated supply and production chain, a dangerously substandard counterfeit airliner part or car airbag in either of our countries is a threat to the citizens of both,” he said. “We therefore believe it is in the best interest of the U.S. AND Canada to expand this legislation to include in-transit goods. We should have laws and procedures stopping these illegal goods at our shared perimeter.”

Though not specifically addressed by Moore, Ambassador Heyman’s allusion to the “North American security perimeter” (now largely subsumed under the Beyond the Border initiative) was not lost at the time on Colin Robertson, a trade advisor and former Canadian diplomat, who said: “Putting in the legislation, and stating quite boldly, ‘We will not [inspect],’ that defies the perimeter that we agree upon and it leaves us open then to the Americans to break the covenant of: inspected once, cleared twice.”

In his testimony, Moore argued that sufficient measures already existed to tackle the problem through the Criminal Code and various acts of legislation which “provide powers to the CBSA, to the RCMP to stop goods that are headed to the United States that are, that cause any damage to possibly and individual, to public health, public safety, and so on.” As for the exemption, Moore said “the idea that Canada would act as a customs agent for the United States is frankly something that’s not on the table. The scope of this is protecting Canadians and the Canadian domestic market and we think this bill achieves that goal.”

If perhaps you are getting the sense that something about the Harper government’s out-of-step position on this issue does not add up or quite make sense, then you are not alone. Writing about this back in May, National Post columnist John Ivison, relaying what sources had told him suggested that the reason for the exemption had to do with money. “Industry Canada, which is taking the lead because it is viewed as an intellectual property (rather than a border security) file, does not want to commit to paying overtime to customs officials,” he wrote.  It was, he said, “the perfect example of government by silo” and that while it “may save the Canada Border Security Agency’s overtime bill but how much is it going to cost the Canadian economy?”