28 May 2003 Excise Interpretation 45438 - Stamping of Imported Tobacco Products

The purpose of this memorandum is to respond to your e-mail XXXXX so as to address the matter of the stamping of imported tobacco products in a customs sufferance warehouse and XXXXX proposal to have a new package stamp for imported cigarettes and other manufactured tobacco. We are also providing you with some suggested paragraphs for inclusion in your response XXXXX XXXXX as set out below:

Section 204 of the current Excise Act specifically calls for unstamped/unmarked imported manufactured tobacco or cigars to be placed in a customs sufferance warehouse ("CSW") for stamping or marking. Section 39 of the Excise Act, 2001 deals with the stamping of imported tobacco products in the same vein. Both the current and future legislation contemplate the stamping of imported tobacco products before the goods are reported under the Customs Act, thus indicating that this stamping may take place outside Canada. Indeed, the stamping of tobacco products destined for sale in Canada is already carried out by some foreign tobacco manufacturers.

Section 17 of the Customs Sufferance Warehouse Regulations also states that manufactured tobacco and cigars may be "manipulated, unpacked, packed, altered or combined with other goods while in a sufferance warehouse only for the purpose of (a) stamping or marking the goods ... that are placed in the sufferance warehouse in accordance with section 204 of the Excise Act;" (See also Customs D-memoranda D4-1-4, and D18-2-1.)

The stamping or marking of manufactured tobacco or cigars may be carried out in the CSW by either the importer or his authorized agent. The CSWs are not actually owned and operated by the CCRA, and indeed are privately owned facilities. However, if there is a problem of importers or their agents gaining access to them to carry out stamping or marking activities, we can take up this matter with the Customs Border Services or Customs Operational Policy persons in XXXXX Region. However, we will also have to provide them with the names of the importers and the CSWs where these problems have arisen.

As for the form of the XXXXX stamp for imported manufactured tobacco, subsection 11(5) of the current Tobacco Ministerial Regulations specifically states that our "Canada Duty Paid" stamps "... may be modified to include, in addition to the information required by these Regulations, any information required by an Act or regulation of a province or to comply with any colour specification required by an Act or regulation of a province in relation to stamps required by an Act or regulation of the province". The proposed Stamping and Marking of Tobacco Products Regulations under the Excise Act, 2001, will carry a provision similar to this.

Therefore, the basic format of the federal duty paid package stamps, whether for cigarettes or manufactured tobacco otherwise, may be modified to add the name of the province XXXXX and any other information that the province may require, and be adapted to the province's colour specification.

If you wish to explore the alternative of adopting XXXXX package stamps for cigarettes and other manufactured tobacco, based on the criteria under the above-noted regulations, we would be pleased to review and comment on any proposed design(s) that you might have in mind.

As for the carton and case stamps for imported manufactured tobacco, the current XXXXX carton stamping or marking may be accepted without the presence of the words "Canada Duty Paid", where the XXXXX stamp is required on the packages. This is what will be called for in the Stamping and Marking of Tobacco Products Regulations under the Excise Act, 2001.

We hope the information included in the above-suggested paragraphs will assist you with your response XXXXX. Please forward to us a copy of the final response, for our records.

If you require further assistance in this matter, please feel free to contact me, at (613) 954-4208 or Steve Mosher, at (613) 941-1497.

Preston Gallant, CGA
Manager
Excise Duty Operations
Excise Duties and Taxes Division