Dear XXXXX:
Thank you for your facsimile XXXXX requesting that your client, XXXXX (Authorization letter already on file), be given assurances that no action would be taken against them in the event of a breach of the prescribed brand conditions for XXXXX brands.
As stated in our letter XXXXX prescribed brands must abide by all prescribed brand criteria to be exempted from the Excise Act tobacco-marking provisions of subsection 202(3). One criterion is that the brand is included in Schedule II to the Tobacco Regulations (prescribed); another is that the brand is not commonly available in Canada. As mentioned in your telephone conversation with Richard Crompton XXXXX and our letter XXXXX, if the brands are commonly sold in Canada, the marking exemption is not applicable, regardless of whether the brands are included in Schedule II to the Tobacco Regulations.
To elaborate, if prescribed brands - whether included on the prescribed brand list or administratively "pre-approved" - are offered for sale in the Canadian duty-paid market at any time, except as provided for in subsection 23.3(1) of the Excise Tax Act and subsection 202(4) of the current Excise Act, or subsections 38(3) and 58(1) of the Excise Act, 2001 (once that Act comes into force), the exemptions from the tobacco marking requirements and the payment of excise tax or special duty would no longer apply. Please note that these conditions apply to the tobacco products no matter who makes them available for sale in the Canadian duty paid market.
We recognize that XXXXX has taken the appropriate steps to advise us that XXXXX should be removed from the prescribed brand schedule. Your XXXXX request that XXXXX not be listed as prescribed brands was noted and the marking and tax exemptions were administratively cancelled at that time. Although no revisions can be made to existing regulations prior to the implementation of Excise Act, 2001 any packages of these brands produced in, or imported into, Canada should now be stamped as required by the Tobacco Agency Regulations. When the Excise Act, 2001 comes into force these brands will not be included on Schedule 10 in the Regulations Respecting the Stamping and Marking of Tobacco Products.
Manufacturers in Canada are responsible for ensuring their products comply with the Excise Act regulations. However, we understand that XXXXX will not be manufacturing these brands in Canada. The CCRA ensures that all tobacco products imported into Canada comply with Excise Act regulations, so any XXXXX imported into Canada will have to be properly stamped (indicating that Canadian duties and taxes are paid) before they can be released for consumption.
Should you require any further information, please contact me at (613) 957-8642 or Richard Crompton at (613) 957-4156.
Sincerely,
Ron Hagmann, CGA
Acting Manager
Excise Duty Operations
Excise Duties and Taxes Div.
XXXXX XXXXX XXXXX XXXXX
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