Customs Tariff Act

Section 11


Canada (Attorney General) v. Best Buy Canada Ltd., 2019 FCA 20

"regard" means that reasons must be given for not following

Best Buy Canada Ltd appealed the decision of the Canadian International Trade Tribunal (the Tribunal) that certain floor stands for flat-panel televisions (the Goods) were properly classified under the Customs Tariff as “other parts” suitable for use solely or principally with televisions as opposed to “other metal furniture” or “other wooden furniture”, consistently with Samus Systems. The Tribunal declined to apply two World Customs Organization (WCO) opinions on the basis that the models at issue in the Opinions had castor wheels and were not designed for domestic use. Section 11 of the Customs Tariff requires that “regard shall be had” to opinions published by the WCO when interpreting headings and subheadings under the tariff classification system

Consistently with Igloo Vikski Inc., 2016 SCC 38 and Suzuki Canada Inc., 2004 FCA 131, Near JA stated: (at para 4):

… [W]hile not binding, opinions of the WCO must “at least be considered” in determining the classification of goods imported into Canada… . Having “regard” further entails that the Tribunal should respect WCO opinions unless there is “sound reason” to do otherwise.

Near JA allowed the appeal, finding (at para 5):

… [I]t is far from clear why the absence of castors and the location of the proposed use of the stands would make the stands in this case a part suitable for use solely or principally with televisions. Although the Opinions were relevant because they dealt with goods that were materially the same as those before the Tribunal, the Tribunal failed to consider or have regard to the Opinions as required under the Customs Tariff.

Words and Phrases
regard shall be had


General Rules for the Interpretation of the Harmonized System

Rule 2

Rule 2(b)


Canada (Attorney General) v. Igloo Vikski Inc., 2016 SCC 38, [2016] 2 S.C.R. 80

good must be described in headings - even if not ultimately included therein because of their composite nature — before Rule 2 can apply

Igloo Vikski imported ice hockey goaltender gloves, which were composed of various types of textiles and plastics, bound together by stitching, with the inner padding consisting mainly of plastic (in the case of “blockers”) or both plastic and textiles (in the case of “catchers”). The Canadian International Trade Tribunal (“CITT”) affirmed the CBSA decision that the gloves in dispute were properly classified as tariff item 6216.00.00 (gloves, mittens or mitts), rather than as item 3926.20.92 (other articles of plastics).

Rule 1 of the General Rules for the Interpretation of the Harmonized System directed that the classification of goods must refer first to the applicable headings (i.e., descriptions), and Rule 2(b) provided that where a good containing a mixture of more than one material, a reference to goods in a heading included goods that consisted partly of the material (provided that the addition of the other material does not alter the goods' character to the point that they cannot answer the heading's description). Igloo Vikski contended that the gloves fell within both the 39.26 and 62.16 headings, at least when read in light of Rule 2(b) (i.e., in the case of 3926, they were other plastic goods because they were made partly of plastic), so that their classification should be resolved (in favour of heading 39.26) by reference to yet a further Rule (Rule 3(b).) The CITT had found that the gloves did not fall within heading 39.26 (before reference was made to Rule 2(b)) because an Explanatory Note indicated that this article included various listed categories of items, one of which (in para. (1) of the list) was articles of apparel and clothing made by sewing or sealing sheets of plastics (which was not the case for the gloves.) It went on to find that the gloves came within heading 62.16 (before reference was made to Rule 2(b)) notwithstanding an Explanatory Note that stated that the presence of additional materials in the good does not affect their classification so long as the additional materials do not constituted “more than mere trimming” (which was not the case for the gloves). As only heading 62.16 applied, no resort should be made to Rule 3(b).

In finding that the CITT decision met the requisite standard of reasonableness, Brown J stated (at paras. 29, 45):

The General Rules are commonly described as “cascading” in nature… . While the General Rules are hierarchical in the sense that any classification exercise must begin with Rule 1… , Rule 1 … does not lose all relevance where Rule 2 is applied. Nor is it an error to consider whether a good meets the description of a heading — that is, to apply Rule 1 — when Rule 2 is also applied. Indeed, Rule 2 would have no purpose were it not applied in conjunction with Rule 1, since its function is to guide the application of Rule 1 when the good in question is incomplete or a composite of different materials. …

… For Rule 2(b) to apply, the goods under consideration must, in accordance with Rule 1, meet the description contained in that heading in whole or in part (once the relevant Chapter, Section, or Explanatory Notes are taken into account) — in this case, as “[g]loves, mittens [or] mitts” under heading 62.16, or as “articles of plastics” under heading 39.26. To be clear, a good must be described in whole or in part by a heading — even if it may ultimately not be classified under that heading because of its unfinished or composite nature — before Rule 2 can be applied. This is consistent with the process of reasoning applied by the CITT to this case… .

Respecting the CITT’s finding that the gloves did not come within heading 39.26 because they did not come within the specific listing of apparel in para. (1), he stated (at paras 49 and 50):

The Explanatory Note overall begins with inclusive language (“[t]hey include”), but para. (1) of the Note specifically does not. The examples listed in para. (1) (“e.g., aprons, belts, . . .”) illustrate the types of articles that meet the criteria of “[a]rticles of apparel and clothing accessories . . . made by sewing or sealing sheets of plastics”. … This led ultimately to the CITT’s conclusion that it could not use Rule 2(b) to extend heading 39.26 to cover the gloves (paras. 55 and 66-69): even if the gloves were comprised entirely of plastics, they could not be classified under heading 39.26 as they were not made by sewing or sealing sheets of plastic together. …

… Even accepting that the term “includes” typically denotes that a non-exhaustive list is to follow …, the non-exhaustive quality of each list item in this case can reasonably be seen as a distinct matter.

Locations of other summaries Wordcount
Tax Topics - Statutory Interpretation - Interpretation/Definition Provisions an “includes” definition could reasonably be viewed as being limited by the listed items 195
Tax Topics - Treaties narrower range of interpretations where implementing a Convention 69