The government of Canada has implemented an outward processing remission program that removes all or part of the import duties on certain wearing apparel produced in a developing General Preferential Tariff (GPT) country using certain Canadian material inputs.
This initiative is intended to benefit both Canadian textile manufacturers and garment manufacturers in developing countries. A brief overview of the program is as follows.
Eligible garments: Knitted, crocheted, woven and non-woven textile garments of HS chapters 61 and 62; Plastic coated apparel of HS subheading 3926.20; Rubber coated apparel of subheading 4015.90; artificial fur garments of HS heading 43.04.
Eligible inputs: Textiles produced in Canada are defined as goods produced in a manufacturing facility located in Canada, classified in HS Chapters 50, 51, 52, 53, 54, 55, 56, 58, 59 or 60, (textile) and HS headings 39.21 (plastic coated), 43.04 (artificial fur) or 70.19 (glass fibres).
GPT Countries: A list of GPT countries can be found in the “List of Countries and Applicable Tariff Treatments” on Canada Customs web site. Most developing countries, with the exception of Taiwan, are entitled to GPT.
Conditions: The garments must be produced in a GPT country shipped from that country directly to Canada. The garments must be produced in whole or in part from eligible inputs made in Canada and shipped from Canada to the country where the garments are produced.
The importer must have a commercial invoice containing a complete description of the foreign processing and the cost of the processing. The total value shown on the invoice will include the export value of the textiles, and the invoice must be sufficiently detailed to enable a CBSA compliance verification officer to confirm the value of processing.
The apparel importer must also maintain evidence satisfactory to the Minister of Public Safety that the goods meet the conditions of the Order such as:
- Proof of the value of the textiles exported from Canada,
- Proof that the textiles meet the conditions of the Order,
- Proof of the value for duty of the apparel subsequently imported into Canada, and
- Proof that the imported apparel incorporates the textiles produced in Canada.
Additional regulatory and administrative conditions apply.
Information concerning the Outward Processing Program is available from our technical consulting group.