Vessel Duties Reduction or Removal Regulations (SOR/90-304)

Short Title

1 These Regulations may be cited as the Vessel Duties Reduction or Removal Regulations.

Interpretation

2 In these Regulations,

Canadian customs waters

Canadian customs waters means all the waters in the territorial sea, internal waters, and the waters above the continental shelf of Canada within which a vessel falls under customs jurisdiction by virtue of the Customs and Excise Offshore Application Act; (eaux douanières canadiennes)

continental shelf of Canada

continental shelf of Canada means the seabed and subsoil of those submarine areas that extend beyond the territorial sea throughout the natural prolongation of the land territory of Canada to the outer edge of the continental margin or to a distance of two hundred nautical miles from the inner limits of the territorial sea, whichever is the greater, or that extend to such other limits as are prescribed by the Governor in Council pursuant to subsection 2(3) of the Customs and Excise Offshore Application Act; (plateau continental du Canada)

cruise ship

cruise ship means a passenger vessel having overnight accommodations for at least 100 persons, exclusive of crew accommodations, but does not include a ship engaged in scheduled passenger or cargo ferry service; (navire de croisière)

customs duties

customs duties[Repealed, SOR/98-28, s. 9]

duty-paid vessel

duty-paid vessel means a vessel that has been released in accordance with section 32 of the Customs Act; (navire dédouané)

inland waters

inland waters means all the rivers, lakes and other fresh waters in Canada and includes the St. Lawrence River as far seaward as the straight lines drawn

• (a) from Cap-des-Rosiers to the westernmost point of Anticosti Island, and

• (b) from Anticosti Island to the north shore of the St. Lawrence River along the meridian of longitude sixty-three degrees west; (eaux internes)

internal waters

internal waters includes

• (a) any areas of the sea that are on the landward side of the baselines of the territorial sea and any areas of the sea, other than the territorial sea, in respect of which Canada has a historic or other title of sovereignty, and

• (b) the inland waters; (eaux intérieures)

Minister

Minister means the Minister of Public Safety and Emergency Preparedness; (ministre)

modifications

modifications means any work done on a vessel, other than repairs; (modifications)

repairs

repairs means the restoration of a vessel to the condition of the vessel at the time it last departed from Canadian customs waters, including any parts, materials and labour incurred in the making of the repairs; (réparations)

storage

storage means the safekeeping of a vessel that has been demobilized in a Canadian port; (entreposage)

territorial sea

territorial sea means the territorial sea of Canada as determined in accordance with the Territorial Sea and Fishing Zones Act; (mer territoriale)

vessel

vessel means a good of heading 89.01, of subheading 8902.00, of tariff item No. 8903.91.00, 8903.92.00, 8903.99.90 or 8904.00.00, of heading 89.05, of heading 89.06 or of tariff item No. 8907.90.90. (navire)

Reduction or Removal of Customs Duty on Temporary Importation

• 3 (1) Subject to sections 8 and 10, in the case of a vessel that is temporarily imported for use in Canadian customs waters, the customs duty on the vessel shall be reduced or removed in accordance with section 4, 5 or 6 for a period not exceeding twelve consecutive months.

• (2) Subject to sections 8 and 10, where the vessel referred to in subsection (1) remains in Canadian customs waters on the expiration of the period for which the customs duty is reduced or removed, the customs duty on the vessel shall be reduced or removed in accordance with section 4, 5 or 6 for an additional period or periods not exceeding 12 consecutive months.

General Customs Duty Reduction

4 With the exception of the removal of customs duty in accordance with section 5 or 6, the reduction of customs duty on a vessel shall be an amount equal to the difference between

• (a) the customs duty on the vessel; and

• (b) the customs duty on 1/120 of the value for duty of the vessel for each month or part of a month during which the vessel remains in Canadian customs waters.

Cruise Ships Customs Duty Removal

5 In the case of a cruise ship, the customs duty on the vessel shall be removed.

Intercoastal Vessels Customs Duty Removal

6 In the case of a vessel used to transport cargo between a point in Canada west of the meridian of longitude ninety-five degrees and a point in Canada east of the meridian of longitude ninety-five degrees, with the exception of movements between points in Canada north of the meridian of latitude sixty degrees, the customs duty on the vessel shall be removed.

Customs Duty Removal

• 7 (1) Subject to sections 9 and 10, in the case of a vessel that is placed in storage in a Canadian port facility, the customs duty on the vessel shall be removed for a period not exceeding 12 consecutive months.

• (2) Subject to sections 8 and 10, where the vessel referred to in subsection (1) remains in Canadian customs waters on the expiration of the period for which the customs duty is removed, the customs duty on the vessel shall be removed in accordance with section 4, 5 or 6 for an additional period or periods not exceeding 12 consecutive months.

Conditions for Customs Duty Reduction or Removal on Temporary Importation and Storage

8 The reduction or removal of customs duty under section 3 shall be granted on condition that,

• (a) in the case of a vessel that is not a duty-paid Canadian-registered vessel, no suitable duty-paid or domestically built Canadian-registered vessel is available to perform the service specified in the application referred to in paragraph 10(a);

• (b) in the case of a vessel that is not a duty-paid foreign-registered vessel, no suitable Canadian-registered vessel is available to perform the service specified in the application referred to in paragraph 10(a); and

• (c) in the case of a vessel that is not a duty-paid vessel and that engages in any activity referred to in subsections 3(2.1) to (2.4) of the Coasting Trade Act, that activity is specified in the application referred to in paragraph 10(a).

9 The removal of customs duty pursuant to section 7 shall be granted on condition that the importer deposits with the Minister security, in a form that is satisfactory to the Minister, in an amount up to that of the customs duty that, but for these Regulations, would be payable on the vessel.

10 The reduction or removal of customs duty on a vessel pursuant to section 3 or 7 shall be granted on condition that

• (a) an application for the reduction or removal of customs duty for the purpose of temporary importation or storage is made to the Minister in a form that is satisfactory to the Minister;

• (b) the application referred to in paragraph (a) is accompanied by documentary evidence that is satisfactory to the Minister;

• (c) in the case of a vessel that is temporarily imported, the vessel is used solely for the purpose for which the reduction or removal of customs duty is granted;

• (d) on the expiration of the period for which the reduction or removal is granted, the vessel is

  • (i) exported from Canada or, in the case of a vessel conditionally exempted from customs duty under the Customs and Excise Offshore Application Act, removed beyond the territorial sea,

  • (ii) released in accordance with section 32 of the Customs Act, or

  • (iii) authorized by the Minister to be placed in a Canadian facility for repairs, overhaul or adjustment; and

• (e) where the vessel is readmitted into Canada at any time other than the time set out in section 3 or 7 or pursuant to any regulations made under the Customs Tariff, customs duty is paid in an amount calculated pursuant to the Customs Act and the Customs Tariff with no deduction for any amount of customs duty previously reduced or removed under these Regulations.

11 Where the conditions set out in section 8, 9 or 10 have not been met, the reduction of customs duty pursuant to section 3 or 7 shall be,

• (a) in the case of a vessel otherwise qualifying for a reduction of customs duty in accordance with section 4, an amount equal to the difference between

  • (i) the customs duty on the vessel, and

  • (ii) the customs duty on 1/50 of the value for duty of the vessel for each month or part of a month during which the conditions set out in section 8, 9 or 10 are not met; and

• (b) in the case of a vessel otherwise qualifying for the removal of customs duty in accordance with section 5, 6 or 7, an amount equal to the difference between

  • (i) the customs duty on the vessel, and

  • (ii) the customs duty on 1/100 of the value for duty of the vessel for each month or part of a month during which the conditions set out in section 8, 9 or 10 are not met.

Reduction or Removal of Customs Duty on Repaired or Modified Vessels

12 Subject to section 18, the reduction or removal of customs duty, as determined in accordance with section 13, 14, 15, 16 or 17, is granted on a Canadian-built or duty-paid vessel that returns to Canadian customs waters after having had repairs or modifications done abroad, except for a vessel that was exported for the purpose of repair or modification.

Reduction of Customs Duty on Repairs Within 12 Months

13 In the case of a vessel that returns to Canadian customs waters within 12 months after having had repairs done abroad, where the repairs were done during the course of the vessel’s operations abroad, except for a vessel having had repairs done in accordance with section 15, the reduction of customs duty on the vessel shall be equal to the difference between

• (a) the customs duty on the vessel; and

• (b) an amount calculated by applying the same rate of customs duty as would be applied to determine the customs duty on the vessel to the value of the repairs done to the vessel.

Reduction of Customs Duty on Modifications Within Three Years

14 In the case of a vessel that returns to Canadian customs waters within three years after having had modifications done abroad, where such modifications were done during the course of the vessel’s operations abroad, the reduction of customs duty on the vessel shall be equal to the difference between

• (a) the customs duty on the vessel; and

• (b) an amount calculated by applying the same rate of customs duty as would be applied to determine the customs duty on the vessel, to the value of the modifications done to the vessel.

Removal of Customs Duty on Essential Repairs

15 In the case of a vessel that returns to Canadian customs waters after having had repairs done abroad, where the repairs resulted from an unforeseen contingency that occurred outside Canadian customs waters and were necessary to ensure the seaworthiness or safety of the vessel, or to enable the vessel to safely reach its port of destination or return to Canadian customs waters, the customs duty on the vessel shall be removed.

Removal of Customs Duty on Repairs over 12 Months

16 In the case of a vessel that returns to Canadian customs waters more than 12 months after having had repairs done abroad, the customs duty on the vessel shall be removed, provided the vessel has not returned to Canadian customs waters in the interim.

Removal of Customs Duty on Modifications over Three Years

17 In the case of a vessel that returns to Canadian customs waters more than three years after having had modifications done abroad, the customs duty on the vessel shall be removed, provided the vessel has not returned to Canadian customs waters in the interim.

Conditions for Customs Duty Reduction or Removal on Repaired or Modified Vessels

18 The reduction or removal of customs duty under section 12 shall be granted on condition that

• (a) all repairs or modifications are reported to the Minister on the return of the vessel in Canadian customs waters;

• (b) the owners or operators of the vessel provide, in accordance with the request of the Minister, any invoice, work order log, report or other information relevant to the repair or modification of the vessel abroad; and

• (c) any application for a reduction or removal of customs duty is made to the Minister within two years after the date the vessel returns to Canadian customs waters.