Today Canada became the first country to announce the removal of “Most Favoured Nation” treatment for imports of goods that are of Russian and Belarussian origin. In the absence of MFN treatment, these goods will be subject to Canada’s “General Tariff” which is calculated as 35% of the declared value for duty of the product at the time of accounting after the importation of the goods into Canada. Only goods from North Korea were previously subject to the 35% customs duty.
The General Tariff will apply to goods of Russian or Belarussian origin. Goods that incur more than 50 percent of their cost of production or are finished into the form in which they are imported into Canada in Russia or Belarus, or are shipped directly from Russia or Belarus to Canada will be subject to the General Tariff.
Note that even though a 35% tariff will apply to these goods at the time of importation, it will still be possible to apply for up-front duty relief under the CBSA’s Duties Relief Program or seek drawback of duties paid if goods are exported from Canada either in the same form or after further processing in Canada, subject to the ordinary rules governing duty relief and drawback applications.