Canada Border Services Agency has issued Customs Notice 17-31: Information for Vessels Seeking to Obtain a Duty Reduction on a 1/120th Basis where No Coasting Trade Licence is Required. Under the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), Canada agreed to allow two categories of European Union (EU) entities to provide certain marine coasting trade, or cabotage services in Canada without a coasting trade licence. They are:
(a) Entities incorporated in an EU Member State and where substantial business operations occur.
(b) Entities located outside an EU Member State if they are owned or controlled by nationals of the EU or Canada. In this category, entities must use vessels on an EU Member State registry.
2. Under CETA, an EU entity may provide the following services without a coasting trade licence:
(a) Feeder services between the Port of Halifax and Montreal
(b) Repositioning Empty Containers is allowed between locations in Canada, only if the containers are empty, owned or leased by the vessel owner/operator; as a non-revenue service. This means no financial gain or in-kind transactions.
(c) Dredging Services - Canadian companies will have the flexibility of being able to hire dredging services from EU entities.
(d) Federal Procurement – Dredging - Canada has aligned the federal government policy that governs how it procures dredging services or dredging services included in construction services contracts, with the negotiated outcome of CETA.
3. Changes to the coasting trade rules as a result of CETA have been incorporated in the Coasting Trade Act, which sets out the laws governing the use of foreign vessels and non-duty paid vessels in Canada’s coasting trade. Further information on the Coasting Trade Act can be found at https://www.tc.gc.ca/eng/policy/acf-acfs-menu-2215.htm