Please be advised of the following updates and changes:
UK - Canada Trade Continuity Agreement Update
Further to letters to trade issued on November 13 and December 1st, the following is an important update to UK importers, in anticipation of the expiry of the Brexit transition period on December 31st, 2020.
As the importer of record for beverage alcohol into Ontario, the LCBO is required to comply with federal laws and follow guidance from the Canada Border Services Agency (CBSA) regarding the importation obligations contained in international trade agreements, and to collect applicable taxes and duties.
On December 9, Canada and the United Kingdom signed a Trade Continuity Agreement (TCA) to continue rights and obligations between Canada and the UK as provided for by CETA, pending the negotiation of a new bilateral trade agreement. Because legislative ratification of this agreement is not expected to occur prior to December 31st, 2020, duty exemption that previously applied to UK imports under CETA is expected to expire at this time.
In order to limit impacts and uncertainty for importers, LCBO is implementing the following interim measures, pending receipt of further information from the federal government on the implementation of the UK-Canada TCA. Please note CETA certificates cannot be accepted for customs purposes and as a result will not be accepted by LCBO for UK origin products.
Cost of Service Differential (COSD) Charges
LCBO previously used CETA certificates of origins submitted by importers to confirm the application of the relevant Cost of Service Differential (COSD) charges on UK products. At this time, the Canada Border Services Agency (CBSA) has not yet provided an appropriate template for this certificate to be used by UK importers for the year 2021. As of January 1st, 2021, on an interim basis, LCBO will continue to apply the EU COSD rates to UK suppliers which previously supplied a certificate for the 2020 year. This interim arrangement will not apply to those who have not submitted a CETA certificate of origin in 2020. For manufacturers and agents who have questions on how this process affects their pricing, please contact Kyle Baker, Manager Pricing Administration – email@example.com.
Most Favored Nation (MFN) Tariffs
As of January 1st, 2021, shipments of cider, flavoured beer, gin, vodka, rum, liqueur and other spirit products from the UK may require requoting, based on the implementation of applicable federal charges under Section 22 of the Customs Tariff. Shipments
of other products such as beer and whisky will also be subject to MFN treatment, but this will not affect pricing given existing duty exemptions in the customs tariff. For more details on how specific products which may be impacted, please consult your customs broker or reach out directly to the CBSA.
The updated MFN tariff treatment for impacted products (cider, flavoured beer, gin, vodka, rum, liqueur and other spirit products) noted above will be applied to new LCBO products and Private Orders starting Monday, January 4, 2021. Continuously available LCBO products will be re-priced for retail effective date Monday, February 1, 2020.
Suppliers of impacted UK continuously available LCBO products who wish to maintain their current retail price on February 1 must submit a rebate quote letter. The letter must state: “The supplier will pay to reduce the cost of inventory on hand and on order.” Rebate letters will be due to firstname.lastname@example.org by Monday January 18, 2020 for processing.
As communicated previously, LCBO will communicate with the trade with further guidance as soon as more details are known about the implementation of the UK-Canada TCA.
If you have additional question regarding pricing timelines and implementation, please contact email@example.com. If you have further questions regarding certificates of origins please contact firstname.lastname@example.org.
Thank you for your continued support and partnership.