Clearit.ca's Blog on Customs Brokerage and News Updates
When you import goods into Canada, it’s the Canada Border Services Agency (CBSA) job to ensure they’re legal and legitimate. This is usually carried out at the border as soon as your carrier arrives, but when immediate clearance isn’t possible, you can have your goods move to a licensed warehouse in the country instead.
By storing your goods in either a bonded or sufferance warehouse, you can defer paying customs duty, excise taxes, and anti-dumping duty. Beyond that fact, however, they’re pretty different beasts.
If you’re looking for help importing your goods into a sufferance or bonded warehouse, get in touch! Clearit is just a click away.
Sufferance Warehouses in Canada
Sufferance warehouses, meaning privately owned storage facilities licensed by the CBSA and operated by citizens, allow you to delay paying duty. Goods stored in a sufferance warehouse have been accepted into Canada, but have not yet been cleared for release.
Not all goods are eligible for sufferance warehouse storage; whatever you want to store must have a financial security bond posted first. This is the trade-off for not paying any duties until the goods are released to the Canadian market.
Placing your goods in a sufferance warehouse will make them much less accessible to you, the importer of record. The only people authorized to enter a sufferance warehouse without a CBSA officer’s permission are the arehouse’s license holder and authorized employees of either the warehouse or a carrier.
Unlike customs bonded warehouses, sufferance warehouses are for short term storage only:
- Perishable goods can be stored for up to 4 days
- Prescribed substances can be stored for up to 14 days
- Firearms, other weapons, and tobacco can be stored for up to 14 days
- Spirits can be stored for up to 21 days
- All other goods can be stored for up to 40 days
If your goods are not moved from the sufferance warehouse within these limits, they will be disposed of by the CBSA.
There are five subtypes of sufferance warehouses. Where your goods will be stored is determined by what it is you’re importing, and to who.
- Type A warehouses are operated by airline, marine, or railway companies.
- Type B warehouses are specifically designated for the storage of goods arriving by highway in commercial trucks.
- Type C warehouses are for consolidated shipments; shipments are deconsolidated in these warehouses.
- Type S warehouses are for specific types of imported goods, including perishable goods, human plasma, used household goods, provincial liquor imports, and more.
- Type PS warehouses are for carloads of imported goods in railway sidings.
Customs Bonded Warehouses in Canada
Like a sufferance warehouse, bonded warehouses are operated by citizens and licensed by the CBSA. When placed into a bonded warehouse, your goods are considered to be imported into Canada (but not released) even though you don’t have to pay duty yet. Both imported goods awaiting clearance and domestic goods waiting to be exported can be held in a bonded warehouse.
If sufferance warehouses are the short term storage option, customs bonded warehouses are decidedly the long term one. Goods can be placed in a bonded warehouse for up to four years; examples would be of goods imported to be re-exported (thus not being subject to duty) or back-up inventory that isn’t needed in circulation yet.
Sufferance warehouses are for storage only. In a customs bonded warehouse, regulations allow alterations to goods with authorization, including:
- Labelling, packaging, and repackaging
- Testing for and separating out defective goods
- Disassembling and reassembling goods
- Diluting, cutting, trimming, or otherwise altering goods
Bonded warehouses are a boon for businesses that want to keep stock on hand, but don’t want to pay the duty costs upfront all at once. By holding imported goods in a customs bonded warehouse, you have imported goods ready to be released when you need them without the added transportation time whenever you need to make an order.
So, in a nutshell:
Sufferance warehouses are short-term storage facilities for deferring duty. You have limited access to your goods, and they must be claimed within the time limit. They’re for when you need a temporary delay on duty for whatever reason.
Customs bonded warehouses are long-term storage facilities for deferring duty. Your goods can undergo alteration, and though they still must be claimed within a time limit, the limit is much longer. They’re for when you need to delay duty on goods until either the stock is needed or the goods are ready for re-exporting.