On June 23, 2022, the Canada Border Services Agency (CBSA) announced the signing of a Mutual Recognition Arrangement (MRA) with the equivalent body responsible for customs matters in Peru. Under the MRA, the CBSA and Peru agree to honour each other’s Trusted Trader Programs.
Canada’s Trusted Trader Program
Trusted Trader programs facilitate legitimate trade by providing streamlined border processes to pre-approved, low-risk trusted traders. Canada’s Trusted Trader Program is known as Partners in Protection (PIP). Companies that wish to participate in PIP must apply for membership, and various conditions need to be satisfied before the applicant will be accepted into the program. However, once in the program, PIP members stand to benefit from faster and more predictable customs clearance, as the CBSA will treat imports by PIP members as low security risks.
PIP members get reciprocal benefits
The MRA signed with Peru means that Peru will recognize Canada’s PIP program and will facilitate customs clearance for PIP members. In return, the CBSA will provide reciprocal benefits to members of Peru’s Trusted Trader Program, which is referred to as the Authorized Economic Operator Program.
Canada has MRAs with nine other jurisdictions, including the USA
This mutual recognition of Trusted Trader Programs adds considerably to the benefits of being a PIP member. While there are clear benefits for PIP members who are importers, the MRA demonstrates that Canadian exporters will also be able to benefit from participation in PIP, by being able to have faster and more predictable customs entries into foreign jurisdictions with which Canada has entered into an MRA. In this connection, the CBSA has signed MRAs with the customs administrations of nine other jurisdictions, namely: Australia, Hong Kong, Israel, Japan, Mexico, New Zealand, Singapore, South Korea and the United States.
PIP membership benefits exporters, not just for importers
The MRA entered into with Peru demonstrates that PIP is not just a program benefitting importers. Canadian exporters who are active suppliers to the jurisdictions with which the CBSA has existing MRAs in place, should consider whether they would benefit from applying for membership in PIP in order to benefit from streamlined customs clearance in those jurisdictions. Furthermore, exporters to other jurisdictions should consider making a case to the CBSA for entering into additional MRAs with still more jurisdictions. One of the most frequent complaints of exporters is the slow customs clearance processes of foreign jurisdictions. Initiatives such as the Trusted Trader MRAs can provide tangible benefits to Canadian exporters, streamlining clearing customs in the destination country and thereby improving the economic competitiveness of Canada’s exports.
Greg Kanargelidis is a customs and trade lawyer practicing as KANARGELIDIS Global Trade & Customs Law and is currently past-Chair of the CBA’s Commodity Tax, Customs and Trade Section.