It is well known that imported clothing is subject to high duty rates of 18% unless some relieving provision applies to reduce or eliminate the tariff. But for special purpose garments, such as protective suits and gloves for use in a “noxious atmosphere,” the goods can be imported on a duty-free basis. So, being “noxious” turns out to be beneficial, at least from a customs duties perspective.
Canada’s Customs Tariff includes at least 10 different tariff items that include the phrase “to be employed in a noxious atmosphere.” Where those words form part of the tariff classification text, the “protective suits” or “protective gloves” that are being imported are duty-free, so long as there is evidence that the goods will actually be used in a “noxious atmosphere.”
So, what is a “noxious atmosphere?” The Canada Border Services Agency (“CBSA”) has just published revised Customs Memorandum D10-15-26 that focuses on those tariff items covering “goods to be employed in a noxious atmosphere.” The CBSA’s publication is helpful in that it summarizes the decisions by the Canadian International Trade Tribunal (“CITT”) that have considered the meaning of this phrase.
According to the Customs Memorandum, the term “noxious” means “harmful, injurious (noxious fumes)” with synonyms “poisonous, virulent, toxic, harmful.” The term “atmosphere” is considered to mean “the air in a particular place, especially if unpleasant.” It is important to note that the Tribunal has also found that a noxious atmosphere is not limited to only “life-threatening environments” but also includes environments that are “potentially harmful to life, injurious to health and/or fatal.”
Based on the CITT decisions, the phrase “noxious atmosphere” has been held to apply to a hospital setting and dental offices, among others. Therefore, the isolation gowns that hospital staff and visitors sometimes need to wear, can be imported duty-free because they are considered to be used in a “noxious atmosphere.” The same would apply to certain gloves used in a hospital setting. The CITT has also ruled that coveralls worn when removing asbestos qualify as being used in a “noxious atmosphere.”
The issue boils down to sufficient evidence of the end use. This is because the duty-free treatment provided to these goods is considered to represent “conditional relief” provisions. In other words, it is not sufficient for the goods to be “designed” or “intended” to be used in a noxious atmosphere; rather, the goods must actually be used in such a situation and the importer must be able to prove it. The type of proof required is not necessarily settled. Invoices and end-use certificates may be considered sufficient evidence in appropriate cases.
While the “noxious atmosphere” conditional relief provisions are broader than one might expect, they would not apply to items used in non-noxious settings. For example, the same one-use garments or gloves used in a spa or nail salon would not qualify for the duty-relief. And a “noxious atmosphere” does not include “mildly uncomfortable environments” such as rain, cold, mud, and minor electric shock.
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.