Sending your international partners a gift is lovely – but beware of customs

24/01/2018

Set of hands passing gift to another set of hands

Set of hands passing gift to another set of hands

Navigating a new international market could be a part of your business strategy, whether you are sourcing new products, or entering a new market to sell your products or services.

With connectivity a driving force of the technological century, it seems so easy right? Nope!

There is a ton of things to consider, and a lot of work to do before you can make any connections, but don’t let that discourage you. Expanding your business into new markets can be profitable, eye opening and full of great experiences.

In this article we will cover something you may not consider important – but it could mean the difference between closing a sale or losing out on a lucrative partnership.

When a gift is an import

The relationships and bonds that are created across land and oceans through technology are powerful, and sometimes we feel like saying “thank you”. Sometimes we want to go beyond saying thank you through e-mail or Skype, so we send gifts to our partners who are often in different countries.

One of the most common questions a customs broker is asked is about receiving gifts from another country:

I had a gift sent to my company, what is my obligation to declare?

Although each country is different with their own set of rules and regulations on importation, it is imperative to be proactive and compliant when receiving any goods within your shipment that were not listed on the commercial or packing list.

First, reach out to your customs broker to let them know. This will ensure that everyone is working together to stay compliant.

I do declare!

There are a few factors to consider if you are a Canadian (individual or company):

  1. Any goods sent by courier or postal with a value of less then CAD $20, has to be declared and are exempt from duties and taxes.
  2. “Gifts” sent person to person under $60 in value will also be exempt, if the gift value is over $60, you would pay the difference over the $60.00. For example, if the value is $100.00, you would be subject to pay duties and taxes on $40. The “gift” MUST include a card saying the “gift” is in fact a gift.
  3. A “gift” included in a shipment sent from a supplier or other company will have to be declared as a part of that shipment and will be subject to duties and taxes no matter the value.

Keep an eye on changing policies and regulations

One of the subjects being discussed in the NAFTA negotiations is the de minimis. There is currently a huge gap between what the USA (USD $800.00) allows and what Canada (CAD $20) allows, so it will be interesting to see the changes that come from the talks.

The lesson here is that sending a token of appreciation to a distributor, partner, customer or an agent is a very nice gesture. But –  you may want to do some research and let the recipient know it is coming, so that they can stay ahead and complaint by keeping their customs broker in the know.

Now sit back and enjoy your thank you card.

Disclaimer: The opinions expressed in this article are those of the contributing author, and do not necessarily reflect those of the Forum for International Trade Training.

About the author

Sarah Barnes-Humphrey, CITP|FIBP

Author: Sarah Barnes-Humphrey, CITP|FIBP

Sarah Barnes-Humphrey, CITP|FIBP, is the founder and CEO of Victoryus Inc, a Supply Chain consulting firm. Sarah stands at the forefront of international trade with expertise in the global logistics industry, working with the private sector to build, develop and increase efficiencies in their supply chains. She has spent the past 20 years working in logistics and supply chain, most recently as Director of Sales and Marketing for ICECORP Logistics Inc, a privately owned 3PL.

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