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  • Question

    Is the US Government responsible for paying custom clerances, applicable brokerage charges, duties and taxes with a Canadian firm?


    Answer

    Since we do not have all of the facts pertaining to your requirement, solicitation/contract or contractor(s), the following answer is based solely on the background and question provided.  As we do not have access to the contract folder or particulars that apply to this situation, we highly recommend you consult the Contracting Officer and possibly the Legal Office.
     
    This question appears to address more than one issue - Customs and duties, and taxes.  Therefore, the response will address each as well. 
     
    FAR 25.901 states in part "United States laws impose duties on foreign supplies imported into the customs territory of the United States. Certain exemptions from these duties are available to Government agencies."  FAR 25.903(a) states in part "Subchapters VIII and X of Chapter 98 of the Harmonized Tariff Schedule of the United States (19 U.S.C. 1202) list supplies for which exemptions from duty may be obtained when imported into the customs territory of the United States under a Government contract."  Supplies purchased under a Free Trade Agreement, such as NAFTA, would qualify for such an exemption.  Since you are purchasing these parts/kits from a Canadian supplier, this would be the case here.  Therefore, you should not be required to pay customs fees/duties on these supplies/kits. 
     
    FAR 29.101(a) states "Contract tax problems are essentially legal in nature and vary widely. Specific tax questions must be resolved by reference to the applicable contract terms and to the pertinent tax laws and regulations. Therefore, when tax questions arise, contracting officers should request assistance from the agency-designated legal counsel."  Additionally, DFARS 229.101(a) states "Within DoD, the agency-designated legal counsels are the defense agency General Counsels, the General Counsels of the Navy and Air Force, and for the Army, the Chief, Contract Law Division, Office of the Judge Advocate General."  So, for the USMC, the agency-designated legal counsel would be the General Counsel of the Navy.  I recommend you begin by discussing with your local contracting legal counsel.
     

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