Customs bonded warehouse licence

A buyer of a warehouse, distribution or import business meets this term when some of the stock sits in the warehouse under customs control. The licence belongs to a person and a place, so a buyer should find out whether it can continue after the sale.

What the federal law says

Section 91(1) of the Customs Tariff lets the Minister of Public Safety and Emergency Preparedness, if that Minister considers it advisable, issue a licence for the operation of a place as a bonded warehouse to a person who meets the qualifications prescribed by regulation and the requirements or conditions set out in the Customs Tariff, the Customs Act and their regulations, and section 91(2) lets the Minister, subject to the regulations, restrict the classes of goods or the circumstances in which goods may be received. Section 92 provides that, subject to section 31 of the Customs Act and the regulations, duties on goods delivered to the warehouse are not payable until the goods are removed.

Operator liability

Section 28(1) of the Customs Act makes the operator of a bonded warehouse liable for duties or taxes on goods received there, unless the operator proves the matters listed in that section. Read the section for those exceptions before relying on any summary.

Ask whether the licence is held by the seller personally or by a corporation, which goods are in the warehouse at closing, and what the buyer must file to hold its own licence. See what licences and permits transfer when I buy a business and licence re-application.