CBSA Published CN26-07 with Wrong Schedule References (and Why That Matters)

CBSA published an updated version of Customs Notice CN26-07 last week, and it contains at least two typos that swap schedule references in the paragraphs covering special authorization codes. Paragraph 26 should cite Schedule 2 only, but it references Schedule 3. Paragraph 27 should cite Schedule 3 only, but it references Schedule 2.

This is not a theoretical problem. Special authorization codes are live fields on every CAD that involves drawback, temporary imports, warranty replacements, repair and return, or goods moving under one of the other Schedule 2 or Schedule 3 scenarios. If you follow the published notice as written, you will file the wrong code. If you file the wrong code, CBSA’s portal will either reject the CAD at submission, or it will clear the goods and trigger a post-release review that you now have to unwind.

What special authorization codes actually do

Special authorization codes sit in Field 45 of the CAD (the CARM-era replacement for the old B3 form). They tell CBSA which relief, exemption, or special treatment applies to the shipment. Schedule 2 of the Customs Tariff covers goods that can enter duty-free under specific conditions: warranty replacements, repairs done abroad and returned, goods for further manufacture and export (drawback), temporary imports, and a few other narrow categories. Schedule 3 covers goods that are conditionally relieved of GST.

When you’re filing a CAD for, say, a warranty replacement of a defective pump that’s being sent back to the Canadian importer at no charge, you claim the Schedule 2 relief by entering the correct authorization code in Field 45. CBSA’s system checks the code against the HS classification, the value declared, and the importer’s account history. If everything lines up, the goods release without paying duty. If the code is wrong, or if the paragraph of the Customs Notice you’re relying on points you to the wrong schedule, you have a problem.

The operational risk of following incorrect CBSA guidance

Here’s the issue with this particular typo: brokers read Customs Notices to understand exactly which code to use in which situation. CN26-07 is the reference document for special authorization codes. If paragraph 26 tells you to refer to Schedule 3 when the actual legal authority is Schedule 2, and you file the CAD accordingly, you’re either going to get a rejection at the border or a correction demand three weeks later when the CSA examiner pulls the file for post-release verification.

The rejection is annoying but clean. The CAD bounces, you refile with the correct code, the goods release a few hours later, and the importer’s drayage carrier charges detention because the container sat at the terminal while you fixed the paperwork.

The post-release correction is worse. CBSA clears the goods, the importer takes delivery, and two weeks later you get a notice that the authorization code was invalid and the full duty is now owing, plus interest from the release date. If the importer already sold the goods or put them into production, you’re now chasing a receivable for duties that should never have been assessed in the first place, and the math on the interest clock is running against a Schedule 2 exemption that was always valid but was claimed under the wrong code because the Customs Notice had a typo.

How brokers handle bad guidance

Most brokers who have been filing CADs since CARM Release 3 went live in October 2024 are not blindly following a single Customs Notice without cross-checking the actual Customs Tariff schedules, the D-memoranda, and the CARM Portal’s own field validation rules. Institutional knowledge fills the gap. If you’ve filed a few hundred warranty replacement CADs, you know that the authorization code for a Schedule 2 paragraph 2(c) claim is not the same as a Schedule 3 relief, and you’re not going to swap them just because paragraph 26 of a Customs Notice contains a typo.

But that institutional knowledge is not evenly distributed. A new broker, or an in-house trade compliance person who is filing their own CADs for the first time under CARM, is going to read CN26-07 and assume it’s correct. They will follow the published guidance, file the wrong code, and eat the cost of the correction. That is the entire point of publishing Customs Notices: to give the trade community clear, accurate, official instruction. When the notice itself contains errors, it creates compliance risk for the people who are trying to follow the rules.

CSCB flagged this to CBSA, and we’re waiting for the correction. Until CN26-07 is republished with the correct schedule references in paragraphs 26 and 27, the working answer is to cross-check every special authorization code filing against the actual Customs Tariff schedules and ignore the specific paragraph references in the notice. Not ideal, but that’s where we are.

The broader pattern

This is not the first time a CBSA notice or CARM Portal guidance document has gone live with errors. The October 2024 launch of CARM Release 3 was accompanied by a wave of contradictory instructions, field validation rules that didn’t match the published D-memos, and portal error messages that cited the wrong regulation. Most of those have been cleaned up. Some have not. The CAD filing community has learned to treat the first version of any new CBSA guidance as a draft, verify it against the underlying legal authorities, and flag the errors back to CBSA through CSCB or direct submission to the CBSA’s trade feedback inbox.

The CN26-07 typo is small, but it’s the kind of error that costs real money if you follow it. Detention charges, interest on duties that should have been relieved, and the broker time to file a correction and argue the case with the CSA examiner all add up. CBSA will fix it, but in the meantime, if you’re filing CADs that involve special authorization codes under Schedule 2 or Schedule 3, double-check the actual Tariff schedule before you trust the paragraph references in the notice.

If you’re seeing CAD rejections or post-release correction demands that don’t make sense, and the authorization code field is in the mix, we file these all day. Get in touch.

Source: CSCB