Importers using Chapters 98 or 99 for U.S.-origin goods have a classification review to complete following CBSA’s October 23, 2026 update to Customs Notice 26-23. The update clarifies that Chapter 98 and 99 goods are generally exempt from the new U.S.-origin surtax unless two conditions are met: the applicable Chapter 98 or 99 tariff item is listed in Schedule 4 of the United States Surtax Order (2026), and the goods are also otherwise classifiable under a tariff item listed in Schedules 1, 2 or 3. The surtax itself took effect on September 8, 2026; October 23 was the date of the guidance clarification, not a new commencement date.
The decision is not made from the Chapter 98 or 99 code alone
The updated notice creates a two-part test for goods that enter under a Chapter 98 or 99 provision. First, the importer’s declared Chapter 98 or 99 tariff item must be checked against Schedule 4. Second, the goods must be assessed against the underlying tariff items listed in Schedules 1, 2 or 3. If both conditions apply, the goods may be subject to the U.S.-origin surtax. If either condition does not apply, the Chapter 98 or 99 exemption described in the notice may apply.
That distinction matters for import files involving special tariff treatment, temporary-entry treatment or other tariff relief. A review limited to the special tariff provision can miss the second part of the test. Conversely, an importer should not treat every U.S.-origin shipment entered under Chapter 98 or 99 as automatically subject to the surtax.
CBSA Customs Notice 26-23 is the source for the October 23 clarification and the conditions described above.
A practical file-review sequence
For importers in Toronto, Mississauga and Brampton handling U.S.-origin goods for processing, repair or specialized use, the review can be organized around the tariff decision rather than the shipment date alone.
- Identify the Chapter 98 or 99 provision. Record the tariff item used for the entry and the reason the provision was applied.
- Check Schedule 4. Determine whether that specific Chapter 98 or 99 tariff item is listed in Schedule 4 of the United States Surtax Order (2026).
- Test the underlying goods. Confirm whether the goods are also otherwise classifiable under a tariff item listed in Schedules 1, 2 or 3.
- Document the result. Keep the classification rationale and the outcome of both schedule checks with the import file so the surtax treatment can be explained later.
- Align the declaration. Where the goods are subject to the measure, the updated notice confirms that the applicable surtax is declared through CARM using the relevant surtax code.
What to check in internal customs controls
Classification records
Importers generally benefit from separating the special tariff provision from the underlying classification analysis. A Chapter 98 or 99 entry may describe how the goods are treated for a particular import purpose, but the surtax review described in Notice 26-23 also requires consideration of the goods’ other applicable tariff classification.
Broker instructions
Where a broker prepares declarations from standing instructions, the importer should identify which Chapter 98 or 99 provisions are in scope and provide the supporting classification analysis. The instruction should also state the outcome of the Schedule 4 and Schedules 1–3 review. This gives the broker a defined basis for applying or not applying the surtax treatment.
Open entries and recurring shipments
Importers generally should prioritize recurring U.S.-origin shipments entered under the same Chapter 98 or 99 provision. The September 8 surtax effective date means that the review may affect entries made before the October 23 clarification, while the clarification explains how the exemption is intended to be assessed. The notice should be used to determine whether any affected entry requires further review.
Separate the guidance date from the surtax date
The key compliance distinction is timing. September 8, 2026 is the underlying surtax effective date identified in the research findings. October 23, 2026 is the date of CBSA’s updated guidance. Importers should therefore avoid treating the October notice as the date on which the surtax began, or assuming that every Chapter 98 or 99 entry became dutiable on that date.
For a GTA importer, the immediate control is a documented classification test: identify the Chapter 98 or 99 tariff item, check Schedule 4, assess the underlying tariff item against Schedules 1, 2 and 3, and ensure the CARM declaration follows the result where the surtax applies. This is a targeted review of U.S.-origin entries, not a general change to every import file.
Frequently asked questions
Does every U.S.-origin Chapter 98 or 99 shipment attract the surtax?
No. The clarification states that the goods are exempt unless both specified conditions apply: the Chapter 98 or 99 tariff item is listed in Schedule 4, and the goods are also otherwise classifiable under a tariff item listed in Schedules 1, 2 or 3.
Did the surtax begin on October 23, 2026?
No. The underlying U.S.-origin surtax effective date was September 8, 2026. October 23 was the date of the CBSA guidance update.
What should an importer do when the surtax applies?
Importers who determine that the goods are subject to the measure are generally expected to declare the applicable surtax through CARM using the relevant surtax code, as described in the updated notice.