Canada: AMPS: Six Month Review Results In Improvements To Canada’s Customs Penalty Regime

Last Updated: November 26 2004

Article by Greg Kanargelidis, Blake, Cassels & Graydon LLP

Importers, brokers, carriers and warehouse operators have been subject to administrative monetary penalties (AMPS) for infractions of customs legislation and regulations, since October 7, 2002. AMPS imposes monetary penalties in proportion to the type, frequency, and severity of the infraction. Most penalties are graduated and take the compliance history of the trader into consideration.

The AMPS regime as originally implemented was subject to much criticism from the trade community, and the Canada Border Services Agency (CBSA) has responded by making numerous changes to the rules and procedures and also to the approximately 250 contraventions that may be assessed against traders. The AMPS regime has undergone many changes already and more changes are expected into the future. Given the constant tweaking and tinkering with the rules and contraventions, traders need to closely monitor the developments and evolution of the AMPS since the changes can have significant implications for importers and other traders.

The Six-Month Review

While amendments have been made regularly to the AMPS contraventions and to the CBSA’s "backgrounders" prepared for each contravention, the CBSA conducted a more formal Six-Month Review of the AMPS regime in 2003. A report was prepared which included a number of recommendations for changes. The report and recommendations were made public in February 2004. The recommendations have been arranged in three categories and the CBSA has announced an ambitious implementation schedule ranging from implementation within 6 months (i.e., by August 2004), within 6 – 18 months (i.e., by August 2005), and matters that are on-going.

Category One Recommendations

The Category 1 recommendations (i.e., those scheduled to have been completed by August 2004) have largely been implemented. The changes address many of the concerns and criticisms of the AMPS regime that were raised by industry. Certain issues remain unresolved. Changes of most concern to importers and traders include: the reduction of the penalty retention periods; cancellation of certain onerous contraventions; and maintenance of existing penalty reduction levels in the case of penalty reduction agreements. An issue not addressed to the satisfaction of industry is the elimination of the "whichever is greater" percentage of value penalties.

Penalty Retention Periods Reduced

The concept of penalty retention periods is necessary in order for the graduated penalty system to operate. Under the AMPS system, there are three penalty levels. A first assessment of a particular contravention is assessed at the first level, a second infraction at the second level, and the third and subsequent contraventions are assessed at the third penalty level. The AMPS regime originally called for a three year penalty retention period, meaning that a contravention would remain on a trader’s compliance history for 3 years before being erased. For large importers who invariably will incur contraventions from time to time, they would always be at the maximum (level 3) penalty level and this was perceived as punitive rather than corrective. The CBSA agreed and as a result the 3 year retention period was reduced to 1 year for all contraventions except those that apply in a compliance verification (audit) environment. This means that over 160 contraventions now have retention periods of only one year rather than three years.

C003 Cancelled

Industry participants were also very critical of certain AMPS contraventions which were felt to be overly onerous. Chief among these was C003, which imposed a penalty for any errors in any of 9 data fields on the B3 Canada Customs Coding Form. The CBSA organized a Working Group to consider whether cancellation of C003 was warranted, and accepted the Working Group’s recommendation that this particular contravention be cancelled.

Penalty Reduction Agreements

Another recommendation that has already been implemented is the extension of the $1.00 for $1.00 penalty reduction available to traders who enter into a Penalty Reduction Agreement (PRA) with the CBSA. The original proposal was for the penalty reduction amount to be reduced to $0.50 for each $1.00 spent in improving systems. The PRA is a formal agreement between the CBSA and a trader which under certain conditions may reduce penalty amounts by $1.00 for each $1.00 invested in correcting systemic problems. The PRA is intended to operate as an incentive to invest in the correction of problems in a trader’s customs information systems. A PRA is potentially available where penalties assessed are $5,000 or more.

"Whichever is Greater" Penalty Stays

A suggestion by industry that was not accepted is the elimination of the "whichever is greater" penalty amounts. In this connection, certain of the penalty amounts assessed against traders are calculated as the greater of a flat amount (say, $100) or a percentage amount (say, 10% of the value for duty). As a result, the penalty actually assessed could end up being a very significant number depending on the value of the affected transaction. The CBSA reviewed those contraventions that included the "whichever is greater" formula and it was determined that no changes should be made and it is appropriate for the "greater of" formula to continue to apply.

Category 2 Recommendations

The Category 2 recommendations (i.e., those due to be implemented by August 2005) will serve to address additional criticisms by industry. These include: introduce volumetrics in the AMPS to account for clients with exemplary compliance records; and introduce penalties for suppliers and service providers that cause infractions.


The issue of volumetrics is raised by high volume importers. The argument is that these importers are exposed to more penalties than small volume importers on the theory that with more volume come more chances of inadvertent errors or other forms of non-compliance. The CBSA was encouraged to accept that total compliance for large volume importers is not possible and what is more appropriate is the adoption of a policy that would preclude penalties in cases where the importer has achieved a high rate of compliance in a specified period of time. The CBSA is seeking further input from industry on this issue and is considering further what changes to the AMPS regime can and should be made.

Third Party Liability

The AMPS regime results in most contraventions being assessed against importers rather than carriers, brokers, or warehouse operators. In fact, statistics show that up to October 2004, about 59% of all penalty assessments were made against importers. This is largely due to the fact that responsibility for compliance with Canada’s customs legislation rests with importers. However, it is also recognized that importers satisfy these obligations with the assistance of other traders such as licensed customs brokers and carriers. Where the contravention was caused by an error of the broker or carrier, it is unfair for the penalty to be assessed against the importer and for the contravention to be registered against the importer’s compliance history. There was general consensus as part of the Six-Month Review that third parties who are responsible for infractions should receive penalties, rather than the importer. As a result, the CBSA is considering this issue.

Category 3 Recommendations

The Category 3 recommendations provide for an ongoing review of AMPS contraventions with a view to improving the AMPS regime. A number of changes to the AMPS contraventions have been made since June 2004 and more are expected.

New C362 - General Export Permits

Contravention C315 is a contravention dealing with, among other things, the failure to properly complete an Export Declaration. The first level penalty is set at $1,000. This penalty was felt to be overly onerous where the sole infraction is the failure to indicate the General Export Permit number in the permit field of the Export Declaration (i.e., indicating that a formal export permit is not required). As a result, the CBSA has added new C362 to apply for errors of this nature, with a first level penalty set at $100.

C019 and C020 Cancelled - Failure to Report

In addition, C019 and C020 have been cancelled. These contraventions dealt with the failure to report imported goods. A number of problems were identified with these contraventions and there were concerns about the legal basis for their imposition. As a result, they have been cancelled and replaced with two new contraventions: C360 (for high value shipments) and C361 (for low value shipments). The new contraventions deal with situations where unreported goods are found during an examination based on a referral of the release request. Any C019 or C020 that have been appealed apparently are being cancelled by the Appeals Directorate.

Sufferance Warehouses

Changes have also been made to several contraventions dealing with warehouses. In particular, C046, C047, C066 and C069 were amended to exclude reference to "sufferance warehouses" (they continue to apply only to customs bonded warehouses). The CBSA determined that a one year retention period only should apply to sufferance warehouse infractions; therefore, new C356, C357, C358 and C359 were added to deal only with sufferance warehouses.

Concluding Comments

Importers and other traders are still getting used to the new AMPS penalty regime. To its credit, the CBSA is working with industry and has demonstrated its willingness to make changes to the regime where changes are warranted. It is expected that the AMPS regime will continue to evolve for the foreseeable future. As a result, it is important for importers and other traders to continually monitor these changes and indeed, to bring to the attention of the CBSA any criticisms or suggestions that would serve to improve the AMPS regime and to further support its objective of encouraging compliance rather than being punitive.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
27 Oct 2016, Seminar, Toronto, Canada

Please join members of the Blakes Commercial Real Estate group as they discuss five key provisions of a commercial real estate purchase agreement that are often the subject of much negotiation but are sometimes misunderstood.

1 Nov 2016, Seminar, Toronto, Canada

What is the emotional culture of your organization?

Every organization and workplace has an emotional culture that can have an impact on everything from employee performance to customer or client satisfaction.

3 Nov 2016, Seminar, Toronto, Canada

Join leading lawyers from the Blakes Pensions, Benefits & Executive Compensation group as they discuss recent updates and legal developments in pension and employee benefits law as well as strategies to identify and minimize common risks.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.