The AMPS applies monetary penalties against importers and
exporters for contraventions of customs reporting, accounting and
other requirements of the Customs Act and Customs
Tariff. For example, penalties are applied against importers
for the failure to amend incorrect declarations of tariff
classification, valuation, and origin within 90 days of having
reason to believe they have made erroneous declarations.
Typically, penalties are issued at the conclusion of CBSA trade
verifications in the form of a Notice of Penalty Assessment (NPA).
Penalty amounts graduate based on contravention history
(i.e., penalty amounts escalate for second, third, and
subsequent offences), but flat rate penalties apply for a small
number of offences that are not suited to the graduated penalty
structure, such as the failure to maintain books and records.
The revisions to Memorandum D-22-1-1 clarify the CBSA's
policy on the application of AMPS and reflect amendments to the
Customs Act relating to the penalty assessment review
process. In particular, importers and exporters should be aware of
the following changes:
The CBSA's policy for determining the contravention history
of a company with more than one division separately operating in
and/or importing into Canada is clarified. Memorandum D-22-1-1
states that if a company has more than one Canadian Business
Number/import account, a poor client contravention history for one
division will not affect the client contravention history or the
penalty levels of the other divisions. In other words, each
division, employing a separate business number/import account, will
be treated as a distinct importer and will have ascribed to it a
distinct compliance history. This policy is consistent with the
treatment of importers who operate under separate divisional or
corporate import numbers and whose practices have conformed with
CBSA trade verification final reports in respect of which the
substantive findings (e.g.,
classification/valuation/origin) are later amended. The CBSA will
generally apply its discretion to assess the company/division in
receipt of the previous incorrect findings on a prospective basis
only, but will not apply the same discretion to other divisions or
members of a multi-corporate enterprise. Relief in the latter
circumstances may be available only through remission.
The time period to request a correction of a NPA pursuant to
subsection 127.1 of the Customs Act has been extended from
30 days to 90 days. The 90-day timeframe is calculated beginning on
the date of issuance of the NPA. A request for a correction to a
penalty assessment can be made if the penalty was applied in error
because there was no contravention or the penalty amount is
incorrect. The additional delay will allow time for the importer to
better assess whether or not an error has been made, and should
reduce the number of requests made to protect the importer against
expiry of the limitation period.
On the administrative front, CBSA policy now provides that all
requests for a review of a penalty assessment must be submitted to
the CBSA Recourse Directorate at 1686 Woodward Drive, Ottawa,
Ontario K1A 0L8. Requests for a review of a penalty assessment were
formerly sent to the CBSA office that issued the NPA.
The "Penalty Reduction Agreement" is renamed the
"Penalty Reinvestment Agreement". The Penalty
Reinvestment Agreement is a program that allows for a full or
partial reduction of penalty amounts if the importer or exporter
agrees to invest the penalty amount in its commercial
information system for the purpose of correcting systematic
problems that are causing customs reporting errors. The agreement
identifies the nature of the problem, what will be done to correct
the problem, and the timeframe required to make the
AMPS highlight the need for importers and exporters to implement
robust customs compliance programs that include procedures for the
self-assessment of compliance in advance of being CBSA audited.
Early detection of customs reporting errors facilitates corrections
and voluntary disclosures, as necessary, in order to mitigate the
risk of penalties.
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.
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While that agreement mandated export measures on Canadian softwood lumber exports destined for the United States, it also protected those lumber exports from the potential imposition of onerous import measures by the U.S.
On September 29, 2016, the Supreme Court of Canada issued its first tariff classification decision since Canada signed the International Convention on the Harmonized Commodity Description and Coding System in 1998.
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