Canada: Canada Border Services Agency ("CBSA") Revises Its Policy On Canadian Customs Voluntary Disclosures

Last Updated: October 5 2015
Article by Jamie M. Wilks

New Voluntary Disclosure Policy Released Late Last Year

Late last year, Canada Border Services Agency ("CBSA") released an updated customs voluntary disclosure policy in Memorandum D11-6-4 – Relief of Interest and/or Penalties including Voluntary Disclosure. This policy goes beyond voluntary disclosures to discuss other circumstances in which CBSA would consider granting relief from interest and/or penalties.

The focus of this Bulletin, however, will be on the voluntary disclosure aspects (the "Current VDP"). With respect to voluntary disclosures, D11-6-4 replaces the Customs Voluntary Disclosures Program Information for Clients released on December 21, 2001 (the "Former VDP"). The Current VDP clarifies certain aspects of the Voluntary Disclosure Program (the "VDP") and provides more details on the VDP.

Purpose of the VDP

The underlying objective of the VDP is to promote voluntary compliance with federal customs import and export legislation "by encouraging clients to come forward voluntarily to:

a) Disclose previously unreported information; or

b) Correct inaccurate or incomplete information."

Under a valid voluntary disclosure, CBSA may waive penalties and reduce interest by imposing interest at the prescribed rate rather than the higher specified rate (6% per annum higher than the prescribed rate). Importers are still required to pay any duties and taxes owing.

As in the Former VDP, the Current VDP provides non-compliant importers and exporters with the opportunity to seek no-names opinions from CBSA as to whether CBSA would allow a voluntary disclosure in particular circumstances.


One welcome development is that the Current VDP provides details relating to exporters disclosing deficient export reporting (at Section III of Appendix B in D11-6-4).

Where the exported goods are controlled or regulated by federal legislation and a permit, licence or certificate is required to export the goods, then the voluntary disclosure would need to be coordinated with the other government department (the "OGD") responsible for administering and issuing the applicable permit, certificate or licence. These OGDs are responsible for enforcement of export control contraventions under their respective mandates, and for granting any relief from any such enforcement. In the case of the Department of Foreign Affairs, Trade and Development Canada ("DFATD"), DFATD has published its own procedures for making voluntary disclosures.

Conditions for Making a Valid Voluntary Disclosure

As in the Former VDP, the Current VDP outlines the conditions for making a valid voluntary disclosure, which can be summarized as follows in the Current VDP:

a) It is voluntary.

b) It involves the potential imposition of a penalty and/or specified interest or the potential of acting against the goods or person involved in the import/export contravention.

c) It is complete in all material respects.

d) Wither respect to regulated or restricted imports and exports and prohibited goods, the special considerations in paragraphs 19 to 24 of D11-6-4 are taken into account.

e) With the exception of disclosures relating to section 32.2 of the Customs Act, the contraventions are non-repetitive and the applicant can satisfactorily explain how the non-compliance occurred and how it has been corrected or what measures have been put in place to reduce the risk of future non-compliance recurring.

Differences with the Former VDP

The conditions differ in certain respects with those in the Former VDP. Regarding the voluntary condition in (a) above, the Current VDP1 provides more details than the Former VDP. In the next two paragraphs below, we discuss certain of these details found in the Current VDP.

To nullify the voluntary nature of a disclosure, a prior enforcement activity or action would not necessarily have to be taken by CBSA, but could be taken by an OGD or another person in authority, such as the police.

On the other hand, certain prior enforcement activity would not negate the ability to make a voluntary disclosure. An enforcement activity that would not lead to the discovery of the customs infractions to be disclosed could be eligible for the Current VDP. For example, a trade program verification by CBSA of an importer's customs valuation of certain imported goods would not prevent the importer from making a voluntary disclosure of tariff classification errors for those same imported goods.

Regarding condition (b) above, the Former VDP required the imposition of at least one applicable monetary penalty. Condition (b) in the Current VDP goes beyond that requirement. To meet this condition, a disclosed infraction could involve the potential imposition of a monetary penalty (notably an Administrative Monetary Penalty or AMP) or specified interest or the potential of an action against the goods (e.g., seizure or ascertained forfeiture) or person (e.g., charges under the Customs Act). Where the conditions of a valid voluntary disclosure are satisfied, CBSA would forego taking enforcement action. Acceptance of a valid voluntary disclosure by CBSA would not necessarily preclude criminal prosecution under the Criminal Code or penalties or other sanctions imposed by an OGD, as applicable.

Regarding condition (c) above, the Current VDP provides more details than the Former VDP on what is meant by a complete disclosure in various contexts. Under the Current VDP, origin/tariff treatment, valuation and tariff classification disclosures should take into account all incidences within the four year reassessment period. Non-report of, or failure to account for, imported goods should take into account all incidences within six years. There is a six-year period of disclosure for export reporting contraventions.

Unlike the Former VDP, corrections or adjustments under section 32.2 of the Customs Act are treated differently than other disclosures2. First, they are explicitly excluded from the criteria in condition (e) above. By their nature, these errors tend to be repetitive or form part of a pattern (e.g., a tariff classification error repeatedly made for one particular type of imported good). Second, the voluntary disclosure application procedures for commercial imports are divided between:

1) disclosures to correct under section 32.2 of the Customs Act, and

2) all other types of voluntary disclosures.

Another significant development is that the criteria in condition (e) of the Current VDP are different than the corresponding criteria in the Former VDP. The Current VDP puts the onus on the applicant to demonstrate how and why the non-compliance will be avoided in future. In addition, where an applicant has previously made a voluntary disclosure for the same non-compliance issue as currently disclosed, then the current voluntary disclosure application may be denied.

Considerations for Proceedings with Voluntary Disclosures under the Current VDP

Voluntary disclosures can be a valuable tool to eliminate AMPs and other exposure under the Customs Act. Voluntary disclosures are intended to encourage voluntary compliance and be remedial. In considering remedial options, and in implementing the appropriate strategy, a non-compliant importer/exporter may be well advised to consult with a customs expert. To seek comfort from CBSA on an anonymous basis, a non-compliant importer/exporter could hire a customs advisor to prepare and submit a no-names letter to CBSA to verify in advance whether CBSA would approve the importer's/exporter's voluntary disclosure. When considering a disclosure involving a contravention administered by an OGD, a prospective applicant would need to consider not only the Current VDP, but also the OGD's relevant administrative policies.


1 At paragraph 16 of D11-6-4.

2 A voluntary disclosure relating to section 32.2 of the Customs Act would be appropriate where an importer seeks to correct origin/tariff treatment, customs valuation or tariff classification errors more than 90 days beyond when the importer acquired "reason to believe" that the errors were committed..

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2015

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.

Jamie M. Wilks
In association with
Related Topics
Related Articles
Related Video
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions