CUSTOMS BROKER AND FREIGHT FORWARDER

FAQs

IMPORTANT NOTICE: The F.A.Q. is a tool we use to inform our customers about the most frequently asked questions.  As it is difficult to address all scenarios or to know the level of knowledge of everyone, we encourage you to contact us if you have topics that have not been addressed in the text below and you would like to discuss.

COMPLIANCE & AMPS

What is compliance?

Failure to comply with the laws and regulations will result in AMPS (Administrative Monetary Penalties Systems) penalties, being applied.

A few examples of failure to comply would be:

Providing incorrect information concerning the value or origin of the goods at the time of importation.

Failing to provide the require permits at the time of importation.

Not correcting the classification or any inaccurate information on your accounting documents (B3) within 90 days.

What are AMPS?

RSAP est l'acronyme du Régime de sanctions administratives pécuniaires.

AMPS stand for Administrative Monetary Penalty System. According to CBSA “The Administrative Monetary Penalty System (AMPS) is a civil penalty regime that secures compliance with customs legislation through the application of monetary penalties.

AMPS authorizes the CBSA to assess monetary penalties for non-compliance with customs legislative, regulatory and program requirements.

AMPS applies to contraventions of the Customs Act and the Customs Tariff and the regulations under these Acts, as well as contraventions of the terms and conditions of licensing agreements and undertakings.”

What government agencies are involved?

All government agencies and departments which have regulations respecting the merchandise imported may be involved. Examples of these would be Transport Canada, Canadian Food Inspection Agency, Natural Resources Canada, Health Canada, Canadian Border Services Agency, and Foreign Affairs and International Trade Canada.

How can I ensure that I am compliant?

Given the importance, and far reaching implications of compliance we recommend that you contact us concerning this matter, and will discuss your particular situation, and create a compliance plan tailored to your needs to ensure your current and future compliance.

Ensuring that you are compliant now will save you time, and money in future, as well protect your company’s record with the government.

How can I ensure that I am compliant?

Given the importance, and far reaching implications of compliance we recommend that you contact us concerning this matter, and will discuss your particular situation, and create a compliance plan tailored to your needs to ensure your current and future compliance.

Ensuring that you are compliant now will save you time, and money in future, as well protect your company’s record with the government.

Why the importer is held responsible to pay the penalties and not your customs broker?

The importer is responsible under the Customs Act for the declarations made either by himself or through an authorized agent (customs broker). The CBSA has taken the position that being the owner and ultimate responsible party for the importation of your product, the importer will be held responsible for the declarations made in their name.

For this reason it is imperative that the importer look over the invoices and declarations presented to the CBSA in his name within 30 days of receipt from his Customs Broker and advice him immediately of any discrepancies or errors found. Failure to do so may result in penalties being assessed on these importations.

Do I have to make corrections even though there are no duties or taxes involved?

Yes. Corrections to your import declarations must be made within 90 days whether or not there are duty or tax implications. Failure to do so may result in penalties.

What is ‘REASON TO BELIEVE’’, and how does it affect my importations?

Reason to Believe is any knowledge or information which would lead you to believe that the information/documentation presented at the time of importation is inaccurate.

Some examples would be

  • Customs ruling
  • Customs Detailed Adjustment Statement (DAS)
  • Changes to the commercial invoice from your supplier
  • Quantities received different than declared at the time of importation
  • Communication with other parties indication errors/omissions

Once you have reason to believe there is an error or inaccuracy in a declaration, you are bound by the Customs Act to have it corrected with 90 days.

IMPORTANT NOTE: The fact that you use a customs broker does not remove the importer's responsibility in this matter, or change the way in which "Reason to Believe" is applied. Lack of knowledge/expertise is no excuse in the face of the law. Ultimately your customs broker is only an agent acting on your behalf, and as such you are responsible for declarations made in your name.

For this reason, it is incumbent upon the importer to look over their importation documents, and ensure that the information is accurate. Your customs broker is there to assist you, but can only provide assistance based upon the information you provide to them or they might have on hand from your supplier.

We cannot stress enough the importance of complete and accurate information. For an example, if the product is a repetitive one, the customs broker would enter the information provided in their database, and all future shipments would be classified under the same classification. If the information provided by the importer is incomplete or inaccurate, and leads to an incorrect classification this may result in penalties, additional duties, taxes, and interest for each importation of the product.

Is the customs broker responsible for this error? No, the customs broker acted in good faith, and applied knowledge and expertise to the information provided and available at the time of importation.

What are the penalties amounts involved with AMPS?

The amounts can go from $100 to a maximum of $25000 depending upon the circumstances, frequency, and severity of the infraction. The amounts increase with subsequent infractions of the same type.

NAFTA

What is NAFTA?

NAFTA stands for the North American Free Trade Agreement, which came into effect in 1994 for Canada, USA, and Mexico. Under this trade agreement goods imported into Canada which were manufactured in any of these countries, and qualify under the Rules of NAFTA, are eligible for duty free importation.

How can I be sure that my NAFTA certificate of origin is valid?

You will need to ensure that all the fields are properly completed, and that the declaration which is indicated in the preference criteria (#7), producer (#8), and net cost (#.9) fields comply with the appropriate rule. We provide a NAFTA verification service, for a nominal fee.

Do I need a NAFTA Certificate of Origin if my goods were made in the United States, and are duty free?

No. We do recommend however that you obtain a NAFTA certificate of origin from your supplier. Should customs reassess the classification of your goods to a tariff item which is dutiable after the one year limit, you would lose the opportunity for NAFTA preferential treatment if a NAFTA certificate of origin was not obtained and applied prior.

In addition, should you use the product as an input, or resell the product you may need a NAFTA certificate of origin, in order to support a NAFTA certificate of origin you complete for your client or for export of the goods.

Do I always need a NAFTA Certificate of Origin regardless of value?

Yes. However, for shipments which are less than $1600 CAD you can use a document named “Statement of Origin for commercial importations of less than $1600CAD” which can be found on our site under the Menu “FORMS/NAFTA”. Note that this document must be signed by the exporter

For your shipments of $1600 CAD or greater you will require the formal NAFTA Certificate of Origin form.

What happens if I claim NAFTA benefits on a shipment, and I do not have a copy of the NAFTA Certificate?

Claiming the benefits of NAFTA without having a certified NAFTA Certificate on file is a serious offense. You will be subject to an Administrative Monetary Penalty (AMPS) for each importation, up to 4 years prior to the Customs audit.

What happens if I claim NAFTA benefits on a shipment, and I do not have a copy of the NAFTA Certificate?

Claiming the benefits of NAFTA without having a certified NAFTA Certificate on file is a serious offense. You will be subject to an Administrative Monetary Penalty (AMPS) for each importation, up to 4 years prior to the Customs audit.

Do all goods manufactured in the USA qualify for duty free treatment under NAFTA?

NO. Just because your goods are manufactured in a country that is part of NAFTA (Canada, USA, or Mexico), it does not automatically mean that your goods will be eligible for the benefits (ie; duty free importation) under NAFTA. A manufacturer may include components or ingredients which where imported from other countries. In such cases the goods must qualify under the rules of origin set out in the North American Free Trade Agreement.

The product involved, along with the country of manufacture of all of the various ingredients/components will play a key role in determining its status.

Head office

2728 Étienne Lenoir (Autoroute 13) Laval, QC H7R 0A3

Téléphone : 450-622-2221 / 800-26-SECAM

Télécopieur : 450-622-8887 / 800-63-SECAM

Courriel : sylvain@secam.ca