At the 2010 CSCB Conference in September, there was a joint CSCB-CBSA session on Compliance at the Border. The presentation for that session included changes to AMPS that had been discussed at a bilateral meeting between the CSCB and CBSA.
Since the conference, these changes were discussed by the BCCC AMPS Subcommittee and between CBSA and its regions. Clarification has been provided by CBSA and we are pleased to say that changes presented at our conference will be going forward. The updated AMPS documents are currently being translated into both official languages and are before the regional Trade Directors, in draft format, for their review.
Final versions of the AMPS documents should be ready for release by the end of this calendar year and will be made available when the proposed AMPS amendments are enacted. The related contravention documents will explain all of these provisions in much greater detail, and will include specific examples that should help the importing community to better understand the trade-related AMPs.
Last, we have also been advised that these changes will not be retroactive.
Clarification of the information provided at the conference follows. Please note the difference between “per error” and “per instance” or “per occurrence”. Per error refers to the same error, made more than once. Per instance, or per occurrence, means each time the same error is made.
1. For contraventions C080, 081, 082, and 083, the CBSA is currently working on the following changes:
At the first level, penalties will be assessed per error, except in instances where the importer has already received written instructions from the CBSA (currently they are issued each time the error occurs).
For example, if pens are misclassified 500 times and each of those 500 times the same incorrect HS is used, a single penalty will be assessed, at the first level of AMPS.
CSCB: Please confirm that if more than one HS error is made, on different items, the maximum penalty still remains $5,000.00.
CBSA: The proposed maximum for any first level penalty is $5,000. Where two different tariff classification errors are made, two $150 penalties will apply, for a total of $300.00. To that end, 33 different tariff classification errors would be required to reach the proposed $5,000 maximum.
2. CSCB: What is CBSA’s position for those who have not received written instructions from CBSA? That is, those who CBSA have determined have reason to believe based on other factors?
CBSA: AMPs only apply in cases where the CBSA has determined that the importer had “reason to believe”. The intention of this proposed amendment is to make a distinction between cases where the CBSA has specifically addressed the issue with the importer in writing previously versus other factors that constitute “reason to believe” (e.g. legislative provisions that are evident (obvious, apparent) and transparent (clear, self-explanatory).
In cases where written instructions have been provided by the CBSA, the $150 penalty would apply per occurrence, to the $5,000 maximum.
In cases where written instructions have not been provided by the CBSA, the $150 penalty per error would apply, to the $5,000 maximum.
3. CSCB: Can you confirm what is meant by the verification period?
CBSA: The verification period is as identified in the letter to the importer initiating the compliance verification activity. Generally speaking, this is typically the importer’s last closed full fiscal year.
4. For contraventions C350, 351, 352, and 353, the CBSA is currently working on the following changes:
Penalties under these contraventions will generally be identical to those under C080, 081, 082, and 083.
However, penalties will be issued for all transactions within the reassessment period (as compared to those within the verification period).
CSCB: Can you confirm what is meant by the reassessment period?
CBSA: The reassessment period is that contemplated in the Canada Border Services Agency (CBSA) Memorandum D11-6-10, Reassessment Policy. In accordance with the Customs Act, this period can extend back a full four years where the importer has had “reason to believe”.
5. There will be $1,000 cap on clerical errors.
CSCB: Can you explain how CBSA will determine what is and what is not a clerical error?
CBSA: A clerical error is an inadvertent mistake, generally of an obvious transcription or typographical nature. The CBSA will make this determination on a case-by-case basis when presented with specific information.
6. CSCB: With this structure in place, what is the process with a second audit if the same error is made? What if a different error is made, but in the same program?
CBSA: Where the same error is found, during a subsequent verification, to have been repeated, a second level penalty will apply. The second level penalties will not change and will therefore continue to have a maximum of $200,000. Where a new error is found, a first level penalty will apply, as second level penalties will only be applied to errors previously made that triggered the first level penalty.