Attention importers! Auditor General’s Report on Customs Duties may affect you
Recommendations
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Review its customs broker licensing regime by considering features such as:
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a licensing process that requires periodic assessment of a broker’s compliance record, and
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shared liability between brokers and importers for compliance with import requirements and payment of duties and taxes.
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Review its penalties in order to better protect import revenues and ensure compliance with trade programs.
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Review the period allowed for retroactive changes on the import form – without compromising its ability to conduct compliance verifications.
What to watch for
Cole’s industry specialists have reviewed the report for indications of potential impacts to our clients. We recommend that Canadian businesses watch for changes down the road that could include any of the following:
- Increased compliance measures could result in increases in the value and frequency of penalties, driving up your costs.
- If the minimum value for duty exemption increases – as is alluded to in the report – Canadian manufacturers and retailers could face greater competition from foreign suppliers.
- There could be increased responsibility on the importer to supply more comprehensive product descriptions on import documents, resulting in clearance delays and increased time and costs for providing information.
- CBSA could step up scrutiny on refund claims and appeals, meaning longer processing times. A by-the-book application of the rules will likely result in more rejected claims.
- Shorter time frames for filing for duty refunds may result in missed deadlines and lost opportunities.
- Increased scrutiny around quota goods, drawbacks and duty relief programs will mean increased controls, more audits, higher penalties and longer approval times to qualify for these benefits.
- CBSA may mandate joint liability for compliance on importers and their brokers. This could have the benefit of closer working relationships between the two parties, but it could also increase brokerage fees paid by importers.
Be prepared
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Start working with your vendors now to improve product descriptions on import documentation.
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Review your customs tariff database and preferential trade programs with your broker.
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Talk to experienced trade consultants or trade lawyers to review your current compliance levels and your readiness to import under a stronger compliance and penalty environment.
We can help
