Compliance Verification Trends Issue #7 - February 2020

Canada Border Services Agency prioritizes certain industries and products for audits to ensure ongoing compliance. The Agency keeps their verification priority list current on their website. Cole’s Audit Response Team also keeps track of trends we see in CBSA verifications, which we share with you regularly so you can feel secure about your customs compliance.

Forewarned is forearmed

Preparation is key if you’re importing targeted items.

Items on the CBSA’s priority list are very likely to be audited. So it’s important that you know which goods are being targeted, and that you ensure customs compliance when importing those items.Being prepared gives you the chance to adapt, account for added costs, adjust selling prices, and generally soften the impacts to your business.

If you aren’t prepared and CBSA finds non-compliance, you may be facing duties, taxes, and additional penalties. It’s worth staying on top of the targeted items and making sure you comply with all customs requirements.

Target update – February 2020

Our Audit Response Unit has recently observed that CBSA has been issuing Trade Verification requests to various importers who import trailers.

There is a different duty rate between trailers and semi-trailers for road tractors or for motor vehicles for the transport of goods (excluding non-commercial snowmobile, utility, boat or horse trailers and trailers for use as permanent mountings for machinery or equipment) compared to those trailers that are for non-commercial snowmobile, utility, boat or horse trailers and for trailers for use as permanent mountings for machinery or equipment.

The difference in duty rate is only 3%. However, due to the large value of some of these trailers, CBSA feels there is potential for a large amount of duty that has not been properly assessed and paid to Customs.

What to do

If you import any of the targeted goods, or goods close in nature to those on the target list, our audit specialists recommend:

• An internal review to ensure your imports have accurate and complete documentation
• Detailed technical information on your products, and copies of any past rulings, verification results, or custom opinions so your customs broker or consultant can help review your product classifications
• A voluntary disclosure if your review reveals any errors or omissions

We can help

Our dedicated Audit Response Unit is staffed by professionals who keep current on verification trends and have decades experience managing customs verifications. They understand the potential risks and costs to a business facing an audit—and work you to both avoid being audited and to respond effectively if an audit does happen.

Information provided by: Audit Response Unit (ARU) - Cole International

Watching audit trends. It's what we do.