How importers can simplify CBSA Customs audits and verification
Companies shipping items across the Canada-U.S. border will eventually face a Customs visit for an audit, also referred to as a verification. Accurate recordkeeping and a consistent compliance process will help your business stay prepared when a customs audit takes place.
Importers are held accountable for non-compliance, including unintentional errors and mistakes. If the Canada Border Services Agency (CBSA) discovers that you haven’t complied with import regulations, they can apply financial penalties and recommend actions that ensure your compliance. Proactive preparation for a customs inspection is the best way to approach audits.
What is a CBSA audit?
The CBSA uses audits and verifications to determine if importers are complying with Canada customs regulations. Typically, the CBSA focuses on tariff classifications, origin of goods, and value for duty when conducting audits.
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Twice a year, the CBSA announces a verification priorities list that targets specific types of imported goods for additional scrutiny. Companies that move goods on the priority list should expect an audit in the near term. The CBSA can conduct random audits, so all importers should stay ready.
3 essentials of successful audits
Advanced preparation is the best way to achieve a smooth verification process. Responding to a CBSA audit with clear, concise communication can prevent a lengthy, time-consuming investigation while ensuring compliance.
Importers should consider these three important tips when responding to a Customs audit:
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Keep records for a minimum of seven years
Maintain all records related to your imports and exports for a period of seven years, including:
- Purchasing records
- Invoices and contracts
- Payment and inventory records
- Receiving and transportation records
- Customs import and export documentation
Providing accurate documentation and data to the CBSA will save time and prevent misunderstandings during the verification process.
- Establish strong compliance processes
Review all processes related to compliance, including the way you respond to audits. If you find gaps in your compliance processes, you should bridge them immediately. Document the methods that your import business follows for ensuring compliance, such as the way you determine tariff classifications and value of duty.
All staff should be familiar with the regulations, processes, and requirements that impact your imports, especially for tariff classification, valuation, and free trade agreements. Identify a manager or leader for your audit response and train employees on their role during CBSA verifications.
- Respond promptly and factually
Don’t let a verification notice gather dust. Prioritize a prompt response when a CBSA audit arrives. If the agency provides recommended changes because of the audit, implement them in a timely manner.
Notice an error in your paperwork? You’re required to voluntarily correct any mistakes within 90 days of discovering the error by submitting corrections to the CBSA. Failing to respond quickly and accurately to a CBSA verification can result in serious interruptions to your business and significant financial penalties.
Working with a customs broker is one of the best ways to ensure a smooth, problem-free audit. An experienced broker knows the best way to interact with agencies on your behalf and solve issues as they arise.
Connect with Cole’s audit response unit. We provide guidance and support for importers dealing with an audit and help businesses prepare for verifications.
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