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The Dreaded Audit

So you’re being audited by the Canada Border Services Agency (CBSA)… Now what?
Anyone who ships items across the Canada-U.S. border should be aware that at some point they are likely to be targeted for a CBSA audit.
“For every customs problem, there is a solution which is straightforward, uncomplicated and wrong.”
(Officially called a Trade Compliance Verification, we’ll continue to use the word “audit” in this blog since it’s a term that everyone is familiar with.)
Audits are serious business and need to be handled carefully.  It can take you significant time and money to wade through the process and navigate the tie-ups and potholes inherent in a complicated and highly technical process.
How does it work?
The CBSA audits importers to ensure they are observing all the rules and regulations associated with cross-border trade. These audits most commonly relate to matters of tariff classification, duty assessments, verification of origin, and NAFTA rules.
You may be selected for an audit in one of two ways.
Random verifications are just that – random – and can happen to any importer at any time. Such audits are designed to measure compliance rates and revenue loss. The results of a random audit may be used by the CBSA for purposes such as risk assessment, revenue assessment, and to promote voluntary compliance.
You may also be selected for an audit as part of a targeted review of specific industries or products identified each year in CBSA’s list of “targeted verification priorities”. The current list of verification priorities can be found here.
The CBSA will start its audit by reviewing a small sample of your customs transactions. However, depending on their final decisions, the data they are interested in could expand to include all transactions over the past four years involving the same or similar goods. That seemingly small sampling then becomes a much larger issue and a much more involved process.
You keep busy enough with the management of your day-to-day operations. Dealing with a CBSA audit can be a frustrating and unanticipated draw on your resources.
To give you the best chance at a swift and effective audit experience, contact your customs broker as soon as possible after you receive notification of an audit by the CBSA. Your customs broker will need to see the CBSA’s request letter, the list of affected transactions and the Authorization to Share Information form. You can then work out an agreement by which your customs broker can guide you through the audit process.
The experienced professionals in our dedicated Audit Response Unit (ARU), are extremely knowledgable about CBSA audits and can both help ensure your compliance in advance of an audit, and guide you through the process when it does. For more information, visit our website, sign up for our technical updates, subscribe to our blog, or...
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Sourced by: Canadian Customs Consulting Dept. - Cole International
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