The Canada Border Services Agency (CBSA) regularly performs verifications or “checks” of importers to assess compliance with Canada’s customs laws. Such audits could result in additional duties, GST and / or other levies payable on imported goods, as well as self-corrections and administrative monetary penalties (AMPS) required for non-compliance. Twice a year (January and July), the CBSA publishes its verification priorities by advising importers in advance of a possible CBSA customs verification.

CBSA customs audits target three main program areas, namely: origin, tariff classification and value for duty. The CBSA may also conduct reviews of an importer’s level of compliance with accounting for imports under Canada’s customs laws, compliance with duty relief programs, or other customs requirements.

The publication of the Customs Verification Priority List gives importers who have not yet been notified of a customs audit the opportunity to conduct an internal customs compliance audit to assess their level of compliance and whether there is a need to file a voluntary customs declaration to correct any past errors.

HOW ARE PRIORITIES ESTABLISHED?

Trade compliance is managed by the CBSA through random and targeted audits. Random audits promote voluntary compliance and are designed to measure compliance rates and revenue losses as well as to gather information that can then be used for risk assessment purposes.

Targeted verification priorities are established by the CBSA on an ongoing basis following a risk-based analysis.

THE JULY 2021 LIST

The most recent list published by the CBSA contains 20 tariff classification priorities, two assessment verification priorities and one origin verification priority. For convenience, we have tabulated the verification priorities both by tariff item (in Canada’s list of tariff provisions), by general description of the targeted program (tariff classification, valuation or origin) and by date. addition to the priority list. Importers of goods declared under the tariff items or descriptions shown in the table may wish to take proactive steps to assess and, if necessary, correct and improve their customs compliance.

TO TAKE AWAY FOR IMPORTERS

To avoid errors in their reports to the CBSA, importers should aim to implement best practices that will help them keep an informed eye on any changes in legislation and ensure continued compliance.

In the event that an importer discovers inaccuracies in previous import declarations before being notified of a CBSA verification, they must take corrective action immediately. In such situations, importers can either make a simple correction to these declarations or file a voluntary disclosure with the CBSA. By correcting or disclosing incorrect declarations in a timely manner, importers may be able to minimize applicable penalties.

Finally, while importers of goods listed as priority are more likely to be subject to verification by the CBSA, importers of goods that are not on the most recent list should be aware that a trade compliance audit remains possible at any time, and that they are not immune to random audits.

TABLE – CBSA Verification Priorities for July 2021

Tariff number

Tariff classification

Date added to the list

Chapter 2, Chapter 4

Import permit numbers (2nd round)

October 2017

02.07, 16.01, 16.02

Spent poultry (Round 2)

july 2017

02.19

Pasta (3rd round)

november 2015

20.01

Pickled vegetables (5th round)

June 2012

38.24

Other chemicals

december 2018

39.26

Articles of clothing and clothing accessories (3rd round)

December 2014

39.26, 40.15

Disposable and protective gloves (Round 4)

October 2012

39.26, 42.02, 85.17

Cell Phone Cases (Round 3

January 2016

42.02

Bags (Round 2)

October 2017

42.03

Gloves (Round 2)

july 2017

64.03

Shoes – CA $ 30 or more per pair (4th round)

March 2014

73.22

Unit heater and hot air distributors (Round 2)

june 2018

83.02

Other assembly and arrangement, suitable for furniture (Round 2)

june 2018

84.79

Parts of machines and mechanical devices

december 2018

85.06

Batteries (Round 4)

November 2013

85.13

Flashlights and Safety Lights for Minors (Round 2)

june 2018

85.39

LED lamps

May 2020

94.03

Stone table and counters (Round 2)

March 2016

94.01, 94.03

Furniture for non-domestic use (3rd round)

January 2013

94.05

Lamp parts (Round 4)

September 2015

Evaluation

Chapters 61 and 62

Clothing (Round 4)

February 2012

Chapter 64

Shoes (Round 2)

February 2012

Origin

63.01, 63.02, 63.03

Bedding and drapery (Round 2)

February 2012

Blakes periodically provides material on our services and developments in the law to interested parties. This article is for informational purposes only and does not constitute legal advice or an opinion on any matter. Blakes will be happy to provide additional details or advice on specific situations if desired. For permission to reprint articles, please contact Blakes Marketing at 416-863-4345 and [email protected] © 2019 Blake, Cassels & Graydon LLP.

Blakes periodically offers documents on legal trends and developments to those who desire them. This article is for informational purposes only and does not constitute legal advice or an opinion on any subject. We will be happy to provide you with additional details or advice on specific situations if you wish. To obtain permission to reproduce articles, please contact Blakes Marketing and Communications at 514-982-4026 or by email at [email protected]. © 2019 Blake, Cassels & Graydon LLP



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