Posts Tagged ‘customs audit’


 

2017 Designation Maintenance Begins in our Professional Development Courses!

T if for Trade Compliance Education

A new year means a new start for most everything and this includes a reset to the maintenance requirements of your professional designations set forth by the credential’s governing body. We are well into the year now and our Professional Development Courses for fall 2017 are about to launch.

Whether you are a Canadian or U.S. Certified Customs Specialist (CCS), a Certified Trade Compliance Specialist (CTCS), a Certified Export Specialist (CES), a designate with the Law Society of British Columbia (LSBC) or accounting professional, taking any of Pacific Customs Brokers’ seminars and webinars will earn you maintenance points, credits and hours towards a variety professional designations.

Review and plan your maintenance for the second half of 2017 by clicking on the course’s name below:

(Fall registration opens at midnight on July 15, 2017)

  CSCB NEI LSBC
Webinar CCS CTCS CCS CES  
CDN Importing for Beginners Part 1
CDN Importing for Beginners Part 2
US Importing for Beginners Part 1 1
US Importing for Beginners Part 2 1
FDA Regulated Goods 2 2 1
CFIA Regulated Goods 2 2
NAFTA for Beginners Part 1 1 1
NAFTA for Beginners Part 2 1
 
Seminar
Shipping Perishables – NEW! 5 5 3 3
CDN Trade Compliance Part 1 5 5
CDN Trade Compliance Part 2 5 5 3
Exporting from Canada 5 5 3 3
US Trade Compliance Part 1 5 5 3
US Trade Compliance Part 2 5 5 3 3
HS Tariff Classification 5 6 4
Free Trade Agreements and Rules of Origin 5 5 5
Customs Valuation 5 3.5
CFIA 5 5
FDA 5 5 3
CTPAT 3 3 2 2

 

If you have never attended one of our Professional Development Courses before, the following information might help you decide on attending the next one.

Professional Development Courses – Webinars

Our webinars are designed to meet the demands of the global trade community. These live webinars are a convenient way for trade professionals to stay ahead of new regulations with international trade and gain additional knowledge in key areas. The benefits of attending an online course include:

  • Cost-effectiveness – More affordable than industry standards and some even offered complimentary
  • Global accessibility – Travel is removed from the equation for companies with multiple locations or branches
  • Convenience – Attend from the comfort of your desk
  • Concise training – In a fast-paced industry, efficiency becomes just as important as staying compliant
  • Industry recognized sessions – Earn points towards maintenance of your industry designations

Professional Development Courses – Seminars and Workshops

At these in-person sessions, you will learn the best practices on being compliant as an importer and/or exporter helping you expedite your commercial shipments rather than triggering costly delays. Our experts share their knowledge on international and cross-border shipping to keep you current with customs and participating government agency regulations.  The benefits of attending an in-person seminar or workshop include:

  • All day access – Get our experts to answer your questions one-on-one
  • Case studies and real-life examples – Examine other attendees’ trade compliance issues
  • Cost-effectiveness – More affordable than industry standards
  • Range of topics – Choose from a wide variety of seminar topics
  • Certificate of Completion – Receive a certificate for each course you attend
  • Handouts – Take home your own set of course material
  • Industry recognized sessions – Earn points towards maintenance of your industry designations
  • Networking – Connect with other like-minded professionals

For future reference, download your own 2017 Fall Trade Compliance Program today!

3 Crucial Customs Regulations Importers Need to Know

Trade ComplianceAs the Importer of Record for transactions made with the Canada Border Services Agency (CBSA), it is extremely important that your company is aware of their obligations regarding compliance with Customs regulations.

Of the myriad regulations that you face as an importer, there are three very important regulations to be aware of :

  1. Administrative Monetary Penalty System (AMPS)
  2. Self Adjustments and Reason to Believe
  3. Compliance Verification Audits

 

1. Administrative Monetary Penalty System (AMPS)

AMPS is a penalty regime designed to “provide the Agency with a means to deter non-compliance by its client (the Importer), and thereby to encourage compliance.  AMPS ensure a level playing field for all Canadian businesses by ensuring that there is a cost for non-compliance.  To this end, AMPS is designed to be a remedial rather than a punitive program”.

There are over 300 specific situations that can trigger an AMPS penalty to be issued.  AMPS penalties can range from $150.00 per transaction up to $25,000.00 for multiple infractions.

 

2. Self-Adjustment — Reason to Believe

Each time a shipment is cleared through Customs, an electronic transaction is presented to the CBSA which provides among other information, the quantity, description, tariff classification and value of each product in that particular shipment or transaction.  This constitutes a declaration under subsection 32(1), (3) or (5) of the Customs Act.

If after the original declaration (transaction) has been acquitted with the CBSA,  it becomes apparent that there has been a change in tariff classification, country of origin, or value for duty, for any reason, the importer is required to make a correction to the declaration whether or not the correction results in duty or GST owing to CBSA, or is revenue neutral.

An importer has an obligation to file any corrections within 90 days of having a “reason to believe”, that an incorrect declaration has been made.  “Reason to believe” can take on a number of different forms.  You may receive a NAFTA Certificate of Origin from your vendor that has a different classification on it than what has been declared to Customs, you may receive a corrected invoice which has a different country of origin than what has been declared, or you may discover that your vendor has been providing an incorrect or incomplete description or pricing on their invoices.

Any of these, and other instances can trigger the requirement for a correction to be filed with the CBSA for the affected transaction or transactions.  Corrections may be required from the earliest date of having “Reason to Believe” that an incorrect declaration has been made to a maximum of four years.  The specific provisions that cover this can be found in the  Customs Memorandum D11-6-6.

If you are unsure of corrections that require filing and have not done so, a member of our Trade Compliance Team can assist you in making that determination through a self-audit process.  If it is discovered that corrections are required within the 90 day time limit then they should be dealt with immediately.  If it is discovered that corrections are required past the 90 day time limit, it may be to your advantage to file a Voluntary Disclosure.  If Customs accept a Voluntary Disclosure, it may mitigate the payment of AMPS penalties and punitive interest on any duty or taxes owing to the CBSA.

Important notes:

  • Corrections must be filed even if they are revenue neutral.
  • Should your company be chosen for a Compliance Verification Audit prior to filing required corrections the Voluntary Disclosure is no longer an option and AMPS penalties and punitive interest may apply.

For further information on the Voluntary Disclosure process please speak with one of our Trade Compliance Specialists.

 

3. Compliance Verification Audit

Should the CBSA choose your company for a Compliance Verification Audit,  you will be asked to provide a number of sample transactions for CBSA to review.  The verification could be for tariff classification, valuation, country or origin or a combination thereof.

For example, in the case of tariff verification you will be provided with a letter requesting copies of transactions that the CBSA wish to review.  You may also be asked to provide samples of the products in question.  At the conclusion of the review, a letter will be sent outlining the CBSA findings.  If the CBSA makes a determination that all transactions were filed in accordance with the regulations, they will issue a letter to close the audit.  If the CBSA determine that there are corrections required, and the “Reason to Believe” is determined to be the date of the final verification letter; corrections would be required to be filed on any affected transactions from the date of the final verification letter, including 12 months from the date of the last fiscal year end.  However, if it is determined that there was “Reason to Believe” that an error had been made in the tariff classification, prior to the verification audit, corrections may be required to be filed on transactions going back four (4) years from the date of the final verification audit letter.  Furthermore, in this scenario, the CBSA can issue AMPS penalties of $150.00 per transaction to a maximum of $25,000.00 for each correction required to be filed.  It is important to note, that any CBSA findings and subsequent corrections and/or penalties are subject to appeal.  Please see CBSA Targeted Priority List – July 2013 for a list of the current CBSA National Audit Priorities.

 

As an importer with the CBSA, your company should be aware of all compliance requirements, and have mechanisms in place within your company to ensure that all information transmitted to the CBSA is as accurate as possible.  It is very important that your company have a plan in place to make sure that any corrections that are required to be made are being addressed. We hope that you will find this information helpful and we urge you to take the steps within your company to ensure that those who need to be aware of this information are made aware of it.

Should your company have any corrections to file at this time, or on an ongoing basis, our Trade Compliance Specialists have the expertise to guide your business through the audit process and avoid incurring further penalties. As your customs broker, we make every effort to provide you with the right tools and information to ensure that your company is as proactive as possible with the CBSA. In this way we hope to help lessen your exposure to any penalties or fines.

As part of our ongoing efforts, we offer a number of  Trade Compliance Seminars and Webinars throughout the year on compliance and customs audit among other subjects. Our upcoming Customs Audit Seminars might be of particular interest details of which are listed below.

  • Canada Customs Audit  – This seminar will focus on the differences between voluntary and enforced compliance, the term “reason to believe”, the potential cost risks of non-compliance, and best practices. Register today!
  • U.S. Customs Audit – This seminar will focus on the differences between voluntary and enforced compliance, the expectation of “reasonable care”, the potential cost risks of non-compliance, and best practices. Register today!

 

Is your company trade compliant? Do you have trade compliance related questions? Use the comments section below to leave us your thoughts or email Ask Your Broker.

 

Additional Resources:

How Your Small Business Can Benefit from a Customs Broker

Business Word CloudA common misconception held by new businesses or ones that are bootstrapped for cash is that only big or established businesses doing a $5M+ in revenue could benefit from the cost savings that a customs broker can help coordinate. And that small businesses may not need to work with a customs broker. 

In our 60+ years of industry experience, we have seen lots of businesses start out small, develop contracts, self-apply tariff classification or determine what they see as a “value for customs” and sales take off. What happens next is what started out as a small error made at the beginning with such things as tariff classification, can become a very large problem once the volume takes over and you are transacting larger volumes across the border with the same information used the “first time”.

If your business is just starting up, caution is advised when deciding not to use the services of a customs broker. Although you may choose to travel to the facility or port of arrival to prepare a formal declaration for Canada Customs yourself, it is highly recommended that you seek guidance and advice from a customs broker in the planning stages to help mitigate risks related to your cross-border business.

How a custom broker can help transact business on your behalf:

  • Streamline the process of clearing customs
  • Ensure your customs documentation is prepared properly
  • Determine tariff classification
  • Determine the admissibility of your commodity into Canada
  • Ensure correct duties and taxes are applied to the shipment when appropriate
  • Determine if your commodity is regulated by any other government departments
  • Determine whether your commodity is entitled to any exemptions
  • Help execute vendor contracts

 

Other Benefits to Importers:

Even if you do not plan to use a customs broker to transact business on your behalf when goods ship, by getting involved in the planning stages, a customs broker may be able to:

  • Provide advantageous advice on terms,
  • Make recommendations on countries of origin to source from,
  • Provide advice on tariff classification and entry types,
  • Assist in the decision making and compliance process,
  • Deliver the best solutions for your business,
  • Make you more competitive in the marketplace and
  • Help you gain a more positive relationship with both Canada Border Services Agency and U.S. Customs and Border Protection.

 

It is well worth the investment up front, to at least consult with a customs broker in the planning stages, so that you can have a clear understanding of your risks, proper tariff classifications and do not let a small issue in the beginning, turn into a large.

Pacific Customs Brokers works with all types of importers from a broad range of industries. Amongst our various services for importers we offer Canadian and U.S. trade compliance advisory services and customs audit consulting. At our core, we are problem solvers and work with a large percentage of small to medium sized companies. To learn more about how we can help you managing the risks of importing and improve efficiencies in your processes, speak with one of our trade compliance specialists today.

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