CBSA to Increase Trade Compliance Penalties Starting April 1

The Canada Border Services Agency will go forward with an increase to Administrative Monetary Penalties for trade compliance violations, CBSA said in a March 1 message. "Effective April 1, 2019, the CBSA will increase a number of AMPs related to commercial trade," CBSA said. "Increases will bring penalty levels in line with other non-trade commercial penalties. These increases affect non-compliant importers only."

CBSA said it will detail the changes in a coming customs notice to allow for preparation ahead of the implementation date. "CBSA will not be increasing system generated penalties related to the timing for accounting for imported goods," it said. "This is because industry stakeholders identified these AMPs as having potentially disproportionate, unintended impacts on small and medium-sized businesses."

The maximum penalty of $25,000 remains unchanged, the agency said. "To ease the transition to the new penalty structure, the CBSA will reset the penalty level to the first level for all existing contraventions importers may have," it said. "This is to avoid unanticipated impacts on industry that could occur by issuing second and third level penalties at higher levels than previously indicated."

A push to increase the AMPs began after some criticism from the Auditor General of Canada. CBSA began a long review of the AMPs in 2017 and previously planned to implement changes in June 2018. That implementation date was delayed "to allow thorough consultations and the submission of a public report to the House of Commons Public Accounts Committee," CBSA said. "This announcement shows an increased focus on compliance by the CBSA that importers need to be aware of," said Canadian customs brokerage Farrow, which posted the CBSA message, in a blog post. "Importers need to understand their obligations and make sure they have a compliance program in place."