The CBSA Publishes its Customs Audit Priorities List

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

CBSA customs verifications target three principal 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 imported entries under Canada’s customs laws, compliance with duties relief programs, or other customs requirements.

The publication of the customs verification priorities list gives importers who have not yet been notified of a customs audit an opportunity to conduct an internal customs compliance audit to assess their level of compliance, and whether there is a need to file a customs voluntary disclosure to correct any past errors. 

HOW ARE THE PRIORITIES ESTABLISHED?

Trade compliance is managed by the CBSA both by random and targeted verifications.
Random verifications promote voluntary compliance and are designed to measure compliance rates and revenue loss 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 as a result of a risk-based analysis.

THE JANUARY 2021 LIST

The most recent list released by the CBSA contains 21 tariff classification priorities, two valuation verification priorities and one origin verification priority. For ease of reference, we have set out in table format the verification priorities by both tariff number (within Canada’s List of Tariff Provisions), targeted program (tariff classification, valuation or origin) general description and the date added to the priorities list. Importers of goods declared under the listed tariff numbers or descriptions set out in the table, may wish to take proactive measures to assess, and if necessary correct and improve, their customs compliance.

TAKEAWAY FOR IMPORTERS

To prevent mistakes in their declarations 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 continuous compliance.

In the event that an importer discovers inaccuracies in past import declarations prior to being notified of an audit by the CBSA, they should take corrective measures immediately. In such situations, importers may either make a simple correction of such declarations or file a voluntary disclosure to the CBSA. By correcting or disclosing erroneous declarations in a timely manner, importers may be able to minimize applicable penalties.

Finally, while importers of goods listed as a priority are more likely to be subject to an audit by the CBSA, importers of goods that are not included in the most recent list must keep in mind that a trade compliance verification remains possible at any time, and that they are not immune to random verifications.

TABLE - 2021 Verification Priorities of the CBSA

For further information please contact:

Greg Kanargelidis        416-863-4306
Patrick Lapierre            514-982-4105

or any other member of our International Trade group.