Smuggling cigarettes and hard drugs may garner the most news headlines.
However, there are a host of other serious customs offenses that generate higher dollar amounts in total fines under Canada's Administrative Monetary Penalty System (AMPS).
AMPS was implemented in 2002, replacing the prior seize-and-forfeit system with monetary penalties for most violations.
The paramount law for Canadian customs compliance is the Customs Act. Details for properly identifying shipped goods including tariff classification codes are specified in the Customs Tariff.
Top 10 Customs Penalties under AMPS
Listed below are the top 10 customs penalties generating the most in AMPS penalties from 2006 to 2008.
Most Costly Customs Penalties for Canadian Importers
The majority of AMPS penalties for top 10 customs offences involve import offences.
The most costly import violation typically occurs when a transportation company or the importer removes goods from a customs office or a private warehouse without a customs officer's approval. While this can easily happen by mistake in a high volume and fast-paced shipping environment, AMPS penalties per shipment are high:
- $1,000 for first violation
- $2,000 for second violation
- $4,000 for subsequent violations.
The release on minimum documentation (RMD), the pre-arrival review system (PARS) and electronic systems reporting have speeded up import deliveries through early release of goods.
However, importers failed to pay required duties by final accounting due dates to the tune of $1.9 million. Those deadlines are typically the last business day of the month, as stated on the monthly K84 detailed accounting statements that the CBSA provides.
Fines totaling $1.9 million represent a high volume of missed deadlines, given that the base penalty for violating section 33 of the Customs Act (release prior to payment of duties) is a flat $100.
Most Costly Customs Penalties for Canadian Exporters
Only sections 95 to 97 out of 214 sections in the Customs Act are export rules. So it should come as no big surprise that the only 1 export violation is on the top 10 list.
That offence occurs when an exporter fails to provide the required export permit, licence or certificate. Still, penalties per required document can be an expensive punishment for those oversights:
- $1,000 for first violation
- $2,000 for second violation
- $4,000 for subsequent violations.
CBSA Education Best Policy
The best defense against expensive AMPS penalties is to work with the CBSA.
Education gained from collaboration can help importers and exporters to develop a meaningful compliance plan.
Such careful planning reduces risks of penalties for violating Canada's customs laws.
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