CBSA Turns Down the AMPS for Disclosed Manifest Mistakes

(Today’s Trucking)

Carriers involved in the Advanced Commercial Information (ACI) eManifest program who disclose and correct incidents of non-compliance prior to a CBSA audit will get a break from Administrative Monetary Penalty System (AMPS) penalties.

The “precedent-setting decision,” announced by the Canada Border Services Agency this week, was quickly endorsed by the Canadian Trucking Alliance, which was lobbying hard for the rule change.

Previously, explains CTA, carriers risked being penalized even when providing corrections voluntarily under the CBSA’s “Voluntary Disclosure Program. The failure of the program to guarantee immunity from AMPS penalties discouraged carriers from coming forward with corrections. The rule placed “an unfair burden” on the carrier to make sure all the data associated with a load is accurate, when in fact shippers, importers really own and control the freight and the loading, says CTA.

The CBSA decision means that carriers will only “be accountable for the information they are given at the time it is given to them,” says CTA’s vice president of customs, Jennifer Fox.

So now if a carrier, for example, discovers 21 pallets on a shipment whose manifest reads 20 pallets – a common occurrence for C-TPAT freight, notes CTA – the carrier will not be penalized if it informs CBSA.

Carriers moving higher volumes of freight across the border have been exposed to greater risk of variances in shipment quantities, and therefore information discrepancies, and ultimately compounding AMPS penalties.

As well, carriers voluntarily reporting high volumes of discrepancies will not face immediate AMPS but instead will be given an opportunity to work with CBSA to address reasons for the discrepancies, which could range from improved communications with US shippers, scrutiny when selecting freight or customized solutions to deal with specific operational challenges, says CTA. Source.

Canada Consumer Product Safety Act Consultation: Administrative Monetary Penalties

(International Law Office – Penny S Bonner and Martha A Healey, Ogilvy Renault LLP)

On August 25 2010 Health Canada announced another consultation on regulations under the proposed Canada Consumer Product Safety Act.

The intent of the proposed Administrative Monetary Penalties Regulations would be to provide details on how a penalty for a violation under the proposed act would be calculated, including ‘gravity factors’, weighting and penalty values. The regulations would:

• contain information classifying violations as minor, serious or very serious;

• identify how gravity factors of history and risk would be used to calculate the penalty; and

• provide for a range of penalties associated with the ‘total gravity values’.

This new consultation is the fourth such consultation launched by Health Canada over the last few months. Even though Health Canada is releasing consultation documents (as opposed to actual draft regulations), this activity shows a clear intent to move actively forward, or be seen to be moving forward, with draft regulations for the proposed act. In turn, this may be a sign that Health Canada will push swift passage of the proposed act once Parliament returns from the summer recess in September.

The consultation on the proposed Administrative Monetary Penalties Regulations is open for comment until November 7, 2010. Read more here.

Penalty Reinvestment Agreement

(CBSA)

CBSA has reissued Form BSF266 to show the new name of the Penalty Reduction Agreement (PRA). This agreement is now called the Penalty Reinvestment Agreement (PRA).

This agreement allows, under certain conditions, full or partial reduction of AMPS penalties.

The form is available here Additional information on the PRA is available in D22-1-1.

AMPS Regulations Consultation

(Health Canada)

Regulatory Consultation on the proposal for the Making of Administrative Monetary Penalty (AMP) Regulations under the proposed Canada Consumer Product Safety Act has been posted on the Health Canada CCPSA website here.

Revised: D22-1-1 Administrative Monetary Penalty System

(CBSA)

1. This memorandum supersedes Memorandum D22-1-1, Administrative Monetary Penalty System, dated June 16, 2003.

2. Paragraph 5 reflects the key changes as a result of the review of the AMPS Program that take effect April 14, 2010.

3. Other key changes in this memorandum are: a. updates to the references and links to Justice Canada’s Web site; b)updates to the links to the Master Penalty Document (MPD), the Short Version and Index; c) incorporating the definitions into the memorandum; d) update the sample Form E650, Notice of Penalty Assessment in Appendix A; and e) updates to contact information and terminology throughout to reflect changes in the CBSA’s organizational structure, including Appendix B.

AMPS - Updated Master Penalty Document (short version)

(CBSA)

CBSA has posted on its website a revised short version of the AMPS Master Penalty Document (MPD). This document has been updated to reflect the new penalty amounts.

Please note that the backgrounders are no longer shown...

The new MPD is available here.

AMPS Penalty Changes

(CBSA)

Message EDI10-025

Please be advised that as a result of the Administrative Monetary Penalty System (AMPS) Review, late accounting penalties for high value shipments (Contravention C288) and for low value shipments (Contravention C292) will be assessed at $100.00, effective April 14, 2010. Further information regarding the key changes to the AMPS regime is provided in Customs Notice CN10-002. For questions regarding the AMPS review, the policy contact is Colleen McGonigle (613-952-5203); for questions concerning these specific contraventions (late accounting penalties), the policy contact is Doug Oakman (613-941-3123).

Valuation (Assists) – Is Your Invoice Declaration to Customs Accurate?

(Alan Dewar — GHY International)

It has come to our attention that recent Compliance Verification Audits completed by Canada Border Service Agency (CBSA) auditors have found a fairly widespread problem with regards to so-called “undeclared assists” that has had the effect of goods in such cases being undervalued for Customs purposes.

The term “assists” refers to something of value provided by an importer to a foreign producer. Generally speaking, the value of the assist needs to be added to the transaction value when calculating Customs value. Failure to disclose “assists” and properly account for them when determining the transaction value of goods is considered an infraction of the Customs regulations and is therefore subject to the assessment of fines under the Administrative Monetary Penalty System (AMPS).

For your reference, he definition of “assists” is dealt with extensively in Departmental Memorandum D13-3-12 (you can download a PDF of it here) which outlines and explains the application of various sections of the Customs Act in determining the value for duty of import transactions involving the goods and services referred to in subparagraph 48(5)(a) (iii) of the Act.

If you have supplied any of the following, free of charge or at a reduced cost to a foreign supplier:

(a) materials, components, parts and other goods incorporated in the imported goods;

(b) tools, dies, moulds and other goods utilized in the production of imported goods;

(c) any materials consumed in the production of the imported goods;

(d) engineering, development work, art work, design work, plans and sketches undertaken elsewhere than in Canada and necessary for the production of the imported goods;

and have not declared the value of these “assists” to the CBSA, we would strongly encourage you to contact your GHY Account Representative or our Consulting Department so that we can review the valuation of your goods and remedy the matter through voluntary amends if necessary. Taking this simple precaution will not only bring your past imports into compliance, thereby avoiding AMPS penalties that would otherwise be applicable should your imports ever become subject to future verification by the CBSA, but will also set you on the right track for the correct valuation of future imports.