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.