CBSA: Letters to the Editor [Auditor General’s Report]

(CBSA)
Letter to the Editor: Ottawa Citizen; Vancouver Sun; National Post; The Province; Windsor Star concerning the Auditor General Annual Report, Chapter 8: Facilitating the Flow of Imported Commercial Goods

Please allow me to provide some additional context to the points raised in your article regarding the Auditor General’s findings on “Facilitating the Flow of Imported Commercial Goods.”

As the Auditor General stated, Canada imported over $440 billion in commercial goods in 2008. However, the $2 billion reported in your article is not substantiated in the Office of the Auditor General report and is a simplistic extrapolation from the data.

The Canada Border Services Agency (CBSA) does recognize that its current system is inadequate.

We are implementing a compliance strategy to increase assurances that duty and tax information provided by importers is accurate and complete. This will allow the Agency to identify specific causes of non-compliance so that effective corrective measures can be put in place.

Much like Canada’s income tax system, whereby Canadians file income tax information that is later assessed by the government, the CBSA has a vigorous program to review and verify duty and tax information that is declared by importers. We have also designed a detailed program to help improve how we monitor non-compliant importer activities.

The CBSA continues to strengthen and refine its processes in order to optimize conditions at the border while ensuring its operations support a strong Canadian economy.

Cathy Munroe
Vice-President, Programs Branch
Canada Border Services Agency

[The original article from the Vancouver Sun is here.]

Customs Notice 10-018: Update Regarding the Strengthening of the Canada Border Services Agency's Procedure Respecting the Importation of Goods Contaminated With Soil

(CBSA)
1. This notice serves as a reminder that the Canada Border Services Agency (CBSA) will be strengthening its commercial importation process respecting goods contaminated with soil. As previously announced, February 1, 2010 marked the launch of a twelve-month transition period culminating in the full implementation and enforcement of the strengthened process in 2011. This period allows industry an opportunity to adjust their operations and ensure that goods arriving in Canada are clean and free of soil.

2. Goods contaminated with soil are not admissible into Canada. The Canadian Food Inspection Agency (CFIA) is responsible for establishing the policy regarding the importation of goods contaminated with soil. The CBSA is responsible for administering and enforcing that policy to the extent it applies at the border.

3. Beginning February 1, 2011, non-compliant goods, i.e. goods contaminated with soil, arriving at the Canadian border will be restricted to a CBSA-controlled area and may be cleaned on-site by a mobile wash facility approved by the CFIA, provided certain conditions can be met, e.g. there is no risk of soil dislodgement during transport, operational capacity exists, availability of a CFIA-approved mobile wash facility. If a CFIA-approved mobile wash facility is not available, or if other conditions listed above are not met, the contaminated goods will be refused entry into Canada under the authority of the Plant Protection Act and the Health of Animals Act. Note: Plants and/or plant products are not eligible for remedial action.

4. The costs associated with cleaning or removal from Canada will be paid for by the importer.

5. This strengthened approach is in line with the CBSA's existing commercial processes and procedures, as well as the CFIA's policy regarding the importation of foreign soil. It will further ensure that the CBSA maintains appropriate control over the contaminated goods, thereby preserving the safety and security of Canada and Canadians.

6. Under the current process, the CBSA may allow contaminated goods to be transported to either a stationary or mobile CFIA-approved treatment facility. However, treatment may only occur if certain conditions can be met, e.g. there is no risk of soil dislodgement during transport, operational capacity exists, availability of a CFIA-approved stationary or mobile wash facility. If the conditions listed above cannot be met, the shipment is refused entry into Canada and ordered removed at the importer's expense.

7. Inquiries and comments about this notice should be directed to:

Food, Plant and Animal Program, Programs Branch
Canada Border Services Agency
Telephone: 613-957-6868, Fax: 613-946-1520 E-mail: fpa-ava@cbsa-asfc.gc.ca

Busted at the Border: $2.3B in Goods Seized by Customs Last Year

(QMI Agency/Toronto Sun)

Canadian officials seized illicit goods worth more than $2.3 billion at the border last year — including stashes of date-rape drugs valued at $1.4 billion.

Records obtained by QMI Agency under Access to Information show huge hauls of booze, drugs, tobacco, guns and other prohibited weapons stopped at air, land and sea ports. Animals, birds, explosives, currency and jewelry were also confiscated under the Customs Act. The most valuable seizure was of GHB - gamma hydroxybutyric... Read more here.

Customs Notice 10-017: United States Loaded Freight Remaining On Board (FROB) Cargo

(CBSA)

1. This Customs Notice (CN) does not serve as a change, modification, or update to the final resolution rendered in CN10-015 (issued on September 17, 2010). Rather, this CN clarifies transmission requirements pertaining to the final resolution issued regarding US-loaded FROB cargo.

2. Pursuant to CN10-007, the purpose of this customs notice is to notify industry that the Canada Border Services Agency (CBSA) has reached a final resolution with regard to the grace period for Advance Commercial Information (ACI) transmission requirements for US-loaded FROB cargo. Based on a thorough analytical review of all information acquired, the following determinations are issued:
a. The exemption for ACI notification of US-loaded FROB cargo is extended until December 31, 2010.
b. Effective January 1, 2011, the CBSA will require ACI transmissions for US-loaded FROB cargo as per current CBSA policy.

3. Prime cargo reports (SO83) as well as supplementary cargo reports (SO687) will be required for US-loaded FROB cargo upon the expiry of the grace period.

4. Until the implementation date, marine carriers are encouraged to transmit US-loaded FROB cargo information to the CBSA in order to achieve full compliance upon the full implementation date.

5. During the interim period, the CBSA will be in a position to provide guidance and assist its clients in meeting the ACI obligations related to US-loaded FROB set forth by this customs notice.

6. Please direct any questions concerning this notice to:

Helene Porter
Manager, Commercial Unit, Advance Information and Programs Division
Pre-Border Programs Directorate, Programs Branch,
Canada Border Services Agency
E-mail: Helene.Porter@cbsa.gc.ca, Telephone: 905-308-8556

U.S. Wants to Share Border Stations

(Montreal Gazette – David Johnston)

American reaction wasn’t favourable when the Canadian Border Services Agency (CBSA) said in August that it was going to close down operations next spring at three land-border crossings with the U. S, including two south of Montreal. The U.S. Department of Homeland Security didn’t like the prospect of one-way border crossings, where people can get into the U.S., but not into Canada.

Complicating the issue was the fact that at two of the three border stations, including one of the two south of Montreal, the corresponding American stations had been undergoing expensive modernization. Ever since the CBSA announcement, those upgrades have been put on hold and the U.S. has asked Canada to consider sharing the two U.S. facilities being upgraded.

That request, though, has sparked a more wide-ranging discussion between the two countries about the future of separate border stations at small crossings in general. [...] Last month, Raphael Lemaitre, an official with the Department of Homeland Security, told The Gazette the U.S. wanted “to explore alternatives with CBSA to enable the continued facilitation of two-way traffic.” Those exploratory talks have now begun, said Sabrina Mehes, a CBSA official. In fact, she said, the future of “all smaller crossings” between the two countries are up for talks. Read more here.

CBP: Multiple Consignees and/or Consolidated Entries

(Ministère des Transports, Québec)

You will find attached an information notice sent by US Customs and Border Protection at Champlain. The document provides indications for the use of the electronic manifest by truck carriers when multiple shippers or consignees are involved. It doesn’t create new requirements but bring clarifications and answers frequently asked questions about the US manifest.

Also, we remind you that the Canada Border Services Agency (CBSA) electronic manifest will progressively be implemented from October 31st. By this date, highway carriers may begin to transmit their information through the Electronic Data Interchange (EDI) system.

The complete implementation timeline as well as many other information about the manifest are available on the CBSA web site here.

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.

Demonstration in Support to our Support (CR/AS) Staff Members

(PR Net-USA)

On Monday, September 27, 2010, the members of the Customs and Immigration Union (CIU) will march in front of the Canada Border Services Agency (CBSA) Offices at 400, Place d’Youville in Montreal, Quebec between 7 and 9 am to support their fellow Sisters and Brothers Support Staff (CR and AS) members.

The Customs and Immigration Union has been aware since 2007 that a pilot project is taken place in Montreal, QC to address the issue of CR/AS job descriptions. It was brought about by the fact that there were 185 job descriptions that covered various support staff positions nationally. These descriptions have followed the now CBSA throughout its legacy evolution. Most of these job descriptions have been identified as inaccurate, improperly classified, obsolete, out-of-date and not reflective of duties performed by those members.

The Support Staff Community and CIU have been very frustrated with the slow approach and disregard apparent in this process. CIU has been approached by numerous CR/AS members seeking an expedient and fair resolve to their job description and classification issues. Many of these members feel this is also an equity issue due to the fact that it’s predominantly a female dominated group. CIU is looking into this as also being a Human Rights issue. Read more here.

CBSA Organization Structure

(CBSA)

Canada Border Services Agency has released a final copy of their current organizational structure chart and contact list. (French version)

CBSA Trade Compliance Verification Priorities

(Baker McKenzie LLP)

The Canada Border Services Agency (CBSA) recently published a list of products that will be the focus of the CBSA’s post-entry compliance verification programs (commonly referred to as audits) for the federal government’s 2010-2011 fiscal year. The areas of increased audit activity for each compliance verification program are as follows:

Tariff classification:
• Furniture parts
• Gloves
• Organic surface-active agents – soap and other than soap
• Stone vs. articles of stone
• Reclaimed rubber

Origin verification:
• Juice products
• Mattress upholstery
• Electric Generators
• Tools, implements, cutlery, spoons, and forks, of base metal; and parts

Valuation verification:
• Light-duty automotive goods

Under the Customs Act, the CBSA may conduct post-entry verification reviews of importers to ensure compliance with respect to the determination and reporting of the proper value, origin, and tariff classification of imported goods.

The CBSA conducts different types of audits for different purposes. The areas identified above were selected due to a perceived risk in an industry or by commodity as determined by the CBSA. Importers of goods in other sectors should not feel complacent, since the CBSA also conducts verification audits to measure compliance rates to determine industry or sectors that will be targeted in the future. Consequently, importers of goods other than those identified above may still be subject to audits in the current government fiscal year.

The CBSA conducts many post-entry verifications by way of a “desk audit”, whereby the importer is asked to supply customs accounting documents for a sample of importation transactions, as chosen by the CBSA, that have occurred during a selected audit period. Under certain circumstances, the CBSA may arrange an on-site visit to the importer’s premises, if needed.

In a typical desk audit where no site visit is required, the CBSA will generally provide the importer with 30 days in which to supply the requisite accounting documents. Once the CBSA officer begins conducting the audit, it is not uncommon for importers to receive additional requests for further information or clarification regarding the transactions chosen for review. Once the audit is complete, the CBSA will typically issue an interim finding letter and provide the importer with an opportunity to respond to the CBSA’s initial findings. The CBSA will then issue a final letter indicating its findings and will also issue formal determinations, known as Detailed Adjustment Statements, for any transactions determined by the CBSA to be in error. Under section 60 of the Customs Act, importers have a legal right to appeal the CBSA’s value, origin, and tariff classification determinations they believe are incorrect.

Source: Baker McKenzie LLP

Passenger Train Between U.S., Vancouver Could Halt Over Customs Fee

(The Canadian Press)

A passenger train running between Portland, Ore., and Vancouver could be cancelled because the Canadian government wants $550,000 a year for extra customs services.

Paula Hammond, transportation secretary for Washington state, said Ottawa wants her department to pay the fee to cover additional border staffing for the evening Amtrak Cascades train.

That doesn't make sense, she said, because that second daily train has brought nearly $12 million in economic benefits to British Columbia in the year it's been operating. Read more here.

Customs Notice 10-015: United States Loaded Freight Remaining On Board (FROB) Cargo

(CBSA)

1. Pursuant to Customs Notice 10-007, the purpose of this customs notice is to notify industry that the Canada Border Service Agency (CBSA) has reached a final resolution with regard to the grace period for Advance Commercial Information (ACI) transmission requirements for US-loaded FROB cargo. Based on a thorough analytical review of all information acquired, the following determinations are issued:

(a) The exemption for ACI notification of US-loaded FROB cargo is extended until December 31, 2010.

(b) Effective January 1, 2011, the CBSA will require ACI transmissions for US-loaded FROB cargo as per CBSA current policy.

2. Until the implementation date, marine carriers are encouraged to transit US-loaded FROB cargo information to the CBSA in order to achieve full compliance upon the full implementation date.

3. During the interim period, the CBSA will be in a position to provide guidance and assist its clients in meeting the ACI obligations related to US-loaded FROB set forth by this customs notice.

4. Please direct any questions concerning this notice to:

Helene Porter
Manager, Commercial Unit
Advance Information and Programs Division
Pre-Border Programs Directorate, Programs Branch
Canada Border Services Agency

E-mail: Helene.Porter@cbsa.gc.ca, Telephone: 905-308-8556

Danish IC Companys to Pay More Customs Duty, CBSA

(IC Companys A/S via Fibre2fasion.com)

The CBSA in Canada has performed a customs audit of the value for duty employed by IC Companys Canada Inc. when importing goods into the Canadian market.

In this connection the CBSA has concluded that IC Companys has employed a too low value for duty. Consequently, the CBSA has imposed IC Companys Canada Inc. to increase both its future value for duty as well as its value for duty with retrospective application for 4 years as from 14 September 2010.

The increase of the value for duty for the past 4 years leads to a non-recurring cost of DKK 15 million [$2.7 million] and accrued interest of DKK 4 million [$724,000]. Both items are fully tax deductible upon recognition of taxable income and have a deductible value of DKK 4 million. The costs will be recognised in the consolidated accounts for the first quarter 2010/11.

IC Companys does not agree with the ruling from the CBSA and expects to appeal the case to the relevant authorities in Canada.

It is expected that the above-mentioned costs may be contained in the Group’s guidance for the financial year 2010/11 with an estimated operating profit in the region of DKK 320-360 million.

CBSA: Port Closures and Reduced Hours of Operation

(CBSA)

The Canada Border Services Agency (CBSA) provides service at over 1200 locations across Canada.

All government programs are reviewed on a regular basis to ensure they are effective and efficient and that they respond to the priorities of Canadians. This ensures that funding is allocated to programs that are a high priority for Canadians and produce results.

Last year, as part of the Strategic Review process, the CBSA reviewed its services at smaller Ports of Entry (POE) across the country to ensure they are operating as efficiently and cost-effectively as possible. As a result, the CBSA decided to close three underused POEs and to reduce hours at four POEs. These changes will take effect April 1, 2011.

These changes will allow the CBSA to focus on its core role and to focus more resources on areas that promote the health, security and safety of Canadians. The CBSA does not anticipate any job losses to result from these changes.

The three POEs identified for closure are:

Jamieson’s Line, Quebec
This POE sees an average of 12 travellers a day and no commercial vehicles. There is a 24/7 POE 10 km away (Herdman).

Franklin Centre, Quebec
This POE sees an average of 56 travellers a day and three commercial vehicles. There is a 24/7 POE 16 km away (Herdman).

Big Beaver, Saskatchewan
This POE sees an average of five travellers a day and no commercial vehicles. Coronach, which has the same hours of service as Big Beaver, is 28 km distant. There is also a 24/7 POE 55 km away (Regway).

The four POEs identified for reduced hours of operation are:

Morses Line, Quebec
This POE sees an average of 84 travellers a day. The hours of service will be reduced to 8 a.m. to 4 p.m. from the current 8 a.m. to midnight. There is a 24/7 POE 13 km away (St-Armand/Philipsburg).

East Pinnacle, Quebec
This POE sees an average of 58 travellers a day. The hours of service will be reduced to 8 a.m. to 4 p.m. from the current 8 a.m. to midnight. There is a 24/7 POE 34 km away (St-Armand/Philipsburg).

Glen Sutton, Quebec
This POE sees an average of 37 travellers a day. The hours of service will be reduced to 8 a.m. to 4 p.m. from the current 24/7. There is a 24/7 POE 11.5 km away (Abercorn).

Kenora, Ontario
This inland POE sees an average of 4 travellers a day. Specific reduced hours have not yet been established.

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.

Planned Border Closings Rankle Communities

(The Gazette)

Opposition is growing to the Canadian Border Security Agency’s (CBSA’s) recent decision to close two Canadian border stations south of Montreal next spring.

The mayor of Franklin, Suzanne Blair, will be holding a news conference next week to launch a petition drive. And the largest employer in the region, Les Vergers Leahy, has written federal authorities a strong letter of protest.

News of the proposed closings has also been greeted negatively south of the border.

Gary Douglas, president of the Plattsburgh-North Country Chamber of Commerce, told Plattsburgh’s Press-Republican that the unilateral decision by Canada to close the two border stations violates the 2002 U.S.-Canada Smart Border Accord.

“The failure of the Canadian government to co-ordinate with the U.S. government is absolutely mind-boggling,” he said. Read more here.

ACI eManifest Roll-Out Delayed Again

(Deanna Pagnan – Canadian Trucking Alliance)

Implementation postponed by one month to Oct. 31

The Canada Border Services Agency (CBSA) has announced that it is again delaying the implementation of the ACI eManifest program for the highway mode, this time by one month from September 30th to October 31st, 2010. ACI eManifest was initially slated to roll out in June of this year, but was pushed to September to allow CBSA to ensure the integrity of the program given the volumes of data being transmitted by highway carriers. According to CBSA the reason for the most recent delay is related to the software of other commercial programs, not ACI.

According to Jason Proceviat, CBSA’s eManifest Director, “While ACI is ready to go, we bundle some commercial programs together, and there are a few delays from other areas that need to be addressed before we can go live.”

Canadian Trucking Alliance (CTA) CEO David Bradley said "the trucking industry understands the challenges involved in implementing such a complex program, but we are frustrated by the latest delay.” He said he hopes CBSA will meet the new implementation date. “Carriers are seeking improved efficiencies at the border,” he said. “This includes electronic transmission of data through ACI, and we are looking forward to implementation sooner rather than later. We want to avoid the stop-start pattern that characterized implementation of the ACE eManifest program in the US.”

There is a keen interest from the trucking industry in getting the program rolled out. Carriers have been preparing for ACI eManifest for a number of years now. In fact, close to a hundred carriers approached CBSA just to participate in the early testing of ACI. CTA has been working closely on the development of the program and believes it will have a beneficial impact on cross-border efficiency.

Customs Staying Put, For Now

(Michael Peeling — Standard Freeholder)

Any bets the Canada Border Services Agency will settle on a permanent location for the port of entry anytime soon are off.

Following a meeting with Cornwall Mayor Bob Kilger and Akwesasne Grand Chief Mike Mitchell on Tuesday, the Canada Border Services Agency (CBSA) has said it’s looking at another 365 days stationed in Cornwall at the foot of the Seaway International Bridge.

“We expect to remain at the current interim location for at least another year,” wrote Sabrina Mehes, a spokesperson for the CBSA, in an e-mail. Read more here.

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.

Canada's Customs Inquisition

(Lysiane Gagnon — Globe & Mail)

‘Going through customs is the only moment when a Canadian can imagine he lives in a police state’

When Marie-Claude Lortie, a food critic for La Presse, returned home from a family trip to France and Italy, she told the customs officer she was carrying more bottles of wine than the limit of two per adult. She was expecting to be asked for the receipts and charged for the taxes. But instead of being treated like a law-abiding citizen, she and her whole family – her husband and three young exhausted children – were subjected to an aggressive search. Looking for the few bottles of Merlot and Sangiovese, the gloved officer rampaged through panties, stuffed animals and dirty jeans as if the family were guilty of illicit trafficking.

When Ms. Lortie wrote about this in La Presse, her inbox was flooded with e-mails from readers who’d suffered the same experience. Each time they declared something over the limit, their baggage would automatically go through what’s called “a secondary search.” Many readers confessed that, at some point, they stopped declaring anything and just tried their luck. Read more here.