CBSA Updates its 2015 Trade Verification/Audit Targets

This month, the Canada Border Services Agency (CBSA) updated its customs compliance verification priorities for 2015. Trade program verifications of tariff classification, customs valuation and origin are not limited to targets but rather are also initiated randomly to assess risk and revenue, and to promote voluntary compliance. In some cases, targets are experiencing a second round of trade verification, and in other cases, the CBSA is either continuing an existing round of verification or is planning a new round.

Importers of furniture for non-domestic purposes, batteries, apparel samples, bags of polymers of ethylene, footwear valued at $30 or more, hair extensions, machinery for public works, sacks and bags, special purpose motor vehicles, polyurethanes in primary forms, parts for power trains, generating sets, cereals, articles of apparel and clothing accessories, bicycle parts, articles of plastics, articles of iron or steel, vices and clamps, parts for use with machinery of chapter 84 are experiencing first time priority continuing or new verifications of their tariff classification practices.

Importers of pickled vegetables, curling irons, spectacle lenses, safety headgear, palm oil, seaweed, dextrins and other modified starches, disposable and protective gloves, wheel rims and spokes, coconut milk from Asia, and gazebos are experiencing a second round of classification audits.

Customs valuation audits will be commenced or continue for apparel, footwear, and preparations and pastrycooks' products.

Finally, origin verifications will continue or be initiated on t-shirts and jewellery.

Importers of the indicated goods would be prudent to prepare themselves for CBSA trade verifications by conducting internal reviews of their compliance practices, thereby getting out in front of audit results that may include application of administrative monetary penalties. Given the random application of CBSA audits, the same would apply to all other importers. As business priorities and judgments necessarily colour decisions as to whether or not to become compliant retroactively or prospectively, if at all, it is very important that internal reviews be conducted under the auspices of solicitor-client privilege to retain confidentiality. This is achieved by retaining actual legal counsel; no other professional advisors can offer the same privilege.

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