Written By Darrel Pearson and Ethan Gordon
The Canada Border Services Agency (CBSA) has released an updated list of trade compliance verification priorities for 2023. Verification priorities are established on an ongoing basis, and reflect the CBSA’s assessment of non-compliance risk with customs rules relating to importations of select categories of imported goods or supply chains.
Updates to the CBSA's priorities since its last update in July 2022 include the removal of pasta under tariff heading 19.02, "other chemical products" under tariff heading 94.03, and footwear under chapter 64, and the addition of safety headgear under tariff subheading 6506.10 and disposable and protective gloves under tariff subheadings 3926.20 and 4015.19, as priorities.
Trade verification audits typically cover (1) tariff classification, (2) customs valuation or (3) origin, and commonly focus on one of these customs programs for a defined “verification period” (generally the last complete fiscal year). The importer faces the prospect of decisions obligating the amendment of non-compliant past import entry declarations made in the period commencing up to four years prior to the date of amendment.
All importers are at risk of random or compliance-based verifications. Note, however, that not all audits are based on verification priorities. Although the priorities identified in this list focus on risk in the three principal customs areas of tariff classification, valuation and country of origin, verifications of import compliance can also cover other customs programs such as trade incentives and compliance with areas of regulation administered by other government departments.
There are currently 20 active verification priorities, some of which have been in place for many years. This list contains 19 priorities for tariff classification and one for customs valuation. There are no origin verification priorities at this time.
The following summarizes the CBSA's current verification priorities:
|Spent fowl||Headings 02.07, 16.01 and 16.02|
|LED lamps||Heading 85.39|
|Furniture for non-domestic purposes||Headings 94.01 and 94.03|
|Footwear ($30 or more per pair)||Heading 64.03|
|Parts of lamps||Heading 94.05|
|Cell phone cases||Headings 39.26, 42.02 and 85.17|
|Pickled vegetables||Heading 20.01|
|Gloves||Headings 39.26 and 42.03|
|Other mountings and fittings, suitable for furniture||Heading 83.02|
|Air heaters and hot air distributors||Heading 73.22|
|Flashlights and miner's safety lamps||Heading 85.13|
|Parts of machines and mechanical appliances||Heading 84.79|
|Bicycle parts||Heading 84.79|
|Parts for use with machinery of chapter 84||Heading 84.31|
|Indicator panels and light-emitting diodes (LED)||Heading 85.31 and 85.41|
|Safety headgear||Subheading 6506.10|
|Disposable and protective gloves||Subheadings 3926.20 and 4015.19|
|Apparel||Chapters 61 and 62|
A detailed list of all current verification priorities is available on the CBSA website.
Businesses that import goods listed as verification priority items should prepare for the possibility of a CBSA trade compliance verification in the near future, the results of which may include payment of additional duties, GST, interest and penalties. These assessments tend to be difficult to recover in increased pricing given their retrospective nature.
Importers of goods not included on this list should nevertheless be aware that the CBSA conducts random or complaint-based verifications. Best practices recommend that importers review their customs compliance practices to make sure they are compliant and can withstand audit by the CBSA.
The Bennett Jones International Trade and Investment group is available to help client importers assess their compliance/non-compliance and to assist them in the steps that should be undertaken to correct errors resulting from past non-compliant practices and improve these practices going forward.