With all of the concerns that businesses engaged in the import/export of products in the United States and Canada face (increased global competition, currency fluctuations and product quality), one of the least considered but most important involves the often confusing world of customs compliance.
While it is inevitable that errors or omissions may occur in customs compliance, errors can be expensive. To avoid customs assessments, and attendant interest and penalties (not to mention potential prosecution), constant vigilance of one's customs obligations is required.
Like many areas of law, in customs valuation there are cases that represent so-called high and low water marks – cases that represent the extremes of possible outcomes, given a set of facts. Every once in a while, a case comes along that moves these marks around – often surprising practitioners. The recent case of Skechers USA Canada Inc. v. CBSA is one of those cases, and the decision of the Canadian International Trade Tribunal (the “CITT”) has caught the attention of many practitioners.
The Canada Border Services Agency ("CBSA") recently issued Customs Notice N-13-011 ... well maybe not so recently ... in May ... but it sometimes takes that long to keep up to date with these pressing announcements :).
The changes relate to CBSA”) administration of customs Administrative Monetary Penalties(“AMPs”) which may apply to the most basic of errors by Canada’s commercial importers, and can in some instances be as high as $500,000. These penalties are often imposed in connection with CBSA customs verifications -- short terms of "audit" and are aimed at securing compliance with customs legislation.
The Canada Border Services Agency ("CBSA") publishes a list of its active trade compliance verification priorities twice a year, outlining the industries or goods that it is prioritizing for compliance verification. This year the Canadian Apparel industry has been targeted, and has been issued a spate of Trade Compliance Notification Letters. The five most critical things that Apparel importers need to know before responding to these Notification letters are as follows.