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Subscribe to this list via RSS Blog posts tagged in Customs

We frequently act for Clients whose goods or vehicles have been seized by Canada Border Services Agency (“CBSA”).   More often that one would think, these seizures involve goods or conveyances (e.g., tractor-trailers, utility vehicles, transport trailers) that are owned by a person other than the importer (e.g., lease goods, borrowed goods, goods subject to a PPSA security).

Where this happens, the true owner is a third party to the seizure but must often take specific steps to protect its legal interest in the seized property.   If nothing is done, the owner can often find the goods subject to forfeit and sold or disposed of by CBSA!

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We are no strangers to helping individuals who find themselves subject to a Canada Border Services Agency (“CBSA”) seizure and all the consequences that come with that – including NEXUS seizures and revocation. But when it comes to bringing plant or animals (or their derivatives – e.g., food) into Canada, travellers can inadvertently commit a violation which is very punitive and difficult to defend.

Specifically, the Agriculture and Agri-Food Administrative Monetary Penalties Act (“AAAMPA”) imposes violations (“AAAMPs”) which leave no room for reasonableness or diligence. Even with the hurdles involved, however, appealing an AAAMP might be worthwhile (and successful) – particularly given that it can lead to continual secondary screening and a loss of NEXUS eligibility!

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The right to make a customs or Special Import Measures Act (SIMA”) appeal is very different than the right to make similar income tax or GST appeals. Unlike income tax or GST, appeals for customs and SIMA cases can ONLY be made once full payment of ALL amounts assessed has been made to the government!

This unfair situation is presenting problems for Canadian commercial importers who want to fight their Canada Border Services Agency (“CBSA”) customs and SIMA assessments but lack the financial ability to do so.   The issue is especially severe in the case of SIMA assessments, where the amounts being levied by CBSA can sometimes exceed two or three times the total value of the imported goods themselves – and add up to 10 or 20 times the profit margin that the importer expected to earn from these import transactions.

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The third and final phase of the Canada Border Services Agency’s (“CBSA”) Assessment and Revenue Management (“CARM”) project (i.e., “CARM R2”) now has a clear target date for release – October 2023! The exact implementation date will depend on when draft regulations, released on November 26, 2022, will be finalized. Importers, brokers, freight-forwarders, and anyone else interested in CARM has until January 10, 2023 to provide feedback on the regulations!

The draft regulations will tweak existing regulations to bring them in-line with how the CBSA envisages CARM applying in practice. Hopefully, this will take Canadian customs into the digital age more smoothly than some other recent Federal IT projects!

Tagged in: CARM CBSA Customs import
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If a person intends to carry CAD $10,000 or more in Cash over Canada’s border (either entering or exiting Canada), the person carrying the cash must declare the amount being carried to Canadian Border Services Agency (“CBSA”). If a CBSA officer determines that a traveller is carrying undeclared cash and suspects that it may be proceeds of a crime, the CBSA may seized the cash and hold it until the matter is proven otherwise. A recent Federal Court decision in Evans v Canada (Public Safety and Emergency Preparedness), 2022 FC 1516 (“Evans”) serves notice that while there are appeal mechanisms available, it can be extremely difficult to overturn these seizures.

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Canada is often viewed as a natural extension of the American direct selling ecosystem:  it has a common dominant language, similar culture, convenient land border, and a market of over 38 million people!

While there are many similarities, there are still unique legal and regulatory features that direct selling businesses operating in Canada must be aware of and adapt to — all of which can be easily avoided with the right planning, structuring or advice.  This includes the appropriate “Canadianization” of plan documents and overall business strategies. 

In the third of a 5-part series, we review one of the major risk areas facing the Canadian direct selling industry:

Understanding CBSA Verifications

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Canada is often viewed as a natural extension of the American direct selling ecosystem: it has a common dominant language, similar culture, convenient land border, and a market of over 38 million people!

While there are many similarities, there are still unique legal and regulatory features that direct selling businesses operating in Canada must be aware of and adapt to — all of which can be easily avoided with the right planning, structuring or advice. This includes the appropriate “Canadianization” of plan documents and overall business strategies.

In the second of a 5-part series, we review one of the major risk areas facing the Canadian direct selling industry:

Importing to Canada under “NFR” Structures

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As we have previously discussed, Canada has one of the most protectionist agricultural product sectors in the world, putting import restrictions and incredibly high tariffs on basic groceries like cheese, eggs and poultry  and leading to continuing disputes with countries like the US and New Zealand over this approach.

Even if Canada is forced to change under pressure from its trade partners, tariff rate quotas (“TRQs”) will still remain a fact of life for importers – so it is best to know when and how to apply, and what to expect!

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The January 2020 Canadian International Trade Tribunal (“CITT”) decision in Landmark Trade Services v. President of the CBSA (Case No. AP-2019-002) was a welcome relief for customs brokers because the CITT held that Landmark (acting as a customs broker for what can loosely be described as a freight-forwarding situation) was not liable as the "importer" of the goods, despite the fact the import documentation described Landmark as the importer and purchaser. Accordingly Landmark would not be on the hook for the additional duty owing from the incorrect tariff classifications used on those import documents.   

Over a year later, Landmark's victory has resulted in headaches for businesses that use similar freight-forwarding structures, as the CBSA looks to re-assess them and hold them liable for additional duty on the basis they were the owners of the goods at the time of import. To understand why, one must understand what Landmark was doing.

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On October 29, 2018, Canada became fifth country to ratify the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (the “CPTPP”), joining Mexico (June 28, 2018), Japan (July 6, 2018), Singapore (July 19, 2018), and New Zealand (October 25, 2018).

Canada’s ratification meant that only one other country needed to ratify the agreement to trigger implementation of the CPTPP. Fortunately, Canada did not have to wait very long because on October 30, 2018 Australia became the sixth country to ratify the CPTTP, triggering a 60-day countdown to the implementation of the agreement on December 30, 2018.

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