RETAINING A LAWYER AT AUDIT OR ASSESSMENT A WISE DECISION!
In my 35+ years of experience, I have seen the tax world evolve quite a bit. It used to be that tax or trade lawyers were engaged very early on in most disputes. Usually at the time of audit. Overtime, we have seen clients try different approaches, from beginning to use non-lawyer accountants or customs brokers for dispute resolution, to (most recently) relying on AI to fight the dispute for them.
Global Affairs Canada (“GAC”) recently announced the opening of the tariff-rate quota (“TRQ”) application period for the 2025-2026 dairy year, which is open from May 1 to June 15, 2025. There are no changes to the existing ministerial allocation policies from the previous year, though this will be the second year Canada applies its new CPTPP dairy TRQ policies we have previously written about here.
On January 1, 2025, Canada is set to make changes to its to unilateral tariff programs for imports under the Customs Tariff. The changes include several beneficiary countries being graduated from the General Preferential Tariff (“GPT”) and Least Developed Country Tariff (“LDCT”) programs, and the introduction of a General Preferential Tariff Plus Program (“GPTP”) that will come into force at a later date.
Background
Canada’s customs system operates on the basis of preferential tariffs, in which countries are assigned a particular tariff treatment. The tariff treatment assigned to a country is used (in conjunction with the HS Code) to determine the rate of duty imposed on a particular good imported into Canada from that country.
As we have previously written about here and here, the Canada Border Services Agency (“CBSA”) has been in the process of rolling out their “CBSA Assessment and Revenue Management” (CARM) project.
Despite recent concerns over more delays, the scheduled CARM cutover period is now underway and the full functionality of the CARM Client Portal is set to be released on October 21, 2024.
The Canada Border Services Agency (“CBSA”) resets its “audit priority areas” twice per year. Essentially, the CBSA designates certain products as priority areas for customs verifications (i.e., “audits”) based on the program areas that the CBSA believes pose a significant risk for import non-compliance in terms of tariff classification, valuation, and/or origin of goods.
The CBSA has now released its January 2024 Trade Compliance Verification priorities, setting the stage for the next six (6) months. While there are no new audit priorities in this round, the CBSA has announced its intention to engage in new rounds of verifications on a number of historic issues, and updated its statistics on existing verifications. As is often the case, most of the focus is on tariff classification!
