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CUSTOMS RULES & CRIMINAL OFFENCES

IMPORTER BEWARE: CUSTOMS NON-COMPLIANCE CAN BE A CRIMINAL OFFENCE

Earlier this year, Canada Border Services Agency (“CBSA”) intercepted a shipment declared to be electric fans from China.  When opened, CBSA found no fans, but almost 20,000 cartons of cigarettes, with a market value of about $2.2 million. (!)

Everyone knows that smuggling millions in cigarettes into Canada is a crime.  Like importing other sensitive goods (e.g., a prohibited weapon), many forms of importation can amount to criminal conduct, carrying with them potential offences under the Criminal Code.  Not all customs errors or violations amount to criminal conduct, however.  We explore the line between the two below.

Prohibited & Restricted Goods

Prohibited goods cannot be brought into Canada except under the most highly regulated circumstances.  Relatively few goods are prohibited, but they would include illegal drugs and weapons.  Importing them without proper authorization is generally an offence,  and prosecutions will be the default enforcement measure here.

Restricted goods are more complicated.  Think of them as like prohibited goods, but whose importation is subject to somewhat less cumbersome licensing and permit processes.  Examples include many food products.  Minor non-compliance with technical rules for "restricted goods" can be dealt with through non-criminal corrective measures like monetary penalties.  More obvious forms of noncompliant importation of restricted goods will often amount to an offence – for example, importing cannabis without a licence. 

The Line Between Non-compliance and Offence

Customs non-compliance can amount to a criminal offence even outside the narrow context of restricted or prohibited goods, and that is when the law can be most ambiguous. 

The Customs Act (the “Act”) contains multiple broad offence provisions, including s. 153 which includes a catch-all provision that makes any form of wilful non-compliance with the Act an offence.  In theory, failing to report the correct value, origin, or tariff class – if intentional – is a crime.  In practice, actual charges are rare, and depend how brazen and deliberate the non-compliance was.

A few real-world examples.  In a 2014 case a young woman declared $300 for the value of certain luxury clothing brought back from New York City, instead of $80,000.  She was charged and convicted.  In a 2008 case, a man chose not to declare his $300,000 watch when returning from Las Vegas.  He was charged and convicted.

In a 2019 case, a boater failed to report his new boat being imported to Canada.  He was charged for failure to declare, and defended himself by testifying that he had meant to declare and pay duties for the boat but had never got around to it, due to his longtime problem with forgetfulness.  The Court accepted that, but still convicted him on a charge of unlawful possession, which only required the knowledge and possession of an unlawfully imported good.

The lesson is that criminal sanctions in the customs context – as it seems to be in most of life these days – are reserved for situations where there is significant value involved and obvious deceit. 

Best off avoiding these kinds of issues by doing things correctly.

Takeaways

Some forms of customs non-compliance amount to a criminal offence.  The line between misguided error and criminal conduct is not always clear.  Experienced Customs Counsel can help make sense of these complex rules, and deal with alleged non-compliance.

For help with Customs issues, please click here.

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