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CUSTOMS INFRACTIONS CAN LEAD TO JAIL!

SERIOUS CUSTOMS COMPLIANCE ISSUES COULD LEAD TO CRIMINAL PROSECUTIONS

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Many travellers are likely unaware that, beyond the civil penalties routinely imposed by the Canada Border Services Agency (“CBSA”), alleged customs non-compliance can also lead to quasi-criminal charges under the Customs Act (“CA”).

In this Customs and Trade Report, we review this intersection of customs and criminality, highlighting the importance of seeking legal advice given the serious consequences of an offence prosecution.

Offences Under the Customs Act

Many travellers and importers of goods are likely aware of their duty under s. 12 of the CA, which generally requires that all goods imported into Canada be reported at the nearest designated customs office (for most travellers, this would be at the airport).

Where goods are not properly reported under the CA, the CBSA’s primary enforcement tool is to seize the goods at issue and require payment of a penalty prior to their release.

However, in more serious situations (e.g., high value goods, commercial quantities of goods not reported, goods hidden in secret compartments, false invoices provided, etc.), the CBSA may refer the matter to its criminal investigations unit and pursue a prosecution for quasi-criminal offences under the CA. The most commonly prosecuted offences are those under s. 153 of the CA (e.g., making false statements, wilfully evading duties or compliance with the CA, etc.) and smuggling under s. 159 of the CA. There are also general offence provisions under ss. 160 and 161 that effectively make contravening any provision of the CA an offence!

Director and Officer Liability

Where a corporation commits an offence under the CA, its directors, officers or agents who directed, authorized, assented to, acquiesced in or participated in the offence may be found to be parties to the offence under s. 158 of the CA. If convicted, those individuals are subject to the punishment provided for the offence in question, whether or not the corporation was prosecuted and convicted.

Punishment for Offences

Some travellers and importers may view offences under the CA as “trivial regulatory offences” rather than being criminal in nature. However, the punishments for these offences can be significant, extending to a maximum fine of $500,000 or a term of imprisonment of up to five years, or both!

Additionally, depending on the facts, it is possible that the CBSA may recommend prosecutions for offences under the Criminal Code of Canada, such as forgery or fraud, which carry even more severe punishments (including potential mandatory prison terms).

Takeaways

Failing to comply with one’s duties under the CA (and other CBSA program legislation), depending on the nature of the CBSA’s allegations, can lead to criminal prosecutions with serious consequences.

Navigating the dangerous intersection between customs compliance issues and criminal exposure, including any potential defences when charged criminally, will require immediate help from Customs and Trade Counsel with criminal law experience.

For help with Customs Compliance Matters, please click here.