Trade compliance verifications: January 2024

About trade compliance

To be trade compliant, the importing community must meet all of the requirements governing the accounting of commercial goods imported into Canada, including, but not limited to:

• classifying their commercial goods under the appropriate tariff classification
• accurately declaring the origin and value of the goods, in accordance with legislative requirements
• paying the appropriate duties and taxes on the goods

The CBSA monitors the extent to which commercial goods are trade compliant by conducting targeted verifications and by issuing verification priorities.

Other CBSA tools for trade compliance

In effect as of January 1, 2022, the CBSA uses 3 additional compliance intervention tools to target various circumstances and risks of non-compliance. These tools do not replace trade compliance verifications; they complement them.

Here is what you can expect to receive and level of CBSA intervention each tool carries:

• Trade advisory notice (TAN)
  • A letter to the importer asking them to review a declaration
    • Includes public resources for guidance
  • Acts as a nudge to help the importing community when there is a potential for non-compliance
  • No monetary assessment is issued as a result of a TAN
• Compliance validation letter (CVL)
  • A letter to the importer asking for more information
    • Importers must send information to the CBSA within 30 days
  • Addresses instances of suspected non-compliance
• Directed compliance letter (DCL)
  • A letter to the importer accompanied by a monetary assessment
  • Addresses instances of known non-compliance

As with trade compliance verifications, recourse provisions of the Customs Act apply to any resulting assessments.

Difference between compliance intervention tools and verifications

Traditional trade compliance verifications are not always efficient for trade chain partners and the CBSA to identify and address instances of non-compliance.

Traditional verifications are:

• lengthy and labour-intensive
  • examining all importations over a period of time, normally 1 year
• generally done well after the importations have occurred
  • which can result in mounting industry costs, particularly when recurring non-compliance is confirmed

In contrast, the 3 trade compliance intervention tools:

• target specific import transactions
• promote voluntary compliance
• enable early correction of errors, and
• mitigate future costs of non-compliance where recurring importations repeat undetected errors

Trade compliance verifications will continue to be the CBSA’s most comprehensive compliance tool. However, as part of its Trade Compliance Strategy, the CBSA is using compliance intervention tools to enhance the overall efficiency and effectiveness of its trade compliance regime.

Most-Favoured-Nation tariff treatment withdrawn from Russia and Belarus

Effective March 2, 2022, the Most-Favoured-Nation (MFN) tariff treatment no longer applies to goods imported into Canada that originate in Russia or Belarus.

This includes goods shipped:

• directly from Russia or Belarus
• from a third country

You must now account for these goods under the General Tariff rate of customs duty of 35%.

If a good is produced with inputs (materials, labour, etc.) from Russia or Belarus, at least 50% of the cost to produce the good must be incurred in one or more MFN beneficiary countries or Canada. This is required by the rule of origin respecting the MFN tariff.

It is a priority for the Government of Canada that goods originating from Russia or Belarus do not enter the Canadian economy under the MFN tariff treatment.

The list of goods currently being monitored and risk assessed includes, but is not limited to:

• products of iron or steel
• fertilizer
• petroleum
• non-ferrous metals
• tires

Source: CBSA

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