UPDATE – Effective April 1, 2019, the CBSA will increase a number of AMPs related to commercial trade. Read more here.
In the 2017 Auditor General Report on customs duties, one of the observations made was that penalties from the Administrative Monetary Penalty System (AMPS) are currently too low to improve importer compliance. To this end, the report makes a recommendation to increase the current structure of penalties.
What are AMPS?
The CBSA uses AMPS to issue monetary penalties to clients for violating the CBSA’s trade and border legislation. The purpose of AMPS is to provide the CBSA with a means to deter non-compliance and create a level playing field for all Canadian businesses. There are approximately 250 contraventions that allow the CBSA to issue penalties to importers, exporters, carriers, or customs brokers. Examples of non-compliance that most often result in AMPS penalties
- Failure to pay duties
- Failure to provide required information to the CBSA
- Unauthorized removal of goods from a warehouse
- Direct delivery of goods prior to release from CBSA control
- Failure to report goods to the CBSA
If you receive an AMPS monetary penalty, your profile will become damaged and it will stay on your record for three years. This can be costly to your bottom line, as your goods will become more prone to secondary inspections when entering the country. It is also costly to your bottom line because of the large fees. Currently, the AMPS monetary penalty structure is as follows:
- 1st offence: $150 to a maximum of $25,000 (per occurrence)
- 2nd offence: $225 to a maximum of $200,000 (per occurrence)
- 3rd offence and Subsequent: $450 to a maximum of $400,000 (per occurrence)
Please Note: Effective April 1, 2019, the CBSA will increase a number of AMPs related to commercial trade. Read more here.
What Does the Auditor General Recommend?
The CBSA is expected to review their penalties by June 2018 and hope to create a more meaningful deterrent to importer non-compliance. This makes customs compliance more important if importers hope to avoid financial penalties related to incorrectly classifying goods and or incorrectly completing customs forms.
Additional Resources
The following articles can help you learn more about avoiding AMPS penalties:
An Explanation of Reason to Believe
How Would you Fare in a Customs Audit?
CBSA Master Penalty Document
CBSA Administrative Monetary Penalty System Overview
There are ways to appeal AMPS penalties, which can be seen here.
