Minimizing the Risk of Government Penalties
Administrative Monetary Penalty System
The Administrative Monetary Penalty System (AMPS) is used by the Canada Border Services Agency (CBSA) to assess penalties for non-compliance with Canada customs import and export legislation.
Historically, the majority of AMPS have been assessed against importers. As a reminder, importers are ultimately responsible for the accuracy of accounting documentation as well as any AMPS penalties that may be issued for non-compliance, whether or not a customs broker is used.
The CBSA recently published guidelines and clarification (in Memorandum D11-6-6) on the concept of what is considered "reason to believe". These are criteria (such as tariff classification, valuation, and country of origin) that may give an importer reason to believe that a customs declaration is incorrect. Other criteria include: formal assessments issued by the CBSA such as audit findings; final tribunal or court decisions; and customs rulings. Importers who have "reason to believe", and who do not have corrections filed within the 90-day period as required under section 32.2 of the Customs Act, will be liable for penalties under the Administrative Monetary Penalty System (AMPS). The applicable penalties are C080 through C083 and C350 through C353 and carry very high dollar amounts.
- 1st: $150 to a maximum of $5,000 (per issue) or $25,000 (per occurrence)
- 2nd: $225 to a maximum of $200,000 (per occurrence)
- 3rd and Subsequent: $450 to a maximum of $400,000 (per occurrence)
To minimize your risk of AMPS, we suggest the following:
- Declare an accurate declared value for each item. The most common valuation method is the ‘transaction value method’. This basically means that the value of the goods on the Commercial Invoice must equal the value that the purchaser has paid for the goods.
- Provide a complete and accurate description for each item.
- Include the Harmonized System (HS) code for each item.
- Include the country of origin for each item (and the tariff treatment if possible) so that you can benefit from any applicable free trade agreements.
- Ensure that all supporting documentation (i.e., Certificate of Origin) is available for the CBSA if requested.
- Refer to the CBSA's latest Trade Compliance Verifications list.
You must be in compliance with:
- Other government departments (OGDs) requirements (i.e., licenses and/or permits required by the Canadian Food Inspection Agency (CFIA), Transport Canada, and Foreign Affairs and International Trade Canada (DFAIT)).
- SIMA regulations for goods that are subject to anti-dumping or countervailing duties.
If you have questions regarding importing or exporting requirements, contact the CBSA and/or any OGD. If you have questions specifically about transactions that were completed on your behalf, please contact your customs broker.
If you receive an AMPS notice from the CSBA, please review it and cross-reference it with your customs documentation. If you believe that the assessment is incorrect, you may consult with your customs broker and/or the CBSA, within 30 days of the date of your notice.