CBSA Announces Mid-2014 Audit Targets


As is its practice, the Canada Border Services Agency recently announced its semi-annual trade verification targets for the balance of 2014. Many targets continue from the past, while new ones have been added.

Amongst new targets are for tariff classification (batteries, gazebos, apparel samples, bags of polymers of ethylene, footwear valued at $30 or more per pair, hair extensions, machinery for public works, special purpose motor vehicles, and polyurethanes in primary forms); for customs valuation there are no new targets; for origin, the CBSA has added jewelry.

The foregoing is hardly all inclusive of targets of CBSA audits. There has been an ongoing focus for customs valuation (related party transactions generally, apparel, footwear, etc.); for tariff classification (flowers, curling irons, palm oil, chemical products, safety headgear, etc.); for origin (bedding and drapery, cotton pants, t-shirts, etc.).

The targets show a very broad range of goods as being within the crosshairs of trade verification, strongly suggesting that it remains the burden/obligation of all Canadian importers to self-assess trade compliance, failing which one of these targets may be directed at you.

It is also important to remember that the announced targets are not exhaustive generally. The CBSA is not constrained, and will act on industry statistics, complaints, and other information, to selectively target importers (on a non-industry basis) for audit. Audits may be time consuming, disruptive, and cause importers to amend practices retroactively, as well as prospectively. It is always best to self-assess compliance in advance of being CBSA audited to facilitate voluntary disclosures and corrections, if appropriate. Guidance provided under the umbrella of solicitor-client privilege by Canadian legal counsel allows companies to assess their positions, and make decisions regarding past and future compliance without fear of disclosure by advisors who cannot advise in a privileged manner. Public companies have a particular imperative to examine their business, including import/export, practices, and to correct non-compliance.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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