A less-than-truckload carrier specializing in US/Canada shipments
Frequently Asked Questions
What are the benefits of the CSA program?
The CSA program will reduce costs for the private sector by:
< ending the transactional transmissions of data elements;
< ending the need for artificial customs systems;
< increasing the certainty of expedited customs processing;
< making it easier for clients to meet their obligations; and
< streamlining legitimate trade.
When will the CSA program be available?
The CCRA intends to offer approved clients the benefits of the CSA program beginning October 2001. Draft part I applications have been available and and are being processed.
What is the CSA progam?
The CSA program will give approved importers the benefits of a streamlined accounting and payment process for all imported goods. The streamlined accounting and payment process ends the need for importers to maintain separate and costly customs processes, allowing them to use their own business systems to fully self assess and their customs obligations.
The CSA program also gives approved importers, approved carriers,and registered drivers the benefits of streamlined clearance option for CSA eligible goods. The streamlined clearance process ends the need for transactional transmissions of data related to eligible goods. This allows for the clearance of goods based on the identification of the approved importer, approved carrier, and registered driver.
What is involved in application and approval?
The CSA program a three-part application and approval process.
Part I-Risk Assessment
The application process involves a risk assessment of the importer or carrier.
Importers will have to give detailed information such as:
< corporate structure and a Business Number;
< key business activities and products;
< company policies to minimize risk;
< a quarterly report or the most recent audited financial statement for importers;and
< a list of U.S. vendors and direct-deliver consignees.
Carriers will have to give detailed information such as:
< corporate structure and carrier codes;
< security measures for freight facilities and personnel policies;
< terminal and warehouse locations;
< a list of owner-operator that the carrier intends to use for CSA freight; and
< Canadian and U.S. divisions.
Part II-Books and Records and Business Systems
Importers will be asked to demonstrate that their books and records and business systems have, or will have , the necessary linkages,controls,and audit trails to support CSA program requirements such as:
< an account security number;
< the accounting option selected;
< an internal business monthly cut-off date;
< a business system trigger for customs accounting;
< a way to capture the receipt date in the commercial system;
< a way to distinguish commercial importations from domestic purchases; and
< a sweep process to account for goods not accounted for by trigger.
Carriers will be asked to illustrate:
< accounting and carrier systems;
< the location of books and records;
<a walk-through of an international Canada-bound order;
< the current business process for all shipments;
< sample documents,descriptions, and the linkages for each step in the shipping process;
< how CSA customers, drivers,and shipments will be identified in the system;and
< how CSA shipments will be traced.
Part III-Client Undertaking
CSA-approved importers and carriers may be asked to sign a Client Undertaking document which will include an outline of the roles and responsibilities of the importer or carrier, agreed-on accounting and payment time frames,and references to possible contravention’s and resultant penalties. The document will also outline how the CSA client and the CCRA can work together to suppress contraband smuggling.
Who is eligible to apply for CSA?
Importers eligible to apply to the CSA program include those who
< Are resident in Canada;
< Have history of actively importing;
< Are without contraband or major commercial systems;
< Are prepared to make an investment in business systems;
< Are willing to provide senior management representation that commercial business processes, customs interfaces, and the required trigger, audit trails, and linkages exist or will exist in the business’s books and records; and
< Are prepared to sign a Client Undertaking document with the CCRA.
Carriers eligible to apply to the CSA program include those who are:
< Bonded or post-audit;
< Have history of transporting international goods;
< Without contraband or major commercial infractions;
< Willing to be liable and maintain control of CSA shipments until delivered;
< Willing to provide senior management representation that proper commercial business processes and audit trails exist or will exist ; and
< Prepared to sign a Client Undertaking document with the CCRA.
Can I appeal a Customs seizure?
When a seizure is made by Customs, a penalty is usually levied in lieu of duty and GST for the return of the goods. While the penalty may be calculated as a multiple of the normal duty and GST, Customs does not consider any portion of the penalty to be eligible for an income tax deduction or a GST input tax credit. The fairness of this policy is often called into question and certain aspects of it may no longer be valid.
Well over a year ago, Revenue Canada initiated a review of its seizure assessment policy for underpayments of GST. This review is on-going and there are now some 500 seizure appeals being held in abeyance pending a resolution to the problem. Importers affected by this may have to wait until mid-March 2000 before the Agency’s new policy is made public. And given the number of open files, it will probably be many more months before the backlog of cases is fully dealt with. The upcoming Administrative Monetary Penalty System (AMPS) is expected to supercede the current seizure regime for all but the most serious infractions.
Do I need a NAFTA Certificate of Origin?
When an importer takes advantage of Free Trade, he is deemed to be telling Canada Customs that he or his Broker has a valid Certificate of Origin on hand. If the value for duty of the shipment is less than CAD $1,600.00, a “Statement of Origin for Commercial Importations of less than CAD $1,600.00” may be used in lieu of a formal Certificate of Origin. For all other shipments, a fully completed single shipment or blanket Certificate of Origin is mandatory. Customs enforces this rule by spot-checking import entries and by conducting comprehensive Free Trade audits. Duty adjustments, interest charges and penalties are routinely assessed for non-compliance—even if the goods qualify for the preferential rate of duty! If HERCULES does not have a Certificate of Origin or standing instructions on file for the goods in question, we will contact you for your instructions. In the event that we do not receive a response, we will process the file in accordance with the terms and conditions of the written notice we send you. As always, you must immediately notify us if the entry needs correcting. Please understand that in the absence of your written instructions to the contrary, HERCULES cannot accept any responsibility for under-payments or over-payments of duty where a valid Certificate of Origin has not been provided to us prior to importation. Also, it is important to note that, if duty is paid on goods and a valid Certificate is presented after importation, you may apply for a refund of duty on those goods.
What is AMPS?
Two years ago the Canadian Government announced that it was developing a system of administrative monetary penalties (AMPS) to promote voluntary compliance with Customs regulations and programme requirements. In mid-October this year, Revenue Canada (now the Canada Customs and Revenue Agency) released an updated provisional list of infractions and penalties. Barring any unanticipated delays, AMPS will come into force sometime in the spring of 2001. Although AMPS is described by some as a ticketing system for relatively minor infractions, importers and exporters must not be lulled into a false sense of complacency. The penalties in the most recent draft range from $100 for a relatively minor first-time infraction up to as much as $25,000 for serious repeated offences. And while AMPS is being presented as a flexible alternative to the rigid enforcement provisions currently in force, the Customs Act will continue to provide for seizures, ascertained forfeitures and criminal prosecutions in lieu of, or in addition to monetary penalties where the gravity of the infraction warrants it. The CCRA plans to administer AMPS strictly, without consideration for fault, intent, due diligence or reasonable care. Importers will have an opportunity to appeal their assessments, but so long as the Courts maintain the Government's right to administer programmes like AMPS on the basis of absolute liability, an appellant will not be able to rely on mitigating circumstances alone to abate even the most severe penalties. An amendment to the Customs Act in 1998 placed the onus for voluntary compliance squarely on the shoulders of the importer. AMPS promises to give the CCRA a powerful new tool to reinforce this principle. To learn more about AMPS and the consequences of non-compliance, contact a member of HERCULES's Customs Brokerage Department.
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