Clearit.ca's Blog on Customs Brokerage and News Updates
Importing and exporting goods is rarely as simple as putting a stamp and a destination on your package. There are rules and regulations that all Canadians must adhere to when shipping items over the border, and the AMPS penalties are what the CBSA uses to penalize those who don’t. The practice of following these rules is usually referred to as customs compliance. If you’re a regular importer or exporter, customs compliance practices are vital to your operation. But what exactly happens when you violate a rule that the CBSA (Canadian Border Services Agency) has put forth?
What are the AMPS penalties?
The AMPS or Administrative Monetary Penalty System is the system that the CBSA uses to give monetary penalties to importers and exporters for violating CBSA trade legislation. Simply put, they’re a fine you’ll have to pay to the CBSA if you’re caught breaking shipping laws. The purpose of AMPS penalties is to deter non-compliance and to make sure that all businesses operate on a level playing field.
The penalties are essentially fines, and they don’t result in a criminal record or prison time. AMPS penalties can be issued in combination with other kinds of fines. However, AMPS penalties will not be proposed if a customs violation is serious enough to warrant prosecution.
When you receive an AMPS penalty, your business profile will be marked and the violation will stay on CBSA records for three years. This could be costly, as your shipments will be watched more carefully, being often subjected to time-costly secondary inspections at the border. It also results in fees that could range from a nuisance to a serious impact on your operations, depending on the amount.
What violations result in AMPS penalties?
There are 152 different contraventions, or violations, that are punishable under AMPS. You can find a full list of all the contraventions and the associated monetary penalties on the Amps Master Penalty Document. According to the CBSA, these are the most common acts of non-compliance that 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;
- Failure to self-correct an incorrect declaration.
Out of the 152 contraventions, these are the penalty codes most frequently imposed on importers and exporters:
- C336 Person failed to pay duties on accounted goods.
- C005 Person failed to provide true, accurate and complete information.
- C082 Importer failed to correct tariff classification within 90 days.
- C084 Importer failed to mark the goods.
- C066 Person removed unreleased goods from customs office or sufferance
- C021 Carrier failed to report regular goods ($1,600 or greater).
- C353 Importer failed to pay duties as a result of a required correction.
- C018 Failure to transport passengers and crew to customs office.
- C315 Exporter failed to provide any export permit required.
For some offences, such as C336, there is a flat rate. For others, such as C082, you could pay up to $25,000 CAD for a single offence. For most AMPS penalties, the fine increases depending on how many times you’ve committed the offence.
Here’s an example of the structure for violation C066:
|1st offence||$1,000 CAD|
|2nd offence||$2,000 CAD|
|3rd and subsequent offences||$4,000 CAD|
Note: On April 1st 2019, the fees of 22 contraventions increased significantly. You can find out more about the violations and the penalty increase through CBSA’s Customs Notice 19-05.
How to respond to AMPS penalties
If you are issued an AMPS penalty, you will receive the CBSA’S Notice of Penalty Assessment (NPA), form E650, which describes your violation and the associated fine. After that, you have a few options on how to proceed.
You can choose to pay the fine upfront. If you have no reason to correct or appeal the fine, you must pay it within 30 days. After 30 days, you’ll start to incur interest.
If you disagree on the penalty issued to you, you can request a correction or appeal. You must contact the CBSA office that issued the penalty within 90 days after receiving the notice. If you do this, the payment will be deferred until a decision has been made. However, should your correction or appeal be denied, you will be responsible for the full payment plus interest. Check out our blog on appealing AMPS penalties for more information.
Avoiding AMPS penalties
You are responsible for making sure your import and export transactions are accurately filed and completely compliant. You are also responsible for obtaining the release of imported goods, paying duties, preparing documents, maintaining records and responding the the CBSA should they contact you.
Many choose to work with a customs broker to make sure their operations are compliant with CBSA regulations. If you hire a customs broker and receive an AMPS penalty, you will still be on the hook for it. The fine does not go to the customs broker. For this reason, it’s important to hire a reputable customs broker. Don’t risk it by going with a broker that cuts corners.
Even if you use a customs broker, it’s recommended that you are up to date and knowledgeable on CBSA customs laws yourself. You should be able to understand what a customs broker does and what violations could result in an AMPS penalty. That way, you’ll be able to tell a good customs broker from a bad one. Unfortunately, ignorance won’t hold up in an appeal.
At Clearit, we have an expert team of brokers who will ensure all your imports and exports are fully customs compliant. We encourage you to learn the ins and outs of import laws so that we can work closely and transparently with you. Our team works hard to ensure that our clients do not receive AMPS penalties, and is prepared to do the same for you. If you’d like to become a Clearit client, get in touch with us today.