Trade Verifications are regularly carried out by the Canada Border Services Agency to ensure businesses are compliant with import rules and regulations. The agency publishes its verification priorities twice a year – in January and July – to provide importers with advance notification about customs audits. Companies can use this listing as a timely prompt to review their own internal trade compliance practices and, if necessary, modify them accordingly.
To be trade compliant, the importing community must meet all the requirements governing the accounting of commercial goods imported into Canada, including, but not limited to:
- Classifying their commercial goods under the appropriate tariff classification
- Accurately declaring the origin and value of the goods in accordance with legislative requirements
- Paying the appropriate duties and taxes on the goods
What is the CBSA Verification Program?
Verification is managed in two ways, by random verifications or verification priorities. Some priorities carry over from one year to the next and some, like those looking into the valuation of footwear and apparel, are perennial. The overall goal of these verifications is both to enforce compliance with customs requirements and ensure that the correct amount of duties is being assessed.
In addition to verification priorities that are determined by risk-based, long-term processes (with new targets added during the year), CBSA also undertakes random verifications, which help it measure compliance rates and estimate potential revenue loss.
MFN Withdrawal (Russia or Belarus)
With the Most-Favoured-Nation (MFN) tariff treatment no longer applying to goods imported into Canada from Russia or Belarus, importers must now account for these goods under the General Tariff rate of customs duty of 35%.
If a good is produced with inputs (materials, labour, etc.) from Russia or Belarus, at least 50% of the cost to produce the good must be incurred in one or more MFN beneficiary countries or Canada. This is required by the rule of origin respecting the MFN tariff.
It is a priority for the Government of Canada that goods originating from Russia or Belarus do not enter the Canadian economy under the MFN tariff treatment. The list of goods currently being monitored and risk assessed includes, but is not limited to:
- Products of iron or steel
- Non-ferrous metals
2023 Verification Priorities
The priorities released as of July 2023 for Tariff Classifications, Valuation, and Origin are as follows:
Freezers and Other Freezing Equipment – new | Headings 84.18
Washers and Dryers – new | Headings 84.50 and 84.51
Spent fowl (Round 2) | Headings 02.07, 16.01 and 16.02
- LED lamps (Round 2) – Heading 85.39
- Furniture for non-domestic purposes (Round 4) | Headings 94.01 and 94.03
- Parts of lamps (Round 4) | Heading 94.05
- Cell phone cases (Round 3) | Headings 39.26, 42.02 and 85.17
- Pickled vegetables (Round 5) | Heading 20.01
- Parts of machines and mechanical appliances | Heading 84.79
- Bicycle Parts (Round 3) | Heading 87.14
- Parts for Use with Machinery of Chapter 84 (Round 3) | Heading 84.31
- Indicator Panels and Light-Emitting Diodes (LED) | Heading 85.31 and 85.41
- Safety Headgear (Round 5) – Subheading 6506.10
- Disposable and Protective Gloves (Round 5) – Subheadings 3926.20 and 4015.19
- Apparel (Round 4): Chapters 61 and 62
- There are no active origin verification priorities at this time.
You can find more detailed information about the nature of the risk(s) identified in connection with each of the verification priorities, as well as the outcome of prior audits here.
If You Import Targeted Goods, What Should You Do?
The likelihood of your import(s) being selected for an audit if you are importing commercial products specifically identified on CBSA’s Trade Compliance Verifications list obviously increases significantly.
In such cases, being proactive and immediately conducting a review or internal audit will help to avoid any unwelcome surprises down the line. In addition to mitigating the risk of incurring Administrative Monetary Penalties for non-compliance, this approach has the advantage of ensuring that your internal records are current and readily accessible in the event that CBSA requests them.
Our Global Trade Services Team can assist your company with a preliminary review or a complete internal audit. Additionally, our Trade Specialists can provide you with professional guidance to help improve your overall trade compliance profile with the CBSA.