Trade Compliance

GHY discusses changes to international trade regulations and explores cutting-edge compliance strategies.

Compliance the Focus in 2018 and Beyond

Posted March 21, 2018

Importers are facing an increase in challenges at the border, due to a rise in compliance focus by customs authorities. We have seen a twofold increase in customs audits this past year which has caused importers clearance delays, regulatory fines and time away from their core competency to deal with data requests by the Canada Border Services Agency (CBSA).  Tariff classification issues are driving this new focus by the CBSA and if you have not been impacted yet by the demands of compliance verification, we feel you most likely will be in the future! 

The Auditor Generals (AG) Report found that 74% of 1.4 million records had insufficient information to properly render tariff classification. Facilitating trade for over 117 years put us on the front lines, we recognize the issue daily and it is our opinion that this report has teeth and will be acted on by the CBSA.  Importers need to be aware of this and prepare for it.

The Auditor General (AG) and Parliament of Canada has given the CBSA clear direction, they must re-calibrate their priorities of “trade facilitation & compliance”. The emphasis will shift to have greater emphasis on compliance, and as a result during the time of a forensic CBSA audit, compliance or regulatory risks will have a high likelihood of being found! This can be costly!  

Key Takeaways

GHY welcomes this increased compliance and security focus, as it will level and possibly tilt the playing field for importers who are compliant. There are key concerns for non-compliance as the CBSA have been given deadlines to report back to Parliament and the AG on the following by Fall of 2018. The key takeaways from these deadlines that will impact everyone are:

1. A framework of how to audit the broker license based on compliance.

  • The Customs Brokers General Agency Agreement places a majority of accountability on the Importer of Record (IOR). However, Customs Brokers have been subjected to paying AMPS penalties as a result of not being thorough with correct audit trails, and/or in action.

2. A proposal of what AMPS penalties should look like to mirror other countries, such as the USA.

  • CBSA will be seeking for higher penalties for non-compliance.
  • This is counterintuitive based on how brokers have chosen to own/co-own many of the penalties that have been assessed.
  • The Customs Brokerage industry needs to educate and engage (with detailed audit trails to support their actions as the more aggressive penalty regime of tomorrow will be enforced by their actions of today).

3. A review of the Duty Relief Program and compliance requirements.

  • CBSA is anticipating implementation of a much more aggressive approach to “Duties Relief Observed”.

4. A review of the Duty Recovery Program and compliance requirements (4 years).

  • The Auditor did not like seeing eligibility to recover duties extend back four years.  Recovery opportunities should be explored and taken advantage of with urgency, as this 4 year window may be reduced.

5. Permit Controls (Supply Chain Goods).

  • CBSA will be more aggressive at the front end, managing and reviewing goods that require permits (over access/ under access) as current system has little to no validations.

To Be Aware of – CBSA’s SWI

The CBSA’s Single Window Initiative (SWI) will require significant collaboration with importers, as tariff is insufficient for “risk”. Data resides in many categories which require an “End Use” and the “Canadian Product Category”. Presently, fewer than 5% of shipments are processed via Single Window Initiative.


We understand the Auditor General Report gave clear direction to the CBSA to act. As a result, the CBSA will be taking prompt actions that will impact our business, as well as yours.  Our recommendation is you watch our President Rick Riess’ quick and informative -  video on the AG Report.

GHY prides itself in being a top compliance & trade facilitator partner for all its clients. If you have any questions regarding this information, or would like to talk with one of our Trade Experts/Advisors, contact us at