Understanding the Administrative Monetary Penalty System (AMPS)

Trade Talk Blog • June 23rd, 2022

f you import goods into Canada, there are rules and regulations you must adhere to. But what happens when you violate or do not fully comply with Canada’s trade and border legislation? The answer is that you could end up paying a hefty penalty.

The Canadian Border Services Agency (CBSA) has a wide range of tools at its disposal to ensure that importers comply with trade laws and regulations. One of these tools is the Administrative Monetary Penalty System (AMPS), which allows the CBSA to issue monetary penalties for violations of the Customs Act and other acts administered by the CBSA. Read on to learn about the AMPS system, its purpose, penalties, and appeals.

What is the Administrative Monetary Penalty System (AMPS)?

Canada’s Administrative Monetary Penalty System (AMPS) permits the CBSA to issue monetary penalties to anyone from the import or export industry who violates the Agency’s trade and border legislation. It was introduced in 2002 to correct non-compliance in commercial trade.

CBSA uses AMPs to encourage voluntary compliance with trade legislation and customs rules and regulations concerning safety, security, and other issues of national importance. Additionally, applying the AMPS system reduces the cost and burden associated with enforcing trade rules.

Who can receive an AMPS penalty?

Anyone involved in the movement of goods into or out of Canada may be subject to penalties under the AMPS. This includes importers, exporters, carriers, and other parties involved in the movement of goods across Canada’s border. Penalties can be issued at the time of importation/exportation or post importation/exportation due to a customs verification.

It is worth noting that after criticism by the Auditor General of Canada, in 2019, the Canada Border Services Agency (CBSA) increased penalty amounts issued under the Administrative Monetary Penalty System to encourage compliance within commercial trade.

How are AMPS penalties assessed?

Penalties can be assessed for a vast number of contraventions, but some common examples of non-compliance are:

• Failure to provide required information to CBSA
• Direct delivery of goods prior to release from CBSA control
• Failure to report goods to CBSA
• Failure to self-correct an incorrect declaration
• Failure to pay duty

A full list of penalties can be found in this Master Penalty Document. The document outlines the contravention and provides guidelines on how the penalties are applied.

How does CBSA issue AMPS penalties?

CBSA issues penalties on a Notice of Penalty Assessment (NPA). The NPA will identify the penalty code, contravention, penalty amount, explanation, how to pay, where to pay, deadline in which to pay, and the issuing office.

CBSA has the authority to issue AMPS retroactively for up to 4 years, and penalties may be issued on either a per issue or per occurrence basis:

• A penalty applied per issue is assessed on an error regardless of how often that error has occurred.
• A penalty applied per occurrence is assessed each time the error occurs. Penalties issued on a per occurrence basis can add up quickly and be quite expensive.

Can I appeal an AMPS penalty?

If you do not agree with the penalty you received, you have the right to appeal to the Recourse Directorate (RD). The RD provides the business community and individuals with an accessible mechanism to seek an impartial review of trade decisions, enforcement actions, prohibited goods, late accounting penalties, and membership cancellations or rejections from a trusted program administered by the CBSA.

Your appeal must be submitted to the RD within 90 days of the date of notice. Upon receipt of your appeal, it will be investigated and reviewed to ensure the penalty was applied properly. The Recourse Directorate will then advise you of their decision.

If you are still in disagreement with the decision, you may exercise your right to appeal to the Federal Court of Canada.

Have you been issued a penalty and/or not sure if you’re compliant with Canada’s trade legislation and regulations? Book a meeting with us (below), we can help you with the appeal, ensure your compliance and help streamline your import/export process.