Master Penalty Document The Master Penalty Document lists contraventions resulting from failure to comply with requirements identified in the Customs Act, Customs Tariff and related regulations. Each contravention describes the failure to comply, the associated penalty amounts, legislative, regulatory and administrative references and guidelines for application of the contravention. The Designated Provisions (Customs) Regulations outline the sections of the Customs Act, Customs Tariff, Special Import Measures Act (SIMA) and related regulations that relate to the AMPS program. Only obligations that are legislatively mandated are subject to AMPS penalties. Unless otherwise indicated, penalties are normally applied by a Canada Border Services Agency (CBSA) officer. The ‘Guidelines’ are meant to provide guidance in applying the contraventions and are not exhaustive examples of the non-compliance they are meant to cover. For further information, refer to the appropriate legislation, regulation or other reference material. Qualifying clients may be eligible for a reduction of penalties amounts under the Penalty Re-Investment Agreement (see D memorandum D22-1-2). The Master Penalty Document is subject to periodic revisions. Last Revision: May 2013 CBSA MASTER PENALTY DOCUMENT C001 Contravention Person failed to keep electronic records in an electronically readable format for the prescribed period. Penalty 1st: $150 2nd: $225 3rd and Subsequent: $450 Penalty Basis Per Verification Legislation Customs Act, subsection 2(1.3) D Memo D17-1-21, Maintenance of Records in Canada by Importers Guidelines Non-compliance occurs when any importer, exporter, person who causes goods to be imported or exported, or any other designated person on behalf of said individuals fails to keep electronic records in an electronically readable format for the prescribed period. The penalty is applied as a result of an audit, verification or examination. The system on which data is stored must have capability of producing accessible and readable electronic records. Any person who chooses to keep records electronically must also maintain the system requirements (including any equipment, hardware and software) that are necessary to access the information contained in those records, and must be willing to provide access to the equipment to CBSA officials for the purpose of reviewing the records. The readable format must provide a link to relevant supporting documents. Retention Period 36 months Revised: May 2013 www.cbsa-asfc.gc.ca 2 CBSA MASTER PENALTY DOCUMENT C004 Contravention Person provided information to an officer that is not true, accurate and complete. When a Special Import Measures Act (SIMA) code was not completed correctly for goods imported seven days or more after a preliminary determination was made and after the importer was notified in writing, and ending when the SIMA action is terminated by Canada Border Services Agency (CBSA) or the Canadian International Trade Tribunal (CITT). Penalty 1st: $150* 2nd: $225 3rd and Subsequent: $450 Penalty Basis Per Document Legislation Customs Act, section 7.1 D Memo D17-1-10, Coding of Customs Accounting Documents Other References D11-6-4, Legislative Authorities and Supporting Documentation Requirements for Form B2, Canada Customs - Adjustment Request D17-2-1, Coding of Adjustment Request Forms D15, Special Import Measures Act (SIMA) / Investigations Guidelines * A 30-day delay in the escalation of penalty levels from the first to the second will apply to this contravention. Should a second penalty with the same contravention be issued against the same client, the system will not escalate the penalty level to level two unless 30 days have transpired from when the first Notice of Penalty Assessment (NPA) was issued or the infraction occurred. The non-escalation rule applies from the first level to the second level only; it does not apply from the second to the third level. Non-compliance occurs when a person failed to meet the requirements for goods subject to the Special Import Measures Act (SIMA) by providing information to an officer that was not true, accurate and complete. Anti-dumping and Countervailing Directorate will notify importers of preliminary and final determinations of dumping or subsidizing concerning specific imported goods. Importers will also be notified of SIMA enforcement activities while an injury finding by the Canadian International Trade Tribunal is in effect. Applied against the importer. Officer must be an authorized user of the SIMA Compliance Web site to be able to apply this penalty. Revised: May 2013 www.cbsa-asfc.gc.ca 3 CBSA MASTER PENALTY DOCUMENT Seven days after the notification is issued the applicable SIMA code must be used on import transactions (i.e. B3). In instances where an officer finds an importer in contravention for the first time, the officer must forward this information to Headquarters (HQ). HQ will issue the notification to the importer. Refer to the Measures in Force in the Anti-dumping section of the CBSA Web site and the relevant D15 Memorandum to verify the goods are subject to the SIMA action. Verify that the importer has been notified regarding the SIMA codes by referring to the case information on the SIMA Compliance Web site. The obligation to code the B3 or B2 ends when the SIMA action is terminated by the CBSA or the CITT or the surtax expires, unless the importer has been given written notice that the coding of transactions is to continue. The penalty will be applied per document, i.e. per B3 or B2. Retention Period 36 months Revised: May 2013 www.cbsa-asfc.gc.ca 4 CBSA MASTER PENALTY DOCUMENT C005 Contravention Person provided information to an officer that is not true, accurate and complete. The information required to be provided in any permit, certificate, licence, document or declaration in respect of imported or exported goods is incorrect. Penalty 1st: $150* 2nd: $225 3rd and Subsequent: $450 Penalty Basis Per Document Legislation Customs Act, section 7.1 D Memo D17-1-10, Coding of Customs Accounting Documents Other Reference D20-1-1, Export Reporting Guidelines * A 30-day delay in the escalation of penalty levels from the first to the second will apply to this contravention. Should a second penalty with the same contravention be issued against the same client, the system will not escalate the penalty level to level two unless 30 days have transpired from when the first Notice of Penalty Assessment (NPA) was issued or the infraction occurred. The non-escalation rule applies from the first level to the second level only; it does not apply from the second to the third level. Non-compliance occurs when mandatory prescribed information required to be provided by electronic or written means, in respect of imported or exported goods is untrue, inaccurate or incomplete. One penalty will be issued per declaration or document regardless of number of errors or omissions in a permit, certificate, licence, document or declaration in respect of imported or exported goods. The penalty will be applied against the person required to provide the information e.g. importer, exporter, carrier. When an officer gives an opportunity to provide missing information on import documentation and a client fails to comply with this request, a penalty will be applied. Where the mandatory prescribed information provided is incorrect, a penalty will be applied and a request for the correct information will be made. Officers will specify that a penalty will be issued on the reject notice. Revised: May 2013 www.cbsa-asfc.gc.ca 5 CBSA MASTER PENALTY DOCUMENT The determination of issues related to origin, tariff classification and value for duty shall not be resolved at the border. No C005 penalty shall be issued by border services officers when mandatory 10-digit HS system code, value for duty and origin submitted are questionable. Border services officers should utilize the established regional methods, i.e., round-trip memorandum, A32, etc., to refer the matter to their local Compliance Verification Unit or Investigations. C005 may apply to exporters and export carriers who have reported goods, but provided incorrect, incomplete or untrue information in the mandatory fields of the export declaration (export permit, licence or certificate, cargo control document, etc.) All Other Government Department requirements must be met prior to release or export of the shipment. C005 is not to be used where a more specific contravention exists. For missing import permits, certificates or energy efficiency information, see C071. For failure to account for imported goods at time of the release request, see C360. For non-compliance involving certificates of origin, see C152 or C194. For Export Summary Reporting violations, see C170 and C317. For missing B13A Export Declaration for regular goods, see C170. For missing B13A Export Declaration for controlled, regulated or prohibited goods, see C345. For missing export permit, licences or certificates, see C315. The issuance of C348 penalties is most suitable for routine finds of breaches where fact finding is straightforward and the evidence of a breach can be easily determined and proven. Retention Period 12 months Revised: May 2013 www.cbsa-asfc.gc.ca 6 CBSA MASTER PENALTY DOCUMENT C008 Contravention Person (carrier) failed to provide a cargo control number in a bar-coded format or in the case of a Customs Self Assessment (CSA) shipment, the required data elements. Penalty 1st: $150* 2nd: $225 3rd and Subsequent: $450 Penalty Basis Per Conveyance Legislation Customs Act, subsection 12(1) and (2) D Memo D3-1-1, Policy Respecting the Importation and Transportation of Goods D3-1-7, Customs Self Assessment Program for Carriers Other References D17-1-10, Coding of Customs Accounting Documents D17-1-7, Customs Self Assessment Program for Importers CSA Participants’ Requirements Documents Guidelines * A 30-day delay in the escalation of penalty levels from the first to the second will apply to this contravention. Should a second penalty with the same contravention be issued against the same client, the system will not escalate the penalty level to level two unless 30 days have transpired from when the first Notice of Penalty Assessment (NPA) was issued or the infraction occurred. The non-escalation rule applies from the first level to the second level only; it does not apply from the second to the third level. Non-compliance occurs when the carrier fails to provide a bar coded cargo control number when reporting goods to the CBSA. In the case of a Highway CSA participant submitting paper documents (Service Option 497), non-compliance occurs when the CSA transporter does not provide the following CSA data elements in a bar-coded format: • CSA importer Business Number (BN), • CSA carrier code, • Secondary CSA carrier code when applicable. If a complete Transport Document Number is provided, it must be bar coded as well. Revised: May 2013 www.cbsa-asfc.gc.ca 7 CBSA MASTER PENALTY DOCUMENT Applied against the carrier or the transporter. This penalty does not apply in the following situations: a- Unreadable bar codes The carrier must be advised that his bar codes are unreadable. The cargo control number must be input manually. Refer to D3-1-1, Appendix H for bar code specifications and testing procedures. (Contravention C005 is not applicable in these circumstances.) b- For CSA participants C008 does not apply in situations where the business number or carrier code provided is invalid (i.e. not CSA approved). In these situations, CSA clearance will be denied for the shipment and a non-CSA service option will be used. c- Failed PARS A failed Pre-Arrival Release System (PARS) is replaced by a handwritten or typed cargo control document (CCD) using the cargo control number of the original PARS document. Alternatively, carriers may use their pre-printed CCDs and cross out the existing bar coded CCN and show the CCN of the failed PARS in the "Previous cargo control number" field. In both cases, the wording "Failed PARS" must be written on the CCD to clarify why a bar code is not being used. d- Where the Commercial Driver Registration Program (CDRP) or Fast and Secure Trade (FAST) barcode is not presented (i.e. driver forgot registration card), the information will be inputted manually. C008 does not apply. Bar coded cargo control numbers are not required for: Shipments being abstracted by a broker or sole importer for release purposes Goods moving in-transit on a "Canada - US In transit manifest" Air (AXX- or IATA assigned code) Rail (6000 series) Marine (9000 series) Mail (E14 series) Apply a penalty per conveyance regardless of the number of shipments. When a bonded carrier fails to use his authorized bonded carrier code or fails to present a letter of authorization when using another bonded carrier’s code, see C371. Retention Period 12 months Revised: May 2013 www.cbsa-asfc.gc.ca 8 CBSA MASTER PENALTY DOCUMENT C010 Contravention While transacting business as a customs broker, a broker failed to make available to an officer, within the time specified by the officer, any records required to be kept under the Regulations. Penalty 1st: $300* 2nd: $450 3rd and Subsequent: $900 Penalty Basis Per Request Legislation Customs Act, subsection 9(3) D Memo D1-8-1, Licensing of Customs Brokers Other Reference Customs Brokers Licensing Regulations Guidelines * A 30-day delay in the escalation of penalty levels from the first to the second will apply to this contravention. Should a second penalty with the same contravention be issued against the same client, the system will not escalate the penalty level to level two unless 30 days have transpired from when the first Notice of Penalty Assessment (NPA) was issued or the infraction occurred. The non-escalation rule applies from the first level to the second level only; it does not apply from the second to the third level. Non-compliance occurs when a broker fails to make available to an officer, within the time frame specified by the officer, and in the manner specified by regulation, any records that the customs broker is required by regulation to keep. The information should be available in such a manner as to enable an officer to perform detailed audits and to obtain or verify information. Failure to produce any or all records as detailed in the Customs Brokers Licensing Regulations, within the time period specified by an officer, shall be considered a single contravention. It should be noted that, by regulation, customs brokers are required to keep records for a period of six years after the importation of the goods to which the information relates. For example, the officer requested the broker to produce documentation relating to a clearance for a particular shipment. The broker did not provide, within the 30-day time frame assigned by the officer, the required information. Retention Period 12 months Revised: May 2013 www.cbsa-asfc.gc.ca 9 CBSA MASTER PENALTY DOCUMENT C011 Contravention A person transacted or attempted to transact business as a customs broker, or held oneself out as a customs broker and did not hold a licence issued under subsection 9(1) of the Customs Act and was not qualified under the regulations, or duly authorized to transact business as a customs broker by a person who holds such a licence. Penalty 1st: $500* 2nd: $750 3rd and Subsequent: $1,500 Penalty Basis Per Client Legislation Customs Act, subsection 9(4) D Memo D1-6-1, Authority to Act as Agent Other References D1-8-1 Licensing of Customs Brokers Customs Brokers Licensing Regulations Guidelines * A 30-day delay in the escalation of penalty levels from the first to the second will apply to this contravention. Should a second penalty with the same contravention be issued against the same client, the system will not escalate the penalty level to level two unless 30 days have transpired from when the first Notice of Penalty Assessment (NPA) was issued or the infraction occurred. The non-escalation rule applies from the first level to the second level only; it does not apply from the second to the third level. Non-compliance occurs when an unlicensed agent, or a person who is not qualified under the regulations or duly authorized to transact business as a customs broker by a person who holds a brokers licence performs customs brokers’ licensed activities. A penalty will be applied for each activity performed by an unlicensed broker, or by a person who is not qualified under the regulations or not duly authorized to transact business as a customs broker by a person who holds a brokers licence, and who performs customs brokers’ licensed activities. Transactions completed for additional clients, but found at the same time, will be assessed on a per client basis at the same level. Retention Period 12 months Revised: May 2013 www.cbsa-asfc.gc.ca 10