Customs Issues and Procedure Part 9.pptx

Important Dates
▶ Assignment 3/21/2024
▶ Midterm 3/27/2024
▶ Final 4/5/2024
This Photo by Unknown Author is licensed under CC BY-SA-NC

Terminal Learning
Objectives
▶ Remit the correct amount
of duties and taxes to
CBSA
▶ Understand the purpose of
a Detailed Adjustment
Statement.
▶ Complete a Form B2,
Canada Customs
Adjustment Request.
▶ Comply with the legislated
time frames for filing Form
B2.

Importing Goods
Process
▶ Importing goods involves several steps,
from planning to receiving the goods.
Here's a general outline of the process:
• Market Research and Planning: Identify
the goods you want to import and
research the market demand,
competition, and potential suppliers.
Determine the regulatory requirements,
tariffs, and taxes associated with
importing those goods.
• Supplier Identification and Negotiation:
Find reliable suppliers who can provide
the goods you need at competitive prices.
Negotiate terms of sale, including price,
quantity, delivery terms, payment terms,
quality standards, and any other relevant
factors.
• Obtaining Necessary Licenses and
Permits: Depending on the nature of the
goods being imported, you may need to
obtain specific licenses or permits from
government authorities. These could
include import licenses, health and safety

Importing Goods
Process
• Customs Clearance: Prepare all necessary
documentation for customs clearance,
including commercial invoices, packing lists,
certificates of origin, and any other required
paperwork. Submit these documents to
customs authorities, either directly or through
a customs broker, and pay any applicable
duties, taxes, or tariffs.
• Transportation and Logistics: Arrange for the
transportation of the goods from the
supplier's location to your own. This may
involve coordinating with freight forwarders,
shipping companies, or other logistics
providers to ensure smooth transit of the
goods.
• Insurance: Consider purchasing insurance to
protect your shipment against loss or
damage during transit. This can provide
added peace of mind and financial security
in case of unforeseen events.
• Receiving and Inspection: Receive the
goods at your designated location and
inspect them to ensure they meet the quality
and quantity standards specified in the
purchase agreement. If there are any
discrepancies or issues, communicate with

Importing Goods
Process
• Inventory Management: Once the goods
have been received and inspected, manage
them appropriately within your inventory
system. This may involve recording their
arrival, updating stock levels, and preparing
them for distribution or further processing.
• Sales and Distribution: If the imported goods
are intended for resale, develop a sales and
distribution strategy to market them to
customers. This could involve various sales
channels, such as retail stores, e-commerce
platforms, or wholesale distribution networks.
• Compliance and Record-Keeping: Ensure
ongoing compliance with import regulations
and maintain accurate records of all import
transactions. This includes retaining
documentation related to customs clearance,
taxes paid, and any other relevant
paperwork for the requisite period.
By following these steps carefully and
staying informed about import regulations and
best practices, you can successfully navigate the
process of importing goods and contribute to the
growth and profitability of your business.

Importing Goods
Process
▶ When importing goods into Canada,
individuals and businesses are required to pay
duties and taxes to the Canada Border
Services Agency (CBSA). Here's a breakdown
of the process:
• Determining Duties and Taxes: The amount of
duties and taxes payable depends on various
factors, including the type of goods being
imported, their value, country of origin, and
any applicable trade agreements or
preferential tariff rates. The CBSA provides
resources such as the Customs Tariff, which
outlines the classification and duty rates for
different goods.
• Customs Valuation: The value of the imported
goods is crucial in determining the amount of
duties and taxes owed. The CBSA uses the
transaction value method, which generally
reflects the price paid or payable for the
goods, including any royalties, commissions,
or additional costs incurred up to the point of
importation.
• Paying Duties and Taxes: Duties and taxes
are typically paid at the time of importation.
Importers can pay directly to the CBSA using
various methods, such as electronic funds
transfer, credit card, or through an account

Importing Goods
Process
• Harmonized System (HS) Codes:
Importers must classify their goods using
the appropriate Harmonized System (HS)
codes, which are standardized codes used
internationally to classify products for
customs purposes. The correct
classification is essential for determining
the applicable duty rates and any
exemptions or preferential treatment under
trade agreements.
• Goods and Services Tax (GST) and
Harmonized Sales Tax (HST): In addition
to duties, most imported goods are subject
to the Goods and Services Tax (GST) or
the Harmonized Sales Tax (HST),
depending on the province of importation.
Certain goods may also be subject to
excise taxes or other specific taxes.
• Customs Clearance Process: Importers are
required to submit documentation to the
CBSA for customs clearance, including a
commercial invoice, bill of lading, packing
list, and any permits or certificates required
for the imported goods. Once the goods
are cleared by customs, they can be
released for entry into Canada.

Importing Goods
Process
• Record-Keeping: Importers must
maintain accurate records of
their import transactions for a
specified period, typically six
years from the end of the
calendar year in which the
goods were imported. This
includes documentation related
to customs valuation,
classification, and payment of
duties and taxes.
By understanding and
complying with the duties and taxes
payable to the CBSA when
importing goods into Canada,
individuals and businesses can
ensure smooth customs clearance
and avoid potential penalties or
delays in their importation

Importing Goods
Remittance
▶ Remitting the correct amount of duties and
taxes when importing goods is crucial for
complying with customs regulations and
avoiding penalties. Here's why it's so
important:
• Legal Compliance: Importing goods
involves adherence to a complex set of
customs regulations and laws. Remitting
the correct amount of duties and taxes
ensures that importers comply with these
regulations, reducing the risk of legal issues
or penalties.
• Fair Trade Practices: Paying the correct
amount of duties and taxes ensures fair
competition and trade practices.
Underpaying duties and taxes can give an
unfair advantage to importers who flout the
rules, harming businesses that comply with
regulations and pay their fair share.
• Financial Responsibility: Importers have a
financial responsibility to accurately declare
the value of imported goods and pay the
associated duties and taxes. Failure to
remit the correct amount can result in

Importing Goods
Remittance
• Maintaining Good Standing: Importers who
consistently remit the correct amount of duties
and taxes demonstrate their commitment to
compliance and good corporate citizenship. This
can enhance their reputation with customs
authorities and other stakeholders, facilitating
smoother import processes in the future.
• Risk Mitigation: Underpaying duties and taxes
poses a significant risk to importers. Customs
authorities conduct audits and inspections to
verify compliance with import regulations. If
discrepancies are found, importers may face
penalties, audits, or even legal action, leading to
reputational damage and financial losses.
• Ethical Considerations: Importers have a moral
obligation to uphold ethical standards in their
business practices. Remitting the correct amount
of duties and taxes reflects integrity and honesty
in trade transactions, contributing to a fair and
transparent global marketplace.
In summary, remitting the correct amount of
duties and taxes is not only a legal requirement but
also an ethical and financial responsibility for
importers. By ensuring compliance with customs
regulations and accurately declaring the value of
imported goods, importers can uphold fair trade
practices, maintain good standing with authorities,
and mitigate risks associated with non-compliance.

Duties and Taxes
▶ Duties and taxes are financial
obligations imposed by
governments on imported goods.
Here's a breakdown of each:
• Duties: Duties, also known as
tariffs or customs duties, are taxes
levied by a government on
imported goods. These taxes are
typically based on the value,
quantity, or weight of the imported
goods and are intended to protect
domestic industries, generate
revenue, or regulate trade. Duties
can vary widely depending on
factors such as the type of goods,
their country of origin, and any
trade agreements in place
between importing and exporting
countries. Duties may be specific
(charged per unit of quantity, such
as per kilogram or per item) or ad
valorem (charged as a percentage

Duties and Taxes
▶ Duties and taxes are financial obligations
imposed by governments on imported
goods. Here's a breakdown of each:
• Taxes: Taxes imposed on imported goods
can include various types of taxes, such
as:
• Value Added Tax (VAT) or Goods and
Services Tax (GST): A consumption tax
levied on the value added to goods or
services at each stage of production or
distribution. VAT or GST is typically applied
to the final sale price of imported goods
and is intended to ensure that consumption
is taxed regardless of whether the goods
are produced domestically or imported.
• Excise Taxes: Specific taxes imposed on
certain types of goods, such as alcohol,
tobacco, fuel, or luxury items. Excise taxes
are typically applied in addition to other
duties and taxes and are designed to
discourage consumption of these goods or
to fund specific government programs.
• Other Taxes: Depending on the jurisdiction,
imported goods may be subject to
additional taxes, such as environmental

Duties and Taxes
▶ Duties and taxes play a
crucial role in regulating
international trade,
generating revenue for
governments, and protecting
domestic industries.
Importers are responsible for
accurately declaring the
value of imported goods and
paying the applicable duties
and taxes to customs
authorities to ensure
compliance with import
regulations and facilitate
smooth customs clearance
processes.

Duties and Taxes
Factors
▶ The calculation of duties and taxes on
imported goods is influenced by a variety
of factors, which can vary depending on
the jurisdiction and the specific goods
being imported. Here are some key
factors that influence the calculation:
• Tariff Classification: The Harmonized
System (HS) is an internationally
standardized system used to classify
goods for customs and tariff purposes.
Each product is assigned a unique HS
code based on its characteristics,
composition, and intended use. The
classification of goods determines the
applicable duty rates, with different rates
applying to different categories of goods.
• Value of Goods: The value of imported
goods is a crucial factor in determining
the amount of duties and taxes owed. The
customs value is typically based on the
transaction value—the price paid or
payable for the goods, including all costs
up to the point of importation. Customs
authorities may use various methods to
determine the customs value, ensuring

Duties and Taxes
Factors
• Country of Origin: The country of origin
of the imported goods can impact the
calculation of duties and taxes. Many
countries have preferential tariff
agreements or free trade agreements
with certain trading partners, which
can result in reduced or zero-duty
rates for goods originating from those
countries. Importers must accurately
declare the country of origin to benefit
from any applicable preferential tariff
treatment.
• Trade Agreements: Bilateral or
multilateral trade agreements between
countries can affect the calculation of
duties and taxes on imported goods.
These agreements may establish
preferential tariff rates, tariff quotas, or
duty-free access for certain goods
traded between participating countries.
Importers should be aware of the
terms and provisions of relevant trade
agreements to take advantage of any
preferential treatment available.

Duties and Taxes
Factors
• Product Characteristics: Certain
characteristics of the imported goods,
such as their composition, function, or
intended use, can influence the
calculation of duties and taxes. For
example, goods subject to excise
taxes, such as alcohol, tobacco, or
fuel, may incur additional taxes in
addition to standard customs duties.
Similarly, goods classified as luxury
items or environmentally sensitive
products may be subject to specific
taxes or regulations.
• Special Programs and Incentives:
Some countries offer special programs
or incentives to promote specific
industries, encourage investment, or
support economic development. These
programs may include duty drawback
schemes, duty deferral programs, or
duty-free zones where imported goods
are exempt from certain duties and
taxes. Importers should explore
available programs and incentives to

Duties and Taxes
Factors
• Documentation and Compliance:
Accurate and complete
documentation is essential for
customs clearance and the
calculation of duties and taxes.
Importers must provide detailed
information about the imported
goods, including commercial
invoices, packing lists, certificates
of origin, and any relevant permits
or licenses. Non-compliance with
documentation requirements or
misdeclaration of goods can result
in delays, penalties, or additional
assessments of duties and taxes.
By considering these factors and
staying informed about relevant
regulations and trade agreements,
importers can accurately calculate
duties and taxes on imported goods,
comply with customs requirements,
and optimize their import operations.

Duties and Taxes
Scenarios
Importing Electronics from China to
the United States
• Product: Smartphones
• Country of Origin: China
• Quantity: 100 units
• Value: $20,000
• Tariff Classification: HS Code
8517.12.00 (Mobile phones with
communication function)
• Tariff Rate: 3.6% (as of January
2022, subject to change)
Calculation:
• Customs Value: $20,000
• Customs Duty: $20,000 * 3.6% =
$720
• Additional Taxes: Depending on the
state of importation, Goods and
Services Tax (GST) or sales tax
might apply, let's say 8%.
• GST/Sales Tax: $20,000 * 8% =
$1,600
• Total Duties and Taxes: $720

Duties and Taxes
Scenarios
Importing Apparel from
Bangladesh to Canada
•Product: T-shirts
•Country of Origin: Bangladesh
•Quantity: 500 units
•Value: $10,000
•Tariff Classification: HS Code
6109.10.00 (T-shirts, knitted or
crocheted)
•Tariff Rate: 18% (as of January
2022, subject to change)
Calculation:
•Customs Value: $10,000
•Customs Duty: $10,000 * 18% =
$1,800
•Additional Taxes: Canada applies the
Goods and Services Tax (GST) or
Harmonized Sales Tax (HST), let's
use 5% for this example.
•GST/HST: $10,000 * 5% = $500
•Total Duties and Taxes: $1,800

Duties and Taxes
Scenarios
Importing Wine from France to
Australia
•Product: Red Wine
•Country of Origin: France
•Quantity: 50 cases
•Value: $15,000
•Tariff Classification: HS Code
2204.21.00 (Wine of fresh grapes,
other than sparkling wine)
•Tariff Rate: 5% (as of January 2022,
subject to change)
Calculation:
•Customs Value: $15,000
•Customs Duty: $15,000 * 5% =
$750
•Additional Taxes: Australia imposes
Wine Equalisation Tax (WET) on
wine at a rate of 29%, let's use that.
•WET: $15,000 * 29% = $4,350
•Total Duties and Taxes: $750
(Customs Duty) + $4,350 (WET) =

Duties and Taxes
Scenarios
These examples demonstrate
how duties and taxes can be
calculated based on the value,
quantity, and classification of
imported goods, as well as the
applicable tariff rates and taxes
in the importing country. It's
important to note that actual
duty rates and taxes may vary
depending on specific
circumstances and any trade
agreements in place between
the importing and exporting
countries.

Remitting Duties and
Taxes To CBSA
Remitting duties and taxes to the Canada
Border Services Agency (CBSA) involves
several steps to ensure compliance with
customs regulations and facilitate the
smooth importation process. Here's an
overview of the typical steps involved:
1. Calculate Duties and Taxes: Before
remitting payments to CBSA, importers
need to calculate the total amount of
duties and taxes owed on the imported
goods. This calculation is based on
various factors such as the value of
the goods, applicable tariff rates, and
any additional taxes or fees.
2. Obtain a Business Number (BN):
Importers are required to have a
Business Number (BN) issued by the
Canada Revenue Agency (CRA) to
conduct business transactions with the
Canadian government, including
importing goods. If you don't have a
BN already, you need to apply for one
through the CRA website.
This Photo by Unknown Author is licensed under CC BY-NC

Taxes To CBSA
3. Set Up an Importer Account: Importers
must set up an importer account with
CBSA to facilitate the payment of duties
and taxes. This involves completing the
necessary forms and providing relevant
information, such as the importer's
name, address, contact details, and
business number.
4. Select a Payment Method: Importers
can choose from various payment
methods to remit duties and taxes to
CBSA. Common payment methods
include electronic funds transfer (EFT),
credit card payments, pre-authorized
debit (PAD), or using a customs broker
or freight forwarder to handle payments
on your behalf.
5. Submit Payment to CBSA: Once the
duties and taxes have been calculated
and the payment method selected,
importers can submit the payment to
CBSA. This typically involves initiating
the payment through the CBSA's online
payment portal or through the importer's

Taxes To CBSA
6. Record Keeping: Importers must maintain
accurate records of all import
transactions, including documentation
related to the calculation and payment of
duties and taxes. This includes
commercial invoices, payment receipts,
customs declarations, and any other
relevant paperwork. These records
should be kept for a specified period as
required by CBSA regulations.
7. Monitor Payment Status: After submitting
the payment to CBSA, importers should
monitor the payment status to ensure that
it is processed successfully. CBSA may
provide confirmation of payment, such as
a receipt or transaction reference number,
which importers should retain for their
records.
8. Compliance and Reporting: Importers are
responsible for ensuring ongoing
compliance with CBSA regulations and
reporting requirements. This includes
accurately declaring the value and
classification of imported goods,
maintaining proper documentation, and

Taxes To CBSA
By following these steps
carefully and staying informed
about CBSA regulations and
procedures, importers can
effectively remit duties and
taxes and ensure compliance
with customs requirements for
importing goods into Canada.
Additionally, importers may
seek assistance from customs
brokers or other professional
service providers to navigate
the process efficiently.

Methods of Payment
CBSA
The Canada Border Services Agency (CBSA)
offers various methods of payment for remitting
duties and taxes on imported goods. Importers
can choose the method that best suits their
preferences and convenience. Here are some
of the common methods of payment accepted
by CBSA:
• Electronic Funds Transfer (EFT): Electronic
Funds Transfer, also known as bank
transfer or wire transfer, allows importers to
transfer funds directly from their bank
account to CBSA's designated bank
account. This method is often preferred for
larger transactions and provides a secure
and efficient way to remit payments.
Importers typically initiate the EFT through
their online banking portal or by visiting their
bank branch.
• Credit Card: CBSA accepts credit card
payments for duties and taxes, providing a
convenient option for importers who prefer
to use credit cards for transactions.
Importers can make payments using major
credit cards such as Visa, MasterCard, or
American Express through CBSA's online
payment portal. It's important to note that

Methods of Payment
CBSA
The Canada Border Services Agency (CBSA)
offers various methods of payment for remitting
duties and taxes on imported goods. Importers
can choose the method that best suits their
preferences and convenience. Here are some of
the common methods of payment accepted by
CBSA:
• Pre-Authorized Debit (PAD): Pre-Authorized
Debit allows importers to authorize CBSA to
withdraw funds directly from their bank
account on a predetermined schedule.
Importers must complete and submit a PAD
Agreement Form to authorize CBSA to debit
their bank account for the payment of duties
and taxes. PAD is a convenient and
automated payment method, ensuring timely
remittance of payments without the need for
manual intervention.
• Customs Broker or Freight Forwarder:
Importers can also choose to use a customs
broker or freight forwarder to handle the
payment of duties and taxes on their behalf.
These service providers often have
established relationships with CBSA and can
facilitate the payment process as part of their
comprehensive import services. Importers
should verify the accepted payment methods

Accurately Reporting
and Paying Duties
Accurately reporting and paying duties and
taxes is crucial for several reasons:
• Legal Compliance: Customs duties and
taxes are a legal requirement imposed
by governments on imported goods.
Accurate reporting and payment ensure
compliance with the law, helping
businesses avoid legal issues and
penalties.
• Smooth Customs Clearance: Providing
correct information and paying the
applicable duties and taxes facilitate
smooth customs clearance processes.
Incorrect or incomplete documentation
can lead to delays in clearance, which
can disrupt supply chains and affect
business operations.
• Financial Implications: Failing to
accurately report and pay duties and
taxes can result in financial
repercussions. Penalties for non-
compliance can be significant and may
include fines, seizure of goods, and even

Accurately Reporting
and Paying Duties
Accurately reporting and paying duties and
taxes is crucial for several reasons:
• Reputation and Relationships: Consistently
complying with customs regulations
enhances a company's reputation as a
reliable and trustworthy business partner.
Conversely, repeated instances of non-
compliance can damage relationships with
suppliers, customers, and regulatory
authorities.
• Risk Management: Accurate reporting and
payment of duties and taxes help mitigate
the risk of audits and investigations by
customs authorities. By maintaining
meticulous records and adhering to
regulatory requirements, businesses can
minimize the likelihood of facing scrutiny or
accusations of wrongdoing.
• Trade Facilitation: Transparent and
compliant trade practices contribute to
overall trade facilitation efforts, promoting
economic growth and stability. By fulfilling
their obligations in customs procedures,
businesses support the efficiency of global
trade networks and foster a conducive

Businesses That
Failed To Remit The
Correct Number Of
Duties and Taxes
There have been numerous cases in the
past where businesses have faced legal
consequences for failing to remit the
correct number of duties and taxes.
Here are a couple of notable examples:
• Google's Tax Evasion Case in
France: In 2019, Google agreed to
pay a €1 billion fine after a probe into
allegations of tax evasion in France.
The investigation found that Google
had failed to declare its activities in
France between 2011 and 2017,
thereby evading corporate income
taxes and value-added taxes (VAT).
This case highlighted the scrutiny
that multinational corporations face
regarding their tax practices and the
importance of accurately reporting
and paying taxes in each jurisdiction.

Businesses That
Failed To Remit The
Correct Number Of
Duties and Taxes
There have been numerous cases in the
past where businesses have faced legal
consequences for failing to remit the
correct number of duties and taxes. Here
are a couple of notable examples:
• Apple's Tax Controversy in Ireland:
Apple faced a lengthy legal battle with
the European Commission over its tax
arrangements in Ireland. The
Commission alleged that Ireland had
granted illegal state aid to Apple by
allowing the company to pay
substantially less tax than other
businesses. In 2016, the Commission
ordered Ireland to recover €13 billion in
unpaid taxes from Apple. While both
Apple and Ireland appealed the
decision, it underscored the importance
of transparent tax practices and
compliance with EU regulations.

Businesses That
Failed To Remit The
Correct Number Of
Duties and Taxes
These cases illustrate the
significant financial and reputational
risks that businesses face when
they fail to remit the correct amount
of duties and taxes. They also
emphasize the increasing scrutiny
from regulatory authorities and the
potential consequences of non-
compliance, including hefty fines,
legal proceedings, and damage to
corporate reputation.

Consequences of Non-
Compliance
Let's delve deeper into the consequences of
non-compliance in terms of fines, seizure of
goods, and damage to the reputation of the
business:
• Fines: Non-compliance with duties and
taxes regulations can result in financial
penalties imposed by customs authorities.
These fines can vary depending on the
severity of the violation, the value of the
goods involved, and the jurisdiction's
regulations. Fines may range from a
percentage of the undeclared amount to
substantial fixed penalties. Repeated
instances of non-compliance can escalate
the fines, leading to significant financial
strain on the business.
• Seizure of Goods: Customs authorities have
the power to seize goods if they suspect
non-compliance with duties and taxes
regulations. Seizure may occur if the
documentation is incorrect, the declared
value is inaccurate, or if prohibited or
restricted goods are being imported. Seized
goods may be held by customs until the
issue is resolved, which can lead to delays
in supply chains and incur additional

Consequences of Non-
Compliance
Let's delve deeper into the consequences of
non-compliance in terms of fines, seizure of
goods, and damage to the reputation of the
business:
• Damage to Reputation: Non-compliance
with duties and taxes regulations can
damage the reputation of a business in
several ways. Firstly, it can erode trust with
customers, suppliers, and partners who
may perceive the business as unreliable or
unethical. Secondly, negative publicity
surrounding non-compliance can tarnish the
brand's image and undermine its market
position. Thirdly, repeated instances of non-
compliance can attract regulatory scrutiny
and media attention, further harming the
business's reputation and credibility in the
industry.
Overall, the consequences of non-
compliance with duties and taxes regulations
extend beyond financial penalties to include
potential seizure of goods and damage to the
reputation of the business. Therefore, it is
imperative for businesses to prioritize
compliance efforts, ensure accurate reporting
and payment of duties and taxes, and maintain

Strategies Ensuring
Compliance
Here are some strategies for ensuring
compliance with customs regulations and
accurately calculating duties and taxes:
• Invest in Proper Training: Ensure that staff
involved in import/export operations receive
comprehensive training on customs
regulations, classification of goods,
valuation methods, and documentation
requirements. Regular training sessions can
help employees stay updated on changes in
regulations and best practices.
• Utilize Technology: Implement customs
compliance software or electronic systems
that can automate processes such as duty
calculation, tariff classification, and
documentation management. These
systems can help reduce errors, improve
efficiency, and ensure consistency in
compliance procedures.
• Maintain Accurate Records: Keep detailed
records of all import/export transactions,
including invoices, shipping documents,
customs declarations, and correspondence
with customs authorities. Organized record-
keeping is essential for auditing purposes

Strategies Ensuring
Compliance
• Conduct Internal Audits: Regularly conduct
internal audits of customs compliance
processes to identify any discrepancies,
errors, or areas for improvement. Audits can
help detect potential non-compliance issues
early on and allow for corrective actions to
be implemented promptly.
• Engage with Customs Authorities: Foster
open communication and establish a
cooperative relationship with customs
authorities. Seek guidance from customs
officials on regulatory requirements, tariff
classifications, and valuation methods to
ensure compliance and address any
uncertainties proactively.
• Stay Informed About Regulatory Changes:
Monitor changes in customs regulations,
trade agreements, and tariff schedules that
may impact import/export operations.
Subscribe to relevant newsletters, attend
industry seminars, and engage with trade
associations to stay informed about

Strategies Ensuring
Compliance
• Work with Experienced Customs Brokers or
Consultants: Consider hiring experienced
customs brokers or consultants who
specialize in customs compliance and trade
facilitation. These professionals can provide
expert guidance, navigate complex
regulations, and assist with accurate duty
calculation and customs documentation.
• Perform Risk Assessments: Conduct
periodic risk assessments to identify
potential compliance risks and
vulnerabilities in import/export processes.
Assess factors such as the complexity of
goods, country-specific regulations,
transaction volumes, and the reliability of
suppliers or logistics partners.
• Implement Internal Controls: Establish
internal controls and procedures to ensure
that customs compliance requirements are
consistently followed across the
organization. Assign roles and
responsibilities, enforce segregation of

Strategies Ensuring
Compliance
compliance with customs regulations
and accurately calculating duties and
taxes:
• Regularly Review and Update
Procedures: Continuously review
and update customs compliance
procedures based on lessons
learned, feedback from audits, and
changes in regulations or business
operations. Flexibility and
adaptability are key to maintaining
effective compliance practices
over time.
By implementing these strategies,
businesses can enhance their
compliance with customs regulations,
accurately calculate duties and taxes,
and mitigate the risks associated with
non-compliance.

AFTER FINAL
ACCOUNTING
▶ A request for the release of goods may be
made by:
• Submitting a Release on Minimum
Documentation (RMD) package or Pre-
Arrival Review System (PARS) package,
both referred to as “interim accounting,” if
the customs broker or importer has
posted security for the release of goods
prior to the payment of duties and taxes
(RMD and PARS release requests may
be transmitted electronically or submitted
in hard copy).
• Submitting an Integrated Import
Declaration (IID) if the customs broker or
importer has posted security for the
release of goods before the payment of
duties and taxes (this is an EDI option
only).
• Presenting a completed Form B3 Type
C accounting document. Duty and taxes
may be paid at the time Form B3 is
presented or payment may be deferred if
security has been posted. Form B3 Type

TEMPORARY
ENTRIES
▶ There are often times when an
importer will choose to import goods
temporarily. In most cases of
temporary importation, the payment
of full duties and taxes is not
required. However, the goods must
still be documented at the time of
importation to ensure that they
remain under customs control while
in Canada.
A few examples of goods that are
not subject to the payment of duties
and taxes when imported
temporarily are:
• goods for display,
• goods for emergency use,
• commercial samples,
• goods for demonstration,
• goods for trial use,
• goods requiring repair, and

TEMPORARY
ENTRIES
▶ After goods have been
released, final accounting
document data are transmitted
to CBSA within a specific time
frame. Note that this step is
not required if a Form B3 Type
C entry has been used. The
data include all information
relating to that particular
release or transaction, plus
the amount of duties and
taxes payable. Accounting
data are transmitted
electronically in most cases;
however, with a Form B3 Type
C entry, it is submitted at the
same time release is
requested. The final step in
the process is the payment of

PAYMENT OF
DUTIES AND TAXES
▶ If the customs broker or importer has
not posted security, duties and taxes
must be paid by cash or certified
cheque before the goods are released.
On a daily basis, customs brokers and
importers who have posted security for
the release of goods prior to the
payment of duty and taxes are issued
a Daily Notice (DN).
A DN lists the accounting documents
that were accepted the previous
business day. It will also indicate any
credits (refunds) that were issued the
previous business day.
On the 25th of each month, a
Statement of Account (SOA) is issued.
The SOA provides a summary of all
DNs from the 25th day of the previous
month to the 24th day of the current
month.
This Photo by Unknown Author is licensed under CC BY-SA

PAYMENT OF
DUTIES AND TAXES
▶ The SOA shows the amount
owing after offsetting any credits
and adding any late accounting
penalties. Late accounting
penalties are issued when final
accounting documents are not
transmitted within the five-day
time limit.
DNs and SOAs are transmitted
to the customs broker or
importer through CBSA’s
Accounts Receivable Ledger
(ARL) system, a fully integrated
and centralized accounting
system that allows for the
offsetting of credits (refunds)
against debits (amounts
payable). This Photo by Unknown Author is licensed under CC BY

VOLUNTARY
ENTRIES
▶ In some cases, goods may
be released but inadvertently
excluded from an accounting
document. As well, goods
may find their way into
Canada without having been
released. In both cases, a
voluntary entry must be
submitted. There are two
types of voluntary entries.
This Photo by Unknown Author is licensed under CC BY

VOLUNTARY ENTRY:
FORM B3 TYPE H
▶ A Form B3 Type H entry is
submitted when goods have been
reported and released but not
accounted for at the time of final
accounting. For example, the
original invoice might have
consisted of many pages and
many items, and some might have
been missed on the accounting
document.
In a Form B3 Type H, “H” is
indicated in Field 3. Field 24,
Previous Transaction Number
indicates the transaction number
from which the goods were
omitted.
A Type H entry cannot be
submitted electronically, and a
statement must be included in the
This Photo by Unknown Author is licensed under CC BY-ND

VOLUNTARY ENTRY:
FORM B3 TYPE V
▶ A Form B3 Type V entry is
submitted when goods have
been delivered without
CBSA release. A Form B3
Type V is completed in the
same manner as an ordinary
Form B3, with “V” being
indicated in Field 3. An
example of a Type V entry
occurs when a carrier
delivers goods to the
consignee before the goods
have been released. A Form
B3 Type V cannot be
submitted electronically, and
a statement must be
included in the body of Form
B3 stating why it is being

REASON TO
BELIEVE
▶ Section 32.2 of the Customs Act1
instructs an importer to make changes
to an accounting document after
payment of duties and taxes if they
have reason to believe that there was
an error in the data provided to CBSA.
A change, or correction, is required
only if there is additional duty and/or
tax owing or if the result of the
correction makes no change to the
amount payable (revenue neutral).
There is similar requirement to make a
change if the result of the correction is
a refund.
“Reason to believe” occurs when the
importer has specific information
regarding the origin, tariff
classification, value for duty, or
diversion of imported goods that
indicates the accounting data are
incorrect. Once an importer has
reason to believe, they are obligated to
make a correction within 90 days. If

Deemed
Determinations
▶ BSOs have the power to make a
determination of the origin, tariff, and/or
value of imported goods at or before the
time they are ac-counted for.
If they do make a determination at this
time, they do so under section 58(1) of
the Customs Act. If they do not make a
determination, a deemed determination is
said to have been made. Deemed
determinations are made under the
authority of section 58(2) of the Customs
Act.
Once one of the above determinations
has been made, other actions can take
place. For example, the importer or
customs broker can file a correction or
refund claim, or CBSA can make
redeterminations, up until four years from
the date of accounting. Redeterminations
and further redeterminations are made by
CBSA under section 59 of the Customs
Act. After that, redeterminations and
further redeterminations are made under
section 60.
This Photo by Unknown Author is licensed under CC BY-SA-NC

DETAILED
ADJUSTMENT
STATEMENTS
▶ If CBSA finds an error after
accounting, they may issue a
Detailed Adjustment Statement
(DAS). This statement makes
changes to the data submitted for
final accounting and may request
additional payment. A DAS may
also be issued by CBSA as a
response to a request by the
importer or customs broker for a
review of, and/or changes to, the
accounting document.
A DAS should be reviewed
thoroughly before any additional
duties and/or taxes are paid, in
case CBSA has made an error.
Should that happen, a note to this
effect should be attached to the
DAS when returning it to CBSA.

Bank Reconciliation
▶ Bank reconciliation is the process of
comparing the balances recorded in an
organization's accounting records (such
as its general ledger) with the balances
shown on its bank statements. The goal
of bank reconciliation is to ensure that
the two sets of records agree and to
identify and resolve any discrepancies
between them.
The process typically involves:
1. Comparing Transactions: Reviewing the
transactions recorded in the
organization's accounting records with
those listed on the bank statement,
including deposits, withdrawals, checks
issued, bank fees, and interest earned.
2. Adjusting for Timing Differences:
Recognizing timing differences between
when transactions are recorded in the
organization's books and when they are
processed by the bank. For example,
outstanding checks that have not yet
cleared or deposits that have not been

Bank Reconciliation
The process typically involves:
3. Identifying Discrepancies: Investigating
any discrepancies between the bank
statement balance and the accounting
records. This may include errors in
recording transactions, bank errors, or
fraudulent activity.
4. Making Adjustments: Making
necessary adjustments to the
accounting records to reconcile the
balances. This may involve updating
the accounting records to reflect
transactions that were not previously
recorded, correcting errors, or
adjusting for timing differences.
5. Reconciling to a Final Balance:
Ultimately, the goal of bank
reconciliation is to reconcile the
balances in the organization's
accounting records with the balances
shown on the bank statement,
resulting in a final reconciled balance
that accurately reflects the true

Bank Reconciliation
Bank reconciliation is an
important control mechanism
in accounting and financial
management, as it helps
ensure the accuracy and
reliability of financial
information, detects errors or
discrepancies in a timely
manner, and provides
assurance over the integrity
of the organization's financial
reporting. It is typically
performed on a regular
basis, such as monthly or
quarterly, to maintain
accurate financial records
and to monitor the
organization's cash flow and
liquidity.

REFUNDS AND
PAYMENTS
▶ In most cases, corrections to
accounting documents are made by
completing Form B2, Canada Customs
Adjustment Request. As well as a
request for a refund, Form B2 is also
used to remit any additional duty and
taxes resulting from a correction.
Accounting documents must be
amended even where there is no
change in the amount of duties and
taxes payable, that is, they are
revenue neutral. CBSA does not issue
penalties for neglecting to file a
correction that results in a re-fund on
the assumption that one will always
submit a correction when a refund is
involved.
Form B2 mirrors Form B3. The first line
in the body of Form B2, the “As
Accounted For” line, is copied directly
from the original transaction. The
second line, the “As Claimed” line, is
This Photo by Unknown Author is licensed under CC BY-NC-ND

JUSTIFICATION FOR
REQUEST
▶ This field must be completed
on the last page of Form B2.
Indicate the type of
request—for example,
correction, refund,
redetermination, or
reappraisal—under the
section, subsection, and/or
paragraph number of the
applicable legislation—for
example, a refund of duty
under section 74(1)(d) of the
Customs Act.

EXPLANATION
▶ All Form B2s must include an
explanation (see Table 9.1).
Clearly state the reason(s)
for the request, providing as
much information as possible
to support the claim, such as
CBSA D-memos, or
information on CBSA’s
website. Depending on why
the correction is being made,
you may need to include
confirmation of price from the
vendor or a Certificate of
Origin. Samples of the goods
in question should not be
submitted; this is done only
at the request of CBSA.
This Photo by Unknown Author is licensed under CC BY-SA

DECLARATION
▶ This field is completed on all
adjustment requests. If the
request has two or more
pages, complete only the last
page. It must show the name
and company name of the
person completing the claim.
The declaration is then dated
and signed.
This Photo by Unknown Author is licensed under CC BY-ND

TIME FRAME
▶ Form B2 must be filed within
a specific time frame. A table
that includes the time frames
for filing Form B2 is provided.
Once Form B2 is completed,
it, along with all required
supporting documentation
and payment or security, if
applicable, is submitted to
CBSA in various locations.
This Photo by Unknown Author is licensed under CC BY-NC-ND

TIME FRAME
▶ For goods released in the Atlantic,
Northern Ontario, and Quebec regions,
Form B2s are submitted to:
CBSA
Trade Operations Division
c/o Form B2 processing
400 Youville Square, 5th Floor
Montreal, QC H2Y 2C2
For goods released in the Greater
Toronto Area (GTA), Southern Ontario,
and Pacific regions, Form B2s are
submitted to:
CBSA Trade Operations Division
55 Bay Street North, 6th Floor
Hamilton, ON L8R 3P7
For goods released in the Prairie region,
Form B2s are submitted to:
CBSA Trade Operations Division
55 Town Centre Court, Suite 718
Scarborough, ON M1P 4X4

TIME FRAME
▶ How a payment is made depends on
whether a DAS was issued. There
are two ways to make a payment:
1. When a DAS has been issued as a
result of Form B2 being filed, the
importer or broker can make a
payment at the port or online. If the
payment is made online, the
importer or broker must send an
email to the CBSA Assessment and
Revenue Management (CARM)
project mailbox to advise that a
payment has been made.
2. When making a payment where a
DAS has not been issued, the
payment is made at the port. The
CBSA cashier will code the payment
in ARL to identify the payment as a
prepaid Form B2. When Form B2
posts to the account, the payment
will automatically be matched to it.

Re-examining trade with Africa under the Continental
Free Trade Agreement

Customs Issues and Procedure Part 9.pptx

Recommended

Recommended

More Related Content

Similar to Customs Issues and Procedure Part 9.pptx

Similar to Customs Issues and Procedure Part 9.pptx (20)

More from Sheldon Byron

More from Sheldon Byron (20)

Recently uploaded

Recently uploaded (20)

Customs Issues and Procedure Part 9.pptx