In a notice[i] published on November 15, 2015, Canada Border Services Agency (CBSA) reminded Canadian exporters that shipments transiting through the U.S. but intended for subsequent destinations must be reported the CBSA. The agency also warned that it will step up enforcement of these requirements in 2016 by conducting audits of past export activities to determine non-compliant exports and issue penalties.
Trade between Canada and the U.S. is straight forward. Canadian exporters are generally not required to declare any of their export shipments destined to consignees in the U.S. The exception to this rule are exports of goods valued at CAN$2000 or greater, that transit through the U.S. but ultimately destined to consignees outside the U.S. For example, shipments valued at CAN$2000 transiting though the U.S. but destined for consignees in Mexico must be declared to CBSA. This also applies to any restricted goods regardless of value.
In the Customs notice, CBSA noted concern over a large number of export shipments that appear to have been undeclared to the agency. As a result, CBSA warns they will launch broad compliance verification activities by June 1, 2016 and penalties may be issued for failure to report exported goods. Compliance verification activities may go back as far as six years.
CBSA is offering a grace period to exporters from December 1, 2015 to June 1, 2016, during which exporters may voluntarily disclose export shipments they failed to declare. Companies that submit voluntary disclosures during the grace period will not be penalized. Canadian companies are urged to review their export activity for the previous six years and determine if they may have any unreported exports to disclose.
Questions can be sent to Marken’s trade compliance team at Tradecompliance@marken.com