Written by: Kerry Lawrence
What is “Reason to Believe?” This occurs when an importer has obtained specific information regarding tariff classification, value for duty, declaration of origin (including free trade agreements), or diversion that gives the Canada Border Services Agency (CBSA) “Reason to Believe” that the original import declaration was incorrect.
Specific product information can be obtained from any of the following:
- Written communication addressed directly to the importer from the CBSA, such as a ruling
- A final report from an importer-initiated internal audit or an external third-party review
- Email communication identifying a declaration error
- A final tribunal or court decision in which the importer was either the appellant or respondent
- Published public rulings and tribunal decisions
- Goods found on the CBSA published Trade Compliance Verification Audit List
The CBSA offers a 90-day period to make corrections, which starts the date that the importer was considered to have received the communicated specific information the declaration was incorrect. If the importer does not file corrections within the 90-day period, an Administrative Monetary Penalty System (AMPS) will be applied.
Current penalties are:
- 1st offense: $500 to a maximum of $5,000 (per issue) or $25,000 (per occurrence)
- 2nd offense: $750 to maximum of $200,000 (per occurrence)
- 3rd and subsequent: $1,500 to a maximum of $400,000 (per occurrence)
Where the 90-day legislated time limit has passed, importers can request corrective measures under the Voluntary Disclosure Program to comply with their legal obligations.
Please contact our Certified Trade Compliance Specialist (CTCS) to discuss how to achieve and maintain compliance practices.
This newsletter content should be used for general informational purposes only and not as a substitute for consultation with professional tax, legal, or other competent advisors. Before making any decision or taking any action based upon the information contained on this website, you should consult with a DMA professional.
If you need further information about anything in the newsletter, please get in touch with your DMA advisor, and we will be pleased to assist you. If you are not a current DMA client, please click here to contact us.