CSCB AGM June 23, 2004

1
Canada Border Services Agency
Administrative Monetary Penalty
System
Canadian Society of Customs Brokers Annual
General Meeting June 23, 2004
2
AMPS Contraventions Issued to June 20, 2004

• 2002-2003 5,975
• 2003-2004 12,663
• 2004-2005 2,497
• Total 21,135
• Total value 13.5 M
• - Figures exclude C244
• - Represents about 0.15 of total commercial
  activity

3
AMPS ContraventionsIssued to Date

• Of the total contraventions
• Importer contraventions 53
• Carrier contraventions 42
• Warehousing contraventions 5

4
Top 19 Contraventions to June 20, 2004

• C336 Failure to pay duties 3, 241
• C007 No bar codes 2, 477
• C005 Failure to provide information 2, 453
• C033 Direct delivery 1,613
• C018 Failure to report pass./crew 1,251

5
Top 19 Contraventions to June 20, 2004

• C071 Failure to provide permit 866
• C066 Unauthorized removal 823
• C020 Failure to report 747
• C019 Failure to report goods 557
• C170 Failure to report export of goods 533

6
Top 19 Contraventions to June 20, 2004

• C008 Failure to use correct carrier code 509
• C274 Goods reported as arrived 508
• C347 Moving/exp. unreleased goods 443
• C343 Failure to report in-bond cargo 396
• C021 Carrier failed to report 358

7
Top 19 Contraventions to June 20, 2004

• C022 Failure to report regular goods 361
• C315 Failure to provide export permit 300
• C348 Intentional false information 284
• C143 Importer failed to mark goods 264

8
AMPS Appeal Statistics to May 2004

• Appeals filed 4,311
• Decisions rendered 1,941
• Upheld 819
• Amended 129
• Cancelled 993
• Remaining inventory 2,370
• Appeal rate 15

9
AMPS Six-Month Review

• Announced by the Minister in April 2003.
• Review is to examine if
• the AMPS levels the playing field
• the AMPS contributes to compliance
• there are any opportunities for improvement
• Consultations with clients held concurrently with
  customs regional officials in June 2003.

10
AMPS Six-Month Review Findings

• Clients identified areas of concern
• Volumetrics (large clients more exposed)
• Penalty level escalation (no chance to correct
  processes and reset compliance history)
• Penalty retention periods (3 years too long)
• Penalty revisions (amounts too high)
• Third party liability
• Penalties should be reviewed on regular basis to
  reflect compliance levels.

11
AMPS Six-Month Review Findings

• Clients support the concept of the AMPS
• Findings show a general consensus that AMPS has
  contributed to improved compliance
• Clients have invested in compliance
• Clients confirmed that education of all players
  in the trade chain is a key to improved
  compliance.

12
AMPS Six-Month Review Reports and Recommendations

• A full report and a summary report were made
  public in late February 2004.
• The report contains an Action Plan with
  recommendations to improve AMPS.
• Category 1
• To be addressed within six months (by the end of
  August 2004)
• Category 2
• To be finalized within 6 to 18 months
• Category 3
• On-going in nature

13
AMPS Six-Month Review Category 1

• Category 1
• PRA
• Extend indefinitely the 1 for 1 penalty
  reduction under the Penalty Reduction Agreement
  (PRA) program
• Retention Period
• Reduce penalty retention period from three years
  to one year for all penalties except for
  contraventions that apply in the compliance
  verification environment

14
AMPS Six-Month Review Category 1

• C003
• Customs has followed the recommendation of the
  C003 Working Group to cancel contravention C003
• Response Standards
• Establish headquarters response standards and
  escalation process for advice and guidance to the
  field

15
AMPS Six-Month Review Category 1

• Whichever is Greater
• Review whichever is greater penalties to see if
  these penalties remain serious enough to warrant
  this type of penalty calculation
• Best Practices
• Establish a national best practices database
• for the trading community and
• one for the use of Customs officials

16
AMPS Six-Month Review Category 2

• Category 2
• Volumetrics
• Explore ways to introduce volumetrics into the
  AMPS to account for clients with exemplary
  compliance records
• Third Party Penalties
• Explore ways to introduce penalties for suppliers
  and service providers that cause infractions

17
AMPS Six-Month Review Category 2

• Category 2
• Automated Correction and Redress
• Introduce Correction and Redress functionality to
  the automated system on a priority basis
• Reduce Administrative Costs
• Explore ways to reduce Customs administrative
  costs associated with managing the system.

18
AMPS Six-Month Review Category 3

• Category 3
• On-going Review of Contraventions
• Continue to review penalties within the AMPS and
  amend them based on objective evidence of
  compliance requirements, or business environment
  changes.

19
AMPS Contraventions Amendments

• In effect as of June 21, 2004
• C008
• Now combines C007 and C008 into one penalty
  regime.
• Use of a carrier code without authorization,
  failure to provide a bar coded cargo document and
  improper use of 77YY.

20
AMPS Contraventions Amendments

• C315
• Excludes reference to General Export Permits.
• 1,000 penalty was considered punitive for a
  missing notation.
• Change in contravention wording (timeframes).

21
AMPS Contraventions Amendments

• C046 (failure to allow free access)
• C047 (failure to open any package)
• C066 (removal of goods prior to release)
• C069 (use of a false RNS / removal of goods)
• For bonded warehouse and Duty Free Shops.
• No more reference to sufferance warehouses.
• Retention period remains at three years.

22
AMPS Contraventions New

• C356 (failure to allow free access)
• C357 (failure to open any package)
• C358 (removal of goods prior to release)
• C359 (use of a false RNS / removal of goods)
• Created for the sufferance warehouse program.
• No reference to the bonded warehouse or Duty
  Free Shop.
• Retention period of one year.

23
AMPS Contraventions New

• C360 (HVS) and C361 (LVS)
• For failure to account for goods at time of
  interim accounting.
• Applies when unreported goods are found during
  an examination based on a referral of the release
  request.
• HVS - 2,000 or 20 of the VFD, whichever is
  greater for the first level
• LVS 100 or 20 of the VFD, whichever is greater
  for the first level

24
AMPS ContraventionsNew

• C362
• Failure to indicate the General Export Permit
  (GEP) number in the permit field of the export
  declaration.
• Previously incorporated in C315.
• Lower penalty structure starting at 100
  escalating to 300 for third and subsequent
  events of non-compliance.

25
AMPS Contraventions Upcoming Changes

• Changes to the retention period
• from three years to one year
• affects 164 contraventions
• C007
• to be expired, incorporated in amended C008
• C018
• guidelines will be expanded to further clarify
  applicability for all modes

26
AMPS Contraventions Upcoming Changes

• C019 and C020
• to be phased out
• C355
• for API program (failure to provide passenger
  information)
• removal from the system as zero-rated penalty
  expired April 30, 2004. C354 is in effect at
  3,000 per conveyance.

27
Supplementary Information

• Information on the AMPS and the complete Master
  Penalty Document can be obtained from the AMPS
  web pages at
• www.cbsa-asfc.gc.ca/general/amps/menu-e.html
• Information on import/export processes and
  requirements can be obtained from CBSA web site
  at
• www.cbsa-asfc.gc.ca/menu-e.html