In light of the renegotiating of NAFTA there are some questions regarding the validity of keeping a NAFTA on file.  Negotiations for changes begin in August however any and all changes to the present NAFTA will have to be agreed upon by all parties.  This agreement will include an effective date for any changes.

NAFTA in its present state is valid until any changes are determined, agreed upon and implemented.

For your benefit, we are posting this article on the Benefits of NAFTA Certificates, Risks and Exposure and Thompson Ahern NAFTA Management Services.



Having a valid NAFTA Certificate for any imported good will confirm the duty free status of the good. Even if CBSA does not agree with the Classification, the NAFTA certificate provides assurance that the product qualifies for duty free status.  One of the many recommendations for change to the NAFTA is the removal of the HS Classification of the product from the certificate. In its place will be Part Number and Product Description.



Is your company open to unnecessary risk and exposure? Have you taken all necessary steps to mitigate unforeseen eventualities? Generally this is done by taking out an insurance policy for which you pay a small premium to protect you from something that if it occurred would incur large losses. We don’t expect that the misfortune will occur, but it does not stop us from obtaining the necessary protection and continuing to pay our insurance premiums to provide us with the peace of mind that if the unexpected does occur we are adequately covered.

Importers commit this oversight when dealing with the management of their NAFTA certificates. In the interests of saving a few dollars, they will forgo the services that their customs service provider has offered for the collection, review and maintenance of these important documents for which an administrative fee is charged. Rather than to pay this service fee, the importer opts to take full control and responsibility for the management of all aspects of the NAFTA certificate process. They do this without fully understanding or appreciating the liability that they have undertaken by doing this.

When such a waiver is issued to the service provider it generally permits the carte blanche entry of all and any goods that are invoiced as originating from a NAFTA country without regard to whether a NAFTA certificate is in fact available to cover the goods as Customs declared. The importer is completely responsible for that declaration and must when requested by the CBSA, be able to produce a valid and correct document to substantiate the application of the NAFTA certificate.

Failures to have a valid and correct NAFTA certificate can lead to Administrative Monetary Penalty fines and also to the loss of a claim to preferential duty free entry causing additional duty payments. Importers who have opted for these waivers have not anticipated the need to have a designated and knowledgeable person within their company to review all entries where the NAFTA Tariff was declared. This is necessary to ensure that a valid document was available to cover the specific goods as declared and/or to arrange for corrections to these documents and to make any necessary voluntary corrections to the CBSA where NAFTA was incorrectly declared.

Companies opting to self-administer their NAFTA certificates may not have factored in the additional resources required to effectively manage these documents for purposes of maintaining their Customs compliance obligations. Any real savings can be quickly erased if errors are made and you are faced with multiple AMPS penalties which are issued on a per transaction basis. The first level penalty under AMPS Contravention C152 for importers or owners of goods who have failed to furnish the proof of origin upon request begins at $150.00 per occurrence. This is a graduated penalty increasing to $225.00 for the second reoccurrence of the same contravention and is further increased to $450.00 for the third and subsequent infractions.

There is something to be said about sticking to ones knitting and doing the things that we do best and not trying to undertake tasks that are better left to those with the necessary skills and knowledge to carry them out. Let Thompson Ahern International provide you with their NAFTA management services and get on with your business.

Goods Subject to SIMA Measures

Importers of goods subject to SIMA measures are required to self-assess applicable SIMA duties.

The below link is to a list of goods currently subject to anti-dumping or countervailing measures pursuant to the Special Import Measures Act (SIMA). It is updated as necessary to reflect the current status of duty liability. The list of HS classifications has been updated to reflect the new Customs Tariff Consolidations that occurred January 1, 2017.

The descriptions and specific particulars of the goods subject to SIMA are described on the website. It is important to review goods on a regular basis to ensure compliance.


Auditor General Audit Recap on Customs Duties Management by CBSA, Global Affairs & Finance Canada

CBSA Mandate:

The Canada Border Services Agency administers more than 90 acts, regulations, and international agreements for federal organizations, the provinces, and the territories. It is responsible for assessing the duties and taxes owed to the Government of Canada. The Agency has a competing mandate—it must ensure the security of the border while facilitating the flow of goods and people.


Audit Objective:

To determine whether the Department of Finance Canada, Global Affairs Canada, and the Canada Border Services Agency adequately managed the customs duties according to their roles and responsibilities in relation to the following:

-perform regular reviews of the Customs Tariff, using sound analyses;

-ensure the correct assessment of customs duties owed to the Crown;

-provide support to commercial importers to enable compliance with importing requirements;

-ensure that the tariff rate quotas were respected; and

-ensure that the goods imported under the Duties Relief Program were not unlawfully diverted into the Canadian economy.


Summary of findings:


1. Overall, the Auditor’s Report found that the Canada Border Services Agency was unable to accurately assess all customs duties owed to the government on goods coming into Canada.


2. Over the last 15 years, the Agency’s compliance verifications on specific goods revealed that importers misclassified imported goods more than 20 percent of the time.


3. Examined 1.4 million records, each of which contained only one narrative description and a single classification number. We found that 74 percent of them did not provide a description that allowed us to determine whether the number used was the right one.


4. These findings matter because when the Canada Border Services Agency fails to accurately assess customs duties, the Government of Canada might lose revenue. The Agency’s verifications indicated lost revenues from misclassifications.


5. The Canada Border Services Agency should review its penalties in order to better protect import revenues and ensure compliance with trade programs.


6. In consultation with its legal services, the Canada Border Services Agency will conduct a review of the current framework that allows for retroactive changes on the import form.


7. Found that in 2015, importers brought quota-controlled goods into Canada without permits and without paying the right amount of customs duties. These quota-controlled goods included dairy, chicken, turkey, beef, and egg products, for which the importers would have paid $168 million in customs duties if the Canada Border Services Agency had compared the permit information with the import form.


RESULT: Various Reviews have been put in place to examine issues identified in the AG Report and are listed with the expected completion date.


Review Completion Dates:

September 2017    CBSA to collaborate with Global Affairs to review permit verification process for quota-controlled goods. An automated means of validation for improved enforcement is being explored.

June 2018   Non-compliance is occurring due to CBSA controls not working.  As a result, CBSA will review invoice requirements to ensure descriptions are sufficient to determine if HS was correct and what was imported.  The goal is to improve the quality of the information submitted.

September 2018   Review of penalties to ensure there is a meaningful deterrent. (Out of 16,000 penalties for 2015/16 with a revenue of 4.4 million this represented less than 1/10th of 1% of the transactions for the year and averaged a penalty of $151.00 each.)

October 2018   Review of the Duties Relief program to be monitored to ensure the goods meet or have met the conditions for the relative Duties Relief Program.  Outcome of the review could possibly entail renewable program licenses made conditional on a participant’s compliance record, and also the requirement of a financial deposit proportionate to the duty risk.

December 2019   Review of the current Import Forms.  Presently, Importers are able to change information on import forms up to 4 years after the importation of the goods, but the CBSA are not able to collect meaningful information about what had been imported at the time of entry.  This review will likely result in the reduction in time for a retroactive correction may be made.

Finance Canada   Regular reviews of the Customs Tariff should be made to identify tariff items no longer meeting their policy objectives of protecting manufacturers and meeting our international obligations.

In concert with our clients, Thompson Ahern can assist by:

1. Reviewing of invoice requirements for correct information to classify correctly.

2. Reviewing document requirements relating to Other Government Departments to ensure validity and compliance.

3. Reviewing  Database to ensure correct HS, applicable tariff codes.

5. Reviewing documents and providing assistance in the event of a CBSA audit.


Things the Public Sector Should Consider when Cross-Border Importing

When importing from the USA and using purchase orders, P Cards, Credit Cards please make sure that when you are buying domestically or directly from US suppliers you indicate the correct terms.

Domestic Purchase-Your Canadian supplier in many cases will order the goods from the USA and they will be drop shipped for direct delivery to you. Their supplier must indicate the Canadian suppliers name and address etc. on the Customs invoices as the importer/purchaser with the delivery location shown as consignee only. In some cases they indicate the drop shipment information (You) and you end up paying GST twice.

Imported Goods. Where you place the order directly with your supplier please insure they follow your Purchase Order. If paying in CAD this must be clearly shown on the commercial invoice they prepare on line with courier, as Canadian dollars is not generally the currency of choice. Insist that they indicate your PO on the commercial invoice which can then be indicated on our billing invoice for ease of processing by your Accounts Payable Department.  Be sure they declare the price paid or payable as we have seen many cases where the commercial invoice being prepared on line is not the correct value and this can cause an AMPS penalty for undervaluation. In cases where your A/P team notice a discrepancy between the payable invoice and the customs invoice we used at the time of customs clearance, please notify us for voluntary correction to the original file . As an Importer you are required by regulation to report this discrepancy to CBSA as a voluntary adjustment. CBSA are verifying Courier shipments more closely for valuation as they feel many shipments are under declared. Therefore not the correct amount of GST is being paid at the Border.

Capital Purchases-It is very important on large capital purchases that we receive a copy of your purchase in advance of the shipment arriving in Canada. This allows us to verify the Harmonized code, the GST status, the correct Importer of Record and update our data base for our customs specialists.

Pharmacy-In many cases we do not receive an advanced copy of the Health Canada LOA.This is very important to have on hand prior to the shipment arriving  in Canada which will allow us time verify the GST status. Emergency drugs in most cases are Zero rated for tax at the border. Clinical trial drugs are taxable. Without having the copy of the LOA we are unable to determine the correct status.

Education-Please attend our seminars or let us know if there are specific topics you would like to know more about. We offer a customs 101 walk through the customs process on cross border customs clearance.

Zoom Room-We are now equipped to bring you the latest video conferencing technology and make the customer experience much more meaningful for your organization. Go to https://taco.zoom.us/


Please help us help you. Please pass this information along to the correct departments for their Action.

For additional details on this document kindly contact Laurel Marshall or Lynn Fullerton @905-677-3471

ARL Update – News from recent ARL Working Group (ARLWG) meetings

1. Centralization of payment update.  Almost all brokers are paying centrally.  100% of all payments are now being allocated by HQ staff.  Most importers with their own ASECs who usually pay CBSA directly have been contacted by CBSA regarding centralized payment. As this is the long range strategy of CBSA we encourage you to start to pay your month end settlement directly to CBSA.

2. By July, all of the major banks should offer EDI and online banking.

3. CBSA issued one ARL bulletin over the past two weeks.

  - ARL Bulletin 36- Payments by Non-Resident Importers.  CBSA is considering whether payments for an NRI with his own ASEC can be included in a broker’s EDI payment. We will keep you advised as information becomes available

4. Re-tagging of Credits. Credits will stay within an importer’s account but those tagged for consultants or importers who have no debt may be retagged as broker filed.  The CSCB will be hosting a webinar on this subject and others on July 19. 

5. Transition to new Payment Policy. CBSA is proposing the following:

a. That there be no more SOA payments at local CBSA offices.  A monitoring of related volumes will take place at the end of June.  The exception to this rule will be B2s with cheques.  Because there is no proof of payment for a particular payable B2 when it is paid as part of an SOA payment and no guarantee that a particular transaction will be allocated full payment, it is recommended currently that payments for a singular transaction be paid at a local CBSA office.

   b. Today according to the rules in place, an importer without his own ASEC must provide certified cheques if the amount owing to CBSA is $2500 or more.  However, this has not been enforced.  CBSA has proposed to raise that amount to $5000 and is moving toward active enforcement.  No deadline has been set for the enforcement of this requirement but unsecured importers who present uncertified cheques to the Receiver General for amounts over $5000 may receive an advice note from CBSA regarding this policy. Please contact us about these payments which will either have to be certified of direct payment

   c. CBSA also wants to move the payment deadline to 4pm on the SOA due date and mandate electronic payment as soon as possible for amounts over $50,000.  Because all brokers do not have access to electronic payment options and the challenge to transition clients to new payment procedures is significant, the CSCB is opposed to this change at this time.  CBSA has agreed that the setting of a date for this change is not appropriate at this time. This will mean that we will have to have your payment in our hands no later than 11am of the last business day in order for us to Courier the payment to Ottawa to avoid late accounting penalty. Again this is a step towards everyone going on direct payment

   d. IOR correction procedures. The procedure to be followed when the broker does not represent both of the implicated importers will involve the filing of a voluntary B3 by the correct importer or his broker.  We hope to see the revised bulletin issued within the next two weeks.   CBSA is also reviewing the process associated with IOR amendments for CLVS

As ARL is a small piece of the CARM initiative which by 2020 CBSA may require all Importers to have their own Bond (Same as US) and will require all payments directly (no cheques).



Highway Border Crossings Summer Outlook

At a recent Regional Conference of the Canadian Society of Customs Brokers in Stratford, ON, the acting Director of Ambassador Bridge District Operations Tamara Allard said, that the commercial highway shipments are up and at the same time the passenger traffic appears to be slower than usual for this time of the year.

A Summer Action plan for all CBSA highway crossings in the Niagara Region is already implemented for both passenger and commercial traffic. As always priority is given to commercial shipments, and making sure that the commercial traffic is not affected by the increase in passengers during the summer months. CBSA are expecting lower shipment volumes in July due to many manufacturing facilities being closed. This will allow for smooth customs clearance and speedy processing of the heavier passenger traffic in July and August. Due to the noticeable increase in refugees coming from the US, CBSA have developed programs for processing and are prepared to handle a potential increase.

Ms. Allard outlined that CBSA encourages participation in Trusted Traders and Trusted Traveller programs and added that they are planning on expending the Fast lanes on Ambassador Bridge. The Free and Secure Trade (FAST) program is a commercial clearance program designed to ensure safety and security while expediting legitimate trade across the Canada-United States (U.S.) border. The FAST membership card for drivers is valid for five years. FAST is highly automated and allows for the expedited release of cargo from compliant importers, reducing congestion at our land borders.

The highway carriers’ eManifest “has calmed down lately” per Ms. Allard. eManifest requires the electronic transmission of manifest information from highway carriers at least one hour prior to the truck's arrival at the first port of entry into Canada.  Information identifying the truck, trailer, shipment(s) and driver can be sent to CBSA through a free web based portal (ACI portal), a direct connection to the CBSA or through a service provider. If the ACI eManifest is submitted prior to the arrival, the border officers could bring that up. CBSA have noticed that many drivers are still reluctant to cross during CBSA system outages. Although penalties will not apply during system outages, many drivers still prefer to wait for the system to go back up.

The CBSA are closely monitoring changes in traveller patterns and commercial volumes while facilitating the legitimate flow of goods and people into Canada.

CBSA Trade Compliance Pilot Projects

The Canada Border Services Agency (CBSA) manages Trade Compliance with the Tariff Classification, Valuation, and Origin programs through random verifications or verification priorities. This ensures the appropriate use of the trade incentive programs and that duties and taxes owing are properly assessed.

Mr. Danny Rinaldi, Regional Program Trade Governance was in attendance of the Regional Conference of the Canadian Society of Customs Brokers on June 8in Stratford, ON, and shared with the audience that there are “6 major pilot projects that are underway”. The Accounting for goods pilot project started with 4 companies and 3 out of 4 of them had major issues. The selected 4 companies have filled adjustments with CBSA in the past. Their next step was to select companies that have never filled adjustments with CBSA and they had the same results.

The advanced targeting and sampling of shipments is another priority for the Agency. The Canada Border Services Agency (CBSA) and the Canadian Food Inspection Agency (CFIA) share responsibility for enforcing acts and regulations that govern the import, export and in-transit movement of food, agricultural inputs and agricultural products. The advanced targeting allows CFIA to take samples on behalf of both Agencies. Mr. Rinaldi said that this pilot project is “getting good results”.

The CBSA is now employing data analysis and data analytics as part of a pilot project focused on valuation. The Agency is experimenting with mathematical analysis and looking at unusual patterns. They have found several anomalies and were pointed out in specific directions.  Per Mr. Rinaldi “Incredible results were found”. The scope of the mathematical analysis was unusual patterns that occur in a natural trade flow, problems with the values paired with sampling of declarations at the border. So far there were 8 verifications performed at the border.

Other problematic issues are the importation of chicken as outside of the tariff rate quota it is subject to 274% duty. They have also come across several cases of non-compliance for imports of fresh cut flowers. Trade operations at CBSA are focused on trade compliance by working well with the bridges and using a variety of innovative

CETA: Bill C-30 Status Update

« CETA is a reflection of the Canada of today and of tomorrow. It is an agreement that responds to what trade has become — addressing not only goods but also services, investments, human mobility and non-tariff barriers. The agreement also includes key labour and environmental protections, while protecting the ability of governments to legislate in favour of the public interest. » said Hon. Andre Pratte in his speech before the Senate.

On May 11th Bill C-30 An Act to implement the Comprehensive Economic and Trade Agreement between Canada and the European Union and its Member States and to provide for certain other measures passed by the Senate without amendment on Third Reading

What is next for CETA?

Royal Ascent : When the Senate and the House of Commons have both passed a bill in identical form, the Governor General, or one of his deputies, gives the bill Royal Assent on behalf of the Queen, and it becomes an Act of Parliament, one of the statutes of Canada. Royal Assent can be granted either at a ceremony in the Senate chamber held in the presence of both Houses, or by written declaration that is announced in both Houses.

Coming into Force : CETA will come into force on a day to be fixed by order of the Governor in Council. The anticipated implementation dates for the agreement are June 15 th, July 1st or July 15th.

Provisional Implementation: CETA has been qualified as a “mixed” treaty by the European Commission, as the treaty covers both exclusive competences of the European Union (EU) and others are a shared competence with the EU and each of the 28 Member States. CETA’s entry into force requires ratification by the EU Member States, which could take several years because each of the Member States must ratify in accordance with their own domestic law. Therefore, the provisional application of the Agreement can reduce the inconveniences of the lengthy ratification process. The provisional application mechanism is not uncommon to free trade agreements concluded by the EU.

Provisional application is expected to bring the vast majority of the agreement into force, and will result in duty free tariff treatment for 97.7 percent of EU’s tariffs and 98.2 percent of Canada’s tariffs. The rules applicable to other products where their tariff is reduced to zero within a period of three, five or seven years, should logically start to apply immediately following provisional application.

Here at Thompson Ahern, we are looking forward to answer all your CETA questions. Please call us to discuss your CETA implementation plan and the steps you have to take to allow for smooth duty free EU imports and exports.

For more info and/or to be included in a mailing list for regular semi weekly CETA Updates please e-mail dtodorov@taco.ca.

Demi Todorov, CCLP, CTCS, CCS (CA/US)| Manager Client Services and Solutions 

Thompson Ahern International