Products
Custom Compliance for Heli-Operators

Lynda J. Murdock

Canadian helicopter business owners and operators have enough pressure
on their bottom lines today without adding an avoidable financial
penalty to the equation. If your company imports or exports goods, it
may be a good time to review the Canadian customs laws, before a fine
shows up on your doorstep.

Ensuring
the smooth flow of trade across our borders is vital for Canadian
industry. To this end, the Administrative Monetary Penalty System
(AMPS) came into effect in 2002. The goal of AMPS is to promote
voluntary compliance with customs legislation by imposing penalties for
non-compliance. The aim is to create a level playing field for Canadian
businesses by making sure there is a cost for those who don’t comply.

Administered
by the Canada Border Services Agency (CBSA), AMPS can impose penalties
on importers, exporters, brokers, and carriers. Now, if your business
properly complies with custom requirements, AMPS will not affect you.
But watch out – penalties can be unpredictable and hard to fight, so a
little knowledge can go a long way.

There are approximately 350
different AMPS penalties ranging from small amounts to a maximum of
$25,000 for a single infraction.In fact, as of October 2004, the CBSA
had collected over $15,500,000 from 41,954 contraventions. And, the
risk of receiving a fine is expected to rise sharply as the program
moves past its early stages of implementation. To add salt to the
wound, since March 22, 2004, fines or penalties imposed are not income
tax deductible.

AMPS has largely replaced the use of seizure and
forfeiture, which is now reserved for only the most serious
contraventions. Importers are the major offenders of AMPS compliance,
owning 58% of the penalties that are levied.

Penalties increase
with repeat occurrences of the same infraction. For example, the
penalties for “failure to report” for all imported goods valued at
$1,600 or greater are:

1st contravention: $2,000, or 20% of value for duty, whichever amount is greater;

2nd contravention: $4,000, or 40% of value for duty, whichever amount is greater; and

3rd and subsequent contraventions: $6,000, or 60% of value for duty, whichever amount is greater.

Some of the more common infractions include:

• Inaccurate valuation of goods

• Failure to report importation of goods

• Incomplete certificates of origin

• Failure to adjust entries when the information originally reported was in some manner incorrect

• Reporting goods as arrived prior to authorized time frames

• Failure to provide the required export permit, licence or certificate prior to the exportation of goods

While
many infractions are discovered in the course of a desk audit or
review, errors affecting importers and exporters are usually identified
in the course of the customs clearance process… and a penalty
assessment simply arrives unannounced in the mail!

Also
important to note, actions taken (or not taken) by your customs broker
may cause penalties to be assessed against your organization. It is the
Importer of Record (you!) that will, in most cases, be identified as
the person responsible for the infraction and the payment of the
penalty.

Something else to watch for – low value courier
shipments (those transported by couriers such as FedEx or UPS where the
value for duty is less than $1,600) pose a unique exposure to AMPS
since they are often treated casually simply because they are of low
value. The related invoices often don’t contain accurate information
which could result in a sizable fine.

Beware also of the
inclusion of a gift to an importer in a shipment. This is a common
practice but, if the gift is not declared and is discovered by CBSA,
the entire shipment could be at risk and the importer could be
penalized (and marked for smuggling with increased future
examinations!).

Understanding your obligations and your state of
compliance is an important step in looking at your customs-related
business systems, processes and procedures. There are several documents
out there to help you navigate your way through the red tape and
simplify the process. For more information on AMPS, visit
www.cbsa.gc.ca/amps.

Remember, a little knowledge can go a long way to preventing an avoidable financial drain on your business.