Tb s5 ppt paul allen

Post-Clearance Audits at the CBSA

Outline

Trade Overview Trade Compliance

Trade Compliance Verifications Priority Approval Committee Verification Priorities

Trade Overview • Canada Border Services Agency (CBSA) carries out its mission of managing access of people and goods to and from Canada by delivering various trade-related programs administered by regional and Headquarters’ (HQ) offices.

• Programs we administer and work we perform support Canadian businesses and help protect our economy.

• We complete verifications, audits and reassessments and provide advice and guidance to importers, exporters and stakeholders.

Trade Compliance • CBSA administers a robust trade compliance program that verifies tariff classification, origin and valuation of goods.

• Agency focuses on areas or businesses where compliance issues need attention.

• CBSA maintains integrity of origin and valuation programs to support competitiveness of industries.

• Agency ensures that government’s economic objectives for Canadian businesses are met through proper classification of goods.

Trade Compliance Verifications • Trade compliance verifications are conducted through desk audits or on-site visits.

• Specific importers, exporters, goods or industries may be selected for random or targeted verifications.

• When non-compliance is found for verified samples, importers must file corrections for importations of same or similar goods within a period of up to four years.

• Escalating penalties may be applied as a corrective measure in cases revealing non-compliance.

Randomly-Selected Verifications • Random verifications based on non-risked selection of importers where samples are selected from a statistically-sound perspective.

• Main goals are to measure compliance rate for trade programs and revenue loss for Government of Canada.

• Random verifications can be used for risk assessment, revenue assessment and promoting voluntary compliance.

• Multiple selection of same importer over the years should not be interpreted as a lack of confidence in that particular importer.

Targeted Verification Priorities • Targeted verification priorities are based on a selection of importers or exporters and on the impact of non-compliance for revenue, national security and/or health and safety.

• Main goals of verification priorities are to:  identify and address inherent weaknesses within trade programs;  engage stakeholders in the management of risks related to trade programs;  keep stakeholders informed of our activities and their ensuing results; and  report on and monitor verification priorities’ results.

Verification Priority Process

Risk Identification

• Referrals from internal or external sources

Priority Submissions

• Prepared by the Regions or Headquarters

Priority Approval Committee (PAC)

• Submissions presented to PAC; • Once approved, issue becomes a verification priority.

Priority Approval Committee • The Priority Approval Committee (PAC) reviews regional and HQ priority submissions for purposes of establishing verification priorities to be actioned in each regional compliance verification office.

• All members are representatives of CBSA’s management cadre with decision-making authority.

• Committee meetings are being held once a month.

PAC Key Responsibilities • Review priority submissions and accept or refuse submissions based on the impact of non-compliance. • Once a priority submission has been approved as a verification priority, generate high-quality trade compliance verification cases that best utilize regional resources and will affect trade compliance in the desired fashion.

Priority Submission • The priority submission document describes the goods at issue, classification number(s), target period and trade program under review.

• The trade compliance issue is explained and information on related previous verifications is provided.

• The impact of non-compliance is determined (e.g. revenue loss, health and safety, national security).

• The duty at risk is calculated for a period of up to four years after the goods have been accounted for.

Priority Submission (cont.) • A risk matrix is utilized to identify the risk ranking category (e.g. acceptable, undesirable, unacceptable). • The risk matrix combines the impact of noncompliance (duty at risk) and the likelihood of the risk to occur (rate of non-compliance based on previous related verifications).

• Finally, a list of targeted importers/exporters is provided.

Identifying Targets • For PAC-approved verification priorities, companies are targeted based on:  importers’ or exporters’ volumes of trade in goods bearing significant inherent risk;  prior compliance history, such as previous verification activity;  importers’ or exporters’ activities, lines of products, etc.

• Once cases are completed, verification results are analyzed to determine efficiency of targeting and following steps.

• If warranted, a second round of verifications could be released with new companies targeted for verification.

Conclusion • Trade compliance verifications are an important tool that the CBSA utilizes to ensure compliance with trade laws.

• Verifications ensure that importers are correctly paying their customs duty and tax obligations.

• Verification Priorities approved by the PAC allows the Agency to identify and mitigate risks, and estimate degree to which importers are complying with their trade obligations.

• Targeted verification priorities have been the Agency’s most resultant workload (in terms of assessment) and will continue to expand as we provide greater emphasis on developing priorities.