The Administrative Monetary Penalty System (AMPS) legislation enables the Canada Border Services Agency to levy monetary penalties for non-compliance of specified regulations ranging from $100 up to $25,000 per infraction. This legislation is designed to promote compliance from all sectors of the importing community within the various CBSA regulations.
One of the major areas of concern under this legislation is the Certificate of Origin. Section 35.1 of the Customs Act states that (1) Subject to any regulations made under subsection (4), proof of origin, in the prescribed form containing the prescribed information and containing or accompanied by the information, statements or proof required by any regulations made under subsection (4), shall be furnished in respect of all goods that are imported.an importer or owner of goods must have a properly completed certificate of origin in their possession when claiming preferential tariff treatment for their goods. This means that in order to claim goods duty free under a free trade agreement, you must have a properly completed Certificate of Origin on file, from the exporter, at the time the goods are accounted for with the CBSA.
Should the CBSA conduct an audit of your company and find that goods have been declared at a lower duty rate using a preferential tariff treatment, and the importer or owner of the goods fail to produce a properly completed Certificate of Origin, the penalties for non-compliance of this regulation are as follows (Master Penalty Contravention Number: C152) :
InfractionPenalty1st$1502nd$2253rd and subsequent infraction$450
It is important to keep in mind that the penalty is applied per request, regardless of the number of transactions or documents pertaining to that request. Also, there are other AMPS penalties that may be applied by CBSA during the audit due to the exclusion of the certificate.
Proof of Origin will be a major part of any customs audit and obviously the cost of non-compliance is extremely high.
NAFTA Certificate of Origin
For anyone importing goods from the USA or Mexico the importance of obtaining a NAFTA Certificate of Origin cannot be stressed strongly enough. As an Importer of Record with the CBSA, it is your responsibility to ensure that all your U.S. and Mexican suppliers provide you with a NAFTA Certificate of Origin for all goods that you purchase from them. And that the Certificate of Origin is:
- Properly completed and
When a NAFTA Certificate is not available
If you do not have a NAFTA Certificate of Origin on file and one cannot be obtained within five (5) days from the date of customs release of the goods, the applicable duty must be paid on those goods.
If a situation arises whereby you have to pay duty because you do not have a NAFTA Certificate available at the time of release, you can pursue a duty refund by providing a properly completed NAFTA Certificate within one year of the date of release of the shipment in question.
Free Trade Agreement Advisory Services
- FTA Concierge Services ? For clients with time constraints, we offer convenient FTA Concierge Services. We can solicit FTA certificates directly from your exporters allowing you to do what you do best ? run your business.
- Tariff Classification Consulting ? We offer expert analysis for clients seeking guidance on tariff classification. You may know the ins and outs of your business, but we know the intricacies of trade and always look out for our clients bottom line.
Free Trade Agreement Workshops and Webinars
Pacific Customs Brokers also offers workshops and webinars such as the FTAs and Rules of Origin Workshop and a NAFTA Webinar Series that help importers and exporters determine eligibility under various FTA programs and gain a clearer understanding of the regulations and best practices for implementation. Learn more or register here!
If you have any questions regarding Rules of Origin or Free Trade Agreement certificates post them in our comments section below or email us at Ask Your Broker.