Importers who import commercial goods into Canada must maintain books and records as prescribed by the Customs Act and Regulations. Importers must be prepared to provide access to and copies of to Canada Border Services Agency (CBSA) for trade audit purposes. In this blog, we will explore the do's and don’ts of importer record keeping responsibilities for Customs.
Who Must Keep Records?
- Resident Importers: These importers reside in Canada and are the Importer of Record (IOR) for the goods they import into Canada.
- Non-Resident Importers: These importers do not reside in Canada but are the IOR (or NRI) for the goods they import into Canada.
What Kind Of Records Must Be Maintained?
As stated in the Government of Canada's Justice Laws website, the types of records that must be maintained are “all records” that relate to:
- [The] origin, marking, purchase, importation, costs and value of the commercial goods;
- payment for the commercial goods;
- the sale or other disposal of the commercial goods in Canada; and
- any application for an advance ruling made under section 43.1 of the Act in respect of the commercial goods.”
Responsibilities For Customs Self Assessment Importers (CSA)
In addition to the types of records noted above, CSA Importers have additional record keeping responsibilities which are:
- Description and quantity of goods
- Records related to the shipment of the goods
- All accounting records for the goods
- Vendors and consignees (names and addresses) for the goods
- Records relating to the payment of duties and taxes on the goods
Responsibilities Of End-Use Importers
End-use importers are in the CBSA End-Use Program and import goods free of duty or at a reduced rate based on the specific use of the goods. End-use importers must provide:
- A record of how the goods imported were actually used and the name, address, and occupation of the user.
- If the goods were used in a manner not initially stated at importation, records of the applicable duty and taxes paid.
How Long Should Records Be Kept?
All records must be kept for a period of six years following the importation of the commercial goods.
Where Do The Records Need To Be Kept?
Records should be kept at the importer’s place of business. Importers can request authorization from CBSA to maintain their records at a separate location from their business address. The request and authorization from CBSA must be in writing.
Non-resident importers who do not maintain an address in Canada may make a request from CBSA to have an agent maintain their records in Canada. Many NRIs have their Canadian customs broker maintain their records.
What Happens If An Importer Does Not Comply With The Prescribed CBSA Record Keeping Regulations?
An importer who does not keep records in the required place and for the appropriate amount of time may be subject to an Administrative Monetary Penalty (AMPS). The applicable AMPS contravention can be found at Administrative Monetary Penalty C299.
The penalty for this contravention is a flat rate of $25,000 per audit and the retention period is 36 months.
What Happens If An Importer Fails To Make Their Records Available To CBSA?
An importer who does not provide their records for imported goods to an officer when requested can face an Administrative Monetary Penalty (AMPS). The applicable AMPS contravention can be found at Administrative Monetary Penalty Contravention C157.
The penalty is not a flat rate but rather an escalating penalty that is applied and escalated for each written request. The first contravention is $600 and can escalate to $1,200 for a second request and $2,400 for a third and all subsequent requests.
Record keeping is a legal requirement for ALL importers regardless of who is “keeping” your records. Further information about the record keeping responsibilities can be found in the CBSA Memorandum D17-1-21.
Our Trade Advisors at PCB can also assist you with meeting all your CBSA record keeping responsibilities.