Hefty AMPS Penalties For ACI eManifest Non-Compliance

ACI eManifest - A Quick Recap:

For those of you new to, or unfamiliar with, ACI eManifest, this is how the CBSA summarizes the program. The Advance Commercial Information (ACI) program provides the Canada Border Services Agency (CBSA) with electronic pre-arrival cargo and conveyance information so they can identify health, safety and security threats related to commercial goods before the goods arrive in Canada. With the implementation of eManifest, highway carriers transporting goods into Canada are required to transmit cargo and conveyance data electronically to the CBSA prior to arrival. The cargo and conveyance data must be received and validated by the CBSA a minimum of one hour before the shipment arrives at the border. ACE is the equivalent U.S. program.

Zero-Rated Penalty Phase - Mandatory Compliance

It has been a few months since CBSA announced the implementation of ACI eManifest in the highway mode. We are currently in the zero-rated penalty phase of the ACI eManifest implementation timeline which means that for the period July 10, 2015 to January 10, 2016 non compliant carriers will be issued a penalty but it will be zero-rated or have no financial ramifications to it. These zero-rated penalties serve as a warning to carriers to correct the issue or contravention prior to January 10, 2016, when monetary fines will be attached to those contraventions.

What Is The Administrative Monetary Penalty System?

Let's take a moment to review the CBSA penalty system for non-compliance known as the Administrative Monetary Penalty System or AMPS. AMPS is described by CBSA as a sanction regime that authorizes CBSA to issue civil monetary penalties to carriers, importers and exporters for the violation of the CBSA's trade and border legislation in the commercial stream.

It is intended to level the playing field for all Canadian businesses by incurring a cost for non-compliance. CBSA states, AMPS provides comprehensive penalty coverage for contraventions of the CBSA requirements and obligations and will result in significant overall reduction of the competitive advantage that non-complying clients have over those who have invested in compliance.

AMPS | How Would This Affect Your Bottom Line?

Application Of The AMPS

AMPS  contraventions may be applied to all commercial clients including importers, exporters, customs brokers, warehouse and duty free operators, carriers, freight forwarders or or their representatives. The AMPS penalties are applied against the person(company), in response to their non-compliance as opposed to seizures which are applied against the goods. To identify the person or company a client identifier, such as the Canada Revenue Agency issued Business Number (BN) can be used, or the 4 digit CBSA issued carrier code, or the sub-office work location code that identifies the warehouse operator. These identifiers are used in the process of issuing the AMPS penalties.

The AMPS Penalty Framework

The AMPS penalty structure is graduated in most cases providing higher monetary penalties for repeat incidences of the same contravention. For a small number of contraventions, the penalty amount is a flat rate.

CBSA has applied a penalty matrix called the AMPS risk grid which identifies the severity of the impact of the contravention from very low to very high plotted against four criteria:

  1. National security
  2. Health and safety
  3. Economic
  4. International commitments

This risk criteria ensures the penalty amount is in line with potential harm of non-compliance. eg. clerical error vs. fraud. AMPS penalties are progressive i.e.the first, second and third subsequent occurrences of the same contravention by the same client will receive progressively higher penalty amounts. For contraventions considered high-risk the penalty amounts increase at the second and third levels at higher rates to reflect the severity of the contravention. This translates into a range from $0 at the warning level to $8,000 for repeat offenses of the most serious contraventions. This is applied to each shipment or submission.

30-Day Non-Escalation

CBSA will provide carriers/importers an opportunity to correct non-compliance for low and medium risk contraventions with a 30-day delay to the penalty escalation from level 1 to level 2. The 30 days start from the date of the issuance of the penalty and will not increase to the second level within that 30 days for a second contravention to allow the carriers/importers to take remedial action to prevent having to pay an increased penalty amount.

Contravention Retention Period

The retention period for each individual contravention is either 12 or 36 months for penalty calculation purposes. Contravention retention periods are for the penalty escalation purposes and used to determine when penalties escalate from one level to the next. They are calculated either one year or three years from the date of the last contravention against the client. Once the retention period has expired, and the same contravention occurs again, the system will begin a new retention period and calculate penalty amounts at the first level. Most eManifest contraventions have a one year retention period.

You should be aware that the overall carriers/importers contravention history remains in the AMPS systems for six years plus the current year. Carriers/importers will be given a risk score on their performance assessed against number of contraventions issued and corrections and amendments made with ACI eManifest. Those with higher risk scores will be scrutinized more than those with lower risk scores.  This means delays and possible more penalties and enforcement.

How To Appeal An ACI eManifest AMPS Penalty

January 10th, 2016 Penalty Phase Starts

Here are some of the penalties which may be applied against the carrier or client who is non-compliant with ACI eManifest (these monetary fines will be applied in January 2016). Again, these penalties are issued per shipment or per submission of data.

Contravention 1st Penalty 2nd Penalty 3rd and Subsequent Penalty
Person failed to submit pre-arrival information relating to their cargo and/or conveyance $2000 $4000 $8000
(and in all likelihood the conveyance will be turned around to submit the ACI information from the US in the prescribed format and time frames)
Person failed to submit advance information in the prescribed time or prescribed manner to the Agency. $250 $375 $750
Person failed to notify the Agency within the prescribed time frames and without delay of any correction to any pre-arrival information sent to the Agency. $500 $750 $1500
Person submitted information prescribed by the Reporting of Imported Goods Regulations that was not true, accurate and complete. $500 $750 $1500
Person failed to comply with notification issued by the CBSA regarding the goods on board or expected to be on board the conveyance. $2000 $4000 $8000

What Carriers And Importers Can Do to avoid AMPS?

While there will be no history of non-compliance retained by the Canada Border Services Agency during the current six-month grace period of zero-rated penalties, now is the time to take the appropriate measures within your company to ensure good compliance protocols so that when the monetary penalties hit in January 2016 your company will avoid the stiff penalties for non-compliance.

A clear understanding of ACI eManifest requirements, comprehensive compliance monitoring and record keeping system will  ensure that you avoid monetary penalties and high risk scoring come January 2016.

eManifest Filing Services

Pacific Customs Brokers provides eManifest filing services can assist you in submitting all relevant information to Canada Customs within the required time period to ensure your trucks cross the border as quickly and efficiently as possible.

Source:

eManifest services for shipment
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About Author
Jan Brock

Jan Brock joined Pacific Customs Brokers in 2015 as a Senior Trade Advisor. She retired from Canada Border Services Agency (CBSA) in 2015 after serving more than 37 years. Jan started her career with CBSA as a summer student in 1976 and worked part-time until she graduated from U.B.C. with a Bachelor of Education Degree in 1980 . Shortly after graduating from U.B.C. Jan worked full time as an inspector with CBSA and within three years was promoted to Superintendent. She served some time in the Regional Operations office as an Operations Review Officer before she was promoted to Chief of Operations first at the Customs Mail Centre, then in the Metro District as the Commercial Chief and ending her career as a Chief at Pacific Highway Commercial Operations where she served as Chief from 1992 to 2015. During her career she was a member of the Customs Drug Team and a trainer in the National Enforcement Program. Jan also served as the Regional Coordinator Officer Powers and Use of Force for the Pacific Region. Jan served on many Commercial Program Reviews and committees both national and regional during her career and possesses an expansive knowledge of importing and exporting into and from Canada.

While we strive for accuracy in all our communications, as the Importer of Record it is incumbent upon your company to ensure that you are aware of the requirements under the new regulations so that you maintain compliance as always.