The CBSA Voluntary Disclosure Program
CBSA has a program whereby commercial clients can correct inaccurate or incomplete information or disclose previously unreported information. When this is done voluntarily, CBSA may grant monetary relief to the client. This program is known as the Voluntary Disclosure Program.
What Is The Purpose Of The CBSA Voluntary Disclosure Program?
- To promote voluntary compliance with Federal import and export legislation by encouraging clients to voluntarily come forward.
- To disclose previously unreported information.
- To correct inaccurate or incomplete information.
The Voluntary Disclosure Program is intended to be remedial. CBSA may waive penalties and reduce interest however duties and taxes still apply.
What Are The Conditions Of Making A Voluntary Disclosure?
- It must be voluntary.
- It involves the potential imposition of a penalty and/or specified interest or the potential of acting against the goods or person involved in the import/export contravention.
- It is complete in all material respects or includes all incidences of non-compliance.
- It takes account of special considerations identified in CBSA Memorandum D11-6-4.
A disclosure may be denied if the client submitted a previous voluntary disclosure and was granted one for the same compliance issue.
The client must explain to the CBSA how the non-compliance occurred and how it has been corrected, or what measures have been taken to reduce the risk of the non-compliance occurring again.
What Does “Voluntary” Mean To CBSA?
- The disclosure must be initiated by the client and not prompted by any action or activity taken by the CBSA or participating government agency or any action of other persons or agencies of authority such as the police.
- The disclosure cannot be made after a CBSA officer has referred the goods for examination or told the client they intend to refer the goods for examination.
- CBSA Trade Program verifications are excluded here. If an importer voluntarily discloses information prior to the issuance of a verification “Notification Letter,” CBSA will consider the disclosure as voluntary.
- An audit by the CRA for tax purposes that includes importation of commercial goods does not preclude an importer from making a voluntary disclosure to CBSA.
What are Special Considerations?
Some contraventions of the Customs Act involve other enforcement actions which do not include a monetary penalty and are outside the scope of the Voluntary Disclosure Program. An example is when terms of release are demanded by CBSA for return of seized goods.
The CBSA has no authority to relieve penalties or interests applied by other Participating Government Agencies (PGAs).
Some contraventions of the Customs Act warrant prosecution. This program does not grant immunity from prosecution.
In cases when the disclosure involves goods which are prohibited entry in Canada, the possession must be disclosed immediately and the goods must be forfeited, abandoned, exported or destroyed under CBSA supervision. Prohibited and illegal goods must be disclosed immediately and will be seized. CBSA will make the decision on the disposition of the goods and what they may be subject to.
Clients can present to CBSA a “no-name” disclosure which is intended to request advice from the CBSA of the potential success of a voluntary disclosure without identifying the client. Discussions with the CBSA are informal, non-binding and very general in nature. No-name disclosures are really intended to provide the client with insight into the process of making a voluntary disclosure and provide the client the information needed to manage their risk with remaining non-compliant and the possible relief afforded under the program.
CBSA will provide a written response to a request made under a no-name disclosure. CBSA will be bound by the response given for a period of 90 days knowing that the response was based on facts presented by the initial request, and if the facts are changed or if new details come to light, then the response provided by CBSA is no longer valid.
How To Make A Voluntary Disclosure?
The application must be in writing and must include as much detail as possible. The details must be clear and concise.
To avoid additional interest accumulating while CBSA makes a decision on the disclosure made, it is advised that the interest already assessed be paid and if CBSA approves the relief, a refund of some or all will be provided.
Appendices A-D of CBSA Memorandum D11-6-4 provide specific direction and forms to be used when making a Voluntary Disclosure.
After a Voluntary Disclosure is made, a delegated CBSA official may grant, partially grant, or deny the application.
If a request for relief was denied, a client can request a judicial review. Applications must be made within 30 days of being notified of CBSA’s decision.
Errors and omissions can occur when importing into Canada and these errors and omissions can have serious consequences. As a commercial importer you should proactively verify the accuracy of all your import declarations. If an error or omission has been found it is important to act quickly. In some cases, a “no-name” disclosure can be made to mitigate or manage your risk.
Should you have any questions or need some help or advice, please do not hesitate to contact one of our trade advisors who would be able to guide you through the process effectively and efficiently.