Highway carriers engaged in cross-border operations should be aware that the Interim Turnaround Policy (the “Policy”) implemented by the Canada Border Services Agency (“CBSA”) will expire as of 11:59pm P.T. on November 2, 2020, as set out in Customs Notice CN17-19: “Interim Measures and Issuance of Penalties to highway carriers for non-compliance of ACI requirements.” Currently, the Policy allows highway carriers who arrive at a Canadian border point of entry and are not in compliance with Advance Commercial Information (“ACI”) / eManifest to turn around and return to the United States to report cargo information properly, meet ACI requirements and avoid penalties.
ACI / eManifest requirements have been mandatory for highway carriers since January 2016, but the Policy has provided a reprieve for non-compliant carriers. Highway carriers transporting goods into Canada are required to transmit cargo and conveyance data electronically to the CBSA a minimum of one hour prior to the time that the shipment arrives at the border. This enables the CBSA to effectively manage high risk goods by identifying threats to health, safety and security prior to arrival of a shipment in Canada, allow low risk goods a more efficient process at the border, and control the movement of in bond goods.
When the Policy expires, any highway carriers who arrive in Canada without having completed their reporting of ACI / eManifest pre-arrival cargo and conveyance data within the above-noted timeframe, or who have provided ACI data that is incomplete, inaccurate or untrue, will not be permitted to move beyond their first port of arrival (FPOA) and may be subject to administrative monetary penalties. The CBSA has full discretion to determine which course of action it wishes to take in the event of non-compliance.
When it comes to determining whether a penalty will be applied, the CBSA’s Carrier, Postal and Courier Compliance (CPCC) unit will review the circumstances and only apply a penalty when it feels that such penalty is warranted.
Penalties for Non-Compliance, Appeals and Reinvestment Agreements
Highway carriers who arrive in Canada and are not in compliance with ACI / eManifest may be subject to administrative monetary penalties as follows:
C378 – Person failed to submit the prescribed pre-load/pre-arrival information relating to their cargo and/or conveyance – Penalty: $2,000 (first occurrence);
C379 – Person failed to submit advance information in the prescribed time or prescribed manner to the CBSA – Penalty: $250 (first occurrence);
C381 – Person failed to notify the CBSA within prescribed timeframes and without delay of any correction to any pre-arrival or pre-load information sent to the CBSA – Penalty: $500 (first occurrence); and/or
C382 – Person submitted information prescribed by the Reporting of Imported Goods Regulations that was not true, accurate and complete – Penalty: $500 (first occurrence).
Penalties increase upon the second, third and subsequent incidents. If a carrier disagrees with a penalty issued in connection with ACI non-compliance, an appeal process is available. To appeal, the carrier must request a ministerial review within 90 calendar days of the date of the enforcement action or service of a notice of penalty. If a carrier still disagrees with the decision on appeal/review, it may request a further appeal to the Federal Court of Canada.
Alternatively, the carrier may request a Penalty Reinvestment Agreement, where it could reinvest the equivalent of all or a portion of the assessed penalty into their systems and processes to support future compliance. This alternative option must be approved by the CBSA after consultation and generally is only allowed when the carrier has: (i) demonstrated that the penalty was a result of a systematic problem affecting their commercial information system or processes; (ii) invested in corrective measures to remedy the problem in a timely manner; and (iii) demonstrated that the corrected measures are effective in achieving compliance. This process is not available to carriers who have been issued penalties arising in connection with contraventions involving prohibited or inadmissible goods or have any outstanding debts payable to the CBSA other than the penalty in question.
Highway carriers should ensure that they have processes and procedures in place to ensure that they are in full compliance with ACI/eManifest requirements when entering Canada in order to avoid penalties for non-compliance after November 2, 2020. If you have any questions regarding compliance or the issuance of a penalty, please feel free to reach out to any member of Miller Thomson’s Transportation & Logistics Group.