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 what exactly that means.
First and foremost, let’s go over 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.
According to Section 40(1) of the Customs Act states: Every person who imports goods or causes goods to be imported for sale or for any industrial, occupational, commercial, institutional or other like use or any other use that may be prescribed shall keep at the person’s place of business in Canada or at any other place that may be designated by the Minister any records in respect of those goods in any manner and for any period of time that may be prescribed and shall, where an officer so requests, make them available to the officer, within the time specified by the officer, and answer truthfully any questions asked by the officer in respect of the records.
What Kind Of Records Must Be Maintained?
The Government of Canada’s Justice Laws website states, 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
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.
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. 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.
