The CBSA's 2011 Post-Release Verification Target List May Result in GST Assessments Too
The Canada Border Services Agency (CBSA) identifies categories of goods for post-release targeted verifications on an annual basis. This list is important for importers of goods for customs purposes and also GST purposes. If the valuation is too low, the CBSA will increase the value for customs duties purposes , which results in an increase in value for GST purposes. Additional GST will be calculated and assessed and interest on that GST debt from the date of importation.
Post-release verifications occur after goods are released by the CBSA and are intended to verify the information provided by businesses when goods are reported for customs purposes (compliance with Canada's customs laws). There are three main types of post-release verifications.
A) Random Post-Release Verifications: These verifications are random. The CBSA randomly selects importers from their records and conducts an verification to measure compliance with Canada's customs laws and revenue seepage. In other words, the importer's number just came up.
B) Targeted Post-Release Verifications: These verifications are not random. The importer is selected due information provided to the CBSA concerning non-compliance with Canada's customs laws.
C) Post-Release Verifications Based on National Priorities: These verifications occur as a result of the CBSA setting national priorities that are determined through a risk-based assessment and evergreen process. The CBSA picks H.S. tariff codes on an annual basis to target for verifications and semi-randomly picks importers of those goods for a targeted verification. Often the importers with significant volumes of the goods are selected for verification and importers who have not been audited recently. The CBSA is asking the question whether the importing community is making mistakes with respect to a particular type of goods.
The CBSA's Post-Release Verification list for 2011 are:
| Type of Goods | H.S. Codes | Comments |
| Gloves | Headings 40.15, 42.03, 61.16, 62.16,39.26, 42.03 |
On list previously and significant non-compliance identified Focus of verification will be tariff classification & tariff treatment |
| Cotton Yarn | Headings 52.05, 52.06, 52.07 |
Focus of verification will be tariff classification & tariff treatment |
| Furniture Parts | Heading 94.03 |
Focus of verification will be tariff classification & tariff treatment |
| Organic surface-active agents - soap and other than soap | Headings 34.01 and 34.02 |
Focus of verification will be tariff classification & tariff treatment |
| Copper and articles thereof | Various goods under Chapter 74 |
Focus of verification will be tariff classification & tariff treatment |
| Stone vs. articles of stone | 25.14, 25.15, 25.16, 68.01, 68.02, 6803.00.90, 6803.00.10.10 |
Focus of verification will be tariff classification & tariff treatment |
| Juice products | Heading 20.09 |
On list previously and significant non-compliance identified Focus of verification will be tariff classification & tariff treatment |
| Textile Bags | 3923.29.90.90 |
Focus of verification will be tariff classification & tariff treatment |
| Ski apparel | Various goods under chapters 39, 61 and 62 | Focus of verification will be valuation of goods |
| Parts of gas turbines | 8411.99.20.11, 8411.99.20.19, 8411.99.290.90 | Focus of verification will be valuation of goods |
| Light-duty automotive goods | Various god under chapter 87 | Focus of verification will be valuation of goods |
| Bulk shipment of ore | Chapter 36 | Focus of verification will be valuation of goods |
| Plastic household goods | Heading 39.24 | Focus of verification will be valuation of goods |
| Motor car, bus and lorry tires | Various goods under heading 40.11 | Focus of verification will be valuation of goods |
| Video recording apparatus | 8521.90.90.00 | Focus of verification will be valuation of goods |
| Pumps for liquids | 8413.11.10, 8413.19.10, 8413.70.99 | Focus of verification will be valuation of goods |
| Article of jewelery and parts | Heading 71.13 | Focus of verification will be valuation of goods |
| Mattresses | Heading 54.07, and Chapters 55 and 60 | Focus of verification will be origin of goods |
| Electric generators | Heading 85.01 | Focus of verification will be origin of goods |
| Vegetable fats | 1516.20.90.41, 157.90.99.00 | Focus of verification will be origin of goods |
| Pumps for liquids | 8413.11.10, 8413.19.10, 8413.70.99 | Focus of verification will be origin of goods |
| Cocoa powder | 1805.00.00, 1806.10.10, 1806.10.90 | Focus of verification will be origin of goods |
This does not mean that all importers who import the goods on the 2011 hit list will be audited. It does mean that some importers of the good on the list will be audited in 2011/2012. Importers of the goods on the list should conduct their own internal verifications and determine whether they are importing goods in compliance with previously issued ruling letters, case law, CBSA policy and other statements of the law. If an importer identifies errors prior to being contacted by the CBSA for a verification, that importer may be permitted to make a voluntary disclosure of its non-compliance and the CBSA may waive the penalties that would have been payable if the CBSA discovered the non-compliance during a verification.
For more information, please contact Cyndee Todgham Cherniak at 416-760-8999.
Cyndee Todgham Cherniak is counsel to and in affiliation with the International Trade Law and the Tax Law (Commodity Tax
