Part 1: Lesson 2 Customs Brokers & Importers

Question 1

describe the purpose of a General Agency Agreement (GAA) and Standard Trading Conditions (STC);

Question 2

explain the purpose and structure of a Business Number (BN);

Question 3

describe the delegation of authority in the CARM Client Portal (CCP);

Question 4

detail the record keeping requirements

Question 5

explain the penalties that may be applicable

Question 6

What is a GAA?

Answer 6

General Agency Agreement; authorizes a customs broker to undertake specific work on behalf of that client at the request of that client (eg. releasing goods)

Question 7

What are STC?

Answer 7

Standard Trading Conditions; accompany the GAA and provide more detail regarding the obligations of the customs broker and the client in the context of the services requested (eg. conditions for payment)

Question 8

True or False; CBSA may refuse to allow a customs broker to transact business on behalf of an importer if the proof of authority is not produced within five days.

Answer 8

True

Question 9

What info is required to be present on a GAA based on DMemo 1-6-1

Answer 9

(a) the names of the person and the agent including their business numbers and addresses;
(b) a description of the type of business transactions being authorized, e.g. accounting and payment of duties on commercial goods imported under section 32 of the Customs Act;
(c) whether the authority is continuous or for a specified period;
(d) whether the agent is authorized to appoint a sub-agent;
(e) the name, title and signature of the agent;
(f) the name, title and signature of the person on whose behalf the agent is acting; and
(g) the effective date.

Question 10

What is a business number?

Answer 10

15 digit alpha numeric number (9 digits, 2 letters for Act Identifier, 4 digits to identify which act) issued by CRA used by the government to identify businesses

Question 11

What form is used to request a BN?

Answer 11

For RC1

Question 12

What are the BN Account Identifiers

Answer 12

RC = corporate income tax
RM = import/export
RP = payroll deductions
RR = Charity
RT = GST
RZ = Information Return

Question 13

What does CARM stand for?

Answer 13

CBSA Assessment and Revenue Management

Question 14

What is CARM

Answer 14

multiyear initiative to simplify the current process in place for assessing and collecting duties and taxes including electronic payment options

Question 15

When should Delegation of Authority to given to a broker by importer?

Answer 15

delegation of authority should be given by importer to broker in the CARM client portal as soon as BN/GAA are known/obtained

Question 16

What is the CARM Client Portal (CCP)?

Answer 16

to become the main communications interface b/w CBSA and importers/brokers/trade chain partners

Question 17

What can a importer do via the CCP?

Answer 17

online access to manage transactions (including corrections/adjustments), apply for classification rulings, accounting/payment of applicable duties, taxes and fees on imported goods

Question 18

Why Delegate authority to your Broker?

Answer 18

Delegation of Authority in CCP must happen in order for Broker to act on behalf of the importer with CBSA, without delegation of authority the Broker can not file entries or provide revenue management of the importer’s account(s) with the CBSA

Question 19

What can a Broker do via the CCP?

Answer 19

1. access and manage client RM (BN15) program accounts;
2. receive CBSA notifications on behalf of their clients;
3. apply for a ruling;
4. submit payment to the CBSA on behalf of their clients;
5. download and view client account reports.

submit a Commercial Accounting Declaration (CAD);
perform corrections and adjustments;
file a CAD for drawback purposes;
process a Voluntary (V-type) entry;
upload required supporting documentation;
monitor the status of a client’s posted security;
view a client’s Statement of Account (SOA);

First 5 can be done today (others are pending)

Question 20

How long must a broker maintain import records?

Answer 20

Six plus current year from date of import

Question 21

How must these records be kept?

Answer 21

in original state, photographic, microphotographic or image-processing process that is in accordance with National Standard of Canada, system capable of producing accessible and readable copy of source docs

Question 22

Which records must be kept?

Answer 22

accounting info on financial transactions, copy of each customs accounting document (and copies of all supporting documents), any related correspondence/bills/accounts/statements related to… there are sub agent specifications laid out in the act that likely need review

Question 23

What legislation outlines record keeping requirements for importers?

Answer 23

Section 40(1) of the Customs Act & Section 2(1) of the Imported Goods Records Regulations

Question 24

What are some key requirements of the Section 40(1) of the Customs Act & Section 2(1) of the Imported Goods Records Regulations

Answer 24

Section (40)1: maintain records related to the import and be able upon request of an officer to produce them and answer any questions regarding them truthfully;
Section 2(1) of the Imported Goods Records Regulations: keep for a period of 6 years records of a) the origin, marking, purchase, importation, costs and value of the commercial goods;
b) payment for the commercial goods;
c) the sale or other disposal of the commercial goods in Canada; and
d) any application for an advance ruling made under section 43.1 of the Act in respect of the commercial goods.

Question 25

What are the key pieces of info needed by a customs broker to conduct business on behalf of an importer?

Answer 25

a thorough knowledge and understanding of the products;
the end-use of the imported goods (since the amount of duty can depend on their end-use);
the countries of origin; and
the relationship of the importer to the seller.

Question 26

When are penalties issued to an importer?

Answer 26

when errors are made in the import process

Question 27

what legislation informs these rules?

Answer 27

Section 32 of the customs act?

Question 28

who is ultimately responsible for the accuracy/compliance of imported goods and therefore in risk of penalties etc.? and what legislation outlines this?

Answer 28

Importer; ection 32 of the Customs Act

Question 29

When can penalties be issued to a Customs Broker? and provide 3 examples

Answer 29

non-compliance with the Customs Brokers Licensing Regulations
examples: C010 Customs broker failed to provide records within specified time limit.; C267 Customs broker failed to account to client for funds owed or refunded.; C336 Person failed to pay duties on accounted goods.

Question 30

List of Penalties applicable to Customs Brokers

Answer 30

Penalty # Description of penalty circumstance
C010 Customs broker failed to provide records within specified time limit.
C011 Person acted as customs broker without a licence. (Technically, this penalty is not issued to a customs broker, since it applies to someone who is not a licensed customs broker)
C012 Customs broker transacted business at office not specified on licence.
C260 Customs broker failed to notify of changes to business address.
C261 Customs broker failed to notify of changes to business name.
C262 Customs broker failed to notify of changes to members of partnership.
C263 Customs broker failed to notify of changes to officers/directors of corporation.
C265 Customs broker failed to notify of changes in ownership of corporation.
C266 Customs broker failed to notify of changes to persons (knowledge requirements).
C267 Customs broker failed to account to client for funds owed or refunded.
C269 Customs broker failed to keep records covering all financial transactions.
C270 Customs broker failed to keep appropriate accounting and supporting documents.
C271 Customs broker failed to keep copies of all documents relating to his business.
C272 A customs broker failed to keep separately copies of the records and books of account relating to business as a customs broker and sub-agent.
C336 Person failed to pay duties on accounted goods.