Part 2: Module 2.3 Lesson 2 Administrative Monetary Penalty System (AMPS)

Question 1

What is the Administrative Monetary Penalty System (APMS)

Answer 1

Short: system of penalties for infractions under the Customs Act, the Customs Tariff Act, and the Special Import Measures Act, and any of the regulations made under these acts.

Long: is a civil penalty regime that ensures compliance with customs legislation through the application of monetary penalties.
The AMPS authorizes the CBSA to assess monetary penalties for non-compliance with customs legislative, regulatory and program requirements.

Question 1

detail when the AMPS is used

Question 2

describe the penalty form

Question 3

recall the appeal process

Question 4

What are the 4 types of criteria for assessing AMPS

Answer 4

national security (D), health (C) and safety (B), economic (A) and international commitments (most severe to least severe risk - through reversed visually from this list on the AMPS gid)

Question 5

True or False: penalties under the AMPS are graduated and increase each time a party repeats the identical infraction.

Answer 5

true

Question 6

what is the max penalty for single contravention?

Answer 6

$25K

Question 7

Notice of Penalty Assessment NPA can have more than $25K tot penalty amount, true or false?

Answer 7

True; when multiple infractions under same NPA

Question 8

What is the AMPS penalty grid?

Answer 8

Graduated chart listing value of penalty based on # of repeat offenses and risk (Impact Scale along y axes 1 low to 5 very high; Criteria groups along bottom A to D) https://cscb.ca/sites/cscb.ca/files/uploads/PenaltyGrid.pdf

Question 9

Define a Seizure by CBSA

Answer 9

CBSA physically taking possession of the goods and sometimes the conveyance in cases of non-compliance.

Question 10

Define Ascertained forfeiture

Answer 10

these take place when customs is unable to seize goods, usually because the goods have been destroyed, exported, or consumed.

Question 11

Define Specified Goods

Answer 11

those defined as prohibited as well as goods such as spirits, beer, wine, cannabis and tobacco.

Question 12

To whom does AMPS apply?

Answer 12

commercial traders and service providers (including importers, exporters, customs brokers, warehouse and duty free shop operators, carriers, and freight forwarders)

Question 13

list some of the reason’s you may get an AMPS penalty

Answer 13

prohibited goods, failure to act or “to do something”, such as pay duties and taxes within the required timeframes, retain records, correct an entry, or obtain a permit.

Question 14

What is the Master Penalty Document (MPD)?

Answer 14

database that contains all the potential penalties that can be issued by the CBSA under the AMPS. Sorted by topic or contravention number
Contraventions resulting from failure to comply with requirements identified in the Customs Act, Customs Tariff and related regulations. Each contravention describes the failure to comply, the associated penalty amounts, legislative, regulatory and administrative references and guidelines for application of the contravention.
https://cbsa-asfc.gc.ca/trade-commerce/amps/mpd-dmi-eng.html

Question 15

For each Contravention what does the MPD list?

Answer 15

• Contravention # & description of infraction
• monetary amount of penalty
• the basis on which the penalty is assessed, for example, per record, per line, or per instance
• the legislation that has been contravened;
• any D Memo that is applicable;
• guidelines for officers assessing the penalty; and
• penalty retention period (how long it will stay on their record) - *record of previous infractions will determine the penalty escalation level.

Question 16

What is the common penalty retention time for border violations?

Answer 16

1 Year

Question 17

What is the common penalty retention time for those pertaining to post release verification activities?

Answer 17

3 Years

Question 18

What do the different impact levels mean?

Answer 18

Level 1 = First Offense
Level 2 = repeat occurrence within the time frame cited on the penalty
and so on

Question 19

What D Memo outlines AMPS?

Answer 19

D22-1-1 https://www.cbsa-asfc.gc.ca/publications/dm-md/d22/d22-1-1-eng.html

Question 20

What are the Designated Provisions (Customs) Regulations?

Answer 20

ist the legislative authority that forms the basis of each penalty; https://laws-lois.justice.gc.ca/eng/regulations/SOR-2002-336/FullText.html

Question 21

What is a Notice of Penalty Assessment (NPA)

Answer 21

issued once an officer determines a penalty is warranted

Question 22

what is listed in an NPA?

Answer 22

penalty assessment date, the contravention and penalty details, correction and redress (appeal) information and payment and interest information.

Question 23

What are the 4 options to an importer or their customs broker once an NPA is issued?

Answer 23

• the importer or customs broker with the delegated authority may pay the penalty through the CARM Client Portal (CCP) within 30 days from the date the NPA is issued;
• request a correction for certain issues, such as errors in calculation, name, address, contravention type, or amount assessed (this is done by contacting, within 90 days, the CBSA office that issued the penalty);
• pay and appeal the penalty (within 90 days of the NPA); or
• enter into a Penalty Reinvestment Agreement (PRA).

**the 4 above options alsoapplicable to other third parties (exporters, warehouse operators etc.)

Question 24

How is a request for correction to NPA made?

Answer 24

Online or in writing to CBSA Recourse Directorate in Ottawa (and include as much info as possible/supporting documentation)
https://cbsa-asfc.gc.ca/recourse-recours/eappealenf-appelexec-eng.html

Question 25

What happens if you are successful in appeal and CBSA cancels the penalty?

Answer 25

penalty amount, plus interest, is returned.

Question 26

who is ultimately liable for the penalty (even if a third party pays due to the error being their error)?

Answer 26

Importer; contravention will remain on the importer’s compliance record and not that of the third party.

Question 27

What is The Penalty Reinvestment Agreement (PRA)?

Answer 27

mechanism by which the amount of a penalty under the AMPS can be reduced under certain circumstances, CBSA will allow a claimant to reinvest all or a portion of a penalty when they meet the eligibility cirteria

Question 28

What are the 3 Eligibility conditions for PRA?

Answer 28

(a) demonstrated that a penalty was issued as a result of a systematic problem affecting their commercial information system (CIS) or related processes
(b) invested in corrective measures to remedy the problem in a timely manner
(c) demonstrated that the corrective measures are effective in achieving compliance

Question 29

What are the 3 Ineligibility conditions for PRA?

Answer 29

(a) have been issued penalties as a result of contraventions involving prohibited or inadmissible goods
(b) have been issued penalties assessed under an Act of Parliament other than the Customs Act
(c) have any outstanding debts payable to the CBSA other than the penalty that is the subject of the PRA.

Question 30

How is the PRA assessed?

Answer 30

dollar for dollar eg. penalties issued $50,000.00 - systematic correction cost $25,000.00 = new penalty amount $25,000.00.

Question 31

How do you apply for PRA?

Answer 31

Form BSF266, Penalty Reinvestment Agreement Application Form
(A PRA is granted through the ministerial review process. For the purposes of this policy, the completed PRA application form will be considered by the CBSA as a request for a Minister’s decision under section 129 of the Customs Act.)

Question 32

Once PRA Application assessed what does CBSA do?

Answer 32

CBSA will notify the applicant of the outcome of the review, advising them of the total monetary amount of penalties that may be eligible for a penalty reinvestment and the date by which the proposed corrective measures described in the application must be implemented.

Question 33

Lesson 2 Summary

Answer 33

Lesson 2 Summary
In this lesson you studied the Administrative Monetary Penalty System (AMPS), the system used by CBSA to issue penalties in cases of non-compliance.

Key points in this lesson are:

• the Administrative Monetary Penalty System (AMPS) is a graduated system of penalties for infractions under the Customs Act, the Customs Tariff, and the Special Import Measures Act, and any of the regulations made under these acts;
• contraventions under the AMPS are found in the AMPS Master Penalty Document (MPD);
• in most cases, the penalty amount increases for subsequent identical infractions;
• penalties are issued on a Notice of Penalty Assessment (NPA);
• once an NPA has been issued, an importer can:
  1. pay the penalty
  2. request that the penalty be reviewed
  3. appeal the penalty or
  4. enter into a Penalty Reinvestment Agreement;
• the Penalty Reinvestment Agreement (PRA) is a mechanism by which the amount of a penalty under the AMPS can be reduced;
• a PRA can be requested when an infraction is found to be the result of a failure in the company’s Customs Information System (CIS);
• under a PRA, the penalty will be reduced on a dollar-for-dollar basis; and
• AMPS penalties issued for contraventions relating to specified or prohibited goods are not eligible for a PRA.