Partners in Compliance

About Partners in Compliance

Partners in Compliance (PIC) is a Canada Border Services Agency (CBSA) pilot project. PIC promotes partnerships between the CBSA and industry in order for businesses to attain the highest rate of compliance with the CBSA's trade programs (tariff classification, origin and value for duty).

PIC builds on the principles of the Customs Self Assessment (CSA) program and risk management.

PIC allows approved CSA importers to voluntarily demonstrate to the CBSA that their business systems, internal controls and self-testing processes are effective and reliable at ensuring their trade program compliance. Since these CSA importers are given greater recognition for the integrity of their internal controls and business systems, the CBSA can focus its post-release verification resources on areas of higher or unknown risk.

Status

The first phase of the pilot is now complete. The CBSA developed a process to evaluate the effectiveness and reliability of participants' internal controls, including self-testing. The two original pilot participants have completed the PIC approval process. They are now conducting their own self-testing for trade program compliance and are submitting their results to the CBSA.

In 2007-2008, the CBSA expanded the PIC pilot in a limited way to assess its viability as a future program for various importer types and industries. Eight eligible importers are now progressing through the expanded PIC process.

If PIC is fully implemented as a program, the CBSA expects that PIC will be available to all CSA importers from different industry sectors and business sizes (very large, large, medium and small).

Benefits

An approved PIC participant receives the following benefits:

• The participant has a unique and exclusive partnership agreement with the CBSA.
• The CBSA reviews the participant's internal controls and business systems to highlight any possible weaknesses that may affect the company's ability to be compliant.
• The participant is removed from the post-release verification pool; however, the CBSA reserves the right to perform or have the participant perform verifications if there is a high-risk or sensitive issue.
• If there is an occurrence of trade program non-compliance, the CBSA may not issue monetary penalties against the participant as its first response provided that (i) the participant takes timely remedial action to address and correct the non-compliance to the CBSA's satisfaction, (ii) the non-compliance is not the subject of an ongoing post-release verification/investigation of which the participant has knowledge, and (iii) the non-compliance is not fraudulent in nature.
• If participants discover errors through their self-testing or auditing, they will not be required to file retroactive corrections provided that they did not have specific information (e.g. legislation or previously issued written instructions or guidance) available to them that the declarations were incorrect.
• The participant receives expanded client service benefits.
• By making improvements to the company's internal controls and systems through PIC, the participant enhances the company's initial CSA investment, which increases the cost effectiveness of participating in both programs.
• The participant has enhanced business certainty with regard to verification and penalty costs.

Eligibility

Importers eligible for PIC participation must meet the following criteria:

• Canadian resident
  The prospective participant is a resident of Canada and his or her business entity is permanently established, located and managed within Canada. He or she has the general authority to carry out business without the approval of another person outside Canada. The importer maintains separate books and records for his or her Canadian operations, prepares separate financial statements, maintains accounts for the imported goods and pays for imports and duties and taxes.
• Approved CSA importer
  The importer is a registered member of the CSA program. He or she has also completed the CSA validation review and has shown that no significant outstanding CBSA accounting issues exist.
• Satisfactory importer compliance history
  The importer's compliance history with the CBSA confirms that there are no outstanding issues that would prevent or prohibit him or her from becoming a participant.

Approval process

The CBSA works with the participant to plan and conduct a preliminary evaluation of the company's internal controls and systems. The objectives of this step are the following:

• To understand the participant's trade program risks;
• To identify and understand the participant's internal control processes; and
• To assess, on a preliminary basis, how likely it is that the participant's controls and systems will detect and prevent non-compliance with the CBSA's trade requirements.

If the CBSA is satisfied with the preliminary evaluation, the participant and the CBSA sign a PIC memorandum of understanding (MOU). If the CBSA is not satisfied, it will either decline the partnership or defer a decision until improvements are made.

Within the first year of signing the MOU, the CBSA conducts a performance monitoring exercise to evaluate the effectiveness and reliability of the participant's internal controls and systems. The CBSA works with the participant to plan and conduct these on-site visits and tests.

Once the CBSA issues a satisfactory "low risk" evaluation of the participant's internal controls and systems, the participant establishes a self-testing plan and carries it out. The participant then submits the results for the CBSA's review on an agreed-upon schedule. The CBSA may undertake additional testing when necessary.

Contacts

For further information about PIC:

Partners in Compliance
Canada Border Services Agency
1980 Matheson Boulevard
Mississauga, ON L4W 5R7

PIC-PEMO@cbsa-asfc.gc.ca