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What we heard report: Importer of record implementation

In Budget 2022, the government announced its intention to amend the Customs Act (the act) to clarify importer responsibility for duties and taxes. Parliament amended section 17 of the act so that the entity that declares itself the importer of record on accounting documents is jointly and severally liable with the owner and importer of the goods for the payment of duties and taxes.

The section 17 amendments did not signify a change in Canada Border Services Agency (CBSA) policy. Rather, they confirm our longstanding administrative practice of considering the importer of record as the primary contact and holder for revenue liabilities.

In , the amendments to the act received royal assent. As the government entered the implementation phase, we launched a series of public consultations with major trade chain partners to discuss how the new law will be put into practice. We consulted a variety of stakeholder groups to get their views.

The general consultation took place on . A follow-up series of topic-based consultation sessions ran from to .

Stakeholders alerted us to a number of issues that were secondary to the amendments, but were related to the changes in the international retail and import industry brought on by the growth of e-commerce. We take note of the comments received. Thank you to everyone who participated.

Related link: Budget 2022, Chapter 2

Our objective

This consultation asked for feedback on the following 4 policy areas of importer of record implementation:

Consumer as importer

Canadian consumers are increasingly using e-commerce to fulfill their retail needs. Many of these transactions are fulfilled by supplies outside of Canada with or without the knowledge of Canadian consumers. As a result, e-commerce is increasing the transaction of goods imported into Canada at a fast rate.

E-commerce has created a new and complex environment where many different entities may be responsible for a specific portion of a transaction.

For example: Consumers usually do not account for e-commerce shipments. In many cases, foreign vendors account for e-commerce imports as commercial shipments. Some foreign vendors contract courier-customs brokers to account for goods under the business number of the courier, in lieu of consumers. There are many other variations, some of which are not supported by law.

The existing CBSA systems do not reveal these business relationships to us. We don't have many ways to identify and track e-commerce transactions from other commercial, courier, or postal importations.

Current compliance strategies were developed with traditional, commercial importers in mind. They are ineffective for managing very low-value imports by millions of potential importers or owners.

As a result, new compliance controls and tools are required to effectively manage liabilities involving these low-value, but high-volume e-commerce importations.

Main takeaways

Section 17 amendments do not differentiate between consumer and commercial importers, nor which mode (that is, commercial, courier, postal) or CBSA system goods may be accounted for in.

The entity identified as the importer at the time of accounting (that is, the importer of record) will be liable for any post-accounting duties determined due to verifications, or the importer having a reason to believe they made an error at the time of accounting.

We recognize consumers are in the business of consuming, not the business of importing or making customs declarations.

Roles and responsibilities for duties, taxes and refunds need to be clear and transparent between customs service providers and the clients who are paying for their expertise.

When customs brokers and couriers have reason to believe they made errors in accounting for the goods, they should correct those errors by following the CBSA's reassessment policy.

Related departmental memoranda

Questions asked during this consultation session

Which of these activities or patterns of activity suggest an intent other than "consuming"?

What are the implications, considerations and unintended consequences (for the customs brokers, importers, consumer, or others)?

What needs to be clarified to offer guidance to implicated stakeholders?

What are the linkages with other topic-specific dialogue sessions?

What we heard

We have broken this down into the following topics:

Casual vs commercial goods

A significant volume of e-commerce goods accounted for by customs brokers as importer of record are done under an agreement with the vendor or shipper, or are low-value goods being imported by Canadian businesses.

Stakeholders supported the vendor-based model used by some of Canada's trading partners. In this model, foreign e-commerce vendors must take on the role of importer of record for their sales. Some models recognize casual program benefits, while others treat the transactions as commercial.

There is stakeholder perception of casual provisions being abused by commercial importers.
Note: Our different import streams and their respective provisions were examined during a subsequent consultation session. For more, refer to Leveling the playing field and sharing liability.

Stakeholders expressed differing positions on the use of specific volumetrics and value thresholds to differentiate between casual and commercial importers.

Position 1: The CBSA needs to be cautious, as these policies may create bureaucratic and ineffective barriers to trade.

Position 2: Certain trade-related thresholds are needed to prevent tariff circumvention on consolidated parcel shipments of retail goods disguised as "casual goods".

Stakeholders also expressed differing positions on duty and tax liability for casual importers.

Position 1: The CBSA should make it easier for casual importers to account for goods, such as the creation of an online tool for consumers to present their declarations. This would lower the risk for customs brokers when dealing with higher risk clients or transactions.

Position 2: There are concerns with imposing such responsibility on the average consumers who would have limited understanding and experience dealing with customs regulations.

The CBSA's position: Currently, we do not plan to explore online tools for consumers' use in accounting goods imported through the commercial or courier streams.

The CBSA's verification and reassessment policy

We heard that the CBSA should shorten the maximum 4-year window to make corrections under section 32.2 of the act.

Customs brokers accept their responsibility to make correct declarations based on the available information. However, there are challenges to gather the required information on e-commerce transactions because the information does not come from a centralized source.

In addition, consumers provide little or no information at the CBSA's compliance verification stage. As a result, remedies are not timely, and the customs brokers continue to get a non-compliance status for which they may be liable.

There is also reluctance to take part in the Voluntary Disclosure Program for fear of increased liability and exposure to penalties under the Administrative Monetary Penalty System.

Also, the CBSA seldom accepts voluntary disclosures at face value. Verification officers ask probing questions and solicit additional documentation to ensure the disclosure is accurate and complete.

Note: This topic was examined further during a subsequent consultation session. For more, refer to Facilitating and verifying compliance.


Differing stakeholder views on the CBSA's refund policies:

The CBSA's position: The one who paid the duties and taxes will be entitled to a refund for redeterminations and reappraisals for tariff classification, origin, and valuation.

E-commerce solution 

We heard from stakeholder participants that the CBSA needs to implement a cohesive e-commerce solution, as the presented trade issues cannot be solved piecemeal.

Who can be an importer of record and what does it mean to become one

The act states that a transaction's importer, owner or their representative can identify themselves as the importer of record. We do not have a CBSA policy document that defines the term "importer" or "owner." Some carriers, who are not a party to the sale between the foreign vendors and domestic purchasers, declare themselves as the importer of record.

Section 17 amendments clarify duty liability of the entity that declares itself as the importer of record. In the commercial and courier streams, the importer of record is identified by citing its Canada Revenue Agency (CRA)-issued business number on customs declarations, regardless of whom they may claim is the true importer or owner.

These amendments have made the customs brokerage community more aware about liability should we begin compliance verifications of customs brokers who declare themselves as the importer of record. Customs brokers are also concerned that other government departments use synonymous terms (that is, importer of record) and the business number as an identifier for the administration of their respective programs.

Therefore, stakeholders want clarity around the general guiding principles and overarching expectations, including who can be an importer of record and how the associated liability would apply in practice.

Main takeaways

According to the act, the following entities have rights and obligations to account for goods:

Importers must make corrections and pay any amount owing when they have a reason to believethey made an incorrect declaration.

The CBSA verification determines the importer had reason to believe: The importer will be required to correct declarations dating back to the date of the specific information to a maximum of 4 years.

The CBSA verification determines the importer did not have reason to believe: The importer will be required to correct declarations only for the verification period (typically the clients' last completed fiscal year) and going forward.

The importer conducts an internal audit or review and there was no previous reason to believe: The importer will only be required to correct declarations going forward.

Questions asked during this consultation session

What do customs brokers need to do to encourage commercial entities to assume the role of an importer of record?

How do customs brokers identify non-compliant behaviours in their clients?

How do customs brokers identify, and manage, in the various business models, the clients that increase a broker's compliance risks?

What of these need to change, if at all?

How does a broker know?

What are a broker's mechanisms and means?

How will these need to adjust if a broker takes on liability or if they take on liability of an importer of record?

What barriers or benefits can stakeholders foresee in managing the transition?

What we heard

We have broken this down into the following topics:

Commercial entities as importer of record

The CBSA and other government department program provisions that afford benefits to importations identified as "casual" are more attractive than program provisions for commercial transactions.

Therefore, foreign vendors, may not feel it is in their best interests to register with the CBSA and become the importer of record at the risk of losing benefits under the casual goods program.

The CBSA should guarantee casual program benefits to all importations destined for a household.

The CBSA's position: Program provisions should not be based on destination, but on the end uses of the goods (that is, for personal consumption versus resale).

Customs brokers' compliance risks

The "onboarding process" of the customs brokers for commercial clients often involves, but is not limited to:

As a result, custom brokers are more confident in the accuracy of information gathered from commercial clients, compared to genuine casual shipments.

Note: Our expectations around a broker's due-diligence were further discussed during a subsequent consultation session. For more, refer to Facilitating and verifying compliance.

Returned goods

Section 74 refunds related to returns of e-commerce goods are complex. Stakeholders would like the CBSA's policy on returned goods to be clearer.

E-commerce vendors who offer duty-paid sales to consumers also tend to offer full refunds for returned goods. This means that consumers may receive double refunds on duties when the goods are returned to the vendor, one from the vendor and another from the CBSA.

Different import streams

Stakeholders believe that:

Note: The discussions around different import streams were covered during a subsequent consultation session. For more, continue onto the next section.

Leveling the playing field and sharing liability

Express carriers and customs brokers continue to feel that the liability is placed disproportionately on them, compared to users of other import streams, and that such a disadvantage will get worse because of importer of record amendments.

Stakeholders have also expressed that certain barriers exist with vendors registering with the CBSA and becoming the importer of record, especially in regards to casual goods.

Therefore, this session was used to explore further industry perspectives on the identified issues, and to exchange ideas and insight on the definitions and requirements for importations of casual and commercial goods.

Main takeaways

We have various modernization efforts underway at the CBSA, including:

Importer of record implementation is not intended to address differences in the commercial programs. Rather, it clarifies liability as it relates to accounting for goods.

Each commercial program and importation stream comes with its own advantages and disadvantages. The trade chain partners should make the decision to operate in the program that best fits their business needs.

The following defines the difference between commercial and casual goods:

Source: Accounting for Imported Goods and Payment of Duties Regulations

Per section 32 of the act, and its associated regulations, the importer or owner may account for importations, including casual goods. Exceptions apply only to the following parties, who will become jointly and severally liable for payment of duties and taxes as the importer of record:

Questions asked during this consultation session

Is it preferable for industry to onboard all clients as commercial importers, or preferable to use a broker business number to account for non-commercial goods?

What are the major advantages or disadvantages of each?

With respect to both casual and commercial goods:

What are the other unintended impacts of importer of record?

What role does an e-commerce platform play in the import process?

What data do e-commerce platforms have to provide to importers and customs brokers to support voluntary compliance?

How do brokers demonstrate due diligence on casual goods transactions today?

Will this change following coming into force of importer of record amendments, and if so how?

What efforts does industry currently take to ensure that information provided by clients regarding shipments is true, accurate and complete?

What are some examples of compliance measure in place and actions taken?

What, if anything, will change after the coming into force of importer of record amendments?

What we heard

We have broken this down into the following topics:

Casual vs commercial goods

There is discrepancy in CBSA guidance and the assessments made by Border Service Officers on whether certain goods qualify as casual or not.

Liability for duties and taxes for casual goods

Further clarity is needed on the implementation of the joint liability between the importer of record and the casual importer.

The issue is not who is liable for the payment of duty and tax at time of accounting, but the 4 year liability on casual goods, regardless of the value of the goods.

Clarity around liability for casual high-value goods needs to be explored further, including discussions around the CARM angle.

Note: CBSA's policy position on these issues was discussed during a subsequent consultation session. For more, refer to Facilitating and verifying compliance.

Verifying client information

Often the importers' goods arrive before customs brokers become aware of their arrival, or can onboard the importer (for example, foreign vessels coming in through marine ports). Additional holds at the border would slow down the supply chain.

Brokers look for different indicators on the client's profiles to decide whether a shipment is casual or commercial. Some brokers employ third parties to perform these types of classification for e-commerce, and some use software to review whether the goods are destined to a casual consignee.

Customs brokers generally have robust onboarding processes for new customers to make sure they are educated on requirements and what information is needed for proper importation.

The issue is with one time casual shipments of goods, which could be coming in through various streams (for example, different couriers, highway, etc.). Brokers only have line of sight to the shipment they have on hand, creating potential compliance issues.

Books and record agreement

Getting authorization for books and record keeping agreements is a lengthy process. The CBSA needs to bring efficiency to the process.

Note: The CBSA takes note and will review whether a service standard could be established.

CARM Release 2 onboarding

There are no mechanisms in CARM to file a B2G refund.

CARM was also not designed for casual importations under the CLVS stream, and there are no mechanisms for GST and PST adjustments.

The CBSA's position: Discussions on collection models are ongoing with some provinces. For clarity, the PST portion of the sales tax falls under the purview of each province.

Facilitating and verifying compliance

The importer of record amendments clarify duty liability of the entity that declares itself as the importer of record by citing its CRA-issued business number on customs declarations.

These amendments have made the customs brokerage community more aware about liability should we begin compliance verifications of customs brokers who declare themselves as the importer of record.

This consultation session was used to address stakeholder concerns by exploring our new vision for the trade compliance framework and importer of record implementation strategy.

We also asked for stakeholder views on different aspects of the compliance verification process to ensure practical and sound guiding principles are set as importer of record amendments are implemented.

Main takeaways

Our proposal is to delay importer of record implementation beyond the third quarter of 2023.

The CRA-issued business number is the cornerstone of compliance and CARM. It is the first point of contact we have with importers.

There are limited linkages between importer of record amendments and the Customs Broker Regulatory Review.

Both importers and customs brokers must keep records for 6 years. There are no regulations requiring casual importers to maintain records.

Compliance management is a long-term partnership between brokers and importers, and between us and trade chain partners. The consumer will not be the focus of CBSA compliance.

Under section 59 of the act, an officer may re-determine or further re-determine the origin, tariff classification and valuation of imported goods within 4 years.

In the early stages of importer of record implementation, our objective will be to provide feedback to the importer of record on compliance performance.

This includes combining traditional trade compliance verifications with new compliance interventions under the Culpability Framework, which pushes compliance and risking upstream.

Examples of interventions include:

Learn more about these other CBSA tools for trade compliance.

This shift will help importers of record to assess risk exposure and to identify investments for improvements.

With a compliance approach geared towards an importer of record, there is an opportunity to explore other ways of establishing the scope of a CBSA verification, including:

Questions asked during this consultation session

On setting the bar for compliance:

On stakeholder practices:

On record retention practices:

What we heard

We have broken this down into the following topics:

Importer of record implementation

The customs broker community broadly supported our plan to:

The stakeholders seek:

Next steps of policy development

Stakeholders, including participants of the Border Commercial Consultative Committees (BCCC), should to be involved in the next steps of importer of record policy development.

Stakeholders also expressed that the CBSA departmental memorandum should:

Further considerations:

After importer of record implementation: Compliance verifications

For customs brokers, it is not realistic to gather additional records for all of the transactions they account for on a yearly basis.

What is reasonable is gathering additional documentation to support a small sample size of compliance verifications conducted by the CBSA.

Key considerations

The section 17 amendments confirm our longstanding policy of considering the importer of record as the primary contact and holder for revenue liabilities by closing the gap between CBSA administrative practice and legislative authority.

While preparing the policy guidance for how to apply these legislative amendments, we will consider:

What's next

Input received through this consultation will help the government develop internal CBSA policy instruments and guidance adopting the section 17 amendments in the act.

If you are a stakeholder that took part in this consultation and feel that your views were misrepresented, please email

Glossary of terms

Accounting for goods
To provide a report of imported goods under section 32 of the act. We do this to know who is importing the goods, what is being imported, how much is being imported, the value of the goods, the country of origin, and other such information. This all has an impact on how much needs to be charged in duty and taxes.
Casual program, provisions or shipments
Casual in this context refers to sales directly to consumers for their own or household use. These are goods that are imported for personal use, not intended for sale or for any commercial, industrial, occupational, institutional, or other similar use.
Departmental memoranda
Administrative policy issued by the CBSA. Also known as directives series or D-Memos, they outline the legislation, regulations, policies, and procedures the CBSA uses to administer its programs.
Duty-paid sale
Occurs when the total selling price includes import fees, such as duty, taxes, and brokerage fees. The vendor may include import fees in the retail price or detail them as separate lines. Vendors provide duty-paid sales to deliver a borderless retail experience for consumers. The vendor is the owner of the goods at the time the CBSA releases them into Canada.
Stands for electronic commerce. It is the buying and selling of goods and services electronically, mostly over the Internet.
Holder for revenue liabilities
The person or company the CBSA will seek payment from.
Importer of record
The changes to section 17 of the act make it so an entity that declares itself the commercial importer on accounting documents (that is, whose business number is used to account for goods) is the importer of record. They are then jointly and severally liable with the importer and owner of the imported goods for the duties and taxes.
Import stream
How goods enter Canada. The CBSA differentiates the commercial stream from the courier and postal streams.
Jointly and severally liable
Any one entity involved in the importation of the goods into Canada can be made responsible for paying the full amount of duty and taxes to the CBSA. These entities include the importer of record, the importer, the owner, or their agents. This is different from being equally liable where each entity would be responsible for paying their fair share.
Trade chain partner
Any businesses that helps importers get their goods from one country to another. They may include, but are not limited to: freight forwarders, customs brokers, trucking companies, airlines, ships, warehouse and storage facilities, consignees, agents, sub-contractors.
Vendor-based model
An e-commerce model where vendors collect duty and taxes directly from their Canadian consumers, and then act as the importer of record. The vendor completes the sale to the consumer after the goods are released by the CBSA. Consumers are not involved in the import process.
Verifications or compliance verifications
An audit tool the CBSA uses to check whether an importer is following the rules set out in Canada's trade laws.
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