Language selection

Search


Trade compliance verifications:

Find out how the Canada Border Services Agency (CBSA) approaches the verification of commercial goods destined for Canada. Review the results of our ongoing efforts to ensure trade compliance.

About trade compliance

To be trade compliant, the importing community must meet all of the requirements governing the accounting of commercial goods imported into Canada, including, but not limited to:

  • classifying their commercial goods under the appropriate tariff classification
  • accurately declaring the origin and value of the goods, in accordance with legislative requirements
  • paying the appropriate duties and taxes on the goods

The CBSA monitors the extent to which commercial goods are trade compliant by conducting targeted verifications and by issuing verification priorities.

Other CBSA tools for trade compliance

In effect as of , the CBSA uses 3 additional compliance intervention tools to target various circumstances and risks of non-compliance. These tools do not replace trade compliance verifications; they complement them.

Here is what you can expect to receive and level of CBSA intervention each tool carries:

  • Trade advisory notice (TAN)
    • A letter to the importer asking them to review a declaration
      • Includes public resources for guidance
    • Acts as a nudge to help the importing community when there is a potential for non-compliance
    • No monetary assessment is issued as a result of a TAN
  • Compliance validation letter (CVL)
    • A letter to the importer asking for more information
      • Importers must send information to the CBSA within 30 days
    • Addresses instances of suspected non-compliance
  • Directed compliance letter (DCL)
    • A letter to the importer accompanied by a monetary assessment
    • Addresses instances of known non-compliance

As with trade compliance verifications, recourse provisions of the Customs Act apply to any resulting assessments.

Difference between compliance intervention tools and verifications

Traditional trade compliance verifications are not always efficient for trade chain partners and the CBSA to identify and address instances of non-compliance.

Traditional verifications are:

  • lengthy and labour-intensive
    • examining all importations over a period of time, normally 1 year
  • generally done well after the importations have occurred
    • which can result in mounting industry costs, particularly when recurring non-compliance is confirmed

In contrast, the 3 trade compliance intervention tools:

  • target specific import transactions
  • promote voluntary compliance
  • enable early correction of errors, and
  • mitigate future costs of non-compliance where recurring importations repeat undetected errors

Trade compliance verifications will continue to be the CBSA's most comprehensive compliance tool. However, as part of its Trade Compliance Strategy, the CBSA is using compliance intervention tools to enhance the overall efficiency and effectiveness of its trade compliance regime.

Most-Favoured-Nation tariff treatment withdrawn from Russia and Belarus

Effective , the Most-Favoured-Nation (MFN) tariff treatment no longer applies to goods imported into Canada that originate in Russia or Belarus.

This includes goods shipped:

  • directly from Russia or Belarus
  • from a third country

You must now account for these goods under the General Tariff rate of customs duty of 35%.

If a good is produced with inputs (materials, labour, etc.) from Russia or Belarus, at least 50% of the cost to produce the good must be incurred in one or more MFN beneficiary countries or Canada. This is required by the rule of origin respecting the MFN tariff.

It is a priority for the Government of Canada that goods originating from Russia or Belarus do not enter the Canadian economy under the MFN tariff treatment.

The list of goods currently being monitored and risk assessed includes, but is not limited to:

  • products of iron or steel
  • fertilizer
  • petroleum
  • non-ferrous metals
  • tires

For more information:

Verification priorities

Targeted verification priorities are determined through a risk-based, evergreen process, meaning that new targets are added throughout the year. Verification priorities may also be carried over from previous years. The current verification priorities are:

Tariff classification

Bags Round 3 New
Harmonized System Number(s): Heading 42.02

Risk identified: Imported goods could be incorrectly classified as bags within Heading 42.02, instead of being properly classified elsewhere within the same heading, and potentially be subject to duty rates up to 11%.

This verification priority was released in and is now complete. A second round of verifications was released in and it is also complete.

Results of first and second round of verifications for bags
Targeted companies
(Rounds 1-2)
Cases closed Cases in error Percentage non-compliance Duty Assessed (dollars) Penalties (dollars) Total (dollars)
60 60 44 73% $3,656,166 $12,550 $3,668,716

A third round of verifications was released in . Results are not yet available.

The results of the first 2 rounds show that most of the goods that were found to be misclassified were properly re-classified elsewhere within Heading 42.02 of the Customs Tariff.

Spent fowl Round 3 New
Harmonized System Number(s): Heading 02.07, 16.01 and 16.02

Risk identified: Imported goods could be incorrectly classified as spent fowl within Headings 02.07, 16.01 and 16.02, instead of being properly classified under tariff items subject to tariff rate quotas (TRQs) within the same chapters, and potentially be subject to very high duty rates.

This verification priority was released in July 2017 and is now complete. A second round of verifications was released in May 2020 and it is also complete.

Results of first and second round of verifications for spent fowl
Targeted companies
(Rounds 1-2)
Cases closed Cases in error Percentage non-compliance Duty Assessed (dollars) Penalties (dollars) Total (dollars)
120 120 46 38% $250,308,409 $211,950 $250,520,359

A third round of verification was released in . Results are not yet available.

The results of the first 2 rounds show that most of the goods that were found to be misclassified were properly re-classified under another spent fowl tariff item or as broiler chicken under Chapter 2 of the Customs Tariff.

Freezers and other freezing equipment
Harmonized System Number(s): Heading 84.18

Risk identified: Imported goods could be incorrectly classified as freezers and other freezing equipment under duty-free tariff items within Heading 84.18, instead of being properly classified elsewhere within the same heading and be subject to duty rates up to 8%.

This verification priority was released in . Results are not yet available.

Washers and dryers
Harmonized System Number(s): Headings 84.50 and 84.51

Risk identified: Imported goods could be incorrectly classified as washers and dryers under duty-free tariff items within Headings 84.50 and 84.51, instead of being properly classified elsewhere within the same headings and be subject to a duty rate of 8%.

This verification priority was released in . Results are not yet available.

LED lamps Round 2
Harmonized System Number(s): Heading 85.39

Risk identified: Imported goods could be incorrectly classified as light-emitting diode (LED) lamps under Heading 85.39, instead of being properly classified under Heading 94.05, and be subject to a duty rate of 7%.

This verification priority was released in , and a second round in , and the results to date are included in the following table.

Results of first and second round of verifications for LED lamps
Targeted companies
(Rounds 1-2)
Cases closed Cases in error Percentage non-compliance Duty Assessed (dollars) Penalties (dollars) Total (dollars)
44 33 29 88% $3,010,120 $56,500 $3,066,620

The results of the first two rounds show that most of the goods that were found to be misclassified were properly re-classified under Heading 94.05 of the Customs Tariff.

Furniture for non-domestic purposes Round 4
Harmonized System Number(s): Headings 94.01 and 94.03

Headings 94.01 (Seats) and 94.03 (Other furniture and parts thereof) classify furniture for domestic purposes or other furniture for non-domestic purposes.

Risk identified: is that goods may be misclassified as furniture for non-domestic purposes, which is duty-free, instead of furniture for domestic purposes, which attracts a duty rate up to 9.5%.

This verification priority was released in and is now complete. A second round of verifications was released in and a third round in , and they are also complete.

Results of first, second and third round of verifications for furniture for non-domestic purposes
Targeted companies
(Rounds 1-2-3)
Cases closed Cases in error Percentage non-compliance Duty Assessed (dollars) Penalties (dollars) Total (dollars)
131 131 109 83% $5,624,714 $216,350 $5,841,064

A fourth round of verifications was released in . The results to date are included in the following table.

Results of fourth round of verifications for furniture for non-domestic purposes
Targeted companies
(Round 4)
Cases closed Cases in error Percentage non-compliance Duty Assessed (dollars) Penalties (dollars) Total (dollars)
60 40 32 80% $1,445,421 $132,700 $1,578,121

The results of the first 4 rounds show that most of the goods that were found to be misclassified were properly re-classified as furniture for domestic purposes.

Parts of lamps Round 4
Harmonized System Number(s): Heading 94.05

Risk identified: Imported goods could be incorrectly classified as parts of lamps, within Heading 94.05, instead of being properly classified elsewhere within the same Heading, or under other chapters, and potentially be subject to various duty rates.

This verification priority was released in and is now complete. A second round of verifications was released in and a third round in , and they are also complete.

Results of first, second and third round of verifications for parts of lamps
Targeted companies
(Rounds 1-2-3)
Cases closed Cases in error Percentage non-compliance Duty assessed (dollars) Penalties (dollars) Total (dollars)
207 207 151 73% $2,780,958 $155,100 $2,936,058

A fourth round of verifications was released in . The results to date are included in the following table.

Results of fourth round of verifications for parts of lamps
Targeted companies
(Round 4)
Cases closed Cases in error Percentage non-compliance Duty assessed (dollars) Penalties (dollars) Total (dollars)
46 44 36 82% $839,379 $113,100 $952,479

The results of the first 4 rounds show that most of the goods that were found to be misclassified were properly re-classified within Heading 94.05 or under Chapters 73, 76, 84 and 85 of the Customs Tariff.

Cell phone cases Round 3
Harmonized System Number(s): Headings 39.26, 42.02 and 85.17

Risk identified: Cell phone cases could be incorrectly classified under various tariff items within Headings 39.26, 42.02 and 85.17, whereas the goods could potentially be properly classified under tariff item 4202.32.90 (articles of a kind normally carried in the pocket or in the handbag; with outer surface of sheeting of plastics or of textile materials; other), and be subject to a duty rate of 8%.

This verification priority was released in January 2016 and is now complete. A second round of verifications was released in June 2018 and is also complete.

Results of first and second round of verifications for cell phone cases
Targeted companies
(Rounds 1-2)
Cases closed Cases in error Percentage non-compliance Duty assessed (dollars) Penalties (dollars) Total (dollars)
39 39 36 92% $2,972,835 $46,250 $3,019,085

A third round of verifications was released in March 2021 and the results to date are included in the following table.

Results of third round of verifications for cell phone cases
Targeted companies
(Round 3)
Cases closed Cases in error Percentage non-compliance Duty assessed (dollars) Penalties (dollars) Total (dollars)
22 19 18 95% $324,371 $126,000 $450,371

The results of the first 3 rounds show that most of the goods that were found to be misclassified were properly re-classified under tariff item 4202.32.90 of the Customs Tariff.

Parts of machines and mechanical appliances
Harmonized System Number(s): Heading 84.79

Risk identified: Imported goods could be incorrectly classified as parts of machines and mechanical appliances within Heading 84.79, instead of being properly classified elsewhere within various Chapters, such as 39 and 73, and be subject to duty rates up to 6.5%.

This verification priority was released in December 2018 and the results to date are included in the following table.

Results of first round of verifications for parts of machines and mechanical appliances
Targeted companies
(Round 1)
Cases closed Cases in error Percentage non-compliance Duty assessed (dollars) Penalties (dollars) Total (dollars)
14 12 9 75% $41,529 $12,000 $53,529

The results of the first round show that most of the goods that were found to be misclassified were properly re-classified under Chapters 39, 73, 84, 85 and 90 of the Customs Tariff.

Bicycle parts Round 3
Harmonized System Number(s): Heading 87.14

Risk identified: Bicycle related goods could be incorrectly classified within Heading 87.14, instead of being properly classified elsewhere within the same chapter, and potentially be subject to various duty rates up to 13%.

This verification priority was released in and is now complete. A second round of verifications was released in and is also complete.

Results of first and second round of verifications for bicycle parts
Targeted companies
(Rounds 1-2)
Cases closed Cases in error Percentage non-compliance Duty assessed (dollars) Penalties (dollars) Total (dollars)
104 104 96 92% $875,113 $127,375 $1,002,488

A third round of verifications was released in and the results to date are included in the following table

Results of third round of verifications for bicycle parts
Targeted companies
(Round 3)
Cases closed Cases in error Percentage non-compliance Duty assessed (dollars) Penalties (dollars) Total (dollars)
17 11 11 100% $258,469 $30,000 $288,469

The results of the first 3 rounds show that the goods that were found to be misclassified were properly re-classified under many different Chapters, such as 40, 62, 73, 85, 87, 90 and many more, of the Customs Tariff.

Parts for Use with Machinery of Chapter 84 Round 3
Harmonized System Number(s): Heading 84.31

Risk identified: Parts for use with certain machinery of Chapter 84 could be incorrectly classified within Heading 84.31, instead of being properly classified under various tariff items, and potentially be subject to a duty rate of 6.5%.

This verification priority was released in June 2015 and is now complete. A second round of verifications was released in October 2017 and is also complete.

Results of first and second round of verifications for parts for use with machinery of Chapter 84
Targeted companies
(Rounds 1-2)
Cases closed Cases in error Percentage non-compliance Duty assessed (dollars) Penalties (dollars) Total (dollars)
25 25 18 72% $377,957 $3,200 $381,157

A third round of verifications was released in and the results to date are included in the following table.

Results of third round of verifications for parts for use with machinery of Chapter 84
Targeted companies (Round 3) Cases closed Cases in error Percentage non-compliance Duty assessed (dollars) Penalties (dollars) Total (dollars)
18 16 9 56% $728,935 $30,500 $759,435

The results of the first 3 rounds show that the goods that were found to be misclassified were properly re-classified under various tariff items within Chapters 39, 40, 70, 73, 83 and 84 of the Customs Tariff.

Indicator panels and light-emitting diodes (LED)
Harmonized System Number(s): Headings 85.31 and 85.41

Risk identified: Imported goods could be incorrectly classified as indicator panels or light-emitting diodes (LED) under Headings 85.31 and 85.41, instead of being properly classified under Headings 85.28 or 94.05, and be subject to duty rates up to 7%.

This verification priority was released in and the results to date are included in the following table.

Results of first round of verifications for indicator panels and light-emitting diodes (LED)
Targeted companies (Round 1) Cases closed Cases in error Percentage non-compliance Duty assessed (dollars) Penalties (dollars) Total (dollars)
14 9 8 89% $982,791 $6,500 $989,291

The results of the first round show that the goods that were found to be misclassified were properly re-classified within Heading 94.05 of the Customs Tariff.

Safety headgear Round 5
Harmonized System Number(s): Subheading 6506.10

Risk identified: Safety headgear could be incorrectly classified under duty-free tariff items, whereas the goods could potentially be properly classified as other safety headgear under tariff item 6506.10.90, which attracts a duty rate of 8.5%.

This verification priority was released in and is now complete.

A second round of verifications was released in , a third round in , and a fourth round in , and they are also complete.

Results of first, second, third and fourth round of verifications for safety headgear
Targeted companies (Rounds 1-2-3-4) Cases closed Cases in error Percentage non-compliance Duty assessed (dollars) Penalties (dollars) Total (dollars)
59 59 47 80% $1,131,576 $131,750 $1,263,326

A fifth round of verifications was released in and the results to date are included in the following table.

Results of fifth round of verifications for safety headgear
Targeted companies (Round 5) Cases closed Cases in error Percentage non-compliance Duty assessed (dollars) Penalties (dollars) Total (dollars)
11 6 4 67% $72,875 $26,000 $98,875

The results of the first 5 rounds show that the vast majority of the goods that were found to be misclassified were properly re-classified under tariff item 6506.10.90 of the Customs Tariff.

Disposable and protective gloves Round 5
Harmonized System Number(s): Subheadings 3926.20 and 4015.19

Risk identified: Disposable and protective gloves, which are duty-free if the gloves qualify for specific end-uses, may be properly classified under tariff items 3926.20.91 or 4015.19.90, which attract a duty rate of 6.5% and 15.5% respectively.

This verification priority was released in and is now complete.

A second round of verifications was released in , a third one in , and a fourth one in , and they are also complete.

Results of first, second, third and fourth round of verifications for disposable and protective gloves
Targeted companies
(Rounds 1-2-3-4)
Cases closed Cases in error Percentage non-compliance Duty assessed (dollars) Penalties (dollars) Total (dollars)
62 62 53 85% $4,617,604 $31,000 $4,648,604

A fifth round of verifications was released in and the results to date are included in the following table.

Results of fifth round of verifications for disposable and protective gloves
Targeted companies
(Round 5)
Cases closed Cases in error Percentage non-compliance Duty assessed (dollars) Penalties (dollars) Total (dollars)
15 7 7 100% $243,440 $5,500 $248,940

The results of the first 5 rounds show that the goods that were found to be misclassified were properly re-classified under tariff items 3926.20.91 and 4015.19.90, and under Headings 48.18, 62.10 and 63.07 of the Customs Tariff.

Valuation

Apparel Round 4
Harmonized System Number(s): Chapters 61 and 62

Risk identified: Given the high rates of duty associated with the apparel industry (Chapters 61 and 62), importers of apparel may not be in compliance with the valuation provisions of the Customs Act. The duty rates vary from 10% to 18%.

This verification priority was released in and is now complete. A second round of verifications was released in and a third round in , and they are also complete.

Results of first, second and third round of verifications for apparel
Targeted companies
(Rounds 1-2-3)
Cases closed Cases in error Percentage non-compliance Duty assessed (dollars) Penalties (dollars) Total (dollars)
228 228 133 58% $85,644,909 $317,700 $85,962,609

A fourth round of verifications was released in and the results to date are included in the following table.

Results of fourth round of verifications for apparel
Targeted companies (Round 4) Cases closed Cases in error Percentage non-compliance Duty assessed (dollars) Penalties (dollars) Total (dollars)
46 29 13 45% $3,689,409 $60,900 $3,750,309

The results of the first 4 rounds show that many goods were found to be valued incorrectly (e.g., assists were not added to the price paid or payable).

Origin

Bedding and drapery Round 3 New
Harmonized System Number(s): Headings 63.01, 63.02 and 63.03

Risk identified: Manufacturers in the United States of America were using fabrics not produced in the former North American Free Trade Agreement (NAFTA) territories as an input for bedding and drapery (under Headings 63.01, 63.02 and 63.03), but were declaring the goods as "Made in USA" in order to qualify for NAFTA.

This verification priority was released in , and is now complete.

A second round of verifications was released in and is also complete.

Results of first and second round of verifications for bedding and drapery
Targeted companies (Rounds 1-2) Cases closed Cases in error Percentage non-compliance Duty assessed (dollars) Penalties (dollars) Total (dollars)
37 37 18 49% $1,900,812 $69,475 $1,970,287

A third round of verification was released in October 2023. It will focus on imports made under the new Canada-United States-Mexico Agreement (CUSMA), which was implemented in 2020. Results are not yet available.

The results of the 2 rounds confirmed that some of the products that were verified did not qualify under NAFTA because of the inputs used in their production.

Contact us

If you have any questions regarding this list, please send an email to the following address: cbsa.trci-erecio.asfc@cbsa-asfc.gc.ca

Related links

Date modified: