Trade compliance verification
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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.
Verification and compliance 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.
With the implementation of the CBSA Assessment and Revenue Management (CARM), the CBSA has modernized their efforts in enforcing compliance by taking a more focused and timely approach while prioritizing initiatives to promote voluntary compliance and to ensure a level playing field while addressing various sectors of the importing community.
Compliance priorities
The CBSA has identified the following compliance priorities:
- Tariff rate quota and classification of supply managed goods
- Verifications on the classification of frozen desserts containing 5% of dairy products
- Verifications on the classification of spent fowl products
- GST and excise duties and taxes
- GST exemption codes
- Vaping products subject to excise duties and taxes
- Precious metals
- Canada-United States-Mexico Agreement (CUSMA) origin verifications:
- Automotive industry
- Import origin verifications under:
- Canada-European Union Comprehensive Economic and Trade Agreement (CETA)
- Canada-United Kingdom Trade Continuity Agreement (CUKTCA)
- Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP): Short supply list of products
- Duties Relief Program (DRP)
- Verifications of licensees importing supply managed goods
- China Surtax Order (2024): Electric vehicles
- China Surtax Order (2024): Steel and Aluminum
- United States Surtax Order (2025-01)
- United States Surtax Order (Steel and Aluminum 2025)
- United States Surtax Order (Motor Vehicles 2025)
- Order imposing a Surtax on the importation of Certain Steel Goods
- Steel Goods and Aluminum Goods Surtax Order
- Steel Derivative Goods Surtax Order
- Energy commodities and final accounting
- Verifications on electricity imports under chapter 27 of the Customs Tariff
As the risk environment evolves, CBSA can change priorities at any time during the course of the year.
As stated above, the priorities are following a continuous and adaptive risk-based approach. Therefore, the results presented below can be subject to change as the number of cases initiated for a listed priority can increase over time based on the outcomes of those verifications, and taking into consideration CBSA’s monitoring activities and newly identified areas of revenue at risk.
Tariff classification
The current verification and compliance priorities are:
Note: Older rounds of verification priorities only included duties at risk and penalties in the calculation of total assessed revenue. They did not include GST and interest. The total assessed revenue calculation in the new rounds include duties at risk, GST, interest, and penalties.
Steel Goods and Aluminum Goods Surtax Order
Harmonized System Number(s): Tariff items listed in the Schedule of the Steel Goods and Aluminum Goods Surtax Order but that are classified under a tariff item of Chapter 99 of the Schedule of Canada's Customs Tariff.
Risk Identified: Surtax in the amount of 25% of the value for duty is not applied to certain steel goods imported into Canada and containing steel melted and poured in China or to certain aluminum goods imported into Canada and containing aluminum smelted and cast in China.
This compliance priority was initiated in and the number of targeted companies is subject to change due to an evergreen risking process.
| Number of targeted companies | Cases closed | Cases in error | Cases in error (percentage) | Total assessed revenue (dollars) |
|---|---|---|---|---|
| 19 | 6 | 3 | 50 | 49,691 |
Order imposing a Surtax on the Importation of Certain Steel Goods
Harmonized System Number(s): Tariff items listed in Schedule 1 and Schedule 2 of the Order Amending the Order Imposing a Surtax on the Importation of Certain Steel Goods.
Risk Identified: Surtax in the amount of 50% of the value for duty is not applied to certain steel goods that are subject to trade measures in the form of tariff rate quotas (TRQ) and where the volumes imported are above the quota identified.
This compliance priority was initiated in and the number of targeted companies is subject to change due to an evergreen risking process.
| Number of targeted companies | Cases closed | Cases in error | Cases in error (percentage) | Total assessed revenue (dollars) |
|---|---|---|---|---|
| 10 | 0 | 0 | Not applicable | 0 |
United States Surtax Order (Steel and Aluminum 2025)
Harmonized System Number(s): Tariff items listed in Schedule 1 of the United States Surtax Order (Steel and Aluminum 2025) and in Schedule 2 of the Order Amending and Repealing Certain Orders Made Under the Customs Tariff (United States Surtax).
Risk Identified: Surtax in the amount of 25% of the value for duty is not applied to steel, aluminum and certain other goods imported into Canada and originating in the United States that are subject to the United States Surtax Order (Steel and Aluminum 2025).
This compliance priority was initiated in and the number of targeted companies is subject to change due to an evergreen risking process.
| Number of targeted companies | Cases closed | Cases in error | Cases in error (percentage) | Total assessed revenue (dollars) |
|---|---|---|---|---|
| 38 | 29 | 20 | 69 | 7,399,577 |
United States Surtax Order (2025-1)
Harmonized System Number(s): Tariff items listed in Schedule 1 of the Order Amending and Repealing Certain Orders Made Under the Customs Tariff (United States Surtax) and in Schedule 1 of the United States Surtax Order (2025-1).
Risk Identified: Surtax in the amount of 25% of the value for duty is not applied to certain goods imported into Canada and originating in the United States that are subject to the United States Surtax Order (2025-1).
This compliance priority was initiated in and the number of targeted companies is subject to change due to an evergreen risking process.
| Number of targeted companies | Cases closed | Cases in error | Cases in error (percentage) | Total assessed revenue (dollars) |
|---|---|---|---|---|
| 245 | 202 | 152 | 75 | 11,808,761 |
China Surtax Order (2024): Steel and Aluminum
Harmonized System Number(s): Tariff items covered in Schedule 2 of the China Surtax Order (2024).
Risk Identified: Surtax in the amount of 25% of the value for duty is not applied to steel and aluminum goods produced in China that are subject to the China Surtax Order (2024).
This compliance priority was initiated in and the number of targeted companies is subject to change due to an evergreen risking process.
| Number of targeted companies | Cases closed | Cases in error | Cases in error (percentage) | Total assessed revenue (dollars) |
|---|---|---|---|---|
| 196 | 171 | 102 | 60 | 5,169,131 |
China Surtax Order (2024): Electric vehicles
Harmonized System Number(s): Tariff items covered in Schedule 1 of the China Surtax Order (2024).
Risk Identified: Surtax in the amount of 100% of the value for duty is not applied to Chinese-made EVs originating in China, including electric and hybrid passenger automobiles, trucks, buses, and delivery vans, that are subject to the China Surtax Order (2024).
This compliance priority was initiated in and the number of targeted companies is subject to change due to an evergreen risking process.
| Number of targeted companies | Cases closed | Cases in error | Cases in error (percentage) | Total assessed revenue (dollars) |
|---|---|---|---|---|
| 17 | 13 | 10 | 77 | 1,903,300 |
Spent fowl
Harmonized System Number(s): Headings 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 compliance priority was initiated in . In lieu of a formal fourth round of verifications with a fixed number of importers subject to review, the number of targeted companies is subject to change due to an evergreen risking process.
| Number of targeted companies | Cases closed | Cases in error | Cases in error (percentage) | Total assessed revenue (dollars) |
|---|---|---|---|---|
| 26 | 12 | 5 | 42 | 196,004,072 |
Frozen desserts
Harmonized System Number(s): Tariff item 2105.00.10
Risk Identified: Imported goods could be incorrectly classified as ice cream and other edible ice within tariff item 2105.00.10, instead of being properly classified within tariff item 2105.00.92, and potentially be subject to higher duty rates up to 277%.
This compliance priority was initiated in and is still on-going. The number of targeted companies is subject to change due to an evergreen risking process.
| Number of targeted companies | Cases closed | Cases in error | Cases in error (percentage) | Total assessed revenue (dollars) |
|---|---|---|---|---|
| 36 | 27 | 17 | 63 | 56,599,453 |
LED Lamps (Round 2)
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 is now complete.
A second round of verification was released in , and the results to date are included in the following table.
| Number of targeted companies (Round 2) | Cases closed | Cases in error | Cases in error (percentage) | Total assessed revenue (dollars) |
|---|---|---|---|---|
| 18 | 16 | 13 | 81 | 1,933,603 |
| Number of targeted companies (Round 1) | Cases closed | Cases in error | Cases in error (percentage) | Duty assessed (dollars) | Penalties (dollars) | Total assessed revenue (dollars) |
|---|---|---|---|---|---|---|
| 26 | 26 | 24 | 92 | 1,725,736 | 77,500 | 1,803,236 |
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.
Bags (Round 3)
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.
A third round of verifications was released in and the results to date are included in the following table.
| Number of targeted companies (Round 3) | Cases closed | Cases in error | Cases in error (percentage) | Total assessed revenue (dollars) |
|---|---|---|---|---|
| 29 | 28 | 25 | 89 | 1,045,728 |
| Number of targeted companies (Rounds 1-2) | Cases closed | Cases in error | Cases in error (percentage) | Duty assessed (dollars) | Penalties (dollars) | Total assessed revenue (dollars) |
|---|---|---|---|---|---|---|
| 60 | 60 | 44 | 73 | 3,656,166 | 12,550 | 3,668,716 |
The results of the first 3 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.
Gloves (Round 3)
Risk identified: Imported goods could be incorrectly classified as gloves within Headings 39.26 and 42.03, instead of being properly classified within Chapter 61 or 62, and potentially be subject to higher duty rates up to 18%.
This verification priority was released in and is now complete. A second round of verifications was released in and it is also complete.
A third round of verifications was released in and the results to date are included in the following table.
| Number of targeted companies (Round 3) | Cases closed | Cases in error | Cases in error (percentage) | Total assessed revenue (dollars) |
|---|---|---|---|---|
| 21 | 20 | 10 | 50 | 520,135 |
| Number of targeted companies (Rounds 1-2) | Cases closed | Cases in error | Cases in error (percentage) | Duty assessed (dollars) | Penalties (dollars) | Total assessed revenue (dollars) |
|---|---|---|---|---|---|---|
| 49 | 49 | 40 | 82 | 2,617,772 | 68,900 | 2,686,672 |
The results of the first 3 rounds show that the goods that were found to be misclassified were properly re-classified under Chapters 39, 40, 42, 62 and 65 of the Customs Tariff.
Valuation
The current compliance priority is:
Energy Commodities
Harmonized System Number: Heading 27.16
Risk Identified: Importers of goods classified as electrical energy within heading 27.16 may not be in compliance with the accounting provisions of the Customs Act and those goods might not have been accounted for in the prescribed manner.
This compliance priority was initiated in and is still on-going.
| Number of targeted companies | Cases closed | Cases in error | Cases in error (percentage) | Total assessed revenue (dollars) |
|---|---|---|---|---|
| 15 | 6 | 1 | 17 | 823,059 |
CARM as a compliance tool
In addition to the priorities above, the CBSA will use the CARM (CBSA Assessment Revenue Management) system to validate duties and taxes and conduct compliance interventions to address areas of known or suspected non-compliance.
Other CBSA tools for trade compliance
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.
Each tool (letter or notice) requires a certain level of CBSA intervention, as described here:
- Trade advisory notice (TAN)
- This is a letter to the importer asking them to review a declaration when there is a potential for non-compliance. It includes guidance resources to help the importing community comply. No monetary assessment follows as a result of a trade advisory notice.
- Compliance validation letter (CVL)
- This is a letter to the importer asking for more information when the CBSA suspects an instance of non-compliance. Importers must send information to the CBSA within 30 days. Monetary assessment might follow as a result of a compliance validation letter.
- Directed compliance letter (DCL)
- This is a letter to the importer accompanied by a monetary assessment. It 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 an efficient way to identify and address instances of non-compliance.
Traditional verifications are:
- lengthy and labour-intensive
- they examine all importations over a period of time (normally 1 year)
- generally done well after the importations have occurred
- this can result in higher costs to industry, 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.
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
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