CUSTOMS RECORDS
Who is obliged to keep customs records?
Pursuant to section 40(1) of the Customs Act, the following persons have the obligation to keep records:
a person who imports goods into Canada, and
a person who causes goods to be imported into Canada.
Non-resident importers, therefore, are required to keep such records.
How do you comply with your customs record-keeping obligations?
Pursuant to sections 2 and 3 of the Imported Goods Records Regulations, any company or person that imports goods or causes goods to be imported to Canada must keep all records that relate to:
the origin, marking, purchase, importation, costs and value of commercial goods imported into Canada,
payment for the commercial goods in Canada, and
any application made for an advance ruling pertaining to NAFTA origin.
In addition, records indicating the actual end-use of imported goods must be kept when goods were imported free of duty or at reduced rates due to their intended use.
All records should be complete to enable Customs to perform detailed audits and verify the amounts of duties (including GST) paid or payable.
Records must be maintained for a period of six years following the importation of the commercial goods.
Records must be maintained in Canada unless permission is obtained from the Canada Border Services Agency(CBSA) to keep books and records outside Canada. A request to keep records outside Canada must be filed with the CBSA.
What are the consequences of failing to comply with the obligations?
Pursuant to section 40(3) of the Customs Act, failure to keep records or to provide reasonable access to any document or property, or failure to provide any document or information as required results in penalties of $1,000 for the first occurrence, $2,500 for the second occurrence, and $5,000 for the third occurrence; maximum $25,000. Goods may also be detained by Customs, and failure to keep records may result in the denial of preferential tariff treatment.
For more details, see Memorandum D17-1-21, Maintenance of Records and Books in Canada by Importers, here.