CBSA Administrative Monetary Penalty System (AMPS)


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Transmanna Intl. can assist you with another CBSA program. Canada Border Services Agency has started the Administrative Monetary Penalty System (AMPS) to encourage compliance with legislative, regulatory, and other program requirements and promote a level playing field for all clients. This program gives the Canada Borders Services Agency (CBSA) the authority to issue penalties to importers, carriers, bonded warehouses, duty free stores and customs brokers. If the above service providers fail to comply with any Customs regulations. AMPS penalties for the most part, take the place of the use of seizures and ascertained forfeitures. If a company is found in non-compliance with a regulation or declaration, CBSA will document the contravention and issue a Notice of Penalty Assessment (NPA). The NPA will have a unique sequential identifier number assigned, a penalty amount, and a contravention number that outlines the reason for the penalty. CBSA keeps the AMPS Client Contravention History on file for a period of three years. AMPS penalties can range from NIL to $25,000.00 per infraction. NPA(s) can sometimes exceed $25,000.00 if multiple contraventions are identified. CBSA generally prefers to impose AMPS penalties instead of using seizures or ascertained forfeitures as an enforcement tool. However, AMPS penalties may be imposed in addition to any seizure of goods or conveyances.

 

 

 

Some Examples of AMPS Penalties are

  1. Failure to pay duties.
  2. Failure to report goods to the CBSA.
  3. Using an incorrect tariff classification.
  4. Importing goods without a permit.
  5. Failing to answer truthfully questions asked by an officer with respect to goods.
  6. Exporting goods without a permit.
  1. Providing an incorrect value for duty.
  2. Providing an incorrect statement of origin.
  3. Providing false information to a CBSA officer.
  4. Failing to keep electronic records in a electronically readable format for prescribed period.
  5. Unauthorized removal of goods from a bonded warehouse.

 Notice of Penalty Assessment (NPA)

Notice of Penalty Assessment is the document in which the Canada Border Services Agency (“CBSA”) issues an assessment of an Administrative Monetary Penalty (“AMP”) against an importer. An AMP is a monetary penalty of a civil nature (rather than criminal) imposed by the CBSA for a contravention of an Act, regulation or by-law. The Master Penalty Document of CBSA contains all AMPS contraventions that may be applied to commercial clients. If you believe that the AMPs penalty issued by the CBSA in the Notice of Penalty Assessment was incorrect, you may file a request to correct within 90 days of the Notice of Penalty Assessment pursuant to subsection 127.1(1) of the Customs Act.  The CBSA may cancel or reduce an AMPS penalty if:

a) It is satisfied that there was no contravention; or

b) There was a contravention but it finds that there was an error with respect to the amount assessed and the penalty should be reduced.

A request to correct must be submitted to the CBSA Recourse Directorate in Ottawa, Ontario. Requests for a review of a penalty assessment is formerly sent to the CBSA office that issued the Notice of Penalty Assessment. If the CBSA does not agree that a correction is appropriate, a review under section 129 of the Customs Act may be filed within 90 days of the date of your notice. Reasons for a request to review may include, but are not limited to, errors in calculation, name, address, contravention type, the level of penalty, or amount assessed.

AMPS Penalty Framework

When CBSA discovers a contravention, it will typically impose an appropriate AMPS penalty on the commercial client. These penalties are described in CBSA’s Master Penalty Document (“MPD”); the MPD lists the relevant contraventions and the penalties that result from a failure to comply.

In many cases, the AMPS penalty structure is graduated (first, second, and third levels) and provides higher penalties for repeated violations of the same contravention. However, for a small number of contraventions, the penalty is set at a flat rate. 

For the purposes of penalty calculation, the retention period for each individual contravention is either 12 or 36 months. Most contraventions that result from post-release verifications have retention periods of 36 months while border-related contraventions have retention periods of 12 months. Any contraventions that occur during the retention period are used to determine whether the penalties will escalate. 

Once the retention period has expired, if the same contravention occurs again, the penalty will be calculated from the first level. However, the commercial client’s overall contravention history will remain on the AMPS system for six years plus the current year; commercial clients with a history of repeated contraventions will be examined more closely during subsequent inspections. Pursuant to Subsection 107(9) of the Customs Act, commercial clients may request a copy of their AMPS Client Contravention History and are entitled to submit up to two requests per calendar year.

CBSA has also implemented a 30-day delay to the penalty escalation from the first level to the second level, for low- and medium-risk contraventions. Between the date that a Notice of Penalty Assessment (“NPA”) is issued and the end of the 30-day period, the commercial client has time to take remedial action in order to avoid the second penalty level.

An AMPS penalty becomes payable on the date that the NPA is served. Interest is payable on penalties at the prescribed rate beginning on the date following the date of the NPA. However, if the penalty is paid within 30 days after the date of the NPA, no interest will apply.

An AMPS penalty is issued against the person named in the NPA and is considered a debt owed to the Government of Canada. The Canada Revenue Agency is responsible for recovering AMPS penalties that are in default.

Review and Appeal of AMPS Penalties

When a commercial client does not agree with the findings described in the NPA, there are two types of initial review available, both of which are described below. 

Requesting a Correction

CBSA may cancel or reduce an AMPS penalty (where the request is made within thirty days after the assessment), if:

a) It is satisfied that there was no contravention; or

b) There was a contravention but it finds that there was an error with respect to the amount assessed and the penalty should be reduced. 

However, an error must be evident to both parties or this strategy will not be successful. Correction requests are made to the issuing CBSA office.

Requesting a Redress Review

The person named on the NPA may request redress review (i.e. a request for a Minister’s decision) of the AMPS Penalty within ninety days (subject to limited exceptions) after service of the NPA. This is initiated by sending a request in writing to the CBSA officer who served the NPA or to the CBSA office closest to the location from where the NPA was served. 

Within thirty days of filing the redress request, the commercial client will receive a letter containing the name and contact details of the adjudicator responsible for the file. The adjudicator will review the request and the reports of the officer who took the original enforcement action. The client will then receive a notice explaining the reasons for the action and the issuing CBSA officer’s reports. At that time, the client will have the opportunity to make further submissions before the decision is made.

The adjudicator will consider the evidence and make a recommendation for decision. A senior CBSA officer, who has the authority to make a decision on behalf of the Minister of Public Safety (the “Minister”), will review the adjudicator’s recommendation and the evidence before making a decision. The decision of the senior CBSA officer is considered final and is not subject to review but is appealable to the Federal Court of Canada.

In certain cases, CBSA will allow a commercial client to reinvest all or a portion of a penalty applied under AMPS, by means of a Penalty Reinvestment Agreement (“PRA”). A PRA is granted through the ministerial review process, which a client may initiate by making a request for redress review. A commercial client may apply for a PRA if they:

a) Are the client against whom the penalties were issued, as identified on each NPA;

b) Have been issued one or more penalties involving numerous and/or repetitive contraventions or instances of non-compliance, caused by a systematic problem in their Commercial Information System;

c) Have not yet been issued a Minister’s decision in respect of the NPAs at issue;

d) Have identified the cause of the systematic problem in their Commercial Information System; and

e) Are prepared to invest in corrective measures to remedy the systematic problem and demonstrate that the corrective measures are effective in achieving compliance.

Appeal of a Redress Review to the Federal Court of Canada

According to Subsection 135(1) of the Customs Act, a person who has requested a redress review (i.e. a Minister’s decision) may appeal that decision by way of an action to the Federal Court of Canada. However, the appeal must occur within ninety days of being notified of the decision. In addition, the Federal Court of Canada will not vary a Minister’s decision unless it is persuaded that:

a) The Minister, or agents of the Minister, failed to observe principles of natural justice or failed to act within their statutory discretion; or

b) The decision was based on error in law or finding of fact that is perverse or capricious or without regard to evidence before the Minister.

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